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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): November 27, 2019

CANNAE HOLDINGS, INC.
(Exact name of Registrant as Specified in its Charter)

Delaware
1-38300
82-1273460
(State or other jurisdiction of 
incorporation)
 (Commission File Number)
(IRS Employer Identification No.)

1701 Village Center Circle
Las Vegas, Nevada 89134
(Addresses of principal executive offices)

(702323-7330
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.






Item 8.01
 
Other Events


Cannae Holdings, Inc. (“the Company”) is filing this Current Report on Form 8-K (this "Current Report") to present retrospectively recast condensed consolidated financial statements for the quarter ended March 31, 2019 to reflect the retrospective application of our previously disclosed change in accounting principle related to the Company's reporting of its investment in The Dun and Bradstreet Corporation ("Dun & Bradstreet") on a current basis rather than our previous reporting on a three-month lag.
We historically accounted for our investment and proportionate share of losses in Dun & Bradstreet utilizing a three-month reporting lag due to timeliness considerations. In the third quarter of 2019, the Company was able to obtain financial information for Dun & Bradstreet on a more timely basis and determined it was preferable to record our investment in Dun & Bradstreet on a current basis as opposed to the previous three-month lag. In accordance with applicable accounting literature, a change to eliminate a previously existing reporting lag is considered a change in accounting principle. Changes in accounting principle are to be reported through retrospective application of the new principle to all prior financial statement periods presented. Accordingly, the Company's condensed consolidated financial statements for the interim periods of fiscal year 2019 were adjusted in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019 filed with the Securities and Exchange Commission (the "SEC") on November 12, 2019 to reflect the period-specific effects of eliminating the three-month reporting lag.
The financial information being recast in this Current Report was originally filed in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (the “Original First Quarter 10-Q”), which was filed with the SEC on May 9, 2019. The updated financial statements are not a restatement of previously issued financial statements. The recast of the information contained in Item 1 of Part I and Item 2 of Part I (to make necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) of the Original First Quarter 10-Q is presented in Exhibit 99.1 to this Current Report. See the Explanatory Note and Note A to such financial statements for further discussion regarding the changes from our previously filed condensed consolidated financial statements included in the Original First Quarter 10-Q and the change in accounting principle, respectively.
The information included in this Current Report is provided for informational purposes only in connection with the change in accounting principle related to the Company's reporting of its investment in The Dun and Bradstreet Corporation on a current basis and does not amend or restate the Company’s condensed consolidated financial statements included in the Company’s Original First Quarter 10-Q. For developments subsequent to the filing of the Original First Quarter 10-Q, refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 which was filed with the SEC on November 12, 2019, and Current Reports on Form 8-K filed subsequent to the filing of the Original First Quarter 10-Q.





Item 9.01.
 
Financial Statements and Exhibits

(d) Exhibits
Exhibit
Description
 
99.1

 
 
 
 
 
 
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

 
Extension Definition Linkbase Document
 
 
 
 
 
101.PRE

 
Inline XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
 
 
101.LAB

 
Extension Label Linkbase Document
 
 
 
 
 
104

 
Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101.
* - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
Cannae Holdings, Inc.
 
 
Date:
November 27, 2019
By:  
/s/ Richard L. Cox
 
 
 
 
Name:  
Richard L. Cox
 
 
 
 
Title:  
Executive Vice President and Chief Financial Officer
 



Exhibit

Exhibit 99.1


EXPLANATORY NOTE

Cannae Holdings, Inc. (the “Company”) is filing this Exhibit 99.1 to its Current Report on Form 8-K (this "Exhibit 99.1") to revise the “Unaudited Condensed Consolidated Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) comprising Item 1 of Part I and Item 2 of Part I, respectively, in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (the “Original First Quarter 10-Q”), which was filed with the SEC on May 9, 2019. These sections have been recast to reflect the retrospective application of the previously disclosed change in accounting principle related to the Company's reporting of its investment in The Dun and Bradstreet Corporation on a current basis rather than our previous reporting on a three-month lag. Refer to the discussion under the header Change in Accounting Principle included in Note A to the Condensed Consolidated Financial Statements included herein for further information regarding the change in accounting principle.
With the exception of the foregoing, this Exhibit 99.1 t is presented as of the filing date of the Original First Quarter 10-Q. Accordingly, this Exhibit 99.1 does not reflect events occurring after the date of filing of the Original First Quarter 10-Q or modify or update disclosures in any way other than as required to reflect the revisions described above. Consequently, all other information not affected by the revisions described above is unchanged and reflects the disclosures and other information made at the date of the filing of the Original First Quarter 10-Q. Among other things, forward-looking statements made in the Original First Quarter 10-Q have not been revised to reflect events that occurred or facts that became known to us after the filing of the Original First Quarter 10-Q, and any such forward-looking statements should be read in their historical context. As such, this Exhibit 99.1 should be read in conjunction with the Original First Quarter 10-Q and our filings with the SEC subsequent to such date, including amendments to such filings, if any.







