Cannae Holdings, Inc.

Previous wording

The statements contained in this Quarterly Report on Form 10-Q (this "Quarterly Report") that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding our expectations, hopes, intentions or strategies regarding the future. All forward-looking statements included in this Quarterly Report are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," or the negative of these terms or other comparable terminology. It is important to note that our actual results could vary materially from those forward-looking statements contained herein due to many factors, including but not limited to: changes in general economic, business and political conditions, including among others, consumer spending, business investment, government spending, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates, commodity prices, inflation levels, changes in trade policy, tariffs on goods, and supply chain disruptions; risks associated with the Investment Company Act of 1940; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; risks related to the externalization of certain of our management functions to our Manager; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of our Annual Report on Form 10-K for the year ended December 31, 2024 (our "Annual Report") and other filings with the Securities Exchange Commission ("SEC").

Current wording

The statements contained in this Quarterly Report on Form 10-Q (this "Quarterly Report") that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding our expectations, hopes, intentions or strategies regarding the future. All forward-looking statements included in this Quarterly Report are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," or the negative of these terms or other comparable terminology. It is important to note that our actual results could vary materially from those forward-looking statements contained herein due to many factors, including but not limited to: changes in general economic, business and political conditions, including among others, consumer spending, business investment, government spending, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates, commodity prices, inflation levels, changes in trade policy, tariffs on goods, and supply chain disruptions; risks associated with the Investment Company Act of 1940; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of our Annual Report on Form 10-K for the year ended December 31, 2025 (our "Annual Report") and other filings with the Securities Exchange Commission ("SEC").

Previous wording

Recent years were a period of high inflation relative to long-term inflation expectations in the U.S. This inflationary environment primarily impacted the commodity and labor costs of our Restaurant Group. We have adjusted menu pricing to account for these cost increases to an extent, but will continue to balance the impact of inflationary pressures on our costs with the value proposition offered to customers, focusing on long-term profitability.

Current wording

Restaurant Group. Recent years were a period of high inflation relative to long-term inflation expectations in the U.S. This inflationary environment primarily impacted the commodity and labor costs of our Restaurant Group. We have adjusted menu pricing to account for these cost increases to an extent, but will continue to balance the impact of inflationary pressures on our costs with the value proposition offered to customers, focusing on long-term profitability.

Previous 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.

Current wording

Average weekly sales per restaurant are typically higher in the first and second quarters than in other quarters, 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 September 30, 2025, the book value of our investment in Alight accounted for under the equity method of accounting is$147.4 million. Based on the closing stock price of Alight common shares as of September 30, 2025, the fair value of our investment in Alight was$132.0 million. 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, 2025, 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 March 31, 2026, the book value of our investment in Alight accounted for under the equity method of accounting is$71.6 million. Based on the closing stock price of Alight common shares as of March 31, 2026, the fair value of our investment in Alight was$23.5 million. While the fair value of our investment in Alight is currently below our book value as of March 31, 2026, the fair value has only been below book value for less than three months. 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 March 31, 2026, 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 September 30, 2025, we had a net deferred tax asset of $50.4 million, which is primarily attributable to temporary differences for our investments in unconsolidated affiliates held through partnerships. In the nine months ended September 30, 2025, we recorded an additional valuation allowance of $99.0 million on the Company's federal NOL carryforwards, state NOL carryforwards, and certain deferred taxes related to basis differences of our investments. In the first quarter of 2025, it was determined that due to the current market and investee-specific conditions, the ability to utilize the entirety of our deferred tax asset related to basis differences in our investments was less likely than prior periods. 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, 2024, the Company was in a cumulative book loss position. 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, 2025, the Company has a federal valuation allowance of $145.2 million representing a full valuation allowance on its federal NOL carryforwards and certain other deferred taxes related to our ownership interests where it is not more likely than not that the tax benefit will be realized. Additionally, a state valuation allowance of $6.6 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 remaining 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 March 31, 2026, the Company has a net deferred tax asset of $1.0 million, which is primarily attributable to temporary differences for certain state income taxes. The Company continues to record a full valuation allowance on its federal NOL carryforwards and certain other deferred taxes related to our ownership interests where it is not more likely than not that the tax benefit will be realized. As of March 31, 2026, our federal valuation allowance was $171.5 million. Additionally, a state valuation allowance of $6.7 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.

