UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~

2021


☐
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-37394

Black Knight, Inc.

______________________________________________________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)



~~Delaware~~		~~81-5265638~~
Delaware					81-5265638
(State or other jurisdiction of incorporation or organization)					(I.R.S. Employer Identification Number)

601 Riverside Avenue ~~Jacksonville, Florida~~	,	Jacksonville	,	Florida	32204
(Address of principal executive offices)					(Zip Code)

(904) 854-5100

(~~Registrant's~~Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value	BKI	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~~ þ NO o

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files).

~~YES~~ þ NO o

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 filerþ

☑

Accelerated filero

☐

Non-accelerated filero

☐

Smaller reporting companyo

☐

~~(Do not check if a smaller reporting company)~~

Emerging growth companyo

☐

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. o

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~YES~~ o NO þ

Yes ☐ No ☑

There were ~~153,469,978~~156,630,031 shares outstanding of the ~~Registrant's~~Registrant’s common stock as of ~~November 1, 2017.~~ August 4, 2021.

Table of Contents

FORM 10-Q

QUARTERLY REPORT

Quarter Ended ~~September~~June 30, ~~2017~~

2021

TABLE OF CONTENTS


	Page

	~~Page~~
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
A. Condensed Consolidated Balance Sheets (Unaudited) as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020	1
B. Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	2
C. Condensed Consolidated ~~Statement~~Statements of Equity (Unaudited) for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2021 and 2020	3
D. Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	4 5
E. Notes to Condensed Consolidated Financial Statements (Unaudited)	5 6
Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	22 26
Item 3. Quantitative and Qualitative Disclosure About Market Risk	35 36
Item 4. Controls and Procedures	35 37
Part II: OTHER INFORMATION	37 38
Item 1. Legal Proceedings	37 38
Item 1A. Risk Factors	37 38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39

Table of Contents

Part I: FINANCIAL INFORMATION


~~Item 1.~~	~~Condensed Consolidated Financial Statements (Unaudited)~~

Item 1.Condensed Consolidated Financial Statements (Unaudited)

BLACK KNIGHT, INC.

Condensed Consolidated Balance Sheets

(In ~~millions, except share data)~~

September 30, 2017 December 31, 2016
(Unaudited)
ASSETS
Current assets:

Cash and cash equivalents $ 146.2
$ 133.9
Trade receivables, net 169.2
155.8
Prepaid expenses and other current assets 42.5
45.4
Receivables from related parties 18.5
4.1
Total current assets 376.4
339.2
Property and equipment, net 165.0
173.0
Computer software, net 422.1
450.0
Other intangible assets, net 248.5
299.5
Goodwill 2,306.8
2,303.8
Other non-current assets 231.2
196.5
Total assets $ 3,750.0
$ 3,762.0
LIABILITIES AND EQUITY
Current liabilities:

Trade accounts payable and other accrued liabilities $ 52.1
$ 55.2
Accrued compensation and benefits 39.2
61.1
Current portion of long-term debt 55.1
63.4
Deferred revenues 54.2
47.4
Total current liabilities 200.6
227.1
Deferred revenues 98.1
77.3
Deferred income taxes 301.8
7.9
Long-term debt, net of current portion 1,486.9
1,506.8
Other non-current liabilities 12.5
3.5
Total liabilities 2,099.9
1,822.6
Commitments and contingencies (Note 6)

Equity:

Black Knight, Inc. common stock; $0.0001 par value; 550,000,000 shares authorized; 153,473,895 shares issued and outstanding as of September 30, 2017 —
—
Black Knight, Inc. preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none as of September 30, 2017 —
—
Black Knight Financial Services, Inc. Class A common stock; $0.0001 par value; 350,000,000 shares authorized; 69,091,008 shares issued and outstanding as of December 31, 2016 —
—
Black Knight Financial Services, Inc. Class B common stock; $0.0001 par value; 200,000,000 shares authorized, 84,826,282 shares issued and outstanding as of December 31, 2016 —
—
Black Knight Financial Services, Inc. preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none as of December 31, 2016 —
—
Additional paid-in capital 1,594.9
810.8
Retained earnings 54.2
65.7
Accumulated other comprehensive earnings (loss) 1.0
(0.8 )
Total shareholders' equity 1,650.1
875.7
Noncontrolling interests —
1,063.7
Total equity 1,650.1
1,939.4
Total liabilities and equity $ 3,750.0
$ 3,762.0

millions)

(Unaudited)


	June 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	88.7	$	34.7
Trade receivables, net		183.6		182.2
Prepaid expenses and other current assets		86.3		70.4
Receivables from related parties		10.5		0
Total current assets		369.1		287.3
Property and equipment, net		157.5		163.1
Computer software, net		496.5		498.3
Other intangible assets, net		624.6		692.3
Goodwill		3,649.6		3,613.4
Investments in unconsolidated affiliates		475.8		470.5
Deferred contract costs, net		179.6		172.3
Other non-current assets		213.2		193.3
Total assets	$	6,165.9	$	6,090.5
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable and other accrued liabilities	$	73.8	$	88.1
Accrued compensation and benefits		91.0		79.3
Current portion of debt		19.0		73.0
Deferred revenues		68.7		50.9
Total current liabilities		252.5		291.3
Deferred revenues		82.7		92.7
Deferred income taxes		282.1		284.0
Long-term debt, net of current portion		2,216.3		2,121.9
Other non-current liabilities		90.1		94.9
Total liabilities		2,923.7		2,884.8
Commitments and contingencies (Note 11)
Redeemable noncontrolling interests		578.0		578.0
Equity:
Common stock; $0.0001 par value; 550,000,000 shares authorized; 160,040,598 shares issued and 156,635,838 shares outstanding as of June 30, 2021, and 160,085,413 shares issued and 157,014,712 shares outstanding as of December 31, 2020		0		0
Preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, NaN as of June 30, 2021 and December 31, 2020		0		0
Additional paid-in capital		2,021.0		2,053.7
Retained earnings		852.4		757.4
Accumulated other comprehensive loss		(32.6)		(38.8)
Treasury stock, at cost, 3,404,760 shares as of June 30, 2021 and 3,070,701 shares as of December 31, 2020		(176.6)		(144.6)
Total shareholders’ equity		2,664.2		2,627.7
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	6,165.9	$	6,090.5

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

BLACK KNIGHT, INC.

Condensed Consolidated Statements of Earnings and Comprehensive Earnings

~~(Unaudited)~~

(In millions, except per share data)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Revenues	$	361.3	$	293.1	$	711.0	$	583.8
Expenses:
Operating expenses		197.0		155.5		383.2		317.9
Depreciation and amortization		90.4		58.6		178.2		116.3
Transition and integration costs		4.3		2.5		12.2		4.9
Total expenses		291.7		216.6		573.6		439.1
Operating income		69.6		76.5		137.4		144.7
Other income and expense:
Interest expense, net		(20.9)		(13.0)		(41.2)		(27.7)
Other (expense) income, net		(1.0)		18.8		(4.2)		18.0
Total other (expense) income, net		(21.9)		5.8		(45.4)		(9.7)
Earnings before income taxes and equity in (losses) earnings of unconsolidated affiliates		47.7		82.3		92.0		135.0
Income tax expense		10.5		17.2		15.7		25.4
Earnings before equity in (losses) earnings of unconsolidated affiliates		37.2		65.1		76.3		109.6
Equity in (losses) earnings of unconsolidated affiliates, net of tax		(5.0)		(26.0)		1.4		(20.4)
Net earnings		32.2		39.1		77.7		89.2
Net losses attributable to redeemable noncontrolling interests		7.5		—		16.1		0
Net earnings attributable to Black Knight	$	39.7	$	39.1	$	93.8	$	89.2
Other comprehensive earnings (loss):
Unrealized holding (losses) gains, net of tax⁽¹⁾		(0.2)		(2.6)		0.3		(24.2)
Reclassification adjustments for losses included in net earnings, net of tax⁽²⁾		4.0		3.2		7.9		4.4
Total unrealized gains (losses) on interest rate swaps, net of tax		3.8		0.6		8.2		(19.8)
Foreign currency translation adjustment, net of tax ⁽³⁾		(0.1)		—		(0.4)		(0.2)
Unrealized gains (losses) on investments in unconsolidated affiliates⁽⁴⁾		1.5		(1.5)		(1.6)		(1.7)
Other comprehensive earnings (loss)		5.2		(0.9)		6.2		(21.7)
Comprehensive earnings		37.4		38.2		83.9		67.5
Net losses attributable to redeemable noncontrolling interests		7.5		—		16.1		0
Comprehensive earnings attributable to Black Knight	$	44.9	$	38.2	$	100.0	$	67.5
Net earnings per share attributable to Black Knight common shareholders:
Basic	$	0.26	$	0.26	$	0.60	$	0.60
Diluted	$	0.25	$	0.26	$	0.60	$	0.60
Weighted average shares of common stock outstanding (see Note 5):
Basic		155.4		149.2		155.5		148.6
Diluted		155.7		150.0		155.8		149.3

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues $ 263.8
$ 267.1
$ 784.1
$ 764.5
Expenses:
Operating expenses 140.7
152.2
428.2
433.4
Depreciation and amortization 51.3
56.8
154.2
154.2
Transition and integration costs 4.0
1.1
8.5
2.2
Total expenses 196.0
210.1
590.9
589.8
Operating income 67.8
57.0
193.2
174.7
Other income and expense:
Interest expense (14.1 ) (16.9 ) (44.8 ) (50.6 )
Other expense, net (0.6 ) (1.4 ) (17.1 ) (6.2 )
Total other expense, net (14.7 ) (18.3 ) (61.9 ) (56.8 )
Earnings before income taxes 53.1
38.7
131.3
117.9
Income tax expense 9.2
6.3
24.3
19.2
Net earnings 43.9
32.4
107.0
98.7
Less: Net earnings attributable to noncontrolling interests 29.2
21.2
71.9
64.7
Net earnings attributable to Black Knight $ 14.7
$ 11.2
$ 35.1
$ 34.0
Other comprehensive earnings (loss):
Unrealized holding gains (losses), net of tax 0.3
0.4
0.9
(0.9 )
Reclassification adjustments for losses included in net earnings, net of tax (1) —
0.1
0.2
0.4
Total unrealized gains (losses) on interest rate swaps, net of tax (2) 0.3
0.5
1.1
(0.5 )
Foreign currency translation adjustment —
0.1
0.1
(0.1 )
Other comprehensive earnings (loss) 0.3
0.6
1.2
(0.6 )
Comprehensive earnings attributable to noncontrolling interests 29.8
22.2
74.1
63.9
Comprehensive earnings $ 44.8
$ 34.0
$ 110.4
$ 97.3

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Earnings per share:
Net earnings per share attributable to Black Knight common shareholders:
Basic $ 0.22
$ 0.17
$ 0.52
$ 0.52
Diluted $ 0.21
$ 0.16
$ 0.51
$ 0.50
Weighted average shares of common stock outstanding (Note 2):
Basic 67.9
65.9
67.7
65.9
Diluted 68.5
67.9
152.7
67.8


(1)	Net of income tax benefit of $0.1 million and income tax expense of $0.1 million for the three and six months ended June 30, 2021, respectively, and income tax benefit of $0.9 million and $8.2 million for the three and six months ended June 30, 2020, respectively.

(2)

Amounts reclassified to net earnings relate to losses on interest rate swaps and are included in Interest expense, ~~on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Amount is~~net above. Amounts are net of income tax ~~expense~~benefit of $1.4 million and $2.7 million for the three and six months ended June 30, 2021, respectively, and $1.1 million and $1.5 million for the three and six months ended June 30, 2020, respectively.

(3)

Net of income tax benefit of less than $0.1 million for the three and six months ended ~~September~~June 30, ~~2017~~2021 and ~~$0.1~~$0.1 million for the ~~three~~six months ended ~~September~~June 30, ~~2016. Amount is net of income tax expense of $0.1 million and $0.3 million for the nine months ended September 30, 2017 and 2016, respectively.~~2020.

(4)

~~(2)~~

Net of income tax expense of ~~$0.2~~$0.5 million and ~~$0.3~~income tax benefit of $0.5 million for the three and six months ended ~~September~~June 30, ~~2017~~2021, respectively, and ~~2016, respectively. Net of~~ income tax ~~expense (benefit)~~benefit of$~~0.7~~0.5 million and ~~$(0.3)~~$0.6 million for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 and 2016, respectively.~~

2020, respectively.

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

BLACK KNIGHT, INC.

Condensed Consolidated ~~Statement~~Statements of Equity

~~(Unaudited)~~

(In millions)

Black Knight Financial Services, Inc. Black Knight, Inc.
Class A common stock Class B common stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) earnings Treasury stock
Shares $ Shares $ Shares $ Shares $ Noncontrolling interests Total equity
Balance, December 31, 2016 69.1
$ —
84.8
$ —
—
$ —
$ 810.8
$ 65.7
$ (0.8 ) —
$ —
$ 1,063.7
$ 1,939.4
Issuance of restricted shares of Class A common stock 1.0
—
—
—
—
—
—
—
—
—
—
—
—
Forfeitures of restricted shares of Class A common stock (0.1 ) —
—
—
—
—
—
—
—
—
—
—
—
Exchange of Class B common stock for Class A common stock 0.2
—
(0.2 ) —
—
—
—
—
—
—
—
—
—
Tax withholding payments for restricted share vesting (0.1 ) —
—
—
—
—
(4.3 ) —
—
—
—
—
(4.3 )
Purchases of treasury stock —
—
—
—
—
—
—
—
—
1.2
(46.6 ) —
(46.6 )
Equity-based compensation expense —
—
—
—
—
—
14.0
—
—
—
—
—
14.0
Net earnings —
—
—
—
—
—
—
35.1
—
—
—
71.9
107.0
Foreign currency translation adjustment —
—
—
—
—
—
—
—
0.1
—
—
—
0.1
Unrealized gains on interest rate swaps, net —
—
—
—
—
—
—
—
1.1
—
—
2.2
3.3
Tax distributions to members —
—
—
—
—
—
—
—
—
—
—
(75.3 ) (75.3 )
Distribution of FNF's ownership interest and related transactions (70.1 ) —
(84.6 ) —
153.5
—
774.4
(46.6 ) 0.6
(1.2 ) 46.6
(1,062.5 ) (287.5 )
Balance, September 30, 2017 —
$ —
—
$ —
153.5
$ —
$ 1,594.9
$ 54.2
$ 1.0
—
$ —
$ —
$ 1,650.1

(Unaudited)


	Three months ended June 30, 2021
								Accumulated
				Additional				other					Total		Redeemable
	Common stock			paid-in		Retained		comprehensive		Treasury stock			shareholders’		noncontrolling
	Shares	$		capital		earnings		loss		Shares	$		equity		interests
Balance, March 31, 2021	160.0	$	—	$	2,017.0	$	812.0	$	(37.8)	3.4	$	(176.5)	$	2,614.7	$	578.0
Fair value adjustment to redeemable noncontrolling interests in Optimal Blue Holdco, LLC	—		—		(7.5)		—		—	—		—		(7.5)		7.5
Grant of restricted shares of common stock	—		—		(1.3)		—		—	—		1.3		—		—
Forfeitures of restricted shares of common stock	—		—		0.4		—		—	—		(0.4)		—		—
Tax withholding payments for restricted share vesting	—		—		(1.7)		—		—	—		—		(1.7)		—
Vesting of restricted shares granted from treasury stock	—		—		1.0		—		—	—		(1.0)		—		—
Equity-based compensation expense	—		—		13.1		—		—	—		—		13.1		—
Net earnings (losses)	—		—		—		39.7		—	—		—		39.7		(7.5)
Equity-based compensation expense of unconsolidated affiliates	—		—		—		0.7		—	—		—		0.7		—
Foreign currency translation adjustment	—		—		—		—		(0.1)	—		—		(0.1)		—
Unrealized gains on interest rate swaps, net	—		—		—		—		3.8	—		—		3.8		—
Other comprehensive gains on investments in unconsolidated affiliates	—		—		—		—		1.5	—		—		1.5		—
Balance, June 30, 2021	160.0	$	—	$	2,021.0	$	852.4	$	(32.6)	3.4	$	(176.6)	$	2,664.2	$	578.0


	Three months ended June 30, 2020

								Accumulated other
	Common stock			Additional		Retained		comprehensive		Treasury stock			Total shareholders’
	Shares	$		paid-in capital		earnings		loss		Shares	$		equity
Balance March 31, 2020	153.0	$	—	$	1,562.7	$	540.0	$	(41.0)	3.0	$	(142.1)	$	1,919.6
Issuance of common stock, net of underwriters' discount and issuance costs	7.1		—		484.2		—		—	—		—		484.2
Grant of restricted shares of common stock	—		—		(0.1)		—		—	—		0.1		—
Forfeitures of restricted shares of common stock	—		—		0.1		—		—	—		(0.1)		—
Tax withholding payments for restricted share vesting	—		—		(1.5)		—		—	—		—		(1.5)
Vesting of restricted shares granted from treasury stock	—		—		1.0		—		—	—		(1.0)		—
Equity-based compensation expense	—		—		9.5		—		—	—		—		9.5
Net earnings	—		—		—		39.1		—	—		—		39.1
Equity-based compensation expense of unconsolidated affiliates	—		—		—		3.2		—	—		—		3.2
Unrealized gains on interest rate swaps, net	—		—		—		—		0.6	—		—		0.6
Other comprehensive loss on investments in unconsolidated affiliates	—		—		—		—		(1.5)	—		—		(1.5)
Balance, June 30, 2020	160.1	$	—	$	2,055.9	$	582.3	$	(41.9)	3.0	$	(143.1)	$	2,453.2

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

BLACK KNIGHT, INC.

Condensed Consolidated Statements of ~~Cash Flows~~

~~(Unaudited)~~

Equity (Continued)

(In millions)

Nine months ended September 30,
2017
2016
Cash flows from operating activities:
Net earnings $ 107.0
$ 98.7
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 154.2
154.2
Amortization of debt issuance costs, bond premium and original issue discount 2.5
2.0
Loss on extinguishment of debt, net 12.6
—
Deferred income taxes, net 4.8
3.7
Equity-based compensation 14.2
9.5
Changes in assets and liabilities, net of acquired assets and liabilities:
Trade and other receivables, including receivables from related parties (19.9 ) (23.1 )
Prepaid expenses and other assets 3.1
(7.0 )
Deferred contract costs (35.6 ) (41.1 )
Deferred revenues 27.6
15.8
Trade accounts payable and other accrued liabilities, including accrued compensation and benefits (30.7 ) (2.2 )
Net cash provided by operating activities 239.8
210.5
Cash flows from investing activities:
Additions to property and equipment (5.3 ) (24.0 )
Additions to computer software (37.1 ) (31.9 )
Business acquisitions, net of cash acquired —
(150.2 )
Other investing activities (4.0 ) —
Net cash used in investing activities (46.4 ) (206.1 )
Cash flows from financing activities:
Borrowings 400.0
55.0
Senior Notes redemption (390.0 ) —
Senior Notes redemption fee (18.8 ) —
Debt service payments (25.9 ) (138.0 )
Distributions to members (75.3 ) (48.5 )
Purchases of treasury stock (46.6 ) —
Capital lease payments (11.6 ) —
Tax withholding payments for restricted share vesting (4.3 ) —
Debt issuance costs (8.6 ) —
Net cash used in financing activities (181.1 ) (131.5 )
Net increase (decrease) in cash and cash equivalents 12.3
(127.1 )
Cash and cash equivalents, beginning of period 133.9
186.0
Cash and cash equivalents, end of period $ 146.2
$ 58.9

Supplemental cash flow information:
Interest paid $ (45.2 ) $ (39.6 )
Income taxes paid $ (13.6 ) $ (16.0 )

(Unaudited)


	Six months ended June 30, 2021
								Accumulated
				Additional				other					Total		Redeemable
	Common stock			paid-in		Retained		comprehensive		Treasury stock			shareholders’		noncontrolling
	Shares	$		capital		earnings		loss		Shares	$		equity		interests
Balance, December 31, 2020	160.1	$	—	$	2,053.7	$	757.4	$	(38.8)	3.1	$	(144.6)	$	2,627.7	$	578.0
Fair value adjustment to redeemable noncontrolling interests in Optimal Blue Holdco, LLC	—		—		(16.1)		—		—	—		—		(16.1)		16.1
Grant of restricted shares of common stock	—		—		(26.6)		—		—	(0.5)		26.6		—		—
Forfeitures of restricted shares of common stock	—		—		0.5		—		—	—		(0.5)		—		—
Tax withholding payments for restricted share vesting	(0.1)		—		(24.4)		—		—	—		—		(24.4)		—
Vesting of restricted shares granted from treasury stock	—		—		11.4		—		—	0.2		(11.4)		—		—
Equity-based compensation expense	—		—		22.5		—		—	—		—		22.5		—
Net earnings (losses)	—		—		—		93.8		—	—		—		93.8		(16.1)
Equity-based compensation expense of unconsolidated affiliates	—		—		—		1.2		—	—		—		1.2		—
Purchases of treasury stock	—		—		—		—		—	0.6		(46.7)		(46.7)		—
Foreign currency translation adjustment	—		—		—		—		(0.4)	—		—		(0.4)		—
Unrealized gains on interest rate swaps, net	—		—		—		—		8.2	—		—		8.2		—
Other comprehensive loss on investments in unconsolidated affiliates	—		—		—		—		(1.6)	—		—		(1.6)		—
Balance, June 30, 2021	160.0	$	—	$	2,021.0	$	852.4	$	(32.6)	3.4	$	(176.6)	$	2,664.2	$	578.0


	Six months ended June 30, 2020
								Accumulated
				Additional				other					Total
	Common stock			paid-in		Retained		comprehensive		Treasury stock			shareholders’
	Shares	$		capital		earnings		loss		Shares	$		equity
Balance December 31, 2019	153.1	$	—	$	1,586.8	$	490.6	$	(20.2)	3.4	$	(158.7)	$	1,898.5
Effect of CECL adoption	—		—		—		(1.1)		—	—		—		(1.1)
Adjusted balance at January 1, 2020	153.1		—		1,586.8		489.5		(20.2)	3.4		(158.7)		1,897.4
Issuance of common stock, net of underwriters' discount and issuance costs	7.1		—		484.2		—		—	—		—		484.2
Grant of restricted shares of common stock	—		—		(24.6)		—		—	(0.5)		24.6		—
Forfeitures of restricted shares of common stock	—		—		0.3		—		—	—		(0.3)		—
Tax withholding payments for restricted share vesting	(0.1)		—		(19.7)		—		—	0.1		—		(19.7)
Vesting of restricted shares granted from treasury stock	—		—		8.7		—		—	—		(8.7)		—
Equity-based compensation expense	—		—		20.2		—		—	—		—		20.2
Net earnings	—		—		—		89.2		—	—		—		89.2
Equity-based compensation expense of unconsolidated affiliates	—		—		—		3.6		—	—		—		3.6
Foreign currency translation adjustment	—		—		—		—		(0.2)	—		—		(0.2)
Unrealized losses on interest rate swaps, net	—		—		—		—		(19.8)	—		—		(19.8)
Other comprehensive loss on investments in unconsolidated affiliates	—		—		—		—		(1.7)	—		—		(1.7)
Balance, June 30, 2020	160.1	$	—	$	2,055.9	$	582.3	$	(41.9)	3.0	$	(143.1)	$	2,453.2

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

BLACK KNIGHT, INC.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Six months ended June 30,
	2021		2020
Cash flows from operating activities:
Net earnings	$	77.7	$	89.2
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		178.2		116.3
Amortization of debt issuance costs and original issue discount		2.0		1.4
Loss on extinguishment of debt		2.5		—
Deferred income taxes, net		(3.9)		0.9
Equity in (earnings) losses of unconsolidated affiliates, net of tax		(1.4)		20.4
Equity-based compensation		22.5		20.2
Changes in assets and liabilities, net of acquired assets and liabilities:
Trade receivables, including receivables from related parties		(10.7)		4.9
Prepaid expenses and other assets		(36.8)		(13.9)
Deferred contract costs		(24.1)		(26.0)
Deferred revenues		6.4		(10.2)
Trade accounts payable and other liabilities		(13.2)		(7.9)
Net cash provided by operating activities		199.2		195.3
Cash flows from investing activities:
Additions to property and equipment		(11.5)		(12.6)
Additions to computer software		(45.4)		(38.2)
Business acquisitions, net of cash acquired		(48.3)		(50.4)
Asset acquisitions		(10.0)		(15.0)
Other investing activities		(1.2)		8.4
Net cash used in investing activities		(116.4)		(107.8)
Cash flows from financing activities:
Net proceeds from issuance of common stock, before offering expenses		0		484.6
Costs directly associated with issuance of common stock		0		(0.4)
Revolver borrowings		260.3		266.6
Revolver payments		(210.0)		(576.6)
Term loan borrowings		1.6		—
Term loan payments		0		(23.4)
Purchases of treasury stock		(46.7)		—
Tax withholding payments for restricted share vesting		(24.4)		(19.7)
Finance lease payments		(2.0)		(5.8)
Debt issuance costs paid		(7.6)		—
Net cash (used in) provided by financing activities		(28.8)		125.3
Net increase in cash and cash equivalents		54.0		212.8
Cash and cash equivalents, beginning of period		34.7		15.4
Cash and cash equivalents, end of period	$	88.7	$	228.2
Supplemental cash flow information:
Interest paid, net	$	(40.0)	$	(26.1)
Income taxes paid, net	$	(42.7)	$	(5.4)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~Except as otherwise indicated or unless the context otherwise requires, all references to "Black~~

(1)Basis of Presentation and Overview

The accompanying Condensed Consolidated Financial Statements (Unaudited) of Black Knight, Inc. (“BKI”) and its subsidiaries ("Black Knight," the "Company," "we," "us" or "our" ~~(1) prior to the Distribution (as defined in Note 1 — Basis of Presentation), are to Black Knight Financial Services, Inc., a Delaware corporation, and its subsidiaries ("BKFS"~~) ~~and (2) after the Distribution, are to Black Knight, Inc., a Delaware corporation, and its subsidiaries.~~


~~(1)~~	~~Basis of Presentation~~

~~The accompanying Condensed Consolidated Financial Statements (Unaudited)~~ were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated.

