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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements and the Notes thereto and Selected Financial Data included elsewhere in this Form 10-K.

Overview

For a description of our business, including descriptions of segments and recent business trends, see the discussion under Business in Item 1 of Part I of this Annual Report, which is incorporated by reference into this Part II, Item 7 of this Annual Report.

Recent Developments

Dun & Bradstreet

On July 6, 2020, Dun & Bradstreet closed its previously announced initial public offering of 90,047,612 shares of common stock, which includes 11,745,340 shares of common stock issued pursuant to the exercise by the underwriters of their option to purchase additional shares in full (the "D&B IPO"). The D&B IPO was priced at $22.00 per share, resulting in gross proceeds to Dun & Bradstreet of $2.4 billion when combined with $400.0 million of aggregate proceeds from a concurrent private placement offering (the "D&B Private Placement") and before deducting underwriting discounts and commissions and other offering expenses payable by Dun & Bradstreet. Shares of Dun & Bradstreet common stock began trading on the New York Stock Exchange ("NYSE") under the ticker symbol "DNB" on July 1, 2020. Dun & Bradstreet used a portion of the net proceeds from the D&B IPO to redeem all of its outstanding Series A Preferred Stock and repay a portion of its 10.250% Senior Unsecured Notes outstanding due 2027.

On July 6, 2020, we invested $200.0 million in the D&B Private Placement. Subsequent to the D&B IPO and the D&B Private Placement, we own 76.6 million shares of Dun & Bradstreet, which represented approximately 18.1% of its outstanding common stock as of December 31, 2020.

As a result of the D&B IPO, we recorded a net gain of $117.0 million (net of $2.3 million of before-tax losses reclassified from other comprehensive earnings) which is included in Recognized gains and losses, net on the Consolidated Statement of Operations for the year ended December 31, 2020.

Ceridian

During the year ended December 31, 2020, we completed the sale of an aggregate of 9.7 million shares of common stock of Ceridian (the "Ceridian Share Sales") to brokers pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. In connection with the Ceridian Share Sales, we received aggregate proceeds of $720.9 million. As of December 31, 2020, we owned approximately 9.5% of the outstanding common stock of Ceridian.

As of March 31, 2020 our voting agreement with Ceridian was terminated and, as a result, we are no longer able to exert influence over the composition and quantity of Ceridian's board of directors. In combination with the reduction in our ownership of Ceridian resulting from the sale of shares in February 2020, we no longer exercise significant influence over Ceridian. As of March 31, 2020, we account for our investment in Ceridian at fair value pursuant to the investment in equity security guidance of Accounting Standards Codification ("ASC") 321. The change resulted in the revaluation of our investment in Ceridian to its fair value of $993.4 million as of March 31, 2020 and recording a non-cash gain on such revaluation of $684.9 million (net of $47.1 million of before-tax losses reclassified from other comprehensive earnings), which is included in Recognized gains and losses, net on the Consolidated Statement of Operations for the year ended December 31, 2020.

Restaurant Group

On January 27, 2020, Blue Ribbon and its wholly-owned subsidiaries, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in connection with the Blue Ribbon Reorganization. The Blue Ribbon Reorganization does not involve or affect the operations of O’Charley’s or 99 Restaurants, which are not part of Blue Ribbon. As a result of the Blue Ribbon Reorganization, we deconsolidated Blue Ribbon as of January 27, 2020 because the bankruptcy court and committee of creditors were deemed to have control of Blue Ribbon.

We recorded a non-cash gain of $26.5 million on January 27, 2020 as a result of the deconsolidation of Blue Ribbon, which is included in Recognized gains and losses, net on the Consolidated Statement of Operations for the year ended December 31, 2020. The recorded gain was measured as the excess of the fair value of our retained equity investment in Blue Ribbon over our book value of Blue Ribbon as of January 27, 2020.

During the Blue Ribbon Reorganization, we accounted for our retained equity interest in Blue Ribbon under the equity method of accounting because (1) we continued to exert significant influence over Blue Ribbon through our majority equity ownership and position as the single largest post-petition creditor of Blue Ribbon through the DIP Loan, (2) the Blue Ribbon Reorganization was limited in scope and expected to be short in duration, and (3) we expected to retain a majority equity interest upon completion of the Blue Ribbon Reorganization. We recorded an investment of $33.6 million as of January 27,

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2020. The fair value of the investment was determined by performing a combination of discounted cash flow and market approaches.

As a result of unprecedented social restrictions imposed by state and local government authorities related to the COVID-19 pandemic, our Restaurant Group brands experienced a significant reduction in guest counts beginning in the last two weeks of March 2020. In response to the outbreak and these changing conditions, our Restaurant Group brands initially closed the dining rooms in substantially all of our restaurants. Due to increased uncertainty in the operating environment for restaurants and a significant reduction in forecasted cash flows for Blue Ribbon, we recorded an other-than-temporary impairment of our investment of $18.6 million as of March 31, 2020.

On July 10, 2020, Blue Ribbon filed its Chapter 11 Plan with the Bankruptcy Court.

On October 2, 2020, the Chapter 11 Plan became effective and Blue Ribbon emerged from bankruptcy as a set of reorganized companies. Upon Blue Ribbon's emergence from bankruptcy, we acquired the assets and uncompromised liabilities of Legendary Baking and VIBSQ in exchange for $15.5 million of the outstanding balance under the DIP Loan with Blue Ribbon. Subsequent to Blue Ribbon's emergence from bankruptcy, we own 100% of the equity of VIBSQ and Legendary Baking. Refer to Note I to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further discussion of our accounting for our acquisition of VIBSQ and Legendary Baking upon their emergence from bankruptcy.

AmeriLife

On March 18, 2020, we closed on the previously announced $125.0 million investment in a partnership (the “AmeriLife Joint Venture”) that invested in the recapitalization of AmeriLife. Cannae and other investors provided an aggregate of $617.0 million in equity financing to the AmeriLife Joint Venture to acquire AmeriLife. AmeriLife is a leader in marketing and distributing life, health, and retirement solutions. We account for our investment in the AmeriLife Joint Venture under the equity method of accounting and the investment is included in Investments in unconsolidated affiliates on our Condensed Consolidated Balance Sheet as of December 31, 2020.

