Cannae Holdings Inc

Previous wording

Restaurant Group. Average weekly sales per restaurant are typically higher in the first and fourth quarters than in other quarters, and we typically generate a disproportionate share of our earnings from operations in the first and fourth quarters. Holidays, severe weather and other disruptive conditions may impact sales volumes seasonally in some operating regions.

Current wording

Restaurant Group. Average weekly sales per restaurant are typically higher in the first half of the year, and we typically generate a disproportionate share of our earnings from operations in the first half of the year. Holidays, severe weather and other disruptive conditions may impact sales volumes seasonally in some operating regions.

Previous wording

As of June 30, 2024, the fair value of our ownership interest in Alight based on quoted market prices was $387.3 million and the book value of our recorded asset for Alight was $492.1 million. While the fair value of our investment in Alight is below our book value as of June 30, 2024, there are other indicators that our investment is not other than temporarily impaired as of June 30, 2024. The fair value of our investment in Alight has been below book value for approximately one quarter. Alight recently completed the sale of the Payroll & Professional Services Business and used a portion of the proceeds to payoff a significant portion of its debt, improving its' capital strength. Alight has consistently reported strong gross profit and operating cash flows subsequent to our initial investment. Due to these factors, we consider the decline in fair value to be temporary as of June 30, 2024. Though we do not currently believe our investment in Alight is other than temporarily impaired, because the fair value is below the book value of our investment as of June 30, 2024, further declines in fair value of the investment, deterioration in Alight's actual or forecasted results of operations or adverse changes in the U.S. macroeconomic environment could result in an impairment charge in future periods to record our asset at fair value.

Current wording

As of September 30, 2024, the fair value of our ownership interest in Alight based on quoted market prices was $388.3 million and the book value of our recorded asset for Alight was $485.3 million. While the fair value of our investment in Alight is below our book value as of September 30, 2024, there are other indicators that our investment is not other than temporarily impaired as of September 30, 2024. The fair value of our investment in Alight has been below book value for approximately 5 months. Alight recently completed the sale of the Payroll & Professional Services Business and used a portion of the proceeds to pay off a significant portion of its debt, improving its' capital strength. Alight has consistently reported strong gross profit and operating cash flows subsequent to our initial investment. Due to these factors, we consider the decline in fair value to be temporary as of September 30, 2024. Though we do not currently believe our investment in Alight is other than temporarily impaired, because the fair value is below the book value of our investment as of September 30, 2024, further declines in fair value of the investment, deterioration in Alight's actual or forecasted results of operations or adverse changes in the U.S. macroeconomic environment could result in an impairment charge in future periods to record our asset at fair value.

Previous wording

As of June 30, 2024, we had a net deferred tax asset of $63.2 million, which is primarily attributable to temporary differences for our investments in unconsolidated affiliates held through partnerships. In the six months ended June 30, 2024, we recorded an additional valuation allowance of $58.8 million on the Company's federal net operating loss ("NOL") carryforwards and certain deferred taxes related to our consolidated partnerships. In the first quarter of 2024 it was determined that the net taxable capital gain from our sales of shares of Dayforce and D&B would likely be offset by other sources of current year taxable loss. Accordingly, we determined it was uncertain whether we would be able to use the Company's available federal NOL carryforwards and certain other deferred taxes. One of the factors used in assessing the need for a valuation allowance on net deferred tax assets is whether a company is in a three-year cumulative book loss position and for the three years ended December 31, 2023, the Company is in a cumulative book loss position. The Company is relying on deferred tax liabilities, and the ability to carry back capital losses, as sources of income to facilitate the recovery of its remaining deferred tax assets. The Company’s prospective investment strategy, fluctuations in the fair market value of its ownership interests prior to any dispositions and other factors may influence the timing of reversals of deferred tax assets and liabilities and their ultimate impact on taxable income or loss, which could have an effect on the recoverability of deferred tax assets. As of June 30, 2024, the Company has a federal valuation allowance of $58.7 million representing a full valuation allowance on its federal NOL carryforwards and certain other deferred taxes where it is not more likely than not that the tax benefit will be realized. Additionally, a state valuation allowance of $4.7 million has been recorded representing certain state NOLs where it is not more likely than not that the tax benefit of certain state NOLs will be realized before the NOLs in those certain states expire. At this time, we consider it more likely than not that we will have sufficient taxable income and available excess capital gain from prior year periods that will allow us to realize our other deferred tax assets. The Company will continue to monitor the recoverability of deferred tax assets on a quarterly basis and may need to record an additional valuation allowance on its net deferred tax asset in future periods.