Previous wording

Earnings (loss) before income taxes and equity in losses of unconsolidated affiliates decrease $9.4 million, or 324.1%, in the three months ended September 30, 2025 compared to the corresponding period in 2024.

Current wording

Earnings (loss) before income taxes and equity in losses of unconsolidated affiliates decreased $12.9 million, or 77.7%, in the three months ended March 31, 2026 compared to the corresponding period in 2025.

Previous wording

Income tax benefit was $3.8 million and $6.4 million in the three-month periods ended September 30, 2025 and 2024, respectively. Our effective tax rate was 58.5% and (220.7)% in the three months ended September 30, 2025 and 2024, 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, 2025 compared to the corresponding period in 2024 is primarily attributable to the impact of equity in losses of unconsolidated affiliates relative to pre-tax losses on our effective tax rate.

Current wording

Income tax benefit was $0.5 million and $20.2 million in the three-month periods ended March 31, 2026 and 2025, respectively. Our effective tax rate was (1.7)% and (121.7)% in the three months ended March 31, 2026 and 2025, 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 March 31, 2026 compared to the corresponding period in 2025 is attributable to recording a valuation allowance recorded in the prior year period of $28.3 million and the varying impact of equity in losses of unconsolidated affiliates on income tax expense (benefit).

Previous wording

Total revenues for the Restaurant Group segment decreased $7.5 million, or 7.3%, in the three months ended September 30, 2025, compared to the corresponding period in 2024. The reduction in revenue is primarily attributable to approximately $3.6 million of incremental revenue included in the three months ended September 30, 2024 associated with O'Charley's store locations that were closed prior to the three months ended September 30, 2025 and a decline in comparable store sales.

Current wording

Total revenues for the Restaurant Group segment decreased $7.2 million, or 7.3%, in the three months ended March 31, 2026, compared to the corresponding period in 2025. The reduction in revenue is primarily attributable to approximately $3.4 million of incremental revenue included in the three months ended March 31, 2025 associated with O'Charley's store locations that were closed prior to the three months ended March 31, 2026 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 13.6% and 0.8%, respectively, in the three months ended September 30, 2025 compared to the corresponding period in 2024. The decrease is primarily attributable to our O'Charley's and 99 Restaurants brands decrease in guest counts of 18.3% and 1.9%, respectively, partially offset by an increase in the average amount spent by guests each visit of 5.7% and 1.2%, respectively. The decline in same store sales is an unfavorable trend reasonably likely to have a material unfavorable impact on future net sales and income from continuing operations.

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 12.6% and 2.1%, respectively, in the three months ended March 31, 2026 compared to the corresponding period in 2025. The decrease is primarily attributable to our O'Charley's and 99 Restaurants brands decrease in guest counts of 20.8% and 7.4%, respectively, partially offset by an increase in the average amount spent by guests each visit of 10.4% and 5.8%, respectively. The decline in same store sales is an unfavorable trend reasonably likely to have a material unfavorable impact on future net sales and income from continuing operations.

Previous wording

As of September 30, 2025, we own approximately 44.7% of the ownership interest of Black Knight Football. We account for our ownership of BKFC under the equity method of accounting, and therefore its results do not consolidate into ours. We report our equity in the earnings or loss of BKFC on a three-month lag, and accordingly, our net loss for the three months ended September 30, 2025 and 2024 includes our equity in Black Knight Football’s losses for the three and nine months ended June 30, 2025 and 2024, respectively.

Current wording

As of March 31, 2026, we own approximately 44.5% of the ownership interest of Black Knight Football. We account for our ownership of BKFC under the equity method of accounting, and therefore its results do not consolidate into ours. We report our equity in the earnings or loss of BKFC on a three-month lag, and accordingly, our net loss for the three months ended March 31, 2026 and 2025 includes our equity in BKFC’s losses for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

Black Knight Football's total revenue is primarily attributable to Premier League media rights, matchday and sponsorship revenue earned by AFCB.

Current wording

BKFC's total revenue is primarily attributable to Premier League media rights, matchday and sponsorship revenue earned by AFCB.

Previous wording

Total revenues for Black Knight Football increased $17.8 million, or 22.9%, in the three months ended June 30, 2025, compared to the corresponding period in 2024. The change in revenue was primarily attributable to a $13.2 million, or 20.7%, increase due to AFCB's higher placement in the table along with $2.6 million, or 41.6%, increase as a result of players out on loan in the three-month period.