CoreLogic

On December 12, 2019, we entered into the Senator JV with affiliates of Senator designed to provide a mechanism to allow us and Senator to jointly invest in CoreLogic. In December 2019, we initially contributed $90.9 million of cash in exchange for a 49.0% in the Senator JV and a deposit on hand. Affiliates of Senator are the general partner and hold the balance of the limited partnership interests of the Senator JV. In the year ended December 31, 2020, we invested an additional $201.2 million in the Senator JV.We account for our investment in the Senator JV under the equity method of accounting and the investment is included in Investments in unconsolidated affiliates on our Condensed Consolidated Balance Sheet as of December 31, 2020.

During the year ended December 31, 2020, we received from the Senator JV a distribution of 2.3 million shares of common stock of CoreLogic and the Senator JV distributed $232.4 million of securities to other limited partners affiliated with Senator.

On June 26, 2020, Cannae and Senator submitted a jointly signed letter to CoreLogic’s board of directors pursuant to which Cannae and Senator proposed to acquire CoreLogic for $65.00 per share in cash. On July 7, 2020, CoreLogic announced that its board of directors unanimously rejected the proposal.

On July 29, 2020, Cannae and Senator sent an open letter to CoreLogic shareholders announcing that we initiated the process to call a special meeting of CoreLogic's shareholders to elect nine independent directors to the CoreLogic board of directors.

On September 14, 2020, Senator and Cannae informed the board of directors of CoreLogic of the decision by Senator and Cannae to increase the proposed purchase price to $66.00 per share in cash. On September 15, 2020, the CoreLogic board of directors delivered to Senator and Cannae a letter in which CoreLogic's board of directors rejected the revised offer and again rejected Senator’s and Cannae’s request for access to targeted due diligence information regarding CoreLogic.

On October 30, 2020, we distributed the 2.3 million shares of CoreLogic previously held directly by us back to the Senator JV.

In November 2020 and December 2020, we received an aggregate of $198.6 million of distributions from the Senator JV resulting from the Senator JV's sales of CoreLogic shares.

Subsequent to December 31, 2020 through the date of this Annual Report, we have received distributions of $280.6 million from the Senator JV, the Senator JV has exited our investment in CoreLogic completely and we have no further material interest in the Senator JV.

Optimal Blue

On September 15, 2020, Black Knight closed on its acquisition of Optimal Blue, a leading provider of secondary market solutions and actionable data services. Cannae, in connection with the closing of the acquisition by Black Knight, funded its

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previously announced commitment to purchase 20% of the equity of Optimal Blue for $289.0 million. We account for our investment in Optimal Blue under the equity method of accounting and the investment is included in Investments in unconsolidated affiliates on our Condensed Consolidated Balance Sheet as of December 31, 2020.

Forward Purchases of Equity of Special Purpose Acquisition Companies

On May 8, 2020, we entered into the FTAC FPA with FTAC, a newly incorporated blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. FTAC is co-sponsored by entities affiliated with the chairman of our Board of Directors, Bill Foley. Under the FTAC FPA, we will purchase an aggregate of 15,000,000 shares of FTAC’s Class A common stock, plus an aggregate of 5,000,000 redeemable warrants to purchase one share of FTAC's Class A common stock at $11.50 per share for an aggregate purchase price of $150.0 million in a private placement to occur concurrently with the closing of the FTAC Alight Business Combination. The forward purchase is contingent upon the closing of the FTAC Alight Business Combination.

On June 5, 2020, we entered into a forward purchase agreement (the "Trebia FPA") with Trebia Acquisition Corp. (“Trebia”), a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the "Trebia Initial Business Combination"). Trebia is co-sponsored by entities affiliated with the chairman and a member of our Board of Directors, Bill Foley and Frank R. Martire, respectively. Under the Trebia FPA, we will purchase an aggregate of 7,500,000 Class A ordinary shares of Trebia, plus an aggregate of 2,500,000 redeemable warrants to purchase one Class A ordinary share of Trebia at $11.50 per share for an aggregate purchase price of $75.0 million in a private placement to occur concurrently with the closing of the Trebia Initial Business Combination. The forward purchase is contingent upon the closing of the Trebia Initial Business Combination.

On July 31, 2020, we entered into the FTAC II FPA (together with the FTAC FPA and Trebia FPA, the "Forward Purchase Agreements") with FTAC II, a newly incorporated blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. FTAC II is sponsored by an entity affiliated with the chairman of our Board of Directors, Bill Foley. Under the FTAC II FPA, we will purchase an aggregate of 15,000,000 shares of FTAC II’s Class A common stock, plus an aggregate of 5,000,000 redeemable warrants to purchase one share of FTAC II's Class A common stock at $11.50 per share for an aggregate purchase price of $150.0 million in a private placement to occur concurrently with the closing of the FTAC II Paysafe Merger. The forward purchase is contingent upon the closing of the FTAC II Paysafe Merger.

On December 7, 2020, FTAC II entered into a definitive agreement and plan of merger with Paysafe, a leading integrated payments platform in connection with the contemplated FTAC II Paysafe Merger. Upon closing of the FTAC II Paysafe Merger, the newly combined company will operate as Paysafe and plans to list on the New York Stock Exchange under the symbol PSFE. The FTAC II Paysafe Merger reflects an implied pro-forma enterprise value for Paysafe of approximately $9.0 billion. The FTAC II Paysafe Merger will be funded with the cash held in trust at FTAC II, forward purchase commitments, PIPE commitments and equity of Paysafe. Completion of the FTAC II Paysafe Merger is subject to approval by FTAC II stockholders, the effectiveness of a registration statement to be filed with the SEC in connection with the FTAC II Paysafe Merger, and other customary closing conditions, including the receipt of certain regulatory approvals. The FTAC II Paysafe Merger is expected to close in the first half of 2021.

In conjunction with the FTAC II Paysafe Merger, Cannae entered into the Paysafe Subscription Agreement to purchase 35,000,000 shares of Paysafe for $350.0 million as part of a subscription to the PIPE. Paysafe has agreed to pay us a placement fee of $5.6 million as consideration for our subscription. Upon consummation of the FTAC II Paysafe Merger, our aggregate investment in Paysafe is expected to be $504.7 million, inclusive of Cannae's investment commitments under the FTAC II FPA and Paysafe Subscription Agreement and our prior $4.7 million investment in the sponsor of FTAC II, and we are expected to receive 54,290,000 shares of common stock of Paysafe which represents approximately 7.5% of the pro forma outstanding common equity of Paysafe and 8,134,067 warrants to purchase one share of Paysafe common stock at $11.50 per share.