Current wording

As of September 30, 2024, we had a net deferred tax asset of $69.4 million, which is primarily attributable to temporary differences for our investments in unconsolidated affiliates held through partnerships. In the nine months ended September 30, 2024, we recorded an additional valuation allowance of $58.9 million on the Company's federal net operating loss ("NOL") carryforwards and certain deferred taxes related to our consolidated partnerships. In the first quarter of 2024 it was determined that the net taxable capital gain from our sales of shares of Dayforce and D&B would likely be offset by other sources of current year taxable loss. Accordingly, we determined it was uncertain whether we would be able to use the Company's available federal NOL carryforwards and certain other deferred taxes. One of the factors used in assessing the need for a valuation allowance on net deferred tax assets is whether a company is in a three-year cumulative book loss position and for the three years ended December 31, 2023, the Company was in a cumulative book loss position. The Company is relying on deferred tax liabilities, and the ability to carry back capital losses, as sources of income to facilitate the recovery of its remaining deferred tax assets. The Company’s prospective investment strategy, fluctuations in the fair market value of its ownership interests prior to any dispositions and other factors may influence the timing of reversals of deferred tax assets and liabilities and their ultimate impact on taxable income or loss, which could have an effect on the recoverability of deferred tax assets. As of September 30, 2024, the Company has a federal valuation allowance of $58.7 million representing a full valuation allowance on its federal NOL carryforwards and certain other deferred taxes where it is not more likely than not that the tax benefit will be realized. Additionally, a state valuation allowance of $4.8 million has been recorded representing certain state NOLs where it is not more likely than not that the tax benefit of certain state NOLs will be realized before the NOLs in those certain states expire. At this time, we consider it more likely than not that we will have sufficient taxable income and available excess capital gain from prior year periods that will allow us to realize our other deferred tax assets. The Company will continue to monitor the recoverability of deferred tax assets on a quarterly basis and may need to record an additional valuation allowance on its net deferred tax asset in future periods.

Previous wording

Total revenues decreased $34.8 million, or 22.8%, in the three months ended June 30, 2024 compared to the corresponding period in 2023. The reduction in revenue is primarily attributable to the closure of O'Charley's locations in 2023.

Current wording

Total revenues decreased $29.7 million, or 20.7%, in the three months ended September 30, 2024 compared to the corresponding period in 2023. The reduction in revenue is primarily attributable to the closure of O'Charley's locations in 2023.

Previous wording

Loss before income taxes and equity in losses of unconsolidated affiliates decreased (increased loss) $106.3 million, or 168.5%, in the three months ended June 30, 2024 compared to the corresponding period in 2023.

Current wording

Earnings (loss) before income taxes and equity in losses of unconsolidated affiliates increased (decreased loss) $188.3 million, or 101.7%, in the three months ended September 30, 2024 compared to the corresponding period in 2023.

Previous wording

Income tax benefit was $33.7 million and $21.8 million in the three-month periods ended June 30, 2024 and 2023, respectively. Our effective tax rate was 19.9% and 34.5% in the three months ended June 30, 2024 and 2023, respectively. Our effective tax rate fluctuates depending on our estimate of ultimate income tax liability and changes in the characteristics of net earnings, such as the weighting of operating income versus other income or earnings and losses of unconsolidated affiliates. The change in our effective tax rate in the three months ended June 30, 2024 compared to the corresponding period in 2023 is primarily attributable to the impact to the rate of equity in losses of unconsolidated affiliates relative to pre-tax losses and the impairment recorded to our investment in Sightline.

Current wording

Income tax benefit was $6.2 million and $40.5 million in the three-month periods ended September 30, 2024 and 2023, respectively. Our effective tax rate was (193.8)% and 21.9% in the three months ended September 30, 2024 and 2023, respectively. Our effective tax rate fluctuates depending on our estimate of ultimate income tax liability and changes in the characteristics of net earnings, such as the weighting of operating income versus other income or earnings and losses of unconsolidated affiliates. The change in our effective tax rate in the three months ended September 30, 2024 compared to the corresponding period in 2023 is primarily attributable to the impact to the rate of equity in losses of unconsolidated affiliates relative to pre-tax losses.

