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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024

OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-38300
CANNAE HOLDINGS, INC.
______________________________________________________________________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
Nevada82-1273460
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
   
1701 Village Center Circle,Las Vegas,Nevada89134
(Address of principal executive offices)(Zip Code)
(702) 323-7330
___________________________________________________________________
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol Name of Each Exchange on Which Registered
Cannae Common Stock, $0.0001 par valueCNNE New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated FilerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of October 31, 2024 there were 62,739,664 shares of the Registrant's common stock outstanding.



FORM 10-Q
QUARTERLY REPORT
QUARTER ENDED SEPTEMBER 30, 2024
TABLE OF CONTENTS
  
 Page
 
 
 
Item 3. Defaults Upon Senior Securities
i

Part I: FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 September 30,
2024
December 31,
2023
ASSETS
Current assets:  
Cash and cash equivalents$160.7 $106.2 
Short-term investments8.9 15.6 
Other current assets19.7 29.5 
Income taxes receivable25.5 26.0 
Total current assets214.8 177.3 
Investments in unconsolidated affiliates1,495.2 1,718.8 
Equity securities, at fair value89.8 290.9 
Lease assets137.7 143.5 
Property and equipment, net63.1 58.7 
Goodwill53.4 53.4 
Deferred tax asset69.4 82.0 
Other intangible assets, net15.4 16.8 
Other long-term investments and non-current assets147.4 145.3 
Total assets$2,286.2 $2,686.7 
LIABILITIES AND EQUITY
Current liabilities: 
Accounts payable and other accrued liabilities, current$55.8 $74.2 
Lease liabilities, current14.3 13.9 
Deferred revenue12.2 16.9 
Notes payable, current1.9 2.5 
Total current liabilities84.2 107.5 
Lease liabilities, long-term134.7 142.2 
Notes payable, long-term179.3 102.5 
Accounts payable and other accrued liabilities, long-term25.2 25.3 
Total liabilities423.4 377.5 
Commitments and contingencies - see Note H
Equity: 
Cannae common stock, 0.0001 par value; authorized 115,000,000 shares as of September 30, 2024 and December 31, 2023; issued of 94,268,232 and 92,844,329 shares as of September 30, 2024 and December 31, 2023, respectively, and outstanding of 62,734,645 and 70,367,088 shares as of September 30, 2024 and December 31, 2023, respectively
  
Preferred stock, 0.0001 par value; authorized 10,000,000 shares; issued and outstanding, none as of September 30, 2024 and December 31, 2023
  
Retained earnings620.8 901.3 
Additional paid-in capital2,005.0 1,977.0 
Less: Treasury stock, 31,533,587 and 22,477,241 shares as of September 30, 2024 and December 31, 2023, respectively, at cost
(724.6)(533.9)
Accumulated other comprehensive loss(17.2)(19.9)
Total Cannae shareholders' equity1,884.0 2,324.5 
Noncontrolling interests(21.2)(15.3)
Total equity1,862.8 2,309.2 
Total liabilities and equity$2,286.2 $2,686.7 
See Notes to Condensed Consolidated Financial Statements
1

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenues:
Restaurant revenue$102.1 $131.2 $316.2 $424.9 
Other operating revenue11.8 12.4 26.4 25.8 
Total operating revenues113.9 143.6 342.6 450.7 
Operating expenses:
Cost of restaurant revenue93.0 115.9 279.3 375.8 
Personnel costs18.1 16.2 60.5 43.1 
Depreciation and amortization3.3 5.9 10.0 15.6 
Other operating expenses17.6 57.5 74.5 110.4 
Total operating expenses132.0 195.5 424.3 544.9 
Operating loss(18.1)(51.9)(81.7)(94.2)
Other income (expense):
Interest, investment and other income0.8 3.4 3.6 8.9 
Interest expense(2.9)(5.8)(7.5)(14.2)
Recognized gains (losses), net23.4 (130.8)(130.3)(120.9)
Total other income (expense)21.3 (133.2)(134.2)(126.2)
Earnings (loss) before income taxes and equity in losses of unconsolidated affiliates3.2 (185.1)(215.9)(220.4)
Income tax (benefit) expense(6.2)(40.5)13.5 (59.7)
Earnings (loss) before equity in losses of unconsolidated affiliates9.4 (144.6)(229.4)(160.7)
Equity in losses of unconsolidated affiliates(26.9)(26.0)(34.9)(107.2)
Net loss(17.5)(170.6)(264.3)(267.9)
Less: Net loss attributable to noncontrolling interests(3.9)(13.3)(5.8)(19.3)
Net loss attributable to Cannae Holdings, Inc. common shareholders$(13.6)$(157.3)$(258.5)$(248.6)
Earnings per share
Basic
Net loss per share $(0.22)$(2.18)$(3.97)$(3.34)
Diluted
Net loss per share$(0.22)$(2.18)$(3.97)$(3.34)
Weighted Average Shares Outstanding
Weighted average shares outstanding Cannae Holdings common stock, basic basis62.4 72.1 65.1 74.5 
Weighted average shares outstanding Cannae Holdings common stock, diluted basis62.4 72.1 65.1 74.5 
See Notes to Condensed Consolidated Financial Statements
2

