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):
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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:
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Securities registered pursuant to Section 12(b) of the Act:
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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 2.02. | Results of Operations and Financial Condition | |||||||
On November 9, 2020, Cannae Holdings, Inc. (the "Company") issued a press release announcing its financial results for the third quarter of 2020. A copy of the press release is furnished as Exhibit 99.1 to this current report and is incorporated by reference herein. The Company also issued a letter to its stockholders announcing its financial results for the third quarter ended September 30, 2020 (the “Stockholder Letter”). A copy of the Stockholder Letter is furnished as Exhibit 99.2 to this current report and is incorporated by reference herein. The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
| Item 9.01. | Financial Statements and Exhibits | |||||||
(d) Exhibits
| Exhibit | Description | |||||||||||||
| 99.1 | ||||||||||||||
| 99.2 | ||||||||||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Cannae Holdings, Inc. | |||||||||||||||||
| Date: | November 9, 2020 | By: | /s/ Bryan D. Coy | ||||||||||||||
| Name: | Bryan D. Coy | ||||||||||||||||
| Title: | Chief Financial Officer | ||||||||||||||||
Exhibit 99.1
Cannae Holdings, Inc. Announces Third Quarter 2020 Financial Results
Las Vegas, November 9, 2020 -- Cannae Holdings, Inc. (NYSE:CNNE) (“Cannae” or the “Company”) has released its third quarter 2020 financial results by posting them to its website. Please visit the Cannae investor relations website at investor.cannaeholdings.com to view the third quarter 2020 financial results, which are included in its Letter to Shareholders.
About Cannae Holdings, Inc.
Cannae Holdings, Inc. (NYSE: CNNE) is engaged in actively managing and operating a group of companies and investments, 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. Cannae was founded and is led by investor William P. Foley, II. Foley is responsible for the creation and growth of over $100 Billion in publicly traded companies including Fidelity National Information Services (“FIS”), Fidelity National Financial (“FNF”), and Black Knight, Inc. (“BKI”). Cannae’s current principal holdings include Dun & Bradstreet Holdings, Inc. (“DNB”), which recently completed a successful business transformation and IPO. Cannae holds an approximately 18% interest in Dun & Bradstreet or ~76 million shares. Cannae’s second principal holding is Ceridian (“CDAY”), which Foley transformed from a legacy payroll bureau into a leading cloud based provider of human capital management software. Cannae owns 11% of Ceridian representing approximately 16.1 million shares.
Contact:
Jamie Lillis, Managing Director, Solebury Trout, 203-428-3223, jlillis@soleburytrout.com
Shannon Devine, VP, Solebury Trout, 203-428-3228, sdevine@soleburytrout.com
Source: Cannae Holdings, Inc.
Q3 2020 Quarterly Update
Quarterly Highlights On July 6, 2020, Dun & Bradstreet Holdings, Inc. (“D&B”), closed its initial public offering of 90,047,612 shares of common stock ("IPO"), WILLIAM P. FOLEY, II which includes the full exercise of the overallotment option. D&B’s Chairman shares of common stock began trading on the New York Stock Exchange under the ticker symbol “DNB” on July 1, 2020. To Our Valued Cannae participated in a $400 million private placement investment in D&B at the time of the IPO with Black Knight, Inc. (“Black Knight”) and CC Capital Partners, LLC. Cannae’s Shareholders, investment was $200 million and Cannae's total investment in D&B is $726.1 million, representing 76.6 million D&B common I hope that you and your families remain safe and shares valued at $1.98 billion on October 31, 2020. well. Although the climate in which we all live and operate remains uncertain, I am pleased to report that On July 29, 2020 Cannae and Senator Investment Group, LP issued an open letter to fellow CoreLogic shareholders and announced our businesses continue to perform well. Our focus that Cannae and Senator have initiated the process to call a special on investing in profitable and growing technology meeting of CoreLogic shareholders, scheduled for November 17, enabled businesses has allowed us to not only rapidly 2020, to elect nine independent directors to the CoreLogic adjust to the changing world, but also has further Board of Directors. highlighted the embedded utility of these investments. Demand has increased for the products and services On July 31, 2020, Cannae entered into a forward purchase of Cannae’s portfolio