þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-4798491 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
601 Riverside Avenue, Jacksonville, Florida | 32204 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Page | |
Item 1. | Condensed Consolidated Financial Statements (Unaudited) |
June 30, 2016 | December 31, 2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 28.2 | $ | 186.0 | |||
Trade receivables, net | 144.3 | 134.9 | |||||
Prepaid expenses and other current assets | 42.0 | 28.2 | |||||
Receivables from related parties | 9.8 | 7.6 | |||||
Total current assets | 224.3 | 356.7 | |||||
Property and equipment, net | 166.4 | 152.0 | |||||
Computer software, net | 471.9 | 466.5 | |||||
Other intangible assets, net | 345.5 | 330.2 | |||||
Goodwill | 2,301.4 | 2,223.9 | |||||
Other non-current assets | 194.3 | 174.4 | |||||
Total assets | $ | 3,703.8 | $ | 3,703.7 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable and other accrued liabilities | $ | 58.8 | $ | 42.1 | |||
Accrued compensation and benefits | 44.9 | 52.2 | |||||
Current portion of long-term debt | 43.5 | 43.5 | |||||
Deferred revenues | 38.2 | 40.4 | |||||
Total current liabilities | 185.4 | 178.2 | |||||
Deferred revenues | 63.2 | 56.2 | |||||
Deferred income taxes | 6.6 | 4.7 | |||||
Long-term debt, net of current portion | 1,577.3 | 1,618.0 | |||||
Other non-current liabilities | 5.7 | 1.6 | |||||
Total liabilities | 1,838.2 | 1,858.7 | |||||
Commitments and contingencies (Note 10) | |||||||
Equity: | |||||||
Class A common stock; $0.0001 par value; 350,000,000 shares authorized, 69,127,362 and 68,303,680 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | — | — | |||||
Class B common stock; $0.0001 par value; 200,000,000 shares authorized, 84,826,282 shares issued and outstanding as of June 30, 2016 and December 31, 2015 | — | — | |||||
Preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none | — | — | |||||
Additional paid-in capital | 804.6 | 798.9 | |||||
Retained earnings | 42.8 | 19.9 | |||||
Accumulated other comprehensive loss | (1.2 | ) | (0.1 | ) | |||
Total shareholders' equity | 846.2 | 818.7 | |||||
Noncontrolling interests | 1,019.4 | 1,026.3 | |||||
Total equity | 1,865.6 | 1,845.0 | |||||
Total liabilities and equity | $ | 3,703.8 | $ | 3,703.7 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Unaudited) | |||||||||||||||
Revenues | $ | 255.5 | $ | 232.1 | $ | 497.4 | $ | 459.3 | |||||||
Expenses: | |||||||||||||||
Operating expenses | 144.4 | 140.3 | 281.2 | 273.5 | |||||||||||
Depreciation and amortization | 49.2 | 48.8 | 97.4 | 94.7 | |||||||||||
Transition and integration costs | 1.1 | 4.7 | 1.1 | 7.3 | |||||||||||
Total expenses | 194.7 | 193.8 | 379.7 | 375.5 | |||||||||||
Operating income | 60.8 | 38.3 | 117.7 | 83.8 | |||||||||||
Other income and expense: | |||||||||||||||
Interest expense | (16.9 | ) | (25.5 | ) | (33.7 | ) | (56.3 | ) | |||||||
Other expense, net | (4.0 | ) | (4.6 | ) | (4.8 | ) | (4.6 | ) | |||||||
Total other expense, net | (20.9 | ) | (30.1 | ) | (38.5 | ) | (60.9 | ) | |||||||
Earnings from continuing operations before income taxes | 39.9 | 8.2 | 79.2 | 22.9 | |||||||||||
Income tax expense | 6.7 | 0.3 | 12.9 | 0.4 | |||||||||||
Net earnings from continuing operations | 33.2 | 7.9 | 66.3 | 22.5 | |||||||||||
Loss from discontinued operations, net of tax | — | (0.1 | ) | — | (0.2 | ) | |||||||||
Net earnings | 33.2 | 7.8 | 66.3 | 22.3 | |||||||||||
Less: Net earnings attributable to noncontrolling interests | 21.8 | 7.5 | 43.5 | 22.0 | |||||||||||
Net earnings attributable to Black Knight Financial Services, Inc. | $ | 11.4 | $ | 0.3 | $ | 22.8 | $ | 0.3 | |||||||
Other comprehensive earnings (loss): | |||||||||||||||
Unrealized holding gains (losses), net of tax | 0.7 | — | (1.3 | ) | — | ||||||||||
Reclassification adjustments for losses included in net earnings, net of tax (1) | — | — | 0.3 | — | |||||||||||
Total unrealized gains (losses) on interest rate swaps, net of tax (2) | 0.7 | — | (1.0 | ) | — | ||||||||||
Foreign currency translation adjustment | (0.1 | ) | — | (0.1 | ) | (0.1 | ) | ||||||||
Other comprehensive earnings (loss) | 0.6 | — | (1.1 | ) | (0.1 | ) | |||||||||
Comprehensive earnings attributable to noncontrolling interests | 20.0 | 7.5 | 41.7 | 22.0 | |||||||||||
Comprehensive earnings | $ | 32.0 | $ | 7.8 | $ | 63.4 | $ | 22.2 | |||||||
Three months ended June 30, 2016 | May 26, 2015 through June 30, 2015 | Six months ended June 30, 2016 | May 26, 2015 through June 30, 2015 | ||||||||||||
Earnings per share: | |||||||||||||||
Net earnings per share attributable to Black Knight Financial Services, Inc., Class A common shareholders: | |||||||||||||||
Basic | $ | 0.17 | $ | 0.01 | $ | 0.35 | $ | 0.01 | |||||||
Diluted | $ | 0.17 | $ | — | $ | 0.34 | $ | — | |||||||
Weighted average shares of Class A common stock outstanding (Note 3): | |||||||||||||||
Basic | 65.9 | 64.4 | 65.9 | 64.4 | |||||||||||
Diluted | 152.7 | 152.5 | 152.7 | 152.5 |
Class A common stock | Class B common stock | ||||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balance, December 31, 2015 | 68.3 | $ | — | 84.8 | $ | — | $ | 798.9 | $ | 19.9 | $ | (0.1 | ) | $ | 1,026.3 | $ | 1,845.0 | ||||||||||||||||
Issuance of restricted shares of Class A common stock | 0.8 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | 5.7 | — | — | — | 5.7 | ||||||||||||||||||||||||
Net earnings | — | — | — | — | — | 22.8 | — | 43.5 | 66.3 | ||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (0.1 | ) | — | (0.1 | ) | |||||||||||||||||||||||
Unrealized loss on interest rate swaps | — | — | — | — | — | — | (1.0 | ) | (1.8 | ) | (2.8 | ) | |||||||||||||||||||||
Tax distributions to members | — | — | — | — | — | 0.1 | — | (48.6 | ) | (48.5 | ) | ||||||||||||||||||||||
Balance, June 30, 2016 | 69.1 | $ | — | 84.8 | $ | — | $ | 804.6 | $ | 42.8 | $ | (1.2 | ) | $ | 1,019.4 | $ | 1,865.6 |
Six months ended June 30, | |||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 66.3 | $ | 22.3 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 97.4 | 94.7 | |||||
Amortization of debt issuance costs, bond premium and original issue discount | 1.4 | (0.4 | ) | ||||
Loss on extinguishment of debt, net | — | 4.8 | |||||
Deferred income taxes, net | 1.9 | 0.2 | |||||
Equity-based compensation | 6.1 | 9.5 | |||||
Changes in assets and liabilities, net of acquired assets and liabilities: | |||||||
Trade and other receivables, including receivables from related parties | (5.9 | ) | (24.6 | ) | |||
Prepaid expenses and other assets | (16.5 | ) | (8.5 | ) | |||
Deferred contract costs | (28.6 | ) | (28.3 | ) | |||
Deferred revenues | 3.0 | 18.2 | |||||
Trade accounts payable and other accrued liabilities, including accrued compensation and benefits | (2.7 | ) | (22.3 | ) | |||
Net cash provided by operating activities | 122.4 | 65.6 | |||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (17.4 | ) | (26.8 | ) | |||
Additions to computer software | (22.1 | ) | (27.1 | ) | |||
Business acquisitions, net of cash acquired | (150.2 | ) | — | ||||
Investment in property records database | — | (6.8 | ) | ||||
Net cash used in investing activities | (189.7 | ) | (60.7 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings, net of original issue discount | 55.0 | 1,299.0 | |||||
Debt service payments | (97.0 | ) | (1,723.9 | ) | |||
Distributions to members | (48.5 | ) | (17.3 | ) | |||
Proceeds from issuance of Class A common stock, before offering expenses | — | 479.3 | |||||
Costs directly associated with issuance of Class A common stock | — | (2.7 | ) | ||||
Debt issuance costs | — | (19.8 | ) | ||||
Senior notes call premium | — | (11.8 | ) | ||||
Net cash (used in) provided by financing activities | (90.5 | ) | 2.8 | ||||
Net (decrease) increase in cash and cash equivalents | (157.8 | ) | 7.7 | ||||
Cash and cash equivalents, beginning of period | 186.0 | 61.9 | |||||
Cash and cash equivalents, end of period | $ | 28.2 | $ | 69.6 | |||
Supplemental cash flow information: | |||||||
Interest paid | $ | (30.1 | ) | $ | (57.9 | ) | |
Income taxes (paid) refunded, net | $ | (12.2 | ) | $ | 0.2 |
(1) | Basis of Presentation |
June 30, 2016 | December 31, 2015 | ||||||
Unrestricted: | |||||||
Cash | $ | 25.9 | $ | 52.3 | |||
Cash equivalents | — | 130.1 | |||||
Total unrestricted cash and cash equivalents | 25.9 | 182.4 | |||||
Restricted cash equivalents (1) | 2.3 | 3.6 | |||||
Total cash and cash equivalents | $ | 28.2 | $ | 186.0 |
2016 (remaining) | $ | 5.1 | |
2017 | 5.0 | ||
Total | $ | 10.1 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Property and equipment | $ | 7.3 | $ | 7.2 | $ | 14.2 | $ | 14.5 | |||||||
Computer software | 18.6 | 17.5 | 36.9 | 34.4 | |||||||||||
Other intangible assets | 17.9 | 21.8 | 35.7 | 42.7 | |||||||||||
Deferred contract costs | 5.4 | 2.3 | 10.6 | 3.1 | |||||||||||
Total | $ | 49.2 | $ | 48.8 | $ | 97.4 | $ | 94.7 |
Cash paid from cash on hand | $ | 95.6 | |
Cash paid from Revolver borrowing (Note 8) | 25.0 | ||
Less: cash acquired | (5.6 | ) | |
Total consideration paid, net | $ | 115.0 |
Total purchase price consideration | $ | 115.0 | |
Accounts receivable | $ | 3.8 | |
Prepaid expenses and other current assets | 0.5 | ||
Property and equipment | 1.1 | ||
Computer software | 14.6 | ||
Other intangible assets (Note 6) | 40.5 | ||
Goodwill (Note 7) | 58.1 | ||
Total assets acquired | 118.6 | ||
Trade accounts payable and other accrued liabilities | (0.9 | ) | |
Accrued salaries and benefits | (1.3 | ) | |
Deferred revenues | (1.4 | ) | |
Total liabilities assumed | (3.6 | ) | |
Net assets acquired | $ | 115.0 |
Cash paid from Revolver borrowing (Note 8) | $ | 30.0 | |
Cash paid from cash on hand | 6.0 | ||
Less: cash acquired | (0.8 | ) | |
Total consideration paid, net | $ | 35.2 |
Total purchase price consideration | $ | 35.2 | |
Accounts receivable | $ | 0.4 | |
Prepaid expenses and other current assets | 0.2 | ||
Property and equipment | 0.1 | ||
Computer software | 5.7 | ||
Other intangible assets (Note 6) | 10.6 | ||
Goodwill (Note 7) | 19.4 | ||
Total assets acquired | 36.4 | ||
Trade accounts payable and other accrued liabilities | (0.7 | ) | |
Deferred revenues | (0.5 | ) | |
Total liabilities assumed | (1.2 | ) | |
Net assets acquired | $ | 35.2 |
Gross Carrying Value | Weighted Average Estimated Life (in Years) | ||||||||||||
eLynx | Motivity | Total | |||||||||||
Computer software | $ | 14.6 | $ | 5.7 | $ | 20.3 | 5 | ||||||
Property and equipment | 1.1 | 0.1 | 1.2 | 3 | |||||||||
Other intangible assets: | |||||||||||||
Customer relationships | 36.4 | 8.4 | 44.8 | 10 | |||||||||
Trade name | 3.9 | 1.7 | 5.6 | 10 | |||||||||
Non-compete agreements | 0.2 | 0.5 | 0.7 | 4 | |||||||||
Total Other intangible assets (Note 6) | 40.5 | 10.6 | 51.1 | ||||||||||
Total gross carrying value | $ | 56.2 | $ | 16.4 | $ | 72.6 |
Three months ended June 30, 2016 | May 26, 2015 through June 30, 2015 | Six months ended June 30, 2016 | May 26, 2015 through June 30, 2015 | ||||||||||||
Basic: | |||||||||||||||
Net earnings attributable to Black Knight | $ | 11.4 | $ | 0.3 | $ | 22.8 | $ | 0.3 | |||||||
Shares used for basic net earnings per share: | |||||||||||||||
Weighted average shares of Class A common stock outstanding | 65.9 | 64.4 | 65.9 | 64.4 | |||||||||||
Basic net earnings per share | $ | 0.17 | $ | 0.01 | $ | 0.35 | $ | 0.01 | |||||||
Diluted: | |||||||||||||||
Earnings from continuing operations before income taxes | $ | 39.9 | $ | 0.9 | $ | 79.2 | $ | 0.9 | |||||||
Income tax expense excluding the effect of noncontrolling interests | (14.0 | ) | (0.4 | ) | (28.0 | ) | (0.4 | ) | |||||||
Net earnings from continuing operations | $ | 25.9 | $ | 0.5 | $ | 51.2 | $ | 0.5 | |||||||
Shares used for diluted net earnings per share: | |||||||||||||||
Weighted average shares of Class A common stock outstanding | 65.9 | 64.4 | 65.9 | 64.4 | |||||||||||
Dilutive effect of unvested restricted shares of Class A common stock | 2.0 | 3.3 | 2.0 | 3.3 | |||||||||||
Weighted average shares of Class B common stock outstanding | 84.8 | 84.8 | 84.8 | 84.8 | |||||||||||
Weighted average shares of common stock, diluted | 152.7 | 152.5 | 152.7 | 152.5 | |||||||||||