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS
(In millions)
(Unaudited)
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Net loss$(17.5)$(170.6)$(264.3)$(267.9)
Other comprehensive earnings (loss), net of tax:    
Unrealized earnings (loss) of investments in unconsolidated affiliates (1)
0.4 (2.5)(1.4)1.7 
Reclassification adjustments for unrealized gains and losses of unconsolidated affiliates, net of tax, included in net earnings (2)
  4.1  
Other comprehensive earnings (loss)0.4 (2.5)2.7 1.7 
Comprehensive loss(17.1)(173.1)(261.6)(266.2)
Less: Comprehensive loss attributable to noncontrolling interests(3.9)(13.3)(5.8)(19.3)
Comprehensive loss attributable to Cannae Holdings, Inc. common shareholders$(13.2)$(159.8)$(255.8)$(246.9)
_________________________________
 
(1)Net of income tax expense (benefit) of $0.1 million and $(0.7) million for the three months ended September 30, 2024 and 2023, respectively, and $(0.4) million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively.
(2)Net of income tax expense of $1.1 million for the nine months ended September 30, 2024.    
See Notes to Condensed Consolidated Financial Statements



3

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
(Unaudited)

 Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comp (Loss) EarningsTreasury StockNon-controlling
Interests
Total
Equity
 Shares$Shares$
 
Balance, June 30, 202392.8 $ $1,957.0 $1,123.4 $(13.9)19.4 $(474.5)$(10.0)$2,582.0 
Other comprehensive earnings — unrealized losses of investments in unconsolidated affiliates, net of tax— — — — (2.5)— — — (2.5)
Treasury stock repurchases— — — — — 2.7 (52.3)— (52.3)
Stock-based compensation, consolidated subsidiaries— — 1.0 — — — — — 1.0 
Stock-based compensation, unconsolidated affiliates— — 8.0 — — — — — 8.0 
Net loss— — — (157.3)— — — (13.3)(170.6)
Balance, September 30, 2023
92.8 $ $1,966.0 $966.1 $(16.4)22.1 $(526.8)$(23.3)$2,365.6 
Balance, June 30, 202494.2 $ $1,997.9 $642.0 $(17.6)31.8 $(721.6)$(17.2)$1,883.5 
Other comprehensive earnings — unrealized earnings of investments in unconsolidated affiliates, net of tax— — — — 0.4 — — — 0.4 
Treasury stock repurchases— — — — — — (0.1)— (0.1)
Issuance of restricted stock and shares held in trust0.1 — — — — — — — — 
Stock-based compensation, consolidated subsidiaries— — 4.0 — — — — — 4.0 
RSU vesting and payment for shares withheld for taxes and in treasury— — — — — (0.3)(2.9)— (2.9)
Stock-based compensation, unconsolidated affiliates— — 3.1 — — — — — 3.1 
Subsidiary dividends paid to noncontrolling interests— — — — — — — (0.1)(0.1)
Dividends declared— — — (7.6)— — — — (7.6)
Net loss— — — (13.6)— — — (3.9)(17.5)
Balance, September 30, 2024
94.3 $ $2,005.0 $620.8 $(17.2)31.5 $(724.6)$(21.2)$1,862.8 

See Notes to Condensed Consolidated Financial Statements
4

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - CONTINUED
(In millions)
(Unaudited)

 Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comp (Loss) EarningsTreasury StockNon-controlling
Interests
Total
Equity
 Shares$Shares$
 
