Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Black Knight Financial Services, Inc. | |
Entity Central Index Key | 1,627,014 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 67,985,605 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 84,826,282 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 69.6 | $ 61.9 |
Trade receivables, net | 159.6 | 132.5 |
Prepaid expenses and other current assets (inclusive of $0.8 and $0.6 of related party prepaid fees as of June 30, 2015 and December 31, 2014, respectively) | 36.3 | 28.6 |
Deferred income taxes | 17.2 | 0.2 |
Receivables from related parties | 5.8 | 7.7 |
Total current assets | 288.5 | 230.9 |
Property and equipment, net | 147.7 | 142.4 |
Computer software, net | 480.4 | 487.8 |
Other intangible assets, net | 373.9 | 416.6 |
Goodwill | 2,223.9 | 2,223.9 |
Other non-current assets | 128.7 | 96.7 |
Total assets | 3,643.1 | 3,598.3 |
Current liabilities: | ||
Trade accounts payable and other accrued liabilities | 30.6 | 41.8 |
Accrued salaries and benefits | 36.3 | 49.5 |
Legal and regulatory accrual | 10.1 | 11.7 |
Current portion of long-term debt (all amounts due to related party as of December 31, 2014) | 43.4 | 64.4 |
Accrued interest (inclusive of $0.1 due to related party as of December 31, 2014) | 6.3 | 7.3 |
Deferred revenues | 27.6 | 28.1 |
Total current liabilities | 154.3 | 202.8 |
Deferred revenues | 54.5 | 35.9 |
Deferred income taxes | 10.3 | 0 |
Long-term debt, net of current portion (inclusive of $1,454.6 due to related party as of December 31, 2014) | 1,639 | 2,070.7 |
Other non-current liabilities | 1.2 | 1.2 |
Liabilities | $ 1,859.3 | $ 2,310.6 |
Commitments and contingencies | ||
Redeemable members' interest | $ 0 | $ 370.7 |
Equity: | ||
Preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none | 0 | 0 |
Contributed member capital | 0 | 1,063.8 |
Additional paid-in capital | 797.6 | 0 |
Retained earnings (accumulated deficit) | 0.3 | (146.7) |
Accumulated other comprehensive loss | 0 | (0.1) |
Total shareholders' equity and members' equity | 797.9 | 917 |
Noncontrolling interests | 985.9 | 0 |
Total equity | 1,783.8 | 917 |
Total liabilities, redeemable members' interest and equity | 3,643.1 | 3,598.3 |
Common Class A [Member] | ||
Equity: | ||
Common stock | 0 | 0 |
Common Class B [Member] | ||
Equity: | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Related party prepaid fees | $ 36.3 | $ 28.6 |
Accrued interest, amount due to related party | $ 6.3 | 7.3 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, shares authorized | 25,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized | 350,000,000 | |
Common stock, share issued | 67,985,605 | |
Common stock, shares outstanding | 67,985,605 | |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized | 200,000,000 | |
Common stock, share issued | 84,826,282 | |
Common stock, shares outstanding | 84,826,282 | |
Affiliated Entity [Member] | ||
Related party prepaid fees | $ 0.8 | 0.6 |
Accrued interest, amount due to related party | 0.1 | |
Long-term debt, net of current portion, amount due to related party | $ 1,454.6 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues | $ 232.1 | $ 214.3 | $ 459.3 | $ 416.8 |
Expenses: | ||||
Operating expenses | 140.3 | 133.8 | 273.5 | 267.6 |
Depreciation and amortization | 48.8 | 47.2 | 94.7 | 94.1 |
Transition and integration costs | 4.7 | 16.9 | 7.3 | 102.9 |
Total expenses | 193.8 | 197.9 | 375.5 | 464.6 |
Operating income (loss) | 38.3 | 16.4 | 83.8 | (47.8) |
Other income and expense: | ||||
Interest expense, net | (25.5) | (32.8) | (56.3) | (64.2) |
Other expense, net | (4.6) | (8) | (4.6) | (8) |
Total other expense, net | (30.1) | (40.8) | (60.9) | (72.2) |
Earnings (loss) from continuing operations before income taxes | 8.2 | (24.4) | 22.9 | (120) |
Income tax expense (benefit) | 0.3 | 0.2 | 0.4 | (5.7) |
Net earnings (loss) from continuing operations | 7.9 | (24.6) | 22.5 | (114.3) |
(Loss) earnings from discontinued operations, net of tax | (0.1) | 0.2 | (0.2) | 0 |
Net earnings (loss) | 7.8 | (24.4) | 22.3 | (114.3) |
Less: Net earnings (loss) attributable to noncontrolling interests | 7.5 | (24.4) | 22 | (114.3) |
Net earnings attributable to Black Knight Financial Services, Inc. | 0.3 | 0 | 0.3 | 0 |
Foreign currency translation adjustment | 0 | 0 | (0.1) | 0 |
Comprehensive earnings (loss) attributable to noncontrolling interests | 7.5 | (24.4) | 22 | (114.3) |
Comprehensive earnings (loss) | $ 7.8 | $ (24.4) | $ 22.2 | $ (114.3) |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Equity - USD ($) shares in Millions, $ in Millions | Total | Noncontrolling Interest [Member] | Black Knight Financial Services, LLC [Member]Contributed Member Capital [Member] | Black Knight Financial Services, LLC [Member]Accumulated Deficit/Retained Earnings [Member] | Black Knight Financial Services, LLC [Member]Accumulated Other Comprehensive Loss [Member] | Black Knight Financial Services, Inc. [Member]Common Stock [Member]Common Class A [Member] | Black Knight Financial Services, Inc. [Member]Common Stock [Member]Common Class B [Member] | Black Knight Financial Services, Inc. [Member]Additional Paid-in Capital [Member] | Black Knight Financial Services, Inc. [Member]Accumulated Deficit/Retained Earnings [Member] |
Beginning balance at Dec. 31, 2014 | $ 917 | $ 1,063.8 | $ (146.7) | $ (0.1) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Profits interests expense | 2.6 | 2.6 | |||||||
Redemption value of profits interests | (59.5) | (59.5) | |||||||
Net earnings (loss) | 21.4 | 21.4 | |||||||
Foreign currency translation adjustment | (0.1) | (0.1) | |||||||
Ending balance at May. 25, 2015 | 881.4 | 1,006.9 | (125.3) | (0.2) | |||||
Beginning balance at Dec. 31, 2014 | 370.7 | ||||||||
Increase (Decrease) in Redeemable Members' Interest [Roll Forward] | |||||||||
Redemption value of profits interest | 59.5 | ||||||||
Ending balance at May. 25, 2015 | 430.2 | ||||||||
Beginning balance at Dec. 31, 2014 | 917 | 1,063.8 | (146.7) | (0.1) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Beginning balance, shares | 68 | 84.8 | |||||||
Net earnings (loss) | 22.3 | ||||||||
Foreign currency translation adjustment | (0.1) | ||||||||
Ending balance at Jun. 30, 2015 | 1,783.8 | $ 985.9 | $ 797.6 | $ 0.3 | |||||
Ending balance, shares at Jun. 30, 2015 | 68 | 84.8 | |||||||
Beginning balance at Dec. 31, 2014 | 370.7 | ||||||||
Ending balance at Jun. 30, 2015 | 0 | ||||||||
Beginning balance at May. 25, 2015 | 881.4 | 1,006.9 | (125.3) | (0.2) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Beginning balance, shares | 68 | 84.8 | |||||||
Issuance of common stock | 475.2 | 475.2 | |||||||
Issuance of common stock, shares | 20.7 | 84.8 | |||||||
Conversion of THL member interest into Class A and Class B common stock | 332.1 | 12.7 | 319.4 | ||||||
Conversion of THL member interest into Class A and Class B common stock, shares | 39.3 | ||||||||
Conversion of profits interests into restricted shares of Class A common stock | 87.6 | 75.7 | 11.9 | ||||||
Conversion of profits interests into restricted shares of Class A common stock, shares | 8 | ||||||||
Reclassification of FNF member capital to noncontrolling interests | 1,082.6 | $ (1,082.6) | |||||||
Reclassifications of accumulated deficit and other comprehensive loss | (110) | $ 125.3 | $ 0.2 | (15.5) | |||||
Equity based compensation expense | 6.6 | 6.6 | |||||||
Net earnings (loss) | 0.9 | 0.6 | 0.3 | ||||||
Ending balance at Jun. 30, 2015 | 1,783.8 | $ 985.9 | $ 797.6 | $ 0.3 | |||||
Ending balance, shares at Jun. 30, 2015 | 68 | 84.8 | |||||||
Beginning balance at May. 25, 2015 | 430.2 | ||||||||
Increase (Decrease) in Redeemable Members' Interest [Roll Forward] | |||||||||
Conversion of THL member interest into Class A common shares | (342.6) | ||||||||
Conversion of profits interest holders into Class A common restricted shares | (87.6) | ||||||||
Ending balance at Jun. 30, 2015 | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 22.3 | $ (114.3) |
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 94.7 | 94.1 |
Amortization of debt issuance costs | 0.6 | 0 |
Amortization of bond premium and original issue discount | (1) | (1.1) |
Loss on extinguishment of debt, net | 4.8 | 0 |
Deferred income taxes, net | 0.2 | 0.3 |
Equity-based compensation | 9.5 | 3.1 |
Changes in assets and liabilities: | ||
Trade and other receivables, including receivables from related parties | (24.6) | 9.2 |
Prepaid expenses and other assets | (8.5) | (7.6) |
Deferred revenues | 18.2 | 8.7 |
Deferred contract costs | (28.3) | (15.7) |
Trade accounts payable and other accrued liabilities | (22.3) | (30.3) |
Net cash provided by (used in) operating activities | 65.6 | (53.6) |
Cash flows from investing activities: | ||
Additions to property and equipment | (26.8) | (5.9) |
Additions to computer software | (27.1) | (20.5) |
Investment in property records database | (6.8) | 0 |
Proceeds from sale of PCLender | 0 | 1.5 |
Net cash used in investing activities | (60.7) | (24.9) |
Cash flows from financing activities: | ||
Borrowings, net of original issue discount | 1,299 | 88 |
Debt service payments | (1,723.9) | (393.3) |
Net proceeds from sale of National Title Insurance of New York, Inc. to Fidelity National Financial, Inc. | 0 | 50.2 |
Proceeds from issuance of Class A common stock, before offering expenses | 479.3 | 0 |
Costs directly associated with issuance of Class A common stock | (2.7) | 0 |
Debt issuance costs | (19.8) | 0 |
Senior notes call premium | (11.8) | 0 |
Distributions to members | (17.3) | (16.9) |
Net cash provided by financing activities | 2.8 | 146.8 |
Net increase in cash and cash equivalents | 7.7 | 68.3 |
Cash and cash equivalents, beginning of period | 61.9 | 0 |
Cash and cash equivalents, end of period | 69.6 | 68.3 |
Supplemental cash flow information: | ||
Interest paid | (57.9) | (61.1) |
Income taxes refunded, net | 0.2 | 31 |
Fidelity National Commerce Velocity, LLC [Member] | ||
Cash flows from financing activities: | ||
Cash from contribution from Fidelity National Financial Inc. | 0 | 0.7 |
Property Insight, LLC [Member] | ||
Cash flows from financing activities: | ||
Cash from contribution from Fidelity National Financial Inc. | 0 | 6.7 |
Thomas H. Lee Partners, LP [Member] | ||
Cash flows from financing activities: | ||
Proceeds from contributions from affiliates | 0 | 350 |
Black Knight InfoServ, LLC [Member] | ||
Cash flows from financing activities: | ||
Proceeds from contributions from affiliates | $ 0 | $ 61.4 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 that 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. These statements should be read in conjunction with our final prospectus dated May 19, 2015 and filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), on May 21, 2015 (the "Final Prospectus"). Description of the Business Black Knight was incorporated in the State of Delaware on October 27, 2014. We are a holding company that conducts our operations through our interest in Black Knight Financial Services, LLC ("BKFS Operating LLC"), our sole asset and a provider of integrated technology, data and analytics solutions that facilitate and automate many of the business processes across the mortgage lifecycle. We provide solutions to the mortgage and real estate industries primarily in the United States. BKFS Operating LLC was established in connection with the acquisition of Lender Processing Services, Inc. (“LPS”) by Fidelity National Financial, Inc. (“FNF”) on January 2, 2014 (the “Acquisition”) and ensuing internal reorganization (the “Reorganization”). As part of the Reorganization, the Technology, Data and Analytics businesses of LPS, as well as certain pre-existing FNF businesses, were contributed into BKFS Operating LLC. Accordingly, we have applied GAAP requirements for transactions between entities under common control to the Condensed Consolidated Financial Statements (Unaudited). We consider the contribution of Black Knight InfoServ, LLC (“BKIS”) (including the Technology, Data and Analytics businesses of LPS) to BKFS Operating LLC on January 3, 2014 to be a change in reporting entity under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). BKIS was contributed by FNF to BKFS Operating LLC after the Acquisition, but has been retroactively reflected as being included in BKFS Operating LLC since January 2, 2014, the date it came under the common control of FNF. The results of operations for the day ended January 1, 2014 are insignificant, and we have included these results in the period for the six months ended June 30, 2014. Our business is organized into two segments: • Technology - offers software and hosting solutions that support loan servicing, which includes core mortgage servicing, specialty mortgage servicing, including loss mitigation and default workflow management, loan origination and settlement services. • Data and Analytics - offers solutions to enhance and support our technology products in the mortgage, real estate and capital markets industries. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions. Our combination of public and proprietary data sets includes 99.99% of the U.S. population and 96% of all mortgage transactions according to 2012 U.S. census data. Organizational Transactions An initial public offering ("IPO") of Black Knight was completed on May 26, 2015. In connection with the IPO, the following transactions occurred: • the amendment and restatement of our certificate of incorporation to authorize the issuance of two classes of common stock, Class A and Class B, which generally vote as a single class on all matters submitted for a vote to shareholders; • the issuance of shares of Class B common stock by us to FNF and certain Thomas H. Lee Partners, L.P. ("THL") affiliates, former holders of membership interests in BKFS Operating LLC ("Units"). Class B common stock is neither registered nor publicly traded and does not entitle the holders thereof to any of the economic rights, including rights to dividends and distributions upon liquidation, that would be provided to holders of Class A common stock; and the total voting power of the Class B common stock is equal to the percentage of Units not held by us; • the issuance of shares of Class A common stock and a $17.3 million cash payment to certain THL affiliates, in connection with the merger of certain THL affiliated entities (the "THL Intermediaries") with and into us, pursuant to which we acquired the Units held by the THL Intermediaries. • the issuance of shares of Class A common stock by Black Knight to the investors in the IPO; • the contribution by us of the net cash proceeds received in the IPO to BKFS Operating LLC in exchange for 44.5% of the Units and a managing member’s membership interest in BKFS Operating LLC; • the conversion of all outstanding equity incentive awards in the form of profits interests in BKFS Operating LLC into restricted shares of our Class A common stock; and • the restatement of the Amended and Restated Operating Agreement to provide for the governance and control of BKFS Operating LLC by Black Knight as its managing member and to establish the terms upon which other holders of Units may exchange their Units, and a corresponding number of shares of Class B common stock for, at our option, shares of Class A common stock on a one -for-one basis or a cash payment from BKFS Operating LLC. We refer to the above transactions as the "Offering Reorganization." Initial Public Offering On May 26, 2015, we completed the IPO of 18,000,000 shares of our Class A common stock, par value $0.0001 per share ("Class A common stock") at an offering price of $24.50 per share. We granted the underwriters a 30 -day option to purchase an additional 2,700,000 shares of our Class A common stock at the offering price, which was exercised in full. A total of 20,700,000 shares of Class A common stock were issued on May 26, 2015, with net proceeds of $475.2 million , after deducting $32.0 million for the underwriters' discount and IPO related expenses. The use of the proceeds from the IPO is as follows (in millions): Gross proceeds $ 507.2 Less: Underwriters' discount 27.9 IPO related expenses 4.1 Partial redemption of 5.75% Senior Notes due 2023 (Note 4) 204.8 Call premium on partial redemption of 5.75% Senior Notes due 2023 11.8 Interest on partial redemption of 5.75% Senior Notes due 2023 1.4 Cash payment to THL 17.3 Partial repayment of principal on other outstanding long-term debt 203.0 Refinancing expenses 20.8 Cash to balance sheet 16.1 Unused proceeds $ — A more detailed description of the material terms of the IPO are included in our Final Prospectus. As a result of the organizational transactions and IPO described above, we own 44.5% of the Units of BKFS Operating LLC, Black Knight Holdings, Inc. ("BKHI"), Chicago Title Insurance Company and Fidelity National Title Insurance Company, all subsidiaries of FNF, collectively own 54.5% of the Units and THL and THL affiliates own 1.0% of the Units. Discontinued Operations On June 30, 2014, we completed the sale of PCLender for $1.5 million . No gain or loss was recognized on the disposal. The results of PCLender are reflected within the Condensed Consolidated Statements of Operations and Comprehensive Earnings (Loss) (Unaudited) as discontinued operations for all periods presented. There were no revenues from discontinued operations during the three and six months ended June 30, 2015. Total revenues for discontinued operations included in Loss from discontinued operations, net of tax was $1.2 million and $2.4 million for the three and six months ended June 30, 2014, respectively. Pre-tax loss from discontinued operations was $0.1 million and $0.2 million for the three and six months ended June 30, 2015, respectively. Pre-tax earnings from discontinued operations was $0.2 million for the three months ended June 30, 2014. There were no pre-tax earnings during the six months ended June 30, 2014. Consolidation We hold the sole managing member interest in BKFS Operating LLC, which grants us the exclusive authority to manage, control and operate the business and affairs of BKFS Operating LLC and its subsidiaries, pursuant to the terms of the Amended and Restated Operating Agreement. Under the terms of the Amended and Restated Operating Agreement, we are authorized to manage the business of BKFS Operating LLC, including the authorization 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. We consolidate BKFS Operating LLC in our consolidated financial statements and report noncontrolling interests related to the Units held by BKHI and certain of its affiliates and certain THL affiliates. Our shareholders indirectly control BKFS Operating LLC through our managing member interest. All earnings (losses) prior to the IPO date have been disclosed as Net earnings (loss) attributable to noncontrolling interests in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Earnings (Loss) (Unaudited). Reclassifications Certain reclassifications have been made in the 2014 Condensed Consolidated Financial Statements (Unaudited) to conform to the classifications used in 2015. These reclassifications have not changed Net loss or Total equity, as previously reported. Cash and Cash Equivalents Highly liquid instruments purchased with original maturities of three months or less are considered cash equivalents. Cash equivalents are invested with high credit quality financial institutions and consist of short-term investments, such as demand deposit accounts, money market accounts, money market funds and time deposits. The carrying amounts of these instruments reported in the Condensed Consolidated Balance Sheets (Unaudited) approximate their fair value because of their immediate or short-term maturities. We held no such instruments as of June 30, 2015. We had a restricted cash balance of $3.8 million as of June 30, 2015. Transition and Integration Costs Transition and integration costs contain incremental costs associated with executing the Acquisition and completing the Reorganization and the Offering Reorganization as described above, as well as the related transitioning costs including employee severance, bonuses under our synergy bonus program, certain other non-recurring professional and other costs, including costs related to the IPO, as well as member management fees, which were incurred through the completion of the IPO on May 26, 2015. Interest expense, net Interest expense, net in 2014 and through May 26, 2015 consisted of interest on our Senior Notes and interest on our intercompany loans that were payable to FNF. Subsequent to May 27, 2015, Interest expense, net consists of interest on our Senior Notes, interest on our new credit facilities, commitment fees on our Revolving Credit Facility, agency fees, rating agency fees and a guarantee fee that we pay FNF for their ongoing guarantee of our Senior Notes. Allowance for Doubtful Accounts Trade receivables, net includes an allowance for doubtful accounts of $2.8 million and $1.6 million as of June 30, 2015 and December 31, 2014, respectively. Accumulated Depreciation and Amortization Accumulated depreciation included in Property and equipment, net on the Condensed Consolidated Balance Sheets (Unaudited) totaled $48.5 million and $34.3 million as of June 30, 2015 and December 31, 2014, respectively. Accumulated amortization included in Computer software, net on the Condensed Consolidated Balance Sheets (Unaudited) totaled $113.7 million and $79.3 million as of June 30, 2015 and December 31, 2014, respectively. Accumulated amortization included in Other intangible assets, net on the Condensed Consolidated Balance Sheets (Unaudited) totaled $150.4 million and $108.0 million as of June 30, 2015 and December 31, 2014, respectively. Fair Value Fair Value of Financial Assets and Liabilities 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. Assets are classified in their entirety based on the lowest level of input that is significant to the 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 fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Fair Value of Assets Acquired and Liabilities Assumed The fair values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions. The most significant assumptions, and those requiring the most judgment, involve the estimated fair values of intangible assets and software, with the remaining value, if any, attributable to goodwill. We utilize third-party specialists to assist with determining the fair values of intangible assets and software purchased in business combinations. These estimates are based on Level 2 and Level 3 inputs. Equity-Based Compensation Under the Black Knight Financial Services, LLC 2013 Management Incentive Plan (the “Incentive Plan”), BKFS Operating LLC was authorized to issue up to 11,111,111 Class B units of BKFS Operating LLC, known as “BKFS Operating LLC profits interests,” to eligible members of management and directors. During the year ended December 31, 2014, we issued BKFS Operating LLC profits interests to certain members of BKFS Operating LLC management, BKFS Operating LLC directors and certain employees of our affiliate ServiceLink Holdings, LLC ("ServiceLink") and FNF, which vest over three years, with 50% vesting after the second year and the remaining 50% vesting after the third year. In connection with the IPO, we converted 10,733,330 outstanding BKFS Operating LLC profits interests into 7,994,215 restricted shares of Black Knight Class A common stock. The fair value of the restricted shares was not greater then the value of the BKFS Operating LLC profits interests immediately prior to the conversion; therefore, no additional compensation expense was recognized. We accelerated the vesting of the 4,381,021 restricted shares of Class A common stock held by our Directors, incurring an acceleration charge of $6.2 million in the three months ended June 30, 2015. The shares are subject to a six -month lock-up. The remaining unvested restricted shares will continue to vest on the same schedule as the former BKFS Operating LLC profits interests. No other shares were granted during the three and six -month periods ended June 30, 2015. Income Taxes For the period prior to the IPO, which we completed on May 26, 2015, income taxes of BKFS Operating LLC were not reflected in the accompanying Condensed Consolidated Financial Statements (Unaudited) as the responsibility for payment of income taxes was borne by the members of BKFS Operating LLC and not by us. Beginning May 26, 2015, we recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and expected benefits of utilizing net operating loss and credit carryforwards. Beginning May 26, 2015 in connection with the IPO, our deferred tax assets and liabilities include those related to our 44.5% membership interest in BKFS Operating LLC and tax attributes obtained from the merger with the THL Intermediaries. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred taxes of changes in tax rates and laws, if any, is applied to the years during which temporary differences are expected to be settled and reflected in the financial statements in the period enacted. We record interest and penalties related to income taxes as a component of Income tax expense. Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740‑10 related to accounting for uncertain tax positions requires that a tax position be recognized or derecognized based on a more likely than not threshold. This applies to positions taken or expected to be taken on a tax return. Recent Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) . This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. This update should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. This update is effective for annual and interim periods beginning on or after December 15, 2015, with early adoption permitted. We early adopted this ASU during the second quarter of 2015 and this update did not have a material impact on our results of operations or our financial position. There were no debt issuance costs included on our Condensed Consolidated Balance Sheets prior to June 30, 2015, and as a result, there were no retrospective adjustments required with this change in accounting principle. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The amendment requires a five-step analysis of transactions to determine when and how revenue is recognized based upon the core principal 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 revenue and cash flows arising from contracts with customers. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendment allows companies to use either a full retrospective or a modified retrospective approach to adopt this ASU. We are currently evaluating which transition approach to use and assessing the impact of the adoption of this principle on our consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing Net earnings attributable to Black Knight by the weighted-average number of shares of Class A common stock outstanding. Diluted net earnings per share is calculated assuming that BKFS Operating LLC is a wholly-owned subsidiary of Black Knight, therefore eliminating the impact of FNF and THL's noncontrolling interests. As such, due to our structure as a C-corporation and BKFS Operating LLC's structure as a pass-through entity for tax purposes, the numerator in the calculation of diluted net earnings per share is adjusted by applying our estimated effective income tax rate that excludes noncontrolling interests to Earnings before income taxes, assuming the conversion of the shares of Class B common stock into shares of Class A common stock. The denominator is adjusted to include the weighted-average shares of Class A common stock outstanding assuming conversion of the shares of Class B common stock on an "if-converted" basis. During the period May 26, 2015 through June 30, 2015, the adjusted effective tax rate used in the calculation of consolidated net earnings was 43.1% and there were approximately 84.8 million shares of Class B common stock outstanding. The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts): May 26, 2015 through June 30, 2015 Basic: Net earnings attributable to Black Knight $ 0.3 Shares used for basic net earnings per share: Weighted average shares of Class A common stock outstanding 64.4 Basic net earnings per share $ 0.01 Diluted: Consolidated earnings before income taxes $ 0.9 Income tax expense excluding impact of noncontrolling interests (0.4 ) Consolidated net income $ 0.5 Shares used in computing diluted net earnings per share: Weighted average shares of Class A common stock outstanding 64.4 Dilutive effect of unvested restricted shares of Class A common stock 3.3 Weighted average shares of Class B common stock outstanding 84.8 Weighted average shares of Class A common stock, diluted 152.5 Diluted net earnings per share $ — Basic and diluted net earnings per share information is not applicable for reporting periods prior to the completion of the IPO. The shares of Class B common stock outstanding do not share in the earnings or losses of Black Knight, nor do they possess any rights upon liquidation and, therefore, are not participating securities. Accordingly, basic and diluted net earnings per share of Class B common stock have not been presented. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We are party to certain related party agreements. These parties became related parties of BKFS Operating LLC on January 2, 2014 as a result of the Acquisition and Reorganization and remain related parties after the completion of the Offering Reorganization. Transactions with these related parties since January 2, 2014 are described below. ServiceLink ServiceLink is a consolidated subsidiary of FNF. We have various agreements with ServiceLink to provide technology, data and analytics services. In addition, we provide certain corporate services to ServiceLink, including corporate shared services and information technology. ServiceLink also occupies space in our headquarters building at our Jacksonville, Florida campus. We are also party to certain other agreements under which we incur other expenses to, or receive revenues from, ServiceLink. A detail of the revenues and allocated operating expenses, net from ServiceLink are set forth in the table below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Revenues $ 6.3 $ 6.3 $ 12.6 $ 11.8 Allocated operating expenses, net (2.4 ) (6.3 ) (5.4 ) (14.8 ) FNF In addition to the agreements with ServiceLink discussed above, we have various agreements with FNF and certain other FNF subsidiaries for providing technology, data, and analytics services. In addition, FNF provides certain corporate services to us, including management and consulting services and corporate administrative services. As a result of the IPO closing on May 26, 2015, we no longer pay management fees to FNF. We are also a party to certain other agreements under which we incur other expenses to or receive revenues from FNF. A detail of the revenues and expenses, net from FNF is set forth in the table below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Revenues $ 11.0 $ 14.1 $ 21.5 $ 26.2 Operating expenses 3.9 6.1 7.5 11.3 Management fees(1) 0.9 1.4 2.4 2.9 Interest expense 14.6 24.9 37.6 48.9 _______________ (1) Amounts are included in Transition and integration costs on the Condensed Consolidated Statements of Operations and Comprehensive Earnings (Loss) (Unaudited). We were party to intercompany note obligations with FNF through May 27, 2015 and recognized $14.6 million and $37.6 million , respectively, in related party interest expense, which includes the guarantee fee paid to FNF, for the three and six-month periods ended June 30, 2015. We also recognized $24.9 million and $48.9 million , respectively, in related party interest expense for the three and six-month periods ended June 30, 2014. We had no outstanding intercompany notes as of June 30, 2015. There were $1,519.0 million of intercompany notes outstanding as of December 31, 2014. As of June 30, 2015, FNF and related subsidiaries held $50.0 million of principal amount of our Term B Loan from our new credit agreement dated May 27, 2015. Beginning on May 26, 2015, we pay to FNF a guarantee fee of 1.0% of the outstanding principal of the Senior Notes in exchange for the ongoing guarantee by FNF of the Senior Notes. In October 2017, the guarantee fee increases to 2.0% of the outstanding principal of the Senior Notes. THL Two managing directors of THL currently serve on our Board of Directors. We receive software and systems services from certain entities over which THL exercises control. In addition, THL provides certain corporate services to us, including management and consulting services. As a result of the IPO closing on May 26, 2015, we no longer pay management fees to THL. A detail of the revenues and expenses, net from THL is set forth in the table below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Operating expenses $ 0.5 $ 0.5 $ 0.9 $ 0.9 Management fees(1) 0.5 0.8 1.3 1.6 Purchases 1.1 0.9 1.3 1.2 _______________ (1) Amounts are included in Transition and integration costs on the Condensed Consolidated Statements of Operations and Comprehensive Earnings (Loss) (Unaudited). In connection with the IPO, we made a $17.3 million cash payment to certain THL affiliates, in connection with the merger of the THL Intermediaries with and into us. As of June 30, 2015, THL and related affiliates held $40.0 million of principal amount of our Term Loan B from our new credit agreement dated May 27, 2015. See Note 4 for further discussion on our Long-term debt. Revenues and Expenses A detail of related party items included in Revenues is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Data and analytics services $ 12.7 $ 16.2 $ 25.0 $ 30.5 Servicing, origination and default technology 4.6 4.2 9.1 7.5 Total related party revenues $ 17.3 $ 20.4 $ 34.1 $ 38.0 A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Data entry, indexing services and other operating expenses $ 2.4 $ 4.3 $ 4.3 $ 7.9 Corporate services 2.2 2.9 4.4 5.7 Technology and corporate services (2.6 ) (6.9 ) (5.7 ) (16.2 ) Total related party expenses, net $ 2.0 $ 0.3 $ 3.0 $ (2.6 ) We believe the amounts earned from or charged by us under each of the foregoing 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 ServiceLink and certain corporate services provided by FNF, which are at cost. However, the 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. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: June 30, 2015 December 31, 2014 (in millions) Term A Loan, net of debt issuance costs of $10.5 as of June 30, 2015 $ 789.5 $ — Term B Loan, net of debt issuance costs of $4.1 and original issue discount of $1.0 as of June 30, 2015 394.9 — Revolving Credit Facility, net of debt issuance costs of $5.2 as of June 30, 2015 94.8 — Intercompany Notes — 699.0 Mirror Note Tranche "T" — 644.0 Mirror Note Tranche "R" — 176.0 Senior Notes, issued at par, inclusive of bond premium of $13.2 and $21.2 as of June 30, 2015 and December 31, 2014, respectively 403.2 616.1 Total long-term debt 1,682.4 2,135.1 Less: Current portion of long-term debt, net of debt issuance costs of $0.6 as of June 30, 2015 43.4 64.4 Long-term debt, net of current portion $ 1,639.0 $ 2,070.7 On May 29, 2015, we redeemed approximately $204.8 million in aggregate principal of our outstanding Senior Notes at a price of 105.75% (the "Redemption"), and paid $1.4 million in interest. We incurred a charge on the Redemption of $11.8 million . We also reduced the bond premium by $7.0 million for the portion of the premium that related to the redeemed Senior Notes, resulting in a net loss on the Redemption of $4.8 million . Following the Redemption, $390.0 million in aggregate principal of our Senior Notes remained outstanding. On May 27, 2015, our indirect subsidiary, BKIS, entered into a credit and guaranty agreement (the “Credit Agreement”), dated as of May 27, 2015, with JPMorgan Chase Bank, N.A. as administrative agent, the guarantors party thereto and the other agents and lenders party thereto. The Credit Agreement provides 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 Term A Loan and the Revolving Credit Facility mature on May 27, 2020, and the Term B Loan matures on May 27, 2022. The Facilities are guaranteed by all of BKIS’s wholly-owned domestic restricted subsidiaries and BKFS Operating 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. The Term A Loan is subject to amortization of principal, payable in quarterly installments on the last day of each fiscal quarter, commencing on September 30, 2015, equal to the percentage set forth below of the initial aggregate principal amount of the Term A Loan for such fiscal quarter: Payment Dates Percentage Commencing on September 30, 2015 through and including June 30, 2017 1.25% Commencing on September 30, 2017 through and including June 30, 2019 2.50% Commencing on September 30, 2019 through and including March 31, 2020 3.75% The remaining principal balance of the Term A Loan is due upon maturity. The Term B Loan is subject to amortization of principal (payable in equal quarterly installments), commencing on September 30, 2015, with 1.0% of the initial aggregate advances thereunder to be payable each year prior to the maturity date of the Term B Loan maturity date, and the remaining initial aggregate advances thereunder to be payable at the Term B Loan maturity date. The Term A Loan and the Revolving Credit Facility bear interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of between 50 and 125 basis points depending on the total leverage ratio of BKIS and its restricted subsidiaries on a consolidated basis (the “Consolidated Leverage Ratio”) or (ii) the Eurodollar rate plus a margin of between 150 and 225 basis points depending on the Consolidated Leverage Ratio. Until the delivery of the initial financial statements under the Credit Agreement, the Term A Loan and the Revolving Credit Facility bear interest, at the option of BKIS, at either (i) the base rate plus a margin of 125 basis points or (ii) the Eurodollar rate plus a margin of 225 basis points. The Term B Loan bears interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of 175 or 200 basis points depending on the Consolidated Leverage Ratio or (ii) the