companies; and we have also agreement with Foley Trasimene Acquisition Corp. II (“BFT”) as an anchor investor and a founding member of the Sponsor Group. seen an acceleration in the pace of opportunities and Cannae is committed to invest $150.0 million, contingent upon the investments for these businesses. Our businesses in closing of an initial business combination by BFT, and has a 15% some ways all benefit from major macroeconomic economic interest in the BFT founder shares prior to the initial forces driving our economy, including: technology public offering of units on the New York Stock Exchange under enabled products, increasing business demand for the symbol “BFT.U.” data and analytics, flexible/remote workforces, the digitization of the residential mortgage lifecycle, and On September 15, 2020, Cannae announced Black Knight completed its acquisition of Optimal Blue. Cannae has a 20% an aging population. Furthermore, we have seen an ownership interest in the new post-acquisition entity. increase of new investment opportunities of businesses that are growing, profitable, and well positioned in their On October 2, 2020, American Blue Ribbon Holdings LLC emerged respective industries. As a result, we are very excited from Chapter 11 bankruptcy, upon conclusion of its restructuring with and enthusiastic about the prospects for Cannae, both now two separate entities, 21 company-owned and 118 franchised related to our existing portfolio and new opportunities. Village Inn restaurants, and 14 Bakers Square restaurants. SELECT PORTFOLIO UPDATES Total book value of portfolio company investments was $3.3 billion, or $35.55 per share, as of September 30, 2020, compared to total book value of $1.5 billion, or $18.72 per share, at December 31, 2019. Three Months Ended, September 30 2020 2019 Revenue $ 442.1M $ 408.2M Net Loss $ (17.0M) $ (88.8M) Adjusted EBITDA $ 197.0M $ 155.0M CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 1
Cannae's investment in D&B continues to excel. In the third quarter, D&B’s management team produced results exceeding analysts’ estimates of top line, profitability, and earnings per Our investment in AmeriLife continues to look promising as share, and accomplished an additional $5 million of annual COVID specifically and aging demographic patterns more cost savings, bringing the program-to-date total to $225 broadly, continue to drive demand for retirement services. million. Management has continued to see strong demand AmeriLife has exceeded its internal growth and profitability for D&B’s solution sets, driving increases in retention rates targets and continued to actively acquire smaller firms and multi-year contracts. We previously discussed that to expand its sales footprint and capture synergies from international partners were a focus and were pleased that industry consolidation. D&B announced it signed a purchase agreement to acquire long-time partner Bisnode, which will significantly expand FTAC and Trebia their presence in several key European regions. The team On May 7 and June 5 of 2020, Cannae invested in two Special continues to develop and launch new solutions like D&B Purpose Acquisition Companies ("SPACs") as a member of Connect, which utilizes D&B's global dataset and proprietary the founding sponsor group, Foley Trasimene Acquisition Corp artificial intelligence powered matching algorithms. (“WPF”) and Trebia Acquisition Corp (“TREB”), putting upfront investments of $4.5 million and $1.9 million, respectively for founders shares and private placement warrants, and entered into forward purchase agreements of $150 million and $75 Ceridian's value proposition and the flexibility of cloud-based million, respectively. Management has been fully engaged in solutions is more relevant than ever in the COVID environment. screening potential targets for these investment vehicles, as well This is evidenced by the growth of Ceridian’s Dayforce products, as for BFT, which was completed in the third quarter. Together which ended the quarter with another double-digit increase in with other PIPE investors, these SPACs can target acquisitions customers live on the platform. That customer growth translated of size ranging from $1.5 billion to $8.0 billion. to a nearly 10% rise in Dayforce revenue, despite pressures on float revenue from 225 basis point reductions in the Federal Reserve discount rates in the last year. Furthermore, CDAY is starting to see customers that delayed decisions earlier in the year moving forward, creating future Dayforce growth. Cannae Our prior investment in healthcare services technology owns 16.1 million shares of Ceridian (CDAY) that have a market was rebranded as CorroHealth at the third quarter close. value of $1.4 billion as of