Balance, December 31, 202292.5 $ $1,936.2 $1,214.7 $(18.1)16.3 $(414.0)$(3.9)$2,714.9 
Other comprehensive earnings — unrealized earnings of investments in unconsolidated affiliates, net of tax— — — — 1.7 — — — 1.7 
Treasury stock repurchases— — — — — 5.8 (112.7)— (112.7)
Issuance of restricted stock0.3 — — — — — — — — 
Payment for shares withheld for taxes and in treasury— — — — — — (0.1)— (0.1)
Stock-based compensation, consolidated subsidiaries— — 2.5 — — — — — 2.5 
Stock-based compensation, unconsolidated affiliates— — 27.3 — — — — — 27.3 
Subsidiary dividends paid to noncontrolling interests— — — — — — — (0.1)(0.1)
Net loss— — — (248.6)— — — (19.3)(267.9)
Balance, September 30, 2023
92.8 $ $1,966.0 $966.1 $(16.4)22.1 $(526.8)$(23.3)$2,365.6 
Balance, December 31, 202392.8 $ $1,977.0 $901.3 $(19.9)22.5 $(533.9)$(15.3)$2,309.2 
Other comprehensive earnings — unrealized losses of investments in unconsolidated affiliates, net of tax— — — — (1.4)— — — (1.4)
Reclassification adjustments for unrealized gains and losses on unconsolidated affiliates, net of tax, included in net loss — — — — 4.1 — — — 4.1 
Treasury stock repurchases— — — — — 10.0 (231.2)— (231.2)
Issuance of restricted stock and shares held in trust1.5 — — — — 1.2 — — — 
RSU vesting and payment for shares withheld for taxes and in treasury— — — — — (0.3)(3.5)— (3.5)
Stock-based compensation, consolidated subsidiaries— — 15.3 — — — — — 15.3 
Stock-based compensation, unconsolidated affiliates— — 12.7 — — — — — 12.7 
Subsidiary dividends paid to noncontrolling interests— — — — — — — (0.1)(0.1)
Treasury shares issued for investment in JANA— — — (6.8)— (1.9)44.0 — 37.2 
Dividends declared— — — (15.2)— — — — (15.2)
Net loss— — — (258.5)— — — (5.8)(264.3)
Balance, September 30, 2024
94.3 $ $2,005.0 $620.8 $(17.2)31.5 $(724.6)$(21.2)$1,862.8 

See Notes to Condensed Consolidated Financial Statements



















5

CANNAE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended September 30,
 20242023
 
Cash flows from operating activities:
Net loss$(264.3)$(267.9)
Adjustments to reconcile net loss to net cash used in operating activities:
            Depreciation and amortization10.0 15.6 
            Equity in losses of unconsolidated affiliates34.9 107.2 
            Distributions from investments in unconsolidated affiliates1.1 0.2 
            Recognized losses and asset impairments, net 130.4 154.1 
            Lease asset amortization10.1 14.3 
            Stock-based compensation expense15.3 2.5 
Changes in assets and liabilities:
Other assets6.4 9.0 
Lease liabilities(11.2)(18.2)
Accounts payable, accrued liabilities, deferred revenue and other liabilities(23.2)(6.5)
Income taxes12.4 (64.8)
Net cash used in operating activities(78.1)(54.5)
Cash flows from investing activities:  
Proceeds from sale of investment securities and other investments in unconsolidated affiliates1.9  
Proceeds from sales of Dayforce shares 264.0 124.6 
Additions to property and equipment and other intangible assets(4.6)(7.0)
Proceeds from sales of property and equipment6.7  
Proceeds from partial sale of D&B shares100.9  
Additional investments in unconsolidated affiliates(35.6)(162.0)
Purchases of other long term investments(45.7)(17.5)
Distributions from investments in unconsolidated affiliates12.8 11.9 
Purchases of short-term investment securities(64.6)(140.6)
Proceeds from sale and maturity of short-term investment securities71.3 157.0 
Net cash provided by (used in) investing activities307.1 (33.6)
Cash flows from financing activities:  
Borrowings103.2 62.3 
Debt service payments(28.1)(57.5)
Subsidiary distributions paid to noncontrolling interest shareholders(0.1)(0.1)
Payment for vested shares withheld for taxes and in treasury(3.4)(0.1)
Dividends paid(14.9) 
Treasury stock repurchases(231.2)(106.1)
Net cash used in financing activities(174.5)(101.5)
Net increase (decrease) in cash and cash equivalents54.5 (189.6)
Cash and cash equivalents at beginning of period106.2 247.7 
Cash and cash equivalents at end of period$160.7 $58.1 
See Notes to Condensed Consolidated Financial Statements
6

CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note A — Basis of Financial Statements
The following describes the significant accounting policies of Cannae Holdings, Inc. and its subsidiaries (collectively, "we," "us," "our,” "Cannae," "CNNE," or the "Company"), which have been followed in preparing the accompanying Condensed Consolidated Financial Statements.
Description of the Business
We primarily acquire interests in operating companies and are engaged in actively managing and operating a core group of those companies, which we are committed to supporting for the long term. From time to time, we also seek to take meaningful equity ownership stakes where we have the ability to control or significantly influence quality companies, and we bring the strength of our operational expertise to each of our subsidiaries. We are a long-term owner that secures control and governance rights of other companies primarily to engage in their lines of business and we have no preset time constraints dictating when we sell or dispose of our businesses. We believe that our long-term ownership and active involvement in the management and operations of companies helps maximize the value of those businesses for our shareholders. Our primary assets as of September 30, 2024 include our ownership interests in Dun & Bradstreet Holdings, Inc. ("Dun & Bradstreet" or "D&B"); Alight, Inc. ("Alight"); Paysafe Limited ("Paysafe"); Sightline Payments Holdings, LLC ("Sightline"); System1, Inc. ("System1"); Black Knight Football Club US, LP ("Black Knight Football" or "BKFC", formerly known as Black Knight Football and Entertainment, LP); Computer Services, Inc. ("CSI"); JANA Partners Capital, LLC and JANA Partners Management, LP (together, "JANA"); High Sierra Distillery, LP ("Minden Mill"); AmeriLife Group, LLC ("AmeriLife"); O'Charley's Holdings, LLC ("O'Charley's"); 99 Restaurants Holdings, LLC ("99 Restaurants"); and various other controlled subsidiary companies and minority equity ownership interests.
See Note E - Segment Information for further discussion of the businesses comprising our reportable segments.
We conduct our business through our wholly-owned subsidiary Cannae Holdings, LLC ("Cannae LLC"), a Delaware limited liability company. Our board of directors ("Board") oversees the management of the Company, Cannae LLC and its businesses, and the performance of our external manager, Trasimene Capital Management, LLC ("Trasimene" or our "Manager").
Principles of Consolidation and Basis of Presentation
The accompanying Condensed Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and the instructions to Form 10-Q and Article 10 of Regulation S-X and include the historical accounts as well as wholly-owned and majority-owned subsidiaries of the Company. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All adjustments made were of a normal, recurring nature. This report should be read in conjunction with our Annual Report on Form 10-K (our "Annual Report") for the year ended December 31, 2023.
All intercompany profits, transactions and balances have been eliminated. Our ownership interests in non-majority-owned partnerships and affiliates are accounted for under the equity method of accounting or as equity securities. Earnings attributable to noncontrolling interests recorded on the Condensed Consolidated Statements of Operations represents the portion of our majority-owned subsidiaries' net earnings or loss that is owned by noncontrolling shareholders of such subsidiaries. Noncontrolling interest recorded on the Condensed Consolidated Balance Sheets represents the portion of equity owned by noncontrolling shareholders in our consolidated subsidiaries.
Management Estimates
The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include the fair value measurements (See Note B - Investments and Note C - Fair Value Measurements). Actual results could differ from estimates.