The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 filed with the Securities and Exchange Commission ("SEC") on February ~~24, 2017.~~

~~As a result of~~26, 2021 and other filings with the Distribution and the THL Interest Exchange on September 29, 2017 (as defined below), Black Knight, Inc. became the new public company and owns 100% of BKFS, and therefore, there are no longer any noncontrolling interests of BKFS as of September 30, 2017. There was no change to the underlying Black Knight business, and for this reason, there was no change in reporting entity in accordance with GAAP.

SEC.

Description of Business

~~Black Knight is~~

We are a leading provider of integrated software, data and analytics solutions to the mortgage and consumer loan, real estate and capital ~~market~~markets verticals. Our solutions facilitate and automate many of the mission-critical business processes across the homeownership lifecycle. We ~~believe~~are committed to being a premier business partner that clients rely on to achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class software, services and insights with a relentless commitment to excellence, innovation, integrity and leadership.

Principles of Consolidation

The Condensed Consolidated Financial Statements (Unaudited) include the accounts of BKI, its wholly-owned subsidiaries and non-wholly owned subsidiaries in which we ~~differentiate ourselves by~~have a controlling financial interest either through voting rights or means other than voting rights. Intercompany transactions and balances have been eliminated in consolidation. Where our ownership interest in a consolidated subsidiary is less than 100%, the ~~breadth~~noncontrolling interests’ share of these non-wholly owned subsidiaries is reported in our Condensed Consolidated Balance Sheets (Unaudited) as a separate component of equity or within temporary equity. The noncontrolling interests’ share of the net earnings (loss) of these non-wholly owned subsidiaries is reported in our Condensed Consolidated Statements of Earnings and ~~depth of our comprehensive, integrated solutions and the insight we provide~~Comprehensive Earnings (Unaudited) as an adjustment to our ~~clients.~~

net earnings to arrive at Net earnings attributable to Black Knight.

We consolidate variable interest entities (“VIEs”) if we are considered the primary beneficiary because we have (a) the power to direct matters that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

Optimal Blue Holdco, LLC (“Optimal Blue Holdco”), a non-wholly owned subsidiary, is considered a VIE. We are the primary beneficiary of Optimal Blue Holdco through our controlling interest and our rights established in the Second Amended and Restated Limited Liability Company Agreement of Optimal Blue Holdco dated November 24, 2020 (the “OB Holdco LLC Agreement”). As such, we control Optimal Blue Holdco and its subsidiaries and consolidate its financial position and results of operations. As of June 30, 2021 and December 31, 2020, we own 60% of Optimal Blue Holdco. Redeemable noncontrolling interests represent the collective 40% equity interest in Optimal Blue Holdco owned by Cannae Holdings, LLC ("Cannae") and affiliates of Thomas H. Lee Partners, L.P. ("THL"). As these redeemable noncontrolling interests provide for redemption features not solely within our control, they are presented outside of shareholders' equity.

Reporting Segments

We conduct our operations through ~~two~~2 reporting segments: (1) Software Solutions ~~(formerly known as the Technology segment)~~ and (2) Data and Analytics. See further discussion in Note 814 — Segment Information.

~~Distribution~~

Table of ~~FNF's Ownership Interest and Related Transactions~~

On December 7, 2016, we announced that Fidelity National Financial, Inc.'s ("FNF") board of directors approved a tax-free plan (the "Distribution Plan") whereby FNF intended to distribute all 83.3 million shares of BKFS common stock that it owned to FNF Group shareholders.

On September 29, 2017, the transactions contemplated by the Distribution Plan were consummated through four newly-formed corporations, New BKH Corp. ("New BKH"), Black Knight, Inc. (formerly known as Black Knight Holdco Corp.), New BKH Merger Sub, Inc. ("Merger Sub One") and BKFS Merger Sub, Inc. ("Merger Sub Two"), as follows:

Black Knight Holdings, Inc. ("BKHI"), a wholly-owned subsidiary of FNF, contributed all of its 83.3 million shares of BKFS Class B common stock and all of its units of Black Knight Financial Services, LLC ("BKFS LLC") to New BKH in exchange for 100% of the shares of New BKH common stock;

~~Following which BKHI converted into a limited liability company and distributed to FNF all of the shares of New BKH common stock held by BKHI;~~

~~Immediately thereafter, FNF distributed the shares of New BKH common stock to the holders of FNF Group common stock on a pro-rata basis (the "Spin-off");~~

~~Immediately following the Spin-off, Merger Sub One merged with and into New BKH (the "New BKH merger");~~

In the New BKH merger, each outstanding share of New BKH common stock (other than shares owned by New BKH) was exchanged for one share of Black Knight, Inc. common stock. New BKH shares owned by New BKH immediately prior to the New BKH merger were canceled for no consideration. As a result of the Spin-Off and the New BKH merger, FNF Group shareholders received 0.3066322 shares of Black Knight, Inc. common stock for each share of FNF Group common stock they held;

Contents

BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

~~Immediately following the New BKH merger, Merger Sub Two merged with and into Black Knight Financial Services, Inc. (the "BKFS merger");~~

In the BKFS merger, each outstanding share of BKFS Class A common stock (other than shares owned by BKFS) was exchanged for one share of Black Knight, Inc. common stock. Shares of BKFS Class A common stock owned by BKFS, otherwise referred to as treasury stock, immediately prior

Reclassification

Certain reclassifications have been made to the ~~BKFS merger were canceled for no consideration; and~~

~~Black Knight, Inc. is the public company following the completion of the transactions above which are collectively referred~~prior year amounts to ~~as the "Distribution".~~

Shares of Black Knight, Inc. common stock are listed on the New York Stock Exchange under the trading symbol “BKI”, and began trading on October 2, 2017. Under the organizational documents of Black Knight, Inc., the rights of the holders of shares of Black Knight, Inc. common stock are substantially the same as the rights of former holders of BKFS Class A common stock.

On June 8, 2017, Black Knight, Inc., BKFS and certain affiliates of Thomas H. Lee Partners, L.P. ("THL") entered into an interest exchange agreement (the "THL Interest Exchange"). Immediately following the completion of the Distribution, affiliates of THL contributed to Black Knight, Inc. all of their BKFS Class B common stock and all of their BKFS LLC Units in exchange for a number of shares of Black Knight, Inc. common stock equalconform to the ~~number of shares of BKFS Class B common stock contributed. Following the completion of the Distribution and the THL Interest Exchange, the shares of BKFS Class B common stock were canceled.~~

~~For additional details of the effects of the Distribution, the THL Interest Exchange~~classifications used in 2021. Certain receivables previously included in Trade and other receivables, including receivables from related ~~transactions, see "Share Repurchase Plan", "Deferred Compensation Plan", "Employee Stock Purchase Plan", "401(k) Profit Sharing Plan" and "Treasury Shares" within this note, Note 5 —~~ ~~Income Taxes~~ ~~and Note 7~~— ~~Equity-Based Compensation.~~

~~Consolidation~~

~~Prior to the Distribution described above, BKFS LLC was subject to the consolidation guidance related to variable interest entities as set forth in Accounting Standards Codification ("ASC") Topic 810,~~ ~~Consolidation~~ ("ASC 810"). Black Knight, as the sole managing member of BKFS LLC, had the exclusive authority to manage, control and operate the business and affairs of BKFS LLC and its subsidiaries, pursuant to the terms of the Second Amended and Restated Limited Liability Company Agreement ("LLC Agreement"). Under the terms of the LLC Agreement, Black Knight was authorized to manage the business of BKFS LLC, including the authority to enter into contracts, manage bank accounts, hire employees and agents, incur and pay debts and expenses, merge or consolidate with other entities and pay taxes. Because Black Knight was the primary beneficiary through its sole managing member interest and possessed the rights established in the LLC Agreement, in accordance with the requirements of ASC 810, Black Knight controlled BKFS LLC and appropriately consolidated the operations thereof.

We account for noncontrolling interests in accordance with ASC 810. Our Class A shareholders indirectly controlled BKFS LLC through our managing member interest. Our Class B shareholders had a noncontrolling interest in BKFS LLC. Their share of equity in BKFS LLC is reflected in Noncontrolling interests in our Condensed Consolidated Balance Sheets (Unaudited) and their share of net earnings or loss in BKFS LLC is reported in Net earnings attributable to noncontrolling interests inparties on our Condensed Consolidated Statements of ~~Earnings and Comprehensive Earnings~~Cash Flows (Unaudited)~~. Net earnings attributable to noncontrolling interests do not include~~ are now included in Prepaid expenses ~~incurred directly by Black Knight, including income tax expense attributable to Black Knight.~~

~~Subsequent to the Distribution, BKFS LLC is an indirect wholly-owned subsidiary of Black Knight, Inc., and therefore, there are no longer any noncontrolling interests in BKFS LLC.~~

~~Realignment of Property Insight~~

Effective January 1, 2017, Property Insight, LLC ("Property Insight"), a Black Knight subsidiary that provides information used by title insurance underwriters, title agents and closing attorneys to source and underwrite title insurance for real property sales and transfer, realigned its commercial relationship with FNF. In connection with the realignment, Property Insight employees responsible for title plant posting and maintenance were transferred to FNF. Under the new commercial arrangement, Black Knight continues to own the title plant technology and retains sales responsibility for third parties, other than FNF. As a result of the realignment, Black Knight no longer recognizes revenues or expenses related to title plant posting and maintenance, but charges FNF a license fee for use of the technology to access and maintain the title plant data. This transaction did not result in any gain or loss.

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

~~Share Repurchase Program~~

On January 31, 2017, the BKFS board of directors approved a three-year share repurchase program, effective February 3, 2017, authorizing us to repurchase up to 10 million shares of BKFS Class A common stock from time to time through February 2, 2020, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other ~~restrictions. There were no repurchases during the third quarter~~assets. We also reclassed certain deferred compensation plan assets and liabilities between Prepaid expenses and other assets and Trade accounts payable and other liabilities on our Condensed Consolidated Statements of ~~2017. During the nine months ended September 30, 2017, we repurchased approximately 1.2 million shares of our BKFS Class A common stock for $46.6 million, or an average of $39.18 per share.~~

In connection with the Distribution, the Black Knight board of directors approved a share repurchase program authorizing the repurchase of shares of Black Knight, Inc. common stock consistent with the previous BKFS share repurchase program. The timing and volume of share repurchases will be determined by our management based on ongoing assessments of the capital needs of the business, the market price of Black Knight, Inc. common stock and general market conditions. As of September 30, 2017, we had approximately 8.8 million shares remaining under our share repurchase authorization.

~~THL Secondary Offering~~

On May 8, 2017, Black Knight announced the pricing of an underwritten secondary offering of 5,000,000 shares of its Class A common stock (the “Offering”) by affiliates of THL pursuant to a shelf registration statement on Form S-3 filed with the SEC on May 8, 2017. Affiliates of THL in the Offering granted the underwriter an option to purchase up to 750,000 additional shares (the “Overallotment Option")Cash Flows (Unaudited). The Offering closed on May 12, 2017, and the full exercise of the Overallotment Option closed on May 18, 2017. The Company did not sell any shares and did not receive any proceeds related to the Offering or Overallotment Option. See Note 3 — ~~Related Party Transactions~~ ~~for the change in ownership percentages related to these transactions.~~

(2)Condensed Consolidated Financial Statement Details

Cash and Cash Equivalents

Cash and cash equivalents are unrestricted and include the following (in millions):

September 30, 2017 December 31, 2016
Unrestricted:
Cash $ 87.0
$ 129.8
Cash equivalents 57.2
1.8
Total unrestricted cash and cash equivalents 144.2
131.6
Restricted cash equivalents (1) 2.0
2.3
Total cash and cash equivalents $ 146.2
$ 133.9

~~_______________~~

~~(1) Restricted cash equivalents relate to our subsidiary, I-Net Reinsurance Limited, and are held in trust until the final reinsurance policy is canceled.~~


	June 30, 2021		December 31, 2020
Cash	$	16.5	$	27.1
Cash equivalents		72.2		7.6
Cash and cash equivalents	$	88.7	$	34.7

Trade Receivables, Net

A summary of Trade receivables, net of allowance for ~~doubtful accounts, as of September 30, 2017 and December 31, 2016~~credit losses is as follows (in millions):



	June 30, 2021		December 31, 2020
Trade receivables — billed	$	137.5	$	136.4
Trade receivables — unbilled		48.4		47.9
Trade receivables		185.9		184.3
Allowance for credit losses		(2.3)		(2.1)
Trade receivables, net	$	183.6	$	182.2

In addition to the amounts above, we have unbilled receivables that we do not expect to collect within the next year included in Other non-current assets in our Condensed Consolidated Balance Sheets (Unaudited). Billings for these receivables are based on contractual terms.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in millions):



	June 30, 2021		December 31, 2020
Prepaid expenses	$	40.1	$	39.7
Contract assets, net		22.0		20.9
Income tax receivables		14.4		2.1
Other current assets		9.8		7.7
Prepaid expenses and other current assets	$	86.3	$	70.4

September 30, 2017 December 31, 2016
Trade receivables — billed $ 129.1
$ 115.4
Trade receivables — unbilled 42.4
42.6
Total trade receivables 171.5
158.0
Allowance for doubtful accounts (2.3 ) (2.2 )
Total trade receivables, net $ 169.2
$ 155.8

Table of Contents

BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

~~Capital Leases~~

Black Knight entered into a one-year capital lease agreement commencing January 1, 2017 with a bargain purchase option for certain computer equipment. The leased equipment has a useful life of five years and will be depreciated on a straight-line basis over this period. The leased equipment was valued based on the net present value

Other Non-Current Assets

Other non-current assets consist of the ~~minimum lease payments, which was $8.4 million (net of imputed interest of $0.1 million).~~following (in millions):


	June 30, 2021		December 31, 2020
Contract assets, net	$	61.9	$	56.5
Property records database		60.5		60.5
Right-of-use assets⁽¹⁾		34.8		41.1
Deferred compensation plan related assets		24.0		19.5
Contract credits		23.2		5.0
Prepaid expenses		5.6		4.9
Other		3.2		5.8
Other non-current assets	$	213.2	$	193.3

(1)	Includes non-cash additions for right-of-use assets obtained in exchange for lease liabilities of $0.1 million and $4.5 million for the six months ended June 30, 2021 and 2020, respectively.

~~The gross value of assets subject to capital leases was $8.4 million (net of imputed interest of $0.1 million)~~

Trade Accounts Payable and $10.0 million (net of imputed interest of $0.1 million) as of September 30, 2017 and December 31, 2016, respectively, and is included in Property and equipment, net on the Condensed Consolidated Balance Sheets (Unaudited). The remaining capital lease obligation of $2.2 million and $5.0 million as of September 30, 2017 and December 31, 2016, respectively, is included in Other Accrued Liabilities

Trade accounts payable and other accrued liabilities onconsist of the ~~Condensed Consolidated Balance Sheets (Unaudited). The non-cash investing and financing activity for~~following (in millions):


	June 30, 2021		December 31, 2020
Accrued interest	$	12.2	$	12.8
Lease liabilities, current		9.9		13.5
Trade accounts payable		9.1		8.9
Other taxes payable and accrued		8.6		10.7
Accrued client liabilities		3.3		6.4
Income taxes payable		1.4		13.6
Other		29.3		22.2
Trade accounts payable and accrued liabilities	$	73.8	$	88.1

Deferred Revenues

During the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 was $2.2~~2020, revenues recognized related to the amount included in the Deferred revenues balance at the beginning of each year were $12.1 million and ~~$8.4~~$12.7 million, respectively, and ~~relates to~~$29.8 million and $28.3 million, respectively, during the ~~unpaid portion~~six months ended June 30, 2021 and 2020.

Depreciation and Amortization

Depreciation and amortization includes the following (in millions):


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Computer software	$	32.7	$	26.4	$	63.3	$	52.2
Other intangible assets		39.1		13.4		77.9		26.4
Deferred contract costs		8.6		8.7		16.8		17.6
Property and equipment		10.0		10.1		20.2		20.1
Total	$	90.4	$	58.6	$	178.2	$	116.3

Table of ~~the capital lease obligation.~~

~~Deferred Compensation Plan~~

Prior to the Distribution, certain of our management level employees and directors participated in the FNF Deferred Compensation Plan (the "FNF Plan"). The FNF Plan permits participants to defer receipt of part of their current compensation. Participant benefits for the FNF Plan are provided by a funded rabbi trust. The compensation withheld from FNF Plan participants, together with investment income on the FNF Plan, was recorded as a deferred compensation obligation to participants. The underlying rabbi trust and the related liability was historically carried by FNF. As a result of the Distribution, the liability to Black Knight participants in the FNF Plan, as well as the related assets of the funded rabbi trust, were transferred to the newly-formed Black Knight Deferred Compensation Plan (the "Black Knight Plan") in a non-cash transaction. The terms of the Black Knight Plan are consistent with the terms of the former FNF Plan. As of September 30, 2017, the assets of the funded rabbi trust of $11.5 million are included in Other non-current assets, $10.2 million of the related liability is included in Other non-current liabilities and $1.2 million of the related liability is included in Trade accounts payable and other accrued liabilities on the Condensed Consolidated Balance Sheets (Unaudited).

~~Employee Stock Purchase Plan~~

Effective July 20, 2015, we adopted the Black Knight Financial Services, Inc. Employee Stock Purchase Plan (the "ESPP"). On September 29, 2017, the board of directors of Black Knight, Inc. approved, and Black Knight, Inc. assumed the ESPP and renamed it the Black Knight, Inc. Employee Stock Purchase Plan. There were no changes to the terms of the ESPP.

~~401(k) Profit Sharing Plan~~

Prior to the Distribution, our employees participated in a qualified 401(k) plan sponsored by FNF. As a result of the Distribution, our employees no longer participate in this plan sponsored by FNF. Our indirect subsidiary, Black Knight InfoServ, LLC ("BKIS"), adopted and established the Black Knight 401(k) Profit Sharing Plan (the “Black Knight 401(k) Plan”), effective September 29, 2017. The terms of the Black Knight 401(k) Plan are consistent with the terms of the 401(k) plan sponsored by FNF.

~~Treasury Shares~~

Shares held in treasury at the time of the Distribution were canceled for no consideration. In connection with this transaction, we made a policy election to charge the cost in excess of par value to Retained earnings when we cancel or retire repurchased shares.

~~Equity-Based Compensation~~

~~During the first quarter of 2017, Black Knight adopted Accounting Standards Update ("ASU") 2016-09,~~ ~~Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~ ("ASU 2016-09"). In connection with this adoption, we made a policy election to account for forfeitures as they occur. The adoption of this ASU did not have a material effect on our business, financial condition or our results of operations.

Contents

BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

~~Depreciation and Amortization~~

~~Depreciation and amortization on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include the following (in millions):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Property and equipment $ 7.3
$ 7.2
$ 21.7
$ 21.4
Computer software 21.2
20.6
62.4
57.5
Other intangible assets 16.9
20.5
50.9
56.2
Deferred contract costs 5.9
8.5
19.2
19.1
Total $ 51.3
$ 56.8
$ 154.2
$ 154.2

Deferred contract costs amortization for the nine months ended September 30, 2017 includes accelerated amortization of $3.3 million recorded in the first quarter related to certain deferred implementation costs. Deferred contract costs amortization for the three and nine months ended September 30, 2016 includes accelerated amortization of $2.9 million.

~~Transition and Integration Costs~~

Transition and integration costs during the three and nine months ended September 30, 2017 primarily represent legal and professional fees related to the Distribution. Transition and integration costs during the three and nine months ended September 30, 2016 primarily represent acquisition-related costs.

~~2016 eLynx Acquisition~~

(3)Business Acquisitions

2021 Acquisitions

On ~~May~~March 16, ~~2016, Black Knight~~2021, we completed the acquisition of ~~eLynx~~the technology assets and business of NexSpring Financial, LLC (“NexSpring”), which is reported within our Software Solutions segment, and is expected to broaden our ability to serve mortgage brokers.

On May 17, 2021, we completed the acquisition of 100% of the equity interests in eMBS, Inc. (“eMBS”), a leading data and analytics aggregator for residential mortgage-backed securities, which is reported within our Data & Analytics segment, and is expected to solidify and further expand our market leadership in solutions and data for agency-backed securities.

On July 7, 2021, we completed the acquisition of 100% of the equity interests in TOMN Holdings, Inc. ~~("eLynx"~~and its subsidiaries (“Top of Mind”). , the developer of Surefire^SM, a leading customer relationship management and marketing automation system for the mortgage industry. Surefire^SM will be integrated with our Empower^® loan origination system and reported within our Software Solutions segment.

2020 Optimal Blue Acquisition

On September 15, 2020, we completed the acquisition of 100% of the equity interests in Optimal Blue and certain affiliates, a leading provider of secondary market solutions and actionable data services, funded with cash on hand, debt financing and investments from co-investors Cannae and THL. Optimal Blue is reported within our Software Solutions segment because it enhances our robust set of software solutions and includes additional product, pricing and eligibility capabilities.

The following table summarizes the total purchase price ~~was allocated to~~consideration and the preliminary fair value amounts recognized for the assets acquired and liabilities assumed based on their estimated fair value at the acquisition date. The fair value of the acquired Computer software and Other intangible assets was determined using a third-party valuation based on significant estimates and assumptions, including level 3 inputs, which are judgmental in nature. These estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting the risk inherent in the future cash flows and future market prices. These estimates for the eLynx acquisition were finalized in the first quarter of 2017. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed on the acquisition date.

~~During the first quarter of 2017, adjustments were recorded to the following~~ (in millions):

Goodwill $ 3.0
Computer software (2.6 )
Accrued compensation and benefits (0.3 )
Other intangible assets (0.1 )

~~The goodwill adjustment~~

Table of $3.0 million is included in the Software Solutions segment. An adjustment of $0.5 million to Depreciation and amortization was recorded in the first quarter of 2017 related to the changes in provisional values.

~~Recent Accounting Pronouncements~~

~~Revenue Recognition (ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"))~~

~~In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~("ASU 2014-09"), which was codified as ASC 606. This ASU supersedes the revenue recognition requirements in ASC Topic 605,~~ ~~Revenue Recognition,~~ and most industry-specific guidance. The guidance requires a five-step analysis of transactions to determine when and how revenue is recognized based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The FASB has issued several additional ASUs since this time that add additional clarification. All of the new standards are effective for the Company on January 1, 2018.

In preparation for adoption of ASC 606, we formed a project team and engaged a third-party professional services firm to assist us with our evaluation. We are applying an integrated approach to analyzing ASC 606's impact on our pattern of revenue

Contents

BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)


	2021				2020
	Top of Mind⁽²⁾		Others⁽³⁾		Optimal Blue⁽⁴⁾
Cash paid	$	258.8	$	48.5	$	1,828.3
Contingent consideration⁽¹⁾		—		4.4		—
Less: cash acquired		(4.7)		(0.2)		(29.3)
Total consideration, net	$	254.1	$	52.7	$	1,799.0

Trade receivables	$	2.0	$	0.4	$	11.3
Computer software		28.8		6.1		79.7
Other intangible assets		69.0		10.2		610.8
Goodwill		178.6		36.1		1,206.1
Other current and non-current assets		2.3		1.1		13.3
Total assets acquired		280.7		53.9		1,921.2
Deferred income taxes		18.5		—		101.4
Current and other non-current liabilities		8.1		1.2		20.8
Total liabilities assumed		26.6		1.2		122.2
Net assets acquired	$	254.1	$	52.7	$	1,799.0

(1)	The estimated contingent consideration is to be paid in cash based on NexSpring revenues recognized over the three-year period subsequent to the acquisition. Refer to Note 9 – Fair Value Measurement for additional information.

(2)

On July 7, 2021, we acquired Top of Mind. As such, these amounts are not recorded in our Condensed Consolidated Financial Statements (Unaudited) as of June 30, 2021. The fair value of all acquired assets and assumed liabilities is preliminary and subject to adjustments as we complete our valuation process.

(3)	Includes the NexSpring and eMBS acquisitions. These estimates are preliminary and subject to adjustments as we complete our valuation process with respect to Computer software, Other intangible assets, including client relationship assets, and contingent consideration.

(4)

During the three months ended June 30, 2021, we recorded a measurement period adjustment of $0.1 million for certain pre-acquisition tax liabilities. The fair value of Goodwill and certain assumed liabilities, including estimated liabilities for pre-acquisition tax exposure, is preliminary and subject to adjustments as we complete our valuation process.

~~recognition, including~~

The preliminary amounts assigned to intangible assets by type for our acquisitions of NexSpring and eMBS are summarized in the table below:


			Weighted average
	Gross		estimated life
	carrying value		(in years)
Computer software	$	6.1	5
Other intangible assets:
Client relationships		9.4	10
Trade names		0.2	3
Non-compete agreements		0.6	3
Other intangible assets		10.2
Total gross carrying value	$	16.3

(4)Investments in Unconsolidated Affiliates

Dun & Bradstreet Holdings, Inc. (“DNB”) is a ~~review~~global leader in commercial data and analytics that provides various services helping companies improve their operational performance. On July 6, 2020, DNB, previously a wholly-owned subsidiary of ~~accounting policies~~Star Parent, L.P., a Delaware limited partnership (“Star Parent”), closed its initial public offering (the “DNB IPO”) and ~~practices, evaluating differences from applying~~concurrent private placement (the “DNB Private Placement”). In connection with the ~~requirements~~DNB IPO and DNB Private Placement, our limited partner interests in Star Parent were exchanged for 54.8 million shares of DNB common stock, which represented ownership of 13.0% of DNB.

We hold less than 20% of the ~~new standard to our contracts and business practices and assessing the need for changes to our processes, accounting systems and design~~outstanding common equity of internal controls. Based upon our assessment to date, we currently do not anticipate a material change to the pattern of revenue recognition related to revenue earned from the majority of our Software Solutions segment hosted software arrangements, Data and Analytics segment arrangements with transaction or volume-based fees or perpetual license arrangements in our Software Solutions and Data and Analytics segments. However, due to the complexity of certain of our contracts, including contracts for multiple products and services related to each of our segments, the final determination will be dependent on contract-specific terms.

