BLACK KNIGHT, INC., 10-Q filed on 11/2/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2017
Nov. 1, 2017
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2017 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Entity Registrant Name
Black Knight, Inc. 
 
Entity Central Index Key
0001627014 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
153,469,978 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 146.2 
$ 133.9 
Trade receivables, net
169.2 
155.8 
Prepaid expenses and other current assets
42.5 
45.4 
Receivables from related parties
18.5 
4.1 
Total current assets
376.4 
339.2 
Property and equipment, net
165.0 
173.0 
Computer software, net
422.1 
450.0 
Other intangible assets, net
248.5 
299.5 
Goodwill
2,306.8 
2,303.8 
Other non-current assets
231.2 
196.5 
Total assets
3,750.0 
3,762.0 
Current liabilities:
 
 
Trade accounts payable and other accrued liabilities
52.1 
55.2 
Accrued compensation and benefits
39.2 
61.1 
Current portion of long-term debt
55.1 
63.4 
Deferred revenues
54.2 
47.4 
Total current liabilities
200.6 
227.1 
Deferred revenues
98.1 
77.3 
Deferred income taxes
301.8 
7.9 
Long-term debt, net of current portion
1,486.9 
1,506.8 
Other non-current liabilities
12.5 
3.5 
Total liabilities
2,099.9 
1,822.6 
Commitments and contingencies
   
   
Equity:
 
 
Common stock
0 
0 
Preferred stock
0 
0 
Additional paid-in capital
1,594.9 
810.8 
Retained earnings
54.2 
65.7 
Accumulated other comprehensive earnings (loss)
1.0 
(0.8)
Total shareholders' equity
1,650.1 
875.7 
Noncontrolling interests
0 
1,063.7 
Total equity
1,650.1 
1,939.4 
Total liabilities and equity
3,750.0 
3,762.0 
Black Knight Financial Services [Member]
 
 
Equity:
 
 
Preferred stock
0 
0 
Black Knight Financial Services [Member] |
Common Class A [Member]
 
 
Equity:
 
 
Common stock
0 
0 
Black Knight Financial Services [Member] |
Common Class B [Member]
 
 
Equity:
 
 
Common stock
$ 0 
$ 0 
Condensed Consolidated Balance Sheets (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Related party prepaid fees
$ 42.5 
$ 45.4 
Long-term debt, net of current portion
$ 1,486.9 
$ 1,506.8 
Common stock, par value (in dollars per share)
$ 0.0001 
 
Common stock, shares authorized
550,000,000 
 
Common stock, share issued
153,473,895 
 
Common stock, shares outstanding
153,473,895 
 
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 
 
Black Knight Financial Services [Member]
 
 
Common stock, shares outstanding
 
153,900,000 
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 
Black Knight Financial Services [Member] |
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
 
69,091,008 
Common stock, shares outstanding
0 
69,100,000 
Black Knight Financial Services [Member] |
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
0 
84,800,000 
Condensed Consolidated Statements of Earnings and Comprehensive Earnings (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Statement [Abstract]
 
 
 
 
Revenues
$ 263.8 
$ 267.1 
$ 784.1 
$ 764.5 
Expenses:
 
 
 
 
Operating expenses
140.7 
152.2 
428.2 
433.4 
Depreciation and amortization
51.3 
56.8 
154.2 
154.2 
Transition and integration costs
4.0 
1.1 
8.5 
2.2 
Total expenses
196.0 
210.1 
590.9 
589.8 
Operating income (loss)
67.8 
57.0 
193.2 
174.7 
Other income and expense:
 
 
 
 
Interest expense
(14.1)
(16.9)
(44.8)
(50.6)
Other expense, net
(0.6)
(1.4)
(17.1)
(6.2)
Total other expense, net
(14.7)
(18.3)
(61.9)
(56.8)
Earnings before income taxes
53.1 
38.7 
131.3 
117.9 
Income tax expense
9.2 
6.3 
24.3 
19.2 
Net earnings
43.9 
32.4 
107.0 
98.7 
Less: Net earnings attributable to noncontrolling interests
29.2 
21.2 
71.9 
64.7 
Net earnings attributable to Black Knight
14.7 
11.2 
35.1 
34.0 
Unrealized holding gains (losses), net of tax
0.3 
0.4 
0.9 
(0.9)
Reclassification adjustments for losses included in net earnings, net of tax
0 1
0.1 1
0.2 1
0.4 1
Total unrealized gains (losses) on interest rate swaps, net of tax
0.3 2
0.5 2
1.1 2
(0.5)2
Foreign currency translation adjustment
0 
0.1 
0.1 
(0.1)
Other comprehensive earnings (loss)
0.3 
0.6 
1.2 
(0.6)
Comprehensive earnings attributable to noncontrolling interests
29.8 
22.2 
74.1 
63.9 
Comprehensive earnings
44.8 
34.0 
110.4 
97.3 
Net earnings per share attributable to Black Knight common shareholders:
 
 
 
 
Basic (in dollars per share)
$ 0.22 
$ 0.17 
$ 0.52 
$ 0.52 
Diluted (in dollars per share)
$ 0.21 
$ 0.16 
$ 0.51 
$ 0.50 
Weighted average shares of common stock outstanding (Note 2):
 
 
 
 
Basic (in shares)
67.9 
65.9 
67.7 
65.9 
Diluted (in shares)
68.5 
67.9 
152.7 
67.8 
Reclassification adjustment from AOCI on derivatives, tax
0.1 
0.1 
0.1 
0.3 
Derivatives qualifying as hedges, tax
$ 0.2 
$ 0.3 
$ 0.7 
$ (0.3)
Condensed Consolidated Statement of Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
USD ($)
Accumulated Deficit/Retained Earnings [Member]
USD ($)
Accumulated Other Comprehensive Loss [Member]
USD ($)
Treasury Stock [Member]
USD ($)
Noncontrolling Interest [Member]
USD ($)
Black Knight Financial Services [Member]
Common Stock [Member]
Common Class A [Member]
Black Knight Financial Services [Member]
Common Stock [Member]
Common Class B [Member]
Beginning balance at Dec. 31, 2016
$ 1,939.4 
 
$ 810.8 
$ 65.7 
$ (0.8)
 
$ 1,063.7 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Beginning balance (in shares)
 
153,500,000 
 
 
 
0 
 
0 
0 
Issuance of restricted shares of Class A common stock (in shares)
 
 
 
 
 
 
 
1,000,000 
 
Issuance of restricted shares of Class A common stock
0 
 
0 
 
 
 
 
 
 
Forfeitures of restricted shares of Class A common stock (in shares)
 
 
 
 
 
 
 
(100,000)
 
Exchange of Class B common stock for Class A common stock
 
 
 
 
 
 
 
200,000 
(200,000)
Tax withholding payments for restricted share vesting (in shares)
 
 
 
 
 
 
 
(100,000)
 
Tax withholding payments for restricted share vesting
(4.3)
 
(4.3)
 
 
 
 
 
 
Purchases of treasury stock (in shares)
 
 
 
 
 
1,200,000 
 
 
 
Purchases of treasury stock
(46.6)
 
 
 
 
(46.6)
 
 
 
Equity-based compensation expense
14.0 
 
14.0 
 
 
 
 
 
 
Net earnings
107.0 
 
 
35.1 
 
 
71.9 
 
 
Foreign currency translation adjustment
0.1 
 
 
 
0.1 
 
0 
 
 
Unrealized gains on interest rate swaps, net
3.3 
 
 
 
1.1 
 
2.2 
 
 
Tax distributions to members
(75.3)
 
 
0 
 
 
(75.3)
 
 
Distribution of FNF's ownership interest and related transactions (in shares)
 
153,500,000 
 
 
 
(1,200,000)
 
(70,100,000)
(84,600,000)
Distribution of FNF's ownership interest and related transactions
(287.5)
 
774.4 
(46.6)
0.6 
46.6 
(1,062.5)
 
 
Ending balance at Sep. 30, 2017
$ 1,650.1 
 
$ 1,594.9 
$ 54.2 
$ 1.0 
$ 0 
$ 0 
 
 
Ending balance (in shares) at Sep. 30, 2017
 
153,500,000 
 
 
 
0 
 
0 
0 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Cash flows from operating activities:
 
 
Net earnings
$ 107.0 
$ 98.7 
Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
Depreciation and amortization
154.2 
154.2 
Amortization of debt issuance costs, bond premium and original issue discount
2.5 
2.0 
Loss on extinguishment of debt, net
12.6 
0 
Deferred income taxes, net
4.8 
3.7 
Equity-based compensation
14.2 
9.5 
Changes in assets and liabilities, net of acquired assets and liabilities:
 
 
Trade and other receivables, including receivables from related parties
(19.9)
(23.1)
Prepaid expenses and other assets
3.1 
(7.0)
Deferred revenues
(35.6)
(41.1)
Deferred contract costs
27.6 
15.8 
Trade accounts payable and other accrued liabilities, including accrued compensation and benefits
(30.7)
(2.2)
Net cash provided by operating activities
239.8 
210.5 
Cash flows from investing activities:
 
 
Additions to property and equipment
(5.3)
(24.0)
Additions to computer software
(37.1)
(31.9)
Business acquisitions, net of cash acquired
0 
150.2 
Other investing activities
(4.0)
0 
Net cash used in investing activities
(46.4)
(206.1)
Cash flows from financing activities:
 
 
Borrowings
400.0 
55.0 
Debt service payments
(25.9)
(138.0)
Senior Notes redemption
(390.0)
0 
Senior Notes redemption fee
(18.8)
0 
Distributions to members
(75.3)
(48.5)
Purchases of treasury stock
(46.6)
0 
Capital lease payments
(11.6)
0 
Tax withholding payments for restricted share vesting
(4.3)
0 
Debt issuance costs
(8.6)
0 
Net cash used in financing activities
(181.1)
(131.5)
Net increase (decrease) in cash and cash equivalents
12.3 
(127.1)
Cash and cash equivalents, beginning of period
133.9 
186.0 
Cash and cash equivalents, end of period
146.2 
58.9 
Supplemental cash flow information:
 
 
Interest paid
(45.2)
(39.6)
Income taxes paid
$ (13.6)
$ (16.0)
Basis of Presentation
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. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission ("SEC") on February 24, 2017.
As a result of the Distribution and the THL Interest Exchange on September 29, 2017 (as defined below), Black Knight, Inc. became the new public company and owns 100% of BKFS, and therefore, there are no longer any noncontrolling interests of BKFS as of September 30, 2017. There was no change to the underlying Black Knight business, and for this reason, there was no change in reporting entity in accordance with GAAP.
Description of Business
Black Knight is a leading provider of software, data and analytics solutions to the mortgage and consumer loan, real estate and capital market verticals. We believe we differentiate ourselves by the breadth and depth of our comprehensive, integrated solutions and the insight we provide to our clients.
Reporting Segments
We conduct our operations through two reporting segments: (1) Software Solutions (formerly known as the Technology segment) and (2) Data and Analytics. See further discussion in Note 8 — Segment Information.
Distribution of FNF's Ownership Interest and Related Transactions
On December 7, 2016, we announced that Fidelity National Financial, Inc.'s ("FNF") board of directors approved a tax-free plan (the "Distribution Plan") whereby FNF intended to distribute all 83.3 million shares of BKFS common stock that it owned to FNF Group shareholders.
On September 29, 2017, the transactions contemplated by the Distribution Plan were consummated through four newly-formed corporations, New BKH Corp. ("New BKH"), Black Knight, Inc. (formerly known as Black Knight Holdco Corp.), New BKH Merger Sub, Inc. ("Merger Sub One") and BKFS Merger Sub, Inc. ("Merger Sub Two"), as follows:
•
Black Knight Holdings, Inc. ("BKHI"), a wholly-owned subsidiary of FNF, contributed all of its 83.3 million shares of BKFS Class B common stock and all of its units of Black Knight Financial Services, LLC ("BKFS LLC") to New BKH in exchange for 100% of the shares of New BKH common stock;
•
Following which BKHI converted into a limited liability company and distributed to FNF all of the shares of New BKH common stock held by BKHI;
•
Immediately thereafter, FNF distributed the shares of New BKH common stock to the holders of FNF Group common stock on a pro-rata basis (the "Spin-off");
•
Immediately following the Spin-off, Merger Sub One merged with and into New BKH (the "New BKH merger");
•
In the New BKH merger, each outstanding share of New BKH common stock (other than shares owned by New BKH) was exchanged for one share of Black Knight, Inc. common stock. New BKH shares owned by New BKH immediately prior to the New BKH merger were canceled for no consideration. As a result of the Spin-Off and the New BKH merger, FNF Group shareholders received 0.3066322 shares of Black Knight, Inc. common stock for each share of FNF Group common stock they held;
•
Immediately following the New BKH merger, Merger Sub Two merged with and into Black Knight Financial Services, Inc. (the "BKFS merger");
•
In the BKFS merger, each outstanding share of BKFS Class A common stock (other than shares owned by BKFS) was exchanged for one share of Black Knight, Inc. common stock. Shares of BKFS Class A common stock owned by BKFS, otherwise referred to as treasury stock, immediately prior to the BKFS merger were canceled for no consideration; and
•
Black Knight, Inc. is the public company following the completion of the transactions above which are collectively referred to as the "Distribution".
Shares of Black Knight, Inc. common stock are listed on the New York Stock Exchange under the trading symbol “BKI”, and began trading on October 2, 2017. Under the organizational documents of Black Knight, Inc., the rights of the holders of shares of Black Knight, Inc. common stock are substantially the same as the rights of former holders of BKFS Class A common stock.
On June 8, 2017, Black Knight, Inc., BKFS and certain affiliates of Thomas H. Lee Partners, L.P. ("THL") entered into an interest exchange agreement (the "THL Interest Exchange"). Immediately following the completion of the Distribution, affiliates of THL contributed to Black Knight, Inc. all of their BKFS Class B common stock and all of their BKFS LLC Units in exchange for a number of shares of Black Knight, Inc. common stock equal to the number of shares of BKFS Class B common stock contributed. Following the completion of the Distribution and the THL Interest Exchange, the shares of BKFS Class B common stock were canceled.
For additional details of the effects of the Distribution, the THL Interest Exchange and other related transactions, see "Share Repurchase Plan", "Deferred Compensation Plan", "Employee Stock Purchase Plan", "401(k) Profit Sharing Plan" and "Treasury Shares" within this note, Note 5 — Income Taxes and Note 7 — Equity-Based Compensation.
Consolidation
Prior to the Distribution described above, BKFS LLC was subject to the consolidation guidance related to variable interest entities as set forth in Accounting Standards Codification ("ASC") Topic 810, Consolidation ("ASC 810"). Black Knight, as the sole managing member of BKFS LLC, had the exclusive authority to manage, control and operate the business and affairs of BKFS LLC and its subsidiaries, pursuant to the terms of the Second Amended and Restated Limited Liability Company Agreement ("LLC Agreement"). Under the terms of the LLC Agreement, Black Knight was authorized to manage the business of BKFS LLC, including the authority to enter into contracts, manage bank accounts, hire employees and agents, incur and pay debts and expenses, merge or consolidate with other entities and pay taxes. Because Black Knight was the primary beneficiary through its sole managing member interest and possessed the rights established in the LLC Agreement, in accordance with the requirements of ASC 810, Black Knight controlled BKFS LLC and appropriately consolidated the operations thereof.
We account for noncontrolling interests in accordance with ASC 810. Our Class A shareholders indirectly controlled BKFS LLC through our managing member interest. Our Class B shareholders had a noncontrolling interest in BKFS LLC. Their share of equity in BKFS LLC is reflected in Noncontrolling interests in our Condensed Consolidated Balance Sheets (Unaudited) and their share of net earnings or loss in BKFS LLC is reported in Net earnings attributable to noncontrolling interests in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Net earnings attributable to noncontrolling interests do not include expenses incurred directly by Black Knight, including income tax expense attributable to Black Knight.
Subsequent to the Distribution, BKFS LLC is an indirect wholly-owned subsidiary of Black Knight, Inc., and therefore, there are no longer any noncontrolling interests in BKFS LLC.
Realignment of Property Insight
Effective January 1, 2017, Property Insight, LLC ("Property Insight"), a Black Knight subsidiary that provides information used by title insurance underwriters, title agents and closing attorneys to source and underwrite title insurance for real property sales and transfer, realigned its commercial relationship with FNF. In connection with the realignment, Property Insight employees responsible for title plant posting and maintenance were transferred to FNF. Under the new commercial arrangement, Black Knight continues to own the title plant technology and retains sales responsibility for third parties, other than FNF. As a result of the realignment, Black Knight no longer recognizes revenues or expenses related to title plant posting and maintenance, but charges FNF a license fee for use of the technology to access and maintain the title plant data. This transaction did not result in any gain or loss.
Share Repurchase Program
On January 31, 2017, the BKFS board of directors approved a three-year share repurchase program, effective February 3, 2017, authorizing us to repurchase up to 10 million shares of BKFS Class A common stock from time to time through February 2, 2020, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other restrictions. There were no repurchases during the third quarter of 2017. During the nine months ended September 30, 2017, we repurchased approximately 1.2 million shares of our BKFS Class A common stock for $46.6 million, or an average of $39.18 per share.
In connection with the Distribution, the Black Knight board of directors approved a share repurchase program authorizing the repurchase of shares of Black Knight, Inc. common stock consistent with the previous BKFS share repurchase program. The timing and volume of share repurchases will be determined by our management based on ongoing assessments of the capital needs of the business, the market price of Black Knight, Inc. common stock and general market conditions. As of September 30, 2017, we had approximately 8.8 million shares remaining under our share repurchase authorization.
THL Secondary Offering
On May 8, 2017, Black Knight announced the pricing of an underwritten secondary offering of 5,000,000 shares of its Class A common stock (the “Offering”) by affiliates of THL pursuant to a shelf registration statement on Form S-3 filed with the SEC on May 8, 2017. Affiliates of THL in the Offering granted the underwriter an option to purchase up to 750,000 additional shares (the “Overallotment Option"). The Offering closed on May 12, 2017, and the full exercise of the Overallotment Option closed on May 18, 2017. The Company did not sell any shares and did not receive any proceeds related to the Offering or Overallotment Option. See Note 3 — Related Party Transactions for the change in ownership percentages related to these transactions.
Cash and Cash Equivalents
Cash and cash equivalents include the following (in millions):
 