On January 25, 2021, FTAC entered into a business combination agreement with Alight, a leading cloud-based provider of integrated digital human capital and business solutions in connection with the contemplated FTAC Alight Business Combination. Under the terms of the FTAC Alight Business Combination, FTAC will combine with Alight and Alight will become a publicly traded entity under the name “Alight, Inc.” and symbol ALIT. The FTAC Alight Business Combination reflects an implied pro-forma enterprise value for Alight of approximately $7.3 billion at closing. The FTAC Alight Business Combination will be funded with the cash held in trust at FTAC, forward purchase commitments, PIPE commitments and equity of Alight. Completion of the FTAC Alight Business Combination is subject to approval by FTAC stockholders, the effectiveness of a registration statement to be filed with the SEC in connection with the FTAC Alight Business Combination, and other customary closing conditions of SPAC business combinations, including the receipt of certain regulatory approvals.

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In conjunction with the FTAC Alight Business Combination, Cannae entered into the Alight Subscription Agreement to purchase 25,000,000 shares of Alight for $250.0 million as part of a subscription to the PIPE. Alight has agreed to pay us a placement fee of $6.3 million as consideration for our subscription. Upon consummation of the FTAC Alight Business Combination, our aggregate investment in Alight is expected to be $404.5 million, inclusive of Cannae's investment commitments under the FTAC FPA and Alight Subscription Agreement and our previous $4.5 million investment in a sponsor of FTAC, and we are expected to receive 44,639,500 shares of common stock of Alight which represents approximately 8.6% of the pro forma outstanding common equity of Alight and 8,026,666 warrants to purchase one share of Alight common stock at $11.50 per share.

Other Developments

In June 2020, we completed an underwritten public offering of an aggregate of 12,650,000 shares of our common stock, including 1,650,000 shares of our common stock pursuant to the full exercise of the underwriter's overallotment option (the "Offering"), pursuant to a prospectus supplement, dated June 10, 2020, and the base prospectus, dated November 27, 2019, included in our registration statement on Form S-3 ASR (File No. 333-235303), which was initially filed with the Securities and Exchange Commission on November 27, 2019. We received net proceeds from the Offering of approximately $455.0 million, after deducting the underwriting discount and capitalized offering expenses payable by us. We intend to use the net proceeds of the Offering to fund future acquisitions or investments, including potential investments in existing portfolio companies, and for general corporate purposes.

Related Party Transactions

Our financial statements for all years presented reflect transactions with FNF and our Manager. See Note R to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further discussion.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. See Note A to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for discussion our significant accounting policies.

The accounting policies and estimates described below are those we consider critical in preparing our Consolidated Financial Statements. Management is required to make estimates and assumptions that can affect the reported amounts of assets and liabilities and disclosures with respect to contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

Investments in unconsolidated affiliates. Investments in unconsolidated affiliates are recorded using the equity method of accounting. If an investor does not possess a controlling financial interest over an investee but has the ability to exercise significant influence over the investee’s operating and financial policies, the investor must account for such an investment under the equity method of accounting. For investments in common stock or in-substance common stock of an investee, which an investor does not control, the general but rebuttable presumption exists that an ownership of greater than 20% of the outstanding equity of an investee indicates the investor has significant influence. For investments in partnerships and similar entities for which an investor does not control, equity method of accounting for the investment is generally required unless the investor's interest is so minor that the investor has virtually no influence.

In the ordinary course of our business, we make investments in companies that provide us with varying degrees of control and influence over the underlying investees through our level of ownership of the outstanding equity of the investee, participation in management of the investee, participation on the board of directors of investees, and/or legal agreements with other investors with control implications. As a result, our analysis of the appropriate accounting for our portfolio companies often requires judgment regarding the level of control, significant influence or lack thereof the Company has over each investee. If we are required to account at fair value for certain of our portfolio companies in which we have concluded the Company has significant influence resulting in the application of the equity method of accounting, the impact of such change could significantly impact the Company's Consolidated Financial Statements.

As of March 31, 2020 our voting agreement with Ceridian was terminated and, as a result, we are no longer able to exert influence over the composition and quantity of Ceridian's board of directors. In combination with the reduction in our ownership of Ceridian resulting from the sale of shares in February 2020, we no longer exercise significant influence over Ceridian. As of March 31, 2020, we account for our investment in Ceridian at fair value pursuant to the investment in equity security guidance of ASC 321. The change resulted in the revaluation of our investment in Ceridian to its fair value of $993.4 million as of March 31, 2020 and recording a gain on such revaluation of $684.9 million (net of $47.1 million of before-tax losses reclassified from other comprehensive earnings) which is included in Recognized gains and losses, net on the Consolidated Statement of Operations for the year ended December 31, 2020.

As of December 31, 2020, we hold less than 20% of the outstanding common equity of Dun & Bradstreet but continue to account for our investment under the equity method because we continue to exert significant influence through our 18.1%

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ownership, because certain of our senior management and directors serve on Dun & Bradstreet's board of directors, and because we are party to an agreement with other of its equity sponsors, which collectively own greater than 50% of the outstanding voting equity of Dun & Bradstreet, pursuant to which we have agreed to collectively vote together on all matters related to the election of directors to the Dun & Bradstreet board of directors for a period of three years.

As of December 31, 2020, the book value of our investment in D&B accounted for under the equity method of accounting is $653.2 million. Based on quoted market prices, the aggregate fair market value of our ownership of Dun & Bradstreet common stock was approximately $1.9 billion as of December 31, 2020.

Valuation of investments. The fair values of financial instruments presented in the Consolidated Financial Statements are estimates of the fair values at a specific point in time using available market information and appropriate valuation methodologies. Estimates that utilize unobservable inputs are subjective in nature and involve uncertainties and significant judgment in the interpretation of current market data.

The fair value hierarchy established by the accounting standards on fair value measurements includes three levels, which are based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities that are recorded in the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access.

Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3. Financial assets and liabilities whose values are based on model inputs that are unobservable.