Current wording

Total revenues for Black Knight Football increased $6.7 million, or 9.4%, in the three months ended December 31, 2025, compared to the corresponding period in 2024. The change in revenue was primarily attributable to a $6.7 million, or 13.4%, increase due to AFCB's higher placement in the table which drives revenue from the Premier League along with an increase in matchday and sponsorship revenue, offset by a decrease in other income from players on loan.

Previous wording

As of September 30, 2025, we own approximately 50.0% of the ownership interest of JANA. We account for our ownership of JANA under the equity method of accounting, and therefore its results do not consolidate into ours. We report our equity in the earnings or loss of JANA on a three-month lag, and accordingly, our net earnings (loss) for the three and nine months ended September 30, 2025 includes our equity in JANA’s earnings for the three and nine months ended June 30, 2025, and our net earnings (loss) for the three and nine months ended September 30, 2024 includes our equity in JANA’s earnings for the three months ended June 30, 2024 and for the period from February 21, 2024 through June 30, 2024, respectively.

Current wording

As of March 31, 2026, we own approximately 50.0% of the ownership interest of JANA Partners. We account for our ownership of JANA under the equity method of accounting, and therefore its results do not consolidate into ours. We report our equity in the earnings or loss of JANA Partners on a three-month lag, and accordingly, our net earnings (loss) for the three months ended March 31, 2026 and 2025 includes our equity in JANA’s earnings for the three months ended December 31, 2025, and 2024, respectively.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $233.8 million, of which $225.8 million was cash held by the corporate holding company, and $50.0 million of immediate capacity under our existing holding company credit facilities.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $135.7 million, of which $124.2 million was cash held by the corporate holding company.

Previous wording

We continually assess our capital allocation strategy, including decisions relating to monetizing investments, reducing debt, repurchasing our stock, and/or conserving cash. We believe that all anticipated cash requirements for current operations will be met from internally generated funds, cash dividends from subsidiaries, cash generated by investment securities, potential sales of non-strategic assets, and borrowings on existing credit facilities. Our short-term and long-term liquidity requirements are monitored regularly to ensure that we can meet our cash requirements. We forecast the needs of all of our subsidiaries and periodically review their short-term and long-term projected sources and uses of funds, as well as the asset, liability, investment and cash flow assumptions underlying such forecasts.

Current wording

We continually assess our capital allocation strategy, including decisions relating to repurchasing our stock, paying dividends, reducing debt, and/or conserving cash. We believe that all anticipated cash requirements for current operations will be met from internally generated funds, cash dividends or distributions from subsidiaries and holdings, cash generated from short-term investments, potential sales of non-strategic assets, and borrowings on existing credit facilities. Our short-term and long-term liquidity requirements are monitored regularly to ensure that we can meet our cash requirements. We forecast the Company's liquidity needs and periodically review the short-term and long-term projected sources and uses of funds, as well as the asset, liability, investment and cash flow assumptions underlying such forecasts. As part of such forecasting, we actively manage the impact of rising interest rates on both our idle cash and our outstanding debt.

Previous wording

We are focused on evaluating our assets and ownership interests as potential vehicles for creating liquidity. Our intent is to use that liquidity for general corporate purposes, including future acquisitions, potentially reducing debt, repurchasing shares of our stock, paying dividends on our stock, other strategic initiatives and/or conserving cash.

Current wording

We are focused on evaluating our assets and investments as potential vehicles for creating liquidity. Our intent is to use that liquidity for general corporate purposes, including funding future investments, other strategic initiatives and/or conserving cash.

Previous wording

Cash Flows for the Nine Months Ended September 30, 2025

Current wording

Cash Flows for the Three Months Ended March 31, 2026

Previous wording

Financing Cash Flows. Our cash flows used in financing activities for the nine months ended September 30, 2025 and 2024 were $357.4 million and $174.5 million, respectively. The increase in cash used in financing activities of $182.9 million is primarily attributable to the decreased borrowings of $61.1 million, increased repayments of debt of $113.9 million and increased dividends paid of $8.5 million in the 2025 period compared to the 2024 period.