Eurodollar rate plus a margin of 275 or 300 basis points depending on the Consolidated Leverage Ratio; subject to a Eurodollar rate floor of 75 basis points. Until the delivery of the initial financial statements under the Credit Agreement, the Term B Loan bears interest, at the option of BKIS, at either (i) the base rate plus a margin of 200 basis points or (ii) the Eurodollar rate plus a margin of 300 basis points. In addition, BKIS will pay an unused commitment fee of between 25 and 35 basis points on the undrawn commitments under the Revolving Credit Facility, also depending on the Consolidated Leverage Ratio. As of June 30, 2015, we have $300.0 million unused on the Revolving Credit Facility. As of June 30, 2015, the interest rates on the Term A Loan, Term B Loan and Revolving Credit Facility were 2.44% , 3.75% and 2.44% , respectively. Under the Credit Agreement, BKIS (and in certain circumstances, BKFS Operating LLC) and its restricted subsidiaries are subject to customary affirmative, negative and financial covenants, and events of default for facilities of this type (with customary grace periods, as applicable, and lender remedies). On May 27, 2015, BKIS, Black Knight Lending Solutions, Inc. (“BKLS,” and, together with BKIS, the “Issuers”), the guarantors named therein (the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”), entered into the Third Supplemental Indenture (the “Third Supplemental Indenture”) to the Indenture, dated as of October 12, 2012, governing the Issuers’ 5.75% Senior Notes due 2023 (the “Senior Notes”), among the Issuers, the Guarantors party thereto and the Trustee, (as supplemented to date, the “Indenture”). The Third Supplemental Indenture supplements the Indenture to add the Guarantors as guarantors of the Issuers’ obligations under the Indenture and the Senior Notes. As the Guarantors consist of substantially all of the subsidiaries of Black Knight, with the exception of two insignificant subsidiaries, the Condensed Consolidated Financial Statements (Unaudited) present all of the required guarantor financial statements and we have not presented separate guarantor financial statements. On January 2, 2014, BKHI issued (i) a Mirror Note (the "Original Mirror Note"), in the original principal amount of $1,400.0 million and (ii) an Intercompany Note (the "Original Intercompany Note"), in the original principal amount of $1,175.0 million to FNF. BKFS Operating LLC entered into an assumption agreement, dated as of January 3, 2014, among BKFS Operating LLC, BKHI and FNF pursuant to which BKFS Operating LLC assumed $820.0 million of the debt issued under the Original Mirror Note and $688.0 million of the debt issued under the Original Intercompany Note (such amounts, the "BKFS Operating LLC Assumed Amounts") and FNF released BKHI of its obligations with respect to the BKFS Operating LLC Assumed Amounts. Subsequently, on January 6, 2014, BKFS Operating LLC borrowed an additional sum of $63.0 million pursuant to an intercompany note (the "Second Intercompany Note") issued by BKFS Operating LLC to FNF, and on March 31, 2014, BKFS Operating LLC borrowed an additional sum of $25.0 million pursuant to the Second Intercompany Note. BKFS Operating LLC amended and restated the Second Intercompany Note on May 30, 2014 to remove required amortization payments. The Second Intercompany Note, as amended and restated, is referred to herein as the "Amended and Restated Second Intercompany Note." BKFS Operating LLC amended and restated the Original Intercompany Note on May 30, 2014 to remove required amortization payments and to reflect BKFS Operating LLC as the Borrower with respect to the indebtedness assumed thereunder. The Original Intercompany Note, as amended and restated, is referred to herein as the "Amended and Restated Original Intercompany Note." We amended and restated each of the Amended and Restated Original Intercompany Note and the Original Mirror Note on March 30, 2015 so that the obligations of each borrower thereunder are evidenced by a separate note. The Amended and Restated Original Intercompany Note and the Original Mirror Note, as amended and restated, are referred to herein as the "Second Amended and Restated Original Intercompany Note" and "Amended and Restated Original Mirror Note," respectively. The Amended and Restated Original Mirror Note is also referred to herein as the "Current Mirror Note." The Second Amended and Restated Original Intercompany Note and the Amended and Restated Second Intercompany Note are collectively referred to herein as the "Current Intercompany Notes." The current Intercompany Notes bore interest at a rate of 10.0% per annum. The Current Mirror Note was divided into two tranches known as Tranche "T" and Tranche "R", collectively, the "Mirror Notes". The Tranche "T" in the original amount of $644.0 million bore interest at the rate or rates of interest charged on borrowings under FNF’s term loan credit agreement, plus 100 basis points. The Tranche "R" in the original amount of $176.0 million bore interest at the rate or rates of interest charged on borrowings under FNF's revolving credit agreement, plus 100 basis points. On May 27, 2015, we repaid the $627.9 million in outstanding principal on the Tranche "T" note, as well as $1.3 million in interest. We also repaid $176.0 million in outstanding principal on the Tranche "R" note, as well as $0.3 million interest. Additionally, during the three-month period ended June 30, 2015 , we repaid $699.0 million in outstanding principal on the Amended and Restated Second Intercompany Note, as well as $10.7 million in interest. On January 2, 2014, upon consummation of the Merger, LPS entered into a Supplemental Indenture (the “Supplemental Indenture”) with FNF, BKLS, a Delaware corporation and wholly-owned subsidiary of BKFS Operating LLC, and U.S. Bank National Association, as trustee (the “Trustee”), to the Indenture (as supplemented by the Supplemental Indenture, the “Indenture”), dated as of October 12, 2012, among LPS, the subsidiary guarantors party thereto and the Trustee, related to LPS’ Senior Notes. Pursuant to the terms of the Supplemental Indenture, (i) FNF became a guarantor of LPS’ obligations under the Senior Notes and agreed to fully and unconditionally guarantee the Senior Notes, on a joint and several basis with the guarantors named in the Indenture, and (ii) BKLS became a “co-issuer” of the Senior Notes and agreed to become a co-obligor of LPS’ obligations under the Indenture and the Senior Notes, on the same terms and subject to the same conditions as LPS, on a joint and several basis. As a result of FNF’s guarantee of the Senior Notes, the Senior Notes were rated as investment grade, which resulted in the suspension of certain restrictive covenants in the Indenture. Beginning on May 26, 2015, we pay to FNF a guarantee fee of 1.0% of the outstanding principal of the Senior Notes in exchange for the ongoing guarantee by FNF of the Senior Notes. In October 2017, the guarantee fee increases to 2.0% of the outstanding principal of the Senior Notes. The Senior Notes are registered under the Securities Act, carry an interest rate of 5.75% and will mature on April 15, 2023. Interest is paid semi-annually on the 15th day of April and October. The Senior Notes are senior unsecured obligations. Prior to October 15, 2017, we may redeem some or all of the Senior Notes by paying a “make-whole” premium based on U.S. Treasury rates. On or after October 15, 2017, we may redeem some or all of the Senior Notes at the redemption prices described in the Indenture, plus accrued and unpaid interest. In addition, if a change of control occurs, we are required to offer to purchase all outstanding Senior Notes at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase. The Senior Notes contain covenants that, among other things, limit our ability to (a) incur or guarantee additional indebtedness or issue preferred stock, (b) make certain restricted payments, including dividends or distributions on equity interests held by persons other than us or certain subsidiaries, in excess of an amount generally equal to 50% of consolidated net income generated since July 1, 2008, (c) create or incur certain liens, (d) engage in sale and leaseback transactions, (e) create restrictions that would prevent or limit the ability of certain subsidiaries to (i) pay dividends or other distributions to us or certain other subsidiaries, (ii) repay any debt or make any loans or advances to us or certain other subsidiaries or (iii) transfer any property or assets to us or certain other subsidiaries, (f) sell or dispose of our assets or any restricted subsidiary or enter into merger or consolidation transactions and (g) engage in certain transactions with affiliates. As a result of FNF's guarantee, covenants (a), (b), (e), (f) and (g) outlined above are suspended. These covenants will continue to be suspended as long as the Senior Notes are rated investment grade, as defined in the Indenture. These covenants are subject to a number of exceptions, limitations and qualifications in the Indenture. We have no independent assets or operations and our guarantees are full and unconditional and joint and several. There are no significant restrictions on our ability to obtain funds from any of our subsidiaries. The Senior Notes contain customary events of default, including failure (i) to pay principal and interest when due and payable and breach of certain other covenants and (ii) to make an offer to purchase and pay for the Senior Notes tendered as required by the Indenture. Events of default also include cross defaults, with respect to any other of our debt or debt of certain subsidiaries having an outstanding principal amount of $80.0 million or more in the aggregate for all such debt, arising from (i) failure to make a principal payment when due and such defaulted payment is not made, waived or extended within the applicable grace period or (ii) the occurrence of an event which results in such debt being due and payable prior to its scheduled maturity. Upon the occurrence of an event of default (other than a bankruptcy default), the trustee or holders of at least 25% of the Senior Notes then outstanding may accelerate the Senior Notes by giving us appropriate notice. If, however, a bankruptcy default occurs, then the principal of and accrued interest on the Senior Notes then outstanding will accelerate immediately without any declaration or other act on the part of the trustee or any holder. On January 16, 2014, we issued an offer to purchase our Senior Notes pursuant to the change of control provisions under the related Indenture at a purchase price of 101% of the principal amount plus accrued interest to the purchase date. The offer expired on February 18, 2014. As a result of the offer, bondholders tendered $5.2 million in principal of the Senior Notes, which were subsequently purchased by us on February 24, 2014. On February 7, 2014, BKIS, FNF, BKLS and the Trustee entered into a second Supplemental Indenture (the “Second Supplemental Indenture”) to the Indenture. Under the Second Supplemental Indenture, the financial reporting covenant under the Indenture was amended to substitute reporting of FNF for that of BKIS and BKLS. In connection with the consent to remove the financial reporting covenant, we paid $0.7 million to the holders of the Senior Notes in February 2014. As a result of the Acquisition, the Senior Notes were adjusted to fair market value, resulting in our recording a premium on the Senior Notes of approximately $23.3 million . The premium is amortized over the remaining term of the Senior Notes using the effective interest method. During the three months ended June 30, 2015 and 2014, we recognized $0.5 million of amortization. During the six months ended June 30, 2015 and 2014, we recognized $1.0 million and $1.1 million of amortization, respectively, which is included as a component of Interest expense, net. As of June 30, 2015 , the unamortized portion of the premium was $13.2 million . Fair Value of Long-Term Debt The fair value of our Senior Notes as of June 30, 2015 was $410.5 million ( 101.8% of carrying value), based upon established market prices for the securities using Level 2 inputs. The fair value of our Facilities approximates their carrying value at June 30, 2015. The fair value of our Facilities is based upon established market prices for the securities using Level 2 inputs. Principal Maturities of Debt Principal maturities as of June 30, 2015 for each of the next five years and thereafter are as follows (in millions): 2015 (remaining) $ 22.0 2016 44.0 2017 64.0 2018 84.0 2019 104.0 Thereafter 1,372.0 Total $ 1,690.0 Scheduled maturities noted above exclude the impact of the $13.2 million unamortized bond premium as well as debt issuance costs. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes A reconciliation of the federal statutory rate to our effective tax rate is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % State taxes, net of federal benefit 3.0 3.0 3.0 3.0 Earnings taxable to members prior to IPO (31.8 ) (38.8 ) (35.0 ) (24.5 ) Transaction costs — — — (8.8 ) Noncontrolling interests (2.7 ) — (1.0 ) — Other 0.2 — (0.3 ) 0.1 Effective tax rate 3.7 % (0.8 )% 1.7 % 4.8 % Our net deferred tax asset was $6.9 million and $0.2 million as of June 30, 2015 and December 31, 2014, respectively. The largest components of the deferred tax asset as of June 30, 2015 are a net operating loss carryforward of $17.2 million and a partnership basis difference of $10.3 million . As of June 30, 2015 and December 31, 2014, we had no valuation allowance. As noted below, we fully anticipate that the net operating losses will be utilized prior to expiration. As of June 30, 2015, we had gross net operating losses ("NOLs") of $50.4 million and none as of December 31, 2014 available to carryforward and offset future taxable income. These NOLs will begin to expire in year 2025 and we anticipate fully utilizing these losses prior to expiration. Thus, no valuation allowance has been established. As of June 30, 2015 and December 31, 2014, we had no uncertain tax positions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 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 no actions, other than those discussed below, depart from customary litigation or regulatory inquiries incidental to our business. We review lawsuits and other legal and regulatory matters (collectively “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. Our accrual for legal and regulatory matters was $10.1 million and $11.7 million as of June 30, 2015 and December 31, 2014, respectively. 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. Litigation Matters On December 16, 2013, LPS received notice that Merion Capital, L.P. and Merion Capital II, L.P. (together "Merion Capital") were asserting their appraisal right relative to their ownership of 5,682,276 shares of LPS stock in connection with the Acquisition. On February 6, 2014, Merion Capital filed an appraisal proceeding, captioned Merion Capital LP and Merion Capital II, LP v. Lender Processing Services, Inc., C.A. No. 9320-VCL, in the Delaware Court of Chancery seeking a judicial determination of the "fair" value of Merion Capital's 5,682,276 shares of LPS common stock under Delaware law (the “Appraisal Shares”), together with statutory interest. We filed an answer to this suit on March 3, 2014. On September 18, 2014, we reached an agreement with Merion Capital to pay the merger consideration to Merion Capital and stop the accrual of additional statutory interest during the pendency of the appraisal proceeding, and FNF paid Merion Capital the merger consideration (cash and stock), which was previously held in escrow for Merion Capital, in respect of the Appraisal Shares, and BKFS Operating LLC paid interest of $9.0 million through the date of payment. Discovery is ongoing. Trial is currently scheduled for early March 2016. The parties will continue the appraisal proceedings, however, we do not believe the case will result in a material negative outcome to us. In March 2013, LPS was named as a defendant in a wrongful death case, Benavides-Mejia v. Lender Processing Services, Inc. n/k/a Black Knight InfoServ, LLC. The case was filed as a result of a fire on December 30, 2010 in a four unit rent controlled apartment building located in Oakland, CA ("the Property") in which three people died. The Property was foreclosed on in 2009, and then assigned to certain subsidiaries of LPS for asset management and preservation. The complaint was filed against BONY, Bank of America, LPS, Security Pacific Brokerage and six independent subcontractors of LPS Field Services n/k/a ServiceLink Field Services, LLC (“Field Services”), alleged negligence and violation of various statutes and regulations, and asserted damages for wrongful death, personal injury, property damage and a host of habitability violations, as well as punitive damages. At a mediation held on May 27, 2015, the parties agreed to settle the matter for $10.0 million . Although LPS is named in the case, the ongoing costs of litigation and any resulting potential liability is borne by the underlying businesses at ServiceLink. This matter is subject to a Cross-Indemnity Agreement between BKFS Operating LLC and ServiceLink (see below). In 2008, our former subsidiary Market Intelligence, Inc. (“MI”) received a demand letter from TCF National Bank (“TCF”) alleging certain evaluation products purchased by TCF from MI between mid-2002 and mid-2005 had improperly overestimated the values of the subject properties as collateral, resulting in losses to TCF when it foreclosed on those properties or otherwise charged off the relevant loans. MI rejected TCF’s demand. In September 2011, TCF filed suit in the U.S. District Court for the District of Minnesota, TCF National Bank v. Market Intelligence, Inc., Fidelity National Information Services, Inc., LSI Appraisal, LLC and Lender Processing Services, Inc ., alleging various common law, contractual and statutory claims. The U.S. District Court dismissed several of TCF’s legal claims in July 2012. Pursuant to the U.S. District Court’s order on January 3, 2013, TCF was allowed to proceed with claims for fraudulent inducement, negligent appraisal, breach of contract, breach of the covenant of good faith, common law fraud and consumer fraud under a Minnesota statute. TCF’s amended complaint alleged damages of at least $3.3 million , but asserted that it would seek to recover additional damages as a result of loan charge-offs and foreclosures after September 2011. In mid-January 2014, TCF asserted that it had suffered additional losses of more than $15.0 million since September 2011, resulting in a new total damages claim of $18.5 million . In addition to compensatory damages, TCF also seeks attorney’s fees, under certain claims, and costs. On October 14, 2014, the court entered a Memorandum Opinion and Order granting our Motion for Summary Judgment on all causes of action. On November 5, 2014, TCF filed an appeal with the Eighth Circuit Court of Appeals, and briefs have been filed by both parties. We continue to vigorously defend the action. The businesses associated with this case were contributed to ServiceLink in connection with the Acquisition and Reorganization (see Note 1). Although LPS is named in the case, the ongoing costs of litigation and any potential resulting liability is borne by the underlying businesses of ServiceLink. This matter is subject to a Cross-Indemnity Agreement between BKFS Operating LLC and ServiceLink (see below). Regulatory Matters Following a review by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision (collectively, the “banking agencies”), LPS entered into a consent order (the “Order”) dated April 13, 2011 with the banking agencies. The banking agencies' review of LPS' services included the services provided by its default operations to mortgage servicers regulated by the banking agencies, including document execution services, which were contributed in connection it the Acquisition and Reorganization (see Note 1). The Order does not make any findings of fact or conclusions of wrongdoing, nor does LPS admit any fault or liability. Under the Order, ServiceLink has adopted enhanced compliance, internal audit, risk management and board oversight plans with respect to those businesses. LPS also agreed to engage an independent third party to conduct a risk assessment and review of its default management businesses and document execution services provided to servicers from January 1, 2008 through December 31, 2010, which has been on indefinite hold since June 2013. To the extent such third party review, once completed, requires additional remediation of mortgage documents, ServiceLink has agreed to implement an appropriate plan to address the issues. The Order does not include any fine or other monetary penalty, although the banking agencies have not yet concluded their assessment of whether any civil monetary penalties should be imposed. Although LPS is a party to the Order, the ongoing costs of litigation and any potential resulting liability is expected to be borne by the underlying LPS default operations, which are now part of ServiceLink. This matter is subject to a Cross-Indemnity Agreement between BKFS Operating LLC and ServiceLink (see below). 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 (the "Cross-Indemnity Agreement"). Pursuant to the Cross-Indemnity Agreement, ServiceLink indemnifies us from liabilities relating to, arising out of or resulting from the conduct of 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 LPS 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. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Summarized financial information concerning our segments is shown in the tables below. Following the Acquisition and Reorganization described in Note 1, our business is organized into two segments: • Technology - offers software and hosting solutions that support loan servicing, which includes core mortgage servicing, specialty mortgage servicing including loss mitigation and default workflow management, loan origination and settlement services. • Data and Analytics - offers solutions to enhance and support our technology products in the mortgage, real estate and capital markets industries. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions. Our combination of public and proprietary data sets include 99.99% of the U.S. population and 96% of all mortgage transactions according to 2012 U.S. census data. Effective January 2, 2014, the Technology segment includes the results of Commerce Velocity and the Data and Analytics segment includes the results of Property Insight, which were contributed into BKFS Operating LLC by FNF in transactions between entities under common control. See Note 1 for further discussion. As of and for the three months ended June 30, 2015: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 188.4 $ 43.7 $ — $ 232.1 Operating expenses (1) 85.6 37.3 17.4 140.3 Depreciation and amortization 44.5 3.3 1.0 48.8 Transition and integration costs — — 4.7 4.7 Operating income (loss) 58.3 3.1 (23.1 ) 38.3 Total other income (expense) 0.3 — (30.4 ) (30.1 ) Earnings (loss) from continuing operations before income taxes $ 58.6 $ 3.1 $ (53.5 ) $ 8.2 Balance sheet data: Total assets $ 3,162.9 $ 312.7 $ 167.5 $ 3,643.1 Goodwill $ 2,050.7 $ 173.2 $ — $ 2,223.9 As of and for the three months ended June 30, 2014: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 173.8 $ 40.5 $ — $ 214.3 Operating expenses (1) 85.9 38.3 9.6 133.8 Depreciation and amortization 42.2 3.4 1.6 47.2 Transition and integration costs 1.3 0.1 15.5 16.9 Operating income (loss) 44.4 (1.3 ) (26.7 ) 16.4 Total other income (expense) 0.1 — (40.9 ) (40.8 ) Earnings (loss) from continuing operations before income taxes $ 44.5 $ (1.3 ) $ (67.6 ) $ (24.4 ) Balance sheet data: Total assets $ 3,163.4 $ 301.6 $ 160.7 $ 3,625.7 Goodwill $ 2,050.7 $ 173.2 $ — $ 2,223.9 For the six months ended June 30, 2015: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 370.7 $ 88.5 $ 0.1 $ 459.3 Operating expenses (1) 169.9 74.3 29.3 273.5 Depreciation and amortization 86.1 6.7 1.9 94.7 Transition and integration costs — — 7.3 7.3 Operating income (loss) 114.7 7.5 (38.4 ) 83.8 Total other income (expense) 0.6 0.1 (61.6 ) (60.9 ) Earnings (loss) from continuing operations before income taxes $ 115.3 $ 7.6 $ (100.0 ) $ 22.9 For the six months ended June 30, 2014: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 339.8 $ 77.0 $ — $ 416.8 Operating expenses (1) 174.2 75.0 18.4 267.6 Depreciation and amortization 85.1 6.7 2.3 94.1 Transition and integration costs 3.0 0.5 99.4 102.9 Operating income (loss) 77.5 (5.2 ) (120.1 ) (47.8 ) Total other income (expense) 0.4 0.3 (72.9 ) (72.2 ) Earnings (loss) from continuing operations before income taxes $ 77.9 $ (4.9 ) $ (193.0 ) $ (120.0 ) ______________________________ (1) Operating expenses within the "Corporate and Other" segment are attributable to unallocated general and administrative expenses. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | 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. |
Consolidation | All significant intercompany accounts and transactions have been eliminated. |