Part I: FINANCIAL INFORMATION

Item 1.
Condensed Consolidated Financial Statements

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
March 31,
2019

December 31,
2018
 
 
 
 
ASSETS
Current assets:
 

 
 

Cash and cash equivalents
$
121.2

 
$
323.0

Short-term investments
12.1

 
31.4

Trade receivables
29.5

 
49.8

Inventory
31.0

 
22.3

Prepaid expenses and other current assets
29.0

 
25.2

Total current assets
222.8

 
451.7

Investments in unconsolidated affiliates
906.3

 
397.2

Lease assets - see Note B
240.6

 

Property and equipment, net
168.7

 
176.4

Other intangible assets, net
162.1

 
175.8

Goodwill
164.8

 
164.8

Fixed maturity securities available for sale, at fair value
17.5

 
17.8

Deferred tax asset
18.2

 
16.9

Other long term investments and non-current assets
58.0

 
58.9

Total assets
$
1,959.0

 
$
1,459.5

 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 

 
 

Accounts payable and other accrued liabilities, current
$
89.9

 
$
98.4

Lease liabilities, current - see Note B
42.7

 

Income taxes payable
23.7

 
24.2

Deferred revenue
25.9

 
31.5

Notes payable, current
5.9

 
5.9

Total current liabilities
188.1

 
160.0

Lease liabilities, long term - see Note B
230.9

 

Deferred revenue, long term
0.2

 
0.2

Notes payable, long term
206.3

 
42.2

Note payable to Fidelity National Financial, Inc. - see Note F
100.0

 

Accounts payable and other accrued liabilities, long term
29.6

 
57.4

Total liabilities
755.1

 
259.8

Commitments and contingencies - see Note G


 


Equity:
 

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

 

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

 

Retained earnings
49.5

 
45.8

Additional paid-in capital
1,148.9

 
1,146.2

Less: Treasury stock, 10,638 shares as of March 31, 2019 and December 31, 2018, at cost

(0.2
)
 
(0.2
)
Accumulated other comprehensive loss
(65.9
)
 
(67.2
)
Total Cannae shareholders' equity
1,132.3

 
1,124.6

Noncontrolling interests
71.6

 
75.1

Total equity
1,203.9

 
1,199.7

Total liabilities and equity
$
1,959.0

 
$
1,459.5

See Notes to Condensed Consolidated Financial Statements

1



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

Three months ended March 31,
 
2019
 
2018
 

Revenues:
 
Restaurant revenue
$
257.8

 
$
273.8

Other operating revenue
16.7

 
18.6

Total operating revenues
274.5

 
292.4

Operating expenses:
 
 
 
Cost of restaurant revenue
227.0

 
240.8

Personnel costs
24.4

 
24.1

Depreciation and amortization
13.9

 
14.3

Other operating expenses
23.8

 
21.2

Total operating expenses
289.1

 
300.4

Operating loss
(14.6
)
 
(8.0
)
Other income (expense):
 
 
 
Interest, investment and other income
11.0

 
1.3

Interest expense
(3.7
)
 
(3.0
)
Realized gains, net
1.6

 

Total other income (expense)
8.9

 
(1.7
)
Loss before income taxes and equity in losses of unconsolidated affiliates
(5.7
)
 
(9.7
)
Income tax benefit
(7.2
)
 
(5.5
)
Earnings (loss) before equity in losses of unconsolidated affiliates
1.5

 
(4.2
)
Equity in losses of unconsolidated affiliates
(21.4
)
 
(1.1
)
Net loss
(19.9
)
 
(5.3
)
Less: Net loss attributable to non-controlling interests
(3.1
)
 
(4.2
)
Net loss attributable to Cannae Holdings, Inc. common shareholders
$
(16.8
)
 
$
(1.1
)
Earnings per share
 
 
 
Basic
 
 
 
Net loss per share
$
(0.23
)
 
$
(0.02
)
Diluted

 

Net loss per share
$
(0.23
)
 
$
(0.02
)
Weighted Average Shares Outstanding
 
 
 
Weighted average shares outstanding Cannae Holdings common stock, basic basis
71.6

 
70.6

Weighted average shares outstanding Cannae Holdings common stock, diluted basis
71.8

 
70.6


See Notes to Condensed Consolidated Financial Statements

2



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

 
Three months ended March 31,
 
2019
 
2018
Net loss
$
(19.9
)
 
$
(5.3
)
Other comprehensive earnings (loss), net of tax:
 

 
 

Unrealized (loss) gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)
(0.2
)
 
2.1

Unrealized gain (loss) relating to investments in unconsolidated affiliates (2)
5.9

 
(6.7
)
Reclassification adjustments for unrealized gains and losses on unconsolidated affiliates, net of tax, included in net earnings (3)
0.6

 

Other comprehensive earnings (loss)
6.3

 
(4.6
)
Comprehensive loss
(13.6
)
 
(9.9
)
Less: Comprehensive loss attributable to noncontrolling interests
(3.1
)
 
(4.2
)
Comprehensive loss attributable to Cannae Holdings, Inc.
$
(10.5
)
 
$
(5.7
)

_________________________________
 
(1)
Net of income tax (benefit) expense of $(0.1) million and $0.8 million for the three months ended March 31, 2019 and 2018, respectively.
(2)
Net of income tax expense (benefit) of $1.6 million and $(1.8) million for the three months ended March 31, 2019 and 2018, respectively.
(3)
Net of income tax expense of $0.2 million for the three months ended March 31, 2019.