Previous wording

The following is a discussion of the material fluctuations in our consolidated results of operations for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The material changes in revenues, expenses and pre-tax loss for the six months ended June 30, 2024 and 2023 are discussed in further detail at the segment level below.

Current wording

The following is a discussion of the material fluctuations in our consolidated results of operations for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The material changes in revenues, expenses and pre-tax loss for the nine months ended September 30, 2024 and 2023 are discussed in further detail at the segment level below.

Previous wording

Total revenues decreased $78.4 million, or 25.5%, in the six months ended June 30, 2024 compared to the corresponding period in 2023. The reduction in revenue is primarily attributable to the closure of O'Charley's locations in 2023.

Current wording

Total revenues decreased $108.1 million, or 24.0%, in the nine months ended September 30, 2024 compared to the corresponding period in 2023. The reduction in revenue is primarily attributable to the closure of O'Charley's locations in 2023.

Previous wording

Loss before income taxes and equity in losses of unconsolidated affiliates decreased (increased loss) $183.8 million, or 520.7%, in the six months ended June 30, 2024 compared to the corresponding period in 2023.

Current wording

Earnings (loss) before income taxes and equity in losses of unconsolidated affiliates increased (decreased loss) $4.5 million, or 2.0%, in the nine months ended September 30, 2024 compared to the corresponding period in 2023.

Previous wording

Income tax expense (benefit) was $19.7 million and $(19.2) million in the six-month periods ended June 30, 2024 and 2023, respectively. Our effective tax rate was (9.0)% and 54.4% in the six months ended June 30, 2024 and 2023, respectively. Our effective tax rate fluctuates depending on our estimate of ultimate income tax liability and changes in the characteristics of net earnings, such as the weighting of operating income versus other income or earnings and losses of unconsolidated affiliates. The change in our effective tax rate in the six months June 30, 2024 compared to the corresponding period in 2023 is attributable to the recording of a valuation allowance in the current period of $58.8 million on our federal net operating loss carryforwards and certain deferred taxes within our consolidated partnerships, the impact to the rate of equity in losses of unconsolidated affiliates relative to pre-tax loss and the impairment recorded to our investment in Sightline.

Current wording

Income tax expense (benefit) was $13.5 million and $(59.7) million in the nine-month periods ended September 30, 2024 and 2023, respectively. Our effective tax rate was (6.3)% and 27.1% in the nine months ended September 30, 2024 and 2023, respectively. Our effective tax rate fluctuates depending on our estimate of ultimate income tax liability and changes in the characteristics of net earnings, such as the weighting of operating income versus other income or earnings and losses of unconsolidated affiliates. The change in our effective tax rate in the nine months September 30, 2024 compared to the corresponding period in 2023 is attributable to the recording of a valuation allowance in the current period of $58.9 million on our federal net operating loss carryforwards and certain deferred taxes within our consolidated partnerships, the impact to the rate of equity in losses of unconsolidated affiliates relative to pre-tax loss and the impairment recorded to our investment in Sightline.

Previous wording

Equity in losses of unconsolidated affiliates for thesix months ended June 30, 2024 and 2023 consisted of the following:

Current wording

Equity in losses of unconsolidated affiliates for thenine months ended September 30, 2024 and 2023 consisted of the following:

Previous wording

The equity in earnings of CSI in the six months ended June 30, 2024 was primarily driven by the sale of a portion of CSI to a third party by BGPT Catalyst, LP, the entity through which we own our interest in CSI.

Current wording

The equity in earnings of CSI in the nine months ended September 30, 2024 was primarily driven by the sale of a portion of CSI to a third party by BGPT Catalyst, LP, the entity through which we own our interest in CSI.

Previous wording

Total revenues for the Restaurant Group segment decreased $37.6 million, or 25.9%, in the three months ended June 30, 2024, compared to the corresponding period in 2023. The change was attributable to approximately $30.4 million of incremental revenue included in the three months ended June 30, 2023 associated with O'Charley's stores that were closed prior to 2024 and a decline in comparable store sales.