October 31, 2020. CorroHealth includes T-System, TrustHCS, Visionary RCM, and RevCycle, and brings together four thousand employees. While the company experienced some slowdown related to COVID, bookings are rebounding and the company is beginning to see the benefits of scale associated with the larger platform. We look forward to the growth in this unified brand. Special Purpose Acquisition Company (SPAC) Overview (In thousands) Cannae Holdings, Inc. Units Issued Forward Economic Private Effective Including Over Unit Purchase Interest in Placement Size of SPAC Ticker Date Allotment Proceeds Commitment Sponsors Warrants Target Range Trebia TREB 6/16/2020 51,750 $517,500 $75,000 15% 1.9M $1.5B - $2.5B FTAC I WPF 5/26/2020 103,500 $1,035,000 $150,000 20% 4.5M $3.5 - $8.0B FTAC II BFT 8/18/2020 146,703 $1,467,033 $150,000 15% 4.7M 6.5B - $11.0B CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 2
RECENT INVESTMENTS Foley Trasimene Acquisition Corp II (“BFT”) On August 21, 2020, Cannae made a $150M forward purchase commitment to a third SPAC, Foley Trasimene Acquisition Corp II (“BFT”). With our investment, BFT has total capital of $1.6B, Period from which it intends to use to pursue a target of between $6.5B and Three Months Ended, Sept. 15 to September 30 Sept. 30 $11B in enterprise value. We believe this investment, as well as 2020 2019 2020 our other SPAC investments, represent very attractive assets for our shareholders as not only does Cannae participate in what Revenue $ 37.2M $ 28.6M $ 6.7M we believe will be a very attractive underlying investment, but Net (loss) income $ (4.3M) $ (0.3M) $ (25.1M) also enjoys the benefit of a portion of the founder shares given its early commitment to the vehicle. In the case of the BFT, Adjusted EBITDA $ 16.3M $ 8.8M $ 3.6M Cannae owns ~15% of the sponsor promote. Note: Cannae made its investment in Optimal Blue on September 15, 2020. Financial information for the three months ended September 30, 2020 PIPELINE and 2019 are presented for illustrative purposes. We continue to see a very attractive environment for new investments and our team has reviewed a large number On September 15, 2020, we successfully completed an of investments over the quarter across a wide range of approximately $289M minority investment in Optimal Blue industries. The team has been very focused on evaluating new alongside our partners at Black Knight and THL. Optimal Blue’s opportunities for all three SPACs Cannae made commitments industry-leading product pricing engines touch approximately to over the summer. We are in extended discussions with 35% of all mortgages. Optimal Blue is a critical utility sitting in multiple targets and expect to be in a position to announce a the center of mortgage originators, mortgage investors, and deal early next year. mortgage servicers, and provides mission critical pricing data required to close a loan. We believe Optimal Blue’s products We thank you for your time and your continued support. will continue to benefit from strong underlying trending in the mortgage market, including the digitization of the mortgages, further diversification of loan originators, and low interest rates driving large volumes. Furthermore, this investment will benefit from the leading management and oversight of its majority WILLIAM P. FOLEY, II owner, Black Knight. We believe our investment in Optimal Blue Chairman represents an attractive opportunity for our shareholders. CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 3
Condensed Consolidated Statements of Operations (In millions) (Unaudited) Three Months Ended, September 30 2020 2019 Restaurant revenue $ 129.4 $ 247.7 Other operating revenue 10.3 9.3 Total operating revenue 139.7 257.0 Cost of restaurant revenue 121.7 220.1 Personnel costs 16.7 22.9 Depreciation and amortization 6.5 9.5 Other operating expenses 23.2 26.0 Total operating expenses 168.1 278.5 Operating loss $ (28.4) $ (21.5) Interest, investment and other income 4.7 1.3 Interest expense (1.6) (5.2) Recognized gains and losses, net 189.6 92.9 Total other income 192.7 89.0 Earnings before tax $ 164.3 $ 67.5 Income tax expense 35.1 15.1 Losses from equity investees (1.2) (8.3) Losses from discontinued operations, net of tax — (2.5) Less: losses attributable to noncontrolling interests (3.9) (4.6) Net earnings attributable to Cannae common shareholders $ 131.9 $ 46.2 Per share amounts: EPS from continuing operations - basic $ 1.44 $ 0.68 EPS from discontinued operations - basic — (0.03) EPS attributable to Cannae common shareholders - basic $ 1.44 $ 0.65 EPS from continuing operations - diluted $ 1.44 $ 0.68 EPS from discontinued operations - diluted — (0.04) EPS attributable to Cannae common shareholders - diluted $ 1.44 $ 0.64 Cannae weighted average shares - basic 91.3 71.6 Cannae weighted average shares - diluted 91.6 71.9 EBITDA reconciliation: Earnings before tax $ 164.3 $ 67.5 Interest expense (1.6) $ (5.2) Depreciation and amortization 6.5 9.5 EBITDA $ 172.4 $ 82.2 Adjusted EBITDA reconciliation: EBITDA $ 172.4 $ 82.2 Non-cash (gains) and asset impairment charges, net (186.5) 4.6 Adjusted EBITDA $ (14.1) $ 86.8 CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 4