Current wording

Financing Cash Flows. Our cash flows used in financing activities for the three months ended March 31, 2026 and 2025 were $23.3 million and $7.4 million, respectively. The change in cash used in financing activities of $15.9 million is primarily attributable to the $14.7 million in repurchases of treasury stock made in the 2026 period compared to none in the 2025 period.

Previous wording

Contractual Obligations. Our long-term contractual obligations generally include our credit agreements and other debt facilities, lease payments and financing obligations on certain of our premises and equipment, purchase obligations of the Restaurant Group and payments to our Manager.

Current wording

Contractual Obligations. Our long-term contractual obligations generally include our credit agreements and other debt facilities, lease payments and financing obligations on certain of our premises and equipment, purchase obligations of the Restaurant Group and payments to our former Manager.

Previous wording

During the three months ended September 30, 2025, we repurchased a total of 6,212,998 shares of Cannae common stock for approximately $120.4 million in the aggregate, or an average of $19.38 per share under the 2023 Repurchase Program. During the nine months ended September 30, 2025, we repurchased a total of 9,705,074 shares of Cannae common stock for approximately $189.8 million in the aggregate, or an average of $19.56 per share under the 2023 Repurchase Program. From October 1, 2025 through November 7, 2025, we repurchased an additional 294,926 shares of Cannae common stock for approximately $5.4 million in the aggregate, or an average of $18.21 per share, pursuant to the 2023 Repurchase Program. Since the original commencement of the 2022 Repurchase Program through market close on November 7, 2025, we have repurchased a total of 10,000,000 shares of Cannae common stock for approximately $195.2 million in the aggregate, or an average of $19.52 per share. As of the date of this Quarterly Report, there are no shares available for repurchase under the 2023 Repurchase Program.

Current wording

Capital Stock Transactions. On March 24, 2025, our Board authorized a new stock repurchase program (the "2025 Repurchase Program"), under which the Company may repurchase up to 10.0 million shares of its common stock. Such repurchases may be made from time to time in the open market at prevailing prices or in privately negotiated transactions. The 2025 Repurchase Program does not obligate us to acquire any specific number of shares and may be suspended or terminated at any time. The 2025 Repurchase Program does not supersede or impact the repurchase capacity under the prior authorizations. During the three months ended March 31, 2026, we repurchased a total of 1,185,000 shares of Cannae common stock for approximately $15.2 million in the aggregate, or an average of $12.84 per share under the 2025 Repurchase program. From April 1, 2026 through May 8, 2026, we repurchased an additional 2,100,000 shares of Cannae common stock for approximately $27.2 million in the aggregate, or an average of $12.94 per share, pursuant to the 2025 Repurchase Program. Since the original commencement of the 2025 Repurchase Program through market close on May 8, 2026, we have repurchased a total of 7,985,913 shares of Cannae common stock for approximately $122.9 million in the aggregate, or an average of $15.39 per share. As of the date of this Quarterly Report, there are 2,014,087 shares available for repurchase under the 2025 Repurchase Program.

Previous wording

On March 24, 2025, our Board authorized a new stock repurchase program (the "2025 Repurchase Program"), under which the Company may repurchase up to 10.0 million shares of its common stock. Purchases may be made from time to time in the open market at prevailing prices or in privately negotiated transactions. The repurchase program does not obligate us to acquire any specific number of shares and may be suspended or terminated at any time. The 2025 Repurchase Program does not supersede or impact the repurchase capacity under the prior authorizations. As of September 30, 2025, we have not made any purchases under the 2025 Repurchase Program and there are 10.0 million shares available for repurchase under the 2025 Repurchase Program. From October 1, 2025 through November 7, 2025, we repurchased an additional 2,003,608 shares of Cannae common stock for approximately $36.9 million in the aggregate, or an average of $18.38 per share, pursuant to the

Current wording

On March 9, 2026, our Board authorized a new stock repurchase program (the "2026 Repurchase Program"), under which the Company may repurchase up to 10.0 million shares of its common stock. Such repurchases may be made from time to time in the open market at prevailing prices or in privately negotiated transactions. The 2026 Repurchase Program does not obligate us to acquire any specific number of shares and may be suspended or terminated at any time. The 2026 Repurchase Program does not supersede or impact the repurchase capacity under the prior authorizations. We have not made any purchases under the 2026 Repurchase Program. As of the date of this Quarterly Report, there are 10.0 million shares available for repurchase under the 2026 Repurchase Program.