Use of Estimates | The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents Highly liquid instruments purchased with original maturities of three months or less are considered cash equivalents. Cash equivalents are invested with high credit quality financial institutions and consist of short-term investments, such as demand deposit accounts, money market accounts, money market funds and time deposits. The carrying amounts of these instruments reported in the Condensed Consolidated Balance Sheets (Unaudited) approximate their fair value because of their immediate or short-term maturities. |
Transition and Integration Costs | Transition and Integration Costs Transition and integration costs contain incremental costs associated with executing the Acquisition and completing the Reorganization and the Offering Reorganization as described above, as well as the related transitioning costs including employee severance, bonuses under our synergy bonus program, certain other non-recurring professional and other costs, including costs related to the IPO, as well as member management fees, which were incurred through the completion of the IPO on May 26, 2015. |
Interest Expense, Net | Interest expense, net Interest expense, net in 2014 and through May 26, 2015 consisted of interest on our Senior Notes and interest on our intercompany loans that were payable to FNF. Subsequent to May 27, 2015, Interest expense, net consists of interest on our Senior Notes, interest on our new credit facilities, commitment fees on our Revolving Credit Facility, agency fees, rating agency fees and a guarantee fee that we pay FNF for their ongoing guarantee of our Senior Notes. |
Fair Value | Fair Value Fair Value of Financial Assets and Liabilities 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. Assets are classified in their entirety based on the lowest level of input that is significant to the 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 fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Fair Value of Assets Acquired and Liabilities Assumed The fair values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions. The most significant assumptions, and those requiring the most judgment, involve the estimated fair values of intangible assets and software, with the remaining value, if any, attributable to goodwill. We utilize third-party specialists to assist with determining the fair values of intangible assets and software purchased in business combinations. These estimates are based on Level 2 and Level 3 inputs. |
Income taxes | Income Taxes For the period prior to the IPO, which we completed on May 26, 2015, income taxes of BKFS Operating LLC were not reflected in the accompanying Condensed Consolidated Financial Statements (Unaudited) as the responsibility for payment of income taxes was borne by the members of BKFS Operating LLC and not by us. Beginning May 26, 2015, we recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and expected benefits of utilizing net operating loss and credit carryforwards. Beginning May 26, 2015 in connection with the IPO, our deferred tax assets and liabilities include those related to our 44.5% membership interest in BKFS Operating LLC and tax attributes obtained from the merger with the THL Intermediaries. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred taxes of changes in tax rates and laws, if any, is applied to the years during which temporary differences are expected to be settled and reflected in the financial statements in the period enacted. We record interest and penalties related to income taxes as a component of Income tax expense. Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740‑10 related to accounting for uncertain tax positions requires that a tax position be recognized or derecognized based on a more likely than not threshold. This applies to positions taken or expected to be taken on a tax return. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) . This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. This update should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. This update is effective for annual and interim periods beginning on or after December 15, 2015, with early adoption permitted. We early adopted this ASU during the second quarter of 2015 and this update did not have a material impact on our results of operations or our financial position. There were no debt issuance costs included on our Condensed Consolidated Balance Sheets prior to June 30, 2015, and as a result, there were no retrospective adjustments required with this change in accounting principle. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The amendment requires a five-step analysis of transactions to determine when and how revenue is recognized based upon the core principal 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 revenue and cash flows arising from contracts with customers. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendment allows companies to use either a full retrospective or a modified retrospective approach to adopt this ASU. We are currently evaluating which transition approach to use and assessing the impact of the adoption of this principle on our consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts): May 26, 2015 through June 30, 2015 Basic: Net earnings attributable to Black Knight $ 0.3 Shares used for basic net earnings per share: Weighted average shares of Class A common stock outstanding 64.4 Basic net earnings per share $ 0.01 Diluted: Consolidated earnings before income taxes $ 0.9 Income tax expense excluding impact of noncontrolling interests (0.4 ) Consolidated net income $ 0.5 Shares used in computing diluted net earnings per share: Weighted average shares of Class A common stock outstanding 64.4 Dilutive effect of unvested restricted shares of Class A common stock 3.3 Weighted average shares of Class B common stock outstanding 84.8 Weighted average shares of Class A common stock, diluted 152.5 Diluted net earnings per share $ — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transaction [Line Items] | |
Schedule of related party items | A detail of related party items included in Revenues is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Data and analytics services $ 12.7 $ 16.2 $ 25.0 $ 30.5 Servicing, origination and default technology 4.6 4.2 9.1 7.5 Total related party revenues $ 17.3 $ 20.4 $ 34.1 $ 38.0 A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Data entry, indexing services and other operating expenses $ 2.4 $ 4.3 $ 4.3 $ 7.9 Corporate services 2.2 2.9 4.4 5.7 Technology and corporate services (2.6 ) (6.9 ) (5.7 ) (16.2 ) Total related party expenses, net $ 2.0 $ 0.3 $ 3.0 $ (2.6 ) |
ServiceLink [Member] | |
Related Party Transaction [Line Items] | |
Schedule of related party items | A detail of the revenues and allocated operating expenses, net from ServiceLink are set forth in the table below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Revenues $ 6.3 $ 6.3 $ 12.6 $ 11.8 Allocated operating expenses, net (2.4 ) (6.3 ) (5.4 ) (14.8 ) |
FNF [Member] | |
Related Party Transaction [Line Items] | |
Schedule of related party items | A detail of the revenues and expenses, net from FNF is set forth in the table below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Revenues $ 11.0 $ 14.1 $ 21.5 $ 26.2 Operating expenses 3.9 6.1 7.5 11.3 Management fees(1) 0.9 1.4 2.4 2.9 Interest expense 14.6 24.9 37.6 48.9 _______________ (1) Amounts are included in Transition and integration costs on the Condensed Consolidated Statements of Operations and Comprehensive Earnings (Loss) (Unaudited). |
THL [Member] | |
Related Party Transaction [Line Items] | |
Schedule of related party items | A detail of the revenues and expenses, net from THL is set forth in the table below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in millions) Operating expenses $ 0.5 $ 0.5 $ 0.9 $ 0.9 Management fees(1) 0.5 0.8 1.3 1.6 Purchases 1.1 0.9 1.3 1.2 _______________ (1) Amounts are included in Transition and integration costs on the Condensed Consolidated Statements of Operations and Comprehensive Earnings (Loss) (Unaudited). |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Payment Dates Percentage Commencing on September 30, 2015 through and including June 30, 2017 1.25% Commencing on September 30, 2017 through and including June 30, 2019 2.50% Commencing on September 30, 2019 through and including March 31, 2020 3.75% Long-term debt consists of the following: June 30, 2015 December 31, 2014 (in millions) Term A Loan, net of debt issuance costs of $10.5 as of June 30, 2015 $ 789.5 $ — Term B Loan, net of debt issuance costs of $4.1 and original issue discount of $1.0 as of June 30, 2015 394.9 — Revolving Credit Facility, net of debt issuance costs of $5.2 as of June 30, 2015 94.8 — Intercompany Notes — 699.0 Mirror Note Tranche "T" — 644.0 Mirror Note Tranche "R" — 176.0 Senior Notes, issued at par, inclusive of bond premium of $13.2 and $21.2 as of June 30, 2015 and December 31, 2014, respectively 403.2 616.1 Total long-term debt 1,682.4 2,135.1 Less: Current portion of long-term debt, net of debt issuance costs of $0.6 as of June 30, 2015 43.4 64.4 Long-term debt, net of current portion $ 1,639.0 $ 2,070.7 |
Schedule of Maturities of Long-term Debt | Principal maturities as of June 30, 2015 for each of the next five years and thereafter are as follows (in millions): 2015 (remaining) $ 22.0 2016 44.0 2017 64.0 2018 84.0 2019 104.0 Thereafter 1,372.0 Total $ 1,690.0 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of the federal statutory rate to effective tax rate | A reconciliation of the federal statutory rate to our effective tax rate is as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % State taxes, net of federal benefit 3.0 3.0 3.0 3.0 Earnings taxable to members prior to IPO (31.8 ) (38.8 ) (35.0 ) (24.5 ) Transaction costs — — — (8.8 ) Noncontrolling interests (2.7 ) — (1.0 ) — Other 0.2 — (0.3 ) 0.1 Effective tax rate 3.7 % (0.8 )% 1.7 % 4.8 % |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Summarized Segment Financial Information | As of and for the three months ended June 30, 2015: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 188.4 $ 43.7 $ — $ 232.1 Operating expenses (1) 85.6 37.3 17.4 140.3 Depreciation and amortization 44.5 3.3 1.0 48.8 Transition and integration costs — — 4.7 4.7 Operating income (loss) 58.3 3.1 (23.1 ) 38.3 Total other income (expense) 0.3 — (30.4 ) (30.1 ) Earnings (loss) from continuing operations before income taxes $ 58.6 $ 3.1 $ (53.5 ) $ 8.2 Balance sheet data: Total assets $ 3,162.9 $ 312.7 $ 167.5 $ 3,643.1 Goodwill $ 2,050.7 $ 173.2 $ — $ 2,223.9 As of and for the three months ended June 30, 2014: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 173.8 $ 40.5 $ — $ 214.3 Operating expenses (1) 85.9 38.3 9.6 133.8 Depreciation and amortization 42.2 3.4 1.6 47.2 Transition and integration costs 1.3 0.1 15.5 16.9 Operating income (loss) 44.4 (1.3 ) (26.7 ) 16.4 Total other income (expense) 0.1 — (40.9 ) (40.8 ) Earnings (loss) from continuing operations before income taxes $ 44.5 $ (1.3 ) $ (67.6 ) $ (24.4 ) Balance sheet data: Total assets $ 3,163.4 $ 301.6 $ 160.7 $ 3,625.7 Goodwill $ 2,050.7 $ 173.2 $ — $ 2,223.9 For the six months ended June 30, 2015: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 370.7 $ 88.5 $ 0.1 $ 459.3 Operating expenses (1) 169.9 74.3 29.3 273.5 Depreciation and amortization 86.1 6.7 1.9 94.7 Transition and integration costs — — 7.3 7.3 Operating income (loss) 114.7 7.5 (38.4 ) 83.8 Total other income (expense) 0.6 0.1 (61.6 ) (60.9 ) Earnings (loss) from continuing operations before income taxes $ 115.3 $ 7.6 $ (100.0 ) $ 22.9 For the six months ended June 30, 2014: Technology Data and Analytics Corporate and Other Total (in millions) Revenues $ 339.8 $ 77.0 $ — $ 416.8 Operating expenses (1) 174.2 75.0 18.4 267.6 Depreciation and amortization 85.1 6.7 2.3 94.1 Transition and integration costs 3.0 0.5 99.4 102.9 Operating income (loss) 77.5 (5.2 ) (120.1 ) (47.8 ) Total other income (expense) 0.4 0.3 (72.9 ) (72.2 ) Earnings (loss) from continuing operations before income taxes $ 77.9 $ (4.9 ) $ (193.0 ) $ (120.0 ) ______________________________ (1) Operating expenses within the "Corporate and Other" segment are attributable to unallocated general and administrative expenses. |
Basis of Presentation - Segment
Basis of Presentation - Segments (Details) - 6 months ended Jun. 30, 2015 - segment | Total |
Segment Reporting Information [Line Items] | |
Number of segments | 2 |
Data and Analytics Segment [Member] | Public and Proprietary Data, U.S. Population [Member] | |
Segment Reporting Information [Line Items] | |
Components of public and propriety data, percentage | 99.99% |
Data and Analytics Segment [Member] | Public and Proprietary Data, Mortgage Transactions [Member] | |
Segment Reporting Information [Line Items] | |
Components of public and propriety data, percentage | 96.00% |
Basis of Presentation - Initial