Diluted net earnings per share | $ | 0.17 | $ | — | $ | 0.34 | $ | — |
June 30, 2016 | December 31, 2015 | ||||||||||
Shares | Ownership Percentage | Shares | Ownership Percentage | ||||||||
Class A common stock: | |||||||||||
THL and its affiliates | 39.3 | 25.5 | % | 39.3 | 25.7 | % | |||||
Restricted shares | 3.2 | 2.1 | % | 3.9 | 2.5 | % | |||||
Other, including those publicly traded | 26.6 | 17.3 | % | 25.1 | 16.4 | % | |||||
Total shares of Class A common stock | 69.1 | 44.9 | % | 68.3 | 44.6 | % | |||||
Class B common stock: | |||||||||||
FNF subsidiaries | 83.3 | 54.1 | % | 83.3 | 54.4 | % | |||||
THL and its affiliates | 1.5 | 1.0 | % | 1.5 | 1.0 | % | |||||
Total shares of Class B common stock | 84.8 | 55.1 | % | 84.8 | 55.4 | % | |||||
Total common stock outstanding | 153.9 | 100.0 | % | 153.1 | 100.0 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 17.8 | $ | 17.3 | $ | 34.2 | $ | 34.1 | |||||||
Operating expenses | 4.3 | 1.5 | 7.7 | 2.1 | |||||||||||
Management fees (1) | — | 0.9 | — | 2.4 | |||||||||||
Interest expense (2) | 1.0 | 14.6 | 2.0 | 37.6 |
(1) | Amounts are included in Transition and integration costs on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). |
(2) | Amounts include guarantee fee (see below). |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating expenses | $ | 0.4 | $ | 0.5 | $ | 0.8 | $ | 0.9 | |||||||
Management fees (1) | — | 0.5 | — | 1.3 | |||||||||||
Software and software-related purchases | 0.2 | 1.1 | 1.1 | 1.3 |
(1) | Amounts are included in Transition and integration costs on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Data and analytics services | $ | 11.5 | $ | 12.7 | $ | 21.9 | $ | 25.0 | |||||||
Servicing, origination and default technology services | 6.3 | 4.6 | 12.3 | 9.1 | |||||||||||
Total related party revenues | $ | 17.8 | $ | 17.3 | $ | 34.2 | $ | 34.1 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Data entry, indexing services and other operating expenses | $ | 2.6 | $ | 2.4 | $ | 4.9 | $ | 4.3 | |||||||
Corporate services operating expenses | 2.9 | 2.2 | 5.2 | 4.4 | |||||||||||
Technology and corporate services expense reimbursement | (0.8 | ) | (2.6 | ) | (1.6 | ) | (5.7 | ) | |||||||
Total related party expenses, net | $ | 4.7 | $ | 2.0 | $ | 8.5 | $ | 3.0 |
June 30, 2016 | December 31, 2015 | ||||||
Internally developed software | $ | 618.9 | $ | 578.1 | |||
Purchased software | 39.2 | 37.8 | |||||
Computer software | 658.1 | 615.9 | |||||
Accumulated depreciation | (186.2 | ) | (149.4 | ) | |||
Computer software, net | $ | 471.9 | $ | 466.5 |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Customer relationships | $ | 559.6 | $ | (221.3 | ) | $ | 338.3 | $ | 514.8 | $ | (186.3 | ) | $ | 328.5 | |||||||||
Other | 16.0 | (8.8 | ) | 7.2 | 9.8 | (8.1 | ) | 1.7 | |||||||||||||||
Total other intangible assets | $ | 575.6 | $ | (230.1 | ) | $ | 345.5 | $ | 524.6 | $ | (194.4 | ) | $ | 330.2 |
Technology | Data and Analytics | Total | |||||||||
Balance, December 31, 2015 | $ | 2,050.7 | $ | 173.2 | $ | 2,223.9 | |||||
Increases to goodwill related to: | |||||||||||
eLynx acquisition (Note 2) (1) | 58.1 | — | 58.1 | ||||||||
Motivity acquisition (Note 2) (1) | — | 19.4 | 19.4 | ||||||||
Balance, June 30, 2016 | $ | 2,108.8 | $ | 192.6 | $ | 2,301.4 |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Principal | Debt Issuance Costs | Premium (Discount) | Total | Principal | Debt Issuance Costs | Premium (Discount) | Total | ||||||||||||||||||||||||
Term A Loan | $ | 760.0 | $ | (8.2 | ) | $ | — | $ | 751.8 | $ | 780.0 | $ | (9.4 | ) | $ | — | $ | 770.6 | |||||||||||||
Term B Loan | 396.0 | (3.6 | ) | (0.9 | ) | 391.5 | 398.0 | (3.9 | ) | (0.9 | ) | 393.2 | |||||||||||||||||||
Revolving Credit Facility | 80.0 | (4.3 | ) | — | 75.7 | 100.0 | (4.8 | ) | — | 95.2 | |||||||||||||||||||||
Senior Notes, issued at par | 390.0 | — | 11.8 | 401.8 | 390.0 | — | 12.5 | 402.5 | |||||||||||||||||||||||
Total long-term debt | 1,626.0 | (16.1 | ) | 10.9 | 1,620.8 | 1,668.0 | (18.1 | ) | 11.6 | 1,661.5 | |||||||||||||||||||||
Less: Current portion of long-term debt | 44.0 | (0.5 | ) | — | 43.5 | 44.0 | (0.5 | ) | — | 43.5 | |||||||||||||||||||||
Long-term debt, net of current portion | $ | 1,582.0 | $ | (15.6 | ) | $ | 10.9 | $ | 1,577.3 | $ | 1,624.0 | $ | (17.6 | ) | $ | 11.6 | $ | 1,618.0 |
2016 (remaining) | $ | 22.0 | |
2017 | 64.0 | ||
2018 | 84.0 | ||
2019 | 104.0 | ||
2020 | 584.0 | ||
Thereafter | 768.0 | ||
Total | $ | 1,626.0 |
Redemption Period | Percentage | |
October 15, 2017 to October 14, 2018 | 102.875% | |
October 15, 2018 to October 14, 2019 | 101.917% | |
October 15, 2019 to October 14, 2020 | 100.958% | |
October 15, 2020 and thereafter | 100.000% |
Balance Sheet Account | June 30, 2016 | December 31, 2015 | ||||||
Other non-current liabilities | $ | 3.4 | $ | — |
Three months ended June 30, 2016 | Six months ended June 30, 2016 | ||||||||||||||
Amount of (Loss) Gain Recognized in OCE | Amount of Loss Reclassified from Accumulated OCE into Net earnings | Amount of Loss Recognized in OCE | Amount of Loss Reclassified from Accumulated OCE into Net earnings | ||||||||||||
Swap agreements | |||||||||||||||
Attributable to noncontrolling interests | $ | (2.3 | ) | $ | 0.5 | $ | (2.3 | ) | $ | 0.5 | |||||
Attributable to Black Knight Financial Services, Inc. | 0.7 | — | (1.3 | ) | 0.3 | ||||||||||
Total | $ | (1.6 | ) | $ | 0.5 | $ | (3.6 | ) | $ | 0.8 |
Shares | Weighted Averaged Grant Date Fair Value | |||||
Balance, December 31, 2015 | 3.9 | * | ||||
Granted | 0.8 | $ | 28.56 | |||
Vested | (1.5 | ) | * | |||
Balance, June 30, 2016 | 3.2 | * |
* | The BKFS LLC profits interest units that were converted into restricted shares in connection with our IPO had a weighted average grant date fair value of $2.10 per unit. The fair value of the restricted shares at the date of conversion, May 20, 2015, was $24.50 per share. The original grant date fair value of the vested restricted shares, which were originally granted as profits interests units, was $2.01 per unit. |
• | Technology - offers software and hosting solutions that support loan servicing, loan origination and settlement services. |
• | Data and Analytics - offers data and analytics solutions to the mortgage, real estate and capital markets industries. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions. |
Three months ended June 30, 2016 | |||||||||||||||
Technology | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | 213.2 | $ | 44.3 | $ | (2.0 | ) | (1) | $ | 255.5 | |||||
Expenses: | |||||||||||||||
Operating expenses | 90.3 | 37.5 | 16.6 | 144.4 | |||||||||||
Transition and integration costs | — | — | 1.1 | 1.1 | |||||||||||
EBITDA | 122.9 | 6.8 | (19.7 | ) | 110.0 | ||||||||||
Depreciation and amortization | 25.8 | 2.3 | 21.1 | (2) | 49.2 | ||||||||||
Operating income (loss) | 97.1 | 4.5 | (40.8 | ) | 60.8 | ||||||||||
Interest expense | (16.9 | ) | |||||||||||||
Other expense, net | (4.0 | ) | |||||||||||||
Earnings from continuing operations before income taxes | 39.9 | ||||||||||||||
Income tax expense | 6.7 | ||||||||||||||
Net earnings from continuing operations | $ | 33.2 |
Three months ended June 30, 2015 | |||||||||||||||
Technology | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | 191.0 | $ | 43.7 | $ | (2.6 | ) | (1) | $ | 232.1 | |||||
Expenses: | |||||||||||||||
Operating expenses | 85.6 | 37.3 | 17.4 | 140.3 | |||||||||||
Transition and integration costs | — | — | 4.7 | 4.7 | |||||||||||
EBITDA | 105.4 | 6.4 | (24.7 | ) | 87.1 | ||||||||||
Depreciation and amortization | 23.8 | 1.6 | 23.4 | (2) | 48.8 | ||||||||||
Operating income (loss) | 81.6 | 4.8 | (48.1 | ) | 38.3 | ||||||||||
Interest expense | (25.5 | ) | |||||||||||||
Other expense, net | (4.6 | ) | |||||||||||||
Earnings from continuing operations before income taxes | 8.2 | ||||||||||||||
Income tax expense | 0.3 | ||||||||||||||
Net earnings from continuing operations | $ | 7.9 |
Six months ended June 30, 2016 | |||||||||||||||
Technology | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | 415.6 | $ | 86.1 | $ | (4.3 | ) | (1) | $ | 497.4 | |||||
Expenses: | |||||||||||||||
Operating expenses | 177.3 | 72.5 | 31.4 | 281.2 | |||||||||||
Transition and integration costs | — | — | 1.1 | 1.1 | |||||||||||
EBITDA | 238.3 | 13.6 | (36.8 | ) | 215.1 | ||||||||||
Depreciation and amortization | 51.2 | 4.4 | 41.8 | (2) | 97.4 | ||||||||||
Operating income (loss) | 187.1 | 9.2 | (78.6 | ) | 117.7 | ||||||||||
Interest expense | (33.7 | ) | |||||||||||||
Other expense, net | (4.8 | ) | |||||||||||||
Earnings from continuing operations before income taxes | 79.2 | ||||||||||||||
Income tax expense | 12.9 | ||||||||||||||
Net earnings from continuing operations | $ | 66.3 | |||||||||||||
Balance sheet data: | |||||||||||||||
Total assets | $ | 3,240.8 | $ | 352.9 | $ | 110.1 | $ | 3,703.8 | |||||||
Goodwill | $ | 2,108.8 | $ | 192.6 | $ | — | $ | 2,301.4 |
Six months ended June 30, 2015 | |||||||||||||||
Technology | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | 375.7 | $ | 88.5 | $ | (4.9 | ) | (1) | $ | 459.3 | |||||
Expenses: | |||||||||||||||
Operating expenses | 169.9 | 74.3 | 29.3 | 273.5 | |||||||||||
Transition and integration costs | — | — | 7.3 | 7.3 | |||||||||||
EBITDA | 205.8 | 14.2 | (41.5 | ) | 178.5 | ||||||||||
Depreciation and amortization | 46.3 | 3.3 | 45.1 | (2) | 94.7 | ||||||||||
Operating income (loss) | 159.5 | 10.9 | (86.6 | ) | 83.8 | ||||||||||
Interest expense | (56.3 | ) | |||||||||||||
Other expense, net | (4.6 | ) | |||||||||||||
Earnings from continuing operations before income taxes | 22.9 | ||||||||||||||
Income tax expense | 0.4 | ||||||||||||||
Net earnings from continuing operations | $ | 22.5 | |||||||||||||
Balance sheet data: | |||||||||||||||
Total assets | $ | 3,163.6 | $ | 312.0 | $ | 167.5 | $ | 3,643.1 | |||||||
Goodwill | $ | 2,050.7 | $ | 173.2 | $ | — | $ | 2,223.9 |
• | Data and Analytics - offers data and analytics solutions to the mortgage, real estate and capital markets industries. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions. |
• | Increased regulation. Most U.S. mortgage market participants have become subject to increasing regulatory oversight and regulatory requirements as federal and state governments have enacted various new laws, rules and regulations. One example of such legislation is the Dodd-Frank Act, which contains broad changes for many sectors of the financial services and lending industries and established the CFPB, a new federal regulatory agency responsible for regulating consumer financial protection within the United States. It is our experience that mortgage lenders have become more focused on minimizing the risk of non-compliance with these evolving regulations and are looking toward technologies and solutions that help them comply with the increased regulatory oversight and burdens. The CFPB final rules became effective October 2015, amending Regulation Z (the Truth in Lending Act) ("TILA") and Regulation X (Real Estate Settlement Procedures Act) ("RESPA") (the “TILA-RESPA Rule”) to consolidate existing loan disclosures under TILA and RESPA for closed-end credit transactions secured by real property. The TILA-RESPA Rule requires (i) timely delivery of a loan estimate upon receipt of a consumer’s application and (ii) timely delivery of a closing disclosure prior to consummation of a transaction. The TILA-RESPA Rule also imposes certain restrictions, including the prohibition of imposing fees prior to provision of an estimate and the prohibition of providing estimates prior to a consumer’s submission of verifying documents. |
• | Lenders increasingly focused on core operations. As a result of greater regulatory scrutiny and the higher cost of doing business, we believe lenders have become more focused on their core operations and customers. We believe lenders are increasingly shifting from in-house technologies to solutions with third-party providers who can provide better technology and services more efficiently. Lenders require these vendors to provide best-in-class technology and deep domain expertise and to assist them in maintaining regulatory compliance. |