Recurring Fair Value Measurements

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019, respectively:

Level 1 Level 2 Level 3 Total

(In millions)

Fixed-maturity securities available for sale:

Corporate debt securities $ — $ — $ 35.2 $ 35.2

Equity securities:

Forward Purchase Agreements — — 136.1 136.1

Paysafe Subscription Agreement — — 169.6 169.6

Level 1 Level 2 Level 3 Total

(In millions)

Fixed-maturity securities available for sale:

Corporate debt securities $ — $ — $ 19.2 $ 19.2

The Forward Purchase Agreements and the Paysafe Subscription Agreement are accounted for at fair value pursuant to ASC 321. We utilized a Monte Carlo Simulation in determining the fair value of these agreements, which is considered to be a Level 3 fair value measurement. The Monte Carlo Simulation model simulates the current security price to a simulated date for the consummation of the underlying initial business combination based on probabilities of consummation. The values of the agreements are then calculated as the difference between the future simulated price and the fixed purchase prices for the

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underlying securities to be purchased pursuant to the Forward Purchase Agreements and the Paysafe Subscription Agreement. The primary unobservable input utilized in determining the fair value of the Forward Purchase Agreements and Paysafe Subscription Agreement is the probability of consummation of the FTAC Initial Business Combination, Trebia Initial Business Combination and FTAC II Initial Business Combination. The probabilities assigned to the consummation of each of the FTAC Initial Business Combination and the Trebia Initial Business Combination was 90% and the probability assigned to the consummation of the FTAC II Initial Business Combination was 95%. Determination of such probabilities is based on a hybrid approach of both observed success rates of business combinations for special purpose acquisition companies and the sponsors of FTAC, FTAC II and Trebia's track record for consummating similar transactions. The FTAC II Paysafe Merger was also considered in our determination of the probability of the FTAC II Initial Business Combination.

Our Level 3 fair value measurement for our fixed maturity securities are provided by a single third-party pricing service. Depending on security specific characteristics, either an income or a contingent claims approach was utilized in determining fair value of our Level 3 fixed-maturity securities available for sale. Discount rates are the primary unobservable inputs utilized for the securities valued using an income approach. The discount rates used are based on company-specific risk premiums, public company comparable securities, and leveraged loan indices. The discount rates used in our determination of the fair value of our Level 3 fixed-maturity securities available for sale varies by security type and ranged from 7.3% to 17.5% and had a weighted average of 12.1% as of December 31, 2020. Based on the total fair value of our Level 3 fixed-maturity securities available for sale as of December 31, 2020, changes in the discount rate utilized will not result in a fair value significantly different than the amount recorded.

The following table presents a summary of the changes in the fair values of Level 3 assets, measured on a recurring basis.

Corporate debt Forward Purchase Paysafe Subscription

securities Agreements Agreement Total

Paid-in-kind dividends (1) 0.2 — — 0.2

Impairment (2) (0.4) — — (0.4)

Net valuation gain included in other comprehensive earnings (3) 1.6 — — 1.6

Paid-in-kind dividends (1) 1.3 — — 1.3

Net valuation gain included in other comprehensive earnings (3) 14.7 — — 14.7

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(1) Included in Interest and investment income on the Consolidated Statements of Operations

(2) Included in Recognized gains and losses, net on the Consolidated Statements of Operations

(3) Included in Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) on the Consolidated Statements of Comprehensive Earnings

Blue Ribbon Reorganization

During the Blue Ribbon Reorganization, we accounted for our retained equity interest in Blue Ribbon under the equity method of accounting. In conjunction with our accounting for our investment in Blue Ribbon under the equity method of accounting, we initially recorded our investment as of January 27, 2020 at fair value. Due to deteriorating operating results and cash flows resulting from declining same store sales, increased costs, and the impact of COVID-19, we also performed impairment tests quarterly by determining the fair value of our interest in Blue Ribbon during the Blue Ribbon Reorganization. Upon emergence and our acquisition of Legendary Baking and VIBSQ out of bankruptcy, we again determined the fair value of our interest in conjunction with our purchase accounting. Refer to Note I to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for discussion our purchase accounting for Legendary Baking and VIBSQ.

To determine the fair value of our interest in Blue Ribbon, Legendary Baking or VIBSQ, we used a combination of discounted cash flow analyses and market approaches. Our discounted cash flow projections include assumptions for growth rates for revenues, costs and earnings, which are based on various long-range financial and operational plans of each reporting unit. Additionally, discount rates used in our analysis are based on weighted-average cost of capital, driven by comparable public companies, the prevailing interest rates, credit ratings, financing abilities and opportunities of each reporting unit, among other factors. Our market-based valuations utilize earnings multiples of comparable public companies, which are reflective of

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the market in which each respective reporting unit operates, and recent comparable market transactions. Changes in these significant management assumptions and estimates could have a significant impact on the determination of the fair values of Blue Ribbon and the reorganized companies.

Valuation of Goodwill. Goodwill represents the excess of cost over fair value of identifiable net assets acquired and assumed in a business combination. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if circumstances indicate potential impairment, through a comparison of fair value to the carrying amount. We have the option to first assess goodwill for impairment based on a review of qualitative factors to determine if events and circumstances exist that will lead to a determination that the fair value of a reporting unit is greater than its carrying amount, prior to performing a full fair-value assessment. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. However, if we conclude otherwise, then we are required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. Goodwill impairment, if any, is measured as the amount by which a reporting unit’s carrying value exceeds its fair value.

We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on at least an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) annually in the fourth quarter (October 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

We use a combination of discounted cash flow analyses and market approaches to determine the fair value of each of our reporting units. Our discounted cash flow projections include assumptions for growth rates for revenues, costs and earnings, which are based on various long-range financial and operational plans of each reporting unit. Additionally, discount rates used in our goodwill analysis are based on weighted-average cost of capital, driven by comparable public companies, the prevailing interest rates, credit ratings, financing abilities and opportunities of each reporting unit, among other factors. Our market-based valuations utilize earnings multiples of comparable public companies, which are reflective of the market in which each respective reporting unit operates, and recent comparable market transactions. Changes in the factors used in our fair value estimates, including declines in industry or company-specific sales, margin erosion, discount rates used, and market multiples could have a significant impact on the fair values of the reporting units.

For the year ended December 31, 2020, we recorded $7.8 million of impairment to goodwill in our Restaurant Group segment. The impairment charge is a result of deteriorating operating results and cash flow resulting from declining same store sales and increased costs at O'Charley's. The impairment recorded was calculated as the deficit between the carrying value of our O'Charley's reporting unit of our Restaurant Group compared to the fair value of the reporting unit determined by performing a combination of discounted cash flow and market approaches.