During the third quarter, we continued our assessment with increased focus on completing certain detailed contract reviews and further identification of data and disclosure requirements, including the effect on our processes, accounting system and design of internal controls. We finalized changes to our revenue recognition and contract costs policies to address differences in treatment resulting from the adoption of the new standard.

~~While~~DNB, but we continue to ~~assess the effect the adoption of ASC 606 will have on~~account for our consolidated financial statements, we currently anticipate changes related to the timing of revenue recognition for distinct professional services performed during implementation of certain solutions within our origination software business, which will be recognized over the period the professional services are performed. Moreover, fees for certain post-implementation professional services related to minor customization of hosted software solutions, determined not to be distinct from the hosted software solutions, will be deferred and recognized over the remaining hosted software contract term. In addition, based on the ongoing analysis of contract acquisition and fulfillment costs, we do not expect a significant change to our current practice for capitalizing such costs; however, we anticipate we will amortize certain capitalized contract costs over a longer time period for certain contracts based on the requirements of the new standard. Further, we currently anticipate recognizing the license portion of certain distinct term license arrangements within our Data and Analytics segment upon delivery as opposed to ratably over the license term. For contracts where the promised software license and ongoing services are not distinct from each other, the timing of revenue recognition will be over time, which is consistent with the treatmentinvestment under the ~~current revenue recognition standard.~~

~~We are still in the process of quantifying the effects ASC 606 will have on our consolidated financial statements.~~

The standard allows companies to use either a full retrospective or a modified retrospective adoption approach. We currently anticipate adopting the new standard using the modified retrospective transition approach. Our decision to adopt using the modified retrospective transition approach is dependent on the completion of our analysis of the effect the adoption of ASC 606 will have on our results of operations, financial position and related disclosures.

~~Other Accounting Pronouncements~~

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~. This ASU expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This update also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. This ASU is effective in fiscal years beginning after December 15, 2018 with early adoption permitted. We are currently evaluating the effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting~~. This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective prospectively in fiscal years beginning after December 15, 2017 with early adoption permitted. We do not expect this update to have a material effect on our results of operations or our financial position.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~. This ASU eliminates Step 2 of the goodwill impairment test that required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit's carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities willequity method because we continue to have ~~the option to perform~~significant influence over DNB primarily through a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This update is effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or those beginning after January 1, 2017 if early adopted. We do not expect this update to have a material effect oncombination of our ~~results~~investment, an agreement with

Table of ~~operations or our financial position.~~

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial~~ ~~Liabilities. This ASU enhances the reporting model and addresses certain aspects~~

Contents

BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

certain other DNB investors pursuant to which we agreed to collectively vote together on matters related to the election of ~~recognition, measurement, presentation~~DNB directors for a period of three years following the initial public offering of DNB and ~~disclosure~~our shared Chief Executive Officer.

On January 8, 2021, DNB completed its acquisition of Bisnode Business Information Group AB (the “Bisnode acquisition”). In connection with the Bisnode acquisition, DNB issued 6.2 million shares of common stock, which resulted in a decrease in our ownership interest in DNB to 12.8%.

As of June 30, 2021, we have invested an aggregate of $492.6 million in DNB. As of June 30, 2021, DNB’s closing share price was $21.37 and the fair value of our investment in DNB was $1,172.1 million before tax.

Summarized consolidated financial information for ~~financial instruments. This ASU~~DNB (Successor) and Star Parent (Predecessor) is ~~effective~~presented below (in millions):


	June 30, 2021		December 31, 2020
Current assets	$	624.2	$	874.4
Non-current assets		9,236.2		8,345.9
Total assets	$	9,860.4	$	9,220.3

Current liabilities, including short-term debt	$	972.9	$	828.1
Non-current liabilities		5,238.9		4,808.3
Total liabilities		6,211.8		5,636.4
Total equity		3,648.6		3,583.9
Total liabilities and shareholders' equity	$	9,860.4	$	9,220.3


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Revenues	$	520.9	$	418.7	$	1,025.4	$	814.4
Loss before provision for income taxes and equity in net income of affiliates		(8.5)		(203.0)		(42.2)		(203.6)
Net loss		(50.8)		(174.7)		(74.1)		(100.4)
Net loss attributable to DNB (Successor)/Star Parent (Predecessor)		(51.7)		(208.0)		(76.7)		(166.1)

Effective January 1, 2021, DNB eliminated the one-month reporting lag for its subsidiaries outside North America and aligned the year-end for all of its subsidiaries to December 31. DNB applied this change in ~~fiscal years beginning after December 15, 2017. Early adoption~~their accounting policy retrospectively. The effect of this ~~ASU is~~change in accounting policy did not ~~permitted. We do not expect this update to~~ have a material ~~effect on~~impact to our results of operations or financial condition and was included in our current period accounting for our investment in DNB. The summarized consolidated financial ~~position.~~

~~(2)~~ information above was derived from DNB’s most recently available unaudited consolidated financial information and includes the effect of their change in accounting policy.

Equity in (losses) earnings of unconsolidated affiliates, net of tax consists of the following (in millions):


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Equity in losses of unconsolidated affiliates, net of tax	$	(5.0)	$	(31.0)	$	(8.5)	$	(25.4)
Non-cash gain related to DNB's issuance of common stock, net of tax		—		—		9.9		—
Sale of an equity method investment, net of tax		—		5.0		—		5.0
Equity in (losses) earnings of unconsolidated affiliates, net of tax	$	(5.0)	$	(26.0)	$	1.4	$	(20.4)

(5)Earnings Per Share

~~Basic~~

Diluted net earnings per share ~~is computed by dividing Net earnings attributable to Black Knight by~~includes the ~~weighted-average number~~effect of ~~shares of common stock outstanding during the period.~~

~~Prior to the Distribution, potentially dilutive securities include~~ unvested restricted stock awards and restricted stock unit awards (“RSUs”). For the ~~shares~~three and six months ended June 30, 2021, the outstanding Optimal Blue Holdco profits interests units (“OB PIUs”) were excluded from the

Table of ~~BKFS Class B common stock. The numerator in the~~ Contents

BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

diluted ~~net~~ earnings per share ~~calculation is adjusted to reflect our income tax expense at an expected effective tax rate assuming~~calculations because the conversion of the shares of BKFS Class B common stock into shares of BKFS Class A common stock on a one-for-one basis, prior to the Distribution, for the nine months ended September 30, 2017. The expected effective tax rate for the nine months ended September 30, 2017 was 41.1%, including certain discrete items recorded during the period. The denominator includes approximately 84.4 million shares of BKFS Class B common stock outstanding for the nine months ended September 30, 2017. However, the approximately 83.7 million shares of BKFS Class B common stock for the three months ended September 30, 2017 and 84.8 million shares of BKFS Class B common stock for the three and nine months ended September 30, 2016 have been excluded in computing diluted net earnings per share because including them on an "if-converted" basis would have an anti-dilutive effect. The denominator also includes the dilutive effect of approximately 0.6 million shares of unvested restricted shares of common stock for the three and nine months ended September 30, 2017, respectively, and approximately 2.0 million and 1.9 million shares for the three and nine months ended September 30, 2016, respectively.

The shares of Class B common stock did not share in the earnings or losses of Black Knight and were, therefore, not participating securities. Accordingly, basic and diluted net earnings per share of Class B common stock have not been presented.

their inclusion was antidilutive. The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share amounts):

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Basic:
Net earnings attributable to Black Knight $ 14.7
$ 11.2
$ 35.1
$ 34.0
Shares used for basic net earnings per share:
Weighted average shares of common stock outstanding 67.9
65.9
67.7
65.9
Basic net earnings per share $ 0.22
$ 0.17
$ 0.52
$ 0.52

Diluted:
Earnings before income taxes $ 131.3

Income tax expense excluding the effect of noncontrolling interests 54.0

Net earnings $ 77.3

Net earnings attributable to Black Knight $ 14.7
$ 11.2
$ 34.0
Shares used for diluted net earnings per share:
Weighted average shares of common stock outstanding 67.9
65.9
67.7
65.9
Dilutive effect of unvested restricted shares of common stock 0.6
2.0
0.6
1.9
Weighted average shares of Class B common stock outstanding —
—
84.4
—
Weighted average shares of common stock, diluted 68.5
67.9
152.7
67.8
Diluted net earnings per share $ 0.21
$ 0.16
$ 0.51
$ 0.50

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

~~(3)~~


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Basic:
Net earnings attributable to Black Knight	$	39.7	$	39.1	$	93.8	$	89.2
Shares used for basic net earnings per share:
Weighted average shares of common stock outstanding		155.4		149.2		155.5		148.6
Basic net earnings per share	$	0.26	$	0.26	$	0.60	$	0.60

Diluted:
Net earnings attributable to Black Knight	$	39.7	$	39.1	$	93.8	$	89.2
Shares used for diluted net earnings per share:
Weighted average shares of common stock outstanding		155.4		149.2		155.5		148.6
Dilutive effect of unvested restricted shares of common stock		0.3		0.8		0.3		0.7
Weighted average shares of common stock, diluted		155.7		150.0		155.8		149.3
Diluted net earnings per share	$	0.25	$	0.26	$	0.60	$	0.60

(6)Related Party Transactions

We are party to certain related party agreements, including those with FNF and THL. The following table sets forth the ownership interests of FNF, THL and other holders of Black Knight common stock (shares in millions):

September 30, 2017 December 31, 2016
Shares
Ownership
Percentage
Shares
Ownership
Percentage
Black Knight, Inc. common stock:
THL and its affiliates 35.1
22.9 % —
— %
Restricted shares 1.9
1.2 % —
— %
Other, including those publicly traded 116.5
75.9 % —
— %
Total shares of Black Knight, Inc. common stock 153.5
100.0 % —
— %
BKFS Class A common stock:
THL and its affiliates —
— % 39.3
25.5 %
Restricted shares —
— % 2.9
1.9 %
Other, including those publicly traded —
— % 26.9
17.5 %
Total shares of Class A common stock —
— % 69.1
44.9 %
BKFS Class B common stock:
FNF subsidiary —
— % 83.3
54.1 %
THL and its affiliates —
— % 1.5
1.0 %
Total shares of Class B common stock —
— % 84.8
55.1 %
Total shares of BKFS common stock —
— % 153.9
100.0 %

~~As a result of the Distribution as described in Note 1 —~~ ~~Basis of Presentation,~~ FNF no longer has an ownership interest in Black Knight as of September 30, 2017. FNF is still considered to be a related party primarily due to the combination of certain shared board members, members of senior management and various agreements.

~~Transactions with FNF and THL are described below.~~

~~FNF~~

We have various agreements with FNF and certain FNF subsidiaries to provide software, data and analytics services, as well as corporate shared services and information technology. We are also a party to certain other agreements under which we incur other expenses or receive revenues from FNF.

A detail of the revenues and expenses, net from FNF is set forth in the table below (in millions). The decrease in Revenues from the prior year period are primarily the result of the Property Insight realignment as described in Note 1 — ~~Basis of Presentation~~.

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues $ 13.8
$ 19.2
$ 43.2
$ 53.4
Operating expenses 3.4
3.8
9.8
11.5
Guarantee fee —
0.9
1.2
2.9

~~We paid to FNF a guarantee fee of 1.0% of the outstanding principal of the Senior Notes (as defined in Note 4 —~~ ~~Long-Term Debt~~) in exchange for the ongoing guarantee by FNF of the Senior Notes. The guarantee fee is included in Interest expense on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). On April 26, 2017, the Senior Notes were redeemed (see Note 4 — ~~Long-Term Debt~~ ~~for further information), and we are no longer required to pay a guarantee fee.~~

~~FNF subsidiaries held $48.9 million and $49.3 million as of September 30, 2017 and December 31, 2016, respectively, of principal amount of our Term B Loan (as defined in Note 4 —~~ ~~Long-Term Debt) from our credit agreement dated May 27, 2015, as amended.~~

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

~~THL~~

~~Two managing directors of THL currently serve on our Board of Directors. We purchase software and systems services from certain entities over which THL exercises control.~~

~~A detail of the expenses, net from THL is set forth in the table below (in millions):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Operating expenses $ —
$ 0.2
$ 0.2
$ 1.0
Software and software-related purchases —
—
—
1.1

~~Certain affiliates of THL held $39.4 million of principal amount of our Term B Loan (as defined in Note 4 —~~ ~~Long-Term Debt) as of December 31, 2016 from our credit agreement dated May 27, 2015. They did not hold any of our debt as of September 30, 2017.~~

~~Revenues and Expenses~~

~~A detail of related party items included in Revenues is as follows (in millions):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Data and analytics services $ 5.7
$ 12.3
$ 18.4
$ 34.2
Servicing, origination and default software services 8.1
6.9
24.8
19.2
Total related party revenues $ 13.8
$ 19.2
$ 43.2
$ 53.4

~~A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Data entry, indexing services and other operating expenses $ 1.4
$ 2.4
$ 3.9
$ 7.3
Corporate services 2.4
2.4
7.4
7.6
Technology and corporate services (0.4 ) (0.8 ) (1.3 ) (2.4 )
Total related party expenses, net $ 3.4
$ 4.0
$ 10.0
$ 12.5

Additionally, related party prepaid fees were less than $0.1 million as of September 30, 2017 and $0.1 million as of December 31, 2016. These fees are included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets (Unaudited). Finally, related party deferred revenues were $1.0 million as of September 30, 2017, which are included in current Deferred revenues on the Condensed Consolidated Balance Sheets (Unaudited).

We believe the amounts earned from or charged by us under each of the ~~foregoing~~following arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties, except for certain corporate services provided to an FNF subsidiary and certain corporate services provided by FNF, which are at cost. However, theThe amounts we earned or that were charged under these arrangements were not negotiated at arm's length and may not represent the terms that we might have obtained from an unrelated third party.

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

~~(4) Long-Term Debt~~

~~Long-term debt consisted~~

DNB

DNB is considered to be a related party primarily due to the combination of our investment in DNB and our shared Chief Executive Officer. Refer to Note 4 — Investments in Unconsolidated Affiliates for additional details.

During the three months ended June 30, 2021, we entered into a five-year agreement with DNB to provide them with certain products and data over the term of the ~~following (in millions):~~

September 30, 2017 December 31, 2016
Principal Debt Issuance Costs Discount Total Principal Debt Issuance Costs Premium (Discount) Total
Term A Loan $ 1,017.1
$ (7.5 ) $ —
$ 1,009.6
$ 740.0
$ (7.0 ) $ —
$ 733.0
Term B Loan 391.0
(2.6 ) (1.5 ) 386.9
394.0
(3.4 ) (0.8 ) 389.8
Revolving Credit Facility 150.0
(4.5 ) —
145.5
50.0
(3.7 ) —
46.3
Senior Notes, issued at par —
—
—
—
390.0
—
11.1
401.1
Total long-term debt 1,558.1
(14.6 ) (1.5 ) 1,542.0
1,574.0
(14.1 ) 10.3
1,570.2
Less: Current portion of long-term debt 55.5
(0.4 ) —
55.1
64.0
(0.6 ) —
63.4
Long-term debt, net of current portion $ 1,502.6
$ (14.2 ) $ (1.5 ) $ 1,486.9
$ 1,510.0
$ (13.5 ) $ 10.3
$ 1,506.8

~~Principal maturities as of September 30, 2017 for each of the next five years and thereafter are as follows (in millions):~~

2017 (remaining) $ 13.9
2018 55.5
2019 81.3
2020 107.0
2021 132.7
Thereafter 1,167.7
Total $ 1,558.1

~~Scheduled maturities noted above exclude the effect of the debt issuance costs of $14.6 million~~agreement, as well as ~~$1.5~~professional services, for an aggregate fee of approximately $34 million ~~original issue discount.~~

~~Credit Agreement~~

~~On May 27, 2015, BKIS~~over the term of the agreement. We also entered into ~~a credit and guaranty~~an agreement ~~(the "Credit Agreement")~~ with ~~JPMorgan Chase Bank, N.A., as administrative agent,~~DNB for access to certain of their data assets for an aggregate fee of approximately $24 million over the ~~guarantors party thereto and the other agents and lenders party thereto. The Credit Agreement provided for (i) an $800.0 million~~ term loan A facility (the "Term A Loan"), (ii) a $400.0 million term loan B facility (the "Term B Loan") and (iii) a $400.0 million revolving credit facility (the "Revolving Credit Facility", and collectively with the Term A Loan and Term B Loan, the "Facilities"). The Facilities are guaranteed by substantially all of BKIS's wholly-owned domestic restricted subsidiaries and BKFS LLC, and are secured by associated collateral agreements that pledge a lien on virtually all of BKIS's assets, including fixed assets and intangible assets, and the assets of the ~~guarantors.~~

agreement. In addition, we will jointly market certain solutions and data. As of ~~September~~June 30, ~~2017, the Term A Loan~~2021, we had a related party receivable of $10.5 million due from DNB and ~~the Revolving Credit Facility bear interest at the Eurodollar rate plus a margin~~deferred revenues of 175 basis points, and the Term B Loan bears interest at the Eurodollar rate plus a margin of 225 basis points, subject to a Eurodollar rate floor of 75 basis points. As of September 30, 2017, we have $350.0$10.4 million capacity on the Revolving Credit Facility and pay an unused commitment fee of 25 basis points. During the nine months ended September 30, 2017, there were $100.0 million of incremental borrowings and no paymentsfrom DNB on our ~~Revolving Credit Facility and $55.0 million of borrowings and $105.0 million of payments during the nine months ended September 30, 2016. As of September 30, 2017, the interest rates~~Condensed Consolidated Balance Sheets (Unaudited). This agreement had no effect on ~~the Term A Loan, Term B Loan and Revolving Credit Facility were 3.00%, 3.50% and 3.00%, respectively.~~

~~After September 30, 2017, we made payments of $150.0 million on~~ our ~~Revolving Credit Facility, which increased our available capacity to $500.0 million.~~

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

~~Term B Loan Repricing~~

On February 27, 2017, BKIS entered into a First Amendment to Credit and Guaranty Agreement (the "Credit Agreement First Amendment") with JPMorgan Chase Bank, N.A. as administrative agent. Pursuant to the Credit Agreement First Amendment, the Term B Loan bears interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of 125 basis points, or (ii) the Eurodollar rate plus a margin of 225 basis points, subject to a Eurodollar rate floor of 75 basis points. The Term B Loan matures on May 27, 2022. In addition, the Credit Agreement First Amendment permitted the Distribution. The amount included in Other expense, net on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three and six months ending June 30, 2021.

Trasimene

Trasimene Capital Management, LLC ("Trasimene") was considered a related party because the former Chairman of our Board of Directors (the “Board”) owns a controlling interest in Trasimene. As of June 16, 2021, our former Chairman retired from the Board and Trasimene is no longer considered a related party. During the periods April 1, 2021 through June 16, 2021 and January 1, 2021 through June 16, 2021 we recognized $0.2 million and $0.5 million, respectively, in fees with Trasimene related to acquisitions, which are included in Transition and integration costs in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

(7)Goodwill

Goodwill consists of the ~~Term B Loan repricing was $1.1 million.~~

~~Term A Loan~~following (in millions):


	Software		Data and
	Solutions		Analytics		Total
Balance, December 31, 2020	$	3,415.8	$	197.6	$	3,613.4
NexSpring acquisition (Note 3)		18.2		0		18.2
eMBS acquisition (Note 3)		0		17.9		17.9
Optimal Blue acquisition (Note 3)		0.1		0		0.1
Balance, June 30, 2021	$	3,434.1	$	215.5	$	3,649.6

The increase in Goodwill related to our NexSpring and ~~Revolver Refinancing~~

eMBS acquisitions is deductible for tax purposes. The change in Goodwill related to a measurement period adjustment for Optimal Blue for certain pre-acquisition tax liabilities.

(8)Long-Term Debt

Long-term debt consists of the following (in millions):


	June 30, 2021		December 31, 2020
Term A Loan	$	1,150.0	$	1,148.4
Revolving Credit Facility		98.0		47.7
Senior Notes		1,000.0		1,000.0
Other		9.0		17.6
Total long-term debt principal		2,257.0		2,213.7
Less: current portion of long-term debt		(19.0)		(73.0)
Long-term debt before debt issuance costs and discount		2,238.0		2,140.7
Less: debt issuance costs and discount		(21.7)		(18.8)
Long-term debt, net of current portion	$	2,216.3	$	2,121.9

As of June 30, 2021, principal maturities, including payments related to our finance leases, are as follows (in millions):


2021	$	1.6
2022		31.9
2023		33.0
2024		57.5
2025		57.5
Thereafter		2,075.5
Total	$	2,257.0

Credit Agreement

On April ~~26, 2017,~~30, 2018, our indirect subsidiary BKIS entered into ~~a Second Amendment to~~an amended and restated credit and guaranty agreement (the “2018 Credit ~~and Guaranty Agreement (the “Credit Agreement Second Amendment”~~Agreement”) with ~~the~~ JPMorgan Chase Bank, N.A. as administrative agent, the guarantors party thereto, the other agents party thereto and the lenders party thereto. The 2018 Credit Agreement ~~Second Amendment increases~~provided for (i) a $1,250.0 million term loan A facility and (ii) a $750.0 million revolving credit facility.

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Debt Refinancing

On March 10, 2021, BKIS entered into a second amended and restated credit and guaranty agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, the ~~aggregate principal amount of~~guarantors party thereto, the other agents party thereto and the lenders party thereto.

The 2021 Credit Agreement provides for (i) a $1,150.0 million term loan A facility (the “Term A Loan”) and (ii) a $1,000.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term A Loan, ~~by $300.0 million~~collectively, the “Facilities”), the proceeds of which were used to ~~$1,030.0 million and (ii)~~repay in full the ~~aggregate principal amount of commitments~~indebtedness outstanding under the ~~Revolving Credit Facility by $100.0 million to $500.0 million. The~~2018 Credit Agreement ~~Second Amendment also reduces the pricing applicable~~and to ~~the loans under the Term A Loan~~pay related fees and ~~Revolving Credit Facility by 25 basis points and reduces the unused commitment fee applicable to the Revolving Credit Facility by 5 basis points.~~ expenses.

The ~~Term A Loan and Revolving Credit Facility bear~~Facilities bear interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of between 25 and ~~100~~50 basis points depending on the total net leverage ratio of ~~BKFS~~Black Knight Financial Services, LLC (“BKFS”), a Delaware limited liability company and the direct parent company of BKIS, and its restricted subsidiaries on a consolidated basis (the “Consolidated Leverage Ratio”) and (ii) the Eurodollar rate plus a margin of between 125 and ~~200~~150 basis points depending on the Consolidated Leverage ~~Ratio, subject to a Eurodollar rate floor of zero basis points.~~Ratio. In addition, BKIS will pay an unused commitment fee of between 15 and 3020 basis points on the undrawn commitments under the Revolving Credit Facility, also depending on the Consolidated Leverage Ratio. ~~Pursuant~~The above unused commitment fee and margins are consistent with the 2018 Credit Agreement. The 2021 Credit Agreement also provides us with an option to choose an alternative rate of interest on or before the cessation of the London Interbank Offered Rate (“LIBOR”) at our election.

As of June 30, 2021, the interest rate for the Facilities was based on the Eurodollar rate plus a margin of 150 basis points and was approximately 1.6%. As of June 30, 2021, we had $902.0 million capacity on the Revolving Credit Facility and the unused commitment fee was 20 basis points.

The Facilities are guaranteed by all of BKIS’s wholly-owned domestic restricted subsidiaries and BKFS, and are secured by associated collateral agreements that pledge a lien on the majority of BKIS’s assets and the assets of the guarantors, in each case, subject to customary exceptions.

The Term A Loan is subject to amortization of principal, payable in quarterly installments on the last day of each fiscal quarter equal to the ~~terms~~percentage set forth below of the ~~Credit Agreement Second Amendment,~~initial aggregate principal amount of the term loans for such fiscal quarter:


Payment Dates	Percentage
Commencing on March 31, 2022 through and including December 31, 2023	0.625	%
Commencing on March 31, 2024 through and including December 31, 2025	1.250	%

The remaining principal balance of the Term A Loan and any outstanding loans under the Revolving Credit Facility ~~mature~~are due upon maturity on ~~February 25, 2022. The amount included~~March 10, 2026.

As a result of the refinancing, we recognized $2.5 million of expense during the six months ended June 30, 2021 in Other expense, net on the Condensed Consolidated ~~Statements~~Statement of Earnings and Comprehensive Earnings (Unaudited) ~~related to~~.

Senior Notes

On August 26, 2020, BKIS completed the ~~Term A Loan~~issuance and ~~Revolving Credit Facility refinancing was $3.3 million.~~

~~Senior Notes~~

~~Through April 25, 2017, BKIS had 5.75% Senior Notes, interest paid semi-annually, which were scheduled to mature on April 15, 2023~~sale of $1.0 billion aggregate principal amount of 3.625% senior unsecured notes due 2028 (the "Senior Notes"). The Senior Notes ~~were senior unsecured~~have a coupon rate of 3.625% and mature on September 1, 2028. Interest is paid semi-annually in arrears on September 1 and March 1 of each year, and commenced on March 1, 2021. The obligations ~~registered~~ under the ~~Securities Act~~Senior Notes are fully and ~~contained customary affirmative, negative~~unconditionally guaranteed, jointly and ~~financial covenants, and events~~severally, on an unsecured basis by the same guarantors that guarantee our credit agreement (collectively, the “Guarantors”). The Senior Notes are effectively subordinated to any obligations that are secured, including obligations under our credit agreement, to the extent of ~~default for indebtedness~~the value of ~~this type (with grace periods, as applicable, and lender remedies).~~ the assets securing those obligations. The Senior Notes are structurally subordinated to all liabilities of BKIS’ subsidiaries that do not guarantee the Senior Notes.