Current wording

Total revenues for the Restaurant Group segment decreased $29.1 million, or 22.2%, in the three months ended September 30, 2024, compared to the corresponding period in 2023. The change was attributable to approximately $22.1 million of incremental revenue included in the three months ended September 30, 2023 associated with O'Charley's stores that were closed prior to 2024 and a decline in comparable store sales.

Previous wording

Comparable Store Sales. One method we use in evaluating the performance of our restaurants is to compare sales results for restaurants period over period. A new restaurant is included in our comparable store sales figures starting in the first period following the restaurant's first seventy-eight weeks of operations. Changes in comparable store sales reflect changes in sales for the comparable store group of restaurants over a specified period of time. This measure highlights the performance of existing restaurants, as the impact of new restaurant openings is excluded. Comparable store sales for our O'Charley's and 99 Restaurants brands decreased by 8.0% and 3.2%, respectively, in the three months ended June 30, 2024 compared to the corresponding period in 2023. The decrease is primarily attributable to a decrease in guest counts, partially offset by an increase in the average amount spent by customers each visit.

Current wording

Comparable Store Sales. One method we use in evaluating the performance of our restaurants is to compare sales results for restaurants period over period. A new restaurant is included in our comparable store sales figures starting in the first period following the restaurant's first seventy-eight weeks of operations. Changes in comparable store sales reflect changes in sales for the comparable store group of restaurants over a specified period of time. This measure highlights the performance of existing restaurants, as the impact of new restaurant openings is excluded. Comparable store sales for our O'Charley's and 99 Restaurants brands decreased by 11.3% and 4.4%, respectively, in the three months ended September 30, 2024 compared to the corresponding period in 2023. The decrease is primarily attributable to a decrease in guest counts, partially offset by an increase in the average amount spent by guests each visit.

Previous wording

Cost of restaurant revenue decreased as a function of Restaurant revenues. Cost of restaurant revenue as a percentage of restaurant revenue was 85.6% and 88.4% in the three months ended June 30, 2024 and 2023, respectively. The decrease was partially attributable to the impact of refunds from certain vendors recorded in the three months ended June 30, 2024.

Current wording

Cost of restaurant revenue decreased directionally consistent with Restaurant revenue in the period. Cost of restaurant revenue as a percentage of Restaurant revenue was 91.1% and 88.3% in the three months ended September 30, 2024 and 2023, respectively. The increase was primarily attributable to promotional initiatives at O'Charley's to drive increased guest counts implemented in the in three months ended September 30, 2024.

Previous wording

Total revenues for the Restaurant Group segment decreased $79.6 million, or 27.1%, in the six months ended June 30, 2024, compared to the corresponding period in 2023. The decrease was attributable to approximately $65.3 million of incremental revenue included in the six months ended June 30, 2023 associated with O'Charley's stores that were closed prior to 2024 and a decline in comparable store sales.

Current wording

Total revenues for the Restaurant Group segment decreased $108.7 million, or 25.6%, in the nine months ended September 30, 2024, compared to the corresponding period in 2023. The decrease was attributable to approximately $87.4 million of incremental revenue included in the nine months ended September 30, 2023 associated with O'Charley's stores that were closed prior to 2024 and a decline in comparable store sales.

Previous wording

Comparable Store Sales. Comparable store sales for our O'Charley's and 99 Restaurants brands decreased by 7.2% and 3.0%, respectively, in the six months ended June 30, 2024 compared to the comparable period in 2023. The decrease in 2024 is primarily attributable to a decrease in guest counts, partially offset by an increase in the average amount spent by customers each visit.

Current wording

Comparable Store Sales. Comparable store sales for our O'Charley's and 99 Restaurants brands decreased by 8.5% and 3.5%, respectively, in the nine months ended September 30, 2024 compared to the comparable period in 2023. The decrease in 2024 is primarily attributable to a decrease in guest counts, partially offset by an increase in the average amount spent by customers each visit.

Previous wording

Cost of restaurant revenue decreased directionally consistent with Restaurant revenues. Cost of restaurant revenue as a percentage of restaurant revenue was 87.0% and 88.5% in the six months ended June 30, 2024 and 2023, respectively.