See Notes to Condensed Consolidated Financial Statements




3




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

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

 

 

 

 
2.1

 

 

 

 
2.1

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

 

 

 

 
(6.7
)
 

 

 

 
(6.7
)
Stock-based compensation

 

 
0.4

 

 

 

 

 

 
0.4

Contribution of CSA services from FNF

 

 
0.3

 

 

 

 

 

 
0.3

Ceridian stock-based compensation

 

 
1.0

 

 

 

 

 

 
1.0

Net loss

 

 

 
(1.1
)
 

 

 

 
(4.2
)
 
(5.3
)
Balance, March 31, 2018
70.9

 
$

 
$
1,131.9

 
$
1.0

 
$
(75.6
)
 

 
$

 
$
89.5

 
$
1,146.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 loss on investments and other financial instruments, net of tax

 

 

 

 
(0.2
)
 

 

 

 
(0.2
)
Other comprehensive earnings — unrealized earnings on investments in unconsolidated affiliates, net of tax

 

 

 

 
5.9

 

 

 

 
5.9

Reclassification of unrealized losses on investments in unconsolidated affiliates, net of tax, included in net earnings


 

 

 

 
0.6

 

 

 

 
0.6

Stock-based compensation, consolidated affiliates

 

 
0.9

 

 

 

 

 

 
0.9

Contribution of CSA services from FNF

 

 
0.3

 

 

 

 

 

 
0.3

Stock-based compensation, unconsolidated affiliates

 

 
1.5

 

 

 

 

 

 
1.5

Subsidiary dividends paid to noncontrolling interests

 

 

 

 

 

 

 
(0.4
)
 
(0.4
)
Net loss

 

 

 
(16.8
)
 

 

 

 
(3.1
)
 
(19.9
)
Balance, March 31, 2019
72.2




1,148.9


49.5


(65.9
)



(0.2
)

71.6

 
$
1,203.9


See Notes to Condensed Consolidated Financial Statements

4



CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
Three months ended March 31,
 
 
2019
 
2018
 
 
Cash flows from operating activities:
 
 
 
Net loss
$
(19.9
)
 
$
(5.3
)
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
 
 
 
            Depreciation and amortization
13.9

 
14.3

            Equity in losses of unconsolidated affiliates
21.4

 
1.1

            Distributions from investments in unconsolidated affiliates
2.0

 
0.9

            Realized gains and asset impairments, net
(1.4
)
 
1.0

            Noncash lease expense
9.9

 

            Stock-based compensation cost
0.9

 
0.4

Changes in assets and liabilities, net of effects from acquisitions:
 
 
 
Net decrease in trade receivables
20.2

 
5.6

Net increase in inventory, prepaid expenses and other assets
(10.1
)
 
(8.0
)
Net decrease in lease liabilities
(10.9
)
 

Net decrease in accounts payable, accrued liabilities, deferred revenue and other
(12.3
)
 
(16.4
)
Net change in income taxes
(7.7
)
 
(4.9
)
Net cash provided by (used in) operating activities
6.0

 
(11.3
)
Cash flows from investing activities:
 
 
 
Proceeds from sale of investment securities and investments in unconsolidated affiliates
1.7

 
17.7

Additions to property and equipment and other intangible assets
(3.2
)
 
(3.1
)
Proceeds from sales of property and equipment
2.9

 
1.4

Dun & Bradstreet Investment, net of capitalized syndication fees - see Note D
(502.7
)
 

Purchases of other long-term investments

 
(1.7
)
Distributions from investments in unconsolidated affiliates
0.3

 

Net proceeds from sales and maturities of (cash paid for purchases of) short-term investment securities
19.2

 
(21.1
)
Net other investing activities

 
0.4

Net cash used in investing activities
(481.8
)
 
(6.4
)
Cash flows from financing activities:
 
 
 
Borrowings
262.2

 
0.1

Debt service payments
(1.0
)
 
(123.8
)
Subsidiary distributions paid to noncontrolling interest shareholders
(0.4
)
 

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

 

Net cash provided by (used in) financing activities
274.0

 
(123.7
)
Net decrease in cash and cash equivalents
(201.8
)
 
