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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended December 31, 2017
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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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82-1273460
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1701 Village Center Circle
Las Vegas, Nevada 89134
(Address of principal executive offices, including zip code)
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(702) 323-7330
(Registrant’s telephone number,
including area code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Cannae Common Stock, $0.0001 par value
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New York Stock Exchange
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
þ
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page
Number
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Item 1.
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Business
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•
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changes in general economic, business, and political conditions, including changes in the financial markets;
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•
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compliance with extensive government regulation of our operating subsidiaries and adverse changes in applicable laws or regulations or in their application by regulators;
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•
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loss of key personnel that could negatively affect our financial results and impair our operating abilities;
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•
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our potential inability to find suitable acquisition candidates, as well as the risks associated with acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties integrating acquisitions;
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•
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other risks detailed in "Risk Factors" below and elsewhere in this document and in our other filings with the SEC.
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•
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increasing Ceridian's vulnerability to general adverse economic and industry conditions, which could place it at a competitive disadvantage compared to its competitors that have relatively less indebtedness;
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•
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requiring Ceridian to dedicate a substantial portion of its cash flow from operations to payments on Ceridian's indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, selling and marketing efforts, service and product development and other purposes;
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•
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exposing Ceridian to the risk of increased interest rates as certain of its borrowings, including borrowings under the Ceridian Credit Facility, are at variable rates of interest;
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•
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restricting Ceridian from making strategic acquisitions, causing it to make non-strategic divestitures, or limiting its ability to engage in acts that may be in its long-term best interests (including merging or consolidating with another person, selling or otherwise disposing of all or substantially all of Ceridian's assets, redeeming, repurchasing or retiring its capital stock, subordinated debt or certain other debt or incurring or guaranteeing additional debt);
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•
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limiting Ceridian's planning flexibility for, or ability to react to, changes in its business and the industries in which it operates; and
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•
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limiting Ceridian's ability to adjust to changing market conditions.
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involve our entry into geographic or business markets in which we have little or no prior experience;
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•
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involve difficulties in retaining the customers of the acquired business;
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•
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involve difficulties and expense associated with regulatory requirements, competition controls or investigations;
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result in a delay or reduction of sales for both us and the business we acquire; and
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•
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disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our current business.
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•
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authorize the issuance of "blank check" preferred stock that could be issued by us upon approval of our board of directors to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive;
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•
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provide that directors may be removed from office only for cause and that any vacancy on our board of directors may only be filled by a majority of our directors then in office, which may make it difficult for other stockholders to reconstitute our board of directors;
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provide that special meetings of the stockholders may be called only upon the request of a majority of our board of directors or by our executive chairman, chief executive officer or president, as applicable;
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require advance notice to be given by stockholders for any stockholder proposals or director nominees;
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provide that directors are elected by a plurality of the votes cast by stockholders, which results in each director nominee elected by a plurality winning his or her seat upon receiving one "for" vote; and
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provide that the board of directors is divided into three classes, as nearly equal in number as possible, with one class being elected at each annual meeting of stockholders, which could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of Cannae.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Cannae Holdings, Inc.
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Stock Price High
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Stock Price Low
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Cash Dividends
Declared
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|||||
Year ended December 31, 2017
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Fourth quarter
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$
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18.45
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$
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16.43
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—
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11/20/2017
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11/30/2017
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12/31/2017
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Cannae Holdings, Inc.
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100.00
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99.02
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92.60
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S&P 500
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100.00
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103.07
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104.21
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Peer Group (1)
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100.00
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103.49
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106.02
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Item 6.
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Selected Financial Data
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As of December 31,
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|||||||||||||||||
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2017
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2016
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2015
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2014
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2013
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|||||||||||||||||
Balance Sheet Data:
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||||
Cash and cash equivalents
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$
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245.6
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$
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141.7
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$
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273.8
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$
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203.0
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150.5
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Total assets
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1,487.2
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1,473.3
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1,469.5
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1,918.1
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2,685.6
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Notes payable, long term
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12.7
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93.3
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92.8
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113.0
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363.1
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Equity
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1,153.1
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1,009.8
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1,056.5
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1,483.6
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1,700.6
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Year Ended December 31,
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2017
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2016
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2015
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2014
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2013
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Operating Data:
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Operating revenue
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$
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1,169.5
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$
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1,178.4
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$
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1,414.7
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$
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1,453.8
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$
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1,426.1
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Expenses:
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Operating Expenses:
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Cost of restaurant revenues
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991.0
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984.1
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1,195.2
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1,219.6
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1,203.6
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Personnel costs
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103.2
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68.3
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85.4
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110.7
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135.7
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Depreciation and amortization
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49.3
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44.7
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49.8
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53.2
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55.1
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|||||
Other operating expenses
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104.4
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83.5
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96.4
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90.6
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71.5
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Total operating expenses
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1,247.9
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1,180.6
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1,426.8
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1,474.1
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1,465.9
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|||||
Operating loss
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(78.4
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)
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(2.2
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)
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(12.1
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)
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(20.3
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)
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(39.8
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)
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|||||
Total other income (expense), net
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3.2
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7.4
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8.3
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(1.4
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)
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(6.4
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)
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|||||
(Loss) earnings before income taxes, equity in earnings (loss) of unconsolidated affiliates, and noncontrolling interest
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(75.2
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)
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5.2
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(3.8
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)
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(21.7
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)
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(46.2
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)
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|||||
Income tax (benefit) expense
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(16.6
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)
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(10.4
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)
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(19.7
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)
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160.3
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(40.1
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)
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|||||
(Loss) earnings before equity in earnings (loss) of unconsolidated affiliates
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(58.6
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)
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15.6
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15.9
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(182.0
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)
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(6.1
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)
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|||||
Equity in earnings (loss) of unconsolidated affiliates
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3.4
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(29.5
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)
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(26.0
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)
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431.9
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(30.1
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)
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|||||
(Loss) earnings from continuing operations, net of tax
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(55.2
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)
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(13.9
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)
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(10.1
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)
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249.9
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(36.2
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)
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|||||
Earnings from discontinued operations, net of tax
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147.7
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2.0
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2.8
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10.1
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14.4
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|||||
Net earnings (loss)
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92.5
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(11.9
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)
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(7.3
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)
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260.0
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(21.8
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)
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|||||
Less: Net (loss) earnings attributable to noncontrolling interests
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(16.3
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)
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0.5
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15.6
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3.8
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13.4
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|||||
Net earnings (loss) attributable to Cannae Holdings
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$
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108.8
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$
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(12.4
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)
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$
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(22.9
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)
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$
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256.2
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$
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(35.2
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)
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||||||||||
Per Share Data:
|
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|
|||||
Basic
|
|
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|||||||||
Net (loss) earnings from continuing operations attributable to Cannae Holdings common shareholders (1)
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$
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(0.55
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)
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$
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(0.21
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)
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$
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(0.36
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)
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$
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3.49
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$
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(0.70
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)
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Net earnings from discontinued operations attributable to Cannae Holdings common shareholders (1)
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2.09
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0.03
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0.04
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0.14
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0.20
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|
|||||
Net earnings (loss) per share attributable to Cannae Holdings common shareholders (1)
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$
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1.54
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$
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(0.18
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)
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$
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(0.32
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)
|
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$
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3.63
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$
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(0.50
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)
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Weighted average shares outstanding Cannae Holdings, basic basis (1)
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70.6
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70.6
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70.6
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70.6
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70.6
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|
|||||
Diluted
|
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|
||||||||||
Net (loss) earnings from continuing operations attributable to Cannae Holdings common shareholders (1)
|
$
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(0.55
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)
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$
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(0.21
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)
|
|
$
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(0.36
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)
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$
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3.49
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$
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(0.70
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)
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Net earnings from discontinued operations attributable to Cannae Holdings common shareholders (1)
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2.09
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0.03
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0.04
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0.14
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0.20
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|
|||||
Net earnings (loss) per share attributable to Cannae Holdings common shareholders (1)
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$
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1.54
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|
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$
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(0.18
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)
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$
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(0.32
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)
|
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$
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3.63
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$
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(0.50
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)
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Weighted average shares outstanding Cannae Holdings, diluted basis (1)
|
70.6
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|
|
70.6
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70.6
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|
|
70.6
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|
|
70.6
|
|
|||||
Cash dividends paid per share Cannae Holdings common stock
|
$
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—
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|
|
$
|
—
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|
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$
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—
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|
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$
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—
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|
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$
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—
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Book value per share Cannae Holdings (1)
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$
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16.33
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$
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14.30
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$
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14.96
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$
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21.01
|
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$
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24.09
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|
(1)
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On November 17, 2017, the date of the consummation of the Split-Off, 70.6 million common shares of CNNE were distributed to FNFV Group shareholders. For comparative purposes, the weighted average number of common shares outstanding and basic and diluted earnings per share for the years ended December 31, 2016, 2015, 2014 and 2013 were calculated using the number of shares distributed as if those shares were issued and outstanding beginning January 1, 2013.
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Quarter Ended
|
||||||||||||||
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March 31,
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June 30,
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September 30,
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December 31,
|
||||||||
2017:
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|
||||
Operating revenue
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$
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275.3
|
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$
|
295.5
|
|
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$
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281.3
|
|
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$
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317.4
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Loss before income taxes, equity in losses of unconsolidated affiliates, and noncontrolling interest
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(2.2
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)
|
|
(35.4
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)
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(21.2
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)
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(16.4
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)
|
||||
Net earnings (loss) attributable to Cannae Holdings (1)
|
$
|
0.5
|
|
|
$
|
126.4
|
|
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$
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(16.6
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)
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|
$
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(1.5
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)
|
Basic earnings (loss) per share attributable to Cannae Holdings common shareholders
|
$
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—
|
|
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$
|
1.79
|
|
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$
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(0.24
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)
|
|
$
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(0.02
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)
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Diluted earnings (loss) per share attributable to Cannae Holdings common shareholders
|
$
|
—
|
|
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$
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1.79
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|
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$
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(0.24
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)
|
|
$
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(0.02
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)
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Cash dividends paid per share Cannae Holdings common stock
|
$
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—
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|
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$
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—
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|
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$
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—
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$
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—
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2016:
|
|
|
|
|
|
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|
||||||||
Operating revenue
|
$
|
295.4
|
|
|
$
|
298.1
|
|
|
$
|
281.9
|
|
|
$
|
303.0
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(Loss) earnings before income taxes, equity in losses of unconsolidated affiliates, and noncontrolling interest
|
(2.0
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)
|
|
18.4
|
|
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(4.3
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)
|
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(6.9
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)
|
||||
Net earnings (loss) attributable to Cannae Holdings (1)
|
$
|
(0.4
|
)
|
|
$
|
16.4
|
|
|
$
|
(27.7
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)
|
|
$
|
(0.7
|
)
|
Basic earnings (loss) per share attributable to Cannae Holdings common shareholders
|
$
|
(0.01
|
)
|
|
$
|
0.23
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.01
|
)
|
Diluted earnings (loss) per share attributable to Cannae Holdings common shareholders
|
$
|
(0.01
|
)
|
|
$
|
0.23
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.01
|
)
|
Cash dividends paid per share Cannae Holdings common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Net earnings (loss) attributable to Cannae Holdings ("Net Earnings") for previously reported quarterly information is different from the previously reported amounts in our Registration Statement and Form 10-Q due to immaterial corrections made during the fourth quarter of 2017. Net earnings for the quarters ended March 31, June 30, and September 30, 2017 increased (decreased) by $(0.2) million, $(1.5) million, and $(1.5) million, respectively from the previously reported amounts. Net Earnings for the quarters ended March 31, June 30, September 30, and December 31, 2016 decreased by $1.3 million, $1.3 million, $1.3 million and $2.6 million, respectively. See Note A
Business and Summary of Significant Accounting Policies
to our Consolidated and Combined Financial Statements for further discussion of immaterial corrections of errors.
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Restaurant revenue
|
$
|
1,129.0
|
|
|
$
|
1,157.6
|
|
|
$
|
1,412.3
|
|
Other operating revenue
|
40.5
|
|
|
20.8
|
|
|
2.4
|
|
|||
Total operating revenues
|
1,169.5
|
|
|
1,178.4
|
|
|
1,414.7
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of restaurant revenue
|
991.0
|
|
|
984.1
|
|
|
1,195.2
|
|
|||
Personnel costs
|
103.2
|
|
|
68.3
|
|
|
85.4
|
|
|||
Depreciation and amortization
|
49.3
|
|
|
44.7
|
|
|
49.8
|
|
|||
Other operating expenses
|
104.4
|
|
|
83.5
|
|
|
96.4
|
|
|||
Total operating expenses
|
1,247.9
|
|
|
1,180.6
|
|
|
1,426.8
|
|
|||
Operating loss
|
(78.4
|
)
|
|
(2.2
|
)
|
|
(12.1
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest and investment income
|
5.3
|
|
|
3.3
|
|
|
2.0
|
|
|||
Interest expense
|
(7.0
|
)
|
|
(5.2
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)
|
|
(5.5
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)
|
|||
Realized gains, net
|
4.9
|
|
|
9.3
|
|
|
11.8
|
|
|||
Total other income
|
3.2
|
|
|
7.4
|
|
|
8.3
|
|
|||
(Loss) earnings from continuing operations before income taxes and equity in earnings (losses) of unconsolidated affiliates
|
(75.2
|
)
|
|
5.2
|
|
|
(3.8
|
)
|
|||
Income tax benefit
|
(16.6
|
)
|
|
(10.4
|
)
|
|
(19.7
|
)
|
|||
(Loss) earnings from continuing operations before equity in earnings (losses) of unconsolidated affiliates
|
(58.6
|
)
|
|
15.6
|
|
|
15.9
|
|
|||
Equity in earnings (losses) of unconsolidated affiliates
|
3.4
|
|
|
(29.5
|
)
|
|
(26.0
|
)
|
|||
Loss from continuing operations
|
(55.2
|
)
|
|
(13.9
|
)
|
|
(10.1
|
)
|
|||
Net earnings from discontinued operations, net of tax
|
147.7
|
|
|
2.0
|
|
|
2.8
|
|
|||
Net earnings (loss)
|
92.5
|
|
|
(11.9
|
)
|
|
(7.3
|
)
|
|||
Less: Net (loss) earnings attributable to non-controlling interests
|
(16.3
|
)
|
|
0.5
|
|
|
15.6
|
|
|||
Net earnings (loss) attributable to Cannae Holdings, Inc. common shareholders
|
$
|
108.8
|
|
|
$
|
(12.4
|
)
|
|
$
|
(22.9
|
)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|||||
Restaurant revenue
|
$
|
1,129.0
|
|
|
$
|
1,157.6
|
|
|
$
|
1,412.3
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Cost of restaurant revenue
|
991.0
|
|
|
984.1
|
|
|
1,195.2
|
|
|||
Personnel costs
|
52.8
|
|
|
52.9
|
|
|
65.1
|
|
|||
Depreciation and amortization
|
43.6
|
|
|
42.4
|
|
|
48.9
|
|
|||
Other operating expenses
|
71.1
|
|
|
70.2
|
|
|
89.1
|
|
|||
Total operating expenses
|
1,158.5
|
|
|
1,149.6
|
|
|
1,398.3
|
|
|||
Operating (loss) income
|
(29.5
|
)
|
|
8.0
|
|
|
14.0
|
|
|||
Other expense:
|
|
|
|
|
|
||||||
Interest expense
|
(6.6
|
)
|
|
(4.7
|
)
|
|
(5.9
|
)
|
|||
Realized losses, net
|
—
|
|
|
(2.5
|
)
|
|
(0.5
|
)
|
|||
Total other expense
|
(6.6
|
)
|
|
(7.2
|
)
|
|
(6.4
|
)
|
|||
(Loss) earnings from continuing operations before income taxes and equity in losses of unconsolidated affiliates
|
(36.1
|
)
|
|
0.8
|
|
|
7.6
|
|
|
Year ended December 31,
|
||
|
2017
|
||
|
(In millions)
|
||
Revenues:
|
|
|
|
Other operating revenue
|
$
|
12.9
|
|
Total operating revenues
|
12.9
|
|
|
Operating expenses:
|
|
||
Personnel costs
|
7.6
|
|
|
Depreciation and amortization
|
3.1
|
|
|
Other operating expenses
|
3.1
|
|
|
Total operating expenses
|
13.8
|
|
|
Operating loss
|
(0.9
|
)
|
|
Loss from continuing operations before income taxes and equity in losses of unconsolidated affiliates
|
$
|
(0.9
|
)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
||||||||||||||||||||||||||
Notes payable
|
$
|
124.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.5
|
|
|
$
|
135.8
|
|
Operating lease payments
|
61.7
|
|
|
57.0
|
|
|
50.6
|
|
|
43.5
|
|
|
32.5
|
|
|
131.5
|
|
|
376.8
|
|
|||||||
Unconditional purchase obligations
|
220.3
|
|
|
26.2
|
|
|
17.0
|
|
|
4.4
|
|
|
3.3
|
|
|
—
|
|
|
271.2
|
|
|||||||
Total
|
$
|
406.3
|
|
|
$
|
83.2
|
|
|
$
|
67.6
|
|
|
$
|
47.9
|
|
|
$
|
35.8
|
|
|
$
|
143.0
|
|
|
$
|
783.8
|
|
Item 7A.