For the year ended December 31, 2019, we recorded $35.1 million of impairment to goodwill in our former T-System segment and $10.4 million of impairment to goodwill in our Restaurant Group segment as a result of our annual goodwill impairment testing. The impairment charge in our Restaurant Group is a result of deteriorating operating results and cash flow resulting from declining same store sales and increased costs, primarily in our Village Inn and Bakers Square branded stores. As a result of the goodwill impairment in the Restaurant Group, the fair value of this reporting unit approximates its carrying value and relatively small decreases in future forecasts or changes in other assumptions could result in additional goodwill impairment. The impairment in our former T-System segment is primarily a result of a decline in earnings multiples from comparable public companies and lower forecasted cash flows for its reporting units. The impairments recorded were calculated as the deficit between the carrying value of the reporting units of each segment compared to the fair value of the reporting unit determined by performing a combination of discounted cash flow and market approaches.

Impairment to goodwill in our former T-System segment is included in Net loss from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019. See Note N to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

For the year ended December 31, 2018, we recorded $26.7 million of impairment to goodwill in our Restaurant Group segment. The impairment charge was a result of deteriorating operating results and cash flow resulting from declining same store sales and increased costs. The impairment recorded was calculated as the deficit between the carrying value of a reporting unit of the Restaurant Group segment compared to the fair value of the reporting unit determined by performing a combination of discounted cash flow and market approaches.

Valuation of Other Intangible Assets. We have other intangible assets, not including goodwill, which consist primarily of customer relationships and contracts, trademarks and tradenames that are generally recorded in connection with acquisitions at

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their fair value, franchise rights, the fair value of purchased software and capitalized software development costs. Intangible assets with estimable lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In general, customer relationships are amortized over their estimated useful lives using an accelerated method, which takes into consideration expected customer attrition rates. Contractual relationships are generally amortized over their respective contractual lives. Useful lives of computer software range from 3 to 10 years. Capitalized software development costs and purchased software are recorded at cost and amortized using the straight-line method over their estimated useful life.

Trademarks and tradenames were generally considered intangible assets with indefinite lives and reviewed for impairment at least annually. In conjunction with our annual testing for impairment of tradenames during the fourth quarter of 2020 and in light of the deteriorating operating environment for restaurants, we changed our estimate of the useful lives of our tradenames for all of our restaurant brands from indefinite to 15 years. The impact of such change on the Company's consolidated income is not considered material.

Tradenames are tested for impairment annually in the fourth quarter (October 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a tradename below its carrying value. We use a relief from royalty method to determine the fair value of our tradenames, which includes assumptions for growth rates for revenues, tax rates, discount rates and royalty rates. Changes in the factors used in our fair value estimates, including declines in industry or company-specific sales, discount rates used, and royalty rates could have a significant impact on the fair values of our tradenames.

We recorded $11.8 million of impairment expense related to the O'Charley's tradename within our Restaurant Group in the year ended December 31, 2020. We recorded $17.1 million of impairment expense related to the Village Inn and Bakers square tradenames within our Restaurant Group in the year ended December 31, 2019. We recorded $5.8 million of impairment expense related to a tradename and an abandoned software project in our Restaurant Group in the year ended December 31, 2018. The impairments are recorded within Other operating expenses on our Consolidated Statement of Operations for the years then ended.

Accounting for Income Taxes. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and expected benefits of utilizing net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact of changes in tax rates and laws on deferred taxes, if any, is applied to the years during which temporary differences are expected to be settled and reflected in the financial statements in the period enacted.

Refer to Note L to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further discussion of our accounting for income taxes.

Certain Factors Affecting Comparability

Year ended December 31, 2020. On January 27, 2020, Blue Ribbon began the Blue Ribbon Reorganization and we deconsolidated Blue Ribbon. On October 2, 2020, the Chapter 11 Plan became effective and Blue Ribbon emerged from bankruptcy as a set of reorganized companies. Upon Blue Ribbon's emergence from bankruptcy, we acquired the assets and uncompromised liabilities of Legendary Baking and VIBSQ in exchange for $15.5 million of the outstanding balance under the DIP Loan with Blue Ribbon. Subsequent to Blue Ribbon's emergence from bankruptcy, we own 100% of the equity of VIBSQ and Legendary Baking. Our consolidated results of operations for the year ended December 31, 2020 include the consolidated results of operations of Blue Ribbon from January 1, 2020 through January 27, 2020 and of Legendary Baking and VIBSQ from October 2, 2020 through December 31, 2020.

Year ended December 31, 2019. On December 31, 2019, we completed the contribution of T-System to Corrohealth. As a result of the contribution, we reclassified the results of operations of T-System to discontinued operations for the years ended December 31, 2019 and 2018 in our Consolidated Statements of Operations.

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Results of Operations

Consolidated Results of Operations

Net earnings. The following table presents certain financial data for the years indicated:

Year ended December 31,

(In millions)

Revenues:

Operating expenses:

Other operating expenses, including asset impairments 116.6 133.4 91.8

Other income (expense):

Interest, investment and other income 17.2 15.6 6.3

Equity in earnings (losses) of unconsolidated affiliates 59.1 (115.1) (16.1)

Earnings (loss) from continuing operations 1,759.8 98.6 (8.5)

Net loss from discontinued operations, net of tax — (51.8) (2.1)

Less: Net loss attributable to non-controlling interests (26.4) (30.5) (38.2)

Revenues

Total revenue in 2020 decreased $484.3 million compared to 2019, primarily driven by a decline in revenue in the Restaurant Group segment. Total revenue in 2019 decreased $77.5 million compared to 2018, primarily driven by a decline in revenue in our Restaurant Group segment.

The change in revenues from our segments is discussed in further detail at the segment level below.

Expenses

Our operating expenses consist primarily of personnel costs, cost of restaurant revenue, other operating expenses, and depreciation and amortization.

Personnel costs include base salaries, commissions, benefits, stock-based compensation and bonuses paid to employees, and are one of our most significant operating expenses. Personnel costs that are directly attributable to the operations of the Restaurant Group are included in Cost of restaurant revenue.

Cost of restaurant revenue includes cost of food and beverage, primarily the costs of beef, groceries, produce, seafood, poultry and alcoholic and non-alcoholic beverages, net of vendor discounts and rebates, payroll and related costs and expenses directly relating to restaurant level activities, and restaurant operating costs including occupancy and other operating expenses at the restaurant level.

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Other operating expenses include professional fees, advertising costs, travel expenses and impairments of operating assets.

Depreciation and amortization expense consists of our depreciation related to investments in property and equipment as well as amortization of intangible assets.

The change in expenses from our segments is discussed in further detail at the segment level below.