7

CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Recent Developments
Dayforce
In the nine months ended September 30, 2024, we sold the remaining 4.0 million shares of common stock of Dayforce, Inc., ("Dayforce", formerly known as Ceridian HCM Holding, Inc.) for gross proceeds of $264.0 million and as of September 30, 2024, we no longer have any holdings of Dayforce.
Refer to Note B - Investments and Note C - Fair Value Measurements for further discussion of our accounting for our ownership interest in Dayforce and other equity securities.
Dun & Bradstreet
On February 8, 2024, April 30, 2024 and July 24, 2024, the board of directors of D&B declared quarterly cash dividends of $0.05 per share of D&B common stock. In the nine months ended September 30, 2024, we received $10.9 million of cash dividends from D&B which are recorded as a reduction to the basis of our recorded asset for D&B.
In March 2024, we completed the sale of 10.0 million shares of common stock of D&B. In connection with the sale, we received proceeds of $100.9 million. As of September 30, 2024, we owned 69.0 million shares of D&B, which represented approximately 15.6% of its outstanding common stock.
See Note B - Investments for further discussion of our accounting for our ownership interest in D&B and other equity method investments.
Paysafe
In January 2024, we purchased 1.6 million shares of Paysafe for $23.4 million. As of September 30, 2024, we hold a 5.5% ownership interest in Paysafe.
Other Developments
On February 21, 2024, we announced a tender offer to purchase up to $200 million of shares of our common stock at a purchase price of not less than $20.75 per share and not greater than $23.75 per share (the "Tender Offer"). We conducted the Tender Offer through a procedure commonly referred to as a "modified Dutch auction." This procedure allows shareholders to select the price within a price range specified by us at which the shareholders are willing to sell their shares.
On April 1, 2024, the Tender Offer expired and the Company accepted for purchase an aggregate of 9,672,540 shares of its common stock that were properly tendered and not properly withdrawn at or below a purchase price of $22.95 per share for an aggregate cost of $222.0 million, excluding fees and expenses. Included in the 9,672,540 shares of Cannae common stock we accepted for purchase in the Tender Offer are 957,943 shares that Cannae elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding common stock.
On February 21, 2024, we issued 1.85 million shares of common stock of the Company from the Company’s treasury and paid $18.3 million in cash, in the aggregate, to certain partners of JANA in exchange for a 19.99% equity interest in JANA. The transaction is valued at $55.5 million based on the closing price of the Company's common stock on February 21, 2024. Cannae also committed to invest $50 million into JANA funds (the "JANA Fund Commitment"). JANA is an investment manager founded in 2001. We account for our ownership interest in JANA as an unconsolidated affiliate using the equity method of accounting and record our ratable share of JANA's net income or loss on a three-month lag.
On February 26, 2024, the Company, Cannae LLC and Trasimene entered into a Third Amended and Restated Management Services Agreement (the "Third Amended MSA"). The Third Amended MSA amends the management services agreement primarily to (i) provide for a termination of the agreement by the Company effective June 30, 2027, (ii) reduce the management fee to a fixed amount of $7.6 million annually effective beginning July 2, 2024 and (iii) provide for payment of the termination fee under the agreement of $20 million to be paid by the Company to Trasimene in installments of $6.7 million annually over the three-year period ended July 1, 2026. The Third Amended MSA has a termination date of June 30, 2027 unless earlier terminated by the Company or Trasimene.
On October 17, 2024, the Company invested approximately $80.0 million for a 52.8% ownership interest in Watkins Holdings, LLC ("Watkins Holdings"), a partnership with KDSA Investment Partners ("KDSA") and Mark Jacobs (the "Watkins Acquisition"). Watkins Holdings concurrently completed the acquisition of The Watkins Company ("Watkins"), a leading producer of high-quality flavoring products. Watkins was founded in 1868 and has grown to be a leading domestic producer of spices, seasonings and extracts. The former majority owner of Watkins, Mark Jacobs, rolled a significant equity stake into Watkins Holdings.
Subsequent to September 30, 2024 through the date of this Quarterly Report, we have invested $25.5 million in BKFC.
8

CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

The following dividends were declared by our Board in 2024:
Declaration DateRecord DatePayment DateDividends Per Share
May 9, 2024June 14, 2024June 28, 2024$0.12
July 30, 2024September 16, 2024September 30, 2024$0.12
November 7, 2024December 17, 2024December 31, 2024$0.12
Related Party Transactions
During the three and nine months ended September 30, 2024, we incurred management fee expenses with our Manager of $1.9 million and $20.1 million, respectively, and during the three and nine months ended September 30, 2024 we incurred $1.8 million and $8.4 million, respectively, of termination fee expenses with our Manager. During the three and nine months ended September 30, 2023, we incurred management fee expenses with our Manager of $9.7 million and $28.7 million, respectively. These expenses are recorded in Other operating expenses on our Condensed Consolidated Statement of Operations.
Earnings Per Share
Basic earnings per share, as presented on the Condensed Consolidated Statement of Operations, is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.
In periods when earnings are positive, diluted earnings per share is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding plus the impact of assumed conversions of potentially dilutive securities. For periods when we recognize a net loss, diluted loss per share is equal to basic loss per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive. We have granted certain shares of restricted stock and restricted stock units that have been treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which positive earnings have been reported.
Instruments that provide the ability to purchase shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. For the three and nine months ended September 30, 2024 and 2023, shares of restricted stock outstanding were excluded from the calculation of diluted earnings per share as inclusion of restricted stock would be antidilutive due to net losses.
Income Taxes
Our effective tax rate was (193.8)% and 21.9% in the three months ended September 30, 2024 and 2023, respectively, and (6.3)% and 27.1% in the nine months ended September 30, 2024 and 2023, respectively. The change in the effective tax rate in the three-month period ended September 30, 2024 compared to the corresponding prior year period was primarily attributable to the varying impact of equity in losses of unconsolidated affiliates on income tax expense (benefit). The change in the effective tax rate in the nine-month period ended September 30, 2024 compared to the corresponding prior year period was primarily attributable to recording of a valuation allowance in the current period of $58.9 million on our federal net operating loss carryforwards and certain deferred taxes related to our consolidated partnerships, the varying impact of equity in losses of unconsolidated affiliates on income tax expense (benefit), and the impairment recorded to our investment in Sightline.
We have a Deferred tax asset of $69.4 million and $82.0 million as of September 30, 2024 and December 31, 2023, respectively. The $12.6 million change in deferred taxes in the nine months ended September 30, 2024 is primarily attributable to recording of a valuation allowance of $58.9 million primarily related to our federal net operating loss carryforwards and certain deferred taxes related to our consolidated partnerships, partially offset by the tax impact of sales of Dayforce and impairment of Sightline.
Stock-Based Compensation
On February 28, 2024, we issued 1.2 million restricted stock units ("RSUs") with a grant date fair value of $24.8 million as compensation to certain employees of the Company and issued 1.2 million shares of the Company's common stock to rabbi trusts that grant the holders of the RSUs pass-through voting rights. The RSUs vest in varying increments over a three-year period and, upon vesting, a number of shares of Company common stock equivalent to the number of vested RSUs will be released from the rabbi trusts to the employee. If the RSUs do not vest, the shares held in the rabbi trusts return to the Company. The Company is the primary beneficiary of the rabbi trusts prior to vesting of the RSUs and accordingly the shares of Company common stock held by the rabbi trusts are treated as treasury stock in the Company's condensed consolidated balance sheet and statement of equity in the period nine-month period ended September 30, 2024. Compensation cost
9

CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

associated with the RSUs is measured based on their grant-date fair value derived from quoted market prices and is recorded over the service period of the awards.
Recent Accounting Pronouncements
We have reviewed the recently issued accounting pronouncements and we did not identify any that are expected to, if currently adopted, have a material impact on our financial position or results of operations.
Note B — Investments
Investments in Unconsolidated Affiliates
Investments in unconsolidated affiliates recorded using the equity method of accounting as of September 30, 2024 and December 31, 2023 consisted of the following:
 
Ownership at September 30, 2024
September 30, 2024December 31, 2023
(In millions)
Dun & Bradstreet15.6 %$699.3 $827.7 
Alight9.8 %485.3 507.2 
Sightline33.0 %11.5 158.3 
Black Knight Football45.5 %93.5 112.3 
CSI6.5 %88.2 47.1 
Othervarious117.4 66.2 
Total $1,495.2 $1,718.8 
The aggregate fair value of our direct ownership in the common stock of unconsolidated affiliates that have quoted market prices as of September 30, 2024 consisted of the following:
 September 30, 2024
(in millions)
Dun & Bradstreet$794.8 
Alight388.3 
System130.3 
Equity in losses of unconsolidated affiliates for the three and nine months ended September 30, 2024 and 2023 consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
(In millions)
Dun & Bradstreet (1)
$(1.7)$(1.4)$(12.7)$(15.3)
Alight(6.6)(4.5)(15.7)(18.6)
Sightline (2)
(2.2)(4.9)(5.9)(14.0)
Black Knight Football(14.4)(3.7)(39.7)(20.6)
CSI  41.1  
Other(2.0)(11.5)(2.0)(38.7)
Total$(26.9)$(26.0)$(34.9)$(107.2)
_____________________________________
(1) Equity in losses for D&B includes $2.1 million of loss for the three months ended September 30, 2024 and 2023, respectively, and $6.4 million of loss in the nine months ended September 30, 2024 and 2023, respectively, related to amortization of Cannae's basis difference between the book value of its ownership interest and ratable portion of the underlying equity in net assets of D&B.
(2) Equity in losses for Sightline includes $1.9 million of loss in the three months ended September 30, 2023, and $2.9 million and $5.8 million of loss in the nine months ended September 30, 2024 and 2023, respectively, related to amortization of Cannae's basis difference between the book value of its investment and ratable portion of the underlying equity in net assets of Sightline.
10

CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Dun & Bradstreet
Summarized statement of operations information for D&B for the relevant dates and time periods included in Equity in losses of unconsolidated affiliates in our Statements of Operations is presented below.
Three months ended September 30,Nine months ended September 30,
 2024202320242023
(In millions)
Total revenues$609.1 $588.5 $1,749.8 $1,683.6 
Operating income62.2 52.1 115.9 76.5 
Income (loss) before income taxes2.1 (6.5)(84.2)(88.9)
Net income (loss)4.2 5.3 (33.4)(46.3)
Net income attributable to noncontrolling interest1.0 0.9 3.0 2.4 
Net income (loss) attributable to Dun & Bradstreet3.2 4.4 (36.4)(48.7)
Alight
Summarized statement of operations information for Alight for the relevant dates and time periods included in Equity in losses of unconsolidated affiliates in our Statements of Operations is presented below.
 