• | Growing role of technology in the U.S. mortgage industry. Banks and other lenders and servicers have become increasingly focused on technology automation and workflow management to operate more efficiently and meet their regulatory guidelines. We believe vendors must be able to support the complexity of the market, display extensive industry knowledge and possess the financial resources to make the necessary investments in technology to support lenders. |
• | Increased demand for enhanced transparency and analytic insight. As U.S. mortgage market participants work to minimize the risk in lending, servicing and capital markets, they rely on the integration of data and analytics with technologies that enhance the decision making process. These industry participants rely on large comprehensive third party databases coupled with enhanced analytics to achieve these goals. |
• | Adjusted Revenues - We define Adjusted Revenues as Revenues adjusted to include the revenues that were not recorded by Black Knight during the periods presented due to the deferred revenue purchase accounting adjustment recorded in accordance with GAAP. These adjustments are reflected in Corporate and Other. |
• | Adjusted EBITDA - We define Adjusted EBITDA as Net earnings from continuing operations, with adjustments to reflect the addition or elimination of certain income statement items including, but not limited to (i) depreciation and amortization; (ii) interest expense; (iii) income tax expense; (iv) the deferred revenue purchase accounting adjustment recorded in accordance with GAAP; (v) equity-based compensation; (vi) charges associated with significant legal and regulatory matters; (vii) member management fees paid to FNF and THL Managers, LLC; (viii) exit costs, impairments and other charges; (ix) one-time costs associated with the initial public offering; and (x) other expenses, net. These adjustments are reflected in Corporate and Other. |
• | Adjusted EBITDA Margin - Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by Adjusted Revenues. |
Consolidated Results of Operations | |||||||||||||||
The following table presents certain financial data for the periods indicated (in millions): | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 255.5 | $ | 232.1 | $ | 497.4 | $ | 459.3 | |||||||
Expenses: | |||||||||||||||
Operating expenses | 144.4 | 140.3 | 281.2 | 273.5 | |||||||||||
Depreciation and amortization | 49.2 | 48.8 | 97.4 | 94.7 | |||||||||||
Transition and integration costs | 1.1 | 4.7 | 1.1 | 7.3 | |||||||||||
Total expenses | 194.7 | 193.8 | 379.7 | 375.5 | |||||||||||
Operating income | 60.8 | 38.3 | 117.7 | 83.8 | |||||||||||
Operating margin | 23.8 | % | 16.5 | % | 23.7 | % | 18.2 | % | |||||||
Interest expense | (16.9 | ) | (25.5 | ) | (33.7 | ) | (56.3 | ) | |||||||
Other expense, net | (4.0 | ) | (4.6 | ) | (4.8 | ) | (4.6 | ) | |||||||
Earnings from continuing operations before income taxes | 39.9 | 8.2 | 79.2 | 22.9 | |||||||||||
Income tax expense | 6.7 | 0.3 | 12.9 | 0.4 | |||||||||||
Net earnings from continuing operations | 33.2 | 7.9 | 66.3 | 22.5 | |||||||||||
Loss from discontinued operations, net of tax | — | (0.1 | ) | — | (0.2 | ) | |||||||||
Net earnings | $ | 33.2 | $ | 7.8 | $ | 66.3 | $ | 22.3 | |||||||
Key Performance Metrics | |||||||||||||||
Adjusted Revenues | $ | 257.5 | $ | 234.7 | $ | 501.7 | $ | 464.3 | |||||||
Adjusted EBITDA | $ | 116.5 | $ | 102.1 | $ | 226.6 | $ | 200.3 | |||||||
Adjusted EBITDA Margin | 45.2 | % | 43.5 | % | 45.2 | % | 43.1 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 255.5 | $ | 232.1 | $ | 497.4 | $ | 459.3 | |||||||
Deferred revenue adjustment | 2.0 | 2.6 | 4.3 | 5.0 | |||||||||||
Adjusted Revenues | $ | 257.5 | $ | 234.7 | $ | 501.7 | $ | 464.3 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net earnings from continuing operations | $ | 33.2 | $ | 7.9 | $ | 66.3 | $ | 22.5 | |||||||
Depreciation and amortization | 49.2 | 48.8 | 97.4 | 94.7 | |||||||||||
Interest expense | 16.9 | 25.5 | 33.7 | 56.3 | |||||||||||
Income tax expense | 6.7 | 0.3 | 12.9 | 0.4 | |||||||||||
Other expense, net | 4.0 | 4.6 | 4.8 | 4.6 | |||||||||||
EBITDA | 110.0 | 87.1 | 215.1 | 178.5 | |||||||||||
Equity-based compensation | 3.4 | 7.7 | 6.1 | 9.5 | |||||||||||
Deferred revenue adjustment | 2.0 | 2.6 | 4.3 | 5.0 | |||||||||||
Transition and integration costs | 1.1 | 1.4 | 1.1 | 3.6 | |||||||||||
IPO costs | — | 3.3 | — | 3.7 | |||||||||||
Adjusted EBITDA | $ | 116.5 | $ | 102.1 | $ | 226.6 | $ | 200.3 | |||||||
Adjusted EBITDA Margin | 45.2 | % | 43.5 | % | 45.2 | % | 43.1 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Technology | $ | 213.2 | $ | 191.0 | $ | 415.6 | $ | 375.7 | |||||||
Data and Analytics | 44.3 | 43.7 | 86.1 | 88.5 | |||||||||||
Corporate and Other (1) | (2.0 | ) | (2.6 | ) | (4.3 | ) | (4.9 | ) | |||||||
Total | $ | 255.5 | $ | 232.1 | $ | 497.4 | $ | 459.3 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Technology | $ | 90.3 | $ | 85.6 | $ | 177.3 | $ | 169.9 | |||||||
Data and Analytics | 37.5 | 37.3 | 72.5 | 74.3 | |||||||||||
Corporate and Other | 16.6 | 17.4 | 31.4 | 29.3 | |||||||||||
Total | $ | 144.4 | $ | 140.3 | $ | 281.2 | $ | 273.5 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Technology | $ | 25.8 | $ | 23.8 | $ | 51.2 | $ | 46.3 | |||||||
Data and Analytics | 2.3 | 1.6 | 4.4 | 3.3 | |||||||||||
Corporate and Other (1) | 21.1 | 23.4 | 41.8 | 45.1 | |||||||||||
Total | $ | 49.2 | $ | 48.8 | $ | 97.4 | $ | 94.7 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Technology | $ | 97.1 | $ | 81.6 | $ | 187.1 | $ | 159.5 | |||||||
Data and Analytics | 4.5 | 4.8 | 9.2 | 10.9 | |||||||||||
Corporate and Other | (40.8 | ) | (48.1 | ) | (78.6 | ) | (86.6 | ) | |||||||
Total | $ | 60.8 | $ | 38.3 | $ | 117.7 | $ | 83.8 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Technology | $ | 122.9 | $ | 105.4 | $ | 238.3 | $ | 205.8 | |||||||
Data and Analytics | 6.8 | 6.4 | 13.6 | 14.2 | |||||||||||
Corporate and Other | (13.2 | ) | (9.7 | ) | (25.3 | ) | (19.7 | ) | |||||||
Total | $ | 116.5 | $ | 102.1 | $ | 226.6 | $ | 200.3 |
Three months ended June 30, | Six months ended June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Technology | 57.6 | % | 55.2 | % | 57.3 | % | 54.8 | % | |||
Data and Analytics | 15.3 | % | 14.6 | % | 15.8 | % | 16.0 | % | |||
Corporate and Other | N/A | N/A | N/A | N/A | |||||||
Total | 45.2 | % | 43.5 | % | 45.2 | % | 43.1 | % |
Six months ended June 30, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities | $ | 122.4 | $ | 65.6 | ||||
Cash flows from investing activities | (189.7 | ) | (60.7 | ) | ||||
Cash flows from financing activities | (90.5 | ) | 2.8 | |||||
Net (decrease) increase in cash and cash equivalents | $ | (157.8 | ) | $ | 7.7 |
2016 (remaining) | $ | 5.1 | |
2017 | 5.0 | ||
Total | $ | 10.1 |
4.1 | Fourth Supplemental Indenture, dated as of June 6, 2016, by and among Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), Black Knight Lending Solutions, Inc., the guarantor party thereto and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2023 | |
4.2 | Fifth Supplemental Indenture, dated as of July 12, 2016, by and among Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), Black Knight Lending Solutions, Inc., the guarantor party thereto and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2023 | |
4.3 | Sixth Supplemental Indenture, dated as of August 4, 2016 by and among Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), Black Knight Lending Solutions, Inc., the guarantor party thereto and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2023 | |
10.1 | Second Amendment to Employment Agreement by and between BKFS I Management, Inc. and Kirk Larsen effective April 30, 2016 | |
10.2 | Amendment No. 3 to Employment Agreement by and between BKFS I Management, Inc. and Tony Orefice effective April 30, 2016 | |
10.3 | First Amendment to Amended and Restated Employment Agreement by and between BKFS I Management, Inc. and Tom Sanzone effective April 30, 2016 | |
10.4 | First Amendment to Employment Agreement by and between BKFS I Management, Inc. and Michael L. Gravelle effective April 30, 2016 | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. | |
32.2 | Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. | |
101 | Interactive data files. |
Date: | August 9, 2016 | BLACK KNIGHT FINANCIAL SERVICES, INC. (registrant) | ||
By: | /s/ Kirk T. Larsen | |||
Kirk T. Larsen | ||||
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit | ||
No. | Description | |
4.1 | Fourth Supplemental Indenture, dated as of June 6, 2016, by and among Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), Black Knight Lending Solutions, Inc., the guarantor party thereto and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2023 | |
4.2 | Fifth Supplemental Indenture, dated as of July 12, 2016, by and among Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), Black Knight Lending Solutions, Inc., the guarantor party thereto and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2023 | |
4.3 | Sixth Supplemental Indenture, dated as of August 4, 2016 by and among Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), Black Knight Lending Solutions, Inc., the guarantor party thereto and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2023 | |
10.1 | Second Amendment to Employment Agreement by and between BKFS I Management, Inc. and Kirk Larsen effective April 30, 2016 | |
10.2 | Amendment No. 3 to Employment Agreement by and between BKFS I Management, Inc. and Tony Orefice effective April 30, 2016 | |
10.3 | First Amendment to Amended and Restated Employment Agreement by and between BKFS I Management, Inc. and Tom Sanzone effective April 30, 2016 | |
10.4 | First Amendment to Employment Agreement by and between BKFS I Management, Inc. and Michael L. Gravelle effective April 30, 2016 | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. | |
32.2 | Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. | |
101 | Interactive data files. |
FOURTH SUPPLEMENTAL INDENTURE | ||||
dated as of June 6, 2016 | ||||
by and among | ||||
Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), | ||||
Black Knight Lending Solutions, Inc., | ||||
The Guarantor Party Hereto | ||||
and | ||||
U.S. Bank National Association, as Trustee | ||||
5.75% | ||||
Senior Notes due | ||||
2023 |
Black Knight InfoServ, LLC, as Issuer | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
Black Knight Lending Solutions, Inc., as Co-Issuer | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
RealEC Technologies, LLC, as a Guarantor | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary | ||
U.S. Bank National Association, as Trustee | |||
By: | /s/ Jack Ellerin | ||
Name: | Jack Ellerin | ||
Title: | Vice President |
FIFTH SUPPLEMENTAL INDENTURE | ||||
dated as of July 12, 2016 | ||||
by and among | ||||
Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), | ||||
Black Knight Lending Solutions, Inc., | ||||
The Guarantor Party Hereto | ||||
and | ||||
U.S. Bank National Association, as Trustee | ||||
5.75% | ||||
Senior Notes due | ||||
2023 |
Black Knight InfoServ, LLC, as Issuer | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
Black Knight Lending Solutions, Inc., as Co-Issuer | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
eLynx Holdings,LLC eLynx, Ltd. SwiftView, LLC as Guarantors | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary | ||
U.S. Bank National Association, as Trustee | |||
By: | /s/ Jack Ellerin | ||
Name: | Jack Ellerin | ||
Title: | Vice President |
SIXTH SUPPLEMENTAL INDENTURE | ||||
dated as of August 4, 2016 | ||||
by and among | ||||
Black Knight InfoServ, LLC (f/k/a Lender Processing Services, Inc.), | ||||
Black Knight Lending Solutions, Inc., | ||||
The Guarantor Party Hereto | ||||
and | ||||
U.S. Bank National Association, as Trustee | ||||
5.75% | ||||
Senior Notes due | ||||
2023 |
Black Knight InfoServ, LLC, as Issuer | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
Black Knight Lending Solutions, Inc., as Co-Issuer | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
Motivity Solutions, LLC, as a Guarantor | |||
By: | /s/ Michael L. Gravelle | ||