|
Quantitative and Qualitative Disclosure about Market Risk
|
|
Page
Number
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
(in millions)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
245.6
|
|
|
$
|
141.7
|
|
Trade receivables
|
35.8
|
|
|
24.7
|
|
||
Inventory
|
29.7
|
|
|
23.9
|
|
||
Equity securities available for sale, at fair value
|
17.7
|
|
|
51.8
|
|
||
Prepaid expenses and other current assets
|
21.4
|
|
|
8.7
|
|
||
Current assets of discontinued operations
|
—
|
|
|
21.8
|
|
||
Total current assets
|
350.2
|
|
|
272.6
|
|
||
Investments in unconsolidated affiliates
|
424.9
|
|
|
401.0
|
|
||
Property and equipment, net
|
218.8
|
|
|
235.0
|
|
||
Other intangible assets, net
|
214.5
|
|
|
111.8
|
|
||
Goodwill
|
202.7
|
|
|
103.1
|
|
||
Fixed maturity securities available for sale, at fair value
|
14.8
|
|
|
25.0
|
|
||
Deferred tax asset
|
10.6
|
|
|
33.1
|
|
||
Other long term investments and noncurrent assets
|
50.7
|
|
|
49.8
|
|
||
Noncurrent assets of discontinued operations
|
—
|
|
|
241.9
|
|
||
Total assets
|
$
|
1,487.2
|
|
|
$
|
1,473.3
|
|
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and other accrued liabilities, current
|
$
|
100.7
|
|
|
$
|
91.5
|
|
Income taxes payable
|
0.8
|
|
|
—
|
|
||
Deferred revenue, current
|
26.1
|
|
|
24.7
|
|
||
Notes payable, current
|
122.2
|
|
|
11.4
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
31.9
|
|
||
Total current liabilities
|
249.8
|
|
|
159.5
|
|
||
Deferred revenue, long-term
|
9.1
|
|
|
—
|
|
||
Notes payable, long-term
|
12.7
|
|
|
93.3
|
|
||
Accounts payable and other accrued liabilities, long-term
|
62.5
|
|
|
60.6
|
|
||
Noncurrent liabilities of discontinued operations
|
—
|
|
|
150.1
|
|
||
Total liabilities
|
334.1
|
|
|
463.5
|
|
||
Commitments and contingencies - see Note M
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|||
Retained earnings
|
0.2
|
|
|
—
|
|
||
Additional paid-in capital
|
1,130.2
|
|
|
—
|
|
||
Parent investment in FNFV
|
—
|
|
|
961.6
|
|
||
Accumulated other comprehensive loss
|
(71.0
|
)
|
|
(68.1
|
)
|
||
Total Cannae shareholders' equity
|
1,059.4
|
|
|
893.5
|
|
||
Noncontrolling interests
|
93.7
|
|
|
116.3
|
|
||
Total equity
|
1,153.1
|
|
|
1,009.8
|
|
||
Total liabilities and equity
|
$
|
1,487.2
|
|
|
$
|
1,473.3
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Restaurant revenue
|
$
|
1,129.0
|
|
|
$
|
1,157.6
|
|
|
$
|
1,412.3
|
|
Other operating revenue
|
40.5
|
|
|
20.8
|
|
|
2.4
|
|
|||
Total operating revenues
|
1,169.5
|
|
|
1,178.4
|
|
|
1,414.7
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of restaurant revenue
|
991.0
|
|
|
984.1
|
|
|
1,195.2
|
|
|||
Personnel costs
|
103.2
|
|
|
68.3
|
|
|
85.4
|
|
|||
Depreciation and amortization
|
49.3
|
|
|
44.7
|
|
|
49.8
|
|
|||
Other operating expenses
|
104.4
|
|
|
83.5
|
|
|
96.4
|
|
|||
Total operating expenses
|
1,247.9
|
|
|
1,180.6
|
|
|
1,426.8
|
|
|||
Operating loss
|
(78.4
|
)
|
|
(2.2
|
)
|
|
(12.1
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest and investment income
|
5.3
|
|
|
3.3
|
|
|
2.0
|
|
|||
Interest expense
|
(7.0
|
)
|
|
(5.2
|
)
|
|
(5.5
|
)
|
|||
Realized gains, net
|
4.9
|
|
|
9.3
|
|
|
11.8
|
|
|||
Total other income
|
3.2
|
|
|
7.4
|
|
|
8.3
|
|
|||
(Loss) earnings from continuing operations before income taxes and equity in earnings (losses) of unconsolidated affiliates
|
(75.2
|
)
|
|
5.2
|
|
|
(3.8
|
)
|
|||
Income tax benefit
|
(16.6
|
)
|
|
(10.4
|
)
|
|
(19.7
|
)
|
|||
(Loss) earnings from continuing operations before equity in earnings (losses) of unconsolidated affiliates
|
(58.6
|
)
|
|
15.6
|
|
|
15.9
|
|
|||
Equity in earnings (losses) of unconsolidated affiliates
|
3.4
|
|
|
(29.5
|
)
|
|
(26.0
|
)
|
|||
Loss from continuing operations
|
(55.2
|
)
|
|
(13.9
|
)
|
|
(10.1
|
)
|
|||
Net earnings from discontinued operations, net of tax - see Note N
|
147.7
|
|
|
2.0
|
|
|
2.8
|
|
|||
Net earnings (loss)
|
92.5
|
|
|
(11.9
|
)
|
|
(7.3
|
)
|
|||
Less: Net (loss) earnings attributable to non-controlling interests
|
(16.3
|
)
|
|
0.5
|
|
|
15.6
|
|
|||
Net earnings (loss) attributable to Cannae Holdings, Inc. common shareholders
|
$
|
108.8
|
|
|
$
|
(12.4
|
)
|
|
$
|
(22.9
|
)
|
|
|
|
|
|
|
||||||
Amounts attributable to Cannae Holdings, Inc. common shareholders
|
|
|
|
|
|
||||||
Net loss from continuing operations attributable to Cannae Holdings, Inc. common shareholders
|
$
|
(38.7
|
)
|
|
$
|
(14.3
|
)
|
|
$
|
(25.7
|
)
|
Net earnings from discontinued operations attributable to Cannae Holdings, Inc. common shareholders
|
147.5
|
|
|
1.9
|
|
|
2.8
|
|
|||
Net earnings (loss) attributable to Cannae Holdings, Inc. common shareholders
|
$
|
108.8
|
|
|
$
|
(12.4
|
)
|
|
$
|
(22.9
|
)
|
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
||||||
Net loss per share from continuing operations
|
$
|
(0.55
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.36
|
)
|
Net earnings per share from discontinued operations
|
2.09
|
|
|
0.03
|
|
|
0.04
|
|
|||
Net earnings (loss) per share
|
$
|
1.54
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.32
|
)
|
Diluted
|
|
|
|
|
|
||||||
Net loss per share from continuing operations
|
$
|
(0.55
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.36
|
)
|
Net earnings per share from discontinued operations
|
2.09
|
|
|
0.03
|
|
|
0.04
|
|
|||
Net earnings (loss) per share
|
$
|
1.54
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.32
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding Cannae Holdings common stock, basic basis
|
70.6
|
|
|
70.6
|
|
|
70.6
|
|
|||
Weighted average shares outstanding Cannae Holdings common stock, diluted basis
|
70.6
|
|
|
70.6
|
|
|
70.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Net earnings (loss)
|
$
|
92.5
|
|
|
$
|
(11.9
|
)
|
|
$
|
(7.3
|
)
|
Other comprehensive earnings (loss), net of tax:
|
|
|
|
|
|
|
|
||||
Unrealized (loss) gain on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) (1)
|
(8.7
|
)
|
|
2.6
|
|
|
2.3
|
|
|||
Unrealized gain (loss) relating to investments in unconsolidated affiliates (2)
|
8.9
|
|
|
4.8
|
|
|
(26.7
|
)
|
|||
Reclassification adjustments for change in unrealized gains and losses included in net earnings (3)
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive (loss) earnings
|
(2.9
|
)
|
|
7.4
|
|
|
(24.4
|
)
|
|||
Comprehensive earnings (loss)
|
89.6
|
|
|
(4.5
|
)
|
|
(31.7
|
)
|
|||
Less: Comprehensive (loss) earnings attributable to noncontrolling interests
|
(16.3
|
)
|
|
0.5
|
|
|
15.6
|
|
|||
Comprehensive earnings (loss) attributable to Parent
|
$
|
105.9
|
|
|
$
|
(5.0
|
)
|
|
$
|
(47.3
|
)
|
(1)
|
Net of income tax (benefit) expense of
$(3.1) million
,
$1.6 million
and
$1.4 million
for the years ended December 31, 2017, 2016 and 2015, respectively.
|
(2)
|
Net of income tax expense (benefit) of
$2.4 million
,
$2.9 million
and
$(16.3) million
for the years ended December 31, 2017, 2016 and 2015, respectively.
|
(3)
|
Net of income tax expense of
$1.9 million
for the year ended December 31, 2017.
|
|
Common Stock
|
|
Parent Investment in FNFV
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comp (Loss) Earnings
|
|
Non-controlling
Interests
|
|
Total
Equity
|
|||||||||||||||||
|
Shares
|
|
$
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
(in millions)
|
|||||||||||||||||||||||||
Balance, December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
$
|
1,397.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(51.1
|
)
|
|
$
|
137.1
|
|
|
$
|
1,483.6
|
|
Other comprehensive earnings — unrealized gain on investments and other financial instruments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|||||||
Other comprehensive earnings — unrealized loss on investments in unconsolidated affiliates, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.7
|
)
|
|
—
|
|
|
(26.7
|
)
|
|||||||
Subsidiary stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.4
|
|
|||||||
Ceridian stock-based compensation
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|||||||
Distribution of J. Alexander's to FNFV Shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.0
|
)
|
|
(13.0
|
)
|
|||||||
Sale of Cascade Timberlands
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
|
(24.5
|
)
|
|||||||
Net change in Parent investment in FNFV
|
—
|
|
|
—
|
|
|
(359.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(359.7
|
)
|
|||||||
Subsidiary dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|
(3.0
|
)
|
|||||||
Net (loss) earnings
|
—
|
|
|
—
|
|
|
(22.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.6
|
|
|
(7.3
|
)
|
|||||||
Balance, December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
1,018.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(75.5
|
)
|
|
$
|
113.6
|
|
|
$
|
1,056.5
|
|
Other comprehensive earnings — unrealized gain on investments and other financial instruments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||||||
Other comprehensive earnings — unrealized gain on investments in unconsolidated affiliates, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
4.8
|
|
|||||||
Subsidiary stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
|||||||
Ceridian stock-based compensation
|
—
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
|||||||
Acquisition of Brasada
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
|||||||
Dissolution of consolidated subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|||||||
Net change in Parent investment in FNFV
|
—
|
|
|
—
|
|
|
(49.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49.5
|
)
|
|||||||
Subsidiary dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|||||||
Net (loss) earnings
|
—
|
|
|
—
|
|
|
(12.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(11.9
|
)
|
|||||||
Balance, December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
$
|
961.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(68.1
|
)
|
|
$
|
116.3
|
|
|
$
|
1,009.8
|
|
Other comprehensive earnings — unrealized loss on investments and other financial instruments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.7
|
)
|
|
—
|
|
|
(8.7
|
)
|
|||||||
Other comprehensive earnings — unrealized gain on investments in unconsolidated affiliates, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
|||||||
Reclassification adjustments for unrealized gains and losses included in net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|||||||
Issuance of restricted stock
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Sale of OneDigital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.2
|
)
|
|
(6.2
|
)
|
|||||||
Contribution of back office services from FNF
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||||
Ceridian stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
|||||||
Net change in Parent investment in FNFV
|
—
|
|
|
—
|
|
|
(46.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.0
|
)
|
|||||||
Subsidiary dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||||||
FNF investment
|
5.7
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
|||||||
FNF contribution of FNFV
|
64.9
|
|
|
—
|
|
|
(1,024.2
|
)
|
|
1,024.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net earnings (loss)
|
—
|
|
|
—
|
|
|
108.6
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(16.3
|
)
|
|
92.5
|
|
|||||||
Balance, December 31, 2017
|
70.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,130.2
|
|
|
$
|
0.2
|
|
|
$
|
(71.0
|
)
|
|
$
|
93.7
|
|
|
$
|
1,153.1
|
|
See Notes to Consolidated and Combined Financial Statements.
|
|
Year ended December 31,
|
||||||||||
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net earnings (loss)
|
$
|
92.5
|
|
|
$
|
(11.9
|
)
|
|
$
|
(7.3
|
)
|
Adjustments to reconcile net earnings (loss) to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
58.1
|
|
|
62.9
|
|
|
65.5
|
|
|||
Equity in (earnings) losses of unconsolidated affiliates
|
(3.4
|
)
|
|
29.5
|
|
|
26.0
|
|
|||
Realized gains, net
|
(4.9
|
)
|
|
(9.3
|
)
|
|
(11.8
|
)
|
|||
Gain on sale of OneDigital
|
(276.0
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of assets
|
9.9
|
|
|
3.3
|
|
|
18.5
|
|
|||
Subsidiary stock-based compensation cost
|
0.5
|
|
|
1.2
|
|
|
1.4
|
|
|||
Changes in assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
||||||
Net increase in trade receivables
|
(1.2
|
)
|
|
(4.2
|
)
|
|
(1.6
|
)
|
|||
Net (increase) decrease in inventory, prepaid expenses and other assets
|
(12.2
|
)
|
|
11.8
|
|
|
11.2
|
|
|||
Net increase (decrease) in accounts payable, accrued liabilities, deferred revenue and other
|
15.0
|
|
|
(7.6
|
)
|
|
(23.5
|
)
|
|||
Net change in income taxes
|
31.0
|
|
|
(15.4
|
)
|
|
(67.3
|
)
|
|||
Net cash (used in) provided by operating activities
|
(90.7
|
)
|
|
60.3
|
|
|
11.1
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of investment securities available for sale
|
31.6
|
|
|
—
|
|
|
—
|
|
|||
Additions to property and equipment
|
(39.0
|
)
|
|
(49.6
|
)
|
|
(55.4
|
)
|
|||
Additions to other intangible assets
|
(1.1
|
)
|
|
(5.6
|
)
|
|
(5.1
|
)
|
|||
Purchases of investment securities available for sale
|
(1.3
|
)
|
|
(39.9
|
)
|
|
(28.8
|
)
|
|||
Contributions to investments in unconsolidated affiliates
|
(1.4
|
)
|
|
(68.6
|
)
|
|
(4.5
|
)
|
|||
Proceeds from the sale of cost method and other investments
|
1.3
|
|
|
36.0
|
|
|
—
|
|
|||
Purchases of other long-term investments
|
(4.3
|
)
|
|
(6.3
|
)
|
|
(5.6
|
)
|
|||
Distributions from investments in unconsolidated affiliates
|
1.1
|
|
|
42.4
|
|
|
315.7
|
|
|||
Net other investing activities
|
1.4
|
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|||
Acquisition of T-System, net of cash acquired
|
(201.6
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of Brasada, net of cash acquired
|
—
|
|
|
(27.5
|
)
|
|
—
|
|
|||
Proceeds from sale of OneDigital
|
326.0
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of Cascade Timberlands, LLC
|
—
|
|
|
—
|
|
|
82.2
|
|
|||
Other acquisitions/disposals of businesses, net of cash acquired
|
(21.0
|
)
|
|
(48.4
|
)
|
|
(24.8
|
)
|
|||
Net cash provided by (used in) investing activities
|
91.7
|
|
|
(168.2
|
)
|
|
273.1
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings
|
84.4
|
|
|
76.7
|
|
|
132.0
|
|
|||
Debt service payments
|
(35.8
|
)
|
|
(44.7
|
)
|
|
(31.2
|
)
|
|||
Proceeds from sale of Cascades paid to noncontrolling interest shareholders
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
|||
Proceeds from FNF Investment
|
100.0
|
|
|
—
|
|
|
—
|
|
|||
Subsidiary distributions paid to noncontrolling interest shareholders
|
(0.4
|
)
|
|
(0.7
|
)
|
|
(3.0
|
)
|
|||
Payment of contingent consideration for prior period acquisitions
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|||
Equity transactions with Parent, net
|
(46.0
|
)
|
|
(52.1
|
)
|
|
(285.8
|
)
|
|||
Net cash provided by (used in) financing activities
|
98.2
|
|
|
(20.8
|
)
|
|
(212.5
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
99.2
|
|
|
(128.7
|
)
|
|
71.7
|
|
|||
Cash and cash equivalents at beginning of period, including cash of discontinued operations
|
146.4
|
|
|
275.1
|
|
|
203.4
|
|
|||
Cash and cash equivalents at end of period
|
$
|
245.6
|
|
|
$
|
146.4
|
|
|
$
|
275.1
|
|
Note A.
|
Business and Summary of Significant Accounting Policies
|
|
Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates)
|
|
Unrealized (loss) gain relating to investments in unconsolidated affiliates
|
|
Total Accumulated Other Comprehensive (Loss) Earnings
|
||||||
|
(In millions)
|
||||||||||
Balance December 31, 2015
|
$
|
2.3
|
|
|
$
|
(77.8
|
)
|
|
$
|
(75.5
|
)
|
Other comprehensive earnings
|
2.6
|
|
|
4.8
|
|
|
7.4
|
|
|||
Balance December 31, 2016
|
4.9
|
|
|
(73.0
|
)
|
|
(68.1
|
)
|
|||
Other comprehensive (losses) earnings
|
(8.7
|
)
|
|
8.9
|
|
|
0.2
|
|
|||
Reclassification adjustments
|
(3.1
|
)
|
|
$
|
—
|
|
|
(3.1
|
)
|
||
Balance December 31, 2017
|
$
|
(6.9
|
)
|
|
$
|
(64.1
|
)
|
|
$
|
(71.0
|
)
|
Cash paid
|
$
|
202.9
|
|
Less: Cash acquired
|
1.3
|
|
|
Total cash consideration paid
|
$
|
201.6
|
|
|
Fair Value
|
||
Trade receivables
|
$
|
11.3
|
|
Prepaid and other current assets
|
2.0
|
|
|
Property and equipment
|
1.2
|
|
|
Goodwill
|
99.6
|
|
|
Other intangible assets
|
112.4
|
|
|
Total assets acquired
|
226.5
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
6.6
|
|
|
Deferred revenue
|
11.0
|
|
|
Deferred tax liabilities
|
7.3
|
|
|
Total liabilities assumed
|
24.9
|
|
|
Net assets acquired
|
$
|
201.6
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Unaudited)
|
||||||||||
Total revenues
|
$
|
1,214.8
|
|
|
$
|
1,242.5
|
|
|
$
|
1,478.4
|
|
Net earnings (loss) attributable to Cannae Holdings
|
109.8
|
|
|
(5.4
|
)
|
|
(18.9
|
)
|
|
|
Gross Carrying Value
|
|
Weighted Average
Estimated Useful Life
(in years)
|
||
Property and equipment
|
|
$
|
1.2
|
|
|
3 - 5
|
Other intangible assets:
|
|
|
|
|
||
Customer relationships
|
|
55.2
|
|
|
10
|
|
Computer software
|
|
45.1
|
|
|
9
|
|
Tradename
|
|
10.6
|
|
|
10
|
|
Noncompete agreement
|
|
1.5
|
|
|
5
|
|
Total other intangible assets
|
|
112.4
|
|
|
|
|
Total
|
|
$
|
113.6
|
|
|
|
Cash paid
|
$
|
12.0
|
|
Cash consideration financed through a mortgage loan
|
15.5
|
|
|
Total cash consideration paid
|
$
|
27.5
|
|
|
Fair Value
|
||
Trade receivables
|
$
|
0.4
|
|
Prepaid and other current assets
|
1.2
|
|
|
Other long-term investments
|
8.7
|
|
|
Property and equipment
|
14.4
|
|
|
Other intangible assets
|
7.0
|
|
|
Total assets acquired
|
31.7
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
1.1
|
|
|
Deferred revenue
|
1.1
|
|
|
Notes payable
|
0.2
|
|
|
Total liabilities assumed
|
2.4
|
|
|
Total noncontrolling assumed
|
1.8
|
|
|
Net assets acquired
|
$
|
27.5
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Unaudited)
|
||||||
Total revenues
|
$
|
1,179.4
|
|
|
$
|
1,434.0
|
|
Net loss attributable to Cannae Holdings
|
(11.7
|
)
|
|
(20.3
|
)
|
|
|
Gross Carrying Value
|
|
Weighted Average
Estimated Useful Life
(in years)
|
||
Property and equipment
|
|
$
|
14.4
|
|
|
3 - 40
|
Other intangible assets:
|
|
|
|
|
||
Management services contract
|
|
5.2
|
|
|
12
|
|
Tradename
|
|
1.8
|
|
|
15
|
|
Total other intangible assets
|
|
7.0
|
|
|
|
|
Total
|
|
$
|
21.4
|
|
|
|
Note C.