Three months ended September 30,
Nine months ended September 30,
2024202320242023
(In millions)
Total revenues$555.0 $557.0 $1,652.0 $1,704.0 
Gross profit174.0 166.0 523.0 540.0 
Net loss from continuing operations(44.0)(40.0)(169.0)(196.0)
Net (loss) earnings from discontinued operations(30.0)(6.0)2.0 4.0 
Net earnings (loss) attributable to noncontrolling interests 2.0 (2.0)(9.0)
Net loss attributable to Alight(74.0)(48.0)(165.0)(183.0)
Sightline
As of June 30, 2024, the book value of our investment in Sightline accounted for under the equity method of accounting prior to any impairment was $154.7 million. Based on a valuation using a hybrid discounted cash flow and market comparison approach and adjusted for the risk of a capital shortfall at the business, the aggregate fair market value of our ownership of Sightline equity was approximately $13.7 million as of June 30, 2024. The fair value measurement is considered a level 3 fair value measure. The primary inputs in the valuation were the forecasted results of operations of Sightline, the discount rate used in the discounted cash flow analysis and the adjustment for risk of capital shortfall. The primary significant unobservable input used was the 35% discount rate used in the discounted cash flow analysis and the 50% adjustment for the risk of capital shortfall.
Due to the quantum of the decrease in the fair market value of our ownership interest subsequent to our acquisition, declines in the forecasted results of operations and liquidity of Sightline, and the uncertainty of the ability of Sightline to raise new capital, management determined the decrease in value of our investment in Sightline was other-than-temporary as of June 30, 2024. Accordingly, we recorded an impairment of $141.0 million which is included in Recognized (losses) gains, net, on our Consolidated Statement of Operations for the nine months ended September 30, 2024.






11

CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Equity Securities
Recognized gains (losses), net on the Condensed Consolidated Statements of Operations consisted of the following (losses) gains on equity securities for the three and nine months ended September 30, 2024 and 2023:
Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
(In millions)
Net gains recognized during the period on equity securities$21.3 $3.2 $26.7 $20.6 
Less: net gains (losses) recognized during the period on equity securities sold, transferred or disposed during the period6.4 (0.3)(7.0)5.9 
Unrealized gains recognized during the reporting period on equity securities held at the reporting date$14.9 $3.5 $33.7 $14.7 
Equity Security Investments Without Readily Determinable Fair Values
We account for our investments in AmeriLife and certain other ownership interests at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly market transactions. As of September 30, 2024 and December 31, 2023, we have $128.5 million and $121.9 million, respectively, recorded for such investments, which is included in Other long term investments and noncurrent assets on our Condensed Consolidated Balance Sheets.
During the nine months ended September 30, 2024, we recorded a gain of $2.6 million to an investment without a readily determinable fair value. The amount of the gain was determined based on an observable third-party purchase of equity in the investee. During the nine months ended September 30, 2023, we recorded an impairment of $9.0 million to an investment without a readily determinable fair value. The amount of the impairment was determined based on the valuation of the investee implied by a contemplated sale of its assets to a third-party.
Note C — Fair Value Measurements
The fair value hierarchy established by the accounting standards on fair value measurements includes three levels, which are based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities that are recorded in the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:
Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access.
Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.
Level 3. Financial assets and liabilities whose values are based on model inputs that are unobservable.
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CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Recurring Fair Value Measurements
The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, respectively:
 September 30, 2024
 Level 1Level 2Level 3Total
 (In millions)
Assets:
Cash and cash equivalents$160.7 $ $ $160.7 
Short-term investments8.9   8.9 
Equity securities:
Paysafe75.8   75.8 
Other14.0   14.0 
Total equity securities89.8   89.8 
     Total assets$259.4 $ $ $259.4 
 December 31, 2023
 Level 1Level 2Level 3Total
 (In millions)
Assets:
Cash and cash equivalents$106.2 $ $ 106.2 
Short-term investments15.6   15.6 
Equity securities:
Dayforce268.5   268.5 
Paysafe22.4   22.4 
Total equity securities290.9   290.9 
     Total assets$412.7 $ $ $412.7 
We had no material assets or liabilities valued on a recurring basis using Level 3 inputs as of September 30, 2024 and December 31, 2023.
Additional information regarding the fair value of our investment portfolio is included in Note B - Investments.
Note D — Variable Interest Entities
The Company, in the normal course of business, engages in certain activities that involve variable interest entities ("VIEs"), which are legal entities in which a group of equity investors individually lack any of the characteristics of a controlling interest. The primary beneficiary of a VIE is generally the enterprise that has both the power to direct the activities most significant to the economic performance of the VIE and the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. The Company evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Company is the primary beneficiary and should consolidate the entity based on the variable interests it holds both at inception and when there is a change in circumstances that requires a reconsideration. If the Company is determined to be the primary beneficiary of a VIE, it must account for the VIE as a consolidated subsidiary. If the Company is determined not to be the primary beneficiary of a VIE but holds a variable interest in the entity, such variable interests are accounted for under accounting standards as deemed appropriate. As of and for the periods ended September 30, 2024 and December 31, 2023, we are not the primary beneficiary of any VIEs.




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CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Unconsolidated VIEs
The table below summarizes select information related to variable interests held by the Company as of September 30, 2024 and December 31, 2023, of which we are not the primary beneficiary:
September 30, 2024December 31, 2023
 Total AssetsMaximum ExposureTotal AssetsMaximum Exposure
 (In millions)
Investments in unconsolidated affiliates$229.8 $229.8 $210.9 $210.9 
Other long term investments and non-current assets3.6 3.6   
Investments in Unconsolidated Affiliates
As of September 30, 2024 and December 31, 2023, we held variable interests in certain unconsolidated affiliates, which are primarily comprised of our ownership interests in BKFC, CSI and Minden Mill. Cannae does not have the power to direct the activities that most significantly impact the economic performance of these unconsolidated affiliates; therefore, we are not the primary beneficiary.
The principal risk to which these investments and funds are exposed is the credit risk of the underlying investees. Cannae has guaranteed certain payment obligations of BKFC related to investment commitments associated with its acquisitions of interests in football clubs. These BKFC obligations total an estimated amount between $39.5 million and $71.9 million as of September 30, 2024. These obligations are potentially payable at various increments over the next four years and vary based on certain performance criteria. The underlying obligation of BKFC to fund these amounts is contingent on the exercise of certain investment options by BKFC or other parties. Cannae is required to fund such payments solely to the extent BKFC is unable to meet these obligations. We do not provide any other implicit or explicit liquidity guarantees or principal value guarantees to these VIEs.
The primary assets for our ownership of these VIEs are included in Investments in unconsolidated affiliates on the Condensed Consolidated Balance Sheets and accounted for under the equity method of accounting. See Note B - Investments for further discussion of our accounting for investments in unconsolidated affiliates.
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CANNAE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Note E — Segment Information
On March 20, 2024, Alight entered into a definitive agreement to sell its professional services segment and its payroll and human capital management outsourcing businesses (the "Payroll & Professional Services Business"). The transaction closed on July 12, 2024. Beginning with the quarter ended March 31, 2024, Alight began accounting for the assets and liabilities of the disposed businesses as held for sale and its operating results as discontinued operations. Accordingly, Alight's results presented for the periods ended September 30, 2023 have been retrospectively revised to reflect the Payroll & Professional Services Business as held for sale and discontinued operations.
Summarized financial information concerning our reportable segments is shown in the following tables.
As of and for the three months ended September 30, 2024:
 Restaurant GroupDun & BradstreetAlightBKFCCorporate and OtherAffiliate EliminationTotal
 (In millions)
Restaurant revenues$102.1 $ $ $ $ $ $102.1 
Other operating revenues 609.1 555.0 77.8 11.8 (1,241.9)11.8 
Revenues from external customers102.1 609.1 555.0 77.8 11.8 (1,241.9)113.9 
Interest, investment and other income (expense), including recognized gains (losses), net4.4 1.2 8.0 (11.5)19.8 2.3 24.2 
Total revenues, other income (expense) and realized gains (losses), net106.5 610.3 563.0 66.3 31.6 (1,239.6)138.1 
Depreciation and amortization2.6 144.8 97.0 31.0 0.7 (272.8)3.3 
Interest expense(1.5)(61.3)(19.0)(3.5)(1.4)83.8 (2.9)
(Loss) earnings before income taxes and equity in earnings (losses) of unconsolidated affiliates(0.9)2.1 (53.0)(27.7)4.1 78.6 3.2 
Income tax (benefit) expense (1.8)(9.0) (6.2)10.8 (6.2)
(Loss) earnings before equity in earnings (losses) of unconsolidated affiliates(0.9)3.9 (44.0)(27.7)10.3 67.8 9.4 
Equity in earnings (losses) of unconsolidated affiliates 0.3  (3.1)(4.2)(19.9)(26.9)
Net (loss) earnings$(0.9)$4.2 $(44.0)$(30.8)$6.1 $47.9 $(17.5)
Assets$271.0 $9,004.9 $8,271.0 $