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Other Debt

On April ~~26, 2017,~~1, 2018, we ~~redeemed~~entered into a financing agreement for $32.9 million, with a stated interest rate of 0% and an imputed interest rate of 3.4%, primarily related to certain data processing and maintenance services. On December 31, 2019, we entered into an amendment to the ~~outstanding Senior Notes at~~financing agreement for an additional $16.3 million, with a ~~price~~stated interest rate of ~~104.825% (the "Redemption")~~0% and ~~paid $0.7~~an imputed interest rate of 3.3%. Under the terms of the amendment, quarterly payments are due beginning January 2, 2020 through January 2, 2023. As of June 30, 2021 and December 31, 2020, $2.3 million ~~in accrued interest. The amount~~and $9.5 million, respectively, are included in ~~Other expense,~~Current portion of debt and $4.0 million and $6.4 million, respectively, are included in Long-term debt, net ~~on the~~of current portion in our Condensed Consolidated ~~Statements~~Balance Sheets (Unaudited).

Finance Leases

On December 31, 2019, we entered into one-year finance lease agreements, with a stated interest rate of ~~Earnings~~0%, an imputed interest rate of 3.3% and ~~Comprehensive Earnings~~bargain purchase options for certain computer equipment. On March 31, 2021, we entered into one-year finance lease agreements, with a stated interest rate of 0%, an imputed interest rate of 1.6% and bargain purchase options for certain computer equipment. The leased equipment has a useful life of five years and is depreciated on a straight-line basis. The finance lease liabilities of $2.4 million and $1.2 million as of June 30, 2021 and December 31, 2020, respectively, are included in Current portion of debt on our Condensed Consolidated Balance Sheets (Unaudited). For the six months ended June 30, 2021 and 2020, non-cash investing and financing activity was $2.5 million and $8.4 million, respectively, related to the ~~Senior Notes redemption was $8.2 million.~~

unpaid portion of our finance lease agreements.

Fair Value of Long-Term Debt

The fair values of our Facilities and Senior Notes are based upon established market prices for the securities using Level 2 inputs. The fair value of our Facilities approximates their carrying value at ~~September~~June 30, ~~2017.~~2021. The fair value of our ~~Facilities is based upon established market prices for the securities using level 2 inputs.~~

Senior Notes at June 30, 2021 was $997.5 million compared to its carrying value of $988.9 million, net of original issue discount and debt issuance costs.

Interest Rate Swaps

~~On September 6, 2017, we entered~~

We enter into an interest rate swap agreement to hedge forecasted monthly interest rate payments on $200.0 million of our floating rate debt (the "September 2017 Swap Agreement"). Under the terms of the September 2017 Swap Agreement, we receive payments based on the 1-month LIBOR rate (equal to 1.25% as of September 30, 2017) and pay a fixed rate of 1.69%. The effective term for the September 2017 Swap Agreement is September 29, 2017 through September 30, 2021.

On March 7, 2017, we entered into an interest rate swap agreement to hedge forecasted monthly interest rate payments on $200.0 million of our floating rate debt (the "March 2017 Swap Agreement"). Under the terms of the March 2017 Swap Agreement, we receive payments based on the 1-month LIBOR rate (equal to 1.25% as of September 30, 2017) and pay a fixed rate of 2.08%. The effective term for the March 2017 Swap Agreement is March 31, 2017 through March 31, 2022.

~~On January 20, 2016, we entered into two~~ interest rate swap agreements to hedge forecasted monthly interest rate payments on ~~$400.0 million of~~ our floating rate ~~debt ($200.0 million notional value each) (the "January 2016 Swap Agreements", and together with~~debt. As of June 30, 2021, we had the ~~March 2017 Swap Agreement and September 2017 Swap Agreement,~~following interest rate swap agreements (collectively, the "Swap Agreements"). (in millions):


Effective dates	Notional amount		Fixed rates
March 31, 2017 through March 31, 2022	$	200.0	2.08	%
September 29, 2017 through September 30, 2021	$	200.0	1.69	%
April 30, 2018 through April 30, 2023	$	250.0	2.61	%
January 31, 2019 through January 31, 2023	$	300.0	2.65	%

Under the terms of the ~~January 2016~~ Swap Agreements, we receive payments based on the 1-month LIBOR ~~rate (equal to 1.25%~~(approximately 0.10% as of ~~September~~June 30, ~~2017) and pay a weighted average fixed rate of 1.01%~~2021). ~~The effective term for the January 2016 Swap Agreements is February 1, 2016 through January 31, 2019.~~

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated these Swap Agreements as cash flow hedges. A portion of the amount included in Accumulated other comprehensive ~~earnings (loss)~~loss is reclassified into Interest expense, net as a yield adjustment as interest ~~payments are made~~is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon ~~level~~Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

~~The estimated fair values of our Swap Agreements are as follows (in millions):~~

Balance Sheet Account September 30, 2017 December 31, 2016
Other non-current assets $ 3.7
$ —
Other non-current liabilities $ 1.8
$ 2.2

As of September 30, 2017, a cumulative gain of $1.9 million ($1.1 million net of tax) is reflected in Accumulated other comprehensive earnings (loss). As of December 31, 2016, a cumulative loss of $1.0 million ($0.6 million net of tax) is reflected in Accumulated other comprehensive earnings (loss), and a cumulative loss of $1.2 million is reflected in Noncontrolling interests. Below is a summary of the effect of derivative instruments on amounts recognized in Other comprehensive earnings (loss) ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three months ended September 30, 2017 and 2016 (in millions):

Three months ended September 30, 2017 Three months ended September 30, 2016
Amount of Gain
Recognized
in OCE Amount of Loss Reclassified from Accumulated OCE
into Net earnings Amount of Gain
Recognized
in OCE Amount of Loss Reclassified from Accumulated OCE
into Net earnings
Swap agreements
Attributable to noncontrolling interests $ 0.5
$ 0.1
$ 0.7
$ 0.3
Attributable to Black Knight 0.3
—
0.4
0.1
Total $ 0.8
$ 0.1
$ 1.1
$ 0.4

Below is a summary of the effect of derivative instruments on amounts recognized in other comprehensive earnings ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the nine months ended September 30, 2017 and 2016 (in millions):

Nine months ended September 30, 2017 Nine months ended September 30, 2016
Amount of Gain
Recognized
in OCE Amount of Loss Reclassified from Accumulated OCE
into Net earnings Amount of Loss
Recognized
in OCE Amount of Loss Reclassified from Accumulated OCE
into Net earnings
Swap agreements
Attributable to noncontrolling interests $ 1.7
$ 0.5
$ (1.6 ) $ 0.8
Attributable to Black Knight 0.9
0.2
(0.9 ) 0.4
Total $ 2.6
$ 0.7
$ (2.5 ) $ 1.2

Approximately $0.3 million ($0.2 million net of tax) of the balance in Accumulated other comprehensive earnings (loss) as of September 30, 2017 is expected to be reclassified into Interest expense over the next 12 months.

It is our policy to execute such instruments with ~~credit-worthy~~creditworthy banks and not to enter into derivative financial instruments for speculative purposes. ~~As of September 30, 2017, we~~We believe our interest rate swap counterparties will be able to fulfill their obligations under our agreements, and we believe we will have debt outstanding through the various expiration dates of the swaps such that the occurrence of future cash flow hedges remains probable.

~~(5) Income Taxes~~

Our effective tax rate for the three months ended September 30, 2017 and 2016 was 17.3% and 16.3%, respectively, and 18.5% and 16.3% for the nine months ended September 30, 2017 and 2016, respectively. These rates are lower than the typical federal and state statutory rate because

Table of the effect of our noncontrolling interests prior to the Distribution. The increase in the effective tax rate for the nine months ended September 30, 2017 is primarily driven by the resolution of a legacy tax matter, partially offset by the effect of adopting ASU 2016-09 related to the income tax effects of awards that vested.

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BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

The estimated fair values of our Swap Agreements are as follows (in millions):


Balance sheet accounts	June 30, 2021		December 31, 2020
Other current liabilities	$	3.8	$	2.4
Other non-current liabilities	$	22.9	$	35.2

A cumulative loss of $26.7 million ($19.9 million net of tax) and cumulative loss of $37.6 million ($28.1 million net of tax) is reflected in Accumulated other comprehensive loss as of June 30, 2021 and December 31, 2020, respectively. Below is a ~~result~~summary of the Distribution and the THL Interest Exchange, there are no longer any noncontrolling interests. Black Knight has determined that the Distribution represents a significant, unusual transaction or infrequently occurring event, and therefore, it is appropriate to exclude the taxes for the period prior to the Distribution from the estimated annual effective tax rate. The taxes for such items are individually computed andeffect of derivative instruments on amounts recognized ~~as they occur.~~

~~Prior to the Distribution and THL Interest Exchange, the net deferred tax liability of Black Knight was primarily related to its investment~~ in BKFS LLC. Following the Distribution, Black Knight indirectly owns 100% of BKFS LLC and has recorded a non-cash transaction resulting in an increase of $288.4 million to Deferred income taxes with an offset to Additional paid-in capital on the Condensed Consolidated Balance Sheets (Unaudited) to reflect the difference in the tax and financial reporting basis of the Company’s assets and liabilities. The components of deferred tax assets and liabilities as of September 30, 2017 primarily relate to intangible assets, deferred contract costs, deferred revenues, property and equipment, equity-based compensation and deferred compensation.

As a result of the Distribution, Black Knight recorded an $8.3 million contingent tax liability for an uncertain tax position that was previously recorded at BKHI. As part of the Distribution, a tax matters agreement was entered into by FNF and Black Knight. The agreement outlines requirements for items such as the filing of pre and post-spin tax returns, payment of tax liabilities, entitlements of refunds and certain other tax matters. Under the tax matters agreement with FNF, Black Knight has an indemnification receivable for the full amount of the contingent tax liability included in Receivables from related parties on the Condensed Consolidated Balance Sheets (Unaudited).

Pursuant to the tax matters agreement with FNF, we are obligated to indemnify FNF for (i) any action by Black Knight, or the failure to take any action within our control that negates the tax-free status of the transactions; or (ii) direct or indirect changes in ownership of Black Knight equity interests that cause the Distribution to be a taxable event to FNF as a result of the application of Section 355(e) of the Internal Revenue Code (“IRC”Other comprehensive (loss) earnings ("OCE") or to be a taxable event as a result of a failure to satisfy the “continuity of interest” or “device” requirements for tax-free treatment under Section 355 of the IRC. No such events have occurred.

~~We record interest and penalties related to income taxes, if any, as a component of Income tax expense~~ on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). (in millions):

Three months ended June 30,

2021

2020

Amount of loss

reclassified from

Amount of loss

reclassified from

recognized

Accumulated OCE

recognized

Accumulated OCE

in OCE

into Net earnings

in OCE

into Net earnings

Swap agreements

(0.2)

4.0

(2.6)

3.2

Six months ended June 30,

2021

2020

Amount of loss

Amount of gain

reclassified from

Amount of loss

reclassified from

recognized

Accumulated OCE

recognized

Accumulated OCE

in OCE

into Net earnings

in OCE

into Net earnings

Swap agreements

0.3

7.9

(24.2)

4.4

Approximately $17.7 million ($13.2 million net of tax) of the balance in Accumulated other comprehensive loss as of June 30, 2021 is expected to be reclassified into Interest expense, net over the next 12 months.

(9)Fair Value Measurements

Fair Value of Financial Assets and Liabilities

Fair value represents the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of financial assets and liabilities are determined using the following fair value hierarchy:

●

Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access.

●

Level 2 inputs to the valuation methodology include:

quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in inactive markets;

inputs other than quoted prices that are observable for the asset or liability; and

inputs that are derived principally from or corroborated by observable market data by correlation or other means.

●

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

~~Tax Distributions~~

~~Prior~~

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Assets are classified in their entirety based on the lowest level of input that is significant to the ~~Distribution,~~fair value measurement. We believe our valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the ~~taxable income~~fair value of ~~BKFS LLC~~certain financial instruments could result in a different fair value measurement at the reporting date.

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in millions):


	June 30, 2021								December 31, 2020
	Carrying		Fair value						Carrying		Fair value
	amount		Level 1		Level 2		Level 3		amount		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents (Note 2)	$	88.7	$	88.7	$	0	$	0	$	34.7	$	34.7	$	0	$	0

Liabilities:
Interest rate swaps (Note 8)		26.7		0		26.7		0		37.6		0		37.6		0
Contingent consideration (Note 3)		7.7		0		0		7.7		3.1		0		0		3.1

Redeemable noncontrolling interests		578.0		0		0		578.0		578.0		0		0		578.0

The fair value of contingent consideration was ~~allocated~~primarily determined based on significant estimates and assumptions, including Level 3 inputs. The estimates and assumptions include the projected timing and amount of future cash flows and discount rates reflecting the rate inherent in the future cash flows.

The following table presents a summary of the change in fair value of our Level 3 fair value measurements (in millions):


Beginning balance, December 31, 2020	$	581.1
Contingent consideration adjustments related to prior year acquisition		0.1
Contingent consideration increase related to current year acquisition		4.5
Ending balance, June 30, 2021	$	585.7

As of June 30, 2021, the fair value of redeemable noncontrolling interests approximates its carrying amount due to ~~its members, including BKFS,~~the close proximity to the reporting date of the contributions received from Cannae and the members were required to reflect on their own income tax returns the items of income, gain, deduction and loss and other tax items of BKFS LLC that were allocated to them. BKFS LLC made tax distributions to its membersTHL for their ~~allocable~~ share of ~~BKFS LLC's taxable income. Tax distributions are calculated based on allocations~~equity interests in Optimal Blue Holdco. Refer to Note 1 — Basis of ~~income to a member~~ Presentation and Overview and Note 3 — Business Acquisitions for ~~a particular taxable year without taking into account any losses allocated~~additional information.

(10)Income Taxes

Our effective tax rate for the three months ended June 30, 2021 and 2020 was 22.0% and 20.9%, respectively, and 17.1% and 18.8% for the six months ended June 30, 2021 and 2020, respectively. Our effective tax rate for the three and six months ended June 30, 2021 and 2020 differs from our statutory rate primarily due to the ~~member in a prior taxable year. This practice is consistent with IRS regulations. Subject to certain reductions,~~effect of excess tax ~~distributions are generally made based on an assumed tax rate equal~~benefits related to the ~~highest combined marginal federal, state~~vesting of restricted shares of our common stock and ~~local income~~research and experimentation tax rate applicable to a U.S. corporation. BKFS LLC made tax distributions of $75.3 million and $48.5 million during the nine months ended September 30, 2017 and 2016, respectively. The 2017 tax distributions were for the 2016 tax year and 2017 tax year relating to the period before the Distribution.

~~(6)~~ credits.

(11)Commitments and Contingencies

Legal and Regulatory Matters

In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters related to our operations, some of which include claims for punitive or exemplary damages. Our ordinary course litigation ~~includes purported~~may include class action lawsuits, which make allegations related to various aspects of our business. From time to time, we also receive requests for information from various state and federal regulatory authorities, some of which take the form of civil investigative demands or subpoenas. Some of these regulatory inquiries may result in the assessment of fines for violations of regulations or settlements with such authorities requiring a variety of remedies. We believe that none of these actions depart from customary litigation or regulatory inquiries incidental to our business.

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

We review lawsuits and other legal and regulatory matters (collectively ~~“legal proceedings”~~"legal proceedings") on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending cases is generally not yet determinable. While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe ~~that~~ the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition.

PennyMac Litigation

On November 5, 2019, Black Knight Servicing Technologies, LLC (“BKST”), an indirect, wholly-owned subsidiary of Black Knight, filed a Complaint and Demand for Jury Trial (the “Black Knight Complaint”) against PennyMac Loan Services, LLC (“PennyMac”) in the Circuit Court for the Fourth Judicial Circuit in and for Duval County, Florida. The Black Knight Complaint includes causes of action for breach of contract and misappropriation of MSP^® System trade secrets in order to develop an imitation mortgage processing system intended to replace the MSP^® System. The Black Knight Complaint seeks damages for breach of contract and misappropriation of trade secrets, injunctive relief under the Florida Uniform Trade Secrets Act and declaratory judgment that BKST owns all intellectual property and software developed by or on behalf of PennyMac as a result of its wrongful use of and access to the MSP^®System and related trade secret and confidential information. PennyMac filed a motion to compel arbitration of the action, and the court granted the motion on April 6, 2020. After the court denied BKST's motion for reconsideration of the court’s order compelling arbitration, BKST filed a notice of appeal with the Florida First District Court of Appeal on May 6, 2020. On January 6, 2021, the appellate court affirmed the trial court's ruling.

On October 21, 2020, PennyMac submitted a dispute regarding a Black Knight Origination Technologies, LLC LendingSpace^® software audit request to the American Arbitration Association ("AAA") for arbitration. Black Knight moved to consolidate the LendingSpace^® arbitration with the existing trade secret/antitrust arbitrations and, on December 21, 2020, the arbitrator granted Black Knight’s motion to consolidate the arbitrations. On December 8, 2020, Black Knight and PennyMac filed motions for summary judgment concerning the LendingSpace^® audit, and responses to the competing motions for summary judgment were filed by both parties on January 7, 2021. On February 16, 2021, the arbitrator granted Black Knight’s motion for summary judgment and ordered that Black Knight may conduct an audit of PennyMac’s use of Black Knight’s LendingSpace^® software.

Shortly after the filing of the Black Knight Complaint, on November 6, 2019, PennyMac filed an Antitrust Complaint (the “PennyMac Complaint”) against Black Knight in the United States District Court for the Central District of California. The PennyMac Complaint included causes of action for alleged monopolization and attempted monopolization under Section 2 of the Sherman Antitrust Act, violation of California’s Cartwright Act, violation of California’s Unfair Competition Law and common law unfair competition under California law. The PennyMac Complaint sought equitable remedies, damages and other monetary relief, including treble and punitive damages. Generally, PennyMac alleged that Black Knight relies on various anticompetitive, unfair, and discriminatory practices to maintain and to enhance its dominance in the mortgage servicing platform market and in an attempt to monopolize the platform software applications market. Black Knight moved to dismiss the PennyMac Complaint or have the action transferred to Florida based upon a forum selection clause in the agreement with BKST. On February 13, 2020, the judge granted Black Knight's motion to transfer the case to Florida and denied as moot the motion to dismiss. On April 17, 2020, PennyMac filed a notice of dismissal of this action without prejudice and indicated that they intended to bring the claims raised in the dismissed PennyMac Complaint as defenses, third party claims and/or counterclaims in arbitration. On April 23, 2020, the court entered an order dismissing the action without prejudice and directing that the clerk close the case. On April 28, 2020, PennyMac submitted this matter to the AAA for arbitration. On May 27, 2020, Black Knight filed its answering statement with the AAA. The arbitrator was confirmed by the AAA on July 21, 2020.

The arbitrator set Black Knight's trade secret case for a 10-day final hearing beginning on October 24, 2022, and set PennyMac's antitrust case for a 5-day final hearing beginning on November 14, 2022.

On June 26, 2020, Black Knight filed a complaint against PennyMac in the United States District Court for the Middle District of Florida seeking a declaratory judgment that PennyMac waived its right to arbitrate federal antitrust and related state law claims against Black Knight because PennyMac previously filed and litigated those claims in a court of law (the “BKI Declaratory Action”). The parties filed cross-

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BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

motions for summary judgment and on March 22, 2021, the Court denied BKI’s motion for summary judgment and granted PennyMac’s motion as to the waiver issue, finding that PennyMac has not waived its right to arbitrate the claims raised in the Black Knight Complaint.

As these cases continue to evolve, it is not possible to reasonably estimate the probability that we will ultimately prevail on our lawsuit or be held liable for the violations alleged in the PennyMac Complaint, nor is it possible to reasonably estimate the ultimate gain or loss, if any, or range of gain or loss that could result from these cases.

Indemnifications and Warranties

We often agree to indemnify our clients against damages and costs resulting from claims of patent, copyright, trademark infringement or breaches of confidentiality associated with use of our software through software licensing agreements. Historically, we have not made any payments under such indemnifications, but continue to monitor the conditions that are subject to the indemnifications to identify whether a loss has occurred that is both probable and estimable that would require recognition. In addition, we warrant to clients that our software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such, no accruals for warranty costs have been made.

Indemnification Agreement

We are party to a cross-indemnity agreement dated December 22, 2014 with ServiceLink Holdings, LLC ("ServiceLink"). Pursuant to this agreement, ServiceLink indemnifies us from liabilities relating to, arising out of or resulting from the conduct of ~~ServiceLink's~~ServiceLink’s business or any action, suit or proceeding in which we or any of our subsidiaries are named by reason of being a successor to the business of Lender Processing Services, Inc. and the cause of such action, suit or proceeding relates to the business of ServiceLink. In return, we indemnify ServiceLink for liabilities relating to, arising out of, or resulting from the conduct of our business.

(12)Revenues

Disaggregation of Revenues

The following tables summarize revenues from contracts with clients (in millions):


	Three months ended June 30, 2021
	Servicing		Origination		Software		Data and		Corporate
	Software		Software		Solutions		Analytics		and Other		Total
Software and hosting solutions	$	187.4	$	82.6	$	270.0	$	9.3	$	0	$	279.3
Professional services		20.4		12.4		32.8		0.1		0		32.9
Data solutions		0		0.5		0.5		45.9		0		46.4
Other		0		2.1		2.1		0.6		0		2.7
Revenues	$	207.8	$	97.6	$	305.4	$	55.9	$	0	$	361.3


	Three months ended June 30, 2020
	Servicing		Origination		Software		Data and		Corporate
	Software		Software		Solutions		Analytics		and Other			Total
Software and hosting solutions	$	166.5	$	44.6	$	211.1	$	8.5	$	0		$	219.6
Professional services		17.8		13.0		30.8		0.2		(0.2)	(1)		30.8
Data solutions		0		0		0		38.9		0			38.9
Other		0		3.2		3.2		0.6		0			3.8
Revenues	$	184.3	$	60.8	$	245.1	$	48.2	$	(0.2)		$	293.1

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)


	Six months ended June 30, 2021
	Servicing		Origination		Software		Data and		Corporate
	Software		Software		Solutions		Analytics		and Other		Total
Software and hosting solutions	$	371.5	$	160.4	$	531.9	$	18.0	$	0	$	549.9
Professional services		39.0		24.2		63.2		0.3		0		63.5
Data solutions		0		1.7		1.7		90.3		0		92.0
Other		0		4.4		4.4		1.2		0		5.6
Revenues	$	410.5	$	190.7	$	601.2	$	109.8	$	0	$	711.0


	Six months ended June 30, 2020
	Servicing		Origination		Software		Data and		Corporate
	Software		Software		Solutions		Analytics		and Other			Total
Software and hosting solutions	$	343.5	$	80.9	$	424.4	$	16.9	$	0		$	441.3
Professional services		36.5		22.5		59.0		0.5		(0.3)	(1)		59.2
Data solutions		0		0		0		75.7		0			75.7
Other		0		6.4		6.4		1.2		0			7.6
Revenues	$	380.0	$	109.8	$	489.8	$	94.3	$	(0.3)		$	583.8

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

Our Software Solutions segment offers leading software and hosting solutions that facilitate and automate many of the mission-critical business processes across the homeownership lifecycle. These solutions primarily consist of processing and workflow management software applications. Our servicing software solutions primarily include our core servicing software solution that automates loan servicing, including loan setup and ongoing processing, customer service, accounting, reporting to the secondary mortgage market and investors and web-based workflow information systems. Our origination software solutions primarily include our solutions that automate and facilitate the origination of mortgage loans, offer product, pricing and eligibility capabilities, and provide an interconnected network allowing the various parties and systems associated with lending transactions to exchange data quickly and efficiently. Professional services consists of pre-implementation and post-implementation support and services and are primarily billed on a time and materials basis. Professional services may also include dedicated teams provided as part of agreements with software and hosting solutions clients.

Our Data and Analytics segment offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, behavioral models, a multiple listing service software solution and other data solutions.

Transaction Price Allocated to Future Performance Obligation

Our disclosure of transaction price allocated to future performance obligations excludes the following:

●

Volume-based fees in excess of contractual minimums and other usage-based fees to the extent they are part of a single performance obligation and meet certain variable allocation criteria;

●

Performance obligations that are part of a contract with an original expected duration of one year or less; and

●

Transactional fees based on a fixed fee per transaction when we have the right to invoice once we have completed the performance obligation.

As of June 30, 2021, the aggregate amount of the transaction price that is allocated to our future performance obligations was approximately $2.4 billion and is expected to be recognized as follows: 13% by December 31, 2021, 37% by December 31, 2022, 74% by December 31, 2024 and the rest thereafter.

~~(7) Equity-Based Compensation~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

(13)Equity

Share Repurchase Program

On February ~~3, 2017, we granted 884,570 restricted~~12, 2020, our Board of Directors approved a three-year share repurchase program authorizing us to repurchase up to 10.0 million shares of our ~~Class A~~outstanding common stock through February 12, 2023, through open market purchases, negotiated transactions or other means, in accordance with ~~a grant date fair value~~applicable securities laws and other restrictions.

There were 0 share repurchases during the three months ended June 30, 2021. A summary of ~~$37.90~~share repurchases under our share repurchase program during the six months ended June 30, 2021 is as follows (in millions, except per share ~~which was based on the closing price~~amounts):


			Shares remaining under repurchase
Total number of shares repurchased	Aggregate purchase price	Average price paid per share	authorization as of June 30, 2021
0.6	$46.7	$ 75.19	9.4

Omnibus Incentive Plan

A summary of ~~our common stock on the date of grant. Of the 884,570~~ restricted shares and RSUs granted ~~203,160 restricted shares vest over a three-year period and 681,410 restricted shares vest over a four-year period. The vesting of all the restricted shares granted on February 3, 2017~~in 2021 is ~~also based on certain operating performance criteria.~~

During the third quarter of 2017, we granted 98,194 restricted shares of our Class A common stock with a grant date fair value ranging from $41.90 to $42.25, which was based on the closing price of our common stock on the date of grant. These vest over a two-year period.

~~Restricted stock transactions in 2017 are~~ as follows:


	Number of shares	Grant date fair		Vesting period
Date	granted	value per share		(in years)	Vesting criteria
March 10, 2021⁽¹⁾	518,219	$	76.00	3.0	Service and Performance
June 2021	34,447		74.56 - 76.51	1 - 2.7	Service

Shares
Weighted Average Grant Date
Fair Value
Balance, December 31, 2016 2,908,374
*
Granted 982,764
$ 38.31
Forfeited (123,824 ) $ 34.42
Vested (1,840,719 ) *
Balance, September 30, 2017 1,926,595
*

(1)

~~The BKFS LLC profits interest units that were converted into restricted shares in connection with our initial public offering had a weighted average grant date fair value~~This award is subject to an independent performance target for each of ~~$2.10 per unit. The fair value~~3 consecutive 12-month measurement periods. Vesting of each tranche is independent of the ~~restricted shares at the date of conversion, May 20, 2015, was $24.50 per share. The original grant date fair value~~satisfaction of the ~~vested restricted shares, which were originally granted as profits interests units, was $2.01 per unit.~~annual performance target for other tranches.