(141.4
)
Cash and cash equivalents at beginning of period
323.0

 
245.6

Cash and cash equivalents at end of period
$
121.2

 
$
104.2


See Notes to Condensed Consolidated Financial Statements

5



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 value of approximately $1.2 billion as of March 31, 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 March 31, 2019, our primary investments include our minority ownership interests in Ceridian Holding HCM, Inc. ("Ceridian") and Dun & Bradstreet (as defined in Note D); majority equity ownership stakes in American Blue Ribbon Holdings, 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 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 valuation of goodwill and acquired intangible assets and fair value measurements (Note C). Actual results may differ from estimates.
Recent Developments
Dun & Bradstreet
In February 2019, we completed our previously announced investment in The Dun & Bradstreet Corporation ("DNB"), a Delaware corporation. DNB is a global leader in commercial data and analytics and provides various services to help companies improve their operational performance. See Note D for further discussion.
Restaurant Group
During the quarter ended March 31, 2019 and year ended December 31, 2018, we entered into a plan to sell certain real estate assets of ABRH including its corporate offices located in Nashville, Tennessee and Denver, Colorado. In conjunction with the plan of sale, $11.2 million of assets are recorded as held for sale and included in Prepaid expenses and other current assets, net as of

6

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

March 31, 2019. In the three months ended March 31, 2019, we reclassified an additional $4.3 million from Property and equipment, net to Prepaid expenses and other current assets on the Consolidated and Combined Balance Sheet as of March 31, 2019.
On March 21, 2019, ABRH sold its corporate office located in Nashville, Tennessee for net cash proceeds of $13.2 million and entered into a lease agreement with the buyer to lease the office for an initial term of 15 years. The transaction was evaluated and determined not to qualify for sale-leaseback accounting. Accordingly, the transaction is accounted for as a failed sale and leaseback and a financing obligation. We reclassified $2.4 million from assets held for sale formerly included Prepaid expenses and other current assets to reflect the real estate assets in Property and equipment, net on our Condensed Consolidated Balance Sheet as of March 31, 2019 as if we were the legal owner. We continue to recognize depreciation expense over the buildings estimated useful life. We have recorded a liability for the financing obligation in the amount of the net cash proceeds of $13.2 million which is included in Accounts payable and other accrued liabilities, long term on our Condensed Consolidated Balance Sheet as of March 31, 2019.
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 earnings per share is equal to basic earnings 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 which 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 which 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 months ended March 31, 2019 and 2018, there were no antidilutive shares of restricted stock outstanding which were excluded from the calculation of diluted earnings per share.
Income Tax
Our effective tax rate was 126.3% and 56.7% in the three months ended March 31, 2019 and 2018, respectively. The increase in the effective tax rate is attributable to increased tax expense on earnings from investments in unconsolidated affiliates and an increased impact of permanent book-to-tax differences for wage and tip credits on pretax loss in the 2019 period compared to 2018.
Recent Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02 Leases (Topic 842). The amendments in this ASU introduce broad changes to the accounting and reporting for leases by lessees. The main provisions of the new standard include: clarifications to the definitions of a lease, components of leases, and criteria for determining lease classification; requiring virtually all leased assets, including operating leases and related liabilities, to be reflected on the lessee's balance sheet; and expanding and adding to the required disclosures for lessees. In July 2018, the FASB issued ASU 2018-11 Leases (Topic 842): Targeted Improvements which allows entities the option to adopt this standard by recording a cumulative-effect adjustment to opening equity, if necessary, and only include required disclosures for prior periods.
We adopted Topic 842 on January 1, 2019 using a modified retrospective approach prescribed by ASU 2018-11 and recorded an operating lease right-of-use asset (Lease assets) of $246.0 million and an operating lease liability for future discounted lease payment obligations (Lease liabilities) of $279.4 million at the date of adoption (January 1, 2019). The other material impacts of the adoption of Topic 842 also resulted in a decrease of $9.1 million and $42.3 million to our Other intangible assets, net and Accounts payable and accrued liabilities, respectively. We elected to apply the following package of practical expedients on a consistent basis permitting entities not to reassess: (i) whether any expired or existing contracts are or contain a lease; (ii) lease classification for any expired or existing leases and (iii) whether initial direct costs for any expired or existing leases qualify for capitalization under the amended guidance.
See Note B. Leases for further discussion of our leasing arrangements and related accounting.
In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this ASU introduce broad changes to accounting for credit impairment of financial instruments. The primary updates include the introduction of a new current expected credit loss ("CECL") model that is based on expected rather than incurred losses and amendments to the accounting for impairment of debt securities available for sale. This