|
Fair Value Measurements
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed-maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
14.8
|
|
|
$
|
—
|
|
|
$
|
14.8
|
|
Equity securities available for sale
|
17.7
|
|
|
—
|
|
|
—
|
|
|
17.7
|
|
||||
Deferred compensation
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||
Total assets
|
$
|
22.1
|
|
|
$
|
14.8
|
|
|
$
|
—
|
|
|
$
|
36.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||
Total liabilities
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed-maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
25.0
|
|
|
$
|
—
|
|
|
$
|
25.0
|
|
Equity securities available for sale
|
51.8
|
|
|
—
|
|
|
—
|
|
|
51.8
|
|
||||
Deferred compensation
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
Total assets
|
$
|
55.3
|
|
|
$
|
25.0
|
|
|
$
|
—
|
|
|
$
|
80.3
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
Total liabilities
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Carrying
Value
|
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate debt securities
|
14.8
|
|
|
26.3
|
|
|
0.3
|
|
|
(11.8
|
)
|
|
14.8
|
|
|||||
Equity securities available for sale
|
17.7
|
|
|
17.7
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
17.7
|
|
|||||
Total
|
$
|
32.5
|
|
|
$
|
44.0
|
|
|
$
|
0.6
|
|
|
$
|
(12.1
|
)
|
|
$
|
32.5
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Carrying
Value
|
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate debt securities
|
25.0
|
|
|
24.7
|
|
|
0.3
|
|
|
—
|
|
|
25.0
|
|
|||||
Equity securities available for sale
|
51.8
|
|
|
44.2
|
|
|
7.6
|
|
|
—
|
|
|
51.8
|
|
|||||
Total
|
$
|
76.8
|
|
|
$
|
68.9
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
76.8
|
|
|
Less than 12 Months
|
||||||
|
Fair
|
|
Unrealized
|
||||
|
Value
|
|
Losses
|
||||
Corporate debt securities
|
$
|
14.3
|
|
|
$
|
(11.8
|
)
|
Equity securities available for sale
|
6.8
|
|
|
(0.3
|
)
|
||
Total temporarily impaired securities
|
$
|
21.1
|
|
|
$
|
(12.1
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Cash and short term investments
|
$
|
2.0
|
|
|
$
|
0.5
|
|
|
$
|
0.2
|
|
Fixed maturity securities available for sale
|
2.5
|
|
|
2.1
|
|
|
—
|
|
|||
Notes receivable
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|||
Other
|
0.2
|
|
|
0.1
|
|
|
1.2
|
|
|||
Total
|
$
|
5.3
|
|
|
$
|
3.3
|
|
|
$
|
2.0
|
|
|
Ownership at December 31, 2017
|
|
2017
|
|
2016
|
|||||
Ceridian
|
33
|
%
|
|
$
|
324.9
|
|
|
$
|
316.9
|
|
Ceridian II
|
32
|
%
|
|
58.4
|
|
|
47.4
|
|
||
Total investment in Ceridian
|
|
|
|
383.3
|
|
|
364.3
|
|
||
Other
|
various
|
|
|
41.6
|
|
|
36.7
|
|
||
Total
|
|
|
|
$
|
424.9
|
|
|
$
|
401.0
|
|
Note E.
|
Property and Equipment
|
Note F.
|
Goodwill
|
|
|
Restaurant Group
|
|
T-System
|
|
FNFV Corporate
and Other |
|
Total
|
||||||||
|
(in millions)
|
|||||||||||||||
Balance, December 31, 2015
|
|
$
|
102.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102.7
|
|
Immaterial prior period correction, see Note A
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
||||
Sale of Max & Erma's
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
||||
Balance, December 31, 2016
|
|
$
|
103.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103.1
|
|
Goodwill acquired during the year
|
|
—
|
|
|
99.6
|
|
|
—
|
|
|
99.6
|
|
||||
Balance, December 31, 2017
|
|
$
|
103.1
|
|
|
$
|
99.6
|
|
|
$
|
—
|
|
|
$
|
202.7
|
|
Note G.
|
Variable Interest Entities
|
|
|
2017
|
|
2016
|
||||||||
|
|
Total Assets
|
|
Maximum Exposure
|
|
Total Assets
|
|
Maximum Exposure
|
||||
|
(in millions)
|
|||||||||||
Investments in unconsolidated affiliates
|
|
13.0
|
|
|
14.7
|
|
|
9.8
|
|
|
11.9
|
|
Note H.
|
Other Intangible Assets
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Trademarks and tradenames
|
$
|
84.0
|
|
|
$
|
76.6
|
|
Software
|
67.4
|
|
|
19.6
|
|
||
Customer relationships and contracts
|
61.8
|
|
|
5.3
|
|
||
Other
|
17.4
|
|
|
19.5
|
|
||
|
230.6
|
|
|
121.0
|
|
||
Accumulated amortization
|
(16.1
|
)
|
|
(9.2
|
)
|
||
|
$
|
214.5
|
|
|
$
|
111.8
|
|
Note I.
|
Inventory
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Bakery inventory:
|
|
|
|
||||
Raw materials
|
$
|
9.1
|
|
|
$
|
5.1
|
|
Semi-finished and finished goods
|
7.5
|
|
|
5.9
|
|
||
Packaging
|
2.8
|
|
|
2.2
|
|
||
Obsolescence reserve
|
(0.6
|
)
|
|
(0.3
|
)
|
||
Total bakery inventory
|
18.8
|
|
|
12.9
|
|
||
Restaurant and other inventory
|
10.9
|
|
|
11.0
|
|
||
Total inventory
|
$
|
29.7
|
|
|
$
|
23.9
|
|
Note J.
|
Accounts Payable and Other Accrued Liabilities
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Accrued payroll and employee benefits
|
$
|
23.7
|
|
|
$
|
20.4
|
|
Trade accounts payable
|
20.3
|
|
|
24.7
|
|
||
Accrued casualty insurance expenses
|
16.5
|
|
|
16.7
|
|
||
Other accrued liabilities
|
40.2
|
|
|
29.7
|
|
||
|
$
|
100.7
|
|
|
$
|
91.5
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Unfavorable lease liability
|
$
|
25.6
|
|
|
$
|
30.0
|
|
Other accrued liabilities
|
36.9
|
|
|
30.6
|
|
||
|
$
|
62.5
|
|
|
$
|
60.6
|
|
Note K.
|
Notes Payable
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(In millions)
|
||||||
ABRH Term Loan, interest payable monthly at LIBOR + 3.0% (4.57% at December 31, 2017), due August 2019
|
|
$
|
84.2
|
|
|
$
|
91.6
|
|
ABRH Revolving Credit Facility, due August 2019 with interest payable monthly or quarterly at various rates
|
|
38.0
|
|
|
—
|
|
||
Brasada Cascades Credit Agreement, due January 2026 with interest payable monthly at varying rates
|
|
12.1
|
|
|
12.9
|
|
||
Revolver Note with FNF, Inc., unused portion of $100.0 million at December 31, 2017
|
|
—
|
|
|
—
|
|
||
Other
|
|
0.6
|
|
|
0.2
|
|
||
Notes payable, total
|
|
$
|
134.9
|
|
|
$
|
104.7
|
|
Less: Notes payable, current
|
|
122.2
|
|
|
11.4
|
|
||
Notes payable, long term
|
|
$
|
12.7
|
|
|
$
|
93.3
|
|
Note L.
|
Income Taxes
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||
Employee benefit accruals
|
$
|
0.2
|
|
|
$
|
1.6
|
|
Net operating loss carryforwards
|
10.9
|
|
|
—
|
|
||
Equity investments
|
14.6
|
|
|
35.0
|
|
||
Investment securities
|
3.0
|
|
|
—
|
|
||
Partnerships
|
—
|
|
|
4.9
|
|
||
Accrued liabilities
|
3.3
|
|
|
—
|
|
||
State income taxes
|
—
|
|
|
0.7
|
|
||
Tax credit carryforwards
|
1.1
|
|
|
—
|
|
||
Total gross deferred tax asset
|
33.1
|
|
|
42.2
|
|
||
Less: valuation allowance
|
0.7
|
|
|
5.8
|
|
||
Total deferred tax asset
|
$
|
32.4
|
|
|
$
|
36.4
|
|
Deferred tax liabilities:
|
|
|
|
|
|
||
Investment securities
|
$
|
—
|
|
|
$
|
(3.0
|
)
|
Amortization of goodwill and intangible assets
|
(16.8
|
)
|
|
—
|
|
||
Partnerships
|
(4.4
|
)
|
|
—
|
|
||
Depreciation
|
(0.6
|
)
|
|
(0.3
|
)
|
||
Total deferred tax liability
|
$
|
(21.8
|
)
|
|
$
|
(3.3
|
)
|
Net deferred tax asset
|
$
|
10.6
|
|
|
$
|
33.1
|
|
Note M.
|
Commitments and Contingencies
|
2018
|
$
|
220.3
|
|
2019
|
26.2
|
|
|
2020
|
17.0
|
|
|
2021
|
4.4
|
|
|
2022
|
3.3
|
|
|
Thereafter
|
—
|
|
|
Total purchase commitments
|
$
|
271.2
|
|
|
Year Ended December 31,
|
||||||||||
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Revenues:
|
|
|
|
||||||||
Other operating revenue
|
$
|
80.9
|
|
|
$
|
148.3
|
|
|
$
|
116.4
|
|
Total operating revenues
|
80.9
|
|
|
148.3
|
|
|
116.4
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Personnel costs
|
56.9
|
|
|
94.8
|
|
|
75.7
|
|
|||
Depreciation and amortization
|
8.8
|
|
|
18.1
|
|
|
15.7
|
|
|||
Other operating expenses
|
11.3
|
|
|
27.1
|
|
|
17.0
|
|
|||
Total operating expenses
|
77.0
|
|
|
140.0
|
|
|
108.4
|
|
|||
Operating income
|
3.9
|
|
|
8.3
|
|
|
8.0
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(2.9
|
)
|
|
(4.8
|
)
|
|
(3.0
|
)
|
|||
Realized gain
|
276.0
|
|
|
—
|
|
|
—
|
|
|||
Total other income (expense)
|
273.1
|
|
|
(4.8
|
)
|
|
(3.0
|
)
|
|||
Earnings from continuing operations before income taxes
|
277.0
|
|
|
3.5
|
|
|
5.0
|
|
|||
Income tax expense
|
129.3
|
|
|
1.5
|
|
|
2.2
|
|
|||
Net earnings from discontinued operations
|
147.7
|
|
|
2.0
|
|
|
2.8
|
|
|||
|
|
|
|
|
|
||||||
Cash flow from discontinued operations data:
|
|
|
|
|
|
||||||
Net cash provided by operations
|
$
|
17.3
|
|
|
$
|
27.6
|
|
|
$
|
17.9
|
|
Net cash used in investing activities
|
(27.3
|
)
|
|
(51.9
|
)
|
|
(30.0
|
)
|
|
December 31,
|
||
|
2016
|
||
|
|
||
Cash and cash equivalents
|
$
|
4.7
|
|
Trade receivables
|
13.6
|
|
|
Prepaid expenses and other current assets
|
3.5
|
|
|
Total current assets of discontinued operations
|
21.8
|
|
|
Property and equipment, net
|
3.0
|
|
|
Deferred tax assets
|
17.0
|
|
|
Other intangible assets, net
|
115.6
|
|
|
Goodwill
|
104.7
|
|
|
Other long term investments and noncurrent assets
|
1.6
|
|
|
Total noncurrent assets of discontinued operations
|
241.9
|
|
|
Total assets of discontinued operations
|
$
|
263.7
|
|
|
|
||
Accounts payable and other accrued liabilities, current
|
$
|
28.5
|
|
Income taxes payable
|
3.4
|
|
|
Total current liabilities of discontinued operations
|
31.9
|
|
|
Long term notes payable
|
128.7
|
|
|
Accounts payable and other accrued liabilities, long term
|
21.4
|
|
|
Total noncurrent liabilities of discontinued operations
|
150.1
|
|
|
Total liabilities of discontinued operations
|
$
|
182.0
|
|
Note O.
|
Employee Benefit Plans
|
|
|
|
|
|||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Balance, December 31, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
287,059
|
|
|
18.45
|
|
|
Balance, December 31, 2017
|
287,059
|
|
|
$
|
18.45
|
|
Note P.
|
Concentration of Risk
|
|
Restaurant Group
|
|
T-System
|
|
Ceridian
|
|
Corporate
and Other |
|
Ceridian Elimination
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Restaurant revenues
|
$
|
1,129.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,129.0
|
|
Other revenues
|
—
|
|
|
12.9
|
|
|
751.7
|
|
|
27.6
|
|
|
(751.7
|
)
|
|
40.5
|
|
||||||
Revenues from external customers
|
1,129.0
|
|
|
12.9
|
|
|
751.7
|
|
|
27.6
|
|
|
(751.7
|
)
|
|
1,169.5
|
|
||||||
Interest and investment income, including realized gains and losses
|
—
|
|
|
—
|
|
|
—
|
|
|
10.2
|
|
|
—
|
|
|
10.2
|
|
||||||
Total revenues
|
1,129.0
|
|
|
12.9
|
|
|
751.7
|
|
|
37.8
|
|
|
(751.7
|
)
|
|
1,179.7
|
|
||||||
Depreciation and amortization
|
43.6
|
|
|
3.1
|
|
|
57.9
|
|
|
2.6
|
|
|
(57.9
|
)
|
|
49.3
|
|
||||||
Interest expense
|
(6.6
|
)
|
|
—
|
|
|
(86.6
|
)
|
|
(0.4
|
)
|
|
86.6
|
|
|
(7.0
|
)
|
||||||
(Loss) earnings from continuing operations, before income taxes and equity in earnings (loss) of unconsolidated affiliates
|
(36.1
|
)
|
|
(0.9
|
)
|
|
(51.8
|
)
|
|
(38.2
|
)
|
|
51.8
|
|
|
(75.2
|
)
|
||||||
Income tax expense (benefit)
|
0.7
|
|
|
(2.4
|
)
|
|
(43.9
|
)
|
|
(14.9
|
)
|
|
43.9
|
|
|
(16.6
|
)
|
||||||
(Loss) earnings from continuing operations, before equity in earnings (loss) of unconsolidated affiliates
|
(36.8
|
)
|
|
1.5
|
|
|
(7.9
|
)
|
|
(23.3
|
)
|
|
7.9
|
|
|
(58.6
|
)
|
||||||
Equity in earnings of unconsolidated affiliates
|
0.1
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.9
|
|
|
3.4
|
|
||||||
(Loss) earnings from continuing operations
|
$
|
(36.7
|
)
|
|
$
|
1.5
|
|
|
$
|
(7.9
|
)
|
|
$
|
(21.9
|
)
|
|
$
|
9.8
|
|
|
$
|
(55.2
|
)
|
Assets
|
$
|
501.0
|
|
|
$
|
221.2
|
|
|
$
|
6,832.9
|
|
|
$
|
765.0
|
|
|
$
|
(6,832.9
|
)
|
|
$
|
1,487.2
|
|
Goodwill
|
103.1
|
|
|
99.6
|
|
|
2,087.3
|
|
|
—
|
|
|
(2,087.3
|
)
|
|
202.7
|
|
|
Restaurant Group
|
|
Ceridian
|
|
Corporate
and Other |
|
Ceridian Elimination
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Restaurant revenues
|
$
|
1,157.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,157.6
|
|
Other revenues
|
—
|
|
|
704.2
|
|
|
20.8
|
|
|
(704.2
|
)
|
|
20.8
|
|
|||||
Revenues from external customers
|
1,157.6
|
|
|
704.2
|
|
|
20.8
|
|
|
(704.2
|
)
|
|
1,178.4
|
|
|||||
Interest and investment (loss) income, including realized gains and losses
|
(2.5
|
)
|
|
—
|
|
|
15.1
|
|
|
—
|
|
|
12.6
|
|
|||||
Total revenues
|
1,155.1
|
|
|
704.2
|
|
|
35.9
|
|
|
(704.2
|
)
|
|
1,191.0
|
|
|||||
Depreciation and amortization
|
42.4
|
|
|
57.3
|
|
|
2.3
|
|
|
(57.3
|
)
|
|
44.7
|
|
|||||
Interest expense
|
(4.7
|
)
|
|
(87.4
|
)
|
|
(0.5
|
)
|
|
87.4
|
|
|
(5.2
|
)
|
|||||
Earnings (loss) from continuing operations, before income taxes and equity in losses of unconsolidated affiliates
|
0.8
|
|
|
(87.6
|
)
|
|
4.4
|
|
|
87.6
|
|
|
5.2
|
|
|||||
Income tax expense (benefit)
|
0.4
|
|
|
17.8
|
|
|
(10.8
|
)
|
|
(17.8
|
)
|
|
(10.4
|
)
|
|||||
Earnings (loss) from continuing operations, before equity in losses of unconsolidated affiliates
|
0.4
|
|
|
(105.4
|
)
|
|
15.2
|
|
|
105.4
|
|
|
15.6
|
|
|||||
Equity in losses of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(29.1
|
)
|
|
(29.5
|
)
|
|||||
Earnings (loss) from continuing operations
|
$
|
0.4
|
|
|
$
|
(105.4
|
)
|
|
$
|
14.8
|
|
|
$
|
76.3
|
|
|
$
|
(13.9
|
)
|
Assets
|
$
|
497.2
|
|
|
$
|
6,426.5
|
|
|
$
|
976.1
|
|
|
$
|
(6,426.5
|
)
|
|
$
|
1,473.3
|
|
Goodwill
|
103.1
|
|
|
2,058.0
|
|
|
—
|
|
|
(2,058.0
|
)
|
|
103.1
|
|
|
Restaurant Group
|
|
Ceridian
|
|
Corporate
and Other |
|
Ceridian Elimination
|
|
Total FNFV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Restaurant revenues
|
$
|
1,412.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,412.3
|
|
Other revenues
|
—
|
|
|
693.9
|
|
|
2.4
|
|
|
(693.9
|
)
|
|
2.4
|
|
|||||
Revenues from external customers
|
1,412.3
|
|
|
693.9
|
|
|
2.4
|
|
|
(693.9
|
)
|
|
1,414.7
|
|
|||||
Interest and investment (loss) income, including realized gains and losses
|
(0.5
|
)
|
|
—
|
|
|
14.3
|
|
|
—
|
|
|
13.8
|
|
|||||
Total revenues
|
1,411.8
|
|
|
693.9
|
|
|
16.7
|
|
|
(693.9
|
)
|
|
1,428.5
|
|
|||||
Depreciation and amortization
|
48.9
|
|
|
56.0
|
|
|
0.9
|
|
|
(56.0
|
)
|
|
49.8
|
|
|||||
Interest expense
|
(5.9
|
)
|
|
(87.8
|
)
|
|
0.4
|
|
|
87.8
|
|
|
(5.5
|
)
|
|||||
Earnings (loss) from continuing operations, before income taxes and equity in earnings (loss) of unconsolidated affiliates
|
7.6
|
|
|
(55.7
|
)
|
|
(11.4
|
)
|
|
55.7
|
|
|
(3.8
|
)
|
|||||
Income tax (benefit) expense
|
(1.8
|
)
|
|
8.6
|
|
|
(17.9
|
)
|
|
(8.6
|
)
|
|
(19.7
|
)
|
|||||
Earnings (loss) from continuing operations, before equity in earnings (loss) of unconsolidated affiliates
|
9.4
|
|
|
(64.3
|
)
|
|
6.5
|
|
|
64.3
|
|
|
15.9
|
|
|||||
Equity in (losses) earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
1.2
|
|
|
(27.2
|
)
|
|
(26.0
|
)
|
|||||
Earnings (loss) from continuing operations
|
$
|
9.4
|
|
|
$
|
(64.3
|
)
|
|
$
|
7.7
|
|
|
$
|
37.1
|
|
|
$
|
(10.1
|
)
|
Assets
|
$
|
507.6
|
|
|
$
|
7,186.4
|
|
|
$
|
961.9
|
|
|
$
|
(7,186.4
|
)
|
|
$
|
1,469.5
|
|
Goodwill
|
102.7
|
|
|
2,008.5
|
|
|
—
|
|
|
(2,008.5
|
)
|
|
102.7
|
|
•
|
Restaurant Group.