Activity related to restricted stock and RSUs in 2021 is as follows:


		Weighted average
		grant date
	Shares	fair value
Balance, December 31, 2020	1,549,098	$	57.86
Granted	552,666	$	75.94
Forfeited	(10,560)	$	68.67
Vested	(872,411)	$	52.42
Balance, June 30, 2021	1,218,793	$	69.86

Equity-based compensation expense related to our restricted shares and RSUs was ~~$4.1~~$10.9 million and ~~$3.4~~$9.5 million for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively, and ~~$14.2~~$18.1 million and ~~$9.5~~$20.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively. Equity-based compensation includes accelerated recognition of $2.9 million for the three and six months ended June 30, 2021 and $0.2 million for the six months ended June 30, 2020. These expenses are included in Operating expenses in the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).

~~Total~~

As of June 30, 2021, total unrecognized compensation cost was ~~$44.3~~$59.7 million ~~as of September 30, 2017~~ and is expected to be recognized over a weighted average period of approximately ~~2.6~~2.2 years.

~~Omnibus Plan~~

Profits Interests Units

The OB PIUs vest over three years, with cliff vesting after the third year. Holders of the OB PIUs have an option to put their profit interests to us if no public offering has been consummated as of the date that is 60 days prior to the fourth and each subsequent anniversary of the acquisition date of Optimal Blue. The units may be settled in cash or Black Knight ~~Financial Services, Inc. 2015 Omnibus Incentive Plan (the "BKFS Omnibus Plan") was established~~common stock or a combination of both at our election and will be settled at the current fair value at the time we receive notice of the put election. As the OB PIUs provide for redemption features not solely within our control, we classify the redemption value outside of permanent equity in ~~2015 and is now titled the “Black Knight, Inc. Amended and Restated 2015 Omnibus Incentive Plan” (the "Black Knight Omnibus Plan"). The Black Knight Financial Services, Inc. board~~redeemable noncontrolling interests.

Table of ~~directors adopted the Black Knight Omnibus Plan as of September 29, 2017, and the Black Knight Omnibus Plan was assumed by Black Knight, Inc. on September 29, 2017.~~

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BLACK KNIGHT, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) -~~(UNAUDITED) – (Continued)

The redemption value is equal to the difference in the per unit fair value of the underlying member units and the hurdle amount, based upon the proportionate required service period rendered to date.

Equity-based compensation expense related to the OB PIUs was $2.2 million and $4.4 million for the three and six months ended June 30, 2021, respectively. As of June 30, 2021, the total unrecognized compensation cost related to non-vested OB PIUs is $21.6 million, which is expected to be recognized over a weighted average period of approximately 2.4 years.

~~(8)~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

(14)Segment Information

~~ASC~~

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

2 segments. Refer to Note 12 — Revenues for a description of our Software Solutions - ~~offers software~~ and ~~hosting solutions that support loan servicing, loan origination and settlement services. The Software Solutions segment was formerly known as the Technology segment.~~

Data and Analytics - offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions.

segments.

Separate discrete financial information is available for these ~~two~~2 segments, and the operating results of each segment are regularly evaluated by the CODM in order to assess performance and allocate resources. We use EBITDA as the primary profitability measure for making decisions regarding ongoing operations. EBITDA is earnings before Interest expense, net, Income tax expense and Depreciation and amortization. It also excludes Equity in earnings (losses) of unconsolidated affiliates. We do not allocate Interest expense, net, Other expense, net, Income tax expense, equity-based compensation and certain other items, such as purchase accounting adjustments and acquisition-related costs to the segments, since these items are not considered in evaluating the ~~segments'~~segments’ overall operating performance.

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


	Three months ended June 30, 2021
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	305.4	$	55.9	$	0	(1)	$	361.3
Expenses:
Operating expenses		130.6		35.1		31.3	(2)		197.0
Transition and integration costs		0		0		4.3	(3)		4.3
EBITDA		174.8		20.8		(35.6)			160.0
Depreciation and amortization		33.2		3.7		53.5	(4)		90.4
Operating income (loss)		141.6		17.1		(89.1)			69.6
Interest expense, net									(20.9)
Other expense, net									(1.0)
Earnings before income taxes and equity in losses of unconsolidated affiliates									47.7
Income tax expense									10.5
Earnings before equity in losses of unconsolidated affiliates									37.2
Equity in losses of unconsolidated affiliates, net of tax									(5.0)
Net earnings									32.2
Net losses attributable to redeemable noncontrolling interests									7.5
Net earnings attributable to Black Knight								$	39.7

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)


	Three months ended June 30, 2020
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	245.1	$	48.2	$	(0.2)	(1)	$	293.1
Expenses:
Operating expenses		98.9		32.1		24.5	(2)		155.5
Transition and integration costs		0		0		2.5	(3)		2.5
EBITDA		146.2		16.1		(27.2)			135.1
Depreciation and amortization		30.2		3.8		24.6	(4)		58.6
Operating income (loss)		116.0		12.3		(51.8)			76.5
Interest expense, net									(13.0)
Other income, net									18.8
Earnings before income taxes and equity in losses of unconsolidated affiliates									82.3
Income tax expense									17.2
Earnings before equity in losses of unconsolidated affiliates									65.1
Equity in losses of unconsolidated affiliates, net of tax									(26.0)
Net earnings								$	39.1


	Six months ended June 30, 2021
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	601.2	$	109.8	$	—	(1)	$	711.0
Expenses:
Operating expenses		255.5		69.3		58.4	(2)		383.2
Transition and integration costs		—		—		12.2	(3)		12.2
EBITDA		345.7		40.5		(70.6)			315.6
Depreciation and amortization		64.4		7.5		106.3	(4)		178.2
Operating income (loss)		281.3		33.0		(176.9)			137.4
Interest expense, net									(41.2)
Other expense, net									(4.2)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									92.0
Income tax expense									15.7
Earnings before equity in earnings of unconsolidated affiliates									76.3
Equity in earnings of unconsolidated affiliates, net of tax									1.4
Net earnings									77.7
Net losses attributable to redeemable noncontrolling interests									16.1
Net earnings attributable to Black Knight								$	93.8

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)


	Six months ended June 30, 2020
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	489.8	$	94.3	$	(0.3)	(1)	$	583.8
Expenses:
Operating expenses		204.2		63.6		50.1	(2)		317.9
Transition and integration costs		—		—		4.9	(3)		4.9
EBITDA		285.6		30.7		(55.3)			261.0
Depreciation and amortization		60.5		7.8		48.0	(4)		116.3
Operating income (loss)		225.1		22.9		(103.3)			144.7
Interest expense, net									(27.7)
Other income, net									18.0
Earnings before income taxes and equity in losses of unconsolidated affiliates									135.0
Income tax expense									25.4
Earnings before equity in losses of unconsolidated affiliates									109.6
Equity in losses of unconsolidated affiliates, net of tax									(20.4)
Net earnings								$	89.2

Three months ended September 30, 2017
Software Solutions Data and Analytics Corporate and Other Total
Revenues $ 224.5
$ 40.3
$ (1.0 ) (1) $ 263.8
Expenses:

Operating expenses 93.0
32.7
15.0
140.7
Transition and integration costs —
—
4.0
4.0
EBITDA 131.5
7.6
(20.0 ) 119.1
Depreciation and amortization 24.3
3.7
23.3
(2) 51.3
Operating income (loss) 107.2
3.9
(43.3 ) 67.8
Interest expense (14.1 )
Other expense, net (0.6 )
Earnings before income taxes 53.1
Income tax expense 9.2
Net earnings $ 43.9

~~Note: The Software Solutions segment was formerly known as the Technology segment.~~


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


(2)	Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $13.2 million and $9.5 million for the three months ended June 30, 2021 and 2020, respectively, and $23.7 million and $21.2 million for the six months ended June 30, 2021 and 2020, respectively.

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

(4)	Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

Table of Contents

Three months ended September 30, 2016
Software Solutions Data and Analytics Corporate and Other Total
Revenues $ 221.0
$ 47.6
$ (1.5 ) (1) $ 267.1
Expenses:

Operating expenses 95.9
39.2
17.1
152.2
Transition and integration costs —
—
1.1
1.1
EBITDA 125.1
8.4
(19.7 ) 113.8
Depreciation and amortization 29.0
2.1
25.7
(2) 56.8
Operating income (loss) 96.1
6.3
(45.4 ) 57.0
Interest expense (16.9 )
Other expense, net (1.4 )
Earnings before income taxes 38.7
Income tax expense 6.3
Net earnings $ 32.4

~~Note: The Software Solutions segment was formerly known as the Technology segment.~~


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


~~(2)~~	Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

Nine months ended September 30, 2017
Software Solutions Data and Analytics Corporate and Other Total
Revenues $ 665.6
$ 122.1
$ (3.6 ) (1) $ 784.1
Expenses:
Operating expenses 277.7
99.2
51.3
428.2
Transition and integration costs —
—
8.5
8.5
EBITDA 387.9
22.9
(63.4 ) 347.4
Depreciation and amortization 74.9
11.0
68.3
(2) 154.2
Operating income (loss) 313.0
11.9
(131.7 ) 193.2
Interest expense (44.8 )
Other expense, net (17.1 )
Earnings before income taxes 131.3
Income tax expense 24.3
Net earnings $ 107.0

Balance sheet data:
Total assets $ 3,153.4
$ 352.0
$ 244.6
$ 3,750.0
Goodwill $ 2,115.0
$ 191.8
$ —
$ 2,306.8

~~Note: The Software Solutions segment was formerly known as the Technology segment.~~


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


~~(2)~~	Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

~~BLACK KNIGHT, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)~~

Nine months ended September 30, 2016
Software Solutions Data and Analytics Corporate and Other Total
Revenues $ 636.6
$ 133.7
$ (5.8 ) (1) $ 764.5
Expenses:
Operating expenses 273.2
111.7
48.5
433.4
Transition and integration costs —
—
2.2
2.2
EBITDA 363.4
22.0
(56.5 ) 328.9
Depreciation and amortization 80.2
6.5
67.5
(2) 154.2
Operating income (loss) 283.2
15.5
(124.0 ) 174.7
Interest expense (50.6 )
Other expense, net (6.2 )
Earnings before income taxes 117.9
Income tax expense 19.2
Net earnings $ 98.7

Balance sheet data:
Total assets $ 3,225.6
$ 353.4
$ 134.5
$ 3,713.5
Goodwill $ 2,108.7
$ 191.8
$ —
$ 2,300.5

~~Note: The Software Solutions segment was formerly known as the Technology segment.~~


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


~~(2)~~	Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

Except as otherwise indicated or unless the context otherwise requires, all references to "Black Knight," the "Company," "we," "us" or "our" (1) prior to the Distribution (as defined in Note 1 — Basis of Presentation), are to Black Knight Financial Services, Inc., a Delaware corporation, and its subsidiaries and (2) after the Distribution, are to Black Knight, Inc., a Delaware corporation, and its subsidiaries.

The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding expectations, hopes, intentions or strategies regarding the future. Forward-looking statements are based on Black Knight, ~~management's~~Inc. and its subsidiaries ("Black Knight," the "Company," "we," "us" or "our") management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. ~~Black Knight, Inc. ("Black Knight," the "Company," "we," "us" or "our") undertakes~~We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties that forward-looking statements are subject to include, but are not limited to:

●

changes in general economic, business, regulatory and political conditions, including those resulting from pandemics such as COVID-19, particularly as they affect foreclosures and the mortgage industry;

●

the outbreak of COVID-19 and measures to reduce its spread, including the effect of governmental or voluntary actions such as business shutdowns and stay-at-home orders;

●

security breaches against our information systems or breaches involving our third-party vendors;

●

our ability to maintain and grow our relationships with our clients;

●

our ability to comply with or changes to the laws, rules and regulations that affect our and our clients’ businesses;

●

our ability to adapt our solutions to technological changes or evolving industry standards or to achieve our growth strategies;

●

our ability to protect our proprietary software and information rights;

●

the effect of any potential defects, development delays, installation difficulties or system failures on our business and reputation;

●

risks associated with the availability of data;

●

the effects of our existing leverage on our ability to make acquisitions and invest in our business;

●

our ability to successfully consummate, integrate and achieve the intended benefits of acquisitions;

●

risks associated with our investment in Dun & Bradstreet Holdings, Inc. ("DNB") and integrating and achieving the intended benefits of the acquisition of Optimal Blue, LLC (“Optimal Blue”); and

●

other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of our Annual Report on Form 10-K for the year ended December 31, 2020 and other filings with the Securities and Exchange Commission ("SEC").

~~security breaches against our information systems;~~

~~our ability to maintain and grow our relationships with our customers;~~

~~changes to the laws, rules and regulations that affect our and our customers' businesses;~~

~~our ability to adapt our services to changes in technology or the marketplace;~~

~~the effect of any potential defects, development delays, installation difficulties or system failures on our business and reputation;~~

~~changes in general economic, business, regulatory and political conditions, particularly as they affect the mortgage industry;~~

~~risks associated with the availability of data;~~

~~the effects of our substantial leverage on our ability to make acquisitions and invest in our business;~~

~~our ability to successfully integrate strategic acquisitions;~~

~~risks associated with our spin-off from FNF, including limitations on our strategic and operating flexibility as a result of the tax-free nature of the spin-off; and~~

other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of our Annual Report on Form 10-K for the year ended December 31, 2016 and other filings with the Securities and Exchange Commission ("SEC").

The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 filed with the SEC on February ~~24, 2017.~~

~~History~~

~~Black Knight is a leading provider of~~26, 2021 and other filings with the SEC.

Overview

We are an award-winning software, data and analytics ~~solutions to~~company that drives innovation in the mortgage lending and ~~consumer loan,~~servicing and real estate industries, as well as the capital and ~~capital market verticals. Our~~secondary markets. Businesses leverage our robust, integrated solutions ~~facilitate and automate many of the mission-critical business processes~~ across the entire homeownership ~~lifecycle, from origination until asset disposition. We believe we differentiate ourselves by the breadth~~life-cycle to help retain existing clients, gain new clients, mitigate risk and ~~depth of~~operate more effectively. Our clients rely on our proven, comprehensive, ~~integrated solutions~~scalable products and ~~the insight we provide~~our unwavering commitment to ~~our clients. Black Knight was a majority-owned subsidiary of Fidelity National Financial, Inc. ("FNF") prior~~delivering superior client support to ~~the Distribution as described in the "Distribution of FNF's Ownership Interest~~achieve their strategic goals and ~~Related Transactions" section below.~~

~~Overview~~

better serve their customers.

We have market-leading ~~positions in mortgage processing and~~vertical software solutions combined with comprehensive real estate data and extensive analytic capabilities. Our solutions are utilized by U.S. mortgage loan originators and ~~mortgage~~ servicers, as well as other financial institutions, investors and real estate professionals, to support mortgage lending and servicing operations, analyze portfolios and properties, operate more efficiently, meet regulatory compliance requirements and mitigate risk.

~~The U.S. mortgage market is undergoing significant change,~~

We believe the breadth and mortgage market participants have been subjected to more stringent oversight in recent years. Regulators have increasingly focused on better disclosure, improved risk mitigation and enhanced oversight. Mortgage lenders large and small have experienced higher costs in order to comply with this higher leveldepth of regulation. Despite these new regulatory requirements, the mortgage industry remains a competitive marketplace with numerous large lenders and smaller institutions competing for new loan originations. In order to comply with the increased regulatory requirements and compete more effectively, mortgage market participants have continued to outsource mission-critical functions to third party technology providers that can offer comprehensive and integrated solutions, which are also cost-effective, due to their deep domain expertise and economies of scale.

~~We believe~~ our comprehensive end-to-end, integrated solutions and the insight we provide to our clients differentiate us from other software providers ~~serving the mortgage industry~~ and position us particularly well for ~~evolving opportunities in this market.~~emerging opportunities. We have served the mortgage and real estate industries for over 5055 years and utilize this experience to design and develop solutions that fit our clients’ ever-evolving needs. Our proprietary software solutions and data and analytics capabilities reduce manual processes, improve compliance and quality, mitigate risk and deliver significant cost savings to our clients. Our scale allows us to continually and cost-effectively invest in our business in order to meet ~~evolving~~ industry requirements and maintain our position as an industry-standard platform for mortgage market participants.

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The table below summarizes active first and second lien ~~mortgages~~mortgage loans on our mortgage loan servicing software solution and the related market data, reflecting our leadership in the mortgage loan servicing software solutions market (in millions):


	First lien						Second lien						Total first and second lien
	as of June 30,						as of June 30,						as of June 30,
	2021			2020			2021			2020			2021		2020
Active loans	32.3			30.7			3.3			2.5			35.6		33.2
Market size	53.1		(1)	53.2		(1)	12.4		(2)	13.0		(2)	65.5		66.2
Market share	61	%		58	%		26	%		19	%		54	%	50	%

First lien mortgages Second lien mortgages
as of September 30, as of September 30,
2017 2016 2017 2016
Active loans 31.5
31.2
1.9
1.1

Market size 51.0
(1) 50.7
(1) 15.4
(2) 15.7
(2)
Market share 62 % 61 % 12 % 7 %

Note: Percentages above may not recalculate due to rounding.


(1)	According to the ~~August~~ Black Knight Mortgage Monitor Report as of ~~August 31, 2017~~June 30, 2021 and ~~2016~~2020 for U.S. first lien ~~mortgages.~~mortgage loans.


(2)	According to the July ~~2017~~2021 and 2020 Equifax National Consumer Credit Trends Report as of June 30, ~~2017~~2021 and ~~September 30, 2016~~2020 for U.S. second lien ~~mortgages.~~mortgage loans.

~~Our business is organized into two segments:~~

~~Software Solutions~~-~~offers software and hosting solutions that support loan servicing, loan origination and settlement services. The Software Solutions segment was formerly known as the Technology segment.~~

~~Data and Analytics~~-offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions.

We offer our solutions to a wide range of clients across the mortgage and consumer loan, real estate and capital ~~market~~markets verticals. The quality and breadth of our solutions contribute to the long-standing nature of our relationships with our clients, the majority of whom enter into long-term contracts across multiple products that are embedded in their ~~mission critical~~mission-critical workflow and decision ~~processes.~~processes, particularly in the Software Solutions segment. Given the contractual nature of our revenues and stickiness of our client relationships, our revenues are highly visible and recurring in nature. Due to our integrated suite of solutions and our scale, ~~in the mortgage market,~~ we are able to drive significant operating leverage, which we believe enables our clients to operate more efficiently while allowing us to generate strong margins and cash ~~flow.~~

~~Business Trends and Conditions~~

~~General~~

flows.

Our Markets

The U.S. mortgage loan market is large, and the loan ~~life cycle~~lifecycle is complex and consists of several stages. The mortgage loan ~~life cycle~~lifecycle includes origination, servicing and default. ~~Mortgages~~Mortgage loans are originated to finance home purchases or refinance existing ~~mortgages.~~mortgage loans. Once a mortgage loan is originated, it is serviced on a periodic basis by mortgage servicers, which may not be the lenders that originated the ~~mortgage.~~mortgage loan. Furthermore, if a mortgage ~~experiences~~loan goes into default, it triggers a set of multifaceted processes with an assortment of potential outcomes depending on a mix of variables.

Underlying the three major ~~components~~stages of the mortgage loan ~~life cycle~~lifecycle are the software, ~~and~~ data and analytics support behind each process, which ~~has~~have become ~~increasingly critical~~integral to industry ~~participants due to the complexity of regulatory requirements.~~participants. As the industry has grown in complexity, participants have responded by outsourcing to ~~large scale~~large-scale specialty providers, automating manual processes and seeking end-to-end solutions that support the processes required to manage the entire mortgage loan ~~life cycle.~~

lifecycle.

Business Trends and Conditions

COVID-19 Pandemic

COVID-19 and the U.S.’s response to the pandemic are significantly affecting the mortgage and real estate industries. The U.S. ~~mortgage market has seen significant change over~~Department of Housing and Urban Development ("HUD"), the past few years and is expected to continue to evolve going forward. Key regulatory actions arising from the recent financial crisis, such as the Dodd-Frank Wall Street Reform and Consumer Protection ActFederal Housing Administration ("~~Dodd-Frank Act"~~FHA”) and the ~~establishment of~~Federal Housing Finance Agency ("FHFA") announced a moratorium on mortgage loan foreclosures and evictions. The FHFA also announced mortgage loan forbearance programs for certain borrowers that allow mortgage loan payments to be suspended for up to 12 months. The federal moratoriums expired on July 31, 2021. However, the Consumer Financial Protection Bureau ~~("CFPB")~~has amended the federal mortgage servicing regulations to support the housing market’s smooth and orderly transition as federal foreclosure protections expire. The amendments establish temporary safeguards to help prevent a surge of foreclosures and ensure that borrowers have time before foreclosure to explore their options. In addition, many states have implemented additional guidance that extends their moratorium on mortgage loan foreclosures and evictions, and additional extensions of these moratoriums may be implemented in the future.

There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business or our operations.

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Black Knight Response and the Effect on Our Business

We continue to execute on our business continuity plans to address the challenges related to the ongoing COVID-19 pandemic. Since March 2020, substantially all of our employees have been working from home. We are following the requirements and protocols published by the U.S. Centers for Disease Control, the WHO and country, state and local governments. Our most important priorities are the health and safety of our employees and helping the communities where we work and live. A phased return to office plan has been created, which outlines when and how we will slowly begin to lift the actions put in place as part of our business continuity plans. The plan includes a phased return to office, social distancing , ~~impose new~~travel restrictions and ~~evolving standards~~additional safety precautions and is being enacted at each location when the risk to re-open has been reduced to an acceptable level. We continue to monitor the effects of the pandemic on our global workforce and have contingency plans in place to mitigate business risks and are prepared to adjust our phased return to office plan as necessary. We believe working from home has been successful and has not significantly affected our results of operations, financial condition, cash flows or control environment.

The extraordinary effects of the broad-based response to the COVID-19 pandemic have delayed the timing of certain revenues. Specifically, the mortgage loan foreclosure moratorium and forbearance plans have reduced the number of foreclosures being processed on our Bankruptcy^SM/Foreclosure^SM and Invoicing^SM software solutions for which revenue is recognized as transactions occur. Many of our clients continue to work from home while experiencing refinance origination volume increases as well as an elevated number of customer service calls. Our teams are focused on supporting our clients in this shifting landscape and stand ready to deliver our solutions.

Our clients have experienced the significant changes in how their customers want to, or are able to, interact with them throughout the pandemic and have realized these changes will likely persist beyond the pandemic. In reaction to these changes, our clients are prioritizing automated technology solutions that enable them to remotely engage with their customers and provide streamlined ways of performing the core functions of their businesses, all while maintaining regulatory compliance in an environment that is rapidly changing. We believe our solutions are well-positioned to help our clients address these needs.

We partner with many of the industry’s best lenders and servicers and believe it is our duty to serve in a leadership role as we manage through this crisis and beyond. From the start of the COVID-19 crisis, we have worked to provide leadership on behalf of our clients and to provide them with actionable intelligence, including our monthly Mortgage Monitor report and our McDash Flash Forbearance Tracker. We have also published in-depth white papers, held town hall meetings with our clients and have had frequent meetings with senior executives at our clients, government agencies and industry associations. We believe the in-depth data and insights we offer are essential for both mortgage market ~~participants. These regulatory changes~~participants and government entities as we work together to address the economic ramifications of the crisis.

Our investment and innovation in digital mortgage loan solutions have made it possible for a majority of the mortgage application, underwriting and closing processes to happen online and remotely. Our industry-leading servicing system and a mortgage loan contributory data set represents a majority of the U.S. market and is modeled to represent the entire U.S. market. Our robust analytics and seamless integration ties them all together and allows for real-time visibility into the majority of active mortgage loans and a holistic view of the homeownership lifecycle. The depth of our integrated software, data and analytics enables clients to see what the effects of the pandemic mean for their business and industry. Our clients use these robust solutions for modeling, forecasting and reserve setting, which is critical, especially in this current environment.

Market Trends

Market trends that have spurred lenders and servicers to seek ~~technology~~software, data and analytics solutions ~~that facilitate the meeting of compliance obligations in the face of a changing regulatory environment while remaining efficient and profitable.~~

~~Evolving regulation. Most U.S. mortgage market participants have become subject to increased regulatory oversight and regulatory requirements~~are as federal and state governments have enacted various new laws, rules and regulations. One example of such legislation is the Dodd-Frank Act, which contained broad changes for many sectors of the financial services and lending industries and established the CFPB, the federal regulatory agency responsible for regulating consumer financial protection within the United States. It is our experience that mortgage lenders have become more focused on minimizing the risk of non-compliance with these evolving regulations and are looking toward technologies and solutions that help them comply with the increased regulatory oversight and requirements.

~~Lenders increasingly focused on core operations.~~ As a result of greater regulatory scrutiny and the higher cost of doing business, we believe lenders have become more focused on their core operations and customers. We believe that lenders are increasingly shifting from in-house technologies to solutions with third-party providers who can provide better technology and services more efficiently. Lenders require these vendors to provide best-in-class technology and deep domain expertise and to assist them in maintaining regulatory compliance.

~~Growing~~follows:

Integral role of technology in the U.S. mortgage ~~industry.~~ ~~Banks~~loan industry. Over the past few years, the homebuyers’ processes have become more digital, and banks and other lenders and servicers have become increasingly focused on ~~technology~~ automation and workflow management to operate more efficiently and meet their regulatory ~~guidelines.~~requirements as well as using technology to enhance the consumer experience during the mortgage loan origination, closing and servicing processes. Since the start of the COVID-19 pandemic, our clients have become increasingly aware that digital solutions are integral to their ability to stay connected with their customer base in times when face-to-face interactions are not possible. We believe ~~that vendors~~technology providers must be able to support the complexity and dynamic nature of the market, display extensive industry knowledge and possess the financial resources to make the necessary investments in technology and software to support ~~lenders.~~lenders and servicers. This includes an enhanced digital experience along with the application of artificial intelligence, robotic process automation and adaptive learning.