7

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

update is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the effect this new guidance will have on our financial statements and related disclosures and have not yet concluded on its effects. We do not expect to early adopt the standard.
Revision of Prior Period Financial Statements
Subsequent to the issuance of the Company’s Condensed Consolidated Financial Statements for the three months ended March 31, 2018, we identified and corrected errors in connection with the preparation of the financial statements for the year ended December 31, 2018 pertaining to: (1) our adjustment for the cumulative effect of the adoption of Accounting Standards Codification ("ASC") Topic 606 as of the date of adoption (January 1, 2018), (2) adjustments to the opening balance sheet of T-System in order to add a contract asset for its unbilled accounts receivable and to remove a portion of deferred revenue for which T-System had no further performance obligations and (3) our accounting for certain revenue transactions in our T-System segment for the three months ended March 31, 2018.
These corrections resulted in a decrease in the Adjustment for cumulative effect of adoption of ASC Topic 606 to Retained earnings in the Condensed Consolidated Statement of Equity for the three months ended March 31, 2018 of $2.4 million from the $4.3 million (net of tax), as reported, to $1.9 million (net of tax), as corrected.
These corrections also resulted in the following changes in our Condensed Consolidated Statement of Operations for the three months ended March 31, 2018:
i.decrease of $1.5 million to Other operating revenue,
ii.decrease of $0.6 million to Depreciation and amortization,
iii.increase of $1.5 million to Income tax benefit (decreased expense) and
iv.decrease of $0.6 million to Net loss and Net loss attributable to Cannae (decreased loss)
In accordance with accounting guidance found in ASC Topic 250-10 Accounting Changes and Error Corrections (SEC Staff Accounting Bulletin Topic 1M), we assessed the materiality of the errors from quantitative and qualitative perspectives and concluded that the errors were not material, individually or in the aggregate, to any of our previously issued financial statements on Form 10-Q. Consequently, we are correcting these errors in this report and will also correct these errors prospectively in our subsequent quarterly filings on Form 10-Q.
Change in Accounting Principle
We historically accounted for our investment and proportionate share of losses in Dun & Bradstreet utilizing a three-month reporting lag due to timeliness considerations. The Company is now able to obtain financial information for Dun & Bradstreet on a more timely basis and has determined it is preferable to record our investment in Dun & Bradstreet on a current basis as opposed to the previous three-month lag.
In accordance with applicable accounting literature, a change to eliminate a previously existing reporting lag is considered a change in accounting principle. Changes in accounting principles are to be reported through retrospective application of the new principle to all prior financial statement periods presented. Accordingly, the Company's condensed consolidated financial statements for the interim periods of the current fiscal year, including the information as of and for the three months ended March 31, 2019 included herein, have been adjusted to reflect the period specific effects of eliminating the three-month reporting lag. The elimination of the three-month reporting lag did not impact total operating, investing or financing cash flows for any period presented. As we made our initial investment in Dun & Bradstreet in February 2019, such adjustments did not impact our fiscal year 2018 financial statements or opening retained earnings of our fiscal year 2019 financial statements.

8

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

The elimination of the three-month reporting lag for our equity investment in Dun & Bradstreet resulted in the adjustments as of and for the periods indicated below (in millions, except per share amounts).
 
Three Months Ended
 
March 31, 2019
 
As Previously Reported
 
As Adjusted in this Report
 
Difference
 
(in millions, except per share amounts)
Condensed Consolidated Statements of Operations
 
 
 
 
 
Income tax benefit
$
(4.8
)
 
$
(7.2
)
 
$
(2.4
)
Equity in earnings (losses) of unconsolidated affiliates
2.9

 
(21.4
)
 
(24.3
)
Net earnings (loss)
2.0

 
(19.9
)
 
(21.9
)
Net earnings (loss) attributable to Cannae Holdings
$
5.1

 
$
(16.8
)
 
$
(21.9
)
Per Share Data:
 
 
 
 
 
Basic
 
 
 
 
 
Basic earnings (loss) per share attributable to Cannae Holdings common shareholders
$
0.07

 
$
(0.23
)
 
$
(0.30
)
Diluted
 
 
 
 
 
Diluted earnings (loss) per share attributable to Cannae Holdings common shareholders
$
0.07

 
$
(0.23
)
 
$
(0.30
)
Condensed Consolidated Statements of Comprehensive Earnings
 
 
 
 
 
Net earnings (loss)
$
2.0

 
$
(19.9
)
 
$
(21.9
)
Unrealized gain relating to investments in unconsolidated affiliates
6.2

 
5.9

 
(0.3
)
Comprehensive earnings (loss) attributable to Cannae Holdings, Inc.
$
11.7

 
$
(10.5
)
 
$
(22.2
)
 
As of
 
March 31, 2019
 
As Previously Reported
 
As Adjusted in this Report
 
Difference
 
(in millions, except per share amounts)
Condensed Consolidated Balance Sheet
 
 
 
 
 
Investments in unconsolidated affiliates
$
930.8

 
$
906.3

 
$
(24.5
)
Deferred tax asset
15.8

 
18.2

 
2.4

Retained earnings
71.4

 
49.5

 
(21.9
)
Additional paid-in capital
1,148.8

 
1,148.9

 
0.1

Accumulated other comprehensive loss
(65.6
)
 
(65.9
)
 
(0.3
)


Note B — Leases
We adopted ASC Topic 842 on January 1, 2019 using a modified retrospective approach. Prior year periods continue to be reported under ASC Topic 840. See Note A for further discussion of the current period effects of adoption of ASU No. 2016-02 Leases (Topic 842).
We are party to operating lease arrangements primarily for leased real estate for restaurants and office space. Right-of-use assets and lease liabilities related to operating leases under ASC 842 are recorded at commencement when we are party to a contract which conveys the right for the Company to control an asset for a specified period of time. Substantially all of our operating lease arrangements relate to real estate for restaurants and office space. We are not a party to any material contracts considered finance leases. Right-of-use assets and lease liabilities related to operating leases are recorded as Lease assets and Lease liabilities, respectively on the Condensed Consolidated Balance Sheets as of March 31, 2019.