This segment consists of the operations of ABRH, in which we have a
55%
ownership interest. ABRH and its affiliates are the owners and operators of the O'Charley's, Ninety Nine Restaurants, Village Inn and Bakers Square food service and restaurant concepts, as well as the Legendary Baking bakery operation. This segment also included the results of operations of J. Alexander's through the date which it was distributed to holders of FNFV Group tracking stock, September 28, 2015, and the Max & Erma's restaurant concept, which was sold pursuant to an APA on January 25, 2016.
|
•
|
Ceridian.
This segment consists of our
33%
ownership interest in Ceridian. Ceridian, through its operating subsidiary Ceridian HCM, is a global company that offers a broad range of services and software designed to help employers more effectively manage employment processes, such as payroll, payroll related tax filing, human resource information systems, employee self-service, time and labor management, employee assistance and work-life programs, and recruitment and applicant screening. Ceridian HCM's cloud offering, Dayforce, is a cloud solution that meets HCM needs with one
|
•
|
T-System.
This segment consists of the operations of our wholly-owned subsidiary, T-System, acquired on October 16, 2017. T-System is a provider of clinical documentation and coding solutions to hospital-based and free-standing emergency departments and urgent care facilities. T-System organizes itself into
two
businesses. The Clinical Documentation business offers software solutions providing clinical staff with full workflow operations that drive documentation completeness and revenue optimization to more than
435
customers. Additionally, the patented T-Sheet is the industry standard for emergency department documentation, with more than
800
customers. The Coding Software & Outsourced Solutions business provides a full-service outsourced coding solution as well as a cloud-based software-as-a-service solution for self-service coding. These offerings help more than
75
customers at over
300
sites optimize their revenue cycle workflow and customer revenue reimbursement through improved coding accuracy and compliance and coder productivity compared to in-house coding
|
•
|
Corporate and Other.
This segment consists of our share in the operations of certain controlled portfolio companies and other equity investments as well as certain intercompany eliminations and taxes. Total assets for this segment as of December 31, 2016 and 2015 also include the assets of One Digital. See Note N
Discontinued Operations
for further details.
|
Note S.
|
Recent Accounting Pronouncements
|
Note T.
|
Supplementary Cash Flow Information
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
Cash paid during the year:
|
|
|
|
|
|
|
|
|
|
|||
Interest
|
|
$
|
8.7
|
|
|
$
|
8.7
|
|
|
$
|
7.4
|
|
Income taxes
|
|
117.7
|
|
|
4.0
|
|
|
53.6
|
|
|||
|
|
|
|
|
|
|
||||||
Non-cash financing activities:
|
|
|
|
|
|
|
|
|
||||
Liabilities and noncontrolling interests assumed in connection with acquisitions (1):
|
|
|
|
|
|
|
|
|
||||
Fair value of net assets acquired
|
|
$
|
252.5
|
|
|
$
|
92.0
|
|
|
$
|
31.5
|
|
Less: Total cash purchase price
|
|
222.7
|
|
|
75.8
|
|
|
24.7
|
|
|||
Liabilities and noncontrolling interests assumed
|
|
$
|
29.8
|
|
|
$
|
16.2
|
|
|
$
|
6.8
|
|
|
|
|
|
|
|
|
||||||
Debt extinguished through the sale of OneDigital
|
|
$
|
151.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 15.
|
Exhibits, Financial Statement Schedules and Reports on Form 8-K
|
Exhibit
Number
|
Description
|
|
|
2.1
|
|
3.1
|
|
3.2
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
21.1
|
|
23.1
|
|
23.2
|
|
23.3
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
99.1
|
|
101
|
The following materials from Cannae Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated and Combined Balance Sheets, (ii) the Consolidated and Combined Statements of Operations, (iii) the Consolidated and Combined Statements of Comprehensive Earnings (Loss), (iv) the Consolidated and Combined Statements of Stockholders' Equity, (v) the Consolidated and Combined Statements of Cash Flows, and (vi) the Notes to Consolidated and Combined Financial Statements.
|
|
Cannae Holdings, Inc.
|
|
|
|
By:
|
/s/ Brent B. Bickett
|
|
|
|
Brent B. Bickett
|
|
|
|
President (Principal Executive Officer)
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|
||||
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Brent B. Bickett
|
|
President
|
|
March 26, 2018
|
Brent B. Bickett
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/
Richard L. Cox
|
|
Executive Vice President and Chief Financial Officer
|
|
March 26, 2018
|
Richard L. Cox
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/
William P. Foley, II
|
|
Director
|
|
March 26, 2018
|
William P. Foley, II
|
|
|
|
|
|
|
|
|
|
/s/
Hugh R. Harris
|
|
Director
|
|
March 26, 2018
|
Hugh R. Harris
|
|
|
|
|
|
|
|
|
|
/s/ C. Malcolm Holland
|
|
Director
|
|
March 26, 2018
|
C. Malcolm Holland
|
|
|
|
|
|
|
|
|
|
/s/ Frank R. Martire
|
|
Director
|
|
March 26, 2018
|
Frank R. Martire
|
|
|
|
|
|
|
|
|
|
/s/ James B. Stallings, Jr.
|
|
Director
|
|
March 26, 2018
|
James B. Stallings, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Frank P. Willey
|
|
Director
|
|
March 26, 2018
|
Frank P. Willey
|
|
|
|
|
a)
|
Revolving Credit
|
Assignors
|
Assignees
|
Facility Assigned
|
Aggregate Amount of Commitment/
Loans for all Lenders
|
Amount of Commitment/
Loans Assigned
|
Percentage Assigned of Commitment/
Loans
|
Wells Fargo Bank, National Association
|
Cannae Holdings, LLC
|
Revolving Credit
|
$60,000,000.00
|
$11,428,571.43
|
19.047619050%
|
Bank of America, N.A.
|
Cannae Holdings, LLC
|
Revolving Credit
|
$60,000,000.00
|
$11,428,571.43
|
19.047619050%
|
Citizens Bank, N.A.
|
Cannae Holdings, LLC
|
Revolving Credit
|
$60,000,000.00
|
$10,000,000.00
|
16.666666667%
|
Regions Bank
|
Cannae Holdings, LLC
|
Revolving Credit
|
$60,000,000.00
|
$10,000,000.00
|
16.666666667%
|
Cooperatieve Rabobank U.A., New York Branch
|
Cannae Holdings, LLC
|
Revolving Credit
|
$60,000,000.00
|
$10,000,000.00
|
16.666666667%
|
Fifth Third Bank
|
Cannae Holdings, LLC
|
Revolving Credit
|
$60,000,000.00
|
$7,142,857.14
|
11.904761900%
|
TOTAL
|
|
|
|
$60,000,000.00
|
100%
|
b)
|
Term Loans
|
Lender
|
Total Payment Amount
|
Wiring Instructions
|
Wells Fargo Bank, National Association
|
$23,608,613.58
|
Wells Fargo Bank, N.A.
Charlotte, NC USA
ABA/ Routing Number: XXXXXX
Account Number: XXXXXXXX
Ref: ABRH LLC
Attn: Financial Cash Controls
|
Bank of America, N.A.
|
$23,605,705.67
|
Bank of America, N.A.
ABA/Routing Number: XXXXXX
Account Number: XXXXXXXX
Reference: ABRH LLC
Attention: Wire clearing Acct for Synd Loans - LIQ
|
Citizens Bank, N.A.
|
$20,654,992.43
|
Citizens Bank
One Citizens Drive
Riverside, RI 02915
ABA/Routing Number: XXXXXXXX
Account Number: XXXXXXXX
Reference: ABRH LLC 880-1013363082
Attention: Jay Kendrick
|
Cooperatieve Rabobank U.A., New York Branch
|
$20,654,992.43
|
J.P.Morgan Chase
New York
ABA/Routing Number: XXXXX
Account Number: XXXXX
Reference: Rabobank New York
|
ABRH, LLC
3038 Sidco Drive
Nashville, TN 37204
Attention: Steve Sparks, Chief Financial Officer
Facsimile: 615-782-5030
|
ABRH, LLC
3038 Sidco Drive
Nashville, TN 37204
Attention: Goodloe Partee, General Counsel
Facsimile: 615-782-5030
|
|
|
||
|
|
|
|
||
Wells Fargo Bank, National Association
MAC D1109-019
1525 West W.T. Harris Blvd.
Charlotte, NC 28262
Attention: Syndication Agency Services
Facsimile: 704-715-0092
|
Wells Fargo Bank, National Association
1808 Aston Avenue, Suite 250
Carlsbad, CA 92008
Attention: Jacob Norton
Facsimile: 760-918-2727
|
|
|||
|
|
|
|||
Cannae Holdings, LLC
1701 Village Center Circle
Las Vegas, NV 89134
Attn: Mike Gravelle
702-323-7334
mgravelle@fnf.com
|
|
1.
|
Credit Agreement, dated as of August 19, 2014, as amended by that First Amendment to Credit Agreement, dated February 24, 2017, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and among Holdings, Borrower, the Lenders, and Administrative Agent.
|
2.
|
Guaranty and Security Agreement, dated as of August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and among the Borrower, Holdings, the Grantors (as defined therein), and Administrative Agent.
|
3.
|
Trademark Security Agreement, dated as of August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between American Blue Ribbon Holdings, LLC and Administrative Agent, recorded August 20, 2014 at US Patent and Trademark Office, Reel 005348/Frame 0417.
|
4.
|
Copyright Security Agreement, dated as of August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between American Blue Ribbon Holdings, LLC and Administrative Agent, recorded December 18, 2014 at US Copyright Office.
|
5.
|
Fee Letter Agreement dated July 21, 2014, among the Borrower, Administrative Agent and Wells Fargo Securities, LLC.
|
6.
|
Irrevocable stock power executed in blank relating to Stock Certificate No. 1, dated as of July 25, 2014, with Borrower as the registered holder of 1000 shares of common stock of ABRH Management Services, Inc.
|
7.
|
Irrevocable stock power executed in blank relating to Class A Share Certificate No. A-54, dated as of August 8, 2012, with O’Charley’s, LLC as the registered owner of 7,750 Class A Shares of Hugo’s Frog Bar-Naperville, LLC.
|
8.
|
Allonge executed in blank relating to Revolving Promissory Note, dated March 14, 2012, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by American Blue Ribbon Holdings, LLC in favor of SVCC, LLC.
|
9.
|
Allonge executed in blank relating to Note, dated March 31, 2012, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by O’Charley’s, LLC in favor of OPI, LLC.
|
10.
|
Revolving Credit Note, dated August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by the Borrower in favor of Wells Fargo Bank, N.A.
|
11.
|
Revolving Credit Note, dated August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by the Borrower in favor of Citizens Bank, National Association.
|
12.
|
Term Loan Note, dated August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by the Borrower in favor of Wells Fargo Bank, N.A.
|
13.
|
Term Loan Note, dated August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by the Borrower in favor of Citizens Bank, National Association.
|
14.
|
Swingline Note, dated August 19, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, made by the Borrower in favor of Wells Fargo Bank, N.A.
|
15.
|
Mortgage, Security Agreement, Assignment of Leases and Rents, Financing Statement and Fixture Filing, dated as of December 9, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between American Blue Ribbon Holdings, LLC and Administrative Agent regarding certain real property in Cook County, IL.
|
16.
|
Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing Statement and Fixture Filing, dated as of December 9, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between O’Charley’s, LLC and Administrative Agent regarding certain real property in Davidson County, TN.
|
17.
|
Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing Statement and Fixture Filing, dated as of December 9, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between American Blue Ribbon Holdings, LLC and Administrative Agent regarding certain real property in Denver County, CO.
|
18.
|
Mortgage, Security Agreement, Assignment of Leases and Rents, Financing Statement and Fixture Filing, dated as of December 9, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between American Blue Ribbon Holdings, LLC and Administrative Agent regarding certain real property in Carver County, MN.
|
19.
|
Deposit Account Control Agreement, dated as of September 18, 2014, as amended, restated, supplemented or otherwise modified prior to the date hereof, by and between O’Charley’s Management Company, Administrative Agent and Regions Bank.
|
20.
|
Letter of Credit #NZS516179 from Wells Fargo Bank, N.A. for the benefit of Arrowood Indemnity Company in the amount of $43,000.00 with expiry date of August 1, 2018
|
21.
|
Letter of Credit #NZS516182 from Wells Fargo Bank, N.A. for the benefit of Federal Insurance Company in the amount of $761,482.00 with expiry date of August 1, 2018
|
22.
|
Letter of Credit #NZS625674 from Wells Fargo Bank, N.A. for the benefit of Arch Insurance Company in the amount of $729,764.00 with expiry date of August 1, 2018
|
23.
|
Letter of Credit #SM202825 from Wells Fargo Bank, N.A. for the benefit of Safety National Casualty Corp in the amount of $3,900,000.00 with expiry date of April 16, 2018
|
24.
|
Letter of Credit #SM202618 from Wells Fargo Bank, N.A. for the benefit of Employers Insurance of Wausau in the amount of $85,000.00 with expiry date of April 16, 2018
|
25.
|
Letter of Credit #SM220033 from Wells Fargo Bank, N.A. for the benefit of Zurich American Insurance in the amount of $5,500,000.00 with expiry date of May 15, 2018
|
26.
|
UCC Financing Statement listing Fidelity Newport Holdings, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324951)
|
27.
|
UCC Financing Statement listing ABRH, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324829)
|
28.
|
UCC Financing Statement listing American Blue Ribbon Holdings, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324936)
|
29.
|
UCC Financing Statement listing SVCC, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Arizona on August 19, 2014 (File #2014-002-5745-5)
|
30.
|
UCC Financing Statement listing O’Charley’s LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Tennessee on August 19, 2014 (File #422020036)
|
31.
|
UCC Financing Statement listing ABRH Management Services, Inc. as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324894)
|
32.
|
UCC Financing Statement listing O’Charley’s Service Company, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Tennessee on August 19, 2014 (File #422020136)
|
33.
|
UCC Financing Statement listing O’Charley’s Sports Bar, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Alabama on August 19, 2014 (File #14-0356261)
|
34.
|
UCC Financing Statement listing O’Charley’s Sports Bar Alabaster, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Alabama on August 19, 2014 (File #14-0356278)
|
35.
|
UCC Financing Statement listing OPI, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Colorado on August 19, 2014 (File #2014078334)
|
36.
|
UCC Financing Statement listing JFC Enterprises, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324985)
|
37.
|
UCC Financing Statement listing O’Charley’s Management Company, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Tennessee on August 19, 2014 (File #422020191)
|
38.
|
UCC Financing Statement listing O’Charley’s Restaurant Properties, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143325008)
|
39.
|
UCC Financing Statement listing 99 Restaurants, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324795)
|
40.
|
UCC Financing Statement listing 99 Commissary, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324555)
|
41.
|
UCC Financing Statement listing 99 Restaurants of Boston, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Delaware on August 19, 2014 (File #20143324779)
|
42.
|
UCC Financing Statement listing 99 West, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Massachusetts on August 19, 2014 (File #201414006110)
|
43.
|
UCC Financing Statement listing 99 Restaurants of Massachusetts, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Massachusetts on August 19, 2014 (File #201414006020)
|
44.
|
UCC Financing Statement listing 99 Restaurants of Vermont, LLC as debtor and Wells Fargo Bank, National Association, as Administrative Agent, as secured party, filed in Vermont on August 20, 2014 (File #14-273752)
|
ABRH, LLC
3038 Sidco Drive
Nashville, TN 37204
Attention: Steve Sparks, Chief Financial Officer
Facsimile: 615-782-5030
|
|
ABRH, LLC
3038 Sidco Drive
Nashville, TN 37204
Attention: Goodloe Partee, General Counsel
Facsimile: 615-782-5030
|
|
|
|
Wells Fargo Bank, National Association
MAC D1109-019
1525 West W.T. Harris Blvd.
Charlotte, NC 28262
Attention: Syndication Agency Services
Facsimile: 704-715-0092
|
Wells Fargo Bank, National Association
1808 Aston Avenue, Suite 250
Carlsbad, CA 92008
Attention: Jacob Norton
Facsimile: 760-918-2727
|
|
Cannae Holdings, LLC
1701 Village Center Circle
Las Vegas, NV 89134
Attn: Mike Gravelle
702-323-7334
|
|
Name of Grantee:
|
[•]
|
Number of Shares of Restricted Stock Granted:
|
[•]
|
Effective Date of Grant:
|
November 28, 2017
|
Vesting and Period of Restriction:
|
Subject to the terms of the Plan and the Restricted Stock Award Agreement attached hereto, the Period of Restriction shall lapse, and the Shares shall vest and become free of the forfeiture provisions contained in the Restricted Stock Award Agreement, with respect to one-third (1/3) of the shares on each of the first three anniversaries of the Effective Date of Grant, as more specifically described on Exhibit A hereto.
|
Section 1.
|
GRANT OF RESTRICTED STOCK
|
Section 2.
|
FORFEITURE AND TRANSFER RESTRICTIONS
|
Section 3.
|
STOCK CERTIFICATES
|
Section 4.
|
SHAREHOLDER RIGHTS
|
Section 5.
|
DIVIDENDS
|
Section 6.
|
MISCELLANEOUS PROVISIONS
|
Anniversary Date
|
% of Restricted Stock to Vest
|
November 28, 2018
|
33 1/3%
|
November 28, 2019
|
33 1/3%
|
November 28, 2020
|
33 1/3%
|
a.
|
Letter Agreement dated as of March 9, 2018 between the Borrower and CNB (the “LC Side Letter”)
|
b.
|
The letters of credit referenced in the LC Side Letter (and any related letter of credit applications);
|
c.
|
Security Agreement dated as of March 9, 2018 between CNB and the Borrower; and
|
d.
|
Subordination Agreement dated as of March 9, 2018 between CNB and the Administrative Agent, and consented to by the Borrower.
|
BORROWER:
|
|
ABRH, LLC
, as Borrower
|
|
By:
|
/s/ W. Craig Barber
|
|
Name:
|
W. Craig Barber
|
|
Title:
|
President
|
HOLDINGS:
|
|
FIDELITY NEWPORT HOLDINGS, LLC
, as Holdings
|
|
By:
|
/s/ W. Craig Barber
|
|
Name:
|
W. Craig Barber
|
|
Title:
|
President
|
GUARANTORS:
|
|
American Blue Ribbon Holdings, LLC
|
|
|
SVCC, LLC
|
|
|
O’Charley’s LLC
|
|
|
ABRH MANAGEMENT SERVICES, INC.