Name: | Michael L. Gravelle | ||
Title: | Executive Vice President, General Counsel and Corporate Secretary | ||
U.S. Bank National Association, as Trustee | |||
By: | /s/ Jack Ellerin | ||
Name: | Jack Ellerin | ||
Title: | Vice President |
By: | BKFS I MANAGEMENT, INC. /s/ Thomas J. Sanzone | |
Its: | Chief Executive Officer | |
KIRK LARSEN | ||
/s/ Kirk Larsen |
By: | BKFS I MANAGEMENT, INC. /s/ Thomas J. Sanzone | |
Its: | Chief Executive Officer | |
TONY OREFICE | ||
/s/ Tony Orefice |
By: | BKFS I MANAGEMENT, INC. /s/ Michael L. Gravelle | |
Its: | Executive Vice President, General Counsel and Corporate Secretary | |
TOM SANZONE | ||
/s/ Thomas J. Sanzone |
By: | BKFS I MANAGEMENT, INC. /s/ Thomas J. Sanzone | |
Its: | Chief Executive Officer | |
MICHAEL L. GRAVELLE | ||
/s/ Michael L. Gravelle |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | omitted; |
(c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Thomas J. Sanzone | |
Thomas J. Sanzone President and Chief Executive Officer |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | omitted; |
(c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Kirk T. Larsen | |
Kirk T. Larsen Executive Vice President and Chief Financial Officer |
1. | The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. |
2. | The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Thomas J. Sanzone | |
Thomas J. Sanzone | ||
President and Chief Executive Officer |
1. | The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. |
2. | The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Kirk T. Larsen | |
Kirk T. Larsen | ||
Executive Vice President and Chief Financial Officer |
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q2 |
Entity Registrant Name | Black Knight Financial Services, Inc. |
Entity Central Index Key | 0001627014 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Common Class A [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 69,094,490 |
Common Class B [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 84,826,282 |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Related party prepaid fees | $ 42.0 | $ 28.2 |
Long-term debt, net of current portion | $ 1,577.3 | $ 1,618.0 |
Common stock, shares outstanding | 153,900,000 | 153,100,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, share issued | 69,103,465 | 68,303,680 |
Common stock, shares outstanding | 69,103,465 | 68,303,680 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, share issued | 84,826,282 | 84,826,282 |
Common stock, shares outstanding | 84,826,282 | 84,826,282 |
Condensed Consolidated Statement of Equity - USD ($) shares in Millions, $ in Millions |
Total |
Accumulated Other Comprehensive Loss [Member] |
Noncontrolling Interest [Member] |
Black Knight Financial Services, Inc. [Member]
Common Stock [Member]
Common Class A [Member]
|
Black Knight Financial Services, Inc. [Member]
Common Stock [Member]
Common Class B [Member]
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Black Knight Financial Services, Inc. [Member]
Additional Paid-in Capital [Member]
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Black Knight Financial Services, Inc. [Member]
Accumulated Deficit/Retained Earnings [Member]
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Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance, shares | 68.3 | 84.8 | |||||
Beginning balance at Dec. 31, 2015 | $ 1,845.0 | $ (0.1) | $ 1,026.3 | $ 798.9 | $ 19.9 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance, shares | 69.1 | 84.8 | |||||
Issuance of common stock | 0.0 | 0.0 | |||||
Issuance of common stock, shares | 0.8 | ||||||
Equity based compensation expense | 5.7 | 5.7 | |||||
Net earnings | 66.3 | 43.5 | 22.8 | ||||
Net earnings attributable to Black Knight | 22.8 | ||||||
Less: Net earnings attributable to noncontrolling interests | 43.5 | ||||||
Foreign currency translation adjustment | (0.1) | (0.1) | |||||
Unrealized Gain (Loss) on Cash Flow Hedging Instruments | (2.8) | (1.0) | (1.8) | ||||
Stockholders' Equity, Other | (48.5) | (48.6) | 0.1 | ||||
Ending balance at Jun. 30, 2016 | $ 1,865.6 | $ (1.2) | $ 1,019.4 | $ 804.6 | $ 42.8 | ||
Ending balance, shares at Jun. 30, 2016 | 69.1 | 84.8 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance, shares | 69.1 | 84.8 |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements (Unaudited) were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated. The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission ("SEC") on February 26, 2016. Prior period amounts related to the Legal and regulatory accrual and Accrued interest on the Condensed Consolidated Balance Sheets (Unaudited) have been reclassified to Trade accounts payable and other accrued liabilities in order to conform to the current period presentation. Description of Business Black Knight is a holding company that conducts business through our sole managing member interest in Black Knight Financial Services, LLC ("BKFS LLC"). Through its subsidiaries, BKFS LLC is a leading provider of integrated technology, workflow automation and data and analytics to the mortgage and real estate industries. Our solutions facilitate and automate many of the mission-critical business processes across the entire mortgage loan life cycle, from origination until asset disposition. We believe we differentiate ourselves by the breadth and depth of our comprehensive, integrated solutions and the insight we provide to our clients. We are a majority-owned subsidiary of Fidelity National Financial, Inc. ("FNF"). Our business generally represents a reorganization of the former Technology, Data and Analytics segment of Lender Processing Services, Inc. ("LPS"), a former provider of integrated technology, data and services to the mortgage lending industry in the United States that FNF acquired in January 2014. Our business also includes two companies that were contributed to us by FNF: Fidelity National Commerce Velocity, LLC and Property Insight, LLC. ServiceLink Holdings, LLC ("ServiceLink"), another majority-owned subsidiary of FNF, operates the Transaction Services businesses of the former LPS as well as FNF’s legacy ServiceLink businesses. Reporting Segments We conduct our operations through two reporting segments: (1) Technology and (2) Data and Analytics. See further discussion in Note 12 — Segment Information. Consolidation BKFS LLC is subject to the consolidation guidance related to variable interest entities as set forth in Accounting Standards Codification ("ASC") Topic 810, Consolidation ("ASC 810"). Black Knight, as the sole managing member of BKFS LLC, has the exclusive authority to manage, control and operate the business and affairs of BKFS LLC and its subsidiaries, pursuant to the terms of the Second Amended and Restated Limited Liability Company Agreement ("LLC Agreement"). Under the terms of the LLC Agreement, Black Knight is authorized to manage the business of BKFS LLC, including the authority to enter into contracts, manage bank accounts, hire employees and agents, incur and pay debts and expenses, merge or consolidate with other entities and pay taxes. Because Black Knight is the primary beneficiary through its sole managing member interest and possesses the rights established in the LLC Agreement, in accordance with the requirements of ASC 810, Black Knight controls BKFS LLC and appropriately consolidates the operations thereof. We account for noncontrolling interests in accordance with ASC 810. Our Class A shareholders indirectly control BKFS LLC through our managing member interest. Our Class B shareholders have a noncontrolling interest in BKFS LLC. Their share of equity in BKFS LLC is reflected in Noncontrolling interests in our Condensed Consolidated Balance Sheets (Unaudited), and their share of net earnings or loss in BKFS LLC are reported in Net earnings attributable to noncontrolling interests in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Net earnings attributable to noncontrolling interests do not include expenses incurred directly by Black Knight, including income tax expense attributable to Black Knight. All earnings prior to the closing of our initial public offering ("IPO") on May 26, 2015 have been disclosed as Net earnings attributable to noncontrolling interests. Cash and Cash Equivalents Cash and cash equivalents include the following (in millions):
_______________ (1) Restricted cash equivalents relate to our subsidiary, I-Net Reinsurance Limited, and are held in trust until the final reinsurance policy is canceled. Allowance for Doubtful Accounts Trade receivables, net includes an allowance for doubtful accounts of $2.2 million as of June 30, 2016 and $2.5 million as of December 31, 2015. Capital Lease On June 29, 2016, Black Knight entered into a one-year capital lease agreement with a bargain purchase option for certain computer equipment. The leased equipment has a useful life of five years and will be depreciated on a straight-line basis over this period. The leased equipment was valued based on the net present value of the minimum lease payments, which was $10.0 million and included in Property and equipment, net on the Condensed Consolidated Balance Sheets (Unaudited) and is net of imputed interest of $0.1 million. The capital lease obligation of $10.0 million is included in Trade accounts payable and other accrued liabilities on the Condensed Consolidated Balance Sheets (Unaudited). This transaction is a non-cash investing and financing activity. Total minimum lease payments as of June 30, 2016 for the remainder of 2016 and 2017 are as follows (in millions):
Depreciation and Amortization Depreciation and amortization on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include the following (in millions):
Transition and Integration Costs Transition and integration costs during the three and six months ended June 30, 2016 primarily represent costs related to business acquisitions. See further discussion in Note 2 — Business Acquisitions. Transition and integration costs during the three and six months ended June 30, 2015 represent management fees paid to FNF and Thomas H. Lee Partners, L.P. ("THL"), and costs related to the IPO. Recent Accounting Pronouncements Revenue Recognition (Topic 606) In May 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this ASU do not change the core principle of the guidance in Topic 606. Rather, the amendments in this update simplify the transition and clarify certain aspects of the revenue standard. Also in May 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. The SEC Staff is rescinding certain SEC Staff Observer comments that are codified in ASC Topic 605, Revenue Recognition, and ASC Topic 932, Extractive Activities-Oil and Gas, effective upon adoption of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Specifically, registrants should not rely on the SEC Staff Observer comments upon adoption of ASC 606 related to revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, accounting for consideration given by a vendor to a customer and accounting for gas-balancing arrangements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This guidance clarifies how to determine whether goods and services are separately identifiable and thus accounted for as separate performance obligations. Additionally, this update clarifies how to evaluate the nature of a promise in granting a license of intellectual property, which determines whether to recognize revenue over time or at a point in time. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This new standard requires a company to determine whether it is a principal (that controls the promised good or service before transferring it to the customer) or an agent (that arranges for another entity to provide the goods or services). Principals are required to recognize revenue equal to the gross amount of consideration exchanged for the promised good or service. Agents are required to recognize revenue net of any fees or commissions paid for arranging the promised good or service to be provided by another party. The ASUs listed above are effective on adoption of ASU 2014-09, Revenue from Contracts with Customers, which is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are currently evaluating which transition approach to use and assessing the effect the adoption of these ASUs will have on our results of operations and our financial position. Other Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses. This guidance significantly changes how companies measure and recognize credit impairment for many financial assets. The new Current Expected Credit Loss Model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets included in the scope of this standard, which include trade receivables. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for annual and interim periods in fiscal years beginning after December 15, 2018. We are currently assessing the effect the adoption of this ASU will have on our results of operations and our financial position. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Under the new guidance, companies will no longer record excess tax benefits and certain tax deficiencies related to share-based awards in additional paid-in capital. Instead, income tax effects of awards will be recorded in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statements should be applied prospectively. Amendments related to minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The guidance is effective for public companies for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted, but all of the guidance must be adopted in the same period. We do not expect this update to have a material effect on our results of operations or our financial position. |