Basis of Presentation - Initial Public Offering (Details) $ / shares in Units, $ in Millions | May. 26, 2015USD ($)class_of_stock$ / sharesshares | Jun. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Jun. 30, 2014USD ($) |
Class of Stock [Line Items] | ||||
Issuance of common stock, value | $ 475.2 | |||
Payments of stock issuance costs | $ 2.7 | $ 0 | ||
Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
IPO and Over-Allotment Option [Member] | Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock, shares | shares | 20,700,000 | |||
IPO [Member] | ||||
Class of Stock [Line Items] | ||||
Number of classes of common stock | class_of_stock | 2 | |||
IPO [Member] | Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock, shares | shares | 18,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Offering price per share (in dollars per share) | $ / shares | $ 24.50 | |||
Issuance of common stock, value | $ 475.2 | |||
Payments of stock issuance costs | $ 32 | |||
IPO [Member] | BKFS Operating LLC [Member] | ||||
Class of Stock [Line Items] | ||||
Ownership interest in consolidated subsidiary | 44.50% | |||
IPO [Member] | BKFS Operating LLC [Member] | Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Conversion of Units to shares of Class A common stock, ratio | 1 | |||
IPO [Member] | BKFS Operating LLC [Member] | BKHI, Chicago Title Insurance Company and Fidelity National Title Insurance Company, and all subsidiaries of FNF[Member] | ||||
Class of Stock [Line Items] | ||||
Noncontrolling ownership interest in consolidated subsidiary | 54.50% | |||
IPO [Member] | BKFS Operating LLC [Member] | Thomas H. Lee Partners, LP and Affiliates [Member] | ||||
Class of Stock [Line Items] | ||||
Noncontrolling ownership interest in consolidated subsidiary | 1.00% | |||
IPO [Member] | Thomas H. Lee Partners, LP [Member] | ||||
Class of Stock [Line Items] | ||||
Cash payment to THL | $ 17.3 | |||
Over-Allotment Option [Member] | Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock, shares | shares | 2,700,000 |
Basis of Presentation - Use of
Basis of Presentation - Use of Proceeds from IPO (Details) - USD ($) $ in Millions | May. 26, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Less: | |||
Call premium on partial redemption of 5.75% Senior Notes due 2023 | $ 11.8 | $ 0 | |
Interest on partial redemption of 5.75% Senior Notes due 2023 | $ 57.9 | $ 61.1 | |
IPO [Member] | |||
Class of Stock [Line Items] | |||
Gross proceeds | $ 507.2 | ||
Less: | |||
Underwriter discount | 27.9 | ||
IPO related expenses | 4.1 | ||
Repayment of principal on other outstanding long-term debt | 203 | ||
Refinancing expenses | 20.8 | ||
Cash to balance sheet | 16.1 | ||
IPO [Member] | Thomas H. Lee Partners, LP [Member] | |||
Less: | |||
Cash payment to THL | 17.3 | ||
IPO [Member] | Senior Notes [Member] | 5.75% Senior Notes [Member] | |||
Less: | |||
Partial redemption of 5.75% Senior Notes due 2023 at 105.750% | 204.8 | ||
Call premium on partial redemption of 5.75% Senior Notes due 2023 | 11.8 | ||
Interest on partial redemption of 5.75% Senior Notes due 2023 | $ 1.4 |
Basis of Presentation - Discont
Basis of Presentation - Discontinued Operations (Details) - USD ($) | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of PCLender | $ 0 | $ 1,500,000 | |||
PCLender [Member] | Discontinued Operations, Disposed of by Sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of PCLender | $ 1,500,000 | ||||
Gain (loss) recognized on disposal | $ 0 | ||||
Revenue from discontinued operations | $ 0 | $ 1,200,000 | 0 | 2,400,000 | |
Pre-tax earnings (loss) from discontinued operations | $ (100,000) | $ 200,000 | $ (200,000) | $ 0 |
Basis of Presentation - Cash an
Basis of Presentation - Cash and Cash Equivalents, Allowance for Doubtful Accounts and Accumulated Depreciation and Amortization (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash equivalents | $ 0 | |
Restricted cash | 3,800,000 | |
Allowance for doubtful accounts | 2,800,000 | $ 1,600,000 |
Accumulated depreciation | 48,500,000 | 34,300,000 |
Accumulated amortization for computer software | 113,700,000 | 79,300,000 |
Accumulated amortization for other intangible assets | $ 150,400,000 | $ 108,000,000 |
Basis of Presentation - Equity
Basis of Presentation - Equity Based Compensation (Details) - USD ($) $ in Millions | May. 26, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | May. 25, 2015 | Dec. 31, 2013 |
Profits Interests [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding shares | 10,733,330 | ||||
Profits Interests [Member] | Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 11,111,111 | ||||
Vesting period | 3 years | ||||
Profits Interests [Member] | Vesting after second year [Member] | Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50.00% | ||||
Profits Interests [Member] | Vesting after third year [Member] | Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50.00% | ||||
Restricted Class A Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding shares | 7,994,215 | ||||
Restricted Class A Shares [Member] | Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Accelerated vesting, number of shares | 4,381,021 | ||||
Acceleration charge | $ 6.2 | ||||
Initial Public Offering, Lock-up Period | 6 months |
Earnings Per Share - Additional
Earnings Per Share - Additional Disclosures (Details) - Jun. 30, 2015 - shares | Total |
Class of Stock [Line Items] | |
Adjusted effective tax rate used in the calculation of consolidated net earnings | 43.10% |
Common Class B [Member] | |
Class of Stock [Line Items] | |
Common stock, shares outstanding | 84,826,282 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Basic: | |||||
Net earnings attributable to Black Knight | $ 0.3 | $ 0.3 | $ 0 | $ 0.3 | $ 0 |
Diluted: | |||||
Consolidated earnings before income taxes | 0.9 | $ 8.2 | $ (24.4) | $ 22.9 | $ (120) |
Income tax expense excluding impact of noncontrolling interest | (0.4) | ||||
Net earnings (loss) | $ 0.5 | ||||
Common Class A [Member] | |||||
Basic: | |||||
Weighted average shares of Class A common stock outstanding | 64.4 | ||||
Basic net earnings per share (in dollars per share) | $ 0.01 | ||||
Shares used in computing diluted net earnings per share: | |||||
Weighted average shares of Class A common stock outstanding | 64.4 | ||||
Dilutive effect of unvested restricted Class A common stock | 3.3 | ||||
Weighted average shares of Class B common stock outstanding | 84.8 | ||||
Weighted average shares of Class A common stock, diluted | 152.5 | ||||
Diluted net earnings per share (in dollars per share) | $ 0 |
Related Party Transactions - Se
Related Party Transactions - ServiceLink (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 17.3 | $ 20.4 | $ 34.1 | $ 38 |
Related party expenses, net | 2 | 0.3 | 3 | (2.6) |
ServiceLink [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | 6.3 | 6.3 | 12.6 | 11.8 |
ServiceLink [Member] | Operating Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party expenses, net | $ (2.4) | $ (6.3) | $ (5.4) | $ (14.8) |
Related Party Transactions - FN
Related Party Transactions - FNF (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Related party revenues | $ 17,300,000 | $ 20,400,000 | $ 34,100,000 | $ 38,000,000 | |
Related party expenses, net | 2,000,000 | 300,000 | 3,000,000 | (2,600,000) | |
FNF [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party revenues | 11,000,000 | 14,100,000 | 21,500,000 | 26,200,000 | |
Related party interest expense | 14,600,000 | 24,900,000 | 37,600,000 | 48,900,000 | |
FNF [Member] | Intercompany Notes and Mirror Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party notes | 0 | 0 | $ 1,519,000,000 | ||
FNF [Member] | Term Loan [Member] | Term Loan B [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party notes | 50,000,000 | $ 50,000,000 | |||
FNF [Member] | Senior Notes [Member] | 5.75% Senior Notes [Member] | Guarantee Fee from May 26, 2015 - October 2017 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Guarantee fee, percent of outstanding principal | 1.00% | ||||
FNF [Member] | Senior Notes [Member] | 5.75% Senior Notes [Member] | Guarantee Fee after October 2017 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Guarantee fee, percent of outstanding principal | 2.00% | ||||
FNF [Member] | Operating Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | 3,900,000 | 6,100,000 | $ 7,500,000 | 11,300,000 | |
FNF [Member] | Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | 900,000 | 1,400,000 | 2,400,000 | 2,900,000 | |
FNF [Member] | Interest Expense and Guarantee Fee [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | $ 14,600,000 | $ 24,900,000 | $ 37,600,000 | $ 48,900,000 |
Related Party Transactions - TH
Related Party Transactions - THL (Details) $ in Millions | May. 26, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)director | Jun. 30, 2014USD ($) |
Related Party Transaction [Line Items] | |||||
Related party expenses, net | $ 2 | $ 0.3 | $ 3 | $ (2.6) | |
THL [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of related party directors serving on Board of Managers | director | 2 | ||||
Purchases from related party | 1.1 | 0.9 | $ 1.3 | 1.2 | |
THL [Member] | Term Loan [Member] | Term Loan B [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party notes | 40 | 40 | |||
THL [Member] | Operating Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | 0.5 | 0.5 | 0.9 | 0.9 | |
THL [Member] | Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses, net | $ 0.5 | $ 0.8 | $ 1.3 | $ 1.6 | |
IPO [Member] | THL [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payment to THL | $ 17.3 |
Related Party Transactions - Re
Related Party Transactions - Related Party Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 17.3 | $ 20.4 | $ 34.1 | $ 38 |
Data and Analytics Services [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | 12.7 | 16.2 | 25 | 30.5 |
Servicing, Origination and Default Technology [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 4.6 | $ 4.2 | $ 9.1 | $ 7.5 |
Related Party Transactions - 32
Related Party Transactions - Related Party Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Related party expenses, net | $ 2 | $ 0.3 | $ 3 | $ (2.6) |
Data Entry, Indexing Services, and Other Operating Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party expenses, net | 2.4 | 4.3 | 4.3 | 7.9 |
Corporate Services [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party expenses, net | 2.2 | 2.9 | 4.4 | 5.7 |
Technology and Corporate Services [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party expenses, net | $ (2.6) | $ (6.9) | $ (5.7) | $ (16.2) |
Long-Term Debt - Long-term Debt
Long-Term Debt - Long-term Debt Components (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Jan. 02, 2014 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 1,682.4 | $ 2,135.1 | |
Less: Current portion of long-term debt, net of debt issuance costs of $0.6 as of June 30, 2015 | 43.4 | 64.4 | |
Long-term debt, net of current portion | 1,639 | 2,070.7 | |
Bond premium | 13.2 | ||
Issuance costs, current | 0.6 | ||
Term Loan [Member] | Term Loan A Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 789.5 | 0 | |
Issuance costs | 10.5 | ||
Term Loan [Member] | Term Loan B Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 394.9 | 0 | |
Issuance costs | 4.1 | ||
Original issue discount | 1 | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 94.8 | 0 | |
Issuance costs | 5.2 | ||
Intercompany Notes [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 0 | 699 | |
Mirror Note [Member] | Mirror Note Tranche T [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 0 | 644 | |
Mirror Note [Member] | Mirror Note Tranche R [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 0 | 176 | |
Senior Notes [Member] | 5.75% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 403.2 | 616.1 | |
Bond premium | $ 13.2 | $ 21.2 | $ 23.3 |
Long-Term Debt - Extinguishment
Long-Term Debt - Extinguishment of Debt (Details) - USD ($) $ in Millions | May. 29, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Extinguishment of Debt [Line Items] | |||
Interest paid | $ 57.9 | $ 61.1 | |
Charge on Redemption | 11.8 | 0 | |
Net loss on Redemption | 4.8 | $ 0 | |
Debt outstanding | $ 1,690 | ||
Senior Notes [Member] | 5.75% Senior Notes [Member] | |||
Extinguishment of Debt [Line Items] | |||
Debt outstanding | $ 390 | ||
Senior Notes [Member] | 5.75% Senior Notes [Member] | |||
Extinguishment of Debt [Line Items] | |||
Debt redeemed | $ 204.8 | ||
Redemption price | 105.75% | ||
Interest paid | $ 1.4 | ||
Charge on Redemption | 11.8 | ||
Reduction in bond premium | 7 | ||
Net loss on Redemption | $ 4.8 |
Long-Term Debt - Term Loans and
Long-Term Debt - Term Loans and Revolving Credit Facility (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | May. 27, 2015 | |