Income tax expense on continuing operations was $481.2 million, $24.2 million, and $15.0 million for the years ended December 31, 2020, 2019, and 2018, respectively. The effective tax rate for the years ended December 31, 2020, 2019, and 2018 was 22.1%, 10.2%, and 66.4%, respectively. The increase in the effective tax rate in 2020 from 2019 is primarily attributable to the decreased impact of earnings from unconsolidated affiliates on pretax income. The increase in the effective tax rate in 2019 from 2018 is primarily attributable to the decreased impact of non-deductible executive compensation on pretax income. Additionally, the impact of the non-controlling interests, permanent items, and tax credits on pretax income was greater in 2018 than the impact of those same items on pretax earnings and losses in 2019. The fluctuation in income tax benefit as a percentage of earnings from continuing operations before income taxes is attributable to our estimate of ultimate income tax liability and changes in the characteristics of net earnings year to year, such as the weighting of operating income versus investment income.

For a detailed breakout of our effective tax rate and further discussion on changes in our taxes, see Note L to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

Other

Recognized gains and losses, net totaled $2,362.2 million, $357.7 million, and $166.8 million for the years ended December 31, 2020, 2019, and 2018, respectively. The net recognized gain for the year ended December 31, 2020 is primarily attributable to gains on equity securities, a gain of $223.1 million on the sale of a portion of our investment in Ceridian in February 2020 and a gain of $117.0 million recorded in conjunction with the D&B IPO. See Note D to our Consolidated Financial Statements included in Item 8 of this Annual Report for further details on gains recognized on equity securities. The $223.1 million gain on sale of Ceridian in February 2020 occurred prior to our change in accounting for our investment in Ceridian as an equity security at fair value in March 2020. The net recognized gain for the year ended December 31, 2019 is primarily attributable to $342.1 million of gains on sales of Ceridian shares and $3.9 million of gains on sales of property in the Restaurant Group. The net recognized gain for the year ended December 31, 2018 is primarily attributable to a $92.6 million gain on the sale of Ceridian shares in the fourth quarter of 2018, $63.2 million of recognized gains associated with Ceridian's initial public offering and a gain of $24.0 million on the sale of LifeWorks, partially offset by impairment losses of $12.5 million recognized on fixed maturity securities in the 2018 period.

Equity in earnings (losses) of unconsolidated affiliates for the periods indicated consisted of the following (in millions):

Year Ended December 31,

Dun & Bradstreet $ (46.8) $ (132.8) $ —

Optimal Blue (9.4) — —

AmeriLife (4.0) — —

_____________________________________

(1) The amount for the year ended December 31, 2020 represents the Company's equity in earnings of Ceridian in the three months ended March 31, 2020 prior to the change in accounting for the investment beginning March 31, 2020.

Net Earnings

Net earnings attributable to Cannae increased $1,708.9 million in the year ended December 31, 2020, compared to 2019. Total net earnings attributable to Cannae increased $49.7 million in the year ended December 31, 2019, compared to 2018.

The change in net earnings is attributable to the factors discussed above and net earnings from the segments is discussed in further detail at the segment level below.

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Segment Results of Operations

Restaurant Group

The following table presents the results from operations of our Restaurant Group segment:

Year Ended December 31,

(In millions)

Revenues:

Operating expenses:

Other operating expenses, including asset impairments 53.1 108.9 86.3

Other expense:

Recognized gains and losses, net 7.5 3.9 (2.1)

Total other expense (1.1) (1.5) (18.1)

Total revenues for the Restaurant Group segment decreased $483.6 million, or 46.4%, in the year ended December 31, 2020 from 2019. The decrease was primarily driven by: (1) decreased revenue related to the Blue Ribbon Reorganization, which resulted in the deconsolidation of Blue Ribbon for the period from January 27, 2020 through October 2, 2020, (2) the closing or sale of company-owned restaurants primarily associated with our O'Charley's, Village Inn and Bakers Square concepts subsequent to December 31, 2019 and (3) a decrease in comparable store sales driven by social restrictions imposed by state and local governments in connection with COVID-19 in March 2020, which resulted in the closing of dining rooms for substantially all of our restaurants from late March 2020 and into May 2020. The decrease was partially offset by an overall increase in the average guest check in the year ended December 31, 2020 compared to 2019. Total revenues for the Restaurant Group segment decreased $74.5 million, or 6.7%, in the year ended December 31, 2019 from 2018. The decrease was primarily driven by decreased revenue related to the closing or sale of 48 company-owned restaurants primarily associated with our O'Charley's, Village Inn and Bakers Square concepts in the year ended December 31, 2019 and to a lesser extent a decrease in comparable store sales. The decrease was partially offset by increases in the average guest check.

Revenue of $183.4 million is recorded in the year ended December 31, 2019 associated with stores across all brands that closed subsequent to December 31, 2019. Revenue associated with our Blue Ribbon brands was $312.5 million and $347.7 million, respectively, in the years ended December 31, 2019 and 2018. Revenue recorded for Blue Ribbon, Legendary Baking and VIBSQ in the year ended December 31, 2020 was $53.1 million and represents Blue Ribbon's revenue for the period from January 1, 2020 through January 27, 2020, the date of Blue Ribbon's filing for bankruptcy, and Legendary Baking and VIBSQ's revenue for the period from October 2, 2020 through December 31, 2020.

Our Restaurant Group ended the years December 31, 2020 and 2019 with 34 and 130 Village Inn and Bakers Square company-owned stores, respectively. The decrease primarily relates to stores closed in conjunction with the Blue Ribbon Reorganization as well as 38 Village Inn stores which were converted from company-owned locations to franchises.

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 99 Restaurants brand changed (32.8)%, (0.4)% and 2.6% in the years ended December 31, 2020, 2019 and 2018, respectively, from the prior fiscal years. The decrease in 2020 is primarily attributable to lower guest counts resulting from COVID-19. The decrease in 2019 is primarily attributable to lower guest counts partially offset by an increase in the average guest check. Comparable store sales for our

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O'Charley's brand decreased 22.5%, 2.5% and 2.9% in the years ended December 31, 2020, 2019 and 2018, respectively, from the prior fiscal years. The decrease in 2020 is primarily attributable to lower guest counts resulting from COVID-19. The decrease in 2019 and 2018 from the previous year is primarily attributable to decreased guest counts partially offset by an increase in the average guest check.

