Segment Information

9 Months Ended

Sep. 30, 2020

ASC Topic 280, Segment Reporting ("ASC 280") establishes standards for reporting information about segments and requires that a public business enterprise reports financial and descriptive information about its segments. Segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our chief executive officer is identified as the CODM as defined by ASC 280. To align with the internal management of our business operations based on service offerings, our business is organized into two segments. Refer to Note 14 — Revenues for a description of our Software Solutions and Data and Analytics segments.

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

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


	Three months ended September 30, 2020
	Software Solutions		Data and Analytics		Corporate and Other			Total
Revenues	$	259.5	$	53.1	$	—	(1)	$	312.6
Expenses:
Operating expenses	107.9		34.8		24.5		(2)	167.2
Transition and integration costs	—		—		21.9		(3)	21.9
EBITDA	151.6		18.3		(46.4)			123.5
Depreciation and amortization	30.6		3.6		29.8		(4)	64.0
Operating income (loss)	121.0		14.7		(76.2)			59.5
Interest expense, net								(14.7)
Other expense, net								(0.9)
Earnings before income taxes and equity in earnings of unconsolidated affiliates								43.9
Income tax expense								15.9
Earnings before equity in earnings of unconsolidated affiliates								28.0
Equity in earnings of unconsolidated affiliates, net of tax								86.6
Net earnings								114.6
Net losses attributable to redeemable noncontrolling interests								13.2
Net earnings attributable to Black Knight								$	127.8



	Three months ended September 30, 2019
	Software Solutions		Data and Analytics		Corporate and Other			Total
Revenues	$	257.3	$	41.9	$	(0.1)	(1)	$	299.1
Expenses:
Operating expenses	104.1		31.4		28.4		(2)	163.9
Transition and integration costs	—		—		0.4		(5)	0.4
EBITDA	153.2		10.5		(28.9)			134.8
Depreciation and amortization	31.4		3.9		24.3		(4)	59.6
Operating income (loss)	121.8		6.6		(53.2)			75.2
Interest expense, net								(16.5)
Other expense, net								(0.1)
Earnings before income taxes and equity in losses of unconsolidated affiliates								58.6
Income tax expense								9.4
Earnings before equity in losses of unconsolidated affiliates								49.2
Equity in losses of unconsolidated affiliates, net of tax								(11.9)
Net earnings								$	37.3


	Nine months ended September 30, 2020
	Software Solutions		Data and Analytics		Corporate and Other			Total
Revenues	$	749.3	$	147.4	$	(0.3)	(1)	$	896.4
Expenses:
Operating expenses	312.1		98.4		74.6		(2)	485.1
Transition and integration costs	—		—		26.8		(3)	26.8
EBITDA	437.2		49.0		(101.7)			384.5
Depreciation and amortization	91.1		11.4		77.8		(4)	180.3
Operating income (loss)	346.1		37.6		(179.5)			204.2
Interest expense, net								(42.4)
Other income, net								17.1
Earnings before income taxes and equity in earnings of unconsolidated affiliates								178.9
Income tax expense								41.3
Earnings before equity in earnings of unconsolidated affiliates								137.6
Equity in earnings of unconsolidated affiliates, net of tax								66.2
Net earnings								203.8
Net losses attributable to redeemable noncontrolling interests								13.2
Net earnings attributable to Black Knight								$	217.0


	Nine months ended September 30, 2019
	Software Solutions		Data and Analytics		Corporate and Other			Total
Revenues	$	756.2	$	121.3	$	(0.4)	(1)	$	877.1
Expenses:
Operating expenses	308.4		91.5		83.4		(2)	483.3
Transition and integration costs	—		—		2.3		(5)	2.3
EBITDA	447.8		29.8		(86.1)			391.5
Depreciation and amortization	91.4		11.6		71.0		(4)	174.0
Operating income (loss)	356.4		18.2		(157.1)			217.5
Interest expense, net								(48.2)
Other expense, net								(0.9)
Earnings before income taxes and equity in losses of unconsolidated affiliates								168.4
Income tax expense								34.6
Earnings before equity in losses of unconsolidated affiliates								133.8
Equity in losses of unconsolidated affiliates, net of tax								(37.9)
Net earnings								$	95.9

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(1) Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.

(2) Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $9.3 million and $14.5 million for the three months ended September 30, 2020 and 2019, respectively, and $30.5 million and $40.6 million for the nine months ended September 30, 2020 and 2019, respectively.

(3) Transition and integration costs primarily consists of costs associated with acquisitions and expense reduction initiatives.

(4) 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.

(5) Transition and integration costs primarily consists of costs associated with acquisitions.