|
|
|
O’Charley’s Service Company, LLC
|
|
|
O’Charley’s Sports Bar, LLC
|
|
|
O’Charley’s Sports Bar Alabaster, LLC
|
|
|
OPI, LLC
|
|
|
O’Charley’s Management Company, LLC
|
|
|
O’Charley’s Restaurant Properties, LLC
|
|
|
99 Restaurants, LLC
|
|
|
99 West, LLC
|
|
|
99 Restaurants of Vermont, LLC
|
|
|
99 Restaurants of Massachusetts, LLC
|
|
|
99 Commissary, LLC
|
|
|
99 Restaurants of Boston, LLC
|
|
|
LEGENDARY BAKING OF CALIFORNIA, LLC
|
|
|
|
|
By:
|
/s/ W. Craig Barber
|
|
Name:
|
W. Craig Barber
|
|
Title:
|
President
|
ADMINISTRATIVE AGENT:
|
|
CANNAE HOLDINGS, LLC,
as a Lender and as Administrative Agent
|
|
By:
|
/s/ Richard L. Cox
|
|
Name:
|
Richard L. Cox
|
|
Title:
|
Managing Director and Chief Financial Officer
|
|
|
|
COMPANY
|
|
INCORPORATION
|
Ceridian Holding LLC
|
|
Delaware
|
Ceridian Holding II LLC
|
|
Delaware
|
Fidelity Newport Holdings, LLC
|
|
Delaware
|
American Blue Ribbon Holdings, LLC
|
|
Delaware
|
Legendary Baking of California, LLC
|
|
Delaware
|
O' Charley's LLC
|
|
Tennessee
|
99 Restaurants, LLC
|
|
Delaware
|
T-System Holdings, LLC
|
|
Delaware
|
|
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)
|
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
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/ Brent B. Bickett
|
|
|
|
|
Brent B. Bickett
|
|
|
|
|
President
|
|
|
|
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)
|
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
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/ Richard L. Cox
|
|
|
|
|
Richard L. Cox
|
|
|
|
|
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.
|
|
|
|
In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.
|
|
|
|
|
|
By:
|
/s/ Brent B. Bickett
|
|
||
|
Brent B. Bickett
|
|
||
|
President
|
|
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/ Richard L. Cox
|
|
||
|
Richard L. Cox
|
|
||
|
Chief Financial Officer
|
|
|
|
Page
|
Consolidated Financial Statements of Ceridian Holding LLC:
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016, and 2015
|
|
|
Consolidated Statements of Members' Equity for the years ended December 31, 2017, 2016, and 2015
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016, and 2015
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|||||||||
Recurring services
|
|
$
|
678.4
|
|
|
|
$
|
639.3
|
|
|
|
$
|
641.6
|
|
|
Professional services and other
|
|
72.3
|
|
|
|
64.9
|
|
|
|
52.3
|
|
|
|||
Total revenue
|
|
750.7
|
|
|
|
704.2
|
|
|
|
693.9
|
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|||||||||
Recurring services
|
|
239.6
|
|
|
|
256.3
|
|
|
|
256.6
|
|
|
|||
Professional services and other
|
|
135.8
|
|
|
|
115.8
|
|
|
|
91.9
|
|
|
|||
Product development and management
|
|
50.4
|
|
|
|
49.2
|
|
|
|
46.0
|
|
|
|||
Depreciation and amortization
|
|
31.9
|
|
|
|
24.0
|
|
|
|
18.6
|
|
|
|||
Total cost of revenue
|
|
457.7
|
|
|
|
445.3
|
|
|
|
413.1
|
|
|
|||
Gross profit
|
|
293.0
|
|
|
|
258.9
|
|
|
|
280.8
|
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|||||||||
Selling, general, and administrative
|
|
253.1
|
|
|
|
249.8
|
|
|
|
246.3
|
|
|
|||
Other expense, net
|
|
7.4
|
|
|
|
9.3
|
|
|
|
2.4
|
|
|
|||
Interest expense, net
|
|
86.6
|
|
|
|
87.4
|
|
|
|
87.8
|
|
|
|||
Total costs and expenses
|
|
347.1
|
|
|
|
346.5
|
|
|
|
336.5
|
|
|
|||
Loss from continuing operations before income taxes
|
|
(54.1
|
)
|
|
|
(87.6
|
)
|
|
|
(55.7
|
)
|
|
|||
Income tax (benefit) expense
|
|
(44.7
|
)
|
|
|
17.8
|
|
|
|
8.6
|
|
|
|||
Loss from continuing operations
|
|
(9.4
|
)
|
|
|
(105.4
|
)
|
|
|
(64.3
|
)
|
|
|||
Income (loss) from discontinued operations
|
|
11.1
|
|
|
|
18.5
|
|
|
|
(23.3
|
)
|
|
|||
Net income (loss)
|
|
1.7
|
|
|
|
(86.9
|
)
|
|
|
(87.6
|
)
|
|
|||
Net (loss) income attributable to noncontrolling interest
|
|
(1.3
|
)
|
|
|
0.1
|
|
|
|
—
|
|
|
|||
Net income (loss) attributable to Ceridian
|
|
$
|
3.0
|
|
|
|
$
|
(87.0
|
)
|
|
|
$
|
(87.6
|
)
|
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||
Net income (loss)
|
$
|
1.7
|
|
|
|
$
|
(86.9
|
)
|
|
|
$
|
(87.6
|
)
|
|
Items of other comprehensive income (loss) before income taxes:
|
|
|
|
|
|
|||||||||
Change in foreign currency translation adjustment
|
39.7
|
|
|
|
24.4
|
|
|
|
(94.2
|
)
|
|
|||
Change in unrealized gain from marketable securities
(1)
|
—
|
|
|
|
—
|
|
|
|
(19.9
|
)
|
|
|||
Change in unrealized loss from invested customer trust funds
|
(17.3
|
)
|
|
|
(10.2
|
)
|
|
|
(4.9
|
)
|
|
|||
Change in pension liability adjustment
(2)
|
13.8
|
|
|
|
13.6
|
|
|
|
14.5
|
|
|
|||
Other comprehensive income (loss) before income taxes
|
36.2
|
|
|
|
27.8
|
|
|
|
(104.5
|
)
|
|
|||
Income tax (benefit) expense, net
|
(3.6
|
)
|
|
|
0.6
|
|
|
|
(0.6
|
)
|
|
|||
Other comprehensive income (loss) after income taxes
|
39.8
|
|
|
|
27.2
|
|
|
|
(103.9
|
)
|
|
|||
Comprehensive income (loss)
|
41.5
|
|
|
|
(59.7
|
)
|
|
|
(191.5
|
)
|
|
|||
Comprehensive loss attributable to noncontrolling interest
|
(0.9
|
)
|
|
|
(0.5
|
)
|
|
|
—
|
|
|
|||
Comprehensive income (loss) attributable to Ceridian
|
$
|
42.4
|
|
|
|
$
|
(59.2
|
)
|
|
|
$
|
(191.5
|
)
|
|
(1)
|
The amount of unrealized gains from marketable securities recognized in the consolidated statements of operations within other expense, net was $3.9 and $26.0 during the years ended December 31, 2016, and 2015, respectively.
|
(2)
|
The amount of the pension liability adjustment recognized in the consolidated statements of operations within selling, general, and administrative expense and income (loss) from discontinued operations was was $10.1, $9.9, and $11.8 during the years ended December 31, 2017, 2016, and 2015, respectively.
|
|
|
Convertible Preferred Stock
|
|
Common Stock
|
|
Additional Paid In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Compre-hensive Loss
|
|
Receivable from Shareholder
|
|
Total Members' Equity
|
|
Non-controlling Interest
|
|
Total Equity
|
|||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2014
|
|
55,316,509.0
|
|
|
$
|
377.1
|
|
|
|
129,847,659.0
|
|
|
$
|
—
|
|
|
|
$
|
1,276.8
|
|
|
|
$
|
869.2
|
|
|
|
$
|
(286.6
|
)
|
|
|
$
|
—
|
|
|
|
$
|
2,236.5
|
|
|
|
$
|
—
|
|
|
|
$
|
2,236.5
|
|
|
||||
Net loss
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(87.6
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(87.6
|
)
|
|
|
—
|
|
|
|
(87.6
|
)
|
|
|||||||||||
Distributions to members
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(928.9
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(928.9
|
)
|
|
|
—
|
|
|
|
(928.9
|
)
|
|
|||||||||||
Dayforce acquisition, release of shares in escrow
|
|
2,924,307.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||||||||
Share repurchase
|
|
(8,699.0
|
)
|
|
|
—
|
|
|
|
(22,344.0
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||||||||
Share-based compensation
|
|
—
|
|
|
|
2.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13.2
|
|
|
|
—
|
|
|
|
13.2
|
|
|
|||||||||||
Foreign currency translation
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(94.2
|
)
|
|
|
—
|
|
|
|
(94.2
|
)
|
|
|
—
|
|
|
|
(94.2
|
)
|
|
|||||||||||
Change in unrealized loss, net of tax of ($0.8)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(24.0
|
)
|
|
|
—
|
|
|
|
(24.0
|
)
|
|
|
—
|
|
|
|
(24.0
|
)
|
|
|||||||||||
Change in minimum pension & postretirement liability, net of tax of $0.2
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14.3
|
|
|
|
—
|
|
|
|
14.3
|
|
|
|
—
|
|
|
|
14.3
|
|
|
|||||||||||
Balance as of December 31, 2015
|
|
58,232,117.0
|
|
|
$
|
379.5
|
|
|
|
129,825,315.0
|
|
|
$
|
—
|
|
|
|
$
|
1,287.6
|
|
|
|
$
|
(147.3
|
)
|
|
|
$
|
(390.5
|
)
|
|
|
$
|
—
|
|
|
|
$
|
1,129.3
|
|
|
|
$
|
—
|
|
|
|
$
|
1,129.3
|
|
|
|
|
Convertible Preferred Stock
|
|
Common Stock
|
|
Additional Paid In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Compre-hensive Loss
|
|
Receivable from Shareholder
|
|
Total Members' Equity
|
|
Non-controlling Interest
|
|
Total Equity
|
|||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2015
|
|
58,232,117
|
|
|
$
|
379.5
|
|
|
|
129,825,315
|
|
|
$
|
—
|
|
|
|
$
|
1,287.6
|
|
|
|
$
|
(147.3
|
)
|
|
|
$
|
(390.5
|
)
|
|
|
$
|
—
|
|
|
|
$
|
1,129.3
|
|
|
|
$
|
—
|
|
|
|
$
|
1,129.3
|
|
|
||||
Net (loss) income
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(87.0
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(87.0
|
)
|
|
|
0.1
|
|
|
|
(86.9
|
)
|
|
|||||||||||
Issuance of stock by subsidiary
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(75.2
|
)
|
|
|
(75.2
|
)
|
|
|
150.2
|
|
|
|
75.0
|
|
|
|||||||||||
Creation of the LifeWorks joint venture
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
39.2
|
|
|
|
39.2
|
|
|
|||||||||||
Sale of the UK Business, net of tax $2.5
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25.9
|
|
|
|
—
|
|
|
|
25.9
|
|
|
|
—
|
|
|
|
25.9
|
|
|
|||||||||||
Preferred dividends declared by subsidiary
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14.1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(14.1
|
)
|
|
|
14.1
|
|
|
|
—
|
|
|
|||||||||||
Distribution to members
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(109.8
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(109.8
|
)
|
|
|
|
|
(109.8
|
)
|
|
|||||||||||||
Share-based compensation
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15.3
|
|
|
|
—
|
|
|
|
15.3
|
|
|
|||||||||||
Foreign currency translation
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8.0
|
|
|
|
—
|
|
|
|
8.0
|
|
|
|
(0.6
|
)
|
|
|
7.4
|
|
|
|||||||||||
Change in unrealized loss, net of tax of ($2.0)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.9
|
)
|
|
|
—
|
|
|
|
(2.9
|
)
|
|
|
—
|
|
|
|
(2.9
|
)
|
|
|||||||||||
Change in minimum pension & postretirement liability, net of tax of $0.1
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|||||||||||
Balance as of December 31, 2016
|
|
58,232,117
|
|
|
$
|
379.5
|
|
|
|
129,825,315
|
|
|
$
|
—
|
|
|
|
$
|
1,302.9
|
|
|
|
$
|
(358.2
|
)
|
|
|
$
|
(357.5
|
)
|
|
|
$
|
(75.2
|
)
|
|
|
$
|
891.5
|
|
|
|
$
|
203.0
|
|
|
|
$
|
1,094.5
|
|
|
|
|
Convertible Preferred Stock
|
|
Common Stock
|
|
Additional Paid In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Compre-hensive Loss
|
|
Receivable from Shareholder
|
|
Total Members' Equity
|
|
Non-controlling Interest
|
|
Total Equity
|
|||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2016
|
|
58,232,117.0
|
|
|
$
|
379.5
|
|
|
|
129,825,315.0
|
|
|
$
|
—
|
|
|
|
$
|
1,302.9
|
|
|
|
$
|
(358.2
|
)
|
|
|
$
|
(357.5
|
)
|
|
|
$
|
(75.2
|
)
|
|
|
$
|
891.5
|
|
|
|
$
|
203.0
|
|
|
|
$
|
1,094.5
|
|
|
||||
Net income (loss)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.0
|
|
|
|
(1.3
|
)
|
|
|
1.7
|
|
|
|||||||||||
Share repurchase
|
|
(3,163.0
|
)
|
|
|
—
|
|
|
|
(8,125.0
|
)
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|||||||||||
Share repurchase by subsidiary
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.6
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.6
|
)
|
|
|
(0.2
|
)
|
|
|
(1.8
|
)
|
|
|||||||||||
Payment for issuance of stock by subsidiary
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75.2
|
|
|
|
75.2
|
|
|
|
—
|
|
|
|
75.2
|
|
|
|||||||||||
Issuance of stock by subsidiary
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.2
|
|
|
|
3.2
|
|
|
|||||||||||
Preferred dividends declared by subsidiary
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(20.5
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(20.5
|
)
|
)
|
|
20.5
|
|
|
|
—
|
|
|
|||||||||||
Share-based compensation
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17.2
|
|
|
|
—
|
|
|
|
17.2
|
|
|
|||||||||||
Foreign currency translation
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
39.3
|
|
|
|
—
|
|
|
|
39.3
|
|
|
|
0.4
|
|
|
|
39.7
|
|
|
|||||||||||
Change in unrealized loss, net of tax ($3.6)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13.7
|
)
|
|
|
—
|
|
|
|
(13.7
|
)
|
|
|
—
|
|
|
|
(13.7
|
)
|
|
|||||||||||
Change in minimum pension & postretirement liability, net of tax of $0.0
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13.8
|
|
|
|
—
|
|
|
|
13.8
|
|
|
|
—
|
|
|
|
13.8
|
|
|
|||||||||||
Balance as of December 31, 2017
|
|
58,228,954.0
|
|
|
$
|
379.5
|
|
|
|
129,817,190.0
|
|
|
$
|
—
|
|
|
|
$
|
1,318.4
|
|
|
|
$
|
(375.7
|
)
|
|
|
$
|
(318.1
|
)
|
|
|
$
|
—
|
|
|
|
$
|
1,004.1
|
|
|
|
$
|
225.6
|
|
|
|
$
|
1,229.7
|
|
|
•
|
Certain Bureau product service revenues and expenses have been reclassified from recurring services to professional services and other. This change resulted in a reduction to recurring revenue with a corresponding increase to professional services and other revenue for the years ended December 31, 2016 and 2015.
|
•
|
All product development and management costs have been reclassified to be included in total cost of revenue. Product development and management costs are related to software development activities that do not qualify for capitalization.
|
•
|
Depreciation and amortization expenses related to cost of revenue, such as amortization of capitalized software, are now presented on a separate line within cost of revenue.