Cost of restaurant revenue decreased $388.5 million, or 42.6%, in the year ended December 31, 2020 from 2019. Cost of restaurant revenue decreased $78.5 million, or 7.9%, in the year ended December 31, 2019 from 2018. Cost of restaurant revenue as a percentage of restaurant revenue was approximately 93.7%, 87.5%, and 88.7% in the years ended December 31, 2020, 2019 and 2018, respectively. The increase in cost of restaurant revenue as a percentage of restaurant revenue in 2020 compared to 2019 is primarily attributable to the impact of unavoidable costs on the substantial decrease in revenue discussed above. The decrease in cost of restaurant revenue as a percentage of restaurant revenues in 2019 compared to 2018 was primarily driven by the closure of underperforming stores with lower margins and higher operating expenses in 2019.

Personnel costs decreased by $20.9 million, or 40.1%, in the year ended December 31, 2020 from 2019. The decrease is primarily attributable to the Blue Ribbon Reorganization.

Other operating expenses decreased by $55.8 million, or 51.2%, in the year ended December 31, 2020 from 2019. The decrease is primarily attributable to the Blue Ribbon Reorganization. Other operating expenses increased by $22.6 million, or 26.2%, in the year ended December 31, 2019 from 2018. The increase is primarily attributable to impairments of other intangible assets and lease assets.

See Note A to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further discussion of goodwill impairments in our Restaurant Group.

Loss from continuing operations before income taxes decreased $4.6 million in the year ended December 31, 2020 from 2019. Loss from continuing operations before income taxes increased $15.9 million in the year ended December 31, 2019 from 2018. The change in losses is primarily attributable to the factors discussed above.

Dun & Bradstreet

We own an approximate 18.1% interest in Dun & Bradstreet and account for our investment in D&B under the equity method of accounting; therefore, its results of operations do not consolidate into ours.

Summarized financial information for Dun & Bradstreet and Star Parent, L.P. ("Star Parent"), the former parent of D&B through which the Company was invested prior to the D&B IPO, for the relevant dates and time periods included in Investments in unconsolidated affiliates and Equity in earnings (losses) of unconsolidated affiliates in our Consolidated Balance Sheets and Statements of Operations, respectively, is presented below.

We acquired our initial interest in Star Parent on February 8, 2019. The results of operations for the year ended December 31, 2019 presented below represent Star Parent's results of operations subsequent to our acquisition.

(In millions)

Goodwill and other intangible assets, net 7,668.2 8,091.5

Preferred equity — 1,030.6

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(In millions)

Net loss attributable to Dun & Bradstreet (175.6) (546.3)

The D&B IPO was completed on July 6, 2020. Details relating to the results of operations of Dun & Bradstreet (NYSE: "DNB") can be found in its periodic reports filed with the SEC.

Optimal Blue

On September 15, 2020, we completed our investment in Optimal Blue. We account for our investment in Optimal Blue under the equity method of accounting; therefore, its results of operations do not consolidate into ours.

Summarized financial information for Optimal Blue for the relevant dates and time periods included in Equity in earnings (losses) of unconsolidated affiliates in our Consolidated Statements of Operations is presented below. Our net earnings for the year ended December 31, 2020 include our equity in the Optimal Blue's losses for the period from September 15, 2020, the date we made our investment in Optimal Blue, through December 31, 2020.

(In millions)

Total current assets $ 38.0

Goodwill and other intangible assets, net 1,831.3

Current liabilities $ 28.9

Other non-current liabilities 105.0

Total liabilities 626.9

Redeemable member's interest 578.0

Additional paid-in capital 813.0

Retained deficit (48.5)

Total redeemable member's interest and equity 1,342.5

Total liabilities, redeemable member's interest and equity $ 1,969.4

(In millions)

Total revenues $ 45.4

Operating loss (38.1)

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Corporate and Other

The Corporate and Other segment consists of our share in the operations of certain controlled portfolio companies and other equity investments, activity of the corporate holding company and certain intercompany eliminations and taxes.

The following table presents the results from operations of our Corporate and Other segment:

Year ended December 31,

(In millions)

Revenues:

Operating expenses:

Depreciation and amortization 3.0 2.2 1.4

Other income (expense):

Interest, investment and other income 17.2 15.6 6.3

Interest (expense) income (0.4) (12.4) 11.3

Personnel costs increased $25.4 million, or 66.5%, in the year ended December 31, 2020 compared to 2019, and decreased $51.7 million, or 57.5%, in the year ended December 31, 2019 compared to 2018. The change in both periods is primarily driven by a change in investment success bonuses paid related to investment monetization events.

Other operating expenses increased $39.0 million, or 159.2%, in the year ended December 31, 2020 compared to 2019 and increased $19.0 million in the year ended December 31, 2019 compared to 2018. The increase in 2020 from 2019 is primarily attributable to $20.8 million of management fee expenses and $11.3 million of carried interest on distributions from the Senator JV and sales of other investments incurred with our Manager. The increase in 2019 from 2018 is primarily attributable to the inclusion of a $14.8 million elimination of intercompany fees charged to the Restaurant Group in 2018.

Interest and investment income increased $9.3 million, or 147.6%, in the year ended December 31, 2019 compared to 2018. The increase was primarily attributable to $9.1 million of syndication fees earned in relation to our organization of investors for the D&B Acquisition.

Interest expense decreased $12.0 million in the year ended December 31, 2020 from 2019. The decrease was attributable to the decrease in corporate debt. Interest expense in the year ended December 31, 2019 consists primarily of interest on our corporate debt instruments. See Note K to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further discussion of our outstanding debt. Interest expense in the year ended December 31, 2018 consists primarily of eliminations of previously outstanding intercompany debt with our Restaurant Group and T-System.

The net recognized gain for the year ended December 31, 2020 is primarily attributable to gains on equity securities, a gain of $223.1 million on the sale of a portion of our investment in Ceridian in February 2020 and a gain of $117.0 million recorded in conjunction with the D&B IPO. See Note D to our Consolidated Financial Statements included in Item 8 of this Annual Report for further details on gains recognized on equity securities. The $223.1 million gain on sale of Ceridian in February 2020 occurred prior to our change in accounting for our investment in Ceridian as an equity security at fair value in March 2020. Net recognized gains for the year ended December 31, 2019 is primarily attributable to $342.1 million of gains on sales of Ceridian shares. Net recognized gain for the year ended December 31, 2018 is primarily attributable to a $92.6 million gain on the sale of Ceridian shares in the fourth quarter of 2018, $63.2 million of recognized gains associated with Ceridian's initial public offering and the gain of $24.0 million on the sale of LifeWorks, partially offset by impairment losses of $12.5 million recognized on fixed maturity securities in 2018.