9

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

Our material operating leases range in term from one year to twenty years. As of March 31, 2019, the weighted-average remaining lease term of our operating leases was 8 years. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the lease term.
Our lease agreements do not contain any material buyout options, residual value guarantees or restrictive covenants.
Most of our leases include one or more options to renew, with renewal terms that can extend the lease term by varying amounts. The exercise of lease renewal options is at our sole discretion. We include options to renew, not to exceed a total lease term of twenty years, in our measurement of right-of-use assets and lease liabilities when they are considered reasonably certain of exercise. We consider a lease probable for renewal when the duration of the lease extensions are in the foreseeable future and related to assets for which will be reasonably assured of continued use.
Excluding certain immaterial classes of leases in our Restaurant Group, we do not separate lease components from nonlease components for any of our right of use assets.
Our operating lease liabilities are determined by discounting future lease payments using a discount rate which represents our best estimate of the incremental borrowing rate our subsidiaries would have to pay to borrow money to finance the asset over the underlying lease term and for an amount equal to the lease payments. Our discount rate is based on interest rates associated with comparable public company secured debt for companies similar to our operating subsidiaries and of similar duration to the underlying lease. As of March 31, 2019 the weighted-average discount rate used to determine our operating lease liabilities was 7.74%.
In our Restaurant Group, lease costs directly attributable to restaurant operations, primarily for real estate and to a lesser extent certain restaurant equipment, are included in Cost of restaurant revenue on the Condensed Consolidated Statements of Operations. Lease costs not directly attributable to cost of goods or services is included in Other operating expense on the Condensed Consolidated Statements of Operations.
Our operating lease costs for the three months ended March 31, 2019 consist of:
 
 
 
 
Three Months Ended March 31, 2019
Lease Cost
 
Classification
 
(in millions)
Operating lease cost
 
Cost of restaurant revenue
 
$
14.6

 
 
Other operating expense
 
0.1

Total operating lease cost
 
 
 
$
14.7


We do not have any material short term lease costs, variable lease costs, or sublease income.
Future undiscounted payments under operating lease arrangements accounted for under ASC Topic 842 are as follows (in millions):
2019 (remaining)
$
47.4

2020
59.9

2021
53.5

2022
42.4

2023
35.4

Thereafter
136.5

Total lease payments, undiscounted
$
375.1

Less: discount
101.5

Total operating lease liability as of March 31, 2019, at present value
$
273.6

Less: operating lease liability, current
42.7

Operating lease liability as of March 31, 2019, long term
$
230.9



10

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

Future payments under operating lease arrangements accounted for under ASC Topic 840 as of December 31, 2018 are as follows (in millions):
2019
$
62.0

2020
57.7

2021
51.3

2022
40.7

2023
34.1

Thereafter
133.2

Total future minimum operating lease payments
$
379.0


See Note I for certain information on noncash investing and financing activities related to our operating lease arrangements.
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 Condensed 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.
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 March 31, 2019 and December 31, 2018, respectively:
 
March 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed-maturity securities available for sale:
 

 
 

 
 

 
 

Corporate debt securities
$

 
$

 
$
17.5

 
$
17.5

     Total
$

 
$

 
$
17.5

 
$
17.5


 
December 31, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In millions)
Fixed-maturity securities available for sale:
 

 
 

 
 

 
 

Corporate debt securities
$

 
$

 
$
17.8

 
$
17.8

     Total
$

 
$

 
$
17.8

 
$
17.8



Our Level 3 fair value measurement for our fixed maturity securities available for sale are provided by a single third-party pricing service. Depending on security specific characteristics, either a combination of an income and net recovery approach or a contingent claims approach was utilized in determining fair value of our Level 3 fixed-maturity securities available for sale. Discount rates are the primary unobservable inputs utilized for the securities valued using a combination of an income and net recovery approach. The discount rates used are based on company-specific risk premiums, public company comparable securities,

11

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

and leveraged loan indices. The discount rates used in our determination of the fair value of our Level 3 fixed-maturity securities available for sale varies by security type and ranged from 16.3% to 17.5% as of March 31, 2019 and a weighted average of 17.5%. Based on the total fair value of our Level 3 fixed-maturity securities available for sale as of March 31, 2019, changes in the discount rate utilized will not result in a fair value significantly different or material to the Company's financial position or results of operation than the amount recorded.
The following table presents a summary of the changes in the fair values of Level 3 assets, measured on a recurring basis, for the three months ended March 31, 2019 and 2018.
 