Condensed Consolidated Statements of Operations (In millions) (Unaudited) Nine Months Ended, September 30 2020 2019 Restaurant revenue $ 398.7 $ 772.0 Other operating revenue 16.6 19.5 Total operating revenue 415.3 791.5 Cost of restaurant revenue 375.6 678.7 Personnel costs 69.2 62.1 Depreciation and amortization 22.2 29.8 Other operating expenses 68.0 74.9 Goodwill impairment 7.7 — Total operating expenses 542.7 845.5 Operating loss $ (127.4) $ (54.0) Interest, investment and other income 15.2 13.7 Interest expense (6.4) (14.4) Recognized gains and losses, net 1,682.8 169.6 Total other income 1,691.6 168.9 Earnings before tax $ 1,564.2 $ 114.9 Income tax expense 335.6 16.2 Earnings (loss) from equity investees 3.6 (50.8) Loss from discontinued operations, net of tax — (7.3) Less: losses attributable to noncontrolling interests (22.7) (12.2) Net earnings attributable to Cannae common shareholders $ 1,254.9 $ 52.8 Per share amounts: EPS from continuing operations - basic $ 14.97 $ 0.84 EPS from discontinued operations - basic $ — $ (0.10) EPS attributable to Cannae common shareholders - basic $ 14.97 $ 0.74 EPS from continuing operations - diluted $ 14.94 $ 0.83 EPS from discontinued operations - diluted $ — $ (0.10) EPS attributable to Cannae common shareholders - diluted $ 14.94 $ 0.73 Cannae weighted average shares - basic 83.8 71.6 Cannae weighted average shares - diluted 84.0 71.9 EBITDA reconciliation: Earnings before tax $ 1,564.2 $ 114.9 Interest expense (6.4) $ (14.4) Depreciation and amortization 22.2 29.8 EBITDA $ 1,592.8 $ 159.1 Adjusted EBITDA reconciliation: EBITDA $ 1,592.8 $ 159.1 Non-cash (gains) and asset impairment charges, net (1,262.2) 12.4 Adjusted EBITDA $ 330.6 $ 171.5 CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 5
Condensed Consolidated Balance Sheets (In millions) Sept 30, 2020 Dec 31, 2019 (Unaudited) (Unaudited) Current assets: Cash and cash equivalents $ 405.9 $ 533.7 Other current assets 87.2 97.2 Total current assets $ 493.1 $ 630.9 Equity securities, at fair value 1,516.6 — Ceridian equity investment, at book value — 309.5 D&B equity method investment 668.5 385.9 Other equity method investments 744.6 141.1 Lease assets 131.8 192.9 Property and equipment, net 127.2 162.6 Software & intangible assets 37.4 63.1 Goodwill 53.5 66.1 Other non-current assets 95.9 140.1 Total assets $ 3,868.6 $ 2,092.2 Current liabilities: A/P & other current liabilities $ 125.8 $ 191.7 Notes payable, current 33.2 7.0 Total current liabilities $ 159.0 $ 198.7 Notes payable, non-current 37.1 120.1 Deferred tax liability 231.1 — Lease liabilities 123.3 199.7 Other non-current liabilities 46.1 43.9 Total liabilities $ 596.6 $ 562.4 Additional paid in capital 1,871.7 1,396.7 Retained earnings 1,398.5 143.6 Treasury stock (20.3) (5.9) Accumulated other comprehensive earnings (loss) 10.1 (45.9) Noncontrolling interests 12.0 41.3 Total equity $ 3,272.0 $ 1,529.8 Total liabilities and equity $ 3,868.6 $ 2,092.2 CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 6
Book Value Summary (In millions, excpet per share amounts) Sept 30, 2020 Dec 31, 2019 (Unaudited) (Unaudited) Ceridian $ 1,096.3 $ 306.1 Dun & Bradstreet 680.6 415.3 Optimal Blue 285.3 — Senator Focused Strategies 243.7 91.7 CoreLogic 147.2 — AmeriLife 118.0 — 99 Restaurants 64.6 65.3 CorroHealth (f/k/a Coding Solutions) 66.6 66.7 Holding company cash and short-term investments 350.8 465.2 Other investments and holding company liabilities, net 206.9 153.2 Holding company debt — (75.0) Cannae Book Value $ 3,260.0 $ 1,488.5 Outstanding Cannae shares 91.7 79.5 Cannae Book Value per Share $ 35.55 $ 18.72 Cost of Invested Capital The following is the cost of invested capital for the Company's current portfolio used in determining Sept 30, 2020 management fees payable to our external manager, Trasimene Capital Management, LLC (in millions). (Unaudited) Dun & Bradstreet $ 726.1 Optimal Blue 289.0 Senator Focused Strategies 179.5 CoreLogic 112.5 AmeriLife 121.3 99 Restaurants 100.0 CorroHealth (f/k/a Coding Solutions) 60.2 Other 138.4 Total cost of invested capital $ 1,727.0 CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 7