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Discontinued Operations

As a result of the T-System Contribution, the financial results of T-System have been reclassified to discontinued operations. See Note N to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further details on amounts included in discontinued operations for the periods ended December 31, 2019 and 2018.

Liquidity and Capital Resources

Cash Requirements.Our current cash requirements include the SPAC Commitments, personnel costs, operating expenses, taxes, payments of interest and principal on our debt, capital expenditures, and business acquisitions. There are no restrictions on our retained earnings regarding our ability to pay dividends to stockholders, although there are limits on the ability of certain subsidiaries to pay dividends to us, as a result of provisions in certain debt agreements. The declaration of any future dividends is at the discretion of our Board of Directors. Additional uses of cash flow are expected to include stock repurchases, acquisitions, and debt repayments.

As of December 31, 2020, we had cash and cash equivalents of $724.7 million, of which $666.0 million was cash held by the corporate holding company, and $200.0 million of available borrowing capacity under our existing holding company credit facilities with the ability to add an additional $400.0 million of borrowing capacity by amending our 2020 Margin Facility.

Subsequent to December 31, 2020 through the date of this Annual Report, we have received distributions of $280.6 million from the Senator JV. As of February 24, 2020, our corporate holding company had cash of $951.3 million.

We continually assess our capital allocation strategy, including decisions relating to 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.

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.

Operating Cash Flows. Our cash flows used in operations for the years ended December 31, 2020, 2019, and 2018 were $113.9 million, $84.2 million and $22.9 million, respectively. The increase in cash used in operations of $29.7 million from 2020 to 2019 is primarily attributable to increased payments for income taxes of $59.0 million and increased losses in our Restaurant Group, excluding non-cash impairments, partially offset by a decrease in operating lease payments of $21.3 million. The remainder of the variance is attributable to the timing of payment and receipt of accounts payable and receivable. The decrease in cash provided by operations of $61.3 million from 2019 to 2018 is primarily attributable to the cash outflow related to amounts previously on deposit with the Senator JV. The remainder of the variance is attributable to the timing of payment and receipt of accounts payable and receivable.

Investing Cash Flows. Our cash flows (used in) provided by investing activities for the years ended December 31, 2020, 2019, and 2018 were $(74.2) million, $(24.2) million and $186.7 million, respectively. The decrease in cash provided by investing activities of $50.0 million from 2020 to 2019 is primarily attributable to an increase in investments in unconsolidated investments, including our investments in AmeriLife, Optimal Blue and the D&B Private Placement, and funding of the DIP Loan, partially offset by an increase in proceeds from sales of Ceridian stock in 2020 compared to 2019. The decrease in cash provided by (increase in cash used in) investing activities of $210.9 million from 2019 to 2018 is primarily attributable to our initial investment in D&B, partially offset by proceeds from sales of Ceridian shares and net sales of short term investments.

Capital Expenditures. Total capital expenditures for property and equipment and other intangible assets were $22.3 million, $28.3 million and $15.9 million for the years ended December 31, 2020, 2019, and 2018, respectively. Capital expenditures in 2020 and 2019 primarily consisted of purchases of property and equipment in our Restaurant Group segment and property improvements at our real estate operations. Expenditures in 2020 also includes the Company's purchase of our corporate headquarters for $9.3 million. The increase in expenditures in 2019 compared to 2018 is reflective of an increase in expenditures in our real estate operations, capital expenditures for new stores and maintenance at 99 Restaurants and store maintenance expenditures at O'Charley's, partially offset by a decrease in capital expenditures at Blue Ribbon.

Financing Cash Flows. Our cash flows provided by (used in) financing activities for the years ended December 31, 2020, 2019, and 2018 were $379.1 million, $319.1 million and $(86.4) million, respectively. The increase in cash provided by financing activities of $60.0 million from 2020 compared to 2019 is primarily attributable to $455.0 million of net proceeds from the Offering compared to $236.0 million from our 2019 equity offering, partially offset by a net decrease in debt proceeds net of service payments of $140.1 million in 2020 compared to 2019, and a $9.5 million increase in cash paid for purchases of

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Treasury stock in 2020 compared to 2019. The increase in cash provided by (decrease in cash used in) financing activities of $405.5 million from 2019 compared to 2018 is primarily attributable to proceeds from our registered offering of shares of our common stock in December 2019 and an increase in net borrowings (net of repayments) in 2019.

Financing Arrangements. In our Restaurant Group, financing arrangements are used both as part of its companies' overall capitalization structure as well as to fund purchases of seasonal inventory in advance of sales. For a description of our historical financing arrangements see Note K to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

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

See Note B to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further discussion of our leasing arrangements.

Pursuant to the terms of the Management Services Agreement between Cannae LLC and our Manager, Cannae LLC is obligated to pay our Manager a quarterly management fee equal to 0.375% (1.5% annualized) of the Company’s cost of invested capital (as defined in the Management Services Agreement) as of the last day of each fiscal quarter, payable in arrears in cash, as may be adjusted pursuant to the terms of the Management Services Agreement. Management fees payable to our Manager are included for the initial 5-year term of the Management Services Agreement that began in September 2019 and are based on our cost of invested capital of $1,613.5 million as of December 31, 2020.

Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Restaurant Group has unconditional purchase obligations with various vendors, primarily related to food and beverage obligations with fixed commitments in regards to the time period of the contract and the quantities purchased with annual price adjustments that can fluctuate. Future purchase obligations are estimated by assuming historical purchase activity over the remaining, non-cancellable terms of the various agreements. For agreements with minimum purchase obligations, at least the minimum amounts we are legally required to purchase are included. These agreements do not include fixed delivery terms. We used both historical and projected volume and pricing as of December 31, 2020 to determine the amount of the obligations.

Restaurant Group financing obligations include its agreements to lease its corporate office and certain O'Charley's restaurant locations that are accounted for as failed sale and leaseback transactions.

As of December 31, 2020, our required annual payments relating to these contractual obligations were as follows:

Capital Stock Transactions.For information on our 2019 Repurchase Program, see discussion under the header Purchases of Equity Securitiesby the Issuer included in Item 5 of Part II of this Annual Report.

Off-Balance Sheet Arrangements. We do not engage in off-balance sheet activities.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Note S to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

Equity Price Risk

We are exposed to market price fluctuations associated with the Company's equity securities holdings