~~Increased~~

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Heightened demand for enhanced transparency and analytic insight. As U.S. mortgage loan market participants work to minimize the risk in lending, servicing and capital markets, they rely on the integration of data and analytics with ~~technologies~~solutions that enhance the ~~decision making~~decision-making process. These industry participants rely on large comprehensive ~~third party~~third-party databases coupled with enhanced analytics to achieve these goals.

The pandemic is putting pressure on the U.S. economy, affecting millions of American jobs and creating a high-level of uncertainty in the volume of work that our clients are facing with possible delinquent mortgage loans. Mortgage ~~Originations~~

~~Our various businesses~~loan market participants are ~~affected differently by~~eager for timely data and insights to help them plan and react to the changing environment.

Regulatory changes and oversight. Most U.S. mortgage loan market participants are subject to a high level of regulatory oversight and regulatory requirements as federal and state governments have enacted various new laws, rules and regulations. It is our experience that mortgage ~~originations, including refinancing transactions.~~ lenders and servicers have become more focused on minimizing the risk of non-compliance with regulatory requirements and are looking toward solutions that assist them in complying with their regulatory requirements. We expect this trend to continue as additional governmental programs and regulations have been recently enacted to address the economic concerns resulting from the pandemic, and our clients have had to adapt their systems and processes in record time to the shifting landscape. In addition, our clients and our clients’ regulators have elevated their focus on privacy and data security while many of our clients’ employees are working from home and in light of an increased level of cybersecurity incidents. We expect the industry focus on privacy and data security to continue to increase.

Our ~~mortgage~~Business Segments

Our business is organized into two segments: Software Solutions and Data and Analytics.

Software Solutions

Our Software Solutions segment offers software and hosting solutions that primarily support loan servicing, loan origination, settlement services and secondary marketing activities. The following table summarizes our software solutions revenues (in millions):


	Three months ended				% of segment				Six months ended				% of segment
	June 30,				revenues				June 30,				revenues
	2021		2020		2021		2020		2021		2020		2021		2020
Servicing software solutions	$	207.8	$	184.3	68	%	75	%	$	410.5	$	380.0	68	%	78	%
Origination software solutions		97.6		60.8	32	%	25	%		190.7		109.8	32	%	22	%
Software Solutions	$	305.4	$	245.1	100	%	100	%	$	601.2	$	489.8	100	%	100	%

Our servicing software solutions primarily include our core servicing software solution ~~is minimally affected by varying levels of~~that automates loan servicing, including loan setup and ongoing processing, customer service, accounting, reporting to the secondary mortgage ~~originations because it~~market and investors and web-based workflow information systems. Our servicing software solutions primarily ~~earns~~generate revenues based on the ~~total~~ number of mortgage loans it processes, which tend to stay more constant than the market for originations. Our origination software and some of our data businesses may be affected by the volume of real estate transactions and mortgage originations, but many of our client contracts for origination software solutions contain minimum charges.

~~Economic Conditions~~

Our various businesses may also be affected by general economic conditions. For example, in the event that a difficult economy or other factors lead to a significant decline in levels of home ownership and a significant reduction in the number of mortgageactive loans outstanding ~~and we are not able to counter the effect of those events with increased market share or higher fees, it could have a material adverse effect~~ on our ~~mortgage processing revenues. In contrast,~~system, which has been very stable; however, we ~~believe that a weaker economy tends~~have some exposure to ~~increase the volume of consumer mortgage defaults,~~foreclosure and bankruptcy loan volumes, which can increase the revenues in our specialty servicing software business that is used to service residential mortgage loans in default. Also, interest rates tend to decline in a weaker economy driving higher than normal refinance transactions that provide potential volume increases to our origination software offerings, most specifically the Exchange platform.

~~Distribution of FNF's Ownership Interest~~fluctuate based on economic cycles and ~~Related Transactions~~

On December 7, 2016, we announced that FNF's Board of Directors approved a tax-free plan (the "Distribution Plan") whereby FNF intended to distribute all 83.3 million shares of Black Knight common stock that it currently owned to FNF Group shareholders.

On September 29, 2017, the transactions contemplated by the Distribution Plan were consummated (the "Distribution") as described in Note 1 of the Notes to Condensed Consolidated Financial Statements (Unaudited).

Following the closing of the transactions, shares of Black Knight, Inc. common stock are listed on the New York Stock Exchange under the trading symbol “BKI”, and began trading on October 2, 2017. Under the organizational documents of Black Knight, Inc., the rights of the holders of shares of Black Knight, Inc. common stock are substantially the same as the rights of former holders of Black Knight Financial Services, Inc. Class A common stock.

Subsequent to the Distribution and related transactions, Black Knight Financial Services, LLC ("BKFS LLC") is an indirect wholly-owned subsidiary of Black Knight, Inc. and there are no noncontrolling interests in BKFS LLC. In addition, the Up-C structure is no longer in place. As a result, our consolidated statements of operations will reflect a higher effective tax rate more closely aligned with other C-corporations in the U.S. and will no longer reflect net earnings attributable to noncontrolling interests. Had the Distribution taken place on January 1, 2017, our effective tax rate for the nine months ended September 30, 2017 would have been 41.1%, including certain discrete items recorded during the period.

~~Realignment of Property Insight~~

As a result of the ~~realignment,~~effects of the broad-based response to the COVID-19 pandemic, we have seen lower foreclosure-related transactional revenues due to the mortgage loan foreclosure moratorium and expect this trend to continue due to the mortgage loan forbearance plans offered as part of the CARES Act. As of July 27, 2021, Black ~~Knight no longer recognizes~~Knight’s McDash Flash Forbearance Tracker estimated 1.9 million homeowners, or 3.6% of all U.S. mortgage loans, were in COVID-19 mortgage loan forbearance plans.

Our origination software solutions primarily include our solutions that automate and facilitate the origination of mortgage loans and provide an interconnected network allowing the various parties and systems associated with lending transactions to exchange data quickly and efficiently. Our exposure to origination volumes is limited as our loan origination system revenues ~~or expenses~~are based on closed loan volumes subject to minimum base software fees that are contractually obligated, and our secondary marketing technologies’ revenues are primarily subscription-based. Some of our origination software solutions are exposed to variances in origination volumes, primarily related to ~~title plant posting and maintenance, but charges FNF a license fee for use~~refinance volumes due to the nature of the ~~technology~~services provided. Given the continued low level of mortgage loan interest rates, we have seen elevated volumes related to ~~access~~refinance originations. However, we expect to see lower volumes related to refinance originations during the remainder of 2021 due to the record volumes in the prior year periods. We have also seen improvement in purchase origination volumes primarily due to the current interest rate environment and ~~maintain~~expect this trend to continue. Our origination software solutions that are more sensitive to origination volumes were approximately 5% of our consolidated revenues for the ~~title plant data. Had~~three months ended June 30, 2021.

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Data and Analytics

Our Data and Analytics segment offers data and analytics solutions to the ~~realignment taken place~~mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, behavioral models, a multiple listing service software solution and other data solutions. Our data and analytics business is predominantly based on ~~January 1, 2016, Black Knight~~longer-term strategic data licenses, other data licenses and subscription-based revenues. For the three and six months ended June 30, 2021, our data and analytics revenues were 15% of our consolidated revenues and ~~expenses~~16% of our consolidated revenues for ~~2016 would have been lower by~~the three and six months ended June 30, 2020. Our data and analytics solutions that are more sensitive to fluctuations in home buying activity and origination volumes were approximately ~~$30 million with essentially no effect~~4% of our consolidated revenues for the three months ended June 30, 2021 and relate to ~~operating income. This transaction did not result in any gain or loss.~~

~~Share Repurchase Program~~

On January 31, 2017, the Black Knight Financial Services, Inc. board of directors approved a three-year share repurchase program, effective February 3, 2017, authorizing us to repurchase up to 10 million shares of Black Knight Financial Services, Inc. Class A common stock. The repurchase program authorized us to purchase Black Knight Class A common stock from time to time through February 2, 2020, through open market purchases, negotiated transactions or other means, in accordance with applicable securities lawsservices where we provide data necessary for title insurance and other restrictions. There were no repurchases during the third quarter of 2017. During the nine months ended September 30, 2017, we repurchased approximately 1.2 million shares of our Class A common stock for $46.6 million, or an average of $39.18 per share.

In connection with the Distribution, the Black Knight board of directors approved a share repurchase program authorizing the repurchase of shares of Black Knight, Inc. common stock consistent with the previous Black Knight Financial Services, Inc. share repurchase program. The timing and volume of share repurchases will be determined by our management based on ongoing assessments of the capital needs of the business, the market price of Black Knight common stock and general market conditions. As of September 30, 2017, we had approximately 8.8 million shares remaining under our share repurchase authorization.

~~Term B Loan Repricing~~

On February 27, 2017, Black Knight InfoServ, LLC ("BKIS") entered into a First Amendment to Credit and Guaranty Agreement (the "Credit Agreement First Amendment") with JPMorgan Chase Bank, N.A. as administrative agent. Pursuant to the Credit Agreement First Amendment, the Term B Loan, as described in Note 4 to the Notes to Condensed Consolidated Financial Statements (Unaudited), bears interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of 125 basis points, or (ii) the Eurodollar rate plus a margin of 225 basis points, subject to a Eurodollar rate floor of 75 basis points. The Term B Loan matures on May 27, 2022. In addition, the Credit Agreement First Amendment permitted the Distribution.

~~Debt Refinancing and Senior Notes Redemption~~

On April 26, 2017, BKIS entered into a Second Amendment to Credit and Guaranty Agreement (the “Credit Agreement Second Amendment”) with the JPMorgan Chase Bank, N.A. as administrative agent, the guarantors party thereto, the other agents party thereto and the lenders party thereto. The Credit Agreement Second Amendment increases (i) the aggregate principal amount of the Term A Loan, as described in Note 4 to the Notes to Condensed Consolidated Financial Statements (Unaudited), by $300.0 million to $1,030.0 million and (ii) the aggregate principal amount of commitments under the Revolving Credit Facility, as described in Note 4 to the Notes to Condensed Consolidated Financial Statements (Unaudited), by $100.0 million to $500.0 million. The Credit Agreement Second Amendment also reduces the pricing applicable to the loans under the Term A Loan and Revolving Credit Facility by 25 basis points and reduces the unused commitment fee applicable to the Revolving Credit Facility by 5 basis points. The Term A Loan and Revolving Credit Facility bear interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of between 25 and 100 basis points depending on the total leverage ratio of BKFS LLC and its restricted subsidiaries on a consolidated basis (the “Consolidated Leverage Ratio”) and (ii) the Eurodollar rate plus a margin of between 125 and 200 basis points depending on the Consolidated Leverage Ratio, subject to a Eurodollar rate floor of zero basis points. In addition, BKIS will pay an unused commitment fee of between 15 and 30 basis points on the undrawn commitments under the Revolving Credit Facility, also depending on the Consolidated Leverage Ratio. Pursuant to the terms of the Credit Agreement Second Amendment, the Term A Loan and the Revolving Credit Facility mature on February 25, 2022.

On April 26, 2017, we redeemed the outstanding Senior Notes, as described in Note 4 to the Notes to Condensed Consolidated Financial Statements (Unaudited), at a price of 104.825% (the "Redemption") and paid $0.7 million in accrued interest.

~~THL Secondary Offering~~

On May 8, 2017, Black Knight announced the pricing of an underwritten secondary offering of 5,000,000 shares of its Class A common stock (the “Offering”) by affiliates of Thomas H. Lee Partners, L.P. (“THL”) pursuant to a shelf registration statement on Form S-3 filed with the SEC on May 8, 2017. Affiliates of THL in the Offering granted the underwriter an option to purchase up to 750,000 additional shares (the “Overallotment Option"). The Offering closed on May 12, 2017, and the full exercise of the Overallotment Option closed on May 18, 2017. The Company did not sell any shares and did not receive any proceeds related to the Offering or Overallotment Option. See Note 3 to the Notes to Condensed Consolidated Financial Statements (Unaudited) for the change in ownership percentages related to these transactions.

settlement service activities.

Results of Operations

Key Performance Metrics

~~We use Adjusted~~

Revenues, ~~Adjusted~~ EBITDA and ~~Adjusted~~ EBITDA Margin for financial and operational decision making and as a means to evaluate period-to-period comparisons. Adjusted Revenues, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures, which we believe are useful for investors in evaluating our overall financial performances. Black Knight believes these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making, including determining a portion of executive compensation.

~~Adjusted Revenues and Adjusted EBITDA~~margin for the Software Solutions and Data and Analytics segments are presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. These measures are reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, these measures are excluded from the definition of non-GAAP financial measures under the ~~Securities and Exchange Commission's~~SEC’s Regulation G and Item 10(e) of Regulation S-K.

~~Adjusted Revenues~~ ~~- We define Adjusted Revenues as Revenues adjusted to include the revenues that were not recorded by Black Knight during~~

Consolidated Results of Operations

The following table presents certain financial data for the periods ~~presented due to the deferred revenue purchase accounting adjustment recorded in accordance with GAAP. These adjustments are reflected in Corporate and Other.~~indicated (in millions, except per share data):


	Three months ended June 30,						Six months ended June 30,
	2021			2020			2021			2020
Revenues	$	361.3		$	293.1		$	711.0		$	583.8
Expenses:
Operating expenses		197.0			155.5			383.2			317.9
Depreciation and amortization		90.4			58.6			178.2			116.3
Transition and integration costs		4.3			2.5			12.2			4.9
Total expenses		291.7			216.6			573.6			439.1
Operating income		69.6			76.5			137.4			144.7
Operating margin		19.3	%		26.1	%		19.3	%		24.8	%
Interest expense, net		(20.9)			(13.0)			(41.2)			(27.7)
Other (expense) income, net		(1.0)			18.8			(4.2)			18.0
Earnings before income taxes and equity in (losses) earnings of unconsolidated affiliates		47.7			82.3			92.0			135.0
Income tax expense		10.5			17.2			15.7			25.4
Earnings before equity in (losses) earnings of unconsolidated affiliates		37.2			65.1			76.3			109.6
Equity in (losses) earnings of unconsolidated affiliates, net of tax		(5.0)			(26.0)			1.4			(20.4)
Net earnings		32.2			39.1			77.7			89.2
Net losses attributable to redeemable noncontrolling interests		7.5			—			16.1			—
Net earnings attributable to Black Knight	$	39.7		$	39.1		$	93.8		$	89.2

Net earnings per share attributable to Black Knight common shareholders:
Diluted	$	0.25		$	0.26		$	0.60		$	0.60
Weighted average shares of common stock outstanding:								��
Diluted		155.7			150.0			155.8			149.3

~~Adjusted EBITDA~~ ~~- We define Adjusted EBITDA as Net earnings, with adjustments to reflect the addition or elimination~~

Table of ~~certain income statement items including, but not limited to:~~


◦	~~Depreciation and amortization;~~


◦	~~Interest expense;~~


◦	~~Income tax expense;~~


◦	~~Other expense, net;~~


◦	~~Loss (gain) from discontinued operations, net of tax;~~


◦	~~deferred revenue purchase accounting adjustment recorded in accordance with GAAP;~~


◦	~~equity-based compensation, including related payroll taxes;~~


◦	~~costs associated with debt and/or equity offerings, including the Distribution;~~


◦	~~spin-off related transition costs; and~~


◦	~~acquisition-related costs.~~

~~These adjustments are reflected in Corporate and Other.~~Contents

~~Adjusted EBITDA Margin~~ ~~- Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by Adjusted Revenues.~~

Consolidated Results of Operations
The following table presents certain financial data for the periods indicated (in millions):
Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues $ 263.8
$ 267.1
$ 784.1
$ 764.5
Expenses:
Operating expenses 140.7
152.2
428.2
433.4
Depreciation and amortization 51.3
56.8
154.2
154.2
Transition and integration costs 4.0
1.1
8.5
2.2
Total expenses 196.0
210.1
590.9
589.8
Operating income 67.8
57.0
193.2
174.7
Operating margin 25.7 % 21.3 % 24.6 % 22.9 %
Interest expense (14.1 ) (16.9 ) (44.8 ) (50.6 )
Other expense, net (0.6 ) (1.4 ) (17.1 ) (6.2 )
Earnings before income taxes 53.1
38.7
131.3
117.9
Income tax expense 9.2
6.3
24.3
19.2
Net earnings $ 43.9
$ 32.4
$ 107.0
$ 98.7

Key Performance Metrics (Non-GAAP)
Adjusted Revenues $ 264.8
$ 268.6
$ 787.7
$ 770.3
Adjusted EBITDA $ 128.2
$ 119.8
$ 373.9
$ 346.4
Adjusted EBITDA Margin 48.4 % 44.6 % 47.5 % 45.0 %

~~A reconciliation of the above non-GAAP financial measures to the most directly comparable GAAP financial measures is presented in the tables below (in millions):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues $ 263.8
$ 267.1
$ 784.1
$ 764.5
Deferred revenue purchase accounting adjustment 1.0
1.5
3.6
5.8
Adjusted Revenues $ 264.8
$ 268.6
$ 787.7
$ 770.3

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Net earnings $ 43.9
$ 32.4
$ 107.0
$ 98.7
Depreciation and amortization 51.3
56.8
154.2
154.2
Interest expense 14.1
16.9
44.8
50.6
Income tax expense 9.2
6.3
24.3
19.2
Other expense, net 0.6
1.4
17.1
6.2
EBITDA 119.1
113.8
347.4
328.9
Deferred revenue purchase accounting adjustment 1.0
1.5
3.6
5.8
Equity-based compensation 4.1
3.4
14.4
9.5
Debt and/or equity offering expenses 2.4
0.5
5.8
0.6
Spin-off related transition costs 1.6
—
2.7
—
Acquisition-related costs —
0.6
—
1.6
Adjusted EBITDA $ 128.2
$ 119.8
$ 373.9
$ 346.4
Adjusted EBITDA Margin 48.4 % 44.6 % 47.5 % 45.0 %

Segment Financial Results

Revenues

Consolidated Revenues were $263.8 million in the three months ended September 30, 2017 compared to $267.1 million in the 2016 period, a decrease of $3.3 million, or 1%. Consolidated Revenues were $784.1 million in the nine months ended September 30, 2017 compared to $764.5 million in the 2016 period, an increase of $19.6 million, or 3%. The change in revenues is discussed further at the segment level below.

The following table sets forth revenues by segment for the periods presented (in millions):


	Three months ended								Six months ended
	June 30,				Variance				June 30,				Variance
	2021		2020		$		%		2021		2020			$	%
Software Solutions	$	305.4	$	245.1	$	60.3	25	%	$	601.2	$	489.8	$	111.4	23	%
Data and Analytics		55.9		48.2		7.7	16	%		109.8		94.3		15.5	16	%
Corporate and Other⁽¹⁾		—		(0.2)		0.2	NM			—		(0.3)		0.3	NM
Total	$	361.3	$	293.1	$	68.2	23	%	$	711.0	$	583.8	$	127.2	22	%

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Software Solutions $ 224.5
$ 221.0
$ 665.6
$ 636.6
Data and Analytics 40.3
47.6
122.1
133.7
Corporate and Other (1) (1.0 ) (1.5 ) (3.6 ) (5.8 )
Total $ 263.8
$ 267.1
$ 784.1
$ 764.5


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

Software Solutions

Revenues were ~~$224.5~~$305.4 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$221.0~~$245.1 million in the ~~2016~~2020 period, an increase of ~~$3.5~~$60.3 million, or 2%25%. Our servicing software ~~business grew 6%~~solutions revenues increased 13%, or ~~$11.1~~$23.5 million, primarily driven by increased revenues from new and existing clients on MSP^®, including higher ~~loan volumes on our core servicing software solution, which increased 3.1% to 33.4 million average loans, and price increases, partially offset by lower specialty servicing volumes.~~usage-based revenues. Our origination software ~~business declined 17%~~solutions revenues increased 61%, or ~~$7.6~~$36.8 million, primarily driven by ~~lower Exchange volumes as a result~~revenues of $37.3 million related to the ~~43% decline~~Optimal Blue acquired business and revenues from new and existing clients, partially offset by higher software license revenues in ~~refinancing originations as reported by~~ the ~~Mortgage Bankers Association ("MBA").~~

prior year quarter.

Revenues were ~~$665.6~~$601.2 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$636.6~~$489.8 million in the ~~2016~~2020 period, an increase of ~~$29.0~~$111.4 million, or 5%23%. Our servicing software ~~business grew~~solutions revenues increased 8%, or ~~$40.6~~$30.5 million, primarily driven by increased revenues from new and existing clients on MSP^®, including higher ~~loan volumes on our core servicing software solution, which increased 2.9% to 32.8 million average loans, price increases~~usage-based revenues, and higher ~~transactional volumes.~~revenue per loan, partially offset by approximately $11 million of lower foreclosure-related revenues due to the foreclosure moratorium as part of the CARES Act. Our origination software ~~business declined 9%~~solutions revenues increased 74%, or ~~$11.6~~$80.9 million, primarily driven by ~~lower Exchange~~revenues of $72.2 million related to the Optimal Blue acquired business, increased revenues from new and existing clients, higher professional services and higher origination volumes, ~~as a result of a decline in refinancing originations, consulting revenues and client contract termination fees,~~ partially offset by higher software license revenues in the ~~eLynx acquisition.~~

prior year period and attrition.

Data and Analytics

Revenues were ~~$40.3~~$55.9 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$47.6~~$48.2 million in the ~~2016~~2020 period, ~~a decrease~~an increase of ~~$7.3~~$7.7 million, or ~~15%~~16%. The ~~decrease~~increase was primarily driven by ~~the effect of the Property Insight realignment, partially offset by~~

~~growth in our property data~~strong sales execution across nearly all business lines, revenues from an acquired business and ~~multiple listing service businesses. Had the realignment taken place on January 1, 2016, Black Knight revenues for the three months ended September 30, 2016 would have been lower by $8.3 million.~~

higher origination volumes.

Revenues were ~~$122.1~~$109.8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$133.7~~$94.3 million in the ~~2016~~2020 period, ~~a decrease~~an increase of ~~$11.6~~$15.5 million, or 9%16%. The ~~decrease~~increase was primarily driven by ~~the effect of the Property Insight realignment, partially offset by incremental~~strong sales execution across nearly all business lines, revenues from ~~the Motivity acquisition~~acquired businesses and ~~growth in our property data~~higher origination volumes.

EBITDA and ~~multiple listing service businesses. Had the realignment taken place on January 1, 2016, Black Knight revenues~~EBITDA margin

The following tables set forth EBITDA (in millions) and EBITDA margin by segment for the ~~nine months ended September 30, 2016 would have been lower by $23.3 million.~~periods presented:


	Three months ended								Six months ended
	June 30,				Variance				June 30,				Variance
	2021		2020		$		%		2021		2020		$		%
Software Solutions	$	174.8	$	146.2	$	28.6	20	%	$	345.7	$	285.6	$	60.1	21	%
Data and Analytics		20.8		16.1		4.7	29	%		40.5		30.7		9.8	32	%

~~Operating Expenses~~

~~Consolidated Operating expenses were $140.7~~

Table of Contents


	Three months ended					Six months ended
	June 30,				Variance		June 30,				Variance
	2021		2020		Basis points		2021		2020		Basis points
Software Solutions	57.2	%	59.6	%	(240)		57.5	%	58.3	%	(80)
Data and Analytics	37.2	%	33.4	%	380		36.9	%	32.6	%	430

Software Solutions

EBITDA was $174.8 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$152.2~~$146.2 million in the ~~2016~~2020 period, an increase of $28.6 million, or 20%, with an EBITDA margin of 57.2%, a decrease of ~~$11.5 million, or 8%. Consolidated Operating expenses were $428.2~~240 basis points from the 2020 period. The EBITDA margin decrease was primarily driven by revenue mix and increased investments in innovation and client support.

EBITDA was $345.7 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$433.4~~$285.6 million in the ~~2016~~2020 period, an increase of $60.1 million, or 21%, with an EBITDA margin of 57.5%, a decrease of ~~$5.2~~80 basis points from the 2020 period. The EBITDA margin decrease was driven by revenue mix and increased investments in innovation and client support.

Data and Analytics

EBITDA was $20.8 million in the three months ended June 30, 2021 compared to $16.1 million in the 2020 period, an increase of $4.7 million, or ~~1%.~~29%, with an EBITDA margin of 37.2%, an increase of 380 basis points from the 2020 period. The ~~changes~~EBITDA margin increase was primarily driven by incremental margins on revenue growth.

EBITDA was $40.5 million in ~~operating expenses are discussed further at~~ the ~~segment level below.~~

six months ended June 30, 2021 compared to $30.7 million in the 2020 period, an increase of $9.8 million, or 32%, with an EBITDA margin of 36.9%, an increase of 430 basis points from the 2020 period. The EBITDA margin increase was primarily driven by incremental margins on revenue growth.

Consolidated Financial Results

Operating Expenses

The following table sets forth operating expenses by segment for the periods presented (in millions):


	Three months ended								Six months ended
	June 30,				Variance				June 30,				Variance
	2021		2020		$		%		2021		2020		$		%
Software Solutions	$	130.6	$	98.9	$	31.7	32	%	$	255.5	$	204.2	$	51.3	25	%
Data and Analytics		35.1		32.1		3.0	9	%		69.3		63.6		5.7	9	%
Corporate and Other⁽¹⁾		31.3		24.5		6.8	28	%		58.4		50.1		8.3	17	%
Total	$	197.0	$	155.5	$	41.5	27	%	$	383.2	$	317.9	$	65.3	21	%

(1)

Operating expenses for Corporate and Other include equity-based compensation, including certain related payroll taxes, of $13.2 million and $9.5 million for the three months ended June 30, 2021 and 2020, respectively, and $23.7 million and $21.2 million for the six months ended June 30, 2021 and 2020, respectively.

