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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-4798491
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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601 Riverside Avenue, Jacksonville, Florida
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32204
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Condensed Consolidated Financial Statements (Unaudited)
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June 30, 2016
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December 31, 2015
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||||
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(Unaudited)
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||||
ASSETS
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||||
Current assets:
|
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Cash and cash equivalents
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$
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28.2
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$
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186.0
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Trade receivables, net
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144.3
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|
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134.9
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Prepaid expenses and other current assets
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42.0
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28.2
|
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||
Receivables from related parties
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9.8
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7.6
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Total current assets
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224.3
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356.7
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Property and equipment, net
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166.4
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152.0
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Computer software, net
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471.9
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466.5
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Other intangible assets, net
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345.5
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330.2
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Goodwill
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2,301.4
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2,223.9
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Other non-current assets
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194.3
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174.4
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Total assets
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$
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3,703.8
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$
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3,703.7
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LIABILITIES AND EQUITY
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||||
Current liabilities:
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|
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Trade accounts payable and other accrued liabilities
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$
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58.8
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$
|
42.1
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|
Accrued compensation and benefits
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44.9
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52.2
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||
Current portion of long-term debt
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43.5
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43.5
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Deferred revenues
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38.2
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40.4
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Total current liabilities
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185.4
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178.2
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Deferred revenues
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63.2
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56.2
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Deferred income taxes
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6.6
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4.7
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Long-term debt, net of current portion
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1,577.3
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1,618.0
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Other non-current liabilities
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5.7
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1.6
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Total liabilities
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1,838.2
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1,858.7
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Commitments and contingencies (Note 10)
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Equity:
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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
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—
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—
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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
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—
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—
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Preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none
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—
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—
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Additional paid-in capital
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804.6
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798.9
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Retained earnings
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42.8
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19.9
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Accumulated other comprehensive loss
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(1.2
|
)
|
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(0.1
|
)
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||
Total shareholders' equity
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846.2
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818.7
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Noncontrolling interests
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1,019.4
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1,026.3
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Total equity
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1,865.6
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1,845.0
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Total liabilities and equity
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$
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3,703.8
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$
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3,703.7
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Three months ended June 30,
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Six months ended June 30,
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||||||||||||
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2016
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2015
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2016
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2015
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||||||||
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(Unaudited)
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||||||||||||||
Revenues
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$
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255.5
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$
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232.1
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$
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497.4
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$
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459.3
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||||||||
Expenses:
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||||||||
Operating expenses
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144.4
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140.3
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281.2
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273.5
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||||
Depreciation and amortization
|
49.2
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48.8
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97.4
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94.7
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||||
Transition and integration costs
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1.1
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4.7
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1.1
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7.3
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||||
Total expenses
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194.7
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193.8
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379.7
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375.5
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||||
Operating income
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60.8
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38.3
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117.7
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83.8
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||||
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Other income and expense:
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Interest expense
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(16.9
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)
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(25.5
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)
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(33.7
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)
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(56.3
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)
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||||
Other expense, net
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(4.0
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)
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(4.6
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)
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(4.8
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)
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(4.6
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)
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||||
Total other expense, net
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(20.9
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)
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(30.1
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)
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(38.5
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)
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(60.9
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)
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||||
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||||||||
Earnings from continuing operations before income taxes
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39.9
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8.2
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79.2
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22.9
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|
||||
Income tax expense
|
6.7
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0.3
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12.9
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0.4
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|
||||
Net earnings from continuing operations
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33.2
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7.9
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66.3
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22.5
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||||
Loss from discontinued operations, net of tax
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—
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(0.1
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)
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—
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(0.2
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)
|
||||
Net earnings
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33.2
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7.8
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66.3
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22.3
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|
||||
Less: Net earnings attributable to noncontrolling interests
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21.8
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7.5
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43.5
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22.0
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|
||||
Net earnings attributable to Black Knight Financial Services, Inc.
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$
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11.4
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$
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0.3
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$
|
22.8
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$
|
0.3
|
|
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||||||||
Other comprehensive earnings (loss):
|
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||||||||
Unrealized holding gains (losses), net of tax
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0.7
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—
|
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(1.3
|
)
|
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—
|
|
||||
Reclassification adjustments for losses included in net earnings, net of tax (1)
|
—
|
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—
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0.3
|
|
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—
|
|
||||
Total unrealized gains (losses) on interest rate swaps, net of tax (2)
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0.7
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—
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(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
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7.5
|
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|
41.7
|
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|
22.0
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|
||||
Comprehensive earnings
|
$
|
32.0
|
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|
$
|
7.8
|
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$
|
63.4
|
|
|
$
|
22.2
|
|
|
|
|
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||||||||
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Three months ended
June 30, 2016
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May 26, 2015 through
June 30, 2015
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Six months ended
June 30, 2016 |
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May 26, 2015 through
June 30, 2015 |
||||||||
Earnings per share:
|
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|
||||||||
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
|
|