Three months ended March 31, 2019
 
Three months ended March 31, 2018
 
Corporate debt
 
Corporate debt
 
securities
 
securities
 
 
 
 
Fair value, beginning of period
$
17.8

 
$

Transfers from Level 2

 
21.4

Impairment (1)
(0.3
)
 

Fair value, end of period
$
17.5

 
$
21.4


_____________________________________
(1) Included in Realized gains, net on the Condensed Consolidated Statements of Operations

Transfers into or out of the Level 3 fair value category occur when unobservable inputs become more or less significant to the fair value measurement or upon a change in valuation technique. For the three months ended March 31, 2018, transfers between Level 2 and Level 3 were based on changes in significance of unobservable inputs used associated with a change in the service provider and in the valuation technique used to value our corporate debt securities. The Company’s policy is to recognize transfers between levels in the fair value hierarchy at the end of the reporting period in which they occur.
All of the unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) on our Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 relate to fixed maturity securities considered Level 3 fair value measures.
Additional information regarding the fair value of our investment portfolio is included in Note D.
The carrying amounts of trade receivables and notes receivable approximate fair value due to their short-term nature. The fair value of our notes payable is included in Note F.


12

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

Note D — Investments

Available for Sale Securities
 The carrying amounts and fair values of our available for sale securities at March 31, 2019 and December 31, 2018 are as follows:
 
March 31, 2019
 
Carrying
Value
 
Cost Basis
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
(In millions)
Fixed maturity securities available for sale:
 

 
 

 
 

 
 

 
 

Corporate debt securities
$
17.5

 
$
18.7

 
$
0.8

 
$
(2.0
)
 
$
17.5

  Total
$
17.5

 
$
18.7

 
$
0.8

 
$
(2.0
)
 
$
17.5

 
December 31, 2018
 
Carrying
Value
 
Cost Basis
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
(In millions)
Fixed maturity securities available for sale:
 

 
 

 
 

 
 

 
 

Corporate debt securities
$
17.8

 
$
18.8

 
$
0.9

 
$
(1.9
)
 
$
17.8

  Total
$
17.8

 
$
18.8

 
$
0.9

 
$
(1.9
)
 
$
17.8

 
The cost basis of fixed maturity securities available for sale includes an adjustment for amortized premium or discount and other-than-temporary-impairment recognized in earnings since the date of purchase.
As of March 31, 2019 the fixed maturity securities in our investment portfolio had a maturity of greater than one year but less than five years. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
Net unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2019 and December 31, 2018 were as follows (in millions):
March 31, 2019
Less than 12 Months
 
Fair
 
Unrealized
 
Value
 
Losses
Corporate debt securities
$
15.6

 
$
(2.0
)
Total temporarily impaired securities
$
15.6

 
$
(2.0
)

December 31, 2018
Less than 12 Months
 
Fair
 
Unrealized
 
Value
 
Losses
Corporate debt securities
$
10.4

 
$
(1.9
)
Total temporarily impaired securities
$
10.4

 
$
(1.9
)


During the three months ended March 31, 2019, we incurred $0.3 million of other-than-temporary impairment charges relating to corporate debt securities which is included in Realized gains, net on the Condensed Consolidated Statements of Operations. The impairment recorded relates to a corporate debt holding which has experienced a prolonged period of declining earnings and which we are uncertain of our ability to recover our initial investment. All of the loss represents credit loss recognized in earnings and no portion of the loss was included in other comprehensive earnings. During the three months ended March 31, 2018, we incurred no other-than-temporary impairment charges relating to investment securities.

13

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

During the three months ended March 31, 2018, we sold equity securities for gross proceeds of $17.7 million, resulting in realized gains of less than $0.1 million.
As of March 31, 2019, we held $1.9 million of corporate debt securities for which an other-than-temporary impairment had been previously recognized. It is possible that future events may lead us to recognize potential future impairment losses related to our investment portfolio and that unanticipated future events may lead us to dispose of certain investment holdings and recognize the effects of any market movements in our results of operations.
Investments in Unconsolidated Affiliates
Investments in unconsolidated affiliates recorded using the equity method of accounting as of March 31, 2019 and December 31, 2018 consisted of the following (in millions):
 
Ownership at March 31, 2019
 
March 31,
2019
 
December 31,
2018
Ceridian
23.3
%
 
392.6

 
359.7

Dun & Bradstreet (defined below)
24.5
%
 
478.2

 

Other
various

 
35.5

 
37.5

Total
 

 
$
906.3

 
$
397.2



Ceridian
Based on quoted market prices, the aggregate value of our ownership of Ceridian common stock is $1.7 billion as of March 31, 2019.
Summarized financial information for Ceridian for the relevant dates and time periods included in Investments in unconsolidated affiliates and Equity in earnings (losses) of unconsolidated affiliates in our Condensed Consolidated Balance Sheets and Statements of Operations, respectively, is presented below. LifeWorks Corporation Ltd. ("LifeWorks"), a former subsidiary of Ceridian, was distributed pro-rata to Ceridian shareholders contemporaneously with Ceridian's initial public offering in April 2018. On July 27, 2018, LifeWorks was sold. The results of Ceridian for the three months ended March 31, 2018 have been adjusted to remove the effects of the discontinued operations of LifeWorks as well as to reflect Ceridian's retrospective adoption of ASC Topic 606 and certain other accounting standards.
 
March 31,
2019
 
December 31,
2018
 
(In millions)
Total current assets before customer funds
$
330.4

 
$
330.6

Customer funds
4,559.7

 
2,603.5

Goodwill and other intangible assets, net
2,129.2

 
2,114.9

Other assets
239.8

 
198.8

Total assets
$
7,259.1

 
$
5,247.8

Current liabilities before customer obligations
$
129.7

 
$
149.9

Customer obligations
4,554.0

 
2,619.7

Long-term obligations, less current portion
662.1

 
663.5

Other long-term liabilities
226.5

 
199.2

Total liabilities
5,572.3

 
3,632.3

Equity
1,686.8

 
1,615.5

Total liabilities and equity
$
7,259.1

 
$
5,247.8



14

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

 
Three months ended March 31, 2019
 
Three months ended March 31, 2018
 
(In millions)
Total revenues
$
203.7

 
$
188.8

Earnings before income taxes
16.9

 
8.0

Net earnings
11.2

 
0.6


Dun & Bradstreet
On August 8, 2018, we entered into an agreement to partner with an investment consortium (the “Consortium”) including CC Capital Partners LLC and Thomas H. Lee Partners along with other investors to acquire DNB (the "DNB Acquisition"). Contemporaneously, DNB entered into an Agreement and Plan of Merger (the "Merger Agreement") by and between DNB, Star Parent, L.P. ("Star"), a Delaware limited partnership, and Star Merger Sub, Inc. ("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of Star, pursuant to which Merger Sub would merge with and into DNB (the "Merger"), with DNB (collectively with Star and its subsidiaries, "Dun & Bradstreet") continuing as the surviving company in the Merger.
On February 8, 2019, the DNB Acquisition closed and was financed through a combination of $2.1 billion of common equity financing provided by the Consortium and Black Knight, Inc., $1.1 billion of preferred equity from preferred equity sources and $4.0 billion of debt financing from various lenders. Of our previously disclosed $900.0 million commitment to purchase common equity of Dun & Bradstreet, we retained and funded a $505.6 million investment (the "Dun & Bradstreet Investment"), representing 24.5% of the outstanding common equity of Dun & Bradstreet, and syndicated the remainder to other investors. We funded the Dun & Bradstreet Investment through a combination of cash on hand and borrowings on the Margin Loan and FNF Revolver. On the closing date, the Company recorded income of $9.1 million for syndication fees from DNB which is recorded in Other income in our Condensed Consolidated Statement of Operations for the three months ended March 31, 2019. In April 2019, we syndicated an additional $2.6 million of our Dun & Bradstreet Investment to other investors resulting in a reduction in the Company's ownership to 24.3% of the outstanding common equity of Dun & Bradstreet.
Summarized financial information for Dun & Bradstreet for the relevant dates and time periods included in Investments in unconsolidated affiliates and Equity in earnings (losses) of unconsolidated affiliates in our Condensed Consolidated Balance Sheets and Statements of Operations, respectively, is presented below.
We historically reported our equity in earnings or loss of Dun & Bradstreet on a one quarter lag. We now receive financial information from Dun & Bradstreet timely and record our equity in its losses on a real-time basis. As noted in the discussion under the heading Change in Accounting Principle in Note A, we have retrospectively applied the change to our prior period financial statements, including as of and for the three month period ended March 31, 2019 included herein. Accordingly, our net earnings for the three month period ended March 31 , 2019 include the Company’s equity in Dun & Bradstreet’s losses for the period from February 8, 2019 (the date of the DNB Acquisition) through March 31, 2019. See Note A for further information on the impact of the change in accounting principle.
 
March 31,
2019
 
(In millions)
Total current assets
$
420.7

Goodwill and other intangible assets, net
8,285.7

Other assets
454.6

Total assets
$
9,161.0

 
 
Current liabilities
$
778.0

Long-term debt
3,821.0

Other non-current liabilities
1,636.5

Total liabilities
6,235.5

Preferred equity
1,028.4

Total capital
1,897.1

Total liabilities and equity
$
9,161.0


15

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

 
Period from February 8, 2019 to March 31, 2019
 
(In millions)
Total revenues
$
174.1

Loss before income taxes
(111.6
)
Net loss
(81.1
)
Dividends attributable to preferred equity and noncontrolling interest expense
(18.3
)
Net loss attributable to Dun & Bradstreet
(99.4
)


Note E — Inventory
Inventory consists of the following:
 
March 31,
2019
 
December 31,
2018
 
(In millions)
Bakery inventory:
 
 
 
Raw materials
$
7.1

 
$
6.8

Semi-finished and finished goods
13.8

 
5.6

Packaging
2.1

 
2.4

Obsolescence reserve
(1.7
)
 
(3.0
)
Total bakery inventory
21.3

 
11.8

Other restaurant-related inventory
9.5

 
10.3

Other
0.2

 
0.2

Total inventory
$
31.0

 
$
22.3



Note F — Notes Payable
Notes payable consists of the following:
 
 
March 31,
2019
 
December 31,
2018
 
 
(In millions)
99 Term Loan
 
$
35.3

 
$
36.1

99 Revolver
 
12.0

 

99 DLOC Loan
 

 

Margin Facility