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Software Solutions $ 93.0
$ 95.9
$ 277.7
$ 273.2
Data and Analytics 32.7
39.2
99.2
111.7
Corporate and Other 15.0
17.1
51.3
48.5
Total $ 140.7
$ 152.2
$ 428.2
$ 433.4

~~Software Solutions~~

The increase in Operating expenses ~~were $93.0 million~~ in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$95.9 million in~~ the ~~2016~~2020 period ~~a decrease of $2.9 million, or 3%. The decrease was primarily due to lower net personnel costs.~~

Operating expenses were $277.7 million in the nine months ended September 30, 2017 compared to $273.2 million in the 2016 period, an increase of $4.5 million, or 2%. The increase was primarily due to the eLynx acquisition.

~~Data and Analytics~~

~~Operating expenses were $32.7 million in the three months ended September 30, 2017 compared to $39.2 million in the 2016 period, a decrease of $6.5 million, or 17%. The decrease~~ was primarily driven by the ~~Property Insight realignment, partially offset by the Motivity acquisition and the~~ effect of prior year acquisitions, higher net personnel expense, including higher medical costs, ~~associated with the data hub.~~

and higher incentive bonus expense, including equity-based compensation.

The increase in Operating expenses ~~were $99.2 million~~ in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$111.7 million in~~ the ~~2016~~2020 period ~~a decrease of $12.5 million, or 11%. The decrease~~ was primarily driven by the ~~Property Insight realignment, partially offset by the Motivity acquisition and the~~ effect of prior year acquisitions, higher net personnel expense, including higher medical costs, ~~associated with the data hub.~~

~~Corporate and Other~~

Operating expenses were $15.0 million in the three months ended September 30, 2017 compared to $17.1 million in the 2016 period, a decrease of $2.1 million, or 12%. The decrease was primarily driven by lowerhigher incentive bonus ~~accruals, partially offset by higher equity-based compensation.~~

Operating expenses were $51.3 million in the nine months ended September 30, 2017 compared to $48.5 million in the 2016 period, an increase of $2.8 million, or 6%. The increase was primarily driven by higherexpense, including equity-based compensation, and ~~professional fees,~~software subscription and maintenance costs, partially offset by lower ~~incentive bonus accruals.~~travel related costs.

Table of Contents

Depreciation and Amortization

Consolidated Depreciation and amortization was $51.3 million in the three months ended September 30, 2017 compared to $56.8 million in the 2016 period, a decrease of $5.5 million, or 10%. Consolidated Depreciation and amortization was $154.2 million in the nine months ended September 30, 2017 and 2016. The changes in depreciation and amortization are discussed further at the segment level below.

The following table sets forth depreciation and amortization by segment for the periods presented (in millions):


	Three months ended								Six months ended
	June 30,				Variance				June 30,				Variance
	2021		2020		$		%		2021		2020		$		%
Software Solutions	$	33.2	$	30.2	$	3.0	10	%	$	64.4	$	60.5	$	3.9	6	%
Data and Analytics		3.7		3.8		(0.1)	(3)	%		7.5		7.8		(0.3)	(4)	%
Corporate and Other⁽¹⁾		53.5		24.6		28.9	117	%		106.3		48.0		58.3	121	%
Total	$	90.4	$	58.6	$	31.8	54	%	$	178.2	$	116.3	$	61.9	53	%

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Software Solutions $ 24.3
$ 29.0
$ 74.9
$ 80.2
Data and Analytics 3.7
2.1
11.0
6.5
Corporate and Other (1) 23.3
25.7
68.3
67.5
Total $ 51.3
$ 56.8
$ 154.2
$ 154.2


(1)	Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

~~Software Solutions~~

The increase in Depreciation and amortization ~~was $24.3~~in the three months ended June 30, 2021 compared to the 2020 period is primarily related to the amortization of acquired intangible assets from acquisitions.

The increase in Depreciation and amortization in the six months ended June 30, 2021 compared to the 2020 period is primarily related to the amortization of acquired intangible assets from acquisitions.

Transition and Integration Costs

Transition and integration costs were $4.3 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$29.0~~$2.5 million in the ~~2016 period, a decrease of $4.7 million. The decrease is primarily due to lower deferred contract~~2020 period. Transition and integration costs ~~amortization. The 2016 period includes accelerated amortization of $2.9 million related to certain deferred implementation costs.~~

~~Depreciation and amortization was $74.9~~were $12.2 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$80.2~~$4.9 million in the ~~2016~~2020 period. Transition and integration costs in the 2021 period ~~a decrease~~primarily consisted of ~~$5.3 million. The decrease is~~costs associated with acquisitions, including costs pursuant to purchase agreements. Transition and integration costs in the 2020 period primarily ~~due~~consisted of costs associated with acquisitions, including costs pursuant to ~~lower deferred contract costs amortization~~purchase agreements, and ~~software amortization.~~

~~Data and Analytics~~

~~Depreciation and amortization~~expense reduction initiatives.

Interest Expense, Net

Interest expense, net was ~~$3.7~~$20.9 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$2.1~~$13.0 million in the ~~2016~~2020 period, an increase of ~~$1.6 million. The increase is primarily due to increased depreciation from both computer hardware and new software development.~~

Depreciation and amortization was $11.0 million in the nine months ended September 30, 2017 compared to $6.5 million in the 2016 period, an increase of $4.5 million. The increase is primarily due to increased depreciation from both computer hardware and new software development.

~~Corporate and Other~~

Depreciation and amortization was $23.3 million in the three months ended September 30, 2017 compared to $25.7 million in the 2016 period, a decrease of $2.4 million. The decrease is primarily due to depreciation and amortization related to customer relationship assets.

~~Depreciation and amortization was $68.3 million in the nine months ended September 30, 2017 compared to $67.5 million in the 2016 period, an increase of $0.8 million.~~

~~Transition and Integration Costs~~

Consolidated Transition and integration costs were $4.0 million in the three months ended September 30, 2017 compared to $1.1 million in the 2016 period, an increase of $2.9 million. Consolidated Transition and integration costs were $8.5 million in the nine months ended September 30, 2017 compared to $2.2 million in the 2016 period, an increase of $6.3 million. Transition and integration costs for the 2017 period primarily represents legal and professional fees related to the Distribution and transition related costs as we transfer certain corporate functions from FNF. Transition and integration costs for the 2016 period primarily represent costs associated with the eLynx and Motivity acquisitions.

~~Operating Income (Loss)~~

~~Consolidated Operating income was $67.8 million in the three months ended September 30, 2017 compared to $57.0 million in the 2016 period, an increase of $10.8~~$7.9 million, or 19%. Consolidated Operating income was $193.2 million in the nine months ended September 30, 2017 compared to $174.7 million in the 2016 period, an increase of $18.5 million, or 11%. The changes in operating income (loss) are discussed further at the segment level below.

~~The following table sets forth operating income (loss) by segment for the periods presented (in millions):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Software Solutions $ 107.2
$ 96.1
$ 313.0
$ 283.2
Data and Analytics 3.9
6.3
11.9
15.5
Corporate and Other (43.3 ) (45.4 ) (131.7 ) (124.0 )
Total $ 67.8
$ 57.0
$ 193.2
$ 174.7

~~Software Solutions~~

Operating income was $107.2 million in the three months ended September 30, 2017 compared to $96.1 million in the 2016 period, an increase of $11.1 million, or 12%. Operating margin was 47.8% in the three months ended September 30, 2017 compared to 43.5% in 2016. The increase in operating income is primarily due to revenue growth within servicing software and lower depreciation and amortization.

Operating income was $313.0 million in the nine months ended September 30, 2017 compared to $283.2 million in the 2016 period, an increase of $29.8 million, or 11%. Operating margin was 47.0% in the nine months ended September 30, 2017 compared to 44.5% in 2016. The increase in operating income is primarily due to revenue growth within servicing software and lower depreciation and amortization.

~~Data and Analytics~~

Operating income was $3.9 million in the three months ended September 30, 2017 compared to $6.3 million in the 2016 period, a decrease of $2.4 million, or 38%. Operating margin was 9.7% in the three months ended September 30, 2017 compared to 13.2% in 2016. The decrease is primarily due to expenses associated with Motivity and the data hub and higher depreciation and amortization.

Operating income was $11.9 million in the nine months ended September 30, 2017 compared to $15.5 million in the 2016 period, a decrease of $3.6 million, or 23%. Operating margin was 9.7% in the nine months ended September 30, 2017 compared to 11.6% in 2016. The decrease is primarily due to the effect of expenses associated with Motivity and the data hub and higher depreciation and amortization.

~~Corporate and Other~~

Operating loss was $43.3 million in the three months ended September 30, 2017 compared to $45.4 million in the 2016 period, a decrease of $2.1 million, or 5%. The decrease was primarily driven by lower incentive bonus accruals, partially offset by legal and professional fees related to the Distribution.

~~Operating loss was $131.7 million in the nine months ended September 30, 2017 compared to $124.0 million in the 2016 period, an increase of $7.7 million, or 6%~~61%. The increase was primarily driven by our higher ~~equity-based compensation and legal and professional fees~~average outstanding debt balances primarily related to the ~~Distribution,~~Senior Notes. Interest expense, net was $41.2 million in the six months ended June 30, 2021 compared to $27.7 million in the 2020 period, an increase of $13.5 million, or 49%. The increase was primarily driven by our higher average outstanding debt balances primarily related to the Senior Notes, partially offset by lower ~~incentive bonus accruals.~~

~~Interest Expense~~

~~Consolidated Interest~~interest rates.

Other (Expense) Income, Net

Other expense, net was ~~$14.1~~$1.0 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$16.9~~Other income, net of $18.8 million in the 2016 period, a decrease of $2.8 million. Consolidated Interest expense was $44.8 million in the nine months ended September 30, 2017 compared to $50.6 million in the 2016 period, a decrease of $5.8 million. The decrease is driven by interest savings from the Term B Loan repricing and debt refinancing.

~~Other Expense, Net~~

~~Consolidated~~2020 period. Other expense, net was ~~$0.6~~$4.2 million in the six months ended June 30, 2021 compared to Other income, net of $18.0 million in the 2020 period. The 2021 amounts primarily related to the debt refinancing and legal fees. The 2020 amounts primarily related to a recognized gain of $18.5 million for the resolution of a legacy legal matter.

Income Tax Expense

Income tax expense was $10.5 million in the three months ended ~~September~~June 30, ~~2017~~2021 compared to ~~$1.4~~$17.2 million in the 2016 period. Consolidated Other expense, net was $17.1 million in the nine months ended September 30, 2017 compared to $6.2 million in the 2016 period. The 2017 amount primarily includes the Senior Notes redemption, Term A Loan and Revolving Credit Facility refinancing, resolution of a legacy legal matter and the Term B Loan repricing. The 2016 amount primarily includes legal fees associated with litigation matters.

~~Income Tax Expense~~

Consolidated Income tax expense was $9.2 million in the three months ended September 30, 2017 compared to $6.3 million in the 2016 period. Consolidated Income tax expense was $24.3 million in the nine months ended September 30, 2017 compared to $19.2 million in the 20162020 period. Our effective tax rate was ~~17.3%~~22.0% in 2021 compared to 20.9% in 2020. For the three months ended ~~September~~June 30, ~~2017 compared~~2021 and 2020, our effective tax rate includes the effect of tax benefits related to

~~16.3%~~ the vesting of restricted shares of the common stock and higher than expected research and experimentation tax credits. Refer to Note 10 — Income taxes in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2 for additional information.

Income tax expense was $15.7 million in the ~~2016~~six months ended June 30, 2021 compared to $25.4 million in the 2020 period. Our effective tax rate was ~~18.5%~~17.1% in 2021 compared to 18.8% in 2020. For the ~~nine~~six months ended ~~September~~June 30, ~~2017 compared to 16.3% in the 2016 period. The increase is related to certain discrete items recorded during the period. These rates are lower than the typical federal~~2021 and ~~state statutory~~2020, our effective tax rate ~~because~~includes

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the effect of ~~our noncontrolling interests prior~~tax benefits related to the ~~Distribution. As a result~~vesting of restricted shares of the ~~Distribution, we no longer have any noncontrolling interests.~~

~~Adjusted Revenues~~

~~Consolidated Adjusted Revenues were $264.8 million~~common stock and research and experimentation tax credits. Refer to Note 10 — Income taxes in ~~the three months ended September 30, 2017 compared to $268.6 million~~Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2 for additional information.

Equity in ~~the 2016 period, a decrease~~(Losses) Earnings of ~~$3.8 million, or 1%. The decrease reflects higher loan volumes and price increases on our core servicing software solution, that were offset by the effect~~Unconsolidated Affiliates, Net of Tax

Equity in (losses) earnings of unconsolidated affiliates, net of tax consists of the ~~Property Insight realignment and lower Exchange volumes as a result~~following (in millions):


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Equity in losses of unconsolidated affiliates, net of tax	$	(5.0)	$	(31.0)	$	(8.5)	$	(25.4)
Non-cash gain related to DNB's issuance of common stock, net of tax		—		—		9.9		—
Sale of an equity method investment, net of tax		—		5.0		—		5.0
Equity in (losses) earnings of unconsolidated affiliates, net of tax	$	(5.0)	$	(26.0)	$	1.4	$	(20.4)

Refer to Note 4 — Investments in Unconsolidated Affiliates in Item 1 of ~~the 43% decline in refinancing originations as reported~~Part I of this Quarterly Report on Form 10-Q, which is incorporated by ~~the MBA.~~

Consolidated Adjusted Revenues were $787.7 million in the nine months ended September 30, 2017 compared to $770.3 million in the 2016 period, an increase of $17.4 million, or 2%. The increase was driven by higher loan volumes on our core servicing software solution, price increases, higher transactional volumes and the eLynx and Motivity acquisitions, partially offset by the effect of the Property Insight realignment and lower Exchange volumes as a result of a decline in refinancing originations.

~~Adjusted EBITDA and Adjusted EBITDA Margin~~

Consolidated Adjusted EBITDA was $128.2 million in the three months ended September 30, 2017 compared to $119.8 million in the 2016 period, an increase of $8.4 million, or 7%. Consolidated Adjusted EBITDA was $373.9 million in the nine months ended September 30, 2017 compared to $346.4 million in the 2016 period, an increase of $27.5 million, or 8%. The changes in Adjusted EBITDA are discussed further at the segment level below.

Consolidated Adjusted EBITDA Margin was 48.4% in the three months ended September 30, 2017 compared to 44.6% in the 2016 period, an increase of 380 basis points. Consolidated Adjusted EBITDA Margin was 47.5% in the nine months ended September 30, 2017 compared to 45.0% in the 2016 period, an increase of 250 basis points. The changes in Adjusted EBITDA Margin are discussed further at the segment level below.

~~The following tables set forth Adjusted EBITDA (in millions) and Adjusted EBITDA Margin by segment~~reference into this Part I Item 2 for ~~the periods presented:~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Software Solutions $ 131.5
$ 125.1
$ 387.9
$ 363.4
Data and Analytics 7.6
8.4
22.9
22.0
Corporate and Other (10.9 ) (13.7 ) (36.9 ) (39.0 )
Total $ 128.2
$ 119.8
$ 373.9
$ 346.4

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Software Solutions 58.6 % 56.6 % 58.3 % 57.1 %
Data and Analytics 18.9 % 17.6 % 18.8 % 16.5 %
Corporate and Other N/A
N/A
N/A
N/A
Total 48.4 % 44.6 % 47.5 % 45.0 %

~~Software Solutions~~

Adjusted EBITDA was $131.5 million in the three months ended September 30, 2017 compared to $125.1 million in the 2016 period, an increase of $6.4 million, or 5%, with an Adjusted EBITDA Margin of 58.6%, an increase of 200 basis points from the 2016 period. The increase was primarily driven by incremental margins on revenue growth.

Adjusted EBITDA was $387.9 million in the nine months ended September 30, 2017 compared to $363.4 million in the 2016 period, an increase of $24.5 million, or 7%, with an Adjusted EBITDA Margin of 58.3%, an increase of 120 basis points from the 2016 period. The increase was primarily driven by incremental margins on revenue growth.

~~Data and Analytics~~

Adjusted EBITDA was $7.6 million in the three months ended September 30, 2017 compared to $8.4 million in the 2016 period, a decrease of $0.8 million, or 10%, with an Adjusted EBITDA Margin of 18.9%, compared to 17.6% in the prior year period, an increase of 130 basis points from the 2016 period. The Adjusted EBITDA Margin increase was primarily due to the Property Insight realignment, partially offset by costs associated with the data hub.

Adjusted EBITDA was $22.9 million in the nine months ended September 30, 2017 compared to $22.0 million in the 2016 period, an increase of $0.9 million, or 4%, with an Adjusted EBITDA Margin of 18.8%, compared to 16.5% in the 2016 period, an increase of 230 basis points from the 2016 period. The Adjusted EBITDA Margin increase was primarily due to the effect of the Property Insight realignment and incremental revenue growth, partially offset by costs associated with Motivity and the data hub.

additional information.

Liquidity and Capital Resources

Cash Requirements

Our primary sources of liquidity are our existing cash balances, cash flows from operations and borrowings on our ~~Revolving Credit Facility.~~

revolving credit facility. On March 10, 2021, we entered into an amended and restated credit agreement that extended the maturity of the facilities until 2026 and delayed mandatory term loan payments until 2022. Refer to Note 8 — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information. As of June 30, 2021, we had cash of $88.7 million, debt principal of $2,257.0 million and available capacity of $902.0 million on our revolving credit facility.

Our primary cash requirements include operating expenses, debt service payments (principal and interest), capital expenditures (including property, equipment and computer software expenditures) and ~~income tax~~tax-related payments and may include ~~share repurchases,~~ business acquisitions ~~and/or dividends. Our cash requirements may also include tax distributions to holders of membership units of BKFS LLC units relating to the period before the Distribution, the timing~~ and amount of which will be dependent upon the taxable income allocable to such holders. BKFS LLC made tax distributions of $75.3 million during the nine months ended September 30, 2017 for the 2016 tax year and 2017 tax year relating to the period before the Distribution.

~~As of September 30, 2017, we had cash and cash equivalents of $146.2 million and debt of $1,558.1 million, excluding debt issuance costs and original issue discount.~~ share repurchases.

We believe that our cash ~~flow~~flows from operations and available cash and cash equivalents are sufficient to meet our liquidity needs, including the repayment of our outstanding debt, for at least the next 12 months. We anticipate that to the extent ~~that~~ we require additional liquidity, it will be funded through borrowings on our ~~Revolving Credit Facility,~~revolving credit facility, the incurrence of other indebtedness, equity issuance or a combination thereof. ~~We cannot be assured that we will be able to obtain this additional liquidity on reasonable terms, or at all.~~ The loss of the largest lender on our ~~Revolving Credit Facility~~revolving credit facility would reduce our borrowing capacity by ~~$41.3~~$90.0 million. Additionally, our liquidity and our ability to meet our obligations and fund our capital requirements are also dependent on our future financial performance, which is subject to general economic, financial and other factors that are beyond our control. Accordingly, we cannot be assured that our business will generate sufficient cash ~~flow~~flows from operations or that future borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or ~~sell~~issue additional equity to finance such acquisitions.

~~After September 30, 2017, we made~~

The CARES Act allows us to defer payments of ~~$150.0~~our share of social security taxes until December 31, 2021 and 2022. As of June 30, 2021, we have deferred $14.8 million of payments related to employer social security taxes.

DNB Investment

As of June 30, 2021, we own 54.8 million shares of DNB common stock. As of June 30, 2021, DNB’s closing share price was $21.37 and the fair value of our investment in DNB was $1,172.1 million before tax. Assuming a statutory tax rate of 25.3%, the estimated after-tax value of our investment in DNB is $1,000.2 million. Refer to Note 4 — Investments in Unconsolidated Affiliates in Item 1 of Part I of this Quarterly Report on ~~our Revolving Credit Facility, which increased our available capacity to $500.0 million.~~Form 10-Q for additional information.

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Cash Flows

The following table provides a summary of cash flows from operating, investing and financing activities for the periods presented (in millions):

Nine months ended September 30,
2017 2016
Cash flows provided by operating activities $ 239.8
$ 210.5
Cash flows used in investing activities (46.4 ) (206.1 )
Cash flows used in financing activities (181.1 ) (131.5 )
Net increase (decrease) in cash and cash equivalents $ 12.3
$ (127.1 )


	Six months ended June 30,
	2021		2020		Variance
Cash flows provided by operating activities	$	199.2	$	195.3	$	3.9
Cash flows used in investing activities		(116.4)		(107.8)		(8.6)
Cash flows (used in) provided by financing activities		(28.8)		125.3		(154.1)
Net increase in cash and cash equivalents	$	54.0	$	212.8	$	(158.8)

Operating Activities

~~Cash provided by operating activities was $239.8~~

The $3.9 million ~~and $210.5 million for the nine months ended September 30, 2017 and 2016, respectively. The~~ increase in cash provided by operating activities in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to the ~~2016~~2020 period is primarily related to ~~increased~~higher earnings adjusted for non-cash amortization, partially offset by higher tax payments and ~~the increase in non-cash expenses from the loss on extinguishment of debt and equity-based compensation.~~

interest payments related to Senior Notes.

Investing Activities

~~Cash used in investing activities was $46.4~~

The $8.6 million ~~and $206.1 million for the nine months ended September 30, 2017 and 2016, respectively. The decrease~~increase in cash used in investing activities in the ~~nine~~six months ended ~~September~~June 30, ~~2017 as~~2021 compared to the ~~2016~~2020 period is primarily related to the ~~eLynx and Motivity acquisitions~~sale of an equity method investment in ~~2016 and lower capital expenditures~~the prior year period.

Financing Activities

The $154.1 million increase in ~~2017.~~

~~Financing Activities~~

~~Cash~~cash used in financing activities ~~was $181.1 million and $131.5 million for~~in the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, respectively. The 2017~~2021 compared to the 2020 period ~~includes cash outflows~~is primarily related to ~~the Senior Notes redemption~~share repurchases and related redemption fee of $408.8 million, tax distributions to BKFS LLC members of $75.3 million, purchases of treasury stock of $46.6 million, debt service payments of $25.9 million, capital lease payments of $11.6 million, debt issuance costs of $8.6 million and tax withholding payments for restricted share vesting of $4.3 million,higher net borrowings in 2021, partially offset by cash inflows of $400.0 million in borrowings. In the 2016 period, we had cash outflows of $138.0 million in debt service payments and tax distributions to BKFS LLC members of $48.5 million, partially offset by cash inflows of $55.0 million in borrowings.

~~Financing~~

~~For a description of~~proceeds from our ~~financing arrangements, see Note 4 —~~ ~~Long-Term Debt~~underwritten common stock offering in the ~~Notes to Condensed Consolidated Financial Statements (Unaudited) included~~prior-year period. See Note 8 — Long-Term Debt and Note 13 — Equity in Item 1 of Part 1I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2.

Financing

For a description of our financing arrangements, see Note 8 — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2.

Contractual Obligations

On March 10, 2021, BKIS entered into an amended and restated credit and guarantee agreement. Refer to Note 8 — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2.

Our long-term contractual obligations generally include our debt and related interest payments, data processing and maintenance commitments ~~purchase commitments,~~and operating and finance lease payments for our offices, data centers, property and ~~capital lease payments on certain computer~~ equipment. ~~Other than the items included below, there~~There were no significant changes to our contractual obligations from those disclosed in the Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

~~In January 2017, we entered into a one-year capital lease agreement with a bargain purchase option for certain computer equipment as described in Note 1 —~~ ~~Basis of Presentation~~ ~~in the Notes to Condensed Consolidated Financial Statements (Unaudited). In February 2017, we repriced our Term B Loan as described in Note 4 —~~ ~~Long-Term Debt~~ in the Notes to Condensed Consolidated Financial Statements (Unaudited). On April 26, 2017, we refinanced our Term A Loan and Revolving Credit Facility and redeemed the outstanding Senior Notes as described in Note 4 — ~~Long-Term Debt~~ ~~in the Notes to Condensed Consolidated Financial Statements (Unaudited).~~

2020.

Share Repurchase Program

~~There were no repurchases during the third quarter~~

On February 12, 2020, our Board of ~~2017. During the nine months ended September 30, 2017, we repurchased approximately 1.2~~Directors approved a three-year share repurchase program authorizing us to repurchase up to 10.0 million shares of our ~~BKFS Class A~~outstanding common stock ~~for $46.6 million,~~through February 12, 2023, through open market purchases, negotiated transactions or ~~an average~~other means, in accordance with applicable securities laws and other restrictions.

Table of ~~$39.18 per share. As~~Contents

There were no share repurchases during the three months ended June 30, 2021. A summary of ~~September 30, 2017, we had approximately 8.8 million shares remaining~~share repurchases under our share repurchase ~~authorization.~~

program during the six months ended June 30, 2021 is as follows (in millions, except per share amounts):


			Shares remaining under repurchase
Total number of shares repurchased	Aggregate purchase price	Average price paid per share	authorization as of June 30, 2021
0.6	$46.7	$ 75.19	9.4

Indemnifications and Warranties

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements other than ~~operating leases and~~ interest rate swaps.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2020.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Market Risk

We regularly assess market risks and have established policies and business practices designed to protect against the adverse effects of these exposures. We are exposed to market risks primarily from changes in interest rates. We use interest rate swaps to manage interest rate risk. We do not use interest rate swaps for trading purposes, to generate income or to engage in speculative activity.

Interest Rate Risk

In addition to existing cash balances and cash provided by operating activities, we use fixed ~~rate~~ and variable rate debt to finance our operations.

Our Senior Notes represent our fixed-rate long-term debt. Refer to Note 8 — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q. The carrying value of our Senior Notes was $988.9 million as of June 30, 2021. The fair value of our Senior Notes was approximately $997.5 million as of June 30, 2021. The potential reduction in fair value of the Senior Notes from a hypothetical 10 percent increase in market interest rates would not be material to the overall fair value of the debt.

We enter into interest rate swap agreements to hedge forecasted monthly interest rate payments on our variable rate debt. We are exposed to interest rate risk on ~~these~~our variable rate debt obligations and related interest rate swaps. WeAs of June 30, 2021, we had ~~$1,558.1~~$1,248.0 million in long-term debt principal outstanding ~~as of September 30, 2017. The Senior Notes were redeemed on April 26, 2017 and represented~~from our Facilities, all of ~~our fixed-rate long-term~~which is variable rate debt, ~~obligations.~~

~~The credit facilities~~ as described in Note 48 — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q.