Business Acquisitions (Notes) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions | (2) Business Acquisitions We include the results of operations of acquired businesses beginning on the respective acquisition dates. The purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed on the acquisition date. Acquisition-related costs are expensed as incurred. During the three months ended June 30, 2016, Black Knight completed the acquisitions of eLynx Holdings, Inc. ("eLynx") and Motivity Solutions, Inc. ("Motivity"). Neither acquisition meets the definition of "significant" pursuant to Article 3 of Regulation S-X (§210.3-05) either individually or in the aggregate. Further, the individual and aggregate results of operations are not material to Black Knight's financial statements. Further details on each acquisition are discussed below. Allocation of Purchase Price The fair value of the acquired Computer software and Other intangible assets for both transactions was determined using a preliminary third-party valuation based on significant estimates and assumptions, including Level 3 inputs, which are judgmental in nature. These estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting the risk inherent in the future cash flows and future market prices. The fair value of the remaining assets acquired and liabilities assumed approximate their carrying values, and therefore, no fair value adjustments are reflected in these amounts. eLynx On May 16, 2016, Black Knight completed its acquisition of eLynx, a leading lending document and data delivery platform. eLynx helps clients in the financial services and real estate industries electronically capture and manage documents and associated data throughout the document lifecycle. Black Knight purchased eLynx to augment its origination technologies. This acquisition positions Black Knight to electronically support the full mortgage origination process. Total consideration paid, net of cash received, was $115.0 million for 100% of the equity interests of eLynx. Additionally, Black Knight incurred $0.8 million of direct transaction costs that are included in Transition and integration costs on the Condensed Consolidated Statement of Earnings and Comprehensive Earnings (Unaudited). The total consideration paid was as follows (in millions):
The following table summarizes the total purchase price consideration and the preliminary fair value amounts recognized for the assets acquired and liabilities assumed as of the acquisition date (in millions):
Motivity On June 22, 2016, Black Knight completed its acquisition of Motivity, which provides customized mortgage business intelligence software solutions. Motivity will be integrated with Black Knight's LoanSphere product suite, including the LoanSphere Data Hub, to provide clients with deeper insights into their origination and servicing operations and portfolios. Total consideration paid, net of cash received, was $35.2 million for 100% of the equity interests of Motivity. Additionally, Black Knight incurred $0.3 million of direct transaction costs that are included in Transition and integration costs on the Condensed Consolidated Statement of Earnings and Comprehensive Earnings (Unaudited). The total consideration paid was as follows (in millions):
The following table summarizes the total purchase price consideration and the preliminary fair value amounts recognized for the assets acquired and liabilities assumed as of the acquisition date (in millions):
Estimated Useful Lives of Property and Equipment, Computer Software and Other Intangible Assets Acquired The gross carrying value and weighted average estimated useful lives of Property and equipment, Computer software and Other intangible assets acquired in the above acquisitions consist of the following (dollars in millions):
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing Net earnings attributable to Black Knight by the weighted-average number of shares of Class A common stock outstanding during the period. During the three and six months ended June 30, 2016 and during the period May 26, 2015 through June 30, 2015, potentially dilutive securities include restricted stock awards and the shares of Class B common stock. The numerator in the diluted net earnings per share calculation is adjusted to reflect our income tax expense at an expected effective tax rate assuming the conversion of the shares of Class B common stock into shares of Class A common stock on a one-for-one basis. The estimated effective tax rate during the three and six months ended June 30, 2016 was 35.2% and 35.3%, respectively. The estimated effective tax rate during the period May 26, 2015 through June 30, 2015 was 43.1%. The shares of Class B common stock do not share in the earnings or losses of Black Knight and are, therefore, not participating securities. Accordingly, basic and diluted net earnings per share of Class B common stock have not been presented. The denominator includes approximately 2.0 million shares of unvested restricted shares of Class A common stock for the three and six months ended June 30, 2016 and 3.3 million shares for the period of May 26, 2015 through June 30, 2015. The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):
Basic and diluted net earnings per share information is not applicable for reporting periods prior to the completion of the IPO. |
Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions We are party to certain related party agreements, including those with FNF and THL. The following table sets forth the ownership interests of FNF, THL and other holders of Black Knight common stock (shares in millions):
Transactions with FNF and THL are described below. FNF We have various agreements with FNF and certain FNF subsidiaries to provide technology, data and analytics services, as well as corporate shared services and information technology. In addition, FNF provided certain corporate services to us, including management consulting and corporate administrative services. Following the IPO, we no longer pay management fees to FNF. We are also a party to certain other agreements under which we incur other expenses or receive revenues from FNF. A detail of the revenues and expenses from FNF is set forth in the table below (in millions):
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We were party to intercompany notes with FNF through May 27, 2015 and recognized $14.2 million and $37.2 million in Interest expense for the three and six months ended June 30, 2015, respectively. We had no outstanding intercompany notes in 2016. Beginning on May 26, 2015, we pay to FNF a guarantee fee of 1.0% of the outstanding principal of the Senior Notes (as defined in Note 8 — Long-Term Debt) in exchange for the ongoing guarantee by FNF of the Senior Notes. In October 2017, the guarantee fee will increase to 2.0% of the outstanding principal of the Senior Notes. During the three months ended June 30, 2016 and 2015, we recognized $1.0 million and $0.4 million, respectively, in Interest expense related to the guarantee fee. During the six months ended June 30, 2016 and 2015, we recognized $2.0 million and $0.4 million, respectively, in Interest expense related to the guarantee fee. FNF subsidiaries held $49.5 million and $49.8 million as of June 30, 2016 and December 31, 2015, respectively, of principal amount of our Term B Loan (as defined in Note 8 — Long-Term Debt) from our credit agreement dated May 27, 2015. THL Two managing directors of THL currently serve on our Board of Directors. We purchase software and systems services from certain entities over which THL exercises control. In addition, THL provided certain corporate services to us, including management and consulting services. Following the IPO, we no longer pay management fees to THL. A detail of the expenses, net from THL is set forth in the table below (in millions):
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In connection with the IPO, we made a $17.3 million cash payment to certain THL affiliates during the three months ended June 30, 2015, in connection with the merger of certain THL intermediaries with and into us. THL affiliates held $39.6 million and $39.8 million as of June 30, 2016 and December 31, 2015, respectively, of principal amount of our Term Loan B (as defined in Note 8 — Long-Term Debt) from our credit agreement dated May 27, 2015. Revenues and Expenses A detail of related party items included in Revenues is as follows (in millions):
A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):
Additionally, related party prepaid fees were $0.5 million and $0.2 million as of June 30, 2016 and December 31, 2015, respectively, which are included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets (Unaudited). We believe the amounts earned from or charged by us under each of the foregoing arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties, except for certain corporate services provided to an FNF subsidiary and certain corporate services provided by FNF, which are at cost. However, the amounts we earned or that were charged under these arrangements were not negotiated at arm's length, and may not represent the terms that we might have obtained from an unrelated third party. |
Computer Software (Notes) |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computer Software | Computer Software Computer software as of June 30, 2016 includes those assets acquired as part of the eLynx and Motivity acquisitions (see further discussion in Note 2 — Business Acquisitions) and consists of the following (in millions):
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Other Intangible Assets (Notes) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets | Other Intangible Assets Other intangible assets as of June 30, 2016 include those assets acquired as part of the eLynx and Motivity acquisitions (see further discussion in Note 2 — Business Acquisitions) and consist of the following (in millions):
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Goodwill (Notes) |
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Goodwill | Goodwill Changes in goodwill during the six months ended June 30, 2016 consist of the following (in millions):
(1) Goodwill related to the eLynx and Motivity acquisitions is expected to be deductible for tax purposes. |
Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in millions):
Principal maturities as of June 30, 2016 for each of the next five years and thereafter are as follows (in millions):
Scheduled maturities noted above exclude the effect of the debt issuance costs of $16.1 million as well as $10.9 million net unamortized debt premium. Credit Agreement On May 27, 2015, our indirect subsidiary, Black Knight InfoServ, LLC ("BKIS"), entered into a credit and guaranty agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto and the other agents and lenders party thereto. The Credit Agreement provides for (i) an $800.0 million term loan A facility (the "Term A Loan"), (ii) a $400.0 million term loan B facility (the "Term B Loan") and (iii) a $400.0 million revolving credit facility (the "Revolving Credit Facility", and collectively with the Term A Loan and Term B Loan, the "Facilities"). The Term A Loan and the Revolving Credit Facility mature on May 27, 2020, and the Term B Loan matures on May 27, 2022. The Facilities are guaranteed by substantially all of BKIS's wholly-owned domestic restricted subsidiaries and BKFS LLC, and are secured by associated collateral agreements that pledge a lien on virtually all of BKIS's assets, including fixed assets and intangible assets, and the assets of the guarantors. As of June 30, 2016, the Term A Loan and the Revolving Credit Facility bear interest at the Eurodollar rate plus a margin of 200 basis points, and the Term B Loan bears interest at the Eurodollar rate plus a margin of 300 basis points, subject to a Eurodollar rate floor of 75 basis points. As of June 30, 2016, we have $320.0 million capacity on the Revolving Credit Facility and pay an unused commitment fee of 30 basis points. During the six months ended June 30, 2016, Black Knight borrowed $55.0 million on our Revolving Credit Facility, all of which was related to the eLynx and Motivity acquisitions. See further discussion in Note 2 — Business Acquisitions. We made payments of $75.0 million on this facility during the six months ended June 30, 2016. As of June 30, 2016, the weighted average interest rates on the Term A Loan, Term B Loan and Revolving Credit Facility were 2.50%, 3.75% and 2.48%, respectively. Senior Notes BKIS has 5.75% Senior Notes, interest paid semi-annually, which mature on April 15, 2023 (the "Senior Notes"). The Senior Notes are senior unsecured obligations, registered under the Securities Act and contain customary affirmative, negative and financial covenants, and events of default for indebtedness of this type (with grace periods, as applicable, and lender remedies). Prior to October 15, 2017, we may redeem some or all of the Senior Notes by paying a "make-whole" premium based on U.S. Treasury rates. On or after October 15, 2017, we may redeem some or all of the Senior Notes at the redemption prices listed in the table below, plus accrued and unpaid interest. In addition, if a change of control occurs, we are required to offer to purchase all outstanding Senior Notes at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase.
Fair Value of Long-Term Debt The fair value of our Senior Notes as of June 30, 2016 was $408.5 million (104.75% of par value), based upon established market prices for the securities using level 2 inputs. The fair value of our Facilities approximates their carrying value at June 30, 2016. The fair value of our Facilities is based upon established market prices for the securities using level 2 inputs. Interest Rate Swaps On January 20, 2016, we entered into two interest rate swap agreements to hedge forecasted monthly interest rate payments on $400.0 million of our floating rate debt ($200.0 million notional value each) (the "Swap Agreements"). Under the terms of the Swap Agreements, we receive payments based on the 1-month LIBOR rate (equal to 0.50% as of June 30, 2016) and pay a weighted average fixed rate of 1.01%. The effective term for the Swap Agreements is February 1, 2016 through January 31, 2019. We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated these Swap Agreements as cash flow hedges. A portion of the amount included in Accumulated other comprehensive loss will be reclassified into Interest expense as a yield adjustment as interest payments are made on the Term A Loan. The fair value of our Swap Agreements is based upon level 2 inputs. We have considered our own credit risk when determining the fair value of our Swap Agreements. The estimated fair values of our Swap Agreements was as follows (in millions):
As of June 30, 2016, a cumulative loss of $1.6 million ($1.0 million net of tax) is reflected in Accumulated other comprehensive loss, and a cumulative loss of $1.8 million is reflected in Noncontrolling interests. Below is a summary of the effect of derivative instruments on amounts recognized in other comprehensive earnings ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three and six months ended June 30, 2016 (in millions):
Approximately $1.8 million ($1.5 million net of tax) of the balance in Accumulated other comprehensive loss and noncontrolling interests as of June 30, 2016 is expected to be reclassified into Interest expense over the next 12 months. It is our policy to execute such instruments with credit-worthy banks and not to enter into derivative financial instruments for speculative purposes. As of June 30, 2016, we believe our interest rate swap counterparties will be able to fulfill their obligations under our agreements, and we believe we will have debt outstanding through the various expiration dates of the swaps such that the occurrence of future cash flow hedges remains probable. |
Commitments and Contingencies |
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Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters related to our operations, some of which include claims for punitive or exemplary damages. Our ordinary course litigation includes purported class action lawsuits, which make allegations related to various aspects of our business. From time to time, we also receive requests for information from various state and federal regulatory authorities, some of which take the form of civil investigative demands or subpoenas. Some of these regulatory inquiries may result in the assessment of fines for violations of regulations or settlements with such authorities requiring a variety of remedies. We believe that no actions, other than those discussed below, depart from customary litigation or regulatory inquiries incidental to our business. We review lawsuits and other legal and regulatory matters (collectively “legal proceedings”) on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending cases is generally not yet determinable. The accrual for legal and regulatory matters, which includes expenses incurred through the balance sheet date, was $8.3 million and $8.0 million as of June 30, 2016 and December 31, 2015, respectively. While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe that the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition. Litigation Matters On December 16, 2013, LPS received notice that Merion Capital, L.P. and Merion Capital II, L.P. (together "Merion Capital") were asserting their appraisal right relative to their ownership of 5,682,276 shares of LPS stock (the “Appraisal Shares”) in connection with the acquisition of LPS by FNF on January 2, 2014. On February 6, 2014, Merion Capital filed an appraisal proceeding, captioned Merion Capital LP and Merion Capital II, LP v. Lender Processing Services, Inc., C.A. No. 9320-VCL, in the Delaware Court of Chancery seeking a judicial determination of the "fair" value of Merion Capital's 5,682,276 shares of LPS common stock under Delaware law, together with statutory interest. We filed an answer to this suit on March 3, 2014. Merion’s expert has opined that the consideration should have been $50.46 per share, which is approximately 36 percent higher than the final consideration of $37.14, and therefore, they are owed an additional $75.7 million plus statutory interest, which is approximately $11.7 million as of June 30, 2016. Black Knight’s position is that no additional consideration is owed. A bench trial was held in May 2016. Post-trial arguments will be held on September 21, 2016. We will continue to vigorously defend against the appraisal proceedings, and we do not believe the result will have a material adverse effect on our financial condition. In 2008, our former subsidiary Market Intelligence, Inc. ("MI") received a demand letter from TCF National Bank (“TCF”) alleging certain evaluation products purchased by TCF from MI between mid-2002 and mid-2005 had improperly overestimated the values of the subject properties as collateral, resulting in losses to TCF when it foreclosed on those properties or otherwise charged off the relevant loans. MI rejected TCF’s demand. In September 2011, TCF filed suit in the U.S. District Court for the District of Minnesota, TCF National Bank v. Market Intelligence, Inc., Fidelity National Information Services, Inc., LSI Appraisal, LLC and Lender Processing Services, Inc., alleging various common law, contractual and statutory claims. The U.S. District Court dismissed several of TCF’s legal claims in July 2012. Pursuant to the U.S. District Court’s order on January 3, 2013, TCF was allowed to proceed with claims for fraudulent inducement, negligent appraisal, breach of contract, breach of the covenant of good faith, common law fraud and consumer fraud under a Minnesota statute. TCF’s amended complaint alleged damages of at least $3.3 million, but asserted that it would seek to recover additional damages as a result of loan charge-offs and foreclosures after September 2011. In mid-January 2014, TCF asserted that it had suffered additional losses of more than $15.0 million since September 2011, resulting in a new total damages claim of $18.5 million. In addition to compensatory damages, TCF also sought attorneys' fees, under certain claims, and costs. On October 14, 2014, the District Court entered a Memorandum Opinion and Order granting our Motion for Summary Judgment on all causes of action. On February 4, 2016, the Eighth Circuit Court of Appeals affirmed the District Court's judgment. The deadlines for Plaintiffs to petition for rehearing or to petition the US Supreme Court for a writ of certiorari have passed. The businesses associated with this case were contributed to ServiceLink in connection with the acquisition and internal reorganization (see Note 1 — Basis of Presentation). Although LPS was named in the case, any costs of litigation and any potential resulting liability would have been borne by the underlying businesses of ServiceLink. This matter is subject to a cross-indemnity agreement dated December 22, 2014 between BKFS LLC and ServiceLink (the "Cross-Indemnity Agreement") (see Indemnification Agreement below). This matter is now closed. Regulatory Matters Following a review by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision (collectively, the "banking agencies"), LPS entered into a consent order (the "Order") dated April 13, 2011 with the banking agencies. The banking agencies' review of LPS' services included the services provided by its default operations to mortgage servicers regulated by the banking agencies, including document execution services, which were contributed to ServiceLink in connection with FNF's acquisition of LPS in January 2014. The Order does not make any findings of fact or conclusions of wrongdoing, nor did LPS admit any fault or liability. Under the Order, ServiceLink has adopted enhanced compliance, internal audit, risk management and board oversight plans with respect to those businesses. ServiceLink also agreed to engage an independent third party to conduct a risk assessment and review of its default management businesses and document execution services provided to servicers from January 1, 2008 through December 31, 2010, which has been on hold since June 2013. To the extent such third party review, once completed, requires additional remediation of mortgage documents, ServiceLink has agreed to implement an appropriate plan to address the issues. The Order does not include any fine or other monetary penalty. The banking agencies notified ServiceLink in December 2015 that they wish to discuss terminating the Order through a possible agreed civil monetary penalty amount in lieu of requiring any additional document execution review by the independent third party. At this time, the parties have not agreed on a possible civil monetary penalty amount. The parties entered into a tolling agreement to allow the parties to engage in these discussions. Although LPS is a party to the Order, the ongoing legal costs and any potential resulting penalty are expected to be borne by the underlying LPS default operations, which are now part of ServiceLink. This matter is subject to a Cross-Indemnity Agreement between BKFS LLC and ServiceLink (see Indemnification Agreement below). Indemnifications and Warranties We often agree to indemnify our clients against damages and costs resulting from claims of patent, copyright, trademark infringement or breaches of confidentiality associated with use of our software through software licensing agreements. Historically, we have not made any payments under such indemnifications, but continue to monitor the conditions that are subject to the indemnifications to identify whether a loss has occurred that is both probable and estimable that would require recognition. In addition, we warrant to clients that our software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such, no accruals for warranty costs have been made. Indemnification Agreement We are party to the Cross-Indemnity Agreement with ServiceLink. Pursuant to this agreement, ServiceLink indemnifies us from liabilities relating to, arising out of or resulting from the conduct of ServiceLink's business or any action, suit or proceeding in which we or any of our subsidiaries are named by reason of being a successor to the business of LPS and the cause of such action, suit or proceeding relates to the business of ServiceLink. In return, we indemnify ServiceLink for liabilities relating to, arising out of, or resulting from the conduct of our business. |
Equity-Based Compensation |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Compensation | Equity-Based Compensation On February 3, 2016, we granted approximately 0.8 million restricted shares of our Class A common stock with a grant date fair value of $28.29 per share, which was based on the closing price of our common stock on the date of grant. The vesting for these shares is based on certain operating performance and service criteria. Of the 0.8 million restricted shares granted, 0.2 million restricted shares vest over a three-year period, and 0.6 million restricted shares vest over a four-year period. Restricted stock transactions in 2016 are as follows (shares in millions):
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Equity-based compensation expense was $3.4 million and $7.7 million for the three months ended June 30, 2016 and 2015, respectively, and $6.1 million and $9.5 million for the six months ended June 30, 2016 and 2015, respectively. These expenses are included in Operating expenses in the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Equity-based compensation expense for the three and six months ended June 30, 2015 includes an acceleration charge of $6.2 million related to the accelerated vesting of 4.4 million restricted shares of Class A common stock in connection with the IPO. Total unrecognized compensation cost was $32.2 million as of June 30, 2016 and is expected to be recognized over a weighted average period of approximately 2.9 years. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information 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. Black Knight’s president and 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:
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 profitability measure for making decisions regarding ongoing operations. EBITDA is earnings before Interest expense, Income tax expense and the Depreciation and amortization of fixed and intangible assets. We do not allocate Interest expense, Other expense, net, Income tax expense 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 segment’s overall operating performance. Summarized financial information concerning our segments is shown in the tables below (in millions). Prior period results have been reclassified to conform to the current segment presentation. We have reclassified purchase accounting adjustments from the Technology and Data and Analytics segments to Corporate and Other to provide a better indication of ongoing segment performance.
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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.
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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.
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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.
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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. |
Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying Condensed Consolidated Financial Statements (Unaudited) were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. |
Use of Estimates | The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Consolidation | BKFS LLC is subject to the consolidation guidance related to variable interest entities as set forth in Accounting Standards Codification ("ASC") Topic 810, Consolidation ("ASC 810"). Black Knight, as the sole managing member of BKFS LLC, has the exclusive authority to manage, control and operate the business and affairs of BKFS LLC and its subsidiaries, pursuant to the terms of the Second Amended and Restated Limited Liability Company Agreement ("LLC Agreement"). Under the terms of the LLC Agreement, Black Knight is authorized to manage the business of BKFS LLC, including the authority to enter into contracts, manage bank accounts, hire employees and agents, incur and pay debts and expenses, merge or consolidate with other entities and pay taxes. Because Black Knight is the primary beneficiary through its sole managing member interest and possesses the rights established in the LLC Agreement, in accordance with the requirements of ASC 810, Black Knight controls BKFS LLC and appropriately consolidates the operations thereof. We account for noncontrolling interests in accordance with ASC 810. Our Class A shareholders indirectly control BKFS LLC through our managing member interest. Our Class B shareholders have a noncontrolling interest in BKFS LLC. Their share of equity in BKFS LLC is reflected in Noncontrolling interests in our Condensed Consolidated Balance Sheets (Unaudited), and their share of net earnings or loss in BKFS LLC are reported in Net earnings attributable to noncontrolling interests in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Net earnings attributable to noncontrolling interests do not include expenses incurred directly by Black Knight, including income tax expense attributable to Black Knight. All earnings prior to the closing of our initial public offering ("IPO") on May 26, 2015 have been disclosed as Net earnings attributable to noncontrolling interests. |
Transition and Integration Costs | Transition and integration costs during the three and six months ended June 30, 2015 represent management fees paid to FNF and Thomas H. Lee Partners, L.P. ("THL"), and costs related to the IPO. |
Recent Accounting Pronouncements | Other Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses. This guidance significantly changes how companies measure and recognize credit impairment for many financial assets. The new Current Expected Credit Loss Model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets included in the scope of this standard, which include trade receivables. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for annual and interim periods in fiscal years beginning after December 15, 2018. We are currently assessing the effect the adoption of this ASU will have on our results of operations and our financial position. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Under the new guidance, companies will no longer record excess tax benefits and certain tax deficiencies related to share-based awards in additional paid-in capital. Instead, income tax effects of awards will be recorded in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statements should be applied prospectively. Amendments related to minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The guidance is effective for public companies for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted, but all of the guidance must be adopted in the same period. We do not expect this update to have a material effect on our results of operations or our financial position. |
Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Cash and cash equivalents include the following (in millions):
_______________ (1) Restricted cash equivalents relate to our subsidiary, I-Net Reinsurance Limited, and are held in trust until the final reinsurance policy is canceled. |
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Schedule of Future Minimum Lease Payments for Capital Leases | Total minimum lease payments as of June 30, 2016 for the remainder of 2016 and 2017 are as follows (in millions):
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Schedule of Depreciation and Amortization | Depreciation and amortization on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include the following (in millions):
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Business Acquisitions (Tables) |
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Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] |
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Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] |
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):
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Related Party Transactions Related Party Transactions (Tables) |
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Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party items | We are party to certain related party agreements, including those with FNF and THL. The following table sets forth the ownership interests of FNF, THL and other holders of Black Knight common stock (shares in millions):
A detail of related party items included in Revenues is as follows (in millions):
A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):
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FNF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party items | A detail of the revenues and expenses from FNF is set forth in the table below (in millions):
_______________
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
THL [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party items | A detail of the expenses, net from THL is set forth in the table below (in millions):
_______________
|
Computer Software (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Capitalized Software | Computer software as of June 30, 2016 includes those assets acquired as part of the eLynx and Motivity acquisitions (see further discussion in Note 2 — Business Acquisitions) and consists of the following (in millions):
|
Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Other intangible assets as of June 30, 2016 include those assets acquired as part of the eLynx and Motivity acquisitions (see further discussion in Note 2 — Business Acquisitions) and consist of the following (in millions):
|
Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Changes in goodwill during the six months ended June 30, 2016 consist of the following (in millions):
|
Long-Term Debt Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consists of the following (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | Principal maturities as of June 30, 2016 for each of the next five years and thereafter are as follows (in millions):
|
Equity-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Restricted stock transactions in 2016 are as follows (shares in millions):
______________________________
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summarized Segment Financial Information |
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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.
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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.