Use of Non-GAAP Financial Information course of D&B’s business (such as gains and losses on Generally Accepted Accounting Principles (GAAP) is the sales of businesses, impairment charges, effect of significant term used to refer to the standard framework of guidelines changes in tax laws and material tax and legal settlements). for financial accounting. GAAP includes the standards, We present D&B’s adjusted EBITDA because D&B believes conventions, and rules accountants follow in recording and that these supplemental non-GAAP financial measure provides summarizing transactions and in the preparation of financial management and other users with additional meaningful statements. In addition to reporting financial results in financial information that should be considered when accordance with GAAP, the Company has provided non- assessing D&B’s ongoing performance. D&B’s management GAAP financial measures for certain investments which we regularly uses its supplemental non-GAAP financial measures believe provides useful information to investors and ratings internally to understand, manage, and evaluate the business agencies regarding our affiliates’ results, operating trends and and make operating decisions. These non-GAAP measures are performance between periods. among the factors D&B management uses in planning for and We define our consolidated Adjusted EBITDA as net income forecasting future periods. (loss) before interest, taxes, depreciation, and amortization, as D&B's adjusted EBITDA is defined as net income or loss adjusted to exclude non-cash gains and impairment charges. excluding the following items: (i) dividends allocated to Any non-GAAP measures have important limitations as analyt- preferred stockholders; (ii) interest expense and income; (iii) ical tools and should be considered in context with the GAAP other expenses or income; (iv) income tax benefit or provision; financial presentation and should be viewed in addition to and (v) equity in net income of affiliates; (vi) net income attributable not be considered in isolation or as a substitute for analysis of to noncontrolling interests; (vii) depreciation and amortization; results reported in accordance with GAAP. Further, our non- (viii) revenue and expense adjustments to include results for the GAAP measures may be calculated differently from similarly ti- period from January 8 to February 7, 2019, for the Predecessor tled measures of other companies in their respective industries. related to the purchase accounting lag adjustment; (ix) Reconciliations of these non-GAAP measures to related GAAP deferred revenue purchase accounting adjustment; (x) revenue measures are provided below. related to the divested and shut-down businesses (if any); (xi) other incremental or reduced expenses from the application of Dun & Bradstreet purchase accounting (e.g. commission asset amortization); (xii) equity-based compensation; (xiii) restructuring charges; (xiv) D&B’s non-GAAP measures include adjusted earnings before merger and acquisition related operating costs; (xv) operating interest, taxes, depreciation, and amortization (adjusted costs related to the divested and shut-down businesses (if EBITDA). Adjusted results are non-GAAP measures that any); (xvi) transition costs primarily consisting of non-recurring eliminate the impact due to purchase accounting application incentive expenses associated with our synergy program; (xvii) and divestitures, restructuring charges, equity based legal reserve and costs associated with significant legal and compensation, acquisition and divestiture-related costs regulatory matters; and (xviii) asset impairment. D&B excludes (such as costs for bankers, legal fees, due diligence, retention amortization of recognized intangible assets resulting from payments, and contingent consideration adjustments), and the application of purchase accounting because it is non-cash other non-core gains and charges that are not in the normal CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 8
and not indicative of its ongoing and underlying operating Optimal Blue performance. Recognized intangible assets arise from Optimal Blue's includes Adjusted EBITDA, as a non-GAAP acquisitions, or primarily D&B's accounting for its privatization financial measure. Adjusted EBITDA is used by management in 2019. D&B believes that recognized intangible assets by to assess performance of Optimal Blue. Adjusted EBITDA is their nature are fundamentally different from other depreciating defined as net income before interest, taxes, depreciation, and assets that are replaced on a predictable operating cycle. amortization, as adjusted to exclude, non-recurring transac- Unlike other depreciating assets, such as developed and tion and integration costs related to the acquisition of Optimal purchased software licenses or property and equipment, Blue, equity-based compensation