Segment Information

9 Months Ended

Sep. 30, 2022

Segment Information

Segment Information

(13)Segment Information

Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting ("ASC 280") establishes standards for reporting information about segments and requires that a public business enterprise reports financial and descriptive information about its segments. Segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our chief executive officer is identified as the CODM as defined by ASC 280. To align with the internal management of our business operations based on service offerings, our business is organized into two segments. Refer to Note 11 — Revenues for a description of our Software Solutions and Data and Analytics segments.

Separate discrete financial information is available for these two segments, and the operating results of each segment are regularly evaluated by the CODM in order to assess performance and allocate resources. We use EBITDA as the primary profitability measure for making decisions regarding ongoing operations. EBITDA is earnings before Interest expense, net, Income tax expense and Depreciation and amortization. It also excludes Equity in earnings of unconsolidated affiliates. We do not allocate Interest expense, net, Other expense, net, Income tax expense, equity-based compensation and certain other items, such as purchase accounting adjustments and acquisition-related costs to the segments, since these items are not considered in evaluating the segments’ overall operating performance.

Segment asset information is not included below because we do not use it to evaluate performance or allocate resources. Summarized financial information concerning our segments is shown in the tables below (in millions):

	Three months ended September 30, 2022
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	332.7	$	54.0	$	—		$	386.7
Expenses:
Operating expenses		153.0		37.1		30.8	(1)		220.9
Transition and integration costs		—		—		4.1	(2)		4.1
EBITDA		179.7		16.9		(34.9)			161.7
Depreciation and amortization		37.4		3.9		52.2	(3)		93.5
Operating income (loss)		142.3		13.0		(87.1)			68.2
Interest expense, net									(26.6)
Other expense, net									(5.4)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									36.2
Income tax expense									6.5
Earnings before equity in earnings of unconsolidated affiliates									29.7
Equity in earnings of unconsolidated affiliates, net of tax									0.3
Net earnings								$	30.0

	Three months ended September 30, 2021
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	319.6	$	58.4	$	—		$	378.0
Expenses:
Operating expenses		137.1		37.5		28.4	(1)		203.0
Transition and integration costs		—		—		(1.3)	(2)		(1.3)
EBITDA		182.5		20.9		(27.1)			176.3
Depreciation and amortization		32.5		3.9		57.2	(3)		93.6
Operating income (loss)		150.0		17.0		(84.3)			82.7
Interest expense, net									(21.6)
Other expense, net									(1.1)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									60.0
Income tax expense									15.3
Earnings before equity in earnings of unconsolidated affiliates									44.7
Equity in earnings of unconsolidated affiliates, net of tax									1.6
Net earnings									46.3
Net losses attributable to redeemable noncontrolling interests									7.1
Net earnings attributable to Black Knight								$	53.4

	Nine months ended September 30, 2022
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	1,002.8	$	165.6	$	—		$	1,168.4
Expenses:
Operating expenses		444.2		112.0		89.4	(1)		645.6
Transition and integration costs		—		—		19.9	(2)		19.9
EBITDA		558.6		53.6		(109.3)			502.9
Depreciation and amortization		108.4		11.7		157.4	(3)		277.5
Operating income (loss)		450.2		41.9		(266.7)			225.4
Interest expense, net									(70.3)
Other expense, net									(9.0)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									146.1
Income tax expense									17.0
Earnings before equity in earnings of unconsolidated affiliates									129.1
Equity in earnings of unconsolidated affiliates, net of tax									303.3
Net earnings									432.4
Net losses attributable to redeemable noncontrolling interests									2.5
Net earnings attributable to Black Knight								$	434.9

	Nine months ended September 30, 2021
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	920.8	$	168.2	$	—		$	1,089.0
Expenses:
Operating expenses		392.6		106.8		86.8	(1)		586.2
Transition and integration costs		—		—		10.9	(2)		10.9
EBITDA		528.2		61.4		(97.7)			491.9
Depreciation and amortization		96.9		11.4		163.5	(3)		271.8
Operating income (loss)		431.3		50.0		(261.2)			220.1
Interest expense, net									(62.8)
Other expense, net									(5.3)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									152.0
Income tax expense									31.0
Earnings before equity in earnings of unconsolidated affiliates									121.0
Equity in earnings of unconsolidated affiliates, net of tax									3.0
Net earnings									124.0
Net losses attributable to redeemable noncontrolling interests									23.2
Net earnings attributable to Black Knight								$	147.2

(1) Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $13.6 million and $9.8 million for the three months ended September 30, 2022 and 2021, respectively, and $37.8 million and $33.5 million for the nine months ended September 30, 2022 and 2021, respectively.

(2) Transition and integration costs primarily consists of costs related to the ICE Transaction and costs associated with acquisitions.

(3) Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.