_______________________________________________________ (1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. (2) 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.
|
Basis of Presentation - Cash and Cash Equivalents, Allowance for Doubtful Accounts and Accumulated Depreciation and Amortization (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
|
Schedule of Depreciation and Amortization Expense [Line Items] | |||||||
Cash | $ 25.9 | $ 25.9 | $ 52.3 | ||||
Cash equivalents | 0.0 | 0.0 | 130.1 | ||||
Total unrestricted cash and cash equivalents | 25.9 | 25.9 | 182.4 | ||||
Restricted cash equivalents | 2.3 | 2.3 | 3.6 | ||||
Total cash and cash equivalents | 28.2 | 28.2 | 186.0 | $ 69.6 | $ 61.9 | ||
Allowance for Doubtful Accounts | |||||||
Allowance for doubtful accounts | 2.2 | 2.2 | $ 2.5 | ||||
Depreciation and Amortization | |||||||
Deferred contract costs | 5.4 | $ 2.3 | 10.6 | $ 3.1 | |||
Total | 49.2 | 48.8 | 97.4 | 94.7 | |||
Property, Plant and Equipment [Member] | |||||||
Depreciation and Amortization | |||||||
Total | 7.3 | 7.2 | 14.2 | 14.5 | |||
Computer Software, Intangible Asset [Member] | |||||||
Depreciation and Amortization | |||||||
Total | 18.6 | 17.5 | 36.9 | 34.4 | |||
Other Intangible Assets [Member] | |||||||
Depreciation and Amortization | |||||||
Total | $ 17.9 | $ 21.8 | $ 35.7 | $ 42.7 |
Basis of Presentation - Capital Lease (Details) - USD ($) $ in Millions |
Jun. 29, 2016 |
Jun. 30, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Capital lease, term of contract | 1 year | |
Capital lease | $ 10.0 | |
Interest included in payments | 0.1 | |
Capital lease obligations | $ 10.0 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
Capital Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 5.1 | |
Capital Leases, Future Minimum Payments Due in Two Years | 5.0 | |
Capital Leases, Future Minimum Payments Due | $ 10.1 | |
Assets Held under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leased equipment useful life | 5 years |
Earnings Per Share - Additional Disclosures (Details) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2015
shares
|
Jun. 30, 2016
shares
|
Jun. 30, 2016
shares
|
Jun. 30, 2015 |
Dec. 31, 2015
shares
|
|
Class of Stock [Line Items] | |||||
Conversion of Units to Shares, Ratio | 1 | ||||
Expected Effective Income Tax Rate Reconciliation, Percent | 35.20% | 35.30% | 43.10% | ||
Common stock, shares outstanding | 153,900,000 | 153,900,000 | 153,100,000 | ||
Common Class A [Member] | |||||
Class of Stock [Line Items] | |||||
Basic (in shares) | 64,400,000 | 65,900,000 | 65,900,000 | ||
Dilutive effect of unvested restricted shares of Class A common stock | 3,300,000 | 2,000,000 | 2,000,000 | ||
Common stock, shares outstanding | 69,103,465 | 69,103,465 | 68,303,680 | ||
Common Class B [Member] | |||||
Class of Stock [Line Items] | |||||
Basic (in shares) | 84,800,000 | 84,800,000 | 84,800,000 | ||
Common stock, shares outstanding | 84,826,282 | 84,826,282 | 84,826,282 |
Related Party Transactions - THL (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
director
|
Jun. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Related Party Transaction [Line Items] | |||||
Related party expenses, net | $ 4.7 | $ 2.0 | $ 8.5 | $ 3.0 | |
THL [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of related party directors serving on Board of Managers | director | 2 | ||||
Purchases from related party | 0.2 | 1.1 | $ 1.1 | 1.3 | |
THL [Member] | Medium-term Notes [Member] | Term Loan B [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party notes | 39.6 | 39.6 | $ 39.8 | ||
THL [Member] | Operating Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | 0.4 | 0.5 | 0.8 | 0.9 | |
THL [Member] | Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | $ 0.0 | 0.5 | $ 0.0 | $ 1.3 | |
IPO [Member] | THL and its affiliates [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payments to Related Party | $ 17.3 |
Related Party Transactions - Related Party Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 17.8 | $ 17.3 | $ 34.2 | $ 34.1 |
Data and Analytics Services [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | 11.5 | 12.7 | 21.9 | 25.0 |
Servicing, Origination and Default Technology [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 6.3 | $ 4.6 | $ 12.3 | $ 9.1 |
Related Party Transactions - Related Party Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | |||||
Related party expenses, net | $ 4.7 | $ 2.0 | $ 8.5 | $ 3.0 | |
Prepaid expense, current | 0.5 | 0.5 | $ 0.2 | ||
Data Entry, Indexing Services, and Other Operating Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | 2.6 | 2.4 | 4.9 | 4.3 | |
Corporate Services [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | 2.9 | 2.2 | 5.2 | 4.4 | |
Technology and Corporate Services [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, reimbursements from transactions with related party | $ (0.8) | $ (2.6) | $ (1.6) | $ (5.7) |
Computer Software (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Computer software | $ 658.1 | $ 615.9 |
Accumulated depreciation | (186.2) | (149.4) |
Computer software, net | 471.9 | 466.5 |
Internally developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Computer software | 618.9 | 578.1 |
Purchased software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Computer software | $ 39.2 | $ 37.8 |
Other Intangible Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 575.6 | $ 524.6 |
Finite-Lived Intangible Assets, Accumulated Amortization | (230.1) | (194.4) |
Finite-Lived Intangible Assets, Net | 345.5 | 330.2 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 559.6 | 514.8 |
Finite-Lived Intangible Assets, Accumulated Amortization | (221.3) | (186.3) |
Finite-Lived Intangible Assets, Net | 338.3 | 328.5 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 16.0 | 9.8 |
Finite-Lived Intangible Assets, Accumulated Amortization | (8.8) | (8.1) |
Finite-Lived Intangible Assets, Net | $ 7.2 | $ 1.7 |
Long-Term Debt - Schedule of Maturities (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Disclosure [Abstract] | ||
2015 | $ 22.0 | |
2016 | 64.0 | |
2017 | 84.0 | |
2018 | 104.0 | |
2019 | 584.0 | |
Thereafter | 768.0 | |
Total long-term debt | 1,626.0 | $ 1,668.0 |
Issuance costs | 16.1 | 18.1 |
Unamortized discount (premium), net | $ (10.9) | $ (11.6) |
Long-Term Debt - Senior Notes (Details) - Senior Notes [Member] - 5.75% Senior Notes [Member] |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Debt Instrument [Line Items] | |
Stated interest rate | 5.75% |
Redemption price in the event of a change in control | 101.00% |
FNF [Member] | Guarantee Fee from May 26, 2015 - October 2017 [Member] | |
Debt Instrument [Line Items] | |
Guarantee fee, percent of outstanding principal | 1.00% |
FNF [Member] | Guarantee Fee after October 2017 [Member] | |
Debt Instrument [Line Items] | |
Guarantee fee, percent of outstanding principal | 2.00% |
Debt Instrument, Redemption, Period One [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 102.875% |
Debt Instrument, Redemption, Period Two [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 101.92% |
Debt Instrument, Redemption, Period Three [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 100.96% |
Debt Instrument, Redemption, Period Four [Member] | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
Long-Term Debt - Fair Value of Long-Term Debt (Details) - Senior Notes [Member] - 5.75% Senior Notes [Member] - Level 2 [Member] $ in Millions |
Jun. 30, 2016
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Fair value of debt | $ 408.5 |
Fair value of debt, percent over carrying value | 104.80% |
Long-Term Debt - Interest Rate Swaps Additional Information (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jan. 20, 2016 |
|
Derivative [Line Items] | ||
Cumulative loss reflected in Noncontrolling interests | $ 1,800,000 | |
Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 400,000,000.0 | |
Derivative, Notional Amount Per Derivative Instrument | $ 200,000,000 | |
Derivative, Average Fixed Interest Rate | 1.01% | |
Derivative, Gain (Loss) on Derivative, Net | $ (1,600,000) | |
Loss recognized in other comprehensive income (loss), net of tax | 1,000,000 | |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Month, Gross | 1,800,000 | |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $ 1,500,000 | |
London Interbank Offered Rate (LIBOR) [Member] | Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Basis Spread on Variable Rate | 0.50% |
Long-Term Debt - Swap Agreements in the Balance Sheets (Unaudited) (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | $ 3.4 | $ 0.0 |
Long-Term Debt - Derivative Instruments Recognized in AOCI (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCE | $ (1.6) | $ (3.6) | ||
Amount of Loss Reclassified from Accumulated OCE into Net earnings | $ 0.5 | $ 0.8 | ||
Attributable to noncontrolling interests [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCE | (2.3) | (2.3) | ||
Amount of Loss Reclassified from Accumulated OCE into Net earnings | 0.5 | 0.5 | ||
Attributable to Black Knight Financial Services, Inc. [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCE | $ 0.7 | $ (1.3) | ||
Amount of Loss Reclassified from Accumulated OCE into Net earnings | $ 0.0 | $ 0.3 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 16.80% | 3.70% | 16.30% | 1.70% |
Segment Information - Additional Disclosures (Details) |
6 Months Ended |
---|---|
Jun. 30, 2016
segment
| |
Segment Reporting [Abstract] | |
Number of segments | 2 |
Segment Information - Summarized Financial Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Segment Reporting Information [Line Items] | |||||
Revenues | $ 255.5 | $ 232.1 | $ 497.4 | $ 459.3 | |
Operating expenses | 144.4 | 140.3 | 281.2 | 273.5 | |
Transition and integration costs | 1.1 | 4.7 | 1.1 | 7.3 | |
EBITDA | 110.0 | 87.1 | 215.1 | 178.5 | |
Depreciation and amortization | 49.2 | 48.8 | 97.4 | 94.7 | |
Operating income | 60.8 | 38.3 | 117.7 | 83.8 | |
Interest expense | (16.9) | (25.5) | (33.7) | (56.3) | |
Other expense, net | (4.0) | (4.6) | (4.8) | (4.6) | |
Earnings from continuing operations before income taxes | 39.9 | 8.2 | 79.2 | 22.9 | |
Income tax expense | 6.7 | 0.3 | 12.9 | 0.4 | |
Net earnings from continuing operations | 33.2 | 7.9 | 66.3 | 22.5 | |
Balance sheet data: | |||||
Total assets | 3,703.8 | 3,643.1 | 3,703.8 | 3,643.1 | $ 3,703.7 |
Goodwill | 2,301.4 | 2,223.9 | 2,301.4 | 2,223.9 | 2,223.9 |
Operating Segments [Member] | Technology Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 213.2 | 191.0 | 415.6 | 375.7 | |
Operating expenses | 90.3 | 85.6 | 177.3 | 169.9 | |
Transition and integration costs | 0.0 | 0.0 | 0.0 | 0.0 | |
EBITDA | 122.9 | 105.4 | 238.3 | 205.8 | |
Depreciation and amortization | 25.8 | 23.8 | 51.2 | 46.3 | |
Operating income | 97.1 | 81.6 | 187.1 | 159.5 | |
Balance sheet data: | |||||
Total assets | 3,240.8 | 3,163.6 | 3,240.8 | 3,163.6 | |
Goodwill | 2,108.8 | 2,050.7 | 2,108.8 | 2,050.7 | 2,050.7 |
Operating Segments [Member] | Data and Analytics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 44.3 | 43.7 | 86.1 | 88.5 | |
Operating expenses | 37.5 | 37.3 | 72.5 | 74.3 | |
Transition and integration costs | 0.0 | 0.0 | 0.0 | 0.0 | |
EBITDA | 6.8 | 6.4 | 13.6 | 14.2 | |
Depreciation and amortization | 2.3 | 1.6 | 4.4 | 3.3 | |
Operating income | 4.5 | 4.8 | 9.2 | 10.9 | |
Balance sheet data: | |||||
Total assets | 352.9 | 312.0 | 352.9 | 312.0 | |
Goodwill | 192.6 | 173.2 | 192.6 | 173.2 | $ 173.2 |
Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | (2.0) | (2.6) | (4.3) | (4.9) | |
Operating expenses | 16.6 | 17.4 | 31.4 | 29.3 | |
Transition and integration costs | 1.1 | 4.7 | 1.1 | 7.3 | |
EBITDA | (19.7) | (24.7) | (36.8) | (41.5) | |
Depreciation and amortization | 21.1 | 23.4 | 41.8 | 45.1 | |
Operating income | (40.8) | (48.1) | (78.6) | (86.6) | |
Balance sheet data: | |||||
Total assets | 110.1 | 167.5 | 110.1 | 167.5 | |
Goodwill | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
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