expense, and management there is no replacement cost once these recognized intangible consulting fees paid by Optimal Blue to certain of its previous assets expire and the assets are not replaced. Additionally, equity holders. Management believes that Adjusted EBITDA is D&B's costs to operate, maintain, and extend the life of helpful in highlighting the performance trends of Optimal Blue acquired intangible assets and purchased intellectual property because it excludes non-cash costs and the results of decisions are reflected in its operating costs as personnel, data fee, that are outside the normal course of Optimal Blue's ongoing facilities, overhead, and similar items. Management believes it business operations. is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of recognized intangible assets will recur in future periods until such assets have been fully amortized. CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 9
Cannae accounts for its investment in D&B using the equity method of accounting; therefore, its results do not consolidate into the Company’s. As prescribed by relevant accounting standards, the Company recognizes its proportionate share of D&B's net earnings or loss in earnings (loss) from equity investees in our consolidated results of operations. See the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for further information on the Company’s accounting for its investments in D&B. Further information on Dun & Bradstreet's (NYSE: DNB) financial results can be found in its filings with the SEC and its investor rela- tions website at http://investor.dnb.com. D&B Adjusted EBITDA Reconciliation (In millions) (Unaudited) Three Months Ended, September 30 2020 2019 Net loss attributable to D&B $ (17.0) $ (88.8) Interest expense, net 60.6 85.1 Income tax benefit (9.3) (24.0) Depreciation and amortization 134.1 123.3 EBITDA 168.4 95.6 Dividends allocated to preferred stockholders — 32.1 Other (income) expense, net 9.5 (6.3) Equity in net income of affiliates (0.7) (0.5) Net income attributable to non-controlling interest 2.1 1.4 Equity-based compensation 9.7 3.6 Merger and acquisition costs 2.2 5.9 Restructuring and transition costs 10.0 28.5 Nonrecurring charges including asset impairments and legal contingencies 0.3 — Other reduced expenses due to purchase accounting (4.5) (5.3) Adjusted EBITDA $ 197.0 $ 155.0 CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 10
Cannae accounts for its investment in Optimal Blue using the equity method of accounting; therefore, its results do not consolidate into the Company’s. As prescribed by relevant accounting standards, the Company recognizes its proportionate share of Optimal Blue's net earnings or loss in earnings (loss) from equity investees in our consolidated results of operations. We acquired our initial interest in Optimal Blue on September 15, 2020. Accordingly, our earnings (loss) from equity investees for the three months ended September 30, 2020 includes our ratable share of Optimal Blue's net loss for the period from September 15, 2020 to September 30, 2020. Financial information for the three months ended September 30, 2020 and 2019 represents the historical information of Optimal Blue, LLC and Compass Analytics, LLC, the operating businesses which now make up the entity in which we are invested, and is presented for illustrative purposes. See the Company’s Quarterly Report on Form 10-Q for further information on the Company’s accounting for its investment in Optimal Blue. Optimal Blue Adjusted EBITDA Reconciliation (In millions) (Unaudited) Period from September 15 to Three Months Ended September 30 September 30 2020 2019 2020 Net loss $ (4.3) $ (0.3) $ (25.1) Interest expense 5.1 3.7 1.4 Income tax expense 2.3 0.4 3.4 Depreciation and amortization 10.1 4.4 5.6 EBITDA 13.2 8.2 (14.7) Transaction and integration costs — — 18.3 Equity-based compensation 3.0 0.5 — Management fees 0.1 0.1 — Adjusted EBITDA $ 16.3 $ 8.8 $ 3.6 CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 11
About Cannae Holdings, Inc. risks and uncertainties which forward-looking statements Cannae Holdings, Inc. (NYSE: CNNE) is engaged in are subject to include, but are not limited to: changes in actively managing and operating a group of companies and general economic, business and political conditions, changes investments, as well as making additional majority and minority in the financial markets, and changes in the conditions equity portfolio investments in businesses, in order to achieve resulting from the outbreak of a pandemic, such as the novel superior financial performance and maximize the value of these COVID-19 (“COVID-19”); the overall impact of the outbreak assets. Cannae was founded and is led by investor William of COVID-19 and measures to curb its spread, including the P. Foley, II. Foley is responsible for the creation and growth effect of governmental or voluntary mitigation measures of over $100 Billion in publicly traded companies including such as business shutdowns, social distancing, and stay- Fidelity National Information Services (“FIS”), Fidelity National at-home orders; our potential inability to find suitable Financial (“FNF”), and Black Knight, Inc. (“BKI”). Cannae’s acquisition candidates, acquisitions in lines of business current principal holdings include Dun & Bradstreet Holdings, that will not necessarily be limited to our traditional areas of Inc. (“DNB”), which recently completed a successful business focus, or difficulties in integrating acquisitions; significant transformation and IPO. Cannae holds an approximately 18% competition that our operating subsidiaries face; compliance interest in Dun & Bradstreet or ~76 million shares. Cannae’s with extensive government regulation of our operating second principal holding is Ceridian (“CDAY”), which Foley subsidiaries; risks associated with our split-off from Fidelity transformed from a legacy payroll bureau into a leading cloud National Financial, Inc., including limitations on our strategic based provider of human capital management software. and operating flexibility related to the tax-free nature of the Cannae owns 11% of Ceridian representing approximately 16.1 split-off and the Investment Company Act of 1940; risks and million shares. uncertainties related to the success of our externalization; the ultimate outcome of any possible transaction between Forward-Looking Statements and Risk Factors us and CoreLogic; uncertainties as to whether CoreLogic will cooperate with us regarding a proposed acquisition; This document contains forward-looking statements that the ultimate result of the proxy contest initiated by Senator involve a number of risks and uncertainties. Statements that and Cannae for election of directors to CoreLogic’s board are not historical facts, including statements regarding our of directors; and our ability to consummate a proposed expectations, hopes, intentions, or strategies regarding the acquisition of CoreLogic. future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as This document should be read in conjunction with the assumptions made by, and information currently available risks detailed in the “Statement Regarding Forward-Looking to, management. Because such statements are based on Information,” “Risk Factors” and other sections of the Company’s expectations as to future financial and operating results Form 10-Q,10-K and other filings with the Securities and and are not statements of fact, actual results may differ Exchange Commission. materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The CANNAE HOLDINGS Q3 2020 QUARTERLY UPDATE 12
Corporate Information MANAGEMENT TEAM BOARD OF DIRECTORS TRANSFER AGENT William P. Foley, II William P. Foley, II Continental Stock Transfer & Trust Company Chairman Chairman 17 Battery Place, 8th Floor Cannae Holdings, Inc. New York, NY 10004 Richard N. Massey 212-509-4000 Chief Executive Officer Hugh R. Harris Retired Chief Executive Officer Brent B. Bickett Lender Processing Services, Inc. PUBLICATIONS President C. Malcolm Holland The Company’s Annual Report on Form 10-K and Bryan D. Coy Chairman & Chief Executive Officer quarterly reports on Form 10-Q are available on the Chief Financial Officer Veritex Holdings, Inc. Investor Relations section of the Company’s website at cannaeholdings.com. Michael L. Gravelle Mark D. Linehan EVP, General Counsel & Corporate Secretary President & Chief Executive Officer A Notice of Annual Meeting of Shareholders and David W. Ducommun Wynmark Company Proxy Statement are furnished to shareholders in advance of the Annual Meeting. EVP, Corporate Finance Frank R. Martire Executive Chairman COMMON SHARE LISTING NCR Corporation INVESTOR RELATIONS Our common stock is listed on the New York Stock Richard N. Massey Solebury Trout Exchange under the symbol CNNE. Chief Executive Officer Jamie Lillis, jlillis@soleburytrout.com Cannae Holdings, Inc. Shannon Devine, sdevine@soleburytrout.com Partner INDEPENDENT AUDITORS Westrock Capital, LLC Cannae Holdings, Inc. 1701 Village Center Circle Deloitte & Touche LLP Erika Meinhardt Las Vegas, NV 89134 3883 Howard Hughes Parkway, Suite 400 Executive Vice President (702) 323-7333 Las Vegas, NV 89169 Fidelity National Financial, Inc. cannaeholdings.com James B. Stallings, Jr. Managing Partner PS27 Ventures, LLC Frank P. Willey Partner Hennelly & Grossfeld LLP
1701 Village Center Circle Las Vegas, NV 89134 (833) 856-8534 Toll Free (702) 323-7330 Direct info@cannaeholdings.com cannaeholdings.com