September 30, 2017
 
December 31, 2016
Unrestricted:
 
 
 
Cash
$
87.0

 
$
129.8

Cash equivalents
57.2

 
1.8

Total unrestricted cash and cash equivalents
144.2

 
131.6

Restricted cash equivalents (1)
2.0

 
2.3

Total cash and cash equivalents
$
146.2

 
$
133.9

_______________
(1) Restricted cash equivalents relate to our subsidiary, I-Net Reinsurance Limited, and are held in trust until the final reinsurance policy is canceled.
Trade Receivables, Net
A summary of Trade receivables, net of allowance for doubtful accounts, as of September 30, 2017 and December 31, 2016 is as follows (in millions):

 
September 30, 2017
 
December 31, 2016
Trade receivables — billed
$
129.1

 
$
115.4

Trade receivables — unbilled
42.4

 
42.6

Total trade receivables
171.5

 
158.0

Allowance for doubtful accounts
(2.3
)
 
(2.2
)
Total trade receivables, net
$
169.2

 
$
155.8



Capital Leases
Black Knight entered into a one-year capital lease agreement commencing January 1, 2017 with a bargain purchase option for certain computer equipment. The leased equipment has a useful life of five years and will be depreciated on a straight-line basis over this period. The leased equipment was valued based on the net present value of the minimum lease payments, which was $8.4 million (net of imputed interest of $0.1 million).
The gross value of assets subject to capital leases was $8.4 million (net of imputed interest of $0.1 million) and $10.0 million (net of imputed interest of $0.1 million) as of September 30, 2017 and December 31, 2016, respectively, and is included in Property and equipment, net on the Condensed Consolidated Balance Sheets (Unaudited). The remaining capital lease obligation of $2.2 million and $5.0 million as of September 30, 2017 and December 31, 2016, respectively, is included in Trade accounts payable and other accrued liabilities on the Condensed Consolidated Balance Sheets (Unaudited). The non-cash investing and financing activity for the nine months ended September 30, 2017 and 2016 was $2.2 million and $8.4 million, respectively, and relates to the unpaid portion of the capital lease obligation.
Deferred Compensation Plan
Prior to the Distribution, certain of our management level employees and directors participated in the FNF Deferred Compensation Plan (the "FNF Plan"). The FNF Plan permits participants to defer receipt of part of their current compensation. Participant benefits for the FNF Plan are provided by a funded rabbi trust. The compensation withheld from FNF Plan participants, together with investment income on the FNF Plan, was recorded as a deferred compensation obligation to participants. The underlying rabbi trust and the related liability was historically carried by FNF. As a result of the Distribution, the liability to Black Knight participants in the FNF Plan, as well as the related assets of the funded rabbi trust, were transferred to the newly-formed Black Knight Deferred Compensation Plan (the "Black Knight Plan") in a non-cash transaction. The terms of the Black Knight Plan are consistent with the terms of the former FNF Plan. As of September 30, 2017, the assets of the funded rabbi trust of $11.5 million are included in Other non-current assets, $10.2 million of the related liability is included in Other non-current liabilities and $1.2 million of the related liability is included in Trade accounts payable and other accrued liabilities on the Condensed Consolidated Balance Sheets (Unaudited).
Employee Stock Purchase Plan
Effective July 20, 2015, we adopted the Black Knight Financial Services, Inc. Employee Stock Purchase Plan (the "ESPP"). On September 29, 2017, the board of directors of Black Knight, Inc. approved, and Black Knight, Inc. assumed the ESPP and renamed it the Black Knight, Inc. Employee Stock Purchase Plan. There were no changes to the terms of the ESPP.
401(k) Profit Sharing Plan
Prior to the Distribution, our employees participated in a qualified 401(k) plan sponsored by FNF. As a result of the Distribution, our employees no longer participate in this plan sponsored by FNF. Our indirect subsidiary, Black Knight InfoServ, LLC ("BKIS"), adopted and established the Black Knight 401(k) Profit Sharing Plan (the “Black Knight 401(k) Plan”), effective September 29, 2017. The terms of the Black Knight 401(k) Plan are consistent with the terms of the 401(k) plan sponsored by FNF.
Treasury Shares
Shares held in treasury at the time of the Distribution were canceled for no consideration. In connection with this transaction, we made a policy election to charge the cost in excess of par value to Retained earnings when we cancel or retire repurchased shares.
Equity-Based Compensation
During the first quarter of 2017, Black Knight adopted Accounting Standards Update ("ASU") 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). In connection with this adoption, we made a policy election to account for forfeitures as they occur. The adoption of this ASU did not have a material effect on our business, financial condition or our results of operations.
Depreciation and Amortization
Depreciation and amortization on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include the following (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Property and equipment
$
7.3

 
$
7.2

 
$
21.7

 
$
21.4

Computer software
21.2

 
20.6

 
62.4

 
57.5

Other intangible assets
16.9

 
20.5

 
50.9

 
56.2

Deferred contract costs
5.9

 
8.5

 
19.2

 
19.1

Total
$
51.3

 
$
56.8

 
$
154.2

 
$
154.2


Deferred contract costs amortization for the nine months ended September 30, 2017 includes accelerated amortization of $3.3 million recorded in the first quarter related to certain deferred implementation costs. Deferred contract costs amortization for the three and nine months ended September 30, 2016 includes accelerated amortization of $2.9 million.
Transition and Integration Costs
Transition and integration costs during the three and nine months ended September 30, 2017 primarily represent legal and professional fees related to the Distribution. Transition and integration costs during the three and nine months ended September 30, 2016 primarily represent acquisition-related costs.
2016 eLynx Acquisition
On May 16, 2016, Black Knight completed the acquisition of eLynx Holdings, Inc. ("eLynx"). The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair value at the acquisition date. The fair value of the acquired Computer software and Other intangible assets was determined using a third-party valuation based on significant estimates and assumptions, including level 3 inputs, which are judgmental in nature. These estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting the risk inherent in the future cash flows and future market prices. These estimates for the eLynx acquisition were finalized in the first quarter of 2017. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed on the acquisition date.
During the first quarter of 2017, adjustments were recorded to the following (in millions):
Goodwill
$
3.0

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

The goodwill adjustment of $3.0 million is included in the Software Solutions segment. An adjustment of $0.5 million to Depreciation and amortization was recorded in the first quarter of 2017 related to the changes in provisional values.
Recent Accounting Pronouncements
Revenue Recognition (ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"))
In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which was codified as ASC 606. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The guidance requires a five-step analysis of transactions to determine when and how revenue is recognized based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The FASB has issued several additional ASUs since this time that add additional clarification. All of the new standards are effective for the Company on January 1, 2018.
In preparation for adoption of ASC 606, we formed a project team and engaged a third-party professional services firm to assist us with our evaluation. We are applying an integrated approach to analyzing ASC 606's impact on our pattern of revenue recognition, including a review of accounting policies and practices, evaluating differences from applying the requirements of the new standard to our contracts and business practices and assessing the need for changes to our processes, accounting systems and design of internal controls. Based upon our assessment to date, we currently do not anticipate a material change to the pattern of revenue recognition related to revenue earned from the majority of our Software Solutions segment hosted software arrangements, Data and Analytics segment arrangements with transaction or volume-based fees or perpetual license arrangements in our Software Solutions and Data and Analytics segments. However, due to the complexity of certain of our contracts, including contracts for multiple products and services related to each of our segments, the final determination will be dependent on contract-specific terms.
During the third quarter, we continued our assessment with increased focus on completing certain detailed contract reviews and further identification of data and disclosure requirements, including the effect on our processes, accounting system and design of internal controls. We finalized changes to our revenue recognition and contract costs policies to address differences in treatment resulting from the adoption of the new standard.
While we continue to assess the effect the adoption of ASC 606 will have on our consolidated financial statements, we currently anticipate changes related to the timing of revenue recognition for distinct professional services performed during implementation of certain solutions within our origination software business, which will be recognized over the period the professional services are performed. Moreover, fees for certain post-implementation professional services related to minor customization of hosted software solutions, determined not to be distinct from the hosted software solutions, will be deferred and recognized over the remaining hosted software contract term. In addition, based on the ongoing analysis of contract acquisition and fulfillment costs, we do not expect a significant change to our current practice for capitalizing such costs; however, we anticipate we will amortize certain capitalized contract costs over a longer time period for certain contracts based on the requirements of the new standard. Further, we currently anticipate recognizing the license portion of certain distinct term license arrangements within our Data and Analytics segment upon delivery as opposed to ratably over the license term. For contracts where the promised software license and ongoing services are not distinct from each other, the timing of revenue recognition will be over time, which is consistent with the treatment under the current revenue recognition standard.
We are still in the process of quantifying the effects ASC 606 will have on our consolidated financial statements.
The standard allows companies to use either a full retrospective or a modified retrospective adoption approach. We currently anticipate adopting the new standard using the modified retrospective transition approach. Our decision to adopt using the modified retrospective transition approach is dependent on the completion of our analysis of the effect the adoption of ASC 606 will have on our results of operations, financial position and related disclosures.
Other Accounting Pronouncements
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This update also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. This ASU is effective in fiscal years beginning after December 15, 2018 with early adoption permitted. We are currently evaluating the effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.
In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective prospectively in fiscal years beginning after December 15, 2017 with early adoption permitted.  We do not expect this update to have a material effect on our results of operations or our financial position.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 of the goodwill impairment test that required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit's carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This update is effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or those beginning after January 1, 2017 if early adopted. We do not expect this update to have a material effect on our results of operations or our financial position.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU enhances the reporting model and addresses certain aspects of recognition, measurement, presentation and disclosure for financial instruments. This ASU is effective in fiscal years beginning after December 15, 2017. Early adoption of this ASU is not permitted. We do not expect this update to have a material effect on our results of operations or our financial position.
Earnings Per Share
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 common stock outstanding during the period.
Prior to the Distribution, potentially dilutive securities include unvested restricted stock awards and the shares of BKFS Class B common stock. The numerator in the diluted net earnings per share calculation is adjusted to reflect our income tax expense at an expected effective tax rate assuming the conversion of the shares of BKFS Class B common stock into shares of BKFS Class A common stock on a one-for-one basis, prior to the Distribution, for the nine months ended September 30, 2017. The expected effective tax rate for the nine months ended September 30, 2017 was 41.1%, including certain discrete items recorded during the period. The denominator includes approximately 84.4 million shares of BKFS Class B common stock outstanding for the nine months ended September 30, 2017. However, the approximately 83.7 million shares of BKFS Class B common stock for the three months ended September 30, 2017 and 84.8 million shares of BKFS Class B common stock for the three and nine months ended September 30, 2016 have been excluded in computing diluted net earnings per share because including them on an "if-converted" basis would have an anti-dilutive effect. The denominator also includes the dilutive effect of approximately 0.6 million shares of unvested restricted shares of common stock for the three and nine months ended September 30, 2017, respectively, and approximately 2.0 million and 1.9 million shares for the three and nine months ended September 30, 2016, respectively.
The shares of Class B common stock did not share in the earnings or losses of Black Knight and were, therefore, not participating securities. Accordingly, basic and diluted net earnings per share of Class B common stock have not been presented.
The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Basic:
 
 
 
 
 
 
 
Net earnings attributable to Black Knight
$
14.7

 
$
11.2

 
$
35.1

 
$
34.0

Shares used for basic net earnings per share:
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding
67.9

 
65.9

 
67.7

 
65.9

Basic net earnings per share
$
0.22

 
$
0.17

 
$
0.52

 
$
0.52

 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
Earnings before income taxes
 
 
 
 
$
131.3

 
 
Income tax expense excluding the effect of noncontrolling interests
 
 
 
 
54.0

 
 
Net earnings
 
 
 
 
$
77.3

 
 
Net earnings attributable to Black Knight
$
14.7

 
$
11.2

 
 
 
$
34.0

Shares used for diluted net earnings per share:
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding
67.9

 
65.9

 
67.7

 
65.9

Dilutive effect of unvested restricted shares of common stock
0.6

 
2.0

 
0.6

 
1.9

Weighted average shares of Class B common stock outstanding
—

 
—

 
84.4

 
—

Weighted average shares of common stock, diluted
68.5

 
67.9

 
152.7

 
67.8

Diluted net earnings per share
$
0.21

 
$
0.16

 
$
0.51

 
$
0.50

Related Party Transactions
Related Party Transactions
Related Party Transactions
We are party to certain related party agreements, including those with FNF and THL. The following table sets forth the ownership interests of FNF, THL and other holders of Black Knight common stock (shares in millions):
 
September 30, 2017
 
December 31, 2016
 
Shares
 
Ownership
Percentage
 
Shares
 
Ownership
Percentage
Black Knight, Inc. common stock:
 
 
 
 
 
 
 
THL and its affiliates
35.1

 
22.9
%
 
—

 
—
%
Restricted shares
1.9

 
1.2
%
 
—

 
—
%
Other, including those publicly traded
116.5

 
75.9
%
 
—

 
—
%
Total shares of Black Knight, Inc. common stock
153.5

 
100.0
%
 
—

 
—
%
BKFS Class A common stock:
 
 
 
 
 
 
 
THL and its affiliates
—

 
—
%
 
39.3

 
25.5
%
Restricted shares
—

 
—
%
 
2.9

 
1.9
%
Other, including those publicly traded
—

 
—
%
 
26.9

 
17.5
%
Total shares of Class A common stock
—

 
—
%
 
69.1

 
44.9
%
BKFS Class B common stock:
 
 
 
 
 
 
 
FNF subsidiary
—

 
—
%
 
83.3

 
54.1
%
THL and its affiliates
—

 
—
%
 
1.5

 
1.0
%
Total shares of Class B common stock
—

 
—
%
 
84.8

 
55.1
%
Total shares of BKFS common stock
—

 
—
%
 
153.9

 
100.0
%

As a result of the Distribution as described in Note 1 — Basis of Presentation, FNF no longer has an ownership interest in Black Knight as of September 30, 2017. FNF is still considered to be a related party primarily due to the combination of certain shared board members, members of senior management and various agreements.
Transactions with FNF and THL are described below.
FNF
We have various agreements with FNF and certain FNF subsidiaries to provide software, data and analytics services, as well as corporate shared services and information technology. We are also a party to certain other agreements under which we incur other expenses or receive revenues from FNF.
A detail of the revenues and expenses, net from FNF is set forth in the table below (in millions). The decrease in Revenues from the prior year period are primarily the result of the Property Insight realignment as described in Note 1 — Basis of Presentation.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Revenues
$
13.8

 
$
19.2

 
$
43.2

 
$
53.4

Operating expenses
3.4

 
3.8

 
9.8

 
11.5

Guarantee fee
—

 
0.9

 
1.2

 
2.9

We paid to FNF a guarantee fee of 1.0% of the outstanding principal of the Senior Notes (as defined in Note 4 — Long-Term Debt) in exchange for the ongoing guarantee by FNF of the Senior Notes. The guarantee fee is included in Interest expense on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). On April 26, 2017, the Senior Notes were redeemed (see Note 4 — Long-Term Debt for further information), and we are no longer required to pay a guarantee fee.
FNF subsidiaries held $48.9 million and $49.3 million as of September 30, 2017 and December 31, 2016, respectively, of principal amount of our Term B Loan (as defined in Note 4 — Long-Term Debt) from our credit agreement dated May 27, 2015, as amended.
THL
Two managing directors of THL currently serve on our Board of Directors. We purchase software and systems services from certain entities over which THL exercises control.
A detail of the expenses, net from THL is set forth in the table below (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Operating expenses
$
—

 
$
0.2

 
$
0.2

 
$
1.0

Software and software-related purchases
—

 
—

 
—

 
1.1


Certain affiliates of THL held $39.4 million of principal amount of our Term B Loan (as defined in Note 4 — Long-Term Debt) as of December 31, 2016 from our credit agreement dated May 27, 2015. They did not hold any of our debt as of September 30, 2017.
Revenues and Expenses
A detail of related party items included in Revenues is as follows (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Data and analytics services
$
5.7

 
$
12.3

 
$
18.4

 
$
34.2

Servicing, origination and default software services
8.1

 
6.9

 
24.8

 
19.2

Total related party revenues
$
13.8

 
$
19.2

 
$
43.2

 
$
53.4

A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Data entry, indexing services and other operating expenses
$
1.4

 
$
2.4

 
$
3.9

 
$
7.3

Corporate services
2.4

 
2.4

 
7.4

 
7.6

Technology and corporate services
(0.4
)
 
(0.8
)
 
(1.3
)
 
(2.4
)
     Total related party expenses, net
$
3.4

 
$
4.0

 
$
10.0

 
$
12.5


Additionally, related party prepaid fees were less than $0.1 million as of September 30, 2017 and $0.1 million as of December 31, 2016. These fees are included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets (Unaudited). Finally, related party deferred revenues were $1.0 million as of September 30, 2017, which are included in current Deferred revenues on the Condensed Consolidated Balance Sheets (Unaudited).
We believe the amounts earned from or charged by us under each of the foregoing arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties, except for certain corporate services provided to an FNF subsidiary and certain corporate services provided by FNF, which are at cost. However, 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
Long-Term Debt
Long-term debt consisted of the following (in millions):
 
September 30, 2017
 
December 31, 2016
 
Principal
 
Debt Issuance Costs
 
Discount
 
Total
 
Principal
 
Debt Issuance Costs
 
Premium (Discount)
 
Total
Term A Loan
$
1,017.1

 
$
(7.5
)
 
$
—

 
$
1,009.6

 
$
740.0

 
$
(7.0
)
 
$
—

 
$
733.0

Term B Loan
391.0

 
(2.6
)
 
(1.5
)
 
386.9

 
394.0

 
(3.4
)
 
(0.8
)
 
389.8

Revolving Credit Facility
150.0

 
(4.5
)
 
—

 
145.5

 
50.0

 
(3.7
)
 
—

 
46.3

Senior Notes, issued at par
—

 
—

 
—

 
—

 
390.0

 
—

 
11.1

 
401.1

   Total long-term debt
1,558.1

 
(14.6
)
 
(1.5
)
 
1,542.0

 
1,574.0

 
(14.1
)
 
10.3

 
1,570.2

Less: Current portion of long-term debt
55.5

 
(0.4
)
 
—

 
55.1

 
64.0

 
(0.6
)
 
—

 
63.4

Long-term debt, net of current portion
$
1,502.6

 
$
(14.2
)
 
$
(1.5
)
 
$
1,486.9

 
$
1,510.0

 
$
(13.5
)
 
$
10.3

 
$
1,506.8


Principal maturities as of September 30, 2017 for each of the next five years and thereafter are as follows (in millions):
2017 (remaining)
$
13.9

2018
55.5

2019
81.3

2020
107.0

2021
132.7

Thereafter
1,167.7

Total
$
1,558.1


Scheduled maturities noted above exclude the effect of the debt issuance costs of $14.6 million as well as $1.5 million original issue discount.
Credit Agreement
On May 27, 2015, BKIS entered into a credit and guaranty agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto and the other agents and lenders party thereto. The Credit Agreement provided for (i) an $800.0 million term loan A facility (the "Term A Loan"), (ii) a $400.0 million term loan B facility (the "Term B Loan") and (iii) a $400.0 million revolving credit facility (the "Revolving Credit Facility", and collectively with the Term A Loan and Term B Loan, the "Facilities"). The Facilities are guaranteed by substantially all of BKIS's wholly-owned domestic restricted subsidiaries and BKFS LLC, and are secured by associated collateral agreements that pledge a lien on virtually all of BKIS's assets, including fixed assets and intangible assets, and the assets of the guarantors.
As of September 30, 2017, the Term A Loan and the Revolving Credit Facility bear interest at the Eurodollar rate plus a margin of 175 basis points, and the Term B Loan bears interest at the Eurodollar rate plus a margin of 225 basis points, subject to a Eurodollar rate floor of 75 basis points. As of September 30, 2017, we have $350.0 million capacity on the Revolving Credit Facility and pay an unused commitment fee of 25 basis points. During the nine months ended September 30, 2017, there were $100.0 million of incremental borrowings and no payments on our Revolving Credit Facility and $55.0 million of borrowings and $105.0 million of payments during the nine months ended September 30, 2016. As of September 30, 2017, the interest rates on the Term A Loan, Term B Loan and Revolving Credit Facility were 3.00%, 3.50% and 3.00%, respectively.
After September 30, 2017, we made payments of $150.0 million on our Revolving Credit Facility, which increased our available capacity to $500.0 million.
Term B Loan Repricing
On February 27, 2017, BKIS entered into a First Amendment to Credit and Guaranty Agreement (the "Credit Agreement First Amendment") with JPMorgan Chase Bank, N.A. as administrative agent. Pursuant to the Credit Agreement First Amendment, the Term B Loan bears interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of 125 basis points, or (ii) the Eurodollar rate plus a margin of 225 basis points, subject to a Eurodollar rate floor of 75 basis points. The Term B Loan matures on May 27, 2022. In addition, the Credit Agreement First Amendment permitted the Distribution. The amount included in Other expense, net on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) related to the Term B Loan repricing was $1.1 million.
Term A Loan and Revolver Refinancing
On April 26, 2017, BKIS entered into a Second Amendment to Credit and Guaranty Agreement (the “Credit Agreement Second Amendment”) with the JPMorgan Chase Bank, N.A. as administrative agent, the guarantors party thereto, the other agents party thereto and the lenders party thereto. The Credit Agreement Second Amendment increases (i) the aggregate principal amount of the Term A Loan by $300.0 million to $1,030.0 million and (ii) the aggregate principal amount of commitments under the Revolving Credit Facility by $100.0 million to $500.0 million. The Credit Agreement Second Amendment also reduces the pricing applicable to the loans under the Term A Loan and Revolving Credit Facility by 25 basis points and reduces the unused commitment fee applicable to the Revolving Credit Facility by 5 basis points. The Term A Loan and Revolving Credit Facility bear interest at rates based upon, at the option of BKIS, either (i) the base rate plus a margin of between 25 and 100 basis points depending on the total leverage ratio of BKFS LLC and its restricted subsidiaries on a consolidated basis (the “Consolidated Leverage Ratio”) and (ii) the Eurodollar rate plus a margin of between 125 and 200 basis points depending on the Consolidated Leverage Ratio, subject to a Eurodollar rate floor of zero basis points. In addition, BKIS will pay an unused commitment fee of between 15 and 30 basis points on the undrawn commitments under the Revolving Credit Facility, also depending on the Consolidated Leverage Ratio. Pursuant to the terms of the Credit Agreement Second Amendment, the Term A Loan and the Revolving Credit Facility mature on February 25, 2022. The amount included in Other expense, net on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) related to the Term A Loan and Revolving Credit Facility refinancing was $3.3 million.
Senior Notes
Through April 25, 2017, BKIS had 5.75% Senior Notes, interest paid semi-annually, which were scheduled to mature on April 15, 2023 (the "Senior Notes"). The Senior Notes were senior unsecured obligations, registered under the Securities Act and contained customary affirmative, negative and financial covenants, and events of default for indebtedness of this type (with grace periods, as applicable, and lender remedies). On April 26, 2017, we redeemed the outstanding Senior Notes at a price of 104.825% (the "Redemption") and paid $0.7 million in accrued interest. The amount included in Other expense, net on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) related to the Senior Notes redemption was $8.2 million.
Fair Value of Long-Term Debt
The fair value of our Facilities approximates their carrying value at September 30, 2017. The fair value of our Facilities is based upon established market prices for the securities using level 2 inputs.
Interest Rate Swaps
On September 6, 2017, we entered into an interest rate swap agreement to hedge forecasted monthly interest rate payments on $200.0 million of our floating rate debt (the "September 2017 Swap Agreement"). Under the terms of the September 2017 Swap Agreement, we receive payments based on the 1-month LIBOR rate (equal to 1.25% as of September 30, 2017) and pay a fixed rate of 1.69%. The effective term for the September 2017 Swap Agreement is September 29, 2017 through September 30, 2021.
On March 7, 2017, we entered into an interest rate swap agreement to hedge forecasted monthly interest rate payments on $200.0 million of our floating rate debt (the "March 2017 Swap Agreement"). Under the terms of the March 2017 Swap Agreement, we receive payments based on the 1-month LIBOR rate (equal to 1.25% as of September 30, 2017) and pay a fixed rate of 2.08%. The effective term for the March 2017 Swap Agreement is March 31, 2017 through March 31, 2022.
On January 20, 2016, we entered into two interest rate swap agreements to hedge forecasted monthly interest rate payments on $400.0 million of our floating rate debt ($200.0 million notional value each) (the "January 2016 Swap Agreements", and together with the March 2017 Swap Agreement and September 2017 Swap Agreement, the "Swap Agreements"). Under the terms of the January 2016 Swap Agreements, we receive payments based on the 1-month LIBOR rate (equal to 1.25% as of September 30, 2017) and pay a weighted average fixed rate of 1.01%. The effective term for the January 2016 Swap Agreements is February 1, 2016 through January 31, 2019.
We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated these Swap Agreements as cash flow hedges. A portion of the amount included in Accumulated other comprehensive earnings (loss) is reclassified into Interest expense as a yield adjustment as interest payments are made on the hedged debt. The fair value of our Swap Agreements is based upon level 2 inputs. We have considered our own credit risk when determining the fair value of our Swap Agreements.
The estimated fair values of our Swap Agreements are as follows (in millions):    
Balance Sheet Account
 
September 30, 2017
 
December 31, 2016
Other non-current assets
 
$
3.7

 
$
—

Other non-current liabilities
 
$
1.8

 
$
2.2

As of September 30, 2017, a cumulative gain of $1.9 million ($1.1 million net of tax) is reflected in Accumulated other comprehensive earnings (loss). As of December 31, 2016, a cumulative loss of $1.0 million ($0.6 million net of tax) is reflected in Accumulated other comprehensive earnings (loss), and a cumulative loss of $1.2 million is reflected in Noncontrolling interests. Below is a summary of the effect of derivative instruments on amounts recognized in Other comprehensive earnings (loss) ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three months ended September 30, 2017 and 2016 (in millions):
 
Three months ended September 30, 2017
 
Three months ended September 30, 2016
 
Amount of Gain
Recognized
in OCE
 
Amount of Loss Reclassified from Accumulated OCE
into Net earnings
 
Amount of Gain
Recognized
in OCE
 
Amount of Loss Reclassified from Accumulated OCE
into Net earnings
Swap agreements
 
 
 
 
 
 
 
Attributable to noncontrolling interests
$
0.5

 
$
0.1

 
$
0.7

 
$
0.3

Attributable to Black Knight
0.3

 
—

 
0.4

 
0.1

Total
$
0.8

 
$
0.1

 
$
1.1

 
$
0.4

Below is a summary of the effect of derivative instruments on amounts recognized in other comprehensive earnings ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the nine months ended September 30, 2017 and 2016 (in millions):
 
Nine months ended September 30, 2017
 
Nine months ended September 30, 2016
 
Amount of Gain
Recognized
in OCE
 
Amount of Loss Reclassified from Accumulated OCE
into Net earnings
 
Amount of Loss
Recognized
in OCE
 
Amount of Loss Reclassified from Accumulated OCE
into Net earnings
Swap agreements
 
 
 
 
 
 
 
Attributable to noncontrolling interests
$
1.7

 
$
0.5

 
$
(1.6
)
 
$
0.8

Attributable to Black Knight
0.9

 
0.2

 
(0.9
)
 
0.4

Total
$
2.6

 
$
0.7

 
$
(2.5
)
 
$
1.2

Approximately $0.3 million ($0.2 million net of tax) of the balance in Accumulated other comprehensive earnings (loss) as of September 30, 2017 is expected to be reclassified into Interest expense over the next 12 months.
It is our policy to execute such instruments with credit-worthy banks and not to enter into derivative financial instruments for speculative purposes. As of September 30, 2017, we believe our interest rate swap counterparties will be able to fulfill their obligations under our agreements, and we believe we will have debt outstanding through the various expiration dates of the swaps such that the occurrence of future cash flow hedges remains probable.
Income Taxes
Income Taxes
Income Taxes
Our effective tax rate for the three months ended September 30, 2017 and 2016 was 17.3% and 16.3%, respectively, and 18.5% and 16.3% for the nine months ended September 30, 2017 and 2016, respectively. These rates are lower than the typical federal and state statutory rate because of the effect of our noncontrolling interests prior to the Distribution. The increase in the effective tax rate for the nine months ended September 30, 2017 is primarily driven by the resolution of a legacy tax matter, partially offset by the effect of adopting ASU 2016-09 related to the income tax effects of awards that vested.
As a result of the Distribution and the THL Interest Exchange, there are no longer any noncontrolling interests. Black Knight has determined that the Distribution represents a significant, unusual transaction or infrequently occurring event, and therefore, it is appropriate to exclude the taxes for the period prior to the Distribution from the estimated annual effective tax rate. The taxes for such items are individually computed and recognized as they occur.
Prior to the Distribution and THL Interest Exchange, the net deferred tax liability of Black Knight was primarily related to its investment in BKFS LLC. Following the Distribution, Black Knight indirectly owns 100% of BKFS LLC and has recorded a non-cash transaction resulting in an increase of $288.4 million to Deferred income taxes with an offset to Additional paid-in capital on the Condensed Consolidated Balance Sheets (Unaudited) to reflect the difference in the tax and financial reporting basis of the Company’s assets and liabilities. The components of deferred tax assets and liabilities as of September 30, 2017 primarily relate to intangible assets, deferred contract costs, deferred revenues, property and equipment, equity-based compensation and deferred compensation.
As a result of the Distribution, Black Knight recorded an $8.3 million contingent tax liability for an uncertain tax position that was previously recorded at BKHI. As part of the Distribution, a tax matters agreement was entered into by FNF and Black Knight. The agreement outlines requirements for items such as the filing of pre and post-spin tax returns, payment of tax liabilities, entitlements of refunds and certain other tax matters. Under the tax matters agreement with FNF, Black Knight has an indemnification receivable for the full amount of the contingent tax liability included in Receivables from related parties on the Condensed Consolidated Balance Sheets (Unaudited).
Pursuant to the tax matters agreement with FNF, we are obligated to indemnify FNF for (i) any action by Black Knight, or the failure to take any action within our control that negates the tax-free status of the transactions; or (ii) direct or indirect changes in ownership of Black Knight equity interests that cause the Distribution to be a taxable event to FNF as a result of the application of Section 355(e) of the Internal Revenue Code (“IRC”) or to be a taxable event as a result of a failure to satisfy the “continuity of interest” or “device” requirements for tax-free treatment under Section 355 of the IRC. No such events have occurred.
We record interest and penalties related to income taxes, if any, as a component of Income tax expense on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).
Tax Distributions
Prior to the Distribution, the taxable income of BKFS LLC was allocated to its members, including BKFS, and the members were required to reflect on their own income tax returns the items of income, gain, deduction and loss and other tax items of BKFS LLC that were allocated to them. BKFS LLC made tax distributions to its members for their allocable share of BKFS LLC's taxable income. Tax distributions are calculated based on allocations of income to a member for a particular taxable year without taking into account any losses allocated to the member in a prior taxable year. This practice is consistent with IRS regulations. Subject to certain reductions, tax distributions are generally made based on an assumed tax rate equal to the highest combined marginal federal, state and local income tax rate applicable to a U.S. corporation. BKFS LLC made tax distributions of $75.3 million and $48.5 million during the nine months ended September 30, 2017 and 2016, respectively. The 2017 tax distributions were for the 2016 tax year and 2017 tax year relating to the period before the Distribution.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Legal and Regulatory Matters
In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters related to our operations, some of which include claims for punitive or exemplary damages. Our ordinary course litigation includes purported class action lawsuits, which make allegations related to various aspects of our business. From time to time, we also receive requests for information from various state and federal regulatory authorities, some of which take the form of civil investigative demands or subpoenas. Some of these regulatory inquiries may result in the assessment of fines for violations of regulations or settlements with such authorities requiring a variety of remedies. We believe that none of these actions depart from customary litigation or regulatory inquiries incidental to our business.
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. 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.
Indemnifications and Warranties
We often agree to indemnify our clients against damages and costs resulting from claims of patent, copyright, trademark infringement or breaches of confidentiality associated with use of our software through software licensing agreements. Historically, we have not made any payments under such indemnifications, but continue to monitor the conditions that are subject to the indemnifications to identify whether a loss has occurred that is both probable and estimable that would require recognition. In addition, we warrant to clients that our software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such, no accruals for warranty costs have been made.
Indemnification Agreement
We are party to a cross-indemnity agreement dated December 22, 2014 with ServiceLink Holdings, LLC ("ServiceLink"). Pursuant to this agreement, ServiceLink indemnifies us from liabilities relating to, arising out of or resulting from the conduct of ServiceLink's business or any action, suit or proceeding in which we or any of our subsidiaries are named by reason of being a successor to the business of Lender Processing Services, Inc. and the cause of such action, suit or proceeding relates to the business of ServiceLink. In return, we indemnify ServiceLink for liabilities relating to, arising out of, or resulting from the conduct of our business.
Equity-Based Compensation
Equity-Based Compensation
Equity-Based Compensation
On February 3, 2017, we granted 884,570 restricted shares of our Class A common stock with a grant date fair value of $37.90 per share, which was based on the closing price of our common stock on the date of grant. Of the 884,570 restricted shares granted, 203,160 restricted shares vest over a three-year period and 681,410 restricted shares vest over a four-year period. The vesting of all the restricted shares granted on February 3, 2017 is also based on certain operating performance criteria.
During the third quarter of 2017, we granted 98,194 restricted shares of our Class A common stock with a grant date fair value ranging from $41.90 to $42.25, which was based on the closing price of our common stock on the date of grant. These vest over a two-year period.
Restricted stock transactions in 2017 are as follows:
 
Shares
 
Weighted Average Grant Date
Fair Value
Balance, December 31, 2016
2,908,374

 
*

Granted
982,764

 
$
38.31

Forfeited
(123,824
)
 
$
34.42

Vested
(1,840,719
)
 
*

Balance, September 30, 2017
1,926,595

 
*

______________________________
*
The BKFS LLC profits interest units that were converted into restricted shares in connection with our initial public offering had a weighted average grant date fair value of $2.10 per unit. The fair value of the restricted shares at the date of conversion, May 20, 2015, was $24.50 per share. The original grant date fair value of the vested restricted shares, which were originally granted as profits interests units, was $2.01 per unit.
Equity-based compensation expense was $4.1 million and $3.4 million for the three months ended September 30, 2017 and 2016, respectively, and $14.2 million and $9.5 million for the nine months ended September 30, 2017 and 2016, respectively. These expenses are included in Operating expenses in the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).
Total unrecognized compensation cost was $44.3 million as of September 30, 2017 and is expected to be recognized over a weighted average period of approximately 2.6 years.
Omnibus Plan
The Black Knight Financial Services, Inc. 2015 Omnibus Incentive Plan (the "BKFS Omnibus Plan") was established in 2015 and is now titled the “Black Knight, Inc. Amended and Restated 2015 Omnibus Incentive Plan” (the "Black Knight Omnibus Plan"). The Black Knight Financial Services, Inc. board of directors adopted the Black Knight Omnibus Plan as of September 29, 2017, and the Black Knight Omnibus Plan was assumed by Black Knight, Inc. on September 29, 2017.
Segment Information
Segment Information
Segment Information
ASC Topic 280, Segment Reporting ("ASC 280") establishes standards for reporting information about segments and requires that a public business enterprise reports financial and descriptive information about its segments. Segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Black Knight’s chief executive officer is identified as the CODM as defined by ASC 280. To align with the internal management of our business operations based on service offerings, our business is organized into two segments:
•
Software Solutions - offers software and hosting solutions that support loan servicing, loan origination and settlement services. The Software Solutions segment was formerly known as the Technology segment.
•
Data and Analytics - offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions.
Separate discrete financial information is available for these two segments and the operating results of each segment are regularly evaluated by the CODM in order to assess performance and allocate resources. We use EBITDA as the primary profitability measure for making decisions regarding ongoing operations. EBITDA is earnings before Interest expense, Income tax expense and Depreciation and amortization. We do not allocate Interest expense, Other expense, net, Income tax expense, equity-based compensation and certain other items, such as purchase accounting adjustments and acquisition-related costs to the segments, since these items are not considered in evaluating the segments' overall operating performance.
Summarized financial information concerning our segments is shown in the tables below (in millions):

 
Three months ended September 30, 2017
 
Software Solutions
 
Data and Analytics
 
Corporate and Other
 
Total
Revenues
$
224.5

 
$
40.3

 
$
(1.0
)
(1)
$
263.8

Expenses:

 

 

 

Operating expenses
93.0

 
32.7

 
15.0

 
140.7

Transition and integration costs
—

 
—

 
4.0

 
4.0

EBITDA
131.5

 
7.6

 
(20.0
)
 
119.1

Depreciation and amortization
24.3

 
3.7

 
23.3

(2)
51.3

Operating income (loss)
107.2

 
3.9

 
(43.3
)
 
67.8

Interest expense
 
 
 
 
 
 
(14.1
)
Other expense, net
 
 
 
 
 
 
(0.6
)
Earnings before income taxes
 
 
 
 
 
 
53.1

Income tax expense
 
 
 
 
 
 
9.2

Net earnings
 
 
 
 
 
 
$
43.9

_______________________________________________________
Note: The Software Solutions segment was formerly known as the Technology segment.
(1)
Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.
(2)
Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

 
Three months ended September 30, 2016
 
Software Solutions
 
Data and Analytics
 
Corporate and Other
 
Total
Revenues
$
221.0

 
$
47.6

 
$
(1.5
)
(1)
$
267.1

Expenses:

 

 

 

Operating expenses
95.9

 
39.2

 
17.1

 
152.2

Transition and integration costs
—

 
—

 
1.1

 
1.1

EBITDA
125.1

 
8.4

 
(19.7
)
 
113.8

Depreciation and amortization
29.0

 
2.1

 
25.7

(2)
56.8

Operating income (loss)
96.1

 
6.3

 
(45.4
)
 
57.0

Interest expense
 
 
 
 
 
 
(16.9
)
Other expense, net
 
 
 
 
 
 
(1.4
)
Earnings before income taxes
 
 
 
 
 
 
38.7

Income tax expense
 
 
 
 
 
 
6.3

Net earnings
 
 
 
 
 
 
$
32.4

_______________________________________________________
Note: The Software Solutions segment was formerly known as the Technology segment.
(1)
Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.
(2)
Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

 
Nine months ended September 30, 2017
 
Software Solutions
 
Data and Analytics
 
Corporate and Other
 
Total
Revenues
$
665.6

 
$
122.1

 
$
(3.6
)
(1)
$
784.1

Expenses:
 
 
 
 
 
 
 
Operating expenses
277.7

 
99.2

 
51.3

 
428.2

Transition and integration costs
—

 
—

 
8.5

 
8.5

EBITDA
387.9

 
22.9

 
(63.4
)
 
347.4

Depreciation and amortization
74.9

 
11.0

 
68.3

(2)
154.2

Operating income (loss)
313.0

 
11.9

 
(131.7
)
 
193.2

Interest expense
 
 
 
 
 
 
(44.8
)
Other expense, net
 
 
 
 
 
 
(17.1
)
Earnings before income taxes
 
 
 
 
 
 
131.3

Income tax expense
 
 
 
 
 
 
24.3

Net earnings
 
 
 
 
 
 
$
107.0

 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
Total assets
$
3,153.4

 
$
352.0

 
$
244.6

 
$
3,750.0

Goodwill
$
2,115.0

 
$
191.8

 
$
—

 
$
2,306.8

_______________________________________________________
Note: The Software Solutions segment was formerly known as the Technology segment.
(1)
Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.
(2)
Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

 
Nine months ended September 30, 2016
 
Software Solutions
 
Data and Analytics
 
Corporate and Other
 
Total
Revenues
$
636.6

 
$
133.7

 
$
(5.8
)
(1)
$
764.5

Expenses:
 
 
 
 
 
 
 
Operating expenses
273.2

 
111.7

 
48.5

 
433.4

Transition and integration costs
—

 
—

 
2.2

 
2.2

EBITDA
363.4

 
22.0

 
(56.5
)
 
328.9

Depreciation and amortization
80.2

 
6.5

 
67.5

(2)
154.2

Operating income (loss)
283.2

 
15.5

 
(124.0
)
 
174.7

Interest expense
 
 
 
 
 
 
(50.6
)
Other expense, net
 
 
 
 
 
 
(6.2
)
Earnings before income taxes
 
 
 
 
 
 
117.9

Income tax expense
 
 
 
 
 
 
19.2

Net earnings
 
 
 
 
 
 
$
98.7

 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
Total assets
$
3,225.6

 
$
353.4

 
$
134.5

 
$
3,713.5

Goodwill
$
2,108.7

 
$
191.8

 
$
—

 
$
2,300.5

_______________________________________________________
Note: The Software Solutions segment was formerly known as the Technology segment.
(1)
Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.
(2)
Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.
Basis of Presentation (Policies)
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.
Use of Estimates 
The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Reportable Segments 
Reporting Segments
We conduct our operations through two reporting segments: (1) Software Solutions (formerly known as the Technology segment) and (2) Data and Analytics. See further discussion in Note 8 — Segment Information.
Distribution of FNF's Ownership Interest 
Distribution of FNF's Ownership Interest and Related Transactions
On December 7, 2016, we announced that Fidelity National Financial, Inc.'s ("FNF") board of directors approved a tax-free plan (the "Distribution Plan") whereby FNF intended to distribute all 83.3 million shares of BKFS common stock that it owned to FNF Group shareholders.
On September 29, 2017, the transactions contemplated by the Distribution Plan were consummated through four newly-formed corporations, New BKH Corp. ("New BKH"), Black Knight, Inc. (formerly known as Black Knight Holdco Corp.), New BKH Merger Sub, Inc. ("Merger Sub One") and BKFS Merger Sub, Inc. ("Merger Sub Two"), as follows:
•
Black Knight Holdings, Inc. ("BKHI"), a wholly-owned subsidiary of FNF, contributed all of its 83.3 million shares of BKFS Class B common stock and all of its units of Black Knight Financial Services, LLC ("BKFS LLC") to New BKH in exchange for 100% of the shares of New BKH common stock;
•
Following which BKHI converted into a limited liability company and distributed to FNF all of the shares of New BKH common stock held by BKHI;
•
Immediately thereafter, FNF distributed the shares of New BKH common stock to the holders of FNF Group common stock on a pro-rata basis (the "Spin-off");
•
Immediately following the Spin-off, Merger Sub One merged with and into New BKH (the "New BKH merger");
•
In the New BKH merger, each outstanding share of New BKH common stock (other than shares owned by New BKH) was exchanged for one share of Black Knight, Inc. common stock. New BKH shares owned by New BKH immediately prior to the New BKH merger were canceled for no consideration. As a result of the Spin-Off and the New BKH merger, FNF Group shareholders received 0.3066322 shares of Black Knight, Inc. common stock for each share of FNF Group common stock they held;
•
Immediately following the New BKH merger, Merger Sub Two merged with and into Black Knight Financial Services, Inc. (the "BKFS merger");
•
In the BKFS merger, each outstanding share of BKFS Class A common stock (other than shares owned by BKFS) was exchanged for one share of Black Knight, Inc. common stock. Shares of BKFS Class A common stock owned by BKFS, otherwise referred to as treasury stock, immediately prior to the BKFS merger were canceled for no consideration; and
•
Black Knight, Inc. is the public company following the completion of the transactions above which are collectively referred to as the "Distribution".
Shares of Black Knight, Inc. common stock are listed on the New York Stock Exchange under the trading symbol “BKI”, and began trading on October 2, 2017. Under the organizational documents of Black Knight, Inc., the rights of the holders of shares of Black Knight, Inc. common stock are substantially the same as the rights of former holders of BKFS Class A common stock.
THL Interest Exchange 
On June 8, 2017, Black Knight, Inc., BKFS and certain affiliates of Thomas H. Lee Partners, L.P. ("THL") entered into an interest exchange agreement (the "THL Interest Exchange"). Immediately following the completion of the Distribution, affiliates of THL contributed to Black Knight, Inc. all of their BKFS Class B common stock and all of their BKFS LLC Units in exchange for a number of shares of Black Knight, Inc. common stock equal to the number of shares of BKFS Class B common stock contributed.
Consolidation 
Consolidation
Prior to the Distribution described above, BKFS LLC was subject to the consolidation guidance related to variable interest entities as set forth in Accounting Standards Codification ("ASC") Topic 810, Consolidation ("ASC 810"). Black Knight, as the sole managing member of BKFS LLC, had the exclusive authority to manage, control and operate the business and affairs of BKFS LLC and its subsidiaries, pursuant to the terms of the Second Amended and Restated Limited Liability Company Agreement ("LLC Agreement"). Under the terms of the LLC Agreement, Black Knight was authorized to manage the business of BKFS LLC, including the authority to enter into contracts, manage bank accounts, hire employees and agents, incur and pay debts and expenses, merge or consolidate with other entities and pay taxes. Because Black Knight was the primary beneficiary through its sole managing member interest and possessed the rights established in the LLC Agreement, in accordance with the requirements of ASC 810, Black Knight controlled BKFS LLC and appropriately consolidated the operations thereof.
We account for noncontrolling interests in accordance with ASC 810. Our Class A shareholders indirectly controlled BKFS LLC through our managing member interest. Our Class B shareholders had a noncontrolling interest in BKFS LLC. Their share of equity in BKFS LLC is reflected in Noncontrolling interests in our Condensed Consolidated Balance Sheets (Unaudited) and their share of net earnings or loss in BKFS LLC is reported in Net earnings attributable to noncontrolling interests in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Net earnings attributable to noncontrolling interests do not include expenses incurred directly by Black Knight, including income tax expense attributable to Black Knight.
Subsequent to the Distribution, BKFS LLC is an indirect wholly-owned subsidiary of Black Knight, Inc., and therefore, there are no longer any noncontrolling interests in BKFS LLC.
Realignment of Property Insight 
Realignment of Property Insight
Effective January 1, 2017, Property Insight, LLC ("Property Insight"), a Black Knight subsidiary that provides information used by title insurance underwriters, title agents and closing attorneys to source and underwrite title insurance for real property sales and transfer, realigned its commercial relationship with FNF. In connection with the realignment, Property Insight employees responsible for title plant posting and maintenance were transferred to FNF. Under the new commercial arrangement, Black Knight continues to own the title plant technology and retains sales responsibility for third parties, other than FNF. As a result of the realignment, Black Knight no longer recognizes revenues or expenses related to title plant posting and maintenance, but charges FNF a license fee for use of the technology to access and maintain the title plant data. This transaction did not result in any gain or loss.
Share Repurchase Program 
Share Repurchase Program
On January 31, 2017, the BKFS board of directors approved a three-year share repurchase program, effective February 3, 2017, authorizing us to repurchase up to 10 million shares of BKFS Class A common stock from time to time through February 2, 2020, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other restrictions. There were no repurchases during the third quarter of 2017. During the nine months ended September 30, 2017, we repurchased approximately 1.2 million shares of our BKFS Class A common stock for $46.6 million, or an average of $39.18 per share.
In connection with the Distribution, the Black Knight board of directors approved a share repurchase program authorizing the repurchase of shares of Black Knight, Inc. common stock consistent with the previous BKFS share repurchase program. The timing and volume of share repurchases will be determined by our management based on ongoing assessments of the capital needs of the business, the market price of Black Knight, Inc. common stock and general market conditions. As of September 30, 2017, we had approximately 8.8 million shares remaining under our share repurchase authorization.
THL Secondary Offering 
THL Secondary Offering
On May 8, 2017, Black Knight announced the pricing of an underwritten secondary offering of 5,000,000 shares of its Class A common stock (the “Offering”) by affiliates of THL pursuant to a shelf registration statement on Form S-3 filed with the SEC on May 8, 2017. Affiliates of THL in the Offering granted the underwriter an option to purchase up to 750,000 additional shares (the “Overallotment Option"). The Offering closed on May 12, 2017, and the full exercise of the Overallotment Option closed on May 18, 2017. The Company did not sell any shares and did not receive any proceeds related to the Offering or Overallotment Option. See Note 3 — Related Party Transactions for the change in ownership percentages related to these transactions.
Capital Leases 
Capital Leases
Black Knight entered into a one-year capital lease agreement commencing January 1, 2017 with a bargain purchase option for certain computer equipment. The leased equipment has a useful life of five years and will be depreciated on a straight-line basis over this period. The leased equipment was valued based on the net present value of the minimum lease payments, which was $8.4 million (net of imputed interest of $0.1 million).
The gross value of assets subject to capital leases was $8.4 million (net of imputed interest of $0.1 million) and $10.0 million (net of imputed interest of $0.1 million) as of September 30, 2017 and December 31, 2016, respectively, and is included in Property and equipment, net on the Condensed Consolidated Balance Sheets (Unaudited). The remaining capital lease obligation of $2.2 million and $5.0 million as of September 30, 2017 and December 31, 2016, respectively, is included in Trade accounts payable and other accrued liabilities on the Condensed Consolidated Balance Sheets (Unaudited). The non-cash investing and financing activity for the nine months ended September 30, 2017 and 2016 was $2.2 million and $8.4 million, respectively, and relates to the unpaid portion of the capital lease obligation.
Deferred Compensation Plan 
Deferred Compensation Plan
Prior to the Distribution, certain of our management level employees and directors participated in the FNF Deferred Compensation Plan (the "FNF Plan"). The FNF Plan permits participants to defer receipt of part of their current compensation. Participant benefits for the FNF Plan are provided by a funded rabbi trust. The compensation withheld from FNF Plan participants, together with investment income on the FNF Plan, was recorded as a deferred compensation obligation to participants. The underlying rabbi trust and the related liability was historically carried by FNF. As a result of the Distribution, the liability to Black Knight participants in the FNF Plan, as well as the related assets of the funded rabbi trust, were transferred to the newly-formed Black Knight Deferred Compensation Plan (the "Black Knight Plan") in a non-cash transaction. The terms of the Black Knight Plan are consistent with the terms of the former FNF Plan. As of September 30, 2017, the assets of the funded rabbi trust of $11.5 million are included in Other non-current assets, $10.2 million of the related liability is included in Other non-current liabilities and $1.2 million of the related liability is included in Trade accounts payable and other accrued liabilities on the Condensed Consolidated Balance Sheets (Unaudited).
Stock Purchase Plan 
Stock Purchase Plan
Effective July 20, 2015, we adopted the Black Knight Financial Services, Inc. Employee Stock Purchase Plan (the "ESPP"). On September 29, 2017, the board of directors of Black Knight, Inc. approved, and Black Knight, Inc. assumed the ESPP and renamed it the Black Knight, Inc. Employee Stock Purchase Plan. There were no changes to the terms of the ESPP.
401(k) Profit Sharing Plan 
401(k) Profit Sharing Plan
Prior to the Distribution, our employees participated in a qualified 401(k) plan sponsored by FNF. As a result of the Distribution, our employees no longer participate in this plan sponsored by FNF. Our indirect subsidiary, Black Knight InfoServ, LLC ("BKIS"), adopted and established the Black Knight 401(k) Profit Sharing Plan (the “Black Knight 401(k) Plan”), effective September 29, 2017. The terms of the Black Knight 401(k) Plan are consistent with the terms of the 401(k) plan sponsored by FNF.
Equity-Based Compensation 
Equity-Based Compensation
During the first quarter of 2017, Black Knight adopted Accounting Standards Update ("ASU") 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). In connection with this adoption, we made a policy election to account for forfeitures as they occur. The adoption of this ASU did not have a material effect on our business, financial condition or our results of operations.
Transition and Integration Costs 
Transition and Integration Costs
Transition and integration costs during the three and nine months ended September 30, 2017 primarily represent legal and professional fees related to the Distribution. Transition and integration costs during the three and nine months ended September 30, 2016 primarily represent acquisition-related costs.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
Revenue Recognition (ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"))
In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which was codified as ASC 606. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The guidance requires a five-step analysis of transactions to determine when and how revenue is recognized based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The FASB has issued several additional ASUs since this time that add additional clarification. All of the new standards are effective for the Company on January 1, 2018.
In preparation for adoption of ASC 606, we formed a project team and engaged a third-party professional services firm to assist us with our evaluation. We are applying an integrated approach to analyzing ASC 606's impact on our pattern of revenue recognition, including a review of accounting policies and practices, evaluating differences from applying the requirements of the new standard to our contracts and business practices and assessing the need for changes to our processes, accounting systems and design of internal controls. Based upon our assessment to date, we currently do not anticipate a material change to the pattern of revenue recognition related to revenue earned from the majority of our Software Solutions segment hosted software arrangements, Data and Analytics segment arrangements with transaction or volume-based fees or perpetual license arrangements in our Software Solutions and Data and Analytics segments. However, due to the complexity of certain of our contracts, including contracts for multiple products and services related to each of our segments, the final determination will be dependent on contract-specific terms.
During the third quarter, we continued our assessment with increased focus on completing certain detailed contract reviews and further identification of data and disclosure requirements, including the effect on our processes, accounting system and design of internal controls. We finalized changes to our revenue recognition and contract costs policies to address differences in treatment resulting from the adoption of the new standard.
While we continue to assess the effect the adoption of ASC 606 will have on our consolidated financial statements, we currently anticipate changes related to the timing of revenue recognition for distinct professional services performed during implementation of certain solutions within our origination software business, which will be recognized over the period the professional services are performed. Moreover, fees for certain post-implementation professional services related to minor customization of hosted software solutions, determined not to be distinct from the hosted software solutions, will be deferred and recognized over the remaining hosted software contract term. In addition, based on the ongoing analysis of contract acquisition and fulfillment costs, we do not expect a significant change to our current practice for capitalizing such costs; however, we anticipate we will amortize certain capitalized contract costs over a longer time period for certain contracts based on the requirements of the new standard. Further, we currently anticipate recognizing the license portion of certain distinct term license arrangements within our Data and Analytics segment upon delivery as opposed to ratably over the license term. For contracts where the promised software license and ongoing services are not distinct from each other, the timing of revenue recognition will be over time, which is consistent with the treatment under the current revenue recognition standard.
We are still in the process of quantifying the effects ASC 606 will have on our consolidated financial statements.
The standard allows companies to use either a full retrospective or a modified retrospective adoption approach. We currently anticipate adopting the new standard using the modified retrospective transition approach. Our decision to adopt using the modified retrospective transition approach is dependent on the completion of our analysis of the effect the adoption of ASC 606 will have on our results of operations, financial position and related disclosures.
Other Accounting Pronouncements
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This update also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. This ASU is effective in fiscal years beginning after December 15, 2018 with early adoption permitted. We are currently evaluating the effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.
In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective prospectively in fiscal years beginning after December 15, 2017 with early adoption permitted.  We do not expect this update to have a material effect on our results of operations or our financial position.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 of the goodwill impairment test that required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit's carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This update is effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or those beginning after January 1, 2017 if early adopted. We do not expect this update to have a material effect on our results of operations or our financial position.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU enhances the reporting model and addresses certain aspects of recognition, measurement, presentation and disclosure for financial instruments. This ASU is effective in fiscal years beginning after December 15, 2017. Early adoption of this ASU is not permitted. We do not expect this update to have a material effect on our results of operations or our financial position.
Basis of Presentation (Tables)
Schedule of Cash and Cash Equivalents 
Cash and cash equivalents include the following (in millions):
 
September 30, 2017
 
December 31, 2016
Unrestricted:
 
 
 
Cash
$
87.0

 
$
129.8

Cash equivalents
57.2

 
1.8

Total unrestricted cash and cash equivalents
144.2

 
131.6

Restricted cash equivalents (1)
2.0

 
2.3

Total cash and cash equivalents
$
146.2

 
$
133.9

_______________
(1) Restricted cash equivalents relate to our subsidiary, I-Net Reinsurance Limited, and are held in trust until the final reinsurance policy is canceled.
Trade Receivables, Net 
A summary of Trade receivables, net of allowance for doubtful accounts, as of September 30, 2017 and December 31, 2016 is as follows (in millions):

 
September 30, 2017
 
December 31, 2016
Trade receivables — billed
$
129.1

 
$
115.4

Trade receivables — unbilled
42.4

 
42.6

Total trade receivables
171.5

 
158.0

Allowance for doubtful accounts
(2.3
)
 
(2.2
)
Total trade receivables, net
$
169.2

 
$
155.8

Schedule of Depreciation and Amortization 
Depreciation and amortization on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include the following (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Property and equipment
$
7.3

 
$
7.2

 
$
21.7

 
$
21.4

Computer software
21.2

 
20.6

 
62.4

 
57.5

Other intangible assets
16.9

 
20.5

 
50.9

 
56.2

Deferred contract costs
5.9

 
8.5

 
19.2

 
19.1

Total
$
51.3

 
$
56.8

 
$
154.2

 
$
154.2

Provisional Information 
During the first quarter of 2017, adjustments were recorded to the following (in millions):
Goodwill
$
3.0

Computer software
(2.6
)
Accrued compensation and benefits
(0.3
)
Other intangible assets
(0.1
)
Earnings Per Share (Tables)
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):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Basic:
 
 
 
 
 
 
 
Net earnings attributable to Black Knight
$
14.7

 
$
11.2

 
$
35.1

 
$
34.0

Shares used for basic net earnings per share:
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding
67.9

 
65.9

 
67.7

 
65.9

Basic net earnings per share
$
0.22

 
$
0.17

 
$
0.52

 
$
0.52

 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
Earnings before income taxes
 
 
 
 
$
131.3

 
 
Income tax expense excluding the effect of noncontrolling interests
 
 
 
 
54.0

 
 
Net earnings
 
 
 
 
$
77.3

 
 
Net earnings attributable to Black Knight
$
14.7

 
$
11.2

 
 
 
$
34.0

Shares used for diluted net earnings per share:
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding
67.9

 
65.9

 
67.7

 
65.9

Dilutive effect of unvested restricted shares of common stock
0.6

 
2.0

 
0.6

 
1.9

Weighted average shares of Class B common stock outstanding
—

 
—

 
84.4

 
—

Weighted average shares of common stock, diluted
68.5

 
67.9

 
152.7

 
67.8

Diluted net earnings per share
$
0.21

 
$
0.16

 
$
0.51

 
$
0.50

Related Party Transactions (Tables)
Schedule of related party items 
We are party to certain related party agreements, including those with FNF and THL. The following table sets forth the ownership interests of FNF, THL and other holders of Black Knight common stock (shares in millions):
 
September 30, 2017
 
December 31, 2016
 
Shares
 
Ownership
Percentage
 
Shares
 
Ownership
Percentage
Black Knight, Inc. common stock:
 
 
 
 
 
 
 
THL and its affiliates
35.1

 
22.9
%
 
—

 
—
%
Restricted shares
1.9

 
1.2
%
 
—

 
—
%
Other, including those publicly traded
116.5

 
75.9
%
 
—

 
—
%
Total shares of Black Knight, Inc. common stock
153.5

 
100.0
%
 
—

 
—
%
BKFS Class A common stock:
 
 
 
 
 
 
 
THL and its affiliates
—

 
—
%
 
39.3

 
25.5
%
Restricted shares
—

 
—
%
 
2.9

 
1.9
%
Other, including those publicly traded
—

 
—
%
 
26.9

 
17.5
%
Total shares of Class A common stock
—

 
—
%
 
69.1

 
44.9
%
BKFS Class B common stock:
 
 
 
 
 
 
 
FNF subsidiary
—

 
—
%
 
83.3

 
54.1
%
THL and its affiliates
—

 
—
%
 
1.5

 
1.0
%
Total shares of Class B common stock
—

 
—
%
 
84.8

 
55.1
%
Total shares of BKFS common stock
—

 
—
%
 
153.9

 
100.0
%
A detail of related party items included in Revenues is as follows (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Data and analytics services
$
5.7

 
$
12.3

 
$
18.4

 
$
34.2

Servicing, origination and default software services
8.1

 
6.9

 
24.8

 
19.2

Total related party revenues
$
13.8

 
$
19.2

 
$
43.2

 
$
53.4

A detail of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Data entry, indexing services and other operating expenses
$
1.4

 
$
2.4

 
$
3.9

 
$
7.3

Corporate services
2.4

 
2.4

 
7.4

 
7.6

Technology and corporate services
(0.4
)
 
(0.8
)
 
(1.3
)
 
(2.4
)
     Total related party expenses, net
$
3.4

 
$
4.0

 
$
10.0

 
$
12.5

Schedule of related party items 
A detail of the revenues and expenses, net from FNF is set forth in the table below (in millions). The decrease in Revenues from the prior year period are primarily the result of the Property Insight realignment as described in Note 1 — Basis of Presentation.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Revenues
$
13.8

 
$
19.2

 
$
43.2

 
$
53.4

Operating expenses
3.4

 
3.8

 
9.8

 
11.5

Guarantee fee
—

 
0.9

 
1.2

 
2.9

Schedule of related party items 
A detail of the expenses, net from THL is set forth in the table below (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Operating expenses
$
—

 
$
0.2

 
$
0.2

 
$
1.0

Software and software-related purchases
—

 
—

 
—

 
1.1

Long-Term Debt Long-Term Debt (Tables)
Schedule of Long-term Debt 
Long-term debt consisted of the following (in millions):
 
September 30, 2017
 
December 31, 2016
 
Principal
 
Debt Issuance Costs
 
Discount
 
Total
 
Principal
 
Debt Issuance Costs
 
Premium (Discount)
 
Total
Term A Loan
$
1,017.1

 
$
(7.5
)
 
$
—

 
$
1,009.6

 
$
740.0

 
$
(7.0
)
 
$
—

 
$
733.0

Term B Loan
391.0

 
(2.6
)
 
(1.5
)
 
386.9

 
394.0

 
(3.4
)
 
(0.8
)
 
389.8

Revolving Credit Facility
150.0

 
(4.5
)
 
—

 
145.5

 
50.0

 
(3.7
)
 
—

 
46.3

Senior Notes, issued at par
—

 
—

 
—

 
—

 
390.0

 
—

 
11.1

 
401.1

   Total long-term debt
1,558.1

 
(14.6
)
 
(1.5
)
 
1,542.0

 
1,574.0

 
(14.1
)
 
10.3

 
1,570.2

Less: Current portion of long-term debt
55.5

 
(0.4
)
 
—

 
55.1

 
64.0

 
(0.6
)
 
—

 
63.4

Long-term debt, net of current portion
$
1,502.6

 
$
(14.2
)
 
$
(1.5
)
 
$
1,486.9

 
$
1,510.0

 
$
(13.5
)
 
$
10.3

 
$
1,506.8

Schedule of Maturities of Long-term Debt 
Principal maturities as of September 30, 2017 for each of the next five years and thereafter are as follows (in millions):
2017 (remaining)
$
13.9

2018
55.5

2019
81.3

2020
107.0

2021
132.7

Thereafter
1,167.7

Total
$
1,558.1

Equity-Based Compensation (Tables)
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity
Restricted stock transactions in 2017 are as follows:
 
Shares
 
Weighted Average Grant Date
Fair Value
Balance, December 31, 2016
2,908,374

 
*

Granted
982,764

 
$
38.31

Forfeited
(123,824
)
 
$
34.42

Vested
(1,840,719
)
 
*

Balance, September 30, 2017
1,926,595

 
*

______________________________
*
The BKFS LLC profits interest units that were converted into restricted shares in connection with our initial public offering had a weighted average grant date fair value of $2.10 per unit. The fair value of the restricted shares at the date of conversion, May 20, 2015, was $24.50 per share. The original grant date fair value of the vested restricted shares, which were originally granted as profits interests units, was $2.01 per unit.
Segment Information (Tables)
Schedule of Summarized Segment Financial Information
 
Nine months ended September 30, 2017
 
Software Solutions
 
Data and Analytics
 
Corporate and Other
 
Total
Revenues
$
665.6

 
$
122.1

 
$
(3.6
)
(1)
$
784.1

Expenses:
 
 
 
 
 
 
 
Operating expenses
277.7

 
99.2

 
51.3

 
428.2

Transition and integration costs
—

 
—

 
8.5

 
8.5

EBITDA
387.9

 
22.9

 
(63.4
)
 
347.4

Depreciation and amortization
74.9

 
11.0

 
68.3

(2)
154.2

Operating income (loss)
313.0

 
11.9

 
(131.7
)
 
193.2

Interest expense
 
 
 
 
 
 
(44.8
)
Other expense, net
 
 
 
 
 
 
(17.1
)
Earnings before income taxes
 
 
 
 
 
 
131.3

Income tax expense
 
 
 
 
 
 
24.3

Net earnings
 
 
 
 
 
 
$
107.0

 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
Total assets
$
3,153.4

 
$
352.0

 
$
244.6

 
$
3,750.0

Goodwill
$
2,115.0

 
$
191.8

 
$
—

 
$
2,306.8

_______________________________________________________
Note: The Software Solutions segment was formerly known as the Technology segment.
(1)
Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.
(2)
Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

 
Nine months ended September 30, 2016
 
Software Solutions
 
Data and Analytics
 
Corporate and Other
 
Total
Revenues
$
636.6

 
$
133.7

 
$
(5.8
)
(1)
$
764.5

Expenses:
 
 
 
 
 
 
 
Operating expenses
273.2

 
111.7

 
48.5

 
433.4

Transition and integration costs
—

 
—

 
2.2

 
2.2

EBITDA
363.4

 
22.0

 
(56.5
)
 
328.9

Depreciation and amortization
80.2

 
6.5

 
67.5

(2)
154.2

Operating income (loss)
283.2

 
15.5

 
(124.0
)
 
174.7

Interest expense
 
 
 
 
 
 
(50.6
)
Other expense, net
 
 
 
 
 
 
(6.2
)
Earnings before income taxes
 
 
 
 
 
 
117.9

Income tax expense
 
 
 
 
 
 
19.2

Net earnings
 
 
 
 
 
 
$
98.7

 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
Total assets
$
3,225.6

 
$
353.4

 
$
134.5

 
$
3,713.5

Goodwill
$
2,108.7

 
$
191.8

 
$
—

 
$
2,300.5

_______________________________________________________
Note: The Software Solutions segment was formerly known as the Technology segment.
(1)
Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP.
(2)
Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.
Basis of Presentation - Narrative (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended
May 8, 2017
Jan. 31, 2017
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
segment
Sep. 30, 2016
Sep. 29, 2017
Jan. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Sep. 30, 2017
Property, Plant and Equipment [Member]
Sep. 30, 2016
Property, Plant and Equipment [Member]
Sep. 30, 2017
Property, Plant and Equipment [Member]
Sep. 30, 2016
Property, Plant and Equipment [Member]
Sep. 30, 2017
Computer Software, Intangible Asset [Member]
Sep. 30, 2016
Computer Software, Intangible Asset [Member]
Sep. 30, 2017
Computer Software, Intangible Asset [Member]
Sep. 30, 2016
Computer Software, Intangible Asset [Member]
Sep. 30, 2017
Other Intangible Assets [Member]
Sep. 30, 2016
Other Intangible Assets [Member]
Sep. 30, 2017
Other Intangible Assets [Member]
Sep. 30, 2016
Other Intangible Assets [Member]
May 8, 2017
Over-Allotment Option [Member]
Mar. 31, 2017
eLynx [Member]
Schedule of Depreciation and Amortization Expense [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets of the funded rabbi trust
 
 
$ 11.5 
 
$ 11.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan liability, other non-current liabilities
 
 
10.2 
 
10.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan liability, trade accounts payable and other accrued liabilities
 
 
1.2 
 
1.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of reporting segments
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion of stock, ratio
 
 
 
 
 
 
0.3066322 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share repurchase program period
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares authorized for repurchase (in shares)
 
 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases of treasury stock (in shares)
 
 
1,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases of treasury stock
 
 
46.6 
 
46.6 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average cost of repurchased shares (in usd per share)
 
 
$ 39.18 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares remaining under repurchase program (in shares)
 
 
8,800,000 
 
8,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.0 
Adjustment to depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.5 
Secondary offering of shares, shares
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
750,000 
 
Cash
 
 
87.0 
 
87.0 
 
 
 
129.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
 
57.2 
 
57.2 
 
 
 
1.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total unrestricted cash and cash equivalents
 
 
144.2 
 
144.2 
 
 
 
131.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted cash equivalents
 
 
2.0 
 
2.0 
 
 
 
2.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total cash and cash equivalents
 
 
146.2 
58.9 
146.2 
58.9 
 
 
133.9 
186.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
 
2.3 
 
2.3 
 
 
 
2.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred contract costs
 
 
5.9 
8.5 
19.2 
19.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
51.3 
56.8 
154.2 
154.2 
 
 
 
 
7.3 
7.2 
21.7 
21.4 
21.2 
20.6 
62.4 
57.5 
16.9 
20.5 
50.9 
56.2 
 
 
Accelerated amortization of deferred charges
 
 
 
 
$ 3.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis of Presentation - Trade Receivable, Net (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Total trade receivables
$ 171.5 
$ 158.0 
Allowance for doubtful accounts
(2.3)
(2.2)
Total trade receivables, net
169.2 
155.8 
Trade receivables — billed
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Total trade receivables
129.1 
115.4 
Trade receivables — unbilled
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Total trade receivables
$ 42.4 
$ 42.6 
Basis of Presentation - Capital Lease Narrative (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
 
Interest included in payments
$ 0.1 
 
$ 0.1 
Capital lease obligations
8.4 
 
10.0 
Capital lease obligations, current
2.2 
 
5.0 
Unpaid portion of capital lease
2.2 
8.4 
 
Assets Held under Capital Leases [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Leased equipment useful life
5 years 0 months 0 days 
 
 
Interest included in payments
0.1 
 
 
Capital lease obligations
$ 8.4 
 
 
Basis of Presentation - Provisional Information of eLynx (Details) (eLynx [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Business Acquisition [Line Items]
 
Goodwill
$ 3.0 
Accrued compensation and benefits
(0.3)
Computer Software, Intangible Asset [Member]
 
Business Acquisition [Line Items]
 
Intangible assets
(2.6)
Other Intangible Assets [Member]
 
Business Acquisition [Line Items]
 
Intangible assets
$ (0.1)
Earnings Per Share - Additional Disclosures (Details)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Class of Stock [Line Items]
 
 
 
 
Conversion of shares
 
 
1 
 
Expected effective tax rate
 
 
41.1272% 
 
Weighted average shares of common stock outstanding (in shares)
67.9 
65.9 
67.7 
65.9 
Common Class A [Member]
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
67.9 
65.9 
67.7 
65.9 
Dilutive effect of unvested restricted shares of Class A common stock (in share)
0.6 
2.0 
0.6 
1.9 
Common Class B [Member]
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
0 
0 
84.4 
0 
Shares excluded from computation of EPS because of antidilutive status
83.7 
84.8 
 
84.8 
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Basic:
 
 
 
 
Net earnings attributable to Black Knight
$ 14.7 
$ 11.2 
$ 35.1 
$ 34.0 
Weighted average shares of common stock outstanding (in shares)
67.9 
65.9 
67.7 
65.9 
Basic net earnings per share (in dollars per share)
$ 0.22 
$ 0.17 
$ 0.52 
$ 0.52 
Diluted:
 
 
 
 
Earnings before income taxes
53.1 
38.7 
131.3 
117.9 
Income tax expense excluding the effect of noncontrolling interests
 
 
54.0 
 
Net earnings
 
 
$ 77.3 
 
Shares used for diluted net earnings per share:
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
67.9 
65.9 
67.7 
65.9 
Weighted average shares of common stock, diluted (in shares)
68.5 
67.9 
152.7 
67.8 
Diluted net earnings per share (in dollars per share)
$ 0.21 
$ 0.16 
$ 0.51 
$ 0.50 
Common Class A [Member]
 
 
 
 
Basic:
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
67.9 
65.9 
67.7 
65.9 
Shares used for diluted net earnings per share:
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
67.9 
65.9 
67.7 
65.9 
Dilutive effect of unvested restricted shares of Class A common stock (in share)
0.6 
2.0 
0.6 
1.9 
Common Class B [Member]
 
 
 
 
Basic:
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
0 
0 
84.4 
0 
Shares used for diluted net earnings per share:
 
 
 
 
Weighted average shares of common stock outstanding (in shares)
0 
0 
84.4 
0 
Related Party Transactions - Ownership Interests in Black Knight (Details)
Sep. 30, 2017
Dec. 31, 2016
Class of Stock [Line Items]
 
 
Common Stock, Percent Of Total Common Stock, Outstanding
100.00% 
 
Common stock, shares outstanding
153,473,895 
 
Common Stock [Member]
 
 
Class of Stock [Line Items]
 
 
Common Stock, Percent Of Total Common Stock, Outstanding
75.90% 
0.00% 
Common stock, shares outstanding
116,500,000 
0 
Common Stock [Member] |
THL and its affiliates [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
1,900,000 
0 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
1.20% 
0.00% 
Common Stock [Member] |
FNF subsidiaries [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
35,100,000 
0 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
22.90% 
0.00% 
Black Knight Financial Services [Member]
 
 
Class of Stock [Line Items]
 
 
Common Stock, Percent Of Total Common Stock, Outstanding
 
100.00% 
Common stock, shares outstanding
 
153,900,000 
Black Knight Financial Services [Member] |
Common Class A [Member]
 
 
Class of Stock [Line Items]
 
 
Common Stock, Percent Of Total Common Stock, Outstanding
0.00% 
44.90% 
Common stock, shares outstanding
0 
69,100,000 
Black Knight Financial Services [Member] |
Common Class A [Member] |
THL and its affiliates [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
0 
39,300,000 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
0.00% 
25.50% 
Black Knight Financial Services [Member] |
Common Class A [Member] |
Restricted Stock [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
0 
2,900,000 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
0.00% 
1.90% 
Black Knight Financial Services [Member] |
Common Class A [Member] |
Other owners of class A common stock [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
0 
26,900,000 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
0.00% 
17.50% 
Black Knight Financial Services [Member] |
Common Class B [Member]
 
 
Class of Stock [Line Items]
 
 
Common Stock, Percent Of Total Common Stock, Outstanding
0.00% 
55.10% 
Common stock, shares outstanding
0 
84,800,000 
Black Knight Financial Services [Member] |
Common Class B [Member] |
THL and its affiliates [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
0 
1,500,000 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
0.00% 
1.00% 
Black Knight Financial Services [Member] |
Common Class B [Member] |
FNF subsidiaries [Member]
 
 
Class of Stock [Line Items]
 
 
Noncontrolling interest, shares owned by noncontrolling owners
0 
83,300,000 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
0.00% 
54.10% 
Related Party Transactions - FNF (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
FNF [Member]
Sep. 30, 2016
FNF [Member]
Sep. 30, 2017
FNF [Member]
Sep. 30, 2016
FNF [Member]
Sep. 30, 2017
FNF [Member]
Medium-term Notes [Member]
Term Loan B [Member]
Dec. 31, 2016
FNF [Member]
Medium-term Notes [Member]
Term Loan B [Member]
Sep. 30, 2017
FNF [Member]
Senior Notes [Member]
5.75% Senior Notes [Member]
Guarantee Fee from May 26, 2015 - October 2017 [Member]
Sep. 30, 2017
FNF [Member]
Operating Expenses [Member]
Sep. 30, 2016
FNF [Member]
Operating Expenses [Member]
Sep. 30, 2017
FNF [Member]
Operating Expenses [Member]
Sep. 30, 2016
FNF [Member]
Operating Expenses [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 13.8 
$ 19.2 
$ 43.2 
$ 53.4 
$ 13.8 
$ 19.2 
$ 43.2 
$ 53.4 
 
 
 
 
 
 
 
Operating expenses
3.4 
4.0 
10.0 
12.5 
 
 
 
 
 
 
 
3.4 
3.8 
9.8 
11.5 
Guarantee fee
 
 
 
 
0 
0.9 
1.2 
2.9 
 
 
 
 
 
 
 
Related party notes
 
 
 
 
 
 
 
 
$ 48.9 
$ 49.3 
 
 
 
 
 
Guarantee fee, percent of outstanding principal
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
Related Party Transactions - THL (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
THL [Member]
Sep. 30, 2016
THL [Member]
Sep. 30, 2017
THL [Member]
director
Sep. 30, 2016
THL [Member]
Dec. 31, 2016
THL [Member]
Medium-term Notes [Member]
Term Loan B [Member]
Sep. 30, 2017
THL [Member]
Operating Expenses [Member]
Sep. 30, 2016
THL [Member]
Operating Expenses [Member]
Sep. 30, 2017
THL [Member]
Operating Expenses [Member]
Sep. 30, 2016
THL [Member]
Operating Expenses [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of related party directors serving on Board of Managers
 
 
 
 
 
 
2 
 
 
 
 
 
 
Operating expenses
$ 3.4 
$ 4.0 
$ 10.0 
$ 12.5 
 
 
 
 
 
$ 0 
$ 0.2 
$ 0.2 
$ 1.0 
Purchases from related party
 
 
 
 
0 
0 
0 
1.1 
 
 
 
 
 
Related party notes
 
 
 
 
 
 
 
 
$ 39.4 
 
 
 
 
Related Party Transactions - Related Party Revenues (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Related Party Transaction [Line Items]
 
 
 
 
Revenues
$ 13.8 
$ 19.2 
$ 43.2 
$ 53.4 
Data and Analytics Services [Member]
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Revenues
5.7 
12.3 
18.4 
34.2 
Servicing, Origination and Default Technology [Member]
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Revenues
$ 8.1 
$ 6.9 
$ 24.8 
$ 19.2 
Related Party Transactions - Related Party Expenses (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Related Party Transaction [Line Items]
 
 
 
 
 
Operating expenses
$ 3.4 
$ 4.0 
$ 10.0 
$ 12.5 
 
Prepaid expense, current
0.1 
 
0.1 
 
0.1 
Related party, deferred revenue
1.0 
 
1.0 
 
 
Data Entry, Indexing Services, and Other Operating Expenses [Member]
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Operating expenses
1.4 
2.4 
3.9 
7.3 
 
Corporate Services [Member]
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Operating expenses
2.4 
2.4 
7.4 
7.6 
 
Technology and Corporate Services [Member]
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Related party transaction, reimbursements from transactions with related party
$ (0.4)
$ (0.8)
$ (1.3)
$ (2.4)
 
Long-Term Debt - Long-term Debt Components (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Total long-term debt
$ 1,558.1 
$ 1,574.0 
Less: Current portion of long-term debt, net of debt issuance costs of $0.6 as of June 30, 2015
55.5 
64.0 
Long-term debt, net of current portion
1,502.6 
1,510.0 
Issuance costs
(14.6)
(14.1)
Issuance costs, current
(0.4)
(0.6)
Debt Instrument, Unamortized Discount (Premium), Net
(1.5)
10.3 
Total
1,542.0 
1,570.2 
Current portion of long-term debt
55.1 
63.4 
Deferred Finance Costs, Noncurrent, Net
(14.2)
(13.5)
Long-term debt, net of current portion
1,486.9 
1,506.8 
Medium-term Notes [Member] |
Term Loan A [Member]
 
 
Debt Instrument [Line Items]
 
 
Total long-term debt
1,017.1 
740.0 
Issuance costs
(7.5)
(7.0)
Debt Instrument, Unamortized Discount (Premium), Net
0 
0 
Total
1,009.6 
733.0 
Medium-term Notes [Member] |
Term Loan B [Member]
 
 
Debt Instrument [Line Items]
 
 
Total long-term debt
391.0 
394.0 
Issuance costs
(2.6)
(3.4)
Debt Instrument, Unamortized Discount (Premium), Net
(1.5)
(0.8)
Total
386.9 
389.8 
Line of Credit [Member] |
Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Total long-term debt
150.0 
50.0 
Issuance costs
(4.5)
(3.7)
Debt Instrument, Unamortized Discount (Premium), Net
0 
0 
Total
145.5 
46.3 
Senior Notes [Member] |
5.75% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Total long-term debt
0 
390.0 
Issuance costs
0 
0 
Debt Instrument, Unamortized Discount (Premium), Net
0 
11.1 
Total
$ 0 
$ 401.1 
Long-Term Debt - Schedule of Maturities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Disclosure [Abstract]
 
 
2017 (remaining)
$ 13.9 
 
2017
55.5 
 
2018
81.3 
 
2019
107.0 
 
2020
132.7 
 
Thereafter
1,167.7 
 
Total long-term debt
1,558.1 
1,574.0 
Issuance costs
14.6 
14.1 
Unamortized discount (premium), net
$ 1.5 
$ (10.3)
Long-Term Debt - Credit Agreement (Details) (USD $)
0 Months Ended 9 Months Ended 1 Months Ended
Feb. 27, 2017
Credit Agreement First Amendment [Member]
Base Rate [Member]
Feb. 27, 2017
Credit Agreement First Amendment [Member]
Eurodollar [Member]
Sep. 30, 2017
Medium-term Notes [Member]
Term Loan A [Member]
Apr. 26, 2017
Medium-term Notes [Member]
Term Loan A [Member]
May 27, 2015
Medium-term Notes [Member]
Term Loan A [Member]
Sep. 30, 2017
Medium-term Notes [Member]
Term Loan B [Member]
May 27, 2015
Medium-term Notes [Member]
Term Loan B [Member]
Sep. 30, 2017
Medium-term Notes [Member]
Term Loan B [Member]
Eurodollar [Member]
Sep. 30, 2017
Line of Credit [Member]
Term Loan A [Member]
Sep. 30, 2017
Line of Credit [Member]
Term Loan B [Member]
Sep. 30, 2017
Term Loan and Revolving Credit Facility [Member]
Term Loan A [Member]
Eurodollar [Member]
Sep. 30, 2017
Revolving Credit Facility [Member]
Line of Credit [Member]
Sep. 30, 2016
Revolving Credit Facility [Member]
Line of Credit [Member]
Apr. 26, 2017
Revolving Credit Facility [Member]
Line of Credit [Member]
May 27, 2015
Revolving Credit Facility [Member]
Line of Credit [Member]
Oct. 31, 2017
Subsequent Event [Member]
Revolving Credit Facility [Member]
Line of Credit [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate at period end
 
 
3.00% 
 
 
3.50% 
 
 
 
 
 
 
 
 
 
 
Principal amount of debt
 
 
 
$ 1,030,000,000.0 
$ 800,000,000.0 
 
$ 400,000,000.0 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000,000.0 
400,000,000.0 
 
Basis spread on variable rate
1.25% 
2.25% 
 
 
 
 
 
2.25% 
 
 
2.00% 
 
 
 
 
 
Variable rate, floor
 
0.75% 
 
 
 
 
 
0.75% 
 
 
 
 
 
 
 
 
Amount unused on the Revolving Credit Facility
 
 
 
 
 
 
 
 
 
 
 
350,000,000 
 
 
 
500,000,000 
Incremental borrowings
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
55,000,000 
 
 
 
Repayments on line of credit
 
 
 
 
 
 
 
 
 
 
 
 
105,000,000 
 
 
150,000,000 
Unused commitment fee
 
 
 
 
 
 
 
 
 
 
 
0.30% 
 
 
 
 
Interest rate at period end
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
 
 
Refinancing expense
 
 
 
 
 
 
 
 
$ 3,300,000 
$ 1,100,000 
 
 
 
 
 
 
Long-Term Debt - Senior Notes (Details) (Senior Notes [Member], 5.75% Senior Notes [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended 9 Months Ended
Apr. 26, 2017
Sep. 30, 2017
Senior Notes [Member] |
5.75% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Redemption price
104.825% 
 
Stated interest rate
 
5.75% 
Interest expense
$ 0.7 
 
Debt redeemed
 
$ 8.2 
Long-Term Debt - Interest Rate Swaps Additional Information (Details) (USD $)
12 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2017
Interest Rate Swap [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Sep. 6, 2017
Interest Rate Swap [Member]
Jan. 20, 2016
Interest Rate Swap [Member]
Sep. 30, 2017
London Interbank Offered Rate (LIBOR) [Member]
Interest Rate Swap [Member]
Sep. 6, 2017
London Interbank Offered Rate (LIBOR) [Member]
Interest Rate Swap [Member]
Mar. 7, 2017
London Interbank Offered Rate (LIBOR) [Member]
Interest Rate Swap [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
Notional amount
 
 
 
 
$ 400,000,000.0 
 
 
 
Notional amount per derivative instrument
 
 
 
 
200,000,000 
 
200,000,000 
200,000,000 
Basis spread on derivative
 
 
 
 
 
1.25% 
 
 
Fixed rate
 
 
 
1.69% 
 
 
 
2.08% 
Average fixed interest rate
 
 
 
 
1.01% 
 
 
 
Gain (loss) on derivative
 
1,900,000 
(1,000,000)
 
 
 
 
 
Gain recognized in other comprehensive income (loss)
 
1,100,000 
 
 
 
 
 
 
Loss recognized in other comprehensive income (loss), net of tax
 
 
600,000 
 
 
 
 
 
Cumulative gain (loss) reflected in Noncontrolling interests
(1,200,000)
 
 
 
 
 
 
 
Reclassification in next 12 months, gross
 
300,000 
 
 
 
 
 
 
Reclassification in next 12 months, net
 
$ 200,000 
 
 
 
 
 
 
Long-Term Debt - Swap Agreements in the Balance Sheets (Unaudited) (Details) (Interest Rate Swap [Member], Designated as Hedging Instrument [Member], USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Other Noncurrent Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability
$ 3.7 
$ 0 
Other Noncurrent Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability
$ 1.8 
$ 2.2 
Long-Term Debt - Derivative Instruments Recognized in AOCI (Details) (Interest Rate Swap [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Gain Recognized in OCE
$ 0.8 
$ 1.1 
$ 2.6 
$ (2.5)
Amount of Loss Reclassified from Accumulated OCE into Net earnings
0.1 
0.4 
0.7 
1.2 
Attributable to noncontrolling interests [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Gain Recognized in OCE
0.5 
0.7 
1.7 
(1.6)
Amount of Loss Reclassified from Accumulated OCE into Net earnings
0.1 
0.3 
0.5 
0.8 
Attributable to Black Knight Financial Services, Inc. [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Gain Recognized in OCE
0.3 
0.4 
0.9 
(0.9)
Amount of Loss Reclassified from Accumulated OCE into Net earnings
$ 0 
$ 0.1 
$ 0.2 
$ 0.4 
Long-Term Debt - Debt Refinancing (Details) (USD $)
0 Months Ended 9 Months Ended
Apr. 26, 2017
Sep. 30, 2017
Apr. 26, 2017
May 27, 2015
Debt Instrument [Line Items]
 
 
 
 
Increase in borrowing capacity
$ 100,000,000 
 
$ 100,000,000 
 
Term Loan and Revolving Credit Facility [Member] |
Base Rate [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Reduction in basis spread
0.25% 
 
 
 
Term Loan and Revolving Credit Facility [Member] |
Base Rate [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Basis spread on variable rate
0.25% 
 
 
 
Term Loan and Revolving Credit Facility [Member] |
Base Rate [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Basis spread on variable rate
1.00% 
 
 
 
Term Loan and Revolving Credit Facility [Member] |
Eurodollar [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Basis spread on variable rate
1.25% 
 
 
 
Term Loan and Revolving Credit Facility [Member] |
Eurodollar [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Basis spread on variable rate
2.00% 
 
 
 
Variable rate, floor
0.00% 
 
 
 
Term Loan and Revolving Credit Facility [Member] |
Term Loan A [Member] |
Eurodollar [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Basis spread on variable rate
 
2.00% 
 
 
Medium-term Notes [Member] |
Term Loan B [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Principal amount of debt
 
 
 
400,000,000.0 
Medium-term Notes [Member] |
Term Loan B [Member] |
Eurodollar [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Basis spread on variable rate
 
2.25% 
 
 
Variable rate, floor
 
0.75% 
 
 
Medium-term Notes [Member] |
Term Loan A [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Increase in borrowing capacity
300,000,000 
 
300,000,000 
 
Principal amount of debt
1,030,000,000.0 
 
1,030,000,000.0 
800,000,000.0 
Revolving Credit Facility [Member] |
Line of Credit [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Maximum borrowing capacity
 
 
$ 500,000,000.0 
$ 400,000,000.0 
Reduction in commitment fee
0.05% 
 
 
 
Unused commitment fee
 
0.30% 
 
 
Revolving Credit Facility [Member] |
Line of Credit [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Unused commitment fee
0.15% 
 
 
 
Revolving Credit Facility [Member] |
Line of Credit [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Unused commitment fee
0.30% 
 
 
 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Tax Disclosure [Abstract]
 
 
 
 
Effective tax rate (as a percent)
17.30% 
16.30% 
18.50% 
16.30% 
Deferred income taxes
$ 288.4 
 
$ 288.4 
 
Tax liability for uncertain tax positions
8.3 
 
8.3 
 
Distributions to members
 
 
$ (75.3)
$ (48.5)
Equity-Based Compensation - Additional Information (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Feb. 3, 2017
Restricted Stock [Member]
Common Class A [Member]
Sep. 30, 2017
Restricted Stock [Member]
Common Class A [Member]
Sep. 30, 2017
Restricted Stock [Member]
Common Class A [Member]
Feb. 3, 2017
Share-based Compensation Award, Tranche One [Member]
Restricted Stock [Member]
Common Class A [Member]
Feb. 3, 2017
Share-based Compensation Award, Tranche Two [Member]
Restricted Stock [Member]
Common Class A [Member]
Sep. 30, 2017
Minimum [Member]
Restricted Stock [Member]
Common Class A [Member]
Sep. 30, 2017
Maximum [Member]
Restricted Stock [Member]
Common Class A [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Granted (in shares)
 
 
 
 
884,570 
98,194 
982,764 
 
 
 
 
Weighted Averaged Grant Date Fair Value (in dollars per share)
 
 
$ 2.10 
 
$ 37.90 
 
$ 38.31 
 
 
$ 41.90 
$ 42.25 
Vesting period
 
 
 
 
 
2 years 
 
4 years 
3 years 
 
 
Share-based compensation expense
$ 4.1 
$ 3.4 
$ 14.2 
$ 9.5 
 
 
 
 
 
 
 
Compensation costs not yet recognized
$ 44.3 
 
$ 44.3 
 
 
 
 
 
 
 
 
Recognition period
 
 
2 years 7 months 12 days 
 
 
 
 
 
 
 
 
Shares expected to vest (shares)
 
 
 
 
 
 
 
681,410 
203,160 
 
 
Equity-Based Compensation - Restricted Stock Transactions (Details) (USD $)
0 Months Ended 3 Months Ended 9 Months Ended
Feb. 3, 2017
May 20, 2015
Sep. 30, 2017
Sep. 30, 2017
Shares
 
 
 
 
Forfeited (in shares)
 
 
 
(123,824)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
 
 
 
Weighted Averaged Grant Date Fair Value (in dollars per share)
 
 
 
$ 2.10 
Restricted Stock [Member] |
Common Class A [Member]
 
 
 
 
Shares
 
 
 
 
Beginning balance (in shares)
 
 
 
2,908,374 
Granted (in shares)
884,570 
 
98,194 
982,764 
Vested (in shares)
 
 
 
(1,840,719)
Ending balance (in shares)
 
 
1,926,595 
1,926,595 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
 
 
 
Weighted Averaged Grant Date Fair Value (in dollars per share)
$ 37.90 
 
 
$ 38.31 
Weighted Averaged Grant Date Fair Value (in dollars per share)
 
 
 
$ 34.42 
Fair value of restricted shares at date of conversion (in dollars per share)
 
$ 24.50 
 
 
BKLS LLC Profit Interests Plan [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
 
 
 
Weighted Averaged Grant Date Fair Value (in dollars per share)
 
 
 
$ 2.01 
Segment Information - Additional Disclosures (Details)
9 Months Ended
Sep. 30, 2017
segment
Segment Reporting [Abstract]
 
Number of segments
2 
Segment Information - Summarized Financial Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues
$ 263.8 
$ 267.1 
$ 784.1 
$ 764.5 
 
Expenses:
 
 
 
 
 
Operating expenses
140.7 
152.2 
428.2 
433.4 
 
Transition and integration costs
4.0 
1.1 
8.5 
2.2 
 
EBITDA
119.1 
113.8 
347.4 
328.9 
 
Depreciation and amortization
51.3 
56.8 
154.2 
154.2 
 
Operating income (loss)
67.8 
57.0 
193.2 
174.7 
 
Interest expense
(14.1)
(16.9)
(44.8)
(50.6)
 
Other expense, net
(0.6)
(1.4)
(17.1)
(6.2)
 
Earnings before income taxes
53.1 
38.7 
131.3 
117.9 
 
Income tax expense
9.2 
6.3 
24.3 
19.2 
 
Net earnings from continuing operations
43.9 
32.4 
107.0 
98.7 
 
Balance sheet data:
 
 
 
 
 
Total assets
3,750.0 
3,713.5 
3,750.0 
3,713.5 
3,762.0 
Goodwill
2,306.8 
2,300.5 
2,306.8 
2,300.5 
2,303.8 
Operating Segments [Member] |
Software Solutions [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues
224.5 
221.0 
665.6 
636.6 
 
Expenses:
 
 
 
 
 
Operating expenses
93.0 
95.9 
277.7 
273.2 
 
Transition and integration costs
0 
0 
0 
0 
 
EBITDA
131.5 
125.1 
387.9 
363.4 
 
Depreciation and amortization
24.3 
29.0 
74.9 
80.2 
 
Operating income (loss)
107.2 
96.1 
313.0 
283.2 
 
Balance sheet data:
 
 
 
 
 
Total assets
3,153.4 
3,225.6 
3,153.4 
3,225.6 
 
Goodwill
2,115.0 
2,108.7 
2,115.0 
2,108.7 
 
Operating Segments [Member] |
Data and Analytics Segment [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues
40.3 
47.6 
122.1 
133.7 
 
Expenses:
 
 
 
 
 
Operating expenses
32.7 
39.2 
99.2 
111.7 
 
Transition and integration costs
0 
0 
0 
0 
 
EBITDA
7.6 
8.4 
22.9 
22.0 
 
Depreciation and amortization
3.7 
2.1 
11.0 
6.5 
 
Operating income (loss)
3.9 
6.3 
11.9 
15.5 
 
Balance sheet data:
 
 
 
 
 
Total assets
352.0 
353.4 
352.0 
353.4 
 
Goodwill
191.8 
191.8 
191.8 
191.8 
 
Corporate and Other [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues
(1.0)
(1.5)
(3.6)
(5.8)
 
Expenses:
 
 
 
 
 
Operating expenses
15.0 
17.1 
51.3 
48.5 
 
Transition and integration costs
4.0 
1.1 
8.5 
2.2 
 
EBITDA
(20.0)
(19.7)
(63.4)
(56.5)
 
Depreciation and amortization
23.3 
25.7 
68.3 
67.5 
 
Operating income (loss)
(43.3)
(45.4)
(131.7)
(124.0)
 
Balance sheet data:
 
 
 
 
 
Total assets
244.6 
134.5 
244.6 
134.5 
 
Goodwill
$ 0 
$ 0 
$ 0 
$ 0