As of June 30, 2021, the ~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~Facilities represent our ~~variable rate~~ long-term debt obligations ~~as of September 30, 2017. The principal outstanding related~~exposed to ~~these facilities was $1,558.1 million as of September 30, 2017.~~interest rate risk. We performed a sensitivity analysis on the principal amount of ~~our long-term debt subject to variable interest rates as of September 30, 2017. This sensitivity analysis is based solely on the principal amount of such~~ debt as of ~~September~~June 30, ~~2017, and does not take into account any changes that occurred in~~2021, as well as the ~~prior 12 months or that may take place in the next 12 months in the amount~~effect of our ~~outstanding debt or in the notional amount of outstanding~~ interest rate swaps. Further, in this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year. An increase of 100 basis points in the applicable interest rate would cause an increase in interest expense of ~~$15.6~~$8.6 million on an annual basis ($~~7.6~~3.0 million including the effect of our current interest rate swaps). A decrease ~~of 100 basis points~~ in the applicable interest rate to 0% would cause a decrease in interest expense of ~~$13.6~~$3.5 million on an annual basis ~~($5.6~~

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($1.6 million including the effect of our current interest rate swaps) as the 1-week and 1-month LIBOR ~~rate was 1.25%~~were approximately 0.09% and 0.10%, respectively, as of ~~September~~June 30, ~~2017.~~

~~On September 6, 2017,~~2021.

As of June 30, 2021, we ~~entered into an~~have the following interest rate swap ~~agreement to hedge forecasted monthly interest rate payments on $200.0 million of our floating rate debt (the "September 2017 Swap Agreement"~~agreements (collectively, the "Swap Agreements"). (in millions):


Effective dates	Notional amount		Fixed rates
March 31, 2017 through March 31, 2022	$	200.0	2.08	%
September 29, 2017 through September 30, 2021	$	200.0	1.69	%
April 30, 2018 through April 30, 2023	$	250.0	2.61	%
January 31, 2019 through January 31, 2023	$	300.0	2.65	%

Under the terms of the September 2017 Swap Agreement, we receive payments based on the 1-month LIBOR rate and pay a fixed rate of 1.69%. The effective term for the September 2017 Swap Agreement is September 29, 2017 through September 30, 2021.

On March 7, 2017, we entered into an interest rate swap agreement to hedge forecasted monthly interest rate payments on $200.0 million of our floating rate debt (the "March 2017 Swap Agreement"). Under the terms of the March 2017 Swap Agreement, we receive payments based on the 1-month LIBOR rate and pay a fixed rate of 2.08%. The effective term for the March 2017 Swap Agreement is March 31, 2017 through March 31, 2022.

On January 20, 2016, we entered into two interest rate swap agreements to hedge forecasted monthly interest rate payments on $400.0 million of our floating rate debt ($200.0 million notional value each) (the "January 2016 Swap Agreements", and together with the March 2017 Swap Agreement and September 2017 Swap Agreement, the "Swap Agreements"). Under the terms of the January 2016 Swap Agreements, we receive payments based on the 1-month LIBOR rate ~~and pay a weighted average fixed rate~~(approximately 0.10% as of ~~1.01%~~June 30, 2021). ~~The effective term for the January 2016 Swap Agreements is February 1, 2016 through January 31, 2019.~~

The Swap Agreements were designated as cash flow hedging instruments. A portion of the amount included in Accumulated other comprehensive ~~earnings (loss)~~loss is reclassified into Interest expense, net as a yield adjustment as interest ~~payments are made~~is either paid or received on the hedged debt. ~~In accordance with the authoritative guidance for fair value measurements, the~~The inputs used to determine the estimated fair value of our interest rate swaps are ~~level~~Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~September~~June 30, ~~2017,~~2021, under the supervision and with the participation of our Chief Executive Officer ("CEO") and Executive Vice President and Chief Financial Officer ("CFO"), management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

Based on that evaluation, our CEO and CFO concluded that as of ~~September~~June 30, ~~2017,~~2021, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit with the SEC are recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There~~was~~ were no ~~change~~changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the ~~period~~quarter ended June 30, 2021 covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II: OTHER INFORMATION

Item 1. Legal Proceedings

See discussion of legal proceedings in Note 611 — Commitments and Contingencies ~~in the Notes to Condensed Consolidated Financial Statements (Unaudited) included~~ in Item ~~1of~~1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Item 1 of Part II.

Item 1A. Risk Factors

~~In addition to~~

There have been no material changes in our risk factors since the ~~significant risks and uncertainties described in~~filing of our Annual Report on Form 10-K for the year ended December 31, 2016, we identified the following additional risks as a result of the completion of the tax-free distribution by FNF of all 83.3 million shares of BKFS Class B common stock that it owned (the “Spin-off”) and related transactions on September 29, 2017 (together with the Spin-off, the “Distribution’). See “Distribution of FNF’s Ownership Interest and Related Transactions” in Note 1 of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included in Item 1 of Part 1 of this report.

The Spin-off could result in significant tax liability to FNF and to holders of FNF Group common stock, and under certain circumstances, we may have a significant indemnity obligation to FNF, which is not limited in amount or subject to any cap, if the Spin-off is treated as a taxable transaction due to our acts or failure to act.

FNF received a private letter ruling from the Internal Revenue Service (“IRS”) in connection with the Spin-off, and an opinion of Deloitte Tax LLP, tax advisor to FNF, to the effect that certain contributions made by FNF to Black Knight Holdings, Inc. (“BKHI”) and the Spin-off qualify as a tax-free reorganization under Sections 368(a) and 355 of the Internal Revenue Code (the “IRC”) and a distribution to which Sections 355 and 361 of the IRC applies, respectively. The IRS private letter ruling and the opinion are based upon various factual representations and assumptions and, in the case of the opinion, certain undertakings, made by FNF and Black Knight. Any inaccuracy in the representations or assumptions upon which such tax opinion was based, or failure by FNF or Black Knight to comply with any undertakings made in connection with such tax opinion, could alter the conclusions reached in such opinion. Opinions with respect to these matters are not binding on the IRS or the courts. As a result, the conclusions expressed in these opinions could be challenged by the IRS and a court could sustain such a challenge.

Even if the Spin-off otherwise qualifies for tax-free treatment under Sections 355, 361 and 368(a) of the IRC, the Spin-off would result in a significant U.S. federal income tax liability to FNF (but not to holders of FNF Group common stock) under Section 355(e) of the IRC if one or more persons acquire a 50% or greater interest (measured by vote or value) in the stock of Black Knight as part of a plan or series of related transactions that includes the Spin-off. Current U.S. federal income tax law generally creates a presumption that any acquisitions of the stock of Black Knight within two years before or after the Spin-off are part of a plan that includes the Spin-off, although the parties may be able to rebut that presumption. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. We do not expect that the mergers and the THL Interest Exchange, by themselves, will cause Section 355(e) to apply to the Spin-off. Notwithstanding the IRS ruling and the opinion of Deloitte Tax LLP described above, Black Knight might inadvertently cause or permit a prohibited change in the ownership of Black Knight to occur, thereby triggering a tax liability to FNF. If the Spin-off is determined to be taxable to FNF, FNF would recognize gain equal to the excess of the fair market value of the New BKH common stock held by it immediately before the Spin-off over FNF’s tax basis therein. Open market purchases of Black Knight common stock by third parties without any negotiation with Black Knight will generally not cause Section 355(e) of the IRC to apply to the Spin-off.

In connection with the Spin-off, we entered into a tax matters agreement with FNF pursuant to which we are obligated to indemnify FNF for (i) any action by Black Knight, or the failure to take any action within our control which, negates the tax-free status of the transactions; or (ii) direct or indirect changes in ownership of Black Knight equity interests that cause the Spin-off to be a taxable event to FNF as a result of the application of Section 355(e) of the IRC or to be a taxable event as a result of a failure to satisfy the “continuity of interest” or “device” requirements for tax-free treatment under Section 355 of the IRC.

If it is subsequently determined, for whatever reason, that the Spin-off does not qualify for tax-free treatment, holders of FNF Group common stock immediately prior to the Spin-off could incur significant tax liabilities.

~~Black Knight may decide to forgo certain transactions in order to avoid the risk of incurring significant tax-related liabilities.~~

Under the tax matters agreement, we covenanted not to take or fail to take any reasonably required action, following the Spin-off, which action or failure to act, would (i) be inconsistent with any covenant or representation made by Black Knight in any document related to the Spin-off, or (ii) prevent, or be reasonably likely to prevent, the tax-free status of the Spin-off. Further, the tax matters agreement requires us to generally indemnify FNF and its subsidiaries for any taxes or losses resulting from any action by Black Knight or our subsidiaries, or the failure to take any action within our control which, negates the tax-free status of the Spin-off; or direct or indirect changes in ownership of Black Knight equity interests that cause the Spin-off to be a taxable event to FNF as a result of the application of Section 355(e) of the IRC or to be a taxable event as a result of a failure to satisfy the “continuity of interest” or “device” requirements for tax-free treatment under Section 355 of the IRC. As a result, we may determine to forgo certain transactions that might have otherwise been advantageous in order to preserve the tax-free treatment of the Spin-off.

In particular, we may determine to continue to operate certain of our business operations for the foreseeable future even if a liquidation or sale of such business might have otherwise been advantageous. Moreover, in light of the mergers as well as certain other transactions that might be treated as part of a plan that includes the Spin-off for purposes of Section 355(e) of the IRC (as discussed above), we may determine to forgo certain transactions, including share repurchases, stock issuances, asset dispositions or other strategic transactions for some period of time following the mergers. In addition, our indemnity obligation under the tax matters agreement might discourage, delay or prevent a third party from entering into a change of control transaction with us for some period of time following the Spin-off.

~~Black Knight will be restricted from pursuing potential business opportunities under the non-competition agreement.~~

In connection with the Distribution, we entered into a non-competition agreement with FNF pursuant to which we agreed to certain restrictions on the scope of the business that we may conduct for the ten-year period following completion of the transactions, including that we are prohibited from (i) engaging in title generation/escrow services, appraisal or default and field services work (other than technology solutions for such settlement services) without the prior written consent of FNF (subject to an exception allowing us to acquire a business engaged in such restricted services if at least 90% of such business’ revenue is contributed by activities other than such restricted services) and (ii) engaging in certain transactions, such as a merger, sale of assets or sale of greater than 5% of its equity interests, with a buyer that derives 10% or more of its revenue from such restricted services. Although we do not presently engage in any of these restricted services and our current business is not restricted, as a result of these restrictions, we may have to forgo certain transactions that might have otherwise been advantageous in compliance with our obligations under the non-competition agreement.

In particular, the restriction on engaging in a merger, sale of assets or sale of greater than 5% of its equity interests with a buyer that derives 10% or more of its revenue from restricted services may discourage a third party engaged in such restricted services from pursuing such a transaction with us during the ten-year period following completion of the transactions.

2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

~~None.~~

Table of Contents

Item 6. Exhibits

~~(a) Exhibits~~

(a)

Exhibits


~~2.1~~ Exhibit		Agreement and Plan of Merger, dated as of June 8, 2017, by and among New BKH Corp., Black Knight Financial Services, Inc., Black Knight Holdco Corp., New BKH Merger Sub, Inc., BKFS Merger Sub, Inc. and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Black Knight Financial Services, Inc. on June 9, 2017 (No. 001-37394))
No.		Description
~~3.1~~ 10.1		~~Amended~~ Form of Notice of Restricted Stock and ~~Restated Certificate of Incorporation of Black Knight, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by Black Knight, Inc. on October 2, 2017 (No. 001-37394))~~

~~3.2~~		~~Amended and Restated Bylaws of Black Knight, Inc. (incorporated by reference to Exhibit 3.2 to Exhibit 3.2 to the Form 8-K filed by Black Knight, Inc. on October 2, 2017 (No. 001-37394))~~

~~10.1~~		~~Interest Exchange~~Restricted Stock Award Agreement dated as of June 8, 2017, by and among Black Knight Financial Services, Inc., Black Knight Holdco Corp., THL Equity Fund VI Investors (BKFS-LM), LLC and THL Equity Fund VI Investors (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Black Knight Financial Services, Inc. on June 9, 2017 (No. 001-37394))

~~10.2~~		Amended and Restated Employment Agreement by and between Joseph M. Nackashi and BKFS I Management, Inc. effective July 17, 2017 (incorporated by reference to Exhibit 10.2 to the Form 10-Q filed by Black Knight Financial Services, Inc. on July 28, 2017 (No. 001-37394))

~~10.3~~		(Directors) under Black Knight, Inc. Amended and Restated 2015 Omnibus Incentive Plan ~~(incorporated by reference to Exhibit 99.1 to the~~ (1)
10.2		Form ~~8-K filed by~~of Notice of Restricted Stock Unit and Restricted Stock Unit Award Agreement (Directors) under Black Knight, Inc. ~~on October 2, 2017 (No. 001-37394))~~Amended and Restated 2015 Omnibus Incentive Plan (1)
31.1
~~10.4~~		~~Black Knight, Inc. Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.2 to the Form S-8 Registration Statement filed by Black Knight, Inc. on October 3, 2017 (No. 333-205784))~~

~~10.5~~		~~Black Knight 401(k) Profit Sharing Plan (incorporated by reference to Exhibit 99.1 to the Form S-8 Registration Statement filed by Black Knight, Inc. on October 3, 2017 (No. 333-220786))~~

~~31.1~~		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
~~31.2~~		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
~~32.1~~		Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2
~~32.2~~		Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
101.INS		Inline XBRL Instance Document*
~~101~~ 101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
104		Cover Page Interactive ~~data files.~~Data File formatted in Inline XBRL and contained in Exhibit 101

(1)	A management or compensatory plan or arrangement required to be filled as an exhibit to this report pursuant to Item 601(b)(10)(iii) of Regulation S-K.

*	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

~~SIGNATURES~~

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



~~Date:~~	~~November 2, 2017~~	BLACK KNIGHT, INC. ~~(registrant)~~
	(registrant)
	~~By:~~
Date: August 5, 2021	By:	/s/ Kirk T. Larsen
			Kirk T. Larsen
			Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

Date: August 5, 2021	By:	/s/ Michele M. Meyers
		Michele M. Meyers
		Chief Accounting Officer and Treasurer
		(Principal Accounting Officer)

~~EXHIBIT INDEX~~



~~Exhibit~~
~~No.~~		~~Description~~
~~2.1~~		Agreement and Plan of Merger, dated as of June 8, 2017, by and among New BKH Corp., Black Knight Financial Services, Inc., Black Knight Holdco Corp., New BKH Merger Sub, Inc., BKFS Merger Sub, Inc. and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Black Knight Financial Services, Inc. on June 9, 2017 (No. 001-37394))

~~3.1~~		~~Amended and Restated Certificate of Incorporation of Black Knight, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by Black Knight, Inc. on October 2, 2017 (No. 001-37394))~~

~~3.2~~		~~Amended and Restated Bylaws of Black Knight, Inc. (incorporated by reference to Exhibit 3.2 to Exhibit 3.2 to the Form 8-K filed by Black Knight, Inc. on October 2, 2017 (No. 001-37394))~~

~~10.1~~		Interest Exchange Agreement, dated as of June 8, 2017, by and among Black Knight Financial Services, Inc., Black Knight Holdco Corp., THL Equity Fund VI Investors (BKFS-LM), LLC and THL Equity Fund VI Investors (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Black Knight Financial Services, Inc. on June 9, 2017 (No. 001-37394))

~~10.2~~		Amended and Restated Employment Agreement by and between Joseph M. Nackashi and BKFS I Management, Inc. effective July 17, 2017 (incorporated by reference to Exhibit 10.2 to the Form 10-Q filed by Black Knight Financial Services, Inc. on July 28, 2017 (No. 001-37394))

~~10.3~~		~~Black Knight, Inc. Amended and Restated 2015 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by Black Knight, Inc. on October 2, 2017 (No. 001-37394))~~

~~10.4~~		~~Black Knight, Inc. Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.2 to the Form S-8 Registration Statement filed by Black Knight, Inc. on October 3, 2017 (No. 333-205784))~~

~~10.5~~		~~Black Knight 401(k) Profit Sharing Plan (incorporated by reference to Exhibit 99.1 to the Form S-8 Registration Statement filed by Black Knight, Inc. on October 3, 2017 (No. 333-220786))~~

~~31.1~~		~~Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~31.2~~		~~Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~32.1~~		~~Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.~~

~~32.2~~		~~Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.~~

~~101~~		~~Interactive data files.~~



	September 30, 2017		December 31, 2016
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	146.2	$	133.9
Trade receivables, net	169.2		155.8
Prepaid expenses and other current assets	42.5		45.4
Receivables from related parties	18.5		4.1
Total current assets	376.4		339.2
Property and equipment, net	165.0		173.0
Computer software, net	422.1		450.0
Other intangible assets, net	248.5		299.5
Goodwill	2,306.8		2,303.8
Other non-current assets	231.2		196.5
Total assets	$	3,750.0	$	3,762.0
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable and other accrued liabilities	$	52.1	$	55.2
Accrued compensation and benefits	39.2		61.1
Current portion of long-term debt	55.1		63.4
Deferred revenues	54.2		47.4
Total current liabilities	200.6		227.1
Deferred revenues	98.1		77.3
Deferred income taxes	301.8		7.9
Long-term debt, net of current portion	1,486.9		1,506.8
Other non-current liabilities	12.5		3.5
Total liabilities	2,099.9		1,822.6
Commitments and contingencies (Note 6)
Equity:
Black Knight, Inc. common stock; $0.0001 par value; 550,000,000 shares authorized; 153,473,895 shares issued and outstanding as of September 30, 2017	—		—
Black Knight, Inc. preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none as of September 30, 2017	—		—
Black Knight Financial Services, Inc. Class A common stock; $0.0001 par value; 350,000,000 shares authorized; 69,091,008 shares issued and outstanding as of December 31, 2016	—		—
Black Knight Financial Services, Inc. Class B common stock; $0.0001 par value; 200,000,000 shares authorized, 84,826,282 shares issued and outstanding as of December 31, 2016	—		—
Black Knight Financial Services, Inc. preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none as of December 31, 2016	—		—
Additional paid-in capital	1,594.9		810.8
Retained earnings	54.2		65.7
Accumulated other comprehensive earnings (loss)	1.0		(0.8		)
Total shareholders' equity	1,650.1		875.7
Noncontrolling interests	—		1,063.7
Total equity	1,650.1		1,939.4
Total liabilities and equity	$	3,750.0	$	3,762.0



	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Revenues	$	263.8		$	267.1		$	784.1		$	764.5
Expenses:
Operating expenses	140.7			152.2			428.2			433.4
Depreciation and amortization	51.3			56.8			154.2			154.2
Transition and integration costs	4.0			1.1			8.5			2.2
Total expenses	196.0			210.1			590.9			589.8
Operating income	67.8			57.0			193.2			174.7
Other income and expense:
Interest expense	(14.1		)	(16.9		)	(44.8		)	(50.6		)
Other expense, net	(0.6		)	(1.4		)	(17.1		)	(6.2		)
Total other expense, net	(14.7		)	(18.3		)	(61.9		)	(56.8		)
Earnings before income taxes	53.1			38.7			131.3			117.9
Income tax expense	9.2			6.3			24.3			19.2
Net earnings	43.9			32.4			107.0			98.7
Less: Net earnings attributable to noncontrolling interests	29.2			21.2			71.9			64.7
Net earnings attributable to Black Knight	$	14.7		$	11.2		$	35.1		$	34.0
Other comprehensive earnings (loss):
Unrealized holding gains (losses), net of tax	0.3			0.4			0.9			(0.9		)
Reclassification adjustments for losses included in net earnings, net of tax (1)	—			0.1			0.2			0.4
Total unrealized gains (losses) on interest rate swaps, net of tax (2)	0.3			0.5			1.1			(0.5		)
Foreign currency translation adjustment	—			0.1			0.1			(0.1		)
Other comprehensive earnings (loss)	0.3			0.6			1.2			(0.6		)
Comprehensive earnings attributable to noncontrolling interests	29.8			22.2			74.1			63.9
Comprehensive earnings	$	44.8		$	34.0		$	110.4		$	97.3

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Earnings per share:
Net earnings per share attributable to Black Knight common shareholders:
Basic	$	0.22		$	0.17		$	0.52		$	0.52
Diluted	$	0.21		$	0.16		$	0.51		$	0.50
Weighted average shares of common stock outstanding (Note 2):
Basic	67.9			65.9			67.7			65.9
Diluted	68.5			67.9			152.7			67.8



	Black Knight Financial Services, Inc.								Black Knight, Inc.
	Class A common stock				Class B common stock				Common stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss) earnings			Treasury stock
	Shares		$		Shares		$		Shares	$		Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss) earnings			Shares		$			Noncontrolling interests			Total equity
Balance, December 31, 2016	69.1		$	—	84.8		$	—	—	$	—	$	810.8		$	65.7		$	(0.8	)	—		$	—		$	1,063.7		$	1,939.4
Issuance of restricted shares of Class A common stock	1.0		—		—		—		—	—		—			—			—			—		—			—			—
Forfeitures of restricted shares of Class A common stock	(0.1	)	—		—		—		—	—		—			—			—			—		—			—			—
Exchange of Class B common stock for Class A common stock	0.2		—		(0.2	)	—		—	—		—			—			—			—		—			—			—
Tax withholding payments for restricted share vesting	(0.1	)	—		—		—		—	—		(4.3		)	—			—			—		—			—			(4.3		)
Purchases of treasury stock	—		—		—		—		—	—		—			—			—			1.2		(46.6		)	—			(46.6		)
Equity-based compensation expense	—		—		—		—		—	—		14.0			—			—			—		—			—			14.0
Net earnings	—		—		—		—		—	—		—			35.1			—			—		—			71.9			107.0
Foreign currency translation adjustment	—		—		—		—		—	—		—			—			0.1			—		—			—			0.1
Unrealized gains on interest rate swaps, net	—		—		—		—		—	—		—			—			1.1			—		—			2.2			3.3
Tax distributions to members	—		—		—		—		—	—		—			—			—			—		—			(75.3		)	(75.3		)
Distribution of FNF's ownership interest and related transactions	(70.1	)	—		(84.6	)	—		153.5	—		774.4			(46.6		)	0.6			(1.2	)	46.6			(1,062.5		)	(287.5		)
Balance, September 30, 2017	—		$	—	—		$	—	153.5	$	—	$	1,594.9		$	54.2		$	1.0		—		$	—		$	—		$	1,650.1



	September 30, 2017		December 31, 2016
Unrestricted:
Cash	$	87.0	$	129.8
Cash equivalents	57.2		1.8
Total unrestricted cash and cash equivalents	144.2		131.6
Restricted cash equivalents (1)	2.0		2.3
Total cash and cash equivalents	$	146.2	$	133.9



Goodwill	$	3.0
Computer software	(2.6		)
Accrued compensation and benefits	(0.3		)
Other intangible assets	(0.1		)



	September 30, 2017										December 31, 2016
	Principal		Debt Issuance Costs			Discount			Total		Principal		Debt Issuance Costs			Premium (Discount)			Total
Term A Loan	$	1,017.1	$	(7.5	)	$	—		$	1,009.6	$	740.0	$	(7.0	)	$	—		$	733.0
Term B Loan	391.0		(2.6		)	(1.5		)	386.9		394.0		(3.4		)	(0.8		)	389.8
Revolving Credit Facility	150.0		(4.5		)	—			145.5		50.0		(3.7		)	—			46.3
Senior Notes, issued at par	—		—			—			—		390.0		—			11.1			401.1
Total long-term debt	1,558.1		(14.6		)	(1.5		)	1,542.0		1,574.0		(14.1		)	10.3			1,570.2
Less: Current portion of long-term debt	55.5		(0.4		)	—			55.1		64.0		(0.6		)	—			63.4
Long-term debt, net of current portion	$	1,502.6	$	(14.2	)	$	(1.5	)	$	1,486.9	$	1,510.0	$	(13.5	)	$	10.3		$	1,506.8



2017 (remaining)	$	13.9
2018	55.5
2019	81.3
2020	107.0
2021	132.7
Thereafter	1,167.7
Total	$	1,558.1



Balance Sheet Account	September 30, 2017		December 31, 2016
Other non-current assets	$	3.7	$	—
Other non-current liabilities	$	1.8	$	2.2



	Three months ended September 30, 2017				Three months ended September 30, 2016
	Amount of Gain Recognized in OCE		Amount of Loss Reclassified from Accumulated OCE into Net earnings		Amount of Gain Recognized in OCE		Amount of Loss Reclassified from Accumulated OCE into Net earnings
Swap agreements
Attributable to noncontrolling interests	$	0.5	$	0.1	$	0.7	$	0.3
Attributable to Black Knight	0.3		—		0.4		0.1
Total	$	0.8	$	0.1	$	1.1	$	0.4



	Nine months ended September 30, 2017				Nine months ended September 30, 2016
	Amount of Gain Recognized in OCE		Amount of Loss Reclassified from Accumulated OCE into Net earnings		Amount of Loss Recognized in OCE			Amount of Loss Reclassified from Accumulated OCE into Net earnings
Swap agreements
Attributable to noncontrolling interests	$	1.7	$	0.5	$	(1.6	)	$	0.8
Attributable to Black Knight	0.9		0.2		(0.9		)	0.4
Total	$	2.6	$	0.7	$	(2.5	)	$	1.2



	Shares		Weighted Average Grant Date Fair Value
Balance, December 31, 2016	2,908,374		*
Granted	982,764		$	38.31
Forfeited	(123,824	)	$	34.42
Vested	(1,840,719	)	*
Balance, September 30, 2017	1,926,595		*



	First lien mortgages						Second lien mortgages
	as of September 30,						as of September 30,
	2017			2016			2017			2016
Active loans	31.5			31.2			1.9			1.1
Market size	51.0		(1)	50.7		(1)	15.4		(2)	15.7		(2)
Market share	62	%		61	%		12	%		7	%