|
|
|
Year Ended December 31, 2016
|
|||||||||||||
|
|
Before reclassification
|
|
After reclassification
|
|
Change
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|||||||||
Recurring services
|
|
$
|
645.9
|
|
|
|
$
|
639.3
|
|
|
|
$
|
(6.6
|
)
|
|
Professional services and other
|
|
58.3
|
|
|
|
64.9
|
|
|
|
6.6
|
|
|
|||
Total revenue
|
|
704.2
|
|
|
|
704.2
|
|
|
|
—
|
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|||||||||
Recurring services
|
|
303.1
|
|
|
|
256.3
|
|
|
|
(46.8
|
)
|
|
|||
Professional services and other
|
|
100.1
|
|
|
|
115.8
|
|
|
|
15.7
|
|
|
|||
Product development and management
|
|
—
|
|
|
|
49.2
|
|
|
|
49.2
|
|
|
|||
Depreciation and amortization
|
|
—
|
|
|
|
24.0
|
|
|
|
24.0
|
|
|
|||
Total cost of revenue
|
|
403.2
|
|
|
|
445.3
|
|
|
|
42.1
|
|
|
|||
Gross profit
|
|
301.0
|
|
|
|
258.9
|
|
|
|
(42.1
|
)
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|||||||||
Selling, general, and administrative
|
|
249.8
|
|
|
|
249.8
|
|
|
|
—
|
|
|
|||
Product development
|
|
42.1
|
|
|
|
—
|
|
|
|
(42.1
|
)
|
|
|||
Other expense, net
|
|
9.3
|
|
|
|
9.3
|
|
|
|
—
|
|
|
|||
Interest expense, net
|
|
87.4
|
|
|
|
87.4
|
|
|
|
—
|
|
|
|||
Total costs and expenses
|
|
388.6
|
|
|
|
346.5
|
|
|
|
(42.1
|
)
|
|
|||
Loss from continuing operations before income taxes
|
|
$
|
(87.6
|
)
|
|
|
$
|
(87.6
|
)
|
|
|
$
|
—
|
|
|
|
|
Year Ended December 31, 2015
|
|||||||||||||
|
|
Before reclassification
|
|
After reclassification
|
|
Change
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|||||||||
Recurring services
|
|
$
|
651.6
|
|
|
|
$
|
641.6
|
|
|
|
$
|
(10.0
|
)
|
|
Professional services and other
|
|
42.3
|
|
|
|
52.3
|
|
|
|
10.0
|
|
|
|||
Total revenue
|
|
693.9
|
|
|
|
693.9
|
|
|
|
—
|
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|||||||||
Recurring services
|
|
309.6
|
|
|
|
256.6
|
|
|
|
(53.0
|
)
|
|
|||
Professional services and other
|
|
72.3
|
|
|
|
91.9
|
|
|
|
19.6
|
|
|
|||
Product development and management
|
|
—
|
|
|
|
46.0
|
|
|
|
46.0
|
|
|
|||
Depreciation and amortization
|
|
—
|
|
|
|
18.6
|
|
|
|
18.6
|
|
|
|||
Total cost of revenue
|
|
381.9
|
|
|
|
413.1
|
|
|
|
31.2
|
|
|
|||
Gross profit
|
|
312.0
|
|
|
|
280.8
|
|
|
|
(31.2
|
)
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|||||||||
Selling, general, and administrative
|
|
246.3
|
|
|
|
246.3
|
|
|
|
—
|
|
|
|||
Product development
|
|
31.2
|
|
|
|
—
|
|
|
|
(31.2
|
)
|
|
|||
Other expense, net
|
|
2.4
|
|
|
|
2.4
|
|
|
|
—
|
|
|
|||
Interest expense, net
|
|
87.8
|
|
|
|
87.8
|
|
|
|
—
|
|
|
|||
Total costs and expenses
|
|
367.7
|
|
|
|
336.5
|
|
|
|
(31.2
|
)
|
|
|||
Loss from continuing operations before income taxes
|
|
$
|
(55.7
|
)
|
|
|
$
|
(55.7
|
)
|
|
|
$
|
—
|
|
|
Buildings
|
|
40 years
|
Building improvements
|
|
5-14 years
|
Machinery and equipment
|
|
3-8 years
|
Computer equipment
|
|
3-6 years
|
Customer lists and relationships
|
|
5-15 years
|
Technology
|
|
2-7 years
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Net revenues
|
|
$
|
—
|
|
|
|
$
|
37.0
|
|
|
|
$
|
79.2
|
|
|
|||
Income from operations before income taxes
|
|
—
|
|
|
|
0.5
|
|
|
|
2.3
|
|
|
||||||
(Loss) gain on sale of business
|
|
(1.0
|
)
|
|
|
5.9
|
|
|
|
—
|
|
|
||||||
Income tax benefit (expense)
|
|
—
|
|
|
|
0.2
|
|
|
|
(1.4
|
)
|
|
||||||
(Loss) income from discontinued operations, net of income taxes
|
|
$
|
(1.0
|
)
|
|
|
$
|
6.6
|
|
|
|
$
|
0.9
|
|
|
|||
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
$
|
—
|
|
|
|
$
|
1.3
|
|
|
|
$
|
3.3
|
|
|
|||
Capital expenditures
|
|
$
|
—
|
|
|
|
$
|
0.7
|
|
|
|
$
|
2.4
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Net revenues
|
|
$
|
—
|
|
|
|
$
|
4.8
|
|
|
|
$
|
40.0
|
|
|
|||
(Loss) income from operations before income taxes
|
|
—
|
|
|
|
(0.8
|
)
|
|
|
12.2
|
|
|
||||||
Gain (loss) on sale of businesses
|
|
0.5
|
|
|
|
21.0
|
|
|
|
(28.9
|
)
|
|
||||||
Income tax expense
|
|
(0.2
|
)
|
|
|
(10.3
|
)
|
|
|
—
|
|
|
||||||
Income (loss) from discontinued operations, net of income taxes
|
|
$
|
0.3
|
|
|
|
$
|
9.9
|
|
|
|
$
|
(16.7
|
)
|
|
|||
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
0.4
|
|
|
|||
Capital expenditures
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
0.5
|
|
|
|
|
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
||||||||
Assets:
|
|
|
|
|
||||||||
Other assets
|
|
$
|
—
|
|
|
|
$
|
0.1
|
|
|
||
Assets of discontinued operations
|
|
$
|
—
|
|
|
|
$
|
0.1
|
|
|
||
Liabilities:
|
|
|
|
|
||||||||
Accounts payable
|
|
$
|
—
|
|
|
|
$
|
0.4
|
|
|
||
Other liabilities
|
|
0.3
|
|
|
|
0.5
|
|
|
||||
Liabilities of discontinued operations
|
|
$
|
0.3
|
|
|
|
$
|
0.9
|
|
|
Date of Share Sale
|
|
Number of Shares Sold (in millions)
|
|
Proceeds Received
|
|
Gain on Sale of Shares
|
|
Amount of Distribution
|
|
Date of Distribution to Shareholders
|
||||||
May 21, 2015
|
|
2.8
|
|
$
|
427.9
|
|
$
|
17.0
|
|
$
|
427.3
|
|
|
June 19, 2015
|
||
September 9, 2015
|
|
2.9
|
|
$
|
431.5
|
|
$
|
8.1
|
|
$
|
430.5
|
|
|
October 14, 2015
|
||
November 20, 2015
|
|
0.5
|
|
$
|
70.7
|
|
$
|
0.3
|
|
$
|
70.7
|
|
|
December 18, 2015
|
||
May 13, 2016
|
|
0.7
|
|
$
|
106.8
|
|
$
|
2.6
|
|
$
|
106.8
|
|
|
November 17, 2016
|
||
June 10, 2016
|
|
0.7
|
|
$
|
103.0
|
|
$
|
1.3
|
|
$
|
3.0
|
|
|
November 17, 2016
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
Gain (loss) on sale of business
|
|
$
|
11.8
|
|
|
|
$
|
2.0
|
|
|
|
$
|
(7.5
|
)
|
|
Income from discontinued operations, net of income taxes
|
|
$
|
11.8
|
|
|
|
$
|
2.0
|
|
|
|
$
|
(7.5
|
)
|
|
|
|
|
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.
|
|
|
|
Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (that is, interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
|
|
|
|
Level 3 inputs include unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including internal data.
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||||||
Available for sale customer trust funds assets
|
$
|
1,782.1
|
|
|
|
$
|
—
|
|
|
|
$
|
1,782.1
|
|
|
(a)
|
$
|
—
|
|
|
Total assets measured at fair value
|
$
|
1,782.1
|
|
|
|
$
|
—
|
|
|
|
$
|
1,782.1
|
|
|
|
$
|
—
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||||||
Available for sale customer trust funds assets
|
$
|
1,755.4
|
|
|
|
$
|
—
|
|
|
|
$
|
1,755.4
|
|
|
(a)
|
$
|
—
|
|
|
Total assets measured at fair value
|
$
|
1,755.4
|
|
|
|
$
|
—
|
|
|
|
$
|
1,755.4
|
|
|
|
$
|
—
|
|
|
(a)
|
Fair value is based on inputs that are observable for the asset or liability, other than quoted prices.
|
Investments of Customer Trust Funds at December 31, 2017
|
|
|
|
|
|
|
|
||||||||||||||
|
Amortized
|
|
Gross Unrealized
|
|
Fair
|
||||||||||||||||
|
Cost
|
|
Gain
|
|
Loss
|
|
Value
|
||||||||||||||
Money market securities, investments carried at cost and other cash equivalents
|
$
|
2,309.3
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
2,309.3
|
|
|
||
Available for sale investments:
|
|
|
|
|
|
|
|
||||||||||||||
U.S. government and agency securities
|
584.6
|
|
|
|
0.1
|
|
|
|
(7.1
|
)
|
|
|
577.6
|
|
|
||||||
Canadian and provincial government securities
|
418.2
|
|
|
|
6.6
|
|
|
|
(1.5
|
)
|
|
|
423.3
|
|
|
||||||
Corporate debt securities
|
472.3
|
|
|
|
0.8
|
|
|
|
(2.5
|
)
|
|
|
470.6
|
|
|
||||||
Asset-backed securities
|
280.8
|
|
|
|
—
|
|
|
|
(1.8
|
)
|
|
|
279.0
|
|
|
||||||
Mortgage-backed securities
|
15.0
|
|
|
|
—
|
|
|
|
(0.2
|
)
|
|
|
14.8
|
|
|
||||||
Other securities
|
17.0
|
|
|
|
—
|
|
|
|
(0.2
|
)
|
|
|
16.8
|
|
|
||||||
Total available for sale investments
|
1,787.9
|
|
|
|
7.5
|
|
|
|
(13.3
|
)
|
|
|
1,782.1
|
|
|
||||||
Invested customer trust funds
|
4,097.2
|
|
|
|
$
|
7.5
|
|
|
$
|
(13.3
|
)
|
|
|
4,091.4
|
|
|
|||||
Trust receivables
|
8.3
|
|
|
|
|
|
|
|
8.3
|
|
|
||||||||||
Total customer trust funds
|
$
|
4,105.5
|
|
|
|
|
|
|
$
|
4,099.7
|
|
|
Investments of Customer Trust Funds at December 31, 2016
|
|
|
|
|
|
|
|
||||||||||||||
|
Amortized
|
|
Gross Unrealized
|
|
Fair
|
||||||||||||||||
|
Cost
|
|
Gain
|
|
Loss
|
|
Value
|
||||||||||||||
Money market securities, investments carried at cost and other cash equivalents
|
$
|
1,941.9
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
1,941.9
|
|
|
||
Available for sale investments:
|
|
|
|
|
|
|
|
||||||||||||||
U.S. government and agency securities
|
607.7
|
|
|
|
0.9
|
|
|
|
(4.7
|
)
|
|
|
603.9
|
|
|
||||||
Canadian and provincial government securities
|
380.0
|
|
|
|
12.9
|
|
|
|
(0.1
|
)
|
|
|
392.8
|
|
|
||||||
Corporate debt securities
|
511.7
|
|
|
|
3.1
|
|
|
|
(1.2
|
)
|
|
|
513.6
|
|
|
||||||
Asset-backed securities
|
192.2
|
|
|
|
0.4
|
|
|
|
(0.3
|
)
|
|
|
192.3
|
|
|
||||||
Mortgage-backed securities
|
28.7
|
|
|
|
—
|
|
|
|
(0.2
|
)
|
|
|
28.5
|
|
|
||||||
Other securities
|
24.6
|
|
|
|
—
|
|
|
|
(0.3
|
)
|
|
|
24.3
|
|
|
||||||
Total available for sale investments
|
1,744.9
|
|
|
|
17.3
|
|
|
|
(6.8
|
)
|
|
|
1,755.4
|
|
|
||||||
Invested customer trust funds
|
3,686.8
|
|
|
|
$
|
17.3
|
|
|
$
|
(6.8
|
)
|
|
|
3,697.3
|
|
|
|||||
Trust receivables
|
5.5
|
|
|
|
|
|
|
|
5.5
|
|
|
||||||||||
Total customer trust funds
|
$
|
3,692.3
|
|
|
|
|
|
|
$
|
3,702.8
|
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||||
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|||||||||||||||||||||
U.S. government and agency securities
|
$
|
(3.6
|
)
|
|
|
$
|
436.7
|
|
|
|
$
|
(3.5
|
)
|
|
|
$
|
113.5
|
|
|
|
$
|
(7.1
|
)
|
|
|
$
|
550.2
|
|
|
|||
Canadian and provincial government securities
|
(1.5
|
)
|
|
|
133.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.5
|
)
|
|
|
133.4
|
|
|
|||||||||
Corporate debt securities
|
(2.0
|
)
|
|
|
264.2
|
|
|
|
(0.5
|
)
|
|
|
41.4
|
|
|
|
(2.5
|
)
|
|
|
305.6
|
|
|
|||||||||
Asset-backed securities
|
(1.7
|
)
|
|
|
239.6
|
|
|
|
(0.1
|
)
|
|
|
17.0
|
|
|
|
(1.8
|
)
|
|
|
256.6
|
|
|
|||||||||
Mortgage-backed securities
|
(0.1
|
)
|
|
|
4.1
|
|
|
|
(0.2
|
)
|
|
|
10.4
|
|
|
|
(0.3
|
)
|
|
|
14.5
|
|
|
|||||||||
Other securities
|
(a)
|
|
|
2.4
|
|
|
|
(0.1
|
)
|
|
|
12.6
|
|
|
|
(0.1
|
)
|
|
|
15.0
|
|
|
||||||||||
Total available for sale investments
|
$
|
(8.9
|
)
|
|
$
|
1,080.4
|
|
|
$
|
(4.4
|
)
|
|
$
|
194.9
|
|
|
|
$
|
(13.3
|
)
|
|
|
$
|
1,275.3
|
|
|
|
|
December 31, 2017
|
||||||||
|
|
Cost
|
|
Fair Value
|
||||||
Due in one year or less
|
|
$
|
2,761.6
|
|
|
|
$
|
2,762.0
|
|
|
Due in one to three years
|
|
518.3
|
|
|
|
648.8
|
|
|||
Due in three to five years
|
|
528.8
|
|
|
|
473.9
|
|
|||
Due after five years
|
|
288.5
|
|
|
|
206.7
|
|
|||
Invested customer trust funds
|
|
$
|
4,097.2
|
|
|
|
$
|
4,091.4
|
|
|
December 31,
|
||||||||
|
2017
|
|
2016
|
||||||
Trade receivables from customers
|
$
|
81.9
|
|
|
|
$
|
78.1
|
|
|
Interest receivable from invested customer trust funds
|
1.7
|
|
|
|
0.5
|
|
|
||
Other
|
3.6
|
|
|
|
6.0
|
|
|
||
Total gross receivables
|
87.2
|
|
|
|
84.6
|
|
|
||
Less: reserve for sales adjustments
|
(4.8
|
)
|
|
|
(4.2
|
)
|
|
||
Less: allowance for doubtful accounts
|
(2.7
|
)
|
|
|
(2.3
|
)
|
|
||
Trade and other receivables, net
|
$
|
79.7
|
|
|
|
$
|
78.1
|
|
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||
Balance at beginning of year
|
$
|
2.3
|
|
|
|
$
|
1.4
|
|
|
|
$
|
1.8
|
|
|
Provision for doubtful accounts
|
1.1
|
|
|
|
1.3
|
|
|
|
0.7
|
|
|
|||
Charge-offs, net of recoveries
|
(0.7
|
)
|
|
|
(0.4
|
)
|
|
|
(1.1
|
)
|
|
|||
Balance at end of year
|
$
|
2.7
|
|
|
|
$
|
2.3
|
|
|
|
$
|
1.4
|
|
|
|
December 31,
|
||||||||
|
2017
|
|
2016
|
||||||
Land
|
$
|
7.5
|
|
|
|
$
|
7.5
|
|
|
Software
|
207.2
|
|
|
|
171.7
|
|
|
||
Machinery and equipment
|
122.1
|
|
|
|
103.9
|
|
|
||
Buildings and improvements
|
36.6
|
|
|
|
36.2
|
|
|
||
Total property, plant and equipment
|
373.4
|
|
|
|
319.3
|
|
|
||
Accumulated depreciation
|
(269.6
|
)
|
|
|
(232.4
|
)
|
|
||
Property, plant and equipment, net
|
$
|
103.8
|
|
|
|
$
|
86.9
|
|
|
|
HCM
|
|
LifeWorks
|
|
Total
|
|||||||||
Balance at December 31, 2015
|
$
|
2,008.5
|
|
|
|
$
|
—
|
|
|
|
$
|
2,008.5
|
|
|
Formation of Joint Venture Company (See Note 4)
|
(87.7
|
)
|
|
|
87.7
|
|
|
|
—
|
|
|
|||
Acquisition of WorkAngel (See Note 4)
|
—
|
|
|
|
37.1
|
|
|
|
37.1
|
|
|
|||
Translation
|
12.3
|
|
|
|
0.1
|
|
|
|
12.4
|
|
|
|||
Balance at December 31, 2016
|
1,933.1
|
|
|
|
124.9
|
|
|
|
2,058.0
|
|
|
|||
Translation
|
27.9
|
|
|
|
1.4
|
|
|
|
29.3
|
|
|
|||
Balance at December 31, 2017
|
$
|
1,961.0
|
|
|
|
$
|
126.3
|
|
|
|
$
|
2,087.3
|
|
|
|
|
|
|
|
|
|||||||||
Tax-deductible goodwill at December 31, 2017
|
$
|
12.2
|
|
|
|
$
|
—
|
|
|
|
$
|
12.2
|
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Estimated Life Range (Years)
|
|||||||||
Customer lists and relationships
|
$
|
248.4
|
|
|
|
$
|
(209.3
|
)
|
|
|
$
|
39.1
|
|
|
|
5-15
|
Tradename
|
174.0
|
|
|
|
(2.1
|
)
|
|
|
171.9
|
|
|
|
0
|
|||
Technology
|
155.6
|
|
|
|
(154.2
|
)
|
|
|
1.4
|
|
|
|
2-7
|
|||
Total other intangible assets
|
$
|
578.0
|
|
|
|
$
|
(365.6
|
)
|
|
|
$
|
212.4
|
|
|
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Estimated Life Range (Years)
|
|||||||||
Customer lists and relationships
|
$
|
244.5
|
|
|
|
$
|
(185.7
|
)
|
|
|
$
|
58.8
|
|
|
|
5-15
|
Tradename
|
|
173.6
|
|
|
|
|
(1.9
|
)
|
|
|
171.7
|
|
|
|
0
|
|
Technology
|
152.5
|
|
|
|
(150.1
|
)
|
|
|
2.4
|
|
|
|
2-7
|
|||
Total other intangible assets
|
$
|
570.6
|
|
|
|
$
|
(337.7
|
)
|
|
|
$
|
232.9
|
|
|
|
|
Years Ending December 31,
|
|
Amount
|
|||
2018
|
|
$
|
21.8
|
|
|
2019
|
|
18.2
|
|
|
|
2020
|
|
0.1
|
|
|
|
2021
|
|
0.1
|
|
|
|
2022
|
|
—
|
|
|
•
|
Ceridian LLC entered into a Credit Agreement, originally dated November 9, 2007, as amended on multiple occasions, pursuant to which a revolving credit facility (“Parent Revolving Credit Facility”) and term debt (“Parent Term Debt”) (together referred to as the “Parent Senior Secured Credit Facility”) were made available. Such Parent Senior Secured Credit Facility was secured by all assets of Ceridian LLC and was senior to certain other debt of Ceridian LLC. During the third quarter of 2012, Ceridian LLC (i) amended the terms of the original 2007 credit agreement to reduce the principal amount of the Parent Senior Secured Credit Facility and (ii) issued its Senior Secured Notes due 2019 (the “Parent Senior Secured Notes”) (together, the “Amend and Extend Transaction”). The Parent Senior Secured Credit Facility and the Parent Senior Secured Notes were both secured by the same collateral and shared the same priority among Ceridian LLC's various debt obligations.
|
•
|
As part of the Separation Transaction on October 1, 2013, (i) Comdata assumed responsibility for the Parent Senior Secured Notes and (ii) Ceridian HCM and Comdata each assumed repayment responsibility for a portion of the Parent Senior Secured Credit Facility. On August 6, 2014, the Parent Senior Secured Credit Facility was then refinanced and provided for three facilities:
|
1.
|
$673.0 Term Loan B-1 Facility: this tranche named Comdata and Ceridian LLC as co-borrowers, with Ceridian HCM and other entities as co-guarantors;
|
2.
|
$702.0 Term Loan B-2 Facility (the “Ceridian Term Loan B-2 Debt”): this tranche named Ceridian HCM and Ceridian LLC as co-borrowers, with Comdata and other entities as co-guarantors and provided that, upon
|
3.
|
$130.0 Revolving Credit Facility: this facility provided Ceridian LLC and Ceridian HCM a revolving credit facility and provided that, upon satisfaction of certain credit conditions, Ceridian HCM could become sole borrower.
|
•
|
Ceridian LLC issued its Senior Notes due 2015 (the “Parent Senior Notes”) pursuant to an Indenture dated November 9, 2007 as amended on multiple occasions. During the first quarter of 2013, Ceridian LLC issued its Senior Exchangeable Notes due 2021 (the “Parent Senior Exchangeable Notes”) which were senior unsecured obligations of Ceridian LLC, exchangeable at any time at the option of Ceridian LLC for notes to be issued by Ceridian HCM, although Ceridian LLC and Comdata remained obligated as guarantors. The proceeds from the issuance of the Parent Senior Exchangeable Notes were used to prepay a portion of the Parent Senior Notes. As part of the Separation Transaction on October 1, 2013, (i) Ceridian HCM issued its Senior Notes due 2021 (the “Ceridian Senior Notes”) in exchange for the Parent Senior Exchangeable Notes, with the same credit support as was applicable to the Parent Senior Exchangeable Notes (including guarantees from Ceridian LLC and Comdata) and (ii) the portion of the Parent Senior Notes that then remained outstanding were assumed by Comdata. The Ceridian Senior Notes provided that, upon satisfaction of certain credit conditions, Ceridian HCM could become the sole obligor and Ceridian LLC, Comdata and the other Comdata affiliates would be released from their obligations. These credit conditions were essentially the same as were applicable to the release described above relating to the Ceridian Term Loan B-2 Debt.
|
1.
|
Ceridian HCM entered into a new Credit Agreement dated as of November 14, 2014 pursuant to the terms of which Ceridian HCM became sole borrower of (i) a term loan debt facility (the “Ceridian Term Debt”) to replace the debt previously known as the Ceridian Term Loan B-2 Debt and (ii) a revolving credit facility (the “Ceridian Revolving Credit Facility”) (the Ceridian Term Debt and the Ceridian Revolving Credit Facility are together referred to as the “Ceridian Senior Secured Credit Facility”), which Ceridian Senior Secured Credit Facility is secured by all assets of Ceridian HCM and is senior to Ceridian HCM’s other debt.
|
2.
|
Ceridian HCM became sole obligor of the Ceridian Senior Notes.
|
|
|
December 31,
|
||||||||
|
|
2017
|
|
2016
|
||||||
Ceridian Term Debt, interest rate of 5.1% and 4.5% as of December 31, 2017 and 2016, respectively
|
|
$
|
657.3
|
|
|
|
$
|
683.2
|
|
|
Ceridian Senior Notes, interest rate of 11.0% as of December 31, 2017 and 2016
|
|
475.0
|
|
|
|
475.0
|
|
|
||
Ceridian Revolving Credit Facility ($130.0 available capacity less amounts reserved for letters of credit, which were $8.4 and $7.7 as of December 31, 2017, and 2016, respectively)
|
|
—
|
|
|
|
—
|
|
|
||
Total debt
|
|
1,132.3
|
|
|
|
1,158.2
|
|
|
||
Less unamortized discount on Ceridian Term Debt
|
|
|
0.9
|
|
|
|
|
1.1
|
|
|
Less unamortized debt issuance costs on Ceridian Senior Notes and Ceridian Term Debt
|
|
11.6
|
|
|
|
15.0
|
|
|
||
Less current portion of long-term debt
|
|
—
|
|
|
|
2.3
|
|
|
||
Long-term debt, less current portion
|
|
$
|
1,119.8
|
|
|
|
$
|
1,139.8
|
|
|
Years Ending December 31,
|
Amount
|
||||
2018
|
$
|
—
|
|
|
|
2019
|
—
|
|
|
||
2020
|
657.3
|
|
|
||
2021
|
475.0
|
|
|
||
2022
|
—
|
|
|
||
Thereafter
|
—
|
|
|
||
|
$
|
1,132.3
|
|
Years Ending December 31,
|
|
Amount
|
|||
2018
|
|
$
|
46.8
|
|
|
2019
|
|
46.3
|
|
|
|
2020
|
|
45.4
|
|
|
|
2021
|
|
44.4
|
|
|
|
2022
|
|
43.1
|
|
|
|
Next five years
|
|
$
|
193.5
|
|
|
Funded Status of Defined Benefit
Retirement Plans at Measurement Date
|
|
Year Ended December 31,
|
||||||||
2017
|
|
2016
|
||||||||
Change in Projected Benefit Obligation During the Year:
|
|
|
|
|
||||||
Projected benefit obligation at beginning of year
|
|
$
|
605.9
|
|
|
|
$
|
636.0
|
|
|
Service cost
|
|
—
|
|
|
|
—
|
|
|
||
Interest cost
|
|
17.2
|
|
|
|
18.2
|
|
|
||
Actuarial loss
|
|
|
20.3
|
|
|
|
|
4.3
|
|
|
Benefits paid and plan expenses
|
|
(50.4
|
)
|
|
|
(52.6
|
)
|
|
||
Projected benefit obligation at end of year
|
|
$
|
593.0
|
|
|
|
$
|
605.9
|
|
|
Change in Fair Value of Plan Assets During the Year:
|
|
|
|
|
||||||
Plan assets at fair value at beginning of year
|
|
416.4
|
|
|
|
410.1
|
|
|
||
Actual return on plan assets
|
|
49.6
|
|
|
|
20.5
|
|
|
||
Employer contributions
|
|
23.0
|
|
|
|
38.4
|
|
|
||
Benefits paid and plan expenses
|
|
|
(50.4
|
)
|
|
|
|
(52.6
|
)
|
|
Plan assets at fair value at end of year
|
|
438.6
|
|
|
|
416.4
|
|
|
||
Funded status of plans
|
|
$
|
(154.4
|
)
|
|
|
$
|
(189.5
|
)
|
|
|
|
December 31,
|
||||||||
Amounts recognized in Consolidated Balance Sheets
|
|
2017
|
|
2016
|
||||||
Current liability
|
|
$
|
20.3
|
|
|
|
$
|
27.1
|
|
|
Noncurrent liability
|
|
|
134.1
|
|
|
|
|
162.4
|
|
|
|
|
|
|
|
||||||
Amounts recognized in Accumulated Other Comprehensive Loss
|
|
|
|
|
||||||
Accumulated other comprehensive loss, net of tax of $91.5 and $91.5, respectively
|
|
$
|
151.4
|
|
|
|
$
|
167.2
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Net actuarial (gain) loss
|
|
$
|
(3.0
|
)
|
|
|
$
|
9.5
|
|
|
|
$
|
2.2
|
|
|
|
Amortization of net actuarial loss
|
|
(12.8
|
)
|
|
|
(12.5
|
)
|
|
|
(13.3
|
)
|
|
||||
Tax expense
|
|
—
|
|
|
|
0.1
|
|
|
—
|
|
|
|||||
Other comprehensive income, net of tax
|
|
$
|
(15.8
|
)
|
|
|
$
|
(2.9
|
)
|
|
|
$
|
(11.1
|
)
|
|
|
|
Year Ended December 31,
|
||||
Assumption Used in Calculations
|
|
2017
|
|
2016
|
|
2015
|
Discount rate used to determine net benefit cost
|
|
3.63%
|
|
3.76%
|
|
3.50%
|
Expected return on plan assets
|
|
6.30%
|
|
6.30%
|
|
6.50%
|
Discount rate used to determine benefit obligations
|
|
3.25%
|
|
3.63%
|
|
3.76%
|
|
|
Year Ended December 31,
|
|||||||||||||
Net Periodic Pension Cost
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
Interest cost
|
|
$
|
17.2
|
|
|
|
$
|
18.2
|
|
|
|
$
|
23.3
|
|
|
Expected return on plan assets
|
|
|
(26.3
|
)
|
|
|
|
(25.7
|
)
|
|
|
|
(26.6
|
)
|
|
Actuarial loss amortization
|
|
|
12.8
|
|
|
|
|
12.5
|
|
|
|
|
13.3
|
|
|
Net periodic pension cost
|
|
$
|
3.7
|
|
|
|
$
|
5.0
|
|
|
|
$
|
10.0
|
|
|
Investments, at fair value:
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Short-term investments
|
$
|
36.8
|
|
|
|
$
|
36.8
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Derivatives (a)
|
14.8
|
|
|
|
—
|
|
|
|
14.8
|
|
|
|
|
—
|
|
|
|||
Government securities
|
88.1
|
|
|
|
—
|
|
|
|
88.1
|
|
|
|
—
|
|
|
||||
Corporate debt securities
|
18.3
|
|
|
|
—
|
|
|
|
18.3
|
|
|
|
—
|
|
|
||||
Collective investment funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Domestic equity (b)
|
144.4
|
|
|
|
—
|
|
|
|
144.4
|
|
|
|
—
|
|
|
||||
Foreign equity (b)
|
57.5
|
|
|
|
—
|
|
|
|
57.5
|
|
|
|
—
|
|
|
||||
Foreign bond (c)
|
41.8
|
|
|
|
—
|
|
|
|
41.8
|
|
|
|
—
|
|
|
||||
Partnerships (d)
|
35.3
|
|
|
|
—
|
|
|
|
35.3
|
|
|
|
—
|
|
|
||||
Hedge fund of funds (e)
|
1.6
|
|
|
|
—
|
|
|
|
1.6
|
|
|
|
—
|
|
|
||||
Total investments, at fair value
|
$
|
438.6
|
|
|
|
$
|
36.8
|
|
|
|
$
|
401.8
|
|
|
|
$
|
—
|
|
|
Investments, at fair value:
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Short-term investments
|
$
|
34.0
|
|
|
|
$
|
34.0
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Derivatives (a)
|
19.0
|
|
|
|
|
|
|
|
19.0
|
|
|
|
|
|
|
||||
Government securities
|
88.9
|
|
|
|
—
|
|
|
|
88.9
|
|
|
|
—
|
|
|
||||
Corporate debt securities
|
25.5
|
|
|
|
—
|
|
|
|
25.5
|
|
|
|
—
|
|
|
||||
Collective investment funds:
|
|
|
|
|
|
|
|
||||||||||||
Domestic equity (b)
|
66.7
|
|
|
|
—
|
|
|
|
66.7
|
|
|
|
—
|
|
|
||||
Foreign equity (b)
|
86.0
|
|
|
|
—
|
|
|
|
86.0
|
|
|
|
—
|
|
|
||||
Foreign bond (c)
|
33.3
|
|
|
|
—
|
|
|
|
33.3
|
|
|
|
—
|
|
|
||||
Partnerships (d)
|
32.7
|
|
|
|
—
|
|
|
|
32.7
|
|
|
|
—
|
|
|
||||
Hedge fund of funds (e)
|
30.3
|
|
|
|
—
|
|
|
|
30.3
|
|
|
|
—
|
|
|
||||
Total investments, at fair value
|
$
|
416.4
|
|
|
|
$
|
34.0
|
|
|
|
$
|
382.4
|
|
|
|
$
|
—
|
|
|
Funded Status of Postretirement
Health Care and Life Insurance Plans
|
|
Year Ended December 31,
|
||||||||
|
2017
|
|
2016
|
|||||||
Change in Benefit Obligation:
|
|
|
|
|
||||||
At beginning of year
|
|
$
|
21.0
|
|
|
|
$
|
23.2
|
|
|
Interest cost
|
|
|
0.5
|
|
|
|
|
0.6
|
|
|
Participant contributions
|
|
|
1.1
|
|
|
|
|
1.2
|
|
|
Actuarial gain
|
|
|
(0.7
|
)
|
|
|
|
(1.4
|
)
|
|
Benefits paid
|
|
|
(2.3
|
)
|
|
|
|
(2.6
|
)
|
|
At end of year
|
|
$
|
19.6
|
|
|
|
$
|
21.0
|
|
|
Change in Plan Assets:
|
|
|
|
|
||||||
At beginning of year
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Company contributions
|
|
|
1.2
|
|
|
|
|
1.5
|
|
|
Participant contributions
|
|
|
1.1
|
|
|
|
|
1.1
|
|
|
Benefits paid
|
|
|
(2.3
|
)
|
|
|
|
(2.6
|
)
|
|
At end of year
|
|
|
—
|
|
|
|
|
—
|
|
|
Funded Status
|
|
$
|
(19.6
|
)
|
|
|
$
|
(21.0
|
)
|
|
|
|
December 31,
|
||||||||
Amounts recognized in Consolidated Balance Sheets
|
|
2017
|
|
2016
|
||||||
Current liability
|
|
$
|
2.4
|
|
|
|
$
|
2.6
|
|
|
Noncurrent liability
|
|
17.2
|
|
|
|
18.4
|
|
|
||
Amounts recognized in Accumulated Other Comprehensive Income
|
|
|
|
|
||||||
Accumulated other comprehensive income, net of tax of $(9.9) and $(9.9), respectively
|
|
$
|
(8.9
|
)
|
|
|
$
|
(10.9
|
)
|
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
Net actuarial gain
|
|
$
|
(0.7
|
)
|
|
|
$
|
(1.4
|
)
|
|
|
$
|
(4.5
|
)
|
|
Amortization of net actuarial gain
|
|
|
2.7
|
|
|
|
|
2.6
|
|
|
|
|
2.0
|
|
|
Tax expense
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Other comprehensive loss (income), net of tax
|
|
$
|
2.0
|
|
|
|
$
|
1.2
|
|
|
|
$
|
(2.5
|
)
|
|
Net Periodic Postretirement Benefit
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||
Service cost
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Interest cost
|
|
0.5
|
|
|
|
0.6
|
|
|
|
0.9
|
|
|
|||
Actuarial gain amortization
|
|
(2.4
|
)
|
|
|
(2.3
|
)
|
|
|
(1.7
|
)
|
|
|||
Prior service credit amortization
|
|
(0.3
|
)
|
|
|
(0.3
|
)
|
|
|
(0.3
|
)
|
|
|||
Net periodic postretirement benefit gain
|
|
$
|
(2.2
|
)
|
|
|
$
|
(2.0
|
)
|
|
|
$
|
(1.1
|
)
|
|
|
Year Ended December 31,
|
||||
Assumption Used in Calculations
|
2017
|
|
2016
|
|
2015
|
Weighted average discount rate used to determine net periodic postretirement cost (credit)
|
3.26%
|
|
3.38%
|
|
3.25%
|
Weighted average discount rate used to determine benefit obligation at measurement date
|
3.01%
|
|
3.26%
|
|
3.38%
|
Years Ending December 31,
|
|
Payments
|
|
Receipts
|
||||||
2018
|
|
$
|
2.5
|
|
|
|
$
|
0.1
|
|
|
2019
|
|
|
2.2
|
|
|
|
|
0.1
|
|
|
2020
|
|
|
2.1
|
|
|
|
|
0.1
|
|
|
2021
|
|
|
2.0
|
|
|
|
|
0.1
|
|
|
2022
|
|
|
1.9
|
|
|
|
|
0.1
|
|
|
Next five years
|
|
$
|
7.3
|
|
|
|
$
|
0.3
|
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
(per share)
|
|
Weighted
Average
Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic Value (in millions)
|
||||||||||||
Options outstanding at December 31, 2014
|
2,686,302
|
|
|
|
$
|
6.73
|
|
6.3
|
|
|
6.3
|
|
|
$
|
|
—
|
|
|
|
Granted
|
—
|
|
—
|
|
|
|
—
|
|
|
|
|
||||||||
Exercised
|
—
|
|
|
|
—
|
|
|
|
|
|
|
||||||||
Forfeited or expired
|
(124,465
|
)
|
|
(6.73
|
)
|
|
|
|
|||||||||||
Options outstanding at December 31, 2015
|
2,561,837
|
|
|
$
|
6.73
|
|
|
5.2
|
|
|
$
|
|
—
|
|
|
||||
Granted
|
—
|
|
—
|
|
|
|
—
|
|
|
|
|
||||||||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|||||||||||
Forfeited or expired
|
(105,885
|
)
|
|
(6.73
|
)
|
|
|
|
|||||||||||
Options outstanding at December 31, 2016
|
2,455,952
|
|
|
$
|
6.73
|
|
|
4.2
|
|
|
$
|
|
—
|
|
|
||||
Granted
|
—
|
|
|
—
|
|
|
|
|
|||||||||||
Exercised
|
(334,404
|
)
|
(a)
|
(6.73
|
)
|
|
|
|
|||||||||||
Forfeited or expired
|
(50,155
|
)
|
|
(6.73
|
)
|
|
|
|
|
|
|
||||||||
Options outstanding at December 31, 2017
|
2,071,393
|
|
|
|
$
|
6.73
|
|
3.5
|
|
|
3.5
|
|
|
$
|
|
—
|
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
(per share)
|
|
Weighted
Average
Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||||||
Options outstanding at December 31, 2014
|
15,176,294
|
|
|
|
$
|
7.99
|
|
|
|
8.2
|
|
|
$
|
13.3
|
|
|
Granted
|
374,280
|
|
|
|
|
8.78
|
|
|
|
|
|
|
||||
Exercised
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|||||
Forfeited or expired
|
(336,121
|
)
|
|
(8.20
|
)
|
|
|
|
|
|||||||
Options outstanding at December 31, 2015
|
15,214,453
|
|
|
$
|
8.01
|
|
|
7.3
|
|
|
$
|
14.1
|
|
|
||
Granted
|
4,678,477
|
|
|
|
|
8.40
|
|
|
|
|
|
|
||||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||||||
Forfeited or expired
|
(353,253
|
)
|
|
(8.27
|
)
|
|
|
|
|
|||||||
Options outstanding at December 31, 2016
|
19,539,677
|
|
|
$
|
8.10
|
|
|
7.1
|
|
|
$
|
9.9
|
|
|
||
Granted
|
4,571,962
|
|
|
8.73
|
|
|
|
|
|
|||||||
Exercised
|
(1,190,929
|
)
|
|
(7.57
|
)
|
|
|
|
|
|||||||
Forfeited or expired
|
(937,212
|
)
|
|
(8.05
|
)
|
|
|
|
|
|||||||
Options outstanding at December 31, 2017
|
21,983,498
|
|
|
|
$
|
8.26
|
|
|
|
6.9
|
|
|
$
|
48.8
|
|
|
Options exercisable at December 31, 2017
|
13,639,537
|
|
|
$
|
8.07
|
|
|
5.5
|
|
|
$
|
32.9
|
|
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Weighted average grant date fair value per share
|
$2.94
|
|
$2.87
|
|
$2.84
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Expected volatility
|
30.0%
|
|
30.0%
|
|
33.0%
|
Expected dividend rate
|
—
|
|
—
|
|
—
|
Risk-free interest rate
|
2.3%
|
1.9%
|
|
2.1%
|
|
Shares
|
||
RSUs outstanding at December 31, 2014
|
—
|
|
|
Granted
|
457,144
|
|
|
Shares issued upon vesting of RSUs
|
—
|
|
|
Forfeited or canceled
|
—
|
|
|
RSUs outstanding at December 31, 2015
|
457,144
|
|
|
Granted
|
59,600
|
|
|
Shares issued upon vesting of RSUs
|
(152,382
|
)
|
|
Forfeited or canceled
|
—
|
|
|
RSUs outstanding at December 31, 2016
|
364,362
|
|
|
Granted
|
1,000,000
|
|
|
Shares issued upon vesting of RSUs
|
(152,382
|
)
|
|
Forfeited or canceled
|
—
|
|
|
RSUs outstanding at December 31, 2017
|
1,211,980
|
|
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Weighted average grant date fair value per share
|
$8.63
|
|
$8.70
|
|
$8.75
|
|
Shares
|
|
Weighted
Average
Exercise
Price
(per share)
|
|
Weighted
Average
Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||||||||
Options outstanding at December 31, 2015
|
—
|
|
|
|
$
|
—
|
|
—
|
|
|
—
|
|
|
$
|
|
—
|
|
|
Granted
|
1,166,402
|
|
2.12
|
|
|
|
|
|||||||||||
Exercised
|
(45,834
|
)
|
|
|
(0.51
|
)
|
|
|
|
|
|
|||||||
Forfeited or expired
|
(29,805
|
)
|
|
(3.26
|
)
|
|
|
|
||||||||||
Options outstanding at December 31, 2016
|
1,090,763
|
|
|
$
|
2.15
|
|
|
7.9
|
|
|
$
|
|
3.3
|
|
|
|||
Granted
|
212,651
|
|
3.90
|
|
|
|
|
|||||||||||
Exercised
|
(46,690
|
)
|
|
(0.57
|
)
|
|
|
|
||||||||||
Forfeited or expired
|
(152,250
|
)
|
|
(3.02
|
)
|
|
|
|
||||||||||
Options outstanding at December 31, 2017
|
1,104,474
|
|
|
$
|
2.44
|
|
|
6.9
|
|
|
$
|
|
3.0
|
|
|
|||
Options exercisable at December 31, 2017
|
570,932
|
|
|
$
|
1.53
|
|
|
6.8
|
|
|
$
|
|
2.1
|
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
(per share)
|
|
Weighted
Average
Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in millions)
|
||||||||||||
Options outstanding at December 31, 2015
|
—
|
|
|
|
$
|
—
|
|
—
|
|
|
—
|
|
|
$
|
|
—
|
|
|
|
Granted
|
873,142
|
|
8.84
|
|
|
|
8.84
|
|
|
|
|
|
|
|
|||||
Exercised
|
—
|
|
|
|
—
|
|
|
|
|
|
|
||||||||
Forfeited or expired
|
(25,000
|
)
|
|
(8.84
|
)
|
|
|
|
|||||||||||
Options outstanding at December 31, 2016
|
848,142
|
|
|
$
|
8.84
|
|
|
|
6.4
|
|
|
$
|
|
0.7
|
|
|
|||
Granted
|
253,797
|
|
7.91
|
|
|
|
7.91
|
|
|
|
|
|
|
|
|||||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|||||||||||
Forfeited or expired
|
(115,414
|
)
|
|
(8.84
|
)
|
|
|
|
|||||||||||
Options outstanding at December 31, 2017
|
986,525
|
|
|
$
|
8.6
|
|
|
|
5.8
|
|
|
$
|
1.0
|
|
|
||||
Options exercisable at December 31, 2017
|
241,436
|
|
|
$
|
8.62
|
|
|
5.7
|
|
|
$
|
0.2
|
|
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||
|
|
Class C
|
|
Class D
|
|
Class C
|
|
Class D
|
Weighted average grant date fair value per share
|
|
$2.41
|
|
3.32
|
|
$ 2.57
|
|
3.3
|
|
Year Ended December 31,
|
||
|
2017
|
|
2016
|
Expected volatility
|
45.0%
|
|
45.0%
|
Expected dividend rate
|
—
|
|
—
|
Risk-free interest rate
|
2.0%
|
|
1.2%
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||
Other Expense, Net
|
|
|
|
|
|
|||||||||
Asset impairment
|
$
|
—
|
|
|
|
$
|
10.4
|
|
|
|
$
|
23.0
|
|
|
Realized gains on sale of short-term investments
|
—
|
|
|
|
(3.9
|
)
|
|
|
(25.4
|
)
|
|
|||
Environmental reserve
|
—
|
|
|
|
5.9
|
|
|
|
—
|
|
|
|||
Foreign currency translation expense (income)
|
7.4
|
|
|
|
(3.1
|
)
|
|
|
4.8
|
|
|
|||
Total other expense, net
|
$
|
7.4
|
|
|
|
$
|
9.3
|
|
|
|
$
|
2.4
|
|
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Loss from Marketable Securities
|
|
Unrealized Gain (Loss) from Invested Customer Trust Funds
|
|
Pension Liability Adjustment
|
|
Total
|
|||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
Balance as of December 31, 2015
|
$
|
(230.8
|
)
|
|
|
$
|
(5.2
|
)
|
|
|
$
|
12.9
|
|
|
|
$
|
(167.3
|
)
|
|
|
$
|
(390.4
|
)
|
|
Other comprehensive income (loss) before income taxes and reclassifications
|
8.0
|
|
|
|
1.3
|
|
|
|
(10.2
|
)
|
|
|
(7.8
|
)
|
|
|
(10.0
|
)
|
|
|||||
Income tax benefit (expense)
|
—
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
(0.1
|
)
|
|
|
1.9
|
|
|
|||||
Sale of UK Business, net of tax
|
16.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9.0
|
|
|
|
25.9
|
|
|
|||||
Reclassifications to earnings
|
—
|
|
|
|
3.9
|
|
|
|
—
|
|
|
|
9.9
|
|
|
|
9.9
|
|
|
|||||
Other comprehensive income (loss) attributable to Ceridian
|
24.9
|
|
|
|
5.2
|
|
|
|
(8.2
|
)
|
|
|
11.0
|
|
|
|
27.7
|
|
|
|||||
Balance as of December 31, 2016
|
(205.9
|
)
|
|
|
—
|
|
|
|
4.7
|
|
|
|
(156.3
|
)
|
|
|
(357.5
|
)
|
|
|||||
Other comprehensive income (loss) before income taxes and reclassifications
|
39.3
|
|
|
|
—
|
|
|
|
(17.3
|
)
|
)
|
|
3.7
|
|
|
|
25.7
|
|
|
|||||
Income tax benefit
|
—
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|||||
Reclassifications to earnings
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10.1
|
|
|
|
10.1
|
|
|
|||||
Other comprehensive income (loss) attributable to Ceridian
|
39.3
|
|
|
|
—
|
|
|
|
(13.7
|
)
|
|
|
13.8
|
|
|
|
39.4
|
|
|
|||||
Balance as of December 31, 2017
|
$
|
(166.6
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(9.0
|
)
|
|
|
$
|
(142.5
|
)
|
|
|
$
|
(318.1
|
)
|
|
|
|
Year Ended December 31,
|
|||||||||||||
Components of Earnings and Taxes from Operations
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
(Loss) Income Before Income Taxes:
|
|
|
|
|
|
|
|||||||||
U.S.
|
|
$
|
(84.4
|
)
|
|
|
$
|
(159.1
|
)
|
|
|
$
|
(130.7
|
)
|
|
International
|
|
30.3
|
|
|
|
67.6
|
|
|
|
50.4
|
|
|
|||
Total
|
|
$
|
(54.1
|
)
|
|
|
$
|
(91.5
|
)
|
|
|
$
|
(80.3
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income Tax Expense (Benefit):
|
|
|
|
|
|
|
|||||||||
Current:
|
|
|
|
|
|
|
|||||||||
U.S.
|
|
$
|
5.5
|
|
|
|
$
|
(6.1
|
)
|
|
|
$
|
(0.2
|
)
|
|
State and local
|
|
1.7
|
|
|
|
0.9
|
|
|
|
0.1
|
|
|
|||
International
|
|
13.4
|
|
|
|
16.0
|
|
|
|
16.6
|
|
|
|||
Total current income tax expense
|
|
20.6
|
|
|
|
10.8
|
|
|
|
16.5
|
|
|
|||
Deferred
|
|
|
|
|
|
|
|||||||||
U.S.
|
|
(63.3
|
)
|
|
|
(0.7
|
)
|
|
|
(7.9
|
)
|
|
|||
State and local
|
|
0.8
|
|
|
|
(0.1
|
)
|
|
|
(1.8
|
)
|
|
|||
International
|
|
(2.8
|
)
|
|
|
7.8
|
|
|
|
1.8
|
|
|
|||
Total deferred income tax (benefit) expense
|
|
(65.3
|
)
|
|
|
7.0
|
|
|
|
(7.9
|
)
|
|
|||
Total income tax (benefit) expense
|
|
$
|
(44.7
|
)
|
|
|
$
|
17.8
|
|
|
|
$
|
8.6
|
|
|
|
|
Year Ended December 31,
|
||||
Effective Rate Reconciliation
|
|
2017
|
|
2016
|
|
2015
|
U.S. statutory rate
|
|
(35.0)%
|
|
(35.0)%
|
|
(35.0)%
|
Change in valuation allowance
|
|
(114.4)
|
|
(0.1)
|
|
14.0
|
State income taxes, net of federal benefit
|
|
(5.3)
|
|
(0.8)
|
|
0.4
|
Share-based compensation
|
|
8.4
|
|
2.8
|
|
3.4
|
International tax rate differential
|
|
(6.8)
|
|
(7.1)
|
|
(7.9)
|
Foreign dividend income
|
|
47.7
|
|
1.1
|
|
16.1
|
Unremitted foreign earnings
|
|
(35.2)
|
|
23.7
|
|
—
|
Foreign capital gain income
|
|
—
|
|
—
|
|
4.6
|
Reserve for tax contingencies
|
|
9.9
|
|
3.2
|
|
0.1
|
Expiration of un-utilized tax credits
|
|
1.5
|
|
—
|
|
13.5
|
Unrealized gain on investments
|
|
—
|
|
33.1
|
|
—
|
Change in tax rate
|
|
51.4
|
|
—
|
|
—
|
Other
|
|
(4.0)
|
|
(1.5)
|
|
1.6
|
Income tax provision
|
|
(81.8)%
|
19.4%
|
|
10.8%
|
Tax Effect of Items That Comprise a Significant Portion of the Net Deferred Tax Asset and Deferred Tax Liability
|
|
December 31,
|
||||||||
|
2017
|
|
2016
|
|||||||
Deferred Tax Asset:
|
|
|
|
|
||||||
Employment related accruals
|
|
$
|
51.3
|
|
|
|
$
|
89.8
|
|
|
Foreign tax credit carryover and other credit carryovers
|
|
0.3
|
|
|
|
1.1
|
|
|
||
Net operating loss carryforwards
|
|
101.1
|
|
|
|
133.1
|
|
|
||
Total gross deferred tax asset
|
|
|
152.7
|
|
|
|
|
224.0
|
|
|
Valuation allowance
|
|
(91.7
|
)
|
|
|
(159.9
|
)
|
|
||
Total deferred tax asset
|
|
$
|
61.0
|
|
|
|
$
|
64.1
|
|
|
Deferred Tax Liability:
|
|
|
|
|
||||||
Intangibles
|
|
$
|
(67.4
|
)
|
|
|
$
|
(105.3
|
)
|
|
Unremitted foreign earnings
|
|
|
—
|
|
|
|
|
(20.9
|
)
|
|
Unrealized gain on investment
|
|
|
(22.2
|
)
|
|
|
|
(33.5
|
)
|
|
Other
|
|
|
(3.9
|
)
|
|
|
|
(5.3
|
)
|
|
Total deferred tax liability
|
|
(93.5
|
)
|
|
|
(165.0
|
)
|
|
||
Net deferred tax liability
|
|
$
|
(32.5
|
)
|
|
|
$
|
(100.9
|
)
|
|
|
|
December 31,
|
||||||||
Net Deferred Tax by Geography
|
|
2017
|
|
2016
|
||||||
U.S.
|
|
$
|
(18.6
|
)
|
|
|
$
|
(81.1
|
)
|
|
International
|
|
(13.9
|
)
|
|
|
(19.8
|
)
|
|
||
Total
|
|
$
|
(32.5
|
)
|
|
|
$
|
(100.9
|
)
|
|
|
|
Year Ended December 31,
|
||||||||
Federal, State and Foreign Tax
|
|
2017
|
|
2016
|
||||||
Beginning unrecognized tax balance
|
|
$
|
4.7
|
|
|
|
$
|
1.7
|
|
|
Increase prior period positions
|
|
0.4
|
|
|
|
0.1
|
|
|
||
Increase current period positions
|
|
5.6
|
|
|
|
3.5
|
|
|
||
Decrease prior period positions
|
|
—
|
|
|
|
(0.3
|
)
|
|
||
Decrease current period positions
|
|
|
—
|
|
|
|
|
(0.1
|
)
|
|
Statutes expiring
|
|
(0.2
|
)
|
|
|
(0.2
|
)
|
|
||
Ending unrecognized tax benefits
|
|
$
|
10.5
|
|
|
|
$
|
4.7
|
|
|
|
|
Year Ended December 31,
|
|||||||||||||
Rental Expense, Net
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
Rental expense
|
|
$
|
17.5
|
|
|
|
$
|
16.8
|
|
|
|
$
|
18.6
|
|
|
Sublease rental income
|
|
|
(4.2
|
)
|
|
|
|
(3.5
|
)
|
|
|
|
(2.3
|
)
|
|
Net rental expense
|
|
$
|
13.3
|
|
|
|
$
|
13.3
|
|
|
|
$
|
16.3
|
|
|
Years Ending December 31,
|
|
Amount
|
|||
2018
|
|
$
|
11.6
|
|
|
2019
|
|
|
11.5
|
|
|
2020
|
|
|
9.4
|
|
|
2021
|
|
|
6.4
|
|
|
2022
|
|
|
5.4
|
|
|
Thereafter
|
|
|
4.3
|
|
|
Total
|
|
$
|
48.6
|
|
|
|
|
Year Ended December 31, 2017
|
|||||||||||||
|
|
HCM
|
|
LifeWorks
|
|
Total
|
|||||||||
|
|
|
|
|
|
|
|||||||||
Cloud revenue
|
|
$
|
404.3
|
|
|
|
$
|
—
|
|
|
|
$
|
404.3
|
|
|
Bureau revenue
|
|
266.5
|
|
|
|
—
|
|
|
|
266.5
|
|
|
|||
LifeWorks revenue
|
|
—
|
|
|
|
79.9
|
|
|
|
79.9
|
|
|
|||
Total revenue
|
|
|
670.8
|
|
|
|
|
79.9
|
|
|
|
|
750.7
|
|
|
Operating profit (loss)
|
|
32.9
|
|
|
|
(0.4
|
)
|
|
|
32.5
|
|
|
|||
Depreciation and amortization
|
|
53.8
|
|
|
|
4.1
|
|
|
|
57.9
|
|
|
|||
Capital expenditures
|
|
$
|
50.6
|
|
|
|
$
|
0.2
|
|
|
|
$
|
50.8
|
|
|
|
|
Year Ended December 31, 2016
|
|||||||||||||
|
|
HCM
|
|
LifeWorks
|
|
Total
|
|||||||||
|
|
|
|
|
|
|
|||||||||
Cloud revenue
|
|
$
|
297.8
|
|
|
|
$
|
—
|
|
|
|
$
|
297.8
|
|
|
Bureau revenue
|
|
325.8
|
|
|
|
—
|
|
|
|
325.8
|
|
|
|||
LifeWorks revenue
|
|
—
|
|
|
|
80.6
|
|
|
|
80.6
|
|
|
|||
Total revenue
|
|
|
623.6
|
|
|
|
|
80.6
|
|
|
|
|
704.2
|
|
|
Operating (loss) profit
|
|
(4.7
|
)
|
|
|
4.5
|
|
|
|
(0.2
|
)
|
|
|||
Depreciation and amortization
|
|
53.2
|
|
|
|
4.1
|
|
|
|
57.3
|
|
|
|||
Capital expenditures
|
|
$
|
32.9
|
|
|
|
$
|
0.3
|
|
|
|
$
|
33.2
|
|
|
|
|
Year Ended December 31, 2015
|
|||||||||||||
|
|
HCM
|
|
LifeWorks
|
|
Total
|
|||||||||
|
|
|
|
|
|
|
|||||||||
Cloud revenue
|
|
$
|
225.2
|
|
|
|
$
|
—
|
|
|
|
$
|
225.2
|
|
|
Bureau revenue
|
|
386.9
|
|
|
|
—
|
|
|
|
386.9
|
|
|
|||
LifeWorks revenue
|
|
—
|
|
|
|
81.8
|
|
|
|
81.8
|
|
|
|||
Total revenue
|
|
|
612.1
|
|
|
|
|
81.8
|
|
|
|
|
693.9
|
|
|
Operating (loss) profit
|
|
23.5
|
|
|
|
8.6
|
|
|
|
32.1
|
|
|
|||
Depreciation and amortization
|
|
52.3
|
|
|
|
3.7
|
|
|
|
56.0
|
|
|
|||
Capital expenditures
|
|
$
|
34.1
|
|
|
|
$
|
0.4
|
|
|
|
$
|
34.5
|
|
|
•
|
Cloud revenue is generated from HCM solutions that are delivered via two cloud offerings: Dayforce and Powerpay. The Dayforce offering is differentiated from our market competition as being a single application that offers a comprehensive range of functionality, including global HR, payroll, benefits, workforce management, and talent management on web and native iOS and Android platforms. Dayforce revenue is primarily generated from monthly recurring fees charged on a PEPM basis, generally one-month in advance of service. Also included within Dayforce revenue is implementation, staging, and other professional services revenue; revenues from the sale, rental, and maintenance of time clocks; and billable travel expenses. The Powerpay offering is our solution designed primarily for small market Canadian customers. The typical Powerpay customer has fewer than 20 employees, and the majority of the revenue is generated from recurring fees charged on a per-employee, per-process basis. Typical processes include the customer’s payroll runs, year-end tax packages, and delivery of customers’ remittance advices or checks. In addition to the direct revenue earned from the Dayforce and Powerpay offerings, Cloud revenue also includes investment income generated from holding Cloud customer funds in trust before funds are remitted to taxing authorities, Cloud customer employees, or other third parties; and revenue from the sale of third party services.
|
•
|
Bureau revenue is generated primarily from HCM solutions delivered via a service-bureau model. These solutions are delivered via three primary service lines: payroll, payroll-related tax filing services, and outsourced human resource solutions. Revenue from payroll services is generated from recurring fees charged on a per-process basis. Typical processes include the customer’s payroll runs, year-end tax packages, and delivery of customers’ remittance advices or checks. In addition to customers who use our payroll services, certain customers use our tax filing services on a stand-alone basis. Our outsourced human resource solutions are tailored to meet the needs of individual customers, and entail our contracting to perform many of the duties of a customer’s human resources department, including payroll processing, time and labor management, performance management, and recruiting. We also perform HCM-related individual services for customers, such as check printing, wage attachment and disbursement, and ACA management. Additional items included in Bureau revenue are custom professional services revenue; investment income generated from holding Bureau customer funds in trust before funds are remitted to taxing authorities, Bureau customer employees, or other third parties; consulting services related to Bureau offerings; and revenue from the sale of third party services.
|
•
|
LifeWorks joint venture revenue is primarily generated from employee assistance, wellness, recognition, and incentive programs offered directly by LifeWorks in the United States, Canada, the United Kingdom and various other countries through LifeWorks’ network of contractors. LifeWorks offers employee engagement services, such as employee assistance programs, social recognition, discounts from participating vendors, a private social network, employee and corporate wellness, and employee engagement analytics.
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
United States
|
|
$
|
514.5
|
|
|
|
$
|
484.2
|
|
|
|
$
|
473.1
|
|
|
Canada
|
|
227.6
|
|
|
|
212.5
|
|
|
|
215.0
|
|
|
|||
Other
|
|
8.6
|
|
|
|
7.5
|
|
|
|
5.8
|
|
|
|||
Total revenue
|
|
$
|
750.7
|
|
|
|
$
|
704.2
|
|
|
|
$
|
693.9
|
|
|
|
|
December 31,
|
||||||||
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
1,859.8
|
|
|
|
$
|
1,865.8
|
|
|
Canada
|
|
503.0
|
|
|
|
472.0
|
|
|
||
Other
|
|
40.7
|
|
|
|
40.0
|
|
|
||
Total long-lived assets
|
|
$
|
2,403.5
|
|
|
|
$
|
2,377.8
|
|
|