Current wording

Cost of restaurant revenue decreased directionally consistent with Restaurant revenues. Cost of restaurant revenue as a percentage of Restaurant revenue was 88.3% and 88.4% in the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Other operating expense for the Restaurant Group segment decreased $7.9 million, or 38.3%, in the six months ended June 30, 2024, compared to the corresponding period in 2023. The decrease is primarily attributable to the closure of stores in 2023.

Current wording

Other operating expense for the Restaurant Group segment decreased $42.8 million, or 70.2%, in the nine months ended September 30, 2024, compared to the corresponding period in 2023. The decrease is primarily attributable to $28.8 million of impairment charges to property and equipment and lease assets of O'Charley's recorded in the quarter ended September 30, 2023 and the closure of stores in 2023.

Previous wording

As of June 30, 2024, we own approximately 9.7% of the outstanding common stock of Alight. We account for our ownership of Alight under the equity method of accounting; therefore, its results do not consolidate into ours.

Current wording

As of September 30, 2024, we own approximately 9.8% of the outstanding common stock of Alight. We account for our ownership of Alight under the equity method of accounting; therefore, its results do not consolidate into ours.

Previous wording

As of June 30, 2024, we own approximately 45.5% of the ownership interest of Black Knight Football. We account for our ownership of BKFC under the equity method of accounting and report our equity in the earnings or loss of BKFC on a three-month lag; therefore, its results do not consolidate into ours. Accordingly, our net loss for the three and six months ended June 30, 2024 includes our equity in Black Knight Football’s losses for the three and six months ended March 31, 2024 and our net loss for the three and six months ended June 30, 2023 includes our equity in Black Knight Football's losses for the three months ended March 31, 2023 and the period from December 13, 2022 (the date we acquired our initial interest in BKFC) through March 31, 2023, respectively.

Current wording

As of September 30, 2024, we own approximately 45.5% of the ownership interest of Black Knight Football. We account for our ownership of BKFC under the equity method of accounting and report our equity in the earnings or loss of BKFC on a three-month lag; therefore, its results do not consolidate into ours. Accordingly, our net loss for the three and nine months ended September 30, 2024 includes our equity in Black Knight Football’s losses for the three and nine months ended June 30, 2024 and our net loss for the three and nine months ended September 30, 2023 includes our equity in Black Knight Football's losses for the three months ended June 30, 2023 and the period from December 13, 2022 (the date we acquired our initial interest in BKFC) through June 30, 2023, respectively.

Previous wording

Black Knight Football's total revenue is primarily attributable to Premier League media rights revenue earned by AFCB and matchday and sponsorship revenue. Total revenues for Black Knight Football increased $13.6 million, or 34.8%, in the three months ended March 31, 2024, compared to the corresponding period in 2023. The increase in revenue was primarily attributable to an increase in matchday and sponsorship revenue. In the three months ended March 31, 2024, total revenue of $49.4 million was more than offset by $43.7 million of personnel cost and $28.0 million of depreciation and amortization of property and equipment and intangible assets by AFCB.

Current wording

Black Knight Football's total revenue is primarily attributable to Premier League media rights revenue earned by AFCB and matchday and sponsorship revenue. Total revenues for Black Knight Football increased $9.8 million, or 14.4%, in the three months ended June 30, 2024, compared to the corresponding period in 2023. The increase in revenue was primarily attributable to an increase in matchday and sponsorship revenue. Total revenues for Black Knight Football increased $66.0 million, or 57.9%, in the nine months ended June 30, 2024, compared to the corresponding period in 2023. The increase in revenue was primarily attributable to the fact that the period in 2023 was shorter due to the date we acquired our initial interest in BKFC along with an increase in matchday and sponsorship revenue. Personnel costs for BKFC increased $13.0 million, or 35.3%, in the three months ended June 30, 2024. The increase in these costs was attributable to the acquisition of new players at AFC Bournemouth. Personnel costs for BKFC increased $58.9 million, or 76.1%, in the nine months ended June 30, 2024 compared to the corresponding period in 2023. The increase was attributable to the acquisition of new players at AFC Bournemouth and the fact that the period in 2023 was shorter due to the date we acquired our initial interest in BKFC (December 13, 2022). Net loss in the three and nine months ended June 30, 2024 was further impacted by an impairment charge of $12.0 million to BKFC's investment in FC Lorient resulting from the club's relegation to Ligue 2.

Previous wording

Other operating expenses increased $3.8 million in the three months ended June 30, 2024 compared to the prior year period. The change in the three-month period was primarily driven by increased professional fees and termination fees associated with the termination of the management agreement with Trasimene.

Current wording

Other operating expenses decreased $5.0 million in the three months ended September 30, 2024 compared to the prior year period. The change in the three-month period was primarily attributable to decreased fees paid to Trasimene, partially offset by an increase in professional fees.

Previous wording

Recognized (losses) gains, net in our Corporate and Other segment consists of the following:

Current wording

Recognized gains (losses), net in our Corporate and Other segment consists of the following:

Previous wording

Personnel costs increased $9.2 million in the three months ended June 30, 2024, compared to the corresponding period in 2023. The change in personnel costs was primarily driven by a $7.0 million increase in stock-based compensation cost and a $1.5 million increase in success bonuses paid related to our sales of shares of Dayforce.

Current wording

Personnel costs increased $20.8 million in the nine months ended September 30, 2024, compared to the corresponding period in 2023. The change in personnel costs was primarily driven by a $12.8 million increase in stock-based compensation cost and a $5.7 million increase in success bonuses paid related to our sales of shares of Dayforce.

Previous wording

Other operating expenses increased $11.9 million in the six months ended June 30, 2024 compared to the prior year period. The increase in the six month period was primarily driven by increased professional fees and termination fees associated with the termination of the management agreement with Trasimene.

Current wording

Other operating expenses increased $6.9 million in the nine months ended September 30, 2024 compared to the prior year period. The increase in the nine month period was primarily driven by increased professional fees associated with 2024 transactions.

Previous wording

Cash Requirements. Our short and long term cash requirements include management fees, personnel costs, other operating expenses, taxes, payments of interest and principal on our debt, capital expenditures, dividends on our common stock, and other potential business acquisitions or investments, including the JANA Fund Commitment. On July 30, 2024, our Board declared cash dividends of $0.12 per share, payable on September 30, 2024, to Cannae common shareholders of record as of September 16, 2024. There are no restrictions on our retained earnings regarding our ability to pay dividends to stockholders. The declaration of any future dividends is at the discretion of our Board. Additional uses of cash flow over the short and long term are expected to include stock repurchases and debt repayments.

Current wording

Cash Requirements. Our short and long term cash requirements include management fees, personnel costs, other operating expenses, taxes, payments of interest and principal on our debt, capital expenditures, dividends on our common stock, and other potential business acquisitions or investments, including the Watkins Acquisition. On November 7, 2024, our Board declared cash dividends of $0.12 per share, payable on December 31, 2024, to Cannae common shareholders of record as of December 17, 2024. There are no restrictions on our retained earnings regarding our ability to pay dividends to stockholders. The declaration of any future dividends is at the discretion of our Board. Additional uses of cash flow over the short and long term are expected to include stock repurchases and debt repayments.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $45.7 million, of which $28.9 million was cash held by the corporate holding company, $8.9 million of short-term investments held by the corporate holding company, and $150.0 million of capacity under our existing holding company credit facilities with the ability to add an additional $350.0 million of borrowing capacity by amending our 2020 Margin Facility. As of June 30, 2024, $8.8 million of our short term investments are pledged as collateral for letters of credit for our Restaurant Group.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $160.7 million, of which $146.5 million was cash held by the corporate holding company, $8.9 million of short-term investments held by the corporate holding company, and $49.0 million of immediate capacity under our existing holding company credit facilities with the ability to add an additional $350.0 million of borrowing capacity by amending our 2020 Margin Facility. As of September 30, 2024, we have pledged $7.0 million of our short term investments as collateral for letters of credit for our Restaurant Group.

Previous wording

Cash Flows for the Six Months Ended June 30, 2024

Current wording

Cash Flows for the Nine Months Ended September 30, 2024

Previous wording

Operating Cash Flow. Our cash flows used in operations for the six months ended June 30, 2024 and 2023 totaled $46.2 million and $34.6 million, respectively. The increase in cash used in operations of $11.6 million is primarily attributable to increased investment success bonuses paid related to sales of Dayforce and professional fees and termination fees associated with the Third Amended MSA.

Current wording

Operating Cash Flow. Our cash flows used in operations for the nine months ended September 30, 2024 and 2023 totaled $78.1 million and $54.5 million, respectively. The increase in cash used in operations of $23.6 million is primarily attributable to increased investment success bonuses paid related to sales of Dayforce and professional fees and termination fees associated with the Third Amended MSA.

Previous wording

Investing Cash Flows. Our cash flows provided by (used in) investing activities for the six months ended June 30, 2024 and 2023 were $252.5 million and $(51.0) million, respectively. The increase in cash provided by investing activities of $303.5 million in the 2024 period from the 2023 period is primarily attributable to higher proceeds from sales of investments and a decrease in new investments made in the 2024 period compared to the 2023 period.

Current wording

Investing Cash Flows. Our cash flows provided by (used in) investing activities for the nine months ended September 30, 2024 and 2023 were $307.1 million and $(33.6) million, respectively. The increase in cash provided by investing activities of $340.7 million in the 2024 period from the 2023 period is primarily attributable to higher proceeds from sales of investments and a decrease in new investments made in the 2024 period compared to the 2023 period.

Previous wording

Financing Cash Flows. Our cash flows used in financing activities for the six months ended June 30, 2024 and 2023 were $266.8 million and $49.4 million, respectively. The increase in cash used in financing activities of $217.4 million is primarily attributable to the Tender Offer, partial repayment of the FNF Note and dividends paid in the six months ended June 30, 2024, partially offset by treasury repurchases in the six months ended June 30, 2023.

Current wording

Financing Cash Flows. Our cash flows used in financing activities for the nine months ended September 30, 2024 and 2023 were $174.5 million and $101.5 million, respectively. The increase in cash used in financing activities of $73.0 million is primarily attributable to the Tender Offer, partial repayment of the FNF Note and dividends paid in the nine months ended September 30, 2024, partially offset by a net increase in debt borrowings in the nine months ended September 30, 2024 and treasury repurchases in the nine months ended September 30, 2023.

Previous wording

On February 26, 2024, the Company, Cannae LLC and Trasimene entered into the Third Amended MSA. The Third Amended MSA amends the management services agreement primarily to (i) provide for a termination of the agreement by the Company effective June 30, 2027, (ii) reduce the management fee to a fixed amount of $7.6 million annually effective beginning July 2, 2024 and (iii) provide for payment of the termination fee under the agreement of $20 million to be paid by the Company to Trasimene in installments of $6.7 million annually over the three-year period ended July 1, 2026. The Third Amended has a termination date of June 30, 2027 unless earlier terminated by the Company or Trasimene.

Current wording

On February 26, 2024, the Company, Cannae LLC and Trasimene entered into the Third Amended MSA. The Third Amended MSA amends the management services agreement primarily to (i) provide for a termination of the agreement by the Company effective June 30, 2027, (ii) reduce the management fee to a fixed amount of $7.6 million annually effective beginning July 2, 2024 and (iii) provide for payment of the termination fee under the agreement of $20 million to be paid by the Company to Trasimene in installments of $6.7 million annually over the three-year period ended July 1, 2026. The Third Amended MSA has a termination date of June 30, 2027 unless earlier terminated by the Company or Trasimene.

Previous wording

We repurchased 300,000 shares of Cannae common stock for $5.6 million, or an average of $18.80 per share pursuant to the 2022 Repurchase Program during the three months ended June 30, 2024. Since the original commencement of the 2022 Repurchase Program through market close on June 30, 2024, we have repurchased a total of 7,704,537 shares of Cannae common stock for approximately $151.0 million in the aggregate, or an average of $19.59 per share. As of the date of this Quarterly Report, there are 2,295,463 shares available for repurchase under the 2022 Repurchase Program.

Current wording

We did not repurchase any shares of Cannae common stock pursuant to the 2022 Repurchase Program during the three months ended September 30, 2024. Since the original commencement of the 2022 Repurchase Program through market close on September 30, 2024, we have repurchased a total of 7,704,537 shares of Cannae common stock for approximately $151.0 million in the aggregate, or an average of $19.59 per share. As of the date of this Quarterly Report, there are 2,295,463 shares available for repurchase under the 2022 Repurchase Program.