Term Loan and Revolving Credit Facility [Member] | Term Loan A [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% | |
Term Loan and Revolving Credit Facility [Member] | Term Loan A [Member] | Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Term Loan and Revolving Credit Facility [Member] | Term Loan A [Member] | Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% | |
Term Loan and Revolving Credit Facility [Member] | Term Loan A [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Term Loan and Revolving Credit Facility [Member] | Term Loan A [Member] | Eurodollar [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Term Loan and Revolving Credit Facility [Member] | Term Loan A [Member] | Eurodollar [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Term Loan [Member] | Term Loan A [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of debt | $ 800,000,000 | |
Interest rate at period end | 2.44% | |
Term Loan [Member] | Term Loan A [Member] | Commencing on September 30, 2015 through and including June 30, 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Quarterly installments of principal payments, percent of initial aggregate principal amount | 1.25% | |
Term Loan [Member] | Term Loan A [Member] | Commencing on September 30, 2017 through and including June 30, 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Quarterly installments of principal payments, percent of initial aggregate principal amount | 2.50% | |
Term Loan [Member] | Term Loan A [Member] | Commencing on September 30, 2019 through and including March 31, 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Quarterly installments of principal payments, percent of initial aggregate principal amount | 3.75% | |
Term Loan [Member] | Term Loan B [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of debt | 400,000,000 | |
Quarterly installments of principal payments, percent of initial aggregate principal amount | 1.00% | |
Interest rate at period end | 3.75% | |
Term Loan [Member] | Term Loan B [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Term Loan [Member] | Term Loan B [Member] | Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.75% | |
Term Loan [Member] | Term Loan B [Member] | Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Term Loan [Member] | Term Loan B [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Variable rate, floor | 0.75% | |
Term Loan [Member] | Term Loan B [Member] | Eurodollar [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.75% | |
Term Loan [Member] | Term Loan B [Member] | Eurodollar [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 400,000,000 | |
Amount unused on the Revolving Credit Facility | $ 300,000,000 | |
Interest rate at period end | 2.44% | |
Revolving Credit Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Unused commitment fee | 0.25% | |
Revolving Credit Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Unused commitment fee | 0.35% |
Long-Term Debt - Mirror Notes a
Long-Term Debt - Mirror Notes and Intercompany Notes (Details) | Mar. 31, 2014USD ($) | Jan. 06, 2014USD ($) | Jan. 03, 2014USD ($) | Jan. 02, 2014USD ($) | Jun. 30, 2015USD ($)tranche | Jun. 30, 2014USD ($) |
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 1,723,900,000 | $ 393,300,000 | ||||
Interest paid | $ 57,900,000 | $ 61,100,000 | ||||
Mirror Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt | $ 1,400,000,000 | |||||
Debt assumed | $ 820,000,000 | |||||
Number of tranches | tranche | 2 | |||||
Mirror Note [Member] | Mirror Note Tranche T [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt | $ 644,000,000 | |||||
Basis spread on variable rate | 1.00% | |||||
Repayments of debt | $ 627,900,000 | |||||
Interest paid | 1,300,000 | |||||
Mirror Note [Member] | Mirror Note Tranche R [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt | $ 176,000,000 | |||||
Basis spread on variable rate | 1.00% | |||||
Repayments of debt | 176,000,000 | |||||
Interest paid | $ 300,000 | |||||
Intercompany Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt | $ 1,175,000,000 | |||||
Debt assumed | $ 688,000,000 | |||||
Additional borrowings | $ 25,000,000 | $ 63,000,000 | ||||
Stated interest rate | 10.00% | |||||
Repayments of debt | $ 699,000,000 | |||||
Interest paid | $ 10,700,000 |
Long-Term Debt - Senior Notes (
Long-Term Debt - Senior Notes (Details) - USD ($) | Jan. 16, 2014 | Feb. 28, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Feb. 24, 2014 | Jan. 02, 2014 |
Debt Instrument [Line Items] | |||||||||
Unamortized premium | $ 13,200,000 | $ 13,200,000 | |||||||
Amortization of debt premium | $ 1,000,000 | $ 1,100,000 | |||||||
Senior Notes [Member] | 5.75% Senior Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 5.75% | 5.75% | |||||||
Redemption price in the event of a change in control | 101.00% | 101.00% | |||||||
Debt covenants, percentage of net income allowable for dividends or distributions | 50.00% | ||||||||
Debt covenants, threshold of default on other debt triggering default | $ 80,000,000 | $ 80,000,000 | |||||||
Debt default, minimum ownership percentage of debt allowed to accelerate maturity | 25.00% | ||||||||
Debt repurchased | $ 5,200,000 | ||||||||
Repayments of Senior Notes | $ 700,000 | ||||||||
Unamortized premium | 13,200,000 | $ 13,200,000 | $ 21,200,000 | $ 23,300,000 | |||||
Senior Notes [Member] | 5.75% Senior Notes [Member] | Interest Expense [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization of debt premium | $ 500,000 | $ 500,000 | $ 1,000,000 | $ 1,100,000 | |||||
Senior Notes [Member] | 5.75% Senior Notes [Member] | FNF [Member] | Guarantee Fee from May 26, 2015 - October 2017 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Guarantee fee, percent of outstanding principal | 1.00% | ||||||||
Senior Notes [Member] | 5.75% Senior Notes [Member] | FNF [Member] | Guarantee Fee after October 2017 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Guarantee fee, percent of outstanding principal | 2.00% |
Long-Term Debt - Fair Value of
Long-Term Debt - Fair Value of Long-Term Debt (Details) - Jun. 30, 2015 - Senior Notes [Member] - 5.75% Senior Notes [Member] - Level 2 [Member] - USD ($) $ in Millions | Total |
Debt Instrument [Line Items] | |
Fair value of debt | $ 410.5 |
Fair value of debt, percent over carrying value | 101.80% |
Long-Term Debt - Schedule of Ma
Long-Term Debt - Schedule of Maturities (Details) $ in Millions | Jun. 30, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,015 | $ 22 |
2,016 | 44 |
2,017 | 64 |
2,018 | 84 |
2,019 | 104 |
Thereafter | 1,372 |
Total | 1,690 |
Bond premium | $ 13.2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation | |||||
Federal statutory rate | 35.00% | 35.00% | 35.00% | 35.00% | |
State taxes, net of federal benefit | 3.00% | 3.00% | 3.00% | 3.00% | |
Earnings taxable to members prior to IPO | (31.80%) | (38.80%) | (35.00%) | (24.50%) | |
Transaction costs | (0.00%) | (0.00%) | (0.00%) | (8.80%) | |
Noncontrolling interest | (2.70%) | (0.00%) | (1.00%) | (0.00%) | |
Other | 0.20% | 0.00% | (0.30%) | 0.10% | |
Effective tax rate | 3.70% | (0.80%) | 1.70% | 4.80% | |
Net deferred tax asset | $ 6,900,000 | $ 6,900,000 | $ 200,000 | ||
Deferred tax assets, operating loss carryforward | 17,200,000 | 17,200,000 | |||
Deferred tax liabilities, partnership basis difference | 10,300,000 | 10,300,000 | |||
Valuation allowance | 0 | 0 | 0 | ||
Net operating loss carryforwards | $ 50,400,000 | $ 50,400,000 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | May. 27, 2015USD ($) | Dec. 16, 2013shares | Dec. 30, 2010unitpeople | Mar. 31, 2013defendant | Sep. 30, 2011USD ($) | Sep. 18, 2014USD ($) | Jan. 15, 2014USD ($) | Jan. 15, 2014USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Loss Contingencies [Line Items] | ||||||||||
Legal and regulatory accrual | $ 10.1 | $ 11.7 | ||||||||
Merion Capital LP and Merion Capital II, LP v. Lender Processing Services, Inc., C.A. No. 9320-VCL [Member] | Pending Litigation [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of shares held in dispute | shares | 5,682,276 | |||||||||
Benavides-Mejia v. Lender Processing Services, Inc. n/k/a Black Knight InfoServ, LLC [Member] | Damage from Fire, Explosion or Other Hazard [Member] | Pending Litigation [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of units in apartment building | unit | 4 | |||||||||
Number of deaths | people | 3 | |||||||||
Settlement amount | $ 10 | |||||||||
TCF National Bank v. Market Intelligence, Inc., Fidelity National Information Services, Inc. LSI Appraisal, LLC and Lender Processing Services, Inc. [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Damages sought | $ 3.3 | |||||||||
TCF National Bank v. Market Intelligence, Inc., Fidelity National Information Services, Inc. LSI Appraisal, LLC and Lender Processing Services, Inc. [Member] | Pending Litigation [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Damages sought | $ 15 | $ 18.5 | ||||||||
BKFS Operating LLC [Member] | Merion Capital LP and Merion Capital II, LP v. Lender Processing Services, Inc., C.A. No. 9320-VCL [Member] | Pending Litigation [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Interest paid | $ 9 | |||||||||
ServiceLink Field Services, LLC [Member] | Benavides-Mejia v. Lender Processing Services, Inc. n/k/a Black Knight InfoServ, LLC [Member] | Damage from Fire, Explosion or Other Hazard [Member] | Pending Litigation [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Loss Contingency, Number of Defendants | defendant | 6 |
Segment Information - Additiona
Segment Information - Additional Disclosures (Details) - 6 months ended Jun. 30, 2015 - segment | Total |
Segment Reporting Information [Line Items] | |
Number of segments | 2 |
Data and Analytics Segment [Member] | Public and Proprietary Data, U.S. Population [Member] | |
Segment Reporting Information [Line Items] | |
Components of public and propriety data, percentage | 99.99% |
Data and Analytics Segment [Member] | Public and Proprietary Data, Mortgage Transactions [Member] | |
Segment Reporting Information [Line Items] | |
Components of public and propriety data, percentage | 96.00% |
Segment Information - Summarize
Segment Information - Summarized Financial Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 232.1 | $ 214.3 | $ 459.3 | $ 416.8 | ||
Operating expenses | 140.3 | 133.8 | 273.5 | 267.6 | ||
Depreciation and amortization | 48.8 | 47.2 | 94.7 | 94.1 | ||
Transition and integration costs | 4.7 | 16.9 | 7.3 | 102.9 | ||
Operating income (loss) | 38.3 | 16.4 | 83.8 | (47.8) | ||
Total other income (expense) | (30.1) | (40.8) | (60.9) | (72.2) | ||
Earnings (loss) from continuing operations before income taxes | $ 0.9 | 8.2 | (24.4) | 22.9 | (120) | |
Balance sheet data: | ||||||
Total assets | 3,643.1 | 3,643.1 | 3,625.7 | 3,643.1 | 3,625.7 | $ 3,598.3 |
Goodwill | 2,223.9 | 2,223.9 | 2,223.9 | 2,223.9 | 2,223.9 | $ 2,223.9 |
Operating Segments [Member] | Technology Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 188.4 | 173.8 | 370.7 | 339.8 | ||
Operating expenses | 85.6 | 85.9 | 169.9 | 174.2 | ||
Depreciation and amortization | 44.5 | 42.2 | 86.1 | 85.1 | ||
Transition and integration costs | 0 | 1.3 | 0 | 3 | ||
Operating income (loss) | 58.3 | 44.4 | 114.7 | 77.5 | ||
Total other income (expense) | 0.3 | 0.1 | 0.6 | 0.4 | ||
Earnings (loss) from continuing operations before income taxes | 58.6 | 44.5 | 115.3 | 77.9 | ||
Balance sheet data: | ||||||
Total assets | 3,162.9 | 3,162.9 | 3,163.4 | 3,162.9 | 3,163.4 | |
Goodwill | 2,050.7 | 2,050.7 | 2,050.7 | 2,050.7 | 2,050.7 | |
Operating Segments [Member] | Data and Analytics Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 43.7 | 40.5 | 88.5 | 77 | ||
Operating expenses | 37.3 | 38.3 | 74.3 | 75 | ||
Depreciation and amortization | 3.3 | 3.4 | 6.7 | 6.7 | ||
Transition and integration costs | 0 | 0.1 | 0 | 0.5 | ||
Operating income (loss) | 3.1 | (1.3) | 7.5 | (5.2) | ||
Total other income (expense) | 0 | 0 | 0.1 | 0.3 | ||
Earnings (loss) from continuing operations before income taxes | 3.1 | (1.3) | 7.6 | (4.9) | ||
Balance sheet data: | ||||||
Total assets | 312.7 | 312.7 | 301.6 | 312.7 | 301.6 | |
Goodwill | 173.2 | 173.2 | 173.2 | 173.2 | 173.2 | |
Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 0 | 0 | 0.1 | 0 | ||
Operating expenses | 17.4 | 9.6 | 29.3 | 18.4 | ||
Depreciation and amortization | 1 | 1.6 | 1.9 | 2.3 | ||
Transition and integration costs | 4.7 | 15.5 | 7.3 | 99.4 | ||
Operating income (loss) | (23.1) | (26.7) | (38.4) | (120.1) | ||
Total other income (expense) | (30.4) | (40.9) | (61.6) | (72.9) | ||
Earnings (loss) from continuing operations before income taxes | (53.5) | (67.6) | (100) | (193) | ||
Balance sheet data: | ||||||
Total assets | 167.5 | 167.5 | 160.7 | 167.5 | 160.7 | |
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |