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Table of Contents


 
 
 
 
 
 
 
 
 
 
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 September 30, 2019

OR
 
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)
Delaware
 
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). 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 October 31, 2019 there were 72,048,053 shares of the Registrant's common stock outstanding.

 
 
 
 
 
 
 
 
 
 



FORM 10-Q
QUARTERLY REPORT
Quarter Ended September 30, 2019
TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


i


Table of Contents


Part I: FINANCIAL INFORMATION

Item 1.
Condensed Consolidated Financial Statements

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
September 30,
2019

December 31,
2018
 
 
 
 
ASSETS
Current assets:
 

 
 

Cash and cash equivalents
$
153.2

 
$
323.0

Short-term investments
0.2

 
31.4

Trade receivables
34.4

 
49.8

Inventory
32.5

 
22.3

Prepaid expenses and other current assets
20.5

 
25.2

Total current assets
240.8

 
451.7

Investments in unconsolidated affiliates
851.9

 
397.2

Lease assets - see Note B
218.6

 

Property and equipment, net
155.8

 
176.4

Other intangible assets, net
154.2

 
175.8

Goodwill
164.8

 
164.8

Fixed maturity securities available for sale, at fair value
18.7

 
17.8

Deferred tax asset
19.9

 
16.9

Other long term investments and non-current assets
69.0

 
58.9

Total assets
$
1,893.7

 
$
1,459.5

 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 

 
 

Accounts payable and other accrued liabilities, current
$
91.6

 
$
98.4

Lease liabilities, current - see Note B
43.2

 

Income taxes payable
20.3

 
24.2

Deferred revenue
22.4

 
31.5

Notes payable, current
7.4

 
5.9

Total current liabilities
184.9

 
160.0

Lease liabilities, long term - see Note B
210.5

 

Deferred revenue, long term
0.2

 
0.2

Notes payable, long term
193.8

 
42.2

Accounts payable and other accrued liabilities, long term
29.6

 
57.4

Total liabilities
619.0

 
259.8

Commitments and contingencies - see Note G


 


Equity:
 

 
 
Cannae common stock, $0.0001 par value; authorized 115,000,000 shares as of September 30, 2019 and December 31, 2018; outstanding of 72,081,360 and 72,223,692 shares as of September 30, 2019 and December 31, 2018, respectively, and issued of 72,236,998 and 72,234,330 shares as of September 30, 2019 and December 31, 2018, respectively

 

Preferred stock, $0.0001 par value; authorized 10,000,000 shares; issued and outstanding, none as of September 30, 2019 and December 31, 2018

 

Retained earnings
119.1

 
45.8

Additional paid-in capital
1,156.3

 
1,146.2

Less: Treasury stock, 155,638 and 10,638 shares as of September 30, 2019 and December 31, 2018, respectively, at cost
(4.1
)
 
(0.2
)
Accumulated other comprehensive loss
(59.2
)
 
(67.2
)
Total Cannae shareholders' equity
1,212.1

 
1,124.6

Noncontrolling interests
62.6

 
75.1

Total equity
1,274.7

 
1,199.7

Total liabilities and equity
$
1,893.7

 
$
1,459.5

See Notes to Condensed Consolidated Financial Statements

1

Table of Contents


CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions)
(Unaudited)

Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
 

 

Revenues:
 
 
 
Restaurant revenue
$
247.7

 
$
269.3

 
$
772.0

 
$
819.3

Other operating revenue
22.7

 
24.2

 
58.0

 
68.9

Total operating revenues
270.4

 
293.5

 
830.0

 
888.2

Operating expenses:
 
 
 
 
 
 
 
Cost of restaurant revenue
220.1

 
244.5

 
678.7

 
725.4

Personnel costs
31.1

 
30.6

 
86.4

 
145.0

Depreciation and amortization
12.9

 
16.1

 
40.1

 
45.3

Other operating expenses
29.9

 
27.6

 
87.5

 
73.9

Total operating expenses
294.0

 
318.8

 
892.7

 
989.6

Operating loss
(23.6
)
 
(25.3
)
 
(62.7
)
 
(101.4
)
Other income (expense):
 
 
 
 
 
 
 
Interest, investment and other income
1.3

 
1.6

 
13.7

 
4.5

Interest expense
(5.2
)
 
(0.4
)
 
(14.4
)
 
(3.6
)
Realized gains, net
93.0

 
11.3

 
169.1

 
77.8

Total other income (expense)
89.1

 
12.5

 
168.4

 
78.7

Earnings (loss) before income taxes and equity in losses of unconsolidated affiliates
65.5

 
(12.8
)
 
105.7

 
(22.7
)
Income tax expense (benefit)
15.6

 
(0.9
)
 
14.3

 
(3.8
)
Earnings (loss) before equity in losses of unconsolidated affiliates
49.9

 
(11.9
)
 
91.4

 
(18.9
)
Equity in (losses) earnings of unconsolidated affiliates
(8.3
)
 
3.8

 
(50.8
)
 
(16.9
)
Net earnings (loss)
41.6

 
(8.1
)
 
40.6

 
(35.8
)
Less: Net loss attributable to non-controlling interests
(4.6
)
 
(9.6
)
 
(12.2
)
 
(16.4
)
Net earnings (loss) attributable to Cannae Holdings, Inc. common shareholders
$
46.2

 
$
1.5

 
$
52.8

 
$
(19.4
)
Earnings per share
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
Net earnings (loss) per share
$
0.65

 
$
0.02

 
$
0.74

 
$
(0.27
)
Diluted

 

 

 

Net earnings (loss) per share
$
0.64

 
$
0.02

 
$
0.73

 
$
(0.27
)
Weighted Average Shares Outstanding
 
 
 
 
 
 
 
Weighted average shares outstanding Cannae Holdings common stock, basic basis
71.6

 
71.6

 
71.6

 
71.1

Weighted average shares outstanding Cannae Holdings common stock, diluted basis
71.9

 
71.6

 
71.9

 
71.1


See Notes to Condensed Consolidated Financial Statements

2

Table of Contents


CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)
(In millions)
(Unaudited)

 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Net earnings (loss)
$
41.6

 
$
(8.1
)
 
$
40.6

 
$
(35.8
)
Other comprehensive earnings (loss), net of tax:
 

 
 

 
 

 
 

Unrealized gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)
0.6

 
1.5

 
0.4

 
3.3

Unrealized (loss) gain relating to investments in unconsolidated affiliates (2)
(4.7
)
 
1.0

 
3.4

 
(5.9
)
Reclassification adjustments for unrealized gains and losses on investments and other financial instruments, net of tax, (excluding investments in unconsolidated affiliates) included in net earnings (3)
(0.3
)
 
7.0

 
(0.4
)
 
7.0

Reclassification adjustments for unrealized gains and losses on unconsolidated affiliates, net of tax, included in net earnings (4)
4.6

 
(1.5
)
 
9.6

 
15.2

Other comprehensive earnings
0.2

 
8.0

 
13.0

 
19.6

Comprehensive earnings (loss)
41.8

 
(0.1
)
 
53.6

 
(16.2
)
Less: Comprehensive loss attributable to noncontrolling interests
(4.6
)
 
(9.6
)
 
(12.2
)
 
(16.4
)
Comprehensive earnings attributable to Cannae Holdings, Inc.
$
46.4

 
$
9.5

 
$
65.8

 
$
0.2


_________________________________
 
(1)
Net of income tax expense of less than $0.2 million and $0.5 million for the three months ended September 30, 2019 and 2018, respectively, and $0.1 million and $1.1 million for the nine months ended September 30, 2019 and 2018, respectively.
(2)
Net of income tax (benefit) expense of $(1.2) million and less than $0.3 million for the three months ended September 30, 2019 and 2018, respectively, and $0.9 million and $(1.5) million for the nine months ended September 30, 2019 and 2018, respectively.
(3)
Net of income tax (benefit) expense of $(0.1) million and $2.5 million for the three months ended September 30, 2018 and $(0.1) million and $2.5 million for the nine months ended September 30, 2019 and 2018, respectively.
(4)
Net of income tax expense (benefit) of $1.2 million and $(0.4) million for the three months ended September 30, 2019 and 2018, respectively, and $2.5 million and $4.0 million for the nine months ended September 30, 2019 and 2018, respectively.
    
See Notes to Condensed Consolidated Financial Statements




3

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, June 30, 2018
71.9

 
$

 
$
1,155.4

 
$
(2.7
)
 
$
(75.5
)
 

 
$

 
$
91.0

 
$
1,168.2

Other comprehensive earnings — unrealized gain on investments and other financial instruments, net of tax

 

 

 

 
1.5

 

 

 

 
1.5

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

 

 

 

 
1.0

 

 

 

 
1.0

Reclassification adjustments for unrealized gains and losses on investments and other financial instruments, net of tax, (excluding investments in unconsolidated affiliates) included in net earnings

 

 

 

 
7.0

 

 

 

 
7.0

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

 

 

 

 
(1.5
)
 

 

 

 
(1.5
)
Stock-based compensation, consolidated subsidiaries

 

 
0.5

 

 

 

 

 

 
0.5

Contribution of CSA services from FNF

 

 
0.3

 

 

 

 

 

 
0.3

Stock-based compensation, unconsolidated affiliates

 

 
1.2

 

 

 

 

 

 
1.2

Net earnings (loss)

 

 

 
1.5

 

 

 

 
(9.6
)
 
(8.1
)
Balance, September 30, 2018
71.9

 
$

 
$
1,157.4

 
$
(1.2
)
 
$
(67.5
)
 

 
$

 
$
81.4

 
$
1,170.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, June 30, 2019
72.2

 
$

 
$
1,152.0

 
$
72.9

 
$
(59.4
)
 

 
$
(0.2
)
 
$
66.9

 
$
1,232.2

Other comprehensive earnings — unrealized gain on investments and other financial instruments, net of tax

 

 

 

 
0.6

 

 

 

 
0.6

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

 

 

 

 
(4.7
)
 

 

 

 
(4.7
)
Reclassification adjustments for unrealized gains and losses on investments and other financial instruments, net of tax, (excluding investments in unconsolidated affiliates) included in net earnings

 

 

 

 
(0.3
)
 

 

 

 
(0.3
)
Reclassification adjustments for unrealized gains and losses on unconsolidated affiliates, net of tax, included in net earnings

 

 

 

 
4.6

 

 

 

 
4.6

Treasury stock repurchases

 

 

 

 

 
0.2

 
(3.9
)
 

 
(3.9
)
Stock-based compensation, consolidated subsidiaries

 

 
1.0

 

 

 

 

 
0.3

 
1.3

Contribution of CSA services from FNF

 

 
0.4

 

 

 

 

 

 
0.4

Stock-based compensation, unconsolidated affiliates

 

 
2.9

 

 

 

 

 

 
2.9

Net earnings (loss)

 

 

 
46.2

 

 

 

 
(4.6
)
 
41.6

Balance, September 30, 2019
72.2


$


$
1,156.3


$
119.1


$
(59.2
)

0.2


$
(4.1
)

$
62.6

 
$
1,274.7


See Notes to Condensed Consolidated Financial Statements

4

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, December 31, 2017
70.9

 
$

 
$
1,130.2

 
$
0.2

 
$
(71.0
)
 

 
$

 
$
93.7

 
$
1,153.1

Adjustment for cumulative effect of adoption of ASC Topic 606

 

 

 
1.9

 

 

 

 

 
1.9

Adjustment for adoption of ASU 2018-02

 

 

 
16.1

 
(16.1
)
 

 

 

 

Other comprehensive earnings — unrealized gain on investments and other financial instruments, net of tax

 

 

 

 
3.3

 

 

 

 
3.3

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

 

 

 

 
(5.9
)
 

 

 

 
(5.9
)
Reclassification adjustments for unrealized gains and losses on investments and other financial instruments, net of tax, (excluding investments in unconsolidated affiliates) included in net earnings

 

 

 

 
7.0

 

 

 

 
7.0

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

 

 

 

 
15.2

 

 

 

 
15.2

Shares issued for investment success bonuses, net of issuance costs
1.0

 

 
19.8

 

 

 

 

 

 
19.8

Stock-based compensation, consolidated subsidiaries

 

 
1.3

 

 

 

 

 

 
1.3

Contribution of CSA services from FNF

 

 
0.9

 

 

 

 

 

 
0.9

Stock-based compensation, unconsolidated affiliates

 

 
5.2

 

 

 

 

 

 
5.2

Sale of noncontrolling interest in consolidated subsidiary

 

 

 

 

 

 

 
4.1

 
4.1

Net loss

 

 

 
(19.4
)
 

 

 

 
(16.4
)
 
(35.8
)
Balance, September 30, 2018
71.9

 
$

 
$
1,157.4

 
$
(1.2
)
 
$
(67.5
)
 

 
$

 
$
81.4

 
$
1,170.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2018
72.2

 
$

 
$
1,146.2

 
$
45.8

 
$
(67.2
)
 

 
$
(0.2
)
 
$
75.1

 
$
1,199.7

Adjustment for cumulative effect of adoption of accounting standards by unconsolidated affiliates

 

 

 
20.5

 
(5.0
)
 

 

 

 
15.5

Other comprehensive earnings — unrealized gain on investments and other financial instruments, net of tax

 

 

 

 
0.4

 

 

 

 
0.4

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

 

 

 

 
3.4

 

 

 

 
3.4

Reclassification adjustments for unrealized gains and losses on investments and other financial instruments, net of tax, (excluding investments in unconsolidated affiliates) included in net earnings

 

 

 

 
(0.4
)
 

 

 

 
(0.4
)
Reclassification adjustments for unrealized gains and losses on unconsolidated affiliates, net of tax, included in net earnings

 

 

 

 
9.6

 

 

 

 
9.6

Dun & Bradstreet equity issuance costs

 

 
(1.4
)
 

 

 

 

 

 
(1.4
)
Treasury stock repurchases

 

 

 

 

 
0.2

 
(3.9
)
 

 
(3.9
)
Stock-based compensation, consolidated subsidiaries

 

 
3.0

 

 

 

 

 
0.3

 
3.3

Contribution of CSA services from FNF

 

 
0.9

 

 

 

 

 

 
0.9

Stock-based compensation, unconsolidated affiliates

 

 
7.6

 

 

 

 

 

 
7.6

Subsidiary dividends paid to noncontrolling interests

 

 

 

 

 

 

 
(0.6
)
 
(0.6
)
Net earnings (loss)

 

 

 
52.8

 

 

 

 
(12.2
)
 
40.6

Balance, September 30, 2019
72.2

 
$

 
$
1,156.3

 
$
119.1

 
$
(59.2
)
 
0.2

 
$
(4.1
)
 
$
62.6

 
$
1,274.7


See Notes to Condensed Consolidated Financial Statements


5

Table of Contents


CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
Nine months ended September 30,
 
 
2019
 
2018
 
 
Cash flows from operating activities:
 
 
 
Net earnings (loss)
$
40.6

 
$
(35.8
)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
 
 
 
            Depreciation and amortization
40.1

 
45.3

            Equity in losses of unconsolidated affiliates
50.8

 
16.9

            Distributions from investments in unconsolidated affiliates
2.0

 
1.2

            Realized gains and asset impairments, net
(152.7
)
 
(71.0
)
            Lease asset amortization
27.1

 

            Stock-based compensation cost
3.3

 
21.0

Changes in assets and liabilities, net of effects from acquisitions:
 
 
 
Net decrease in trade receivables
15.2

 
1.6

Net decrease (increase) in inventory, prepaid expenses and other assets
(4.8
)
 
(10.6
)
Net decrease in lease liabilities
(33.0
)
 

Net decrease in accounts payable, accrued liabilities, deferred revenue and other
(13.6
)
 
(9.7
)
Net change in income taxes
(14.1
)
 
(7.7
)
Net cash used in operating activities
(39.1
)
 
(48.8
)
Cash flows from investing activities:
 
 
 
Proceeds from sale of investment securities and investments in unconsolidated affiliates

 
17.7

Proceeds from Ceridian Share Sales - See Note A
212.5

 

Additions to property and equipment and other intangible assets
(19.0
)
 
(10.3
)
Proceeds from sales of property and equipment
18.7

 
3.2

Proceeds from sale of investments in unconsolidated affiliates and other long term investments
4.8

 
7.0

Investments in Dun & Bradstreet, net of capitalized syndication fees - see Note D
(526.2
)
 

Purchases of other long-term investments
(15.0
)
 
(5.5
)
Distributions from investments in unconsolidated affiliates
0.7

 
0.3

Net proceeds from sales and maturities of (cash paid for purchases of) short-term investment securities
31.1

 
(32.2
)
Net other investing activities
2.5

 
0.7

Net cash used in investing activities
(289.9
)
 
(19.1
)
Cash flows from financing activities:
 
 
 
Borrowings
364.0

 
0.1

Debt service payments
(213.5
)
 
(124.1
)
Subsidiary distributions paid to noncontrolling interest shareholders
(0.6
)
 

Sale of noncontrolling interest in consolidated subsidiary

 
4.1

Treasury stock repurchases
(3.9
)
 

Proceeds from ABRH sale and leaseback of corporate office, net of issuance costs- see Note A
13.2

 

Net cash provided by (used in) financing activities
159.2

 
(119.9
)
Net decrease in cash and cash equivalents
(169.8
)
 
(187.8
)
Cash and cash equivalents at beginning of period
323.0

 
245.6

Cash and cash equivalents at end of period
$
153.2

 
$
57.8


See Notes to Condensed Consolidated Financial Statements

6

Table of Contents


CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note A — Basis of Financial Statements
Description of the Business
We are a holding company engaged in actively managing and operating a group of companies and investments with a net asset book value of approximately $1.3 billion as of September 30, 2019. Our business consists of managing and operating certain majority-owned subsidiaries, as well as making additional majority and minority equity portfolio investments in businesses, in order to achieve superior financial performance and maximize the value of these assets. As of September 30, 2019, our primary investments include our minority ownership interests in Ceridian HCM Holding, Inc. ("Ceridian") and The Dun & Bradstreet Corporation ("DNB"); majority equity ownership stakes in ABRH, LLC ("ABRH"), 99 Restaurants Holdings, LLC ("99 Restaurants") and T-System Holdings, LLC ("T-System"); and various other controlled portfolio companies and minority equity and debt investments. Except where otherwise noted, all references to we, us, our, Cannae, Cannae Holdings, the Company, or CNNE are to Cannae Holdings, Inc. and its subsidiaries, taken together.

See Note H for further discussion of the businesses comprising our reportable segments.

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, 2018.
Following the split-off of the former portfolio company investments by Fidelity National Financial, Inc. ("FNF"), and subsequent contribution to us (the "FNF Split-Off"), the Company is allocated certain corporate overhead and management services expenses from FNF based on the terms of the Corporate Services Agreement ("CSA"), dated as of November 17, 2017, by and between the Company and FNF and our proportionate share of the expense determined on actual usage and our best estimate of management's allocation of time. Both FNF and Cannae believe such allocations are reasonable; however, they may not be indicative of the actual results of operations or cash flows of the Company had the Company been operating as an independent, publicly-traded company for the periods presented or the amounts that will be incurred by the Company in the future. FNF is considered a related party to the Company.
All intercompany profits, transactions and balances have been eliminated. Our investments in non-majority-owned partnerships and affiliates are accounted for using the equity method until such time that they may become wholly or majority-owned. Earnings attributable to noncontrolling interests are recorded on the Condensed Consolidated Statements of Operations relating to majority-owned subsidiaries with the appropriate noncontrolling interest that represents the portion of equity not related to our ownership interest recorded on the Condensed Consolidated Balance Sheets in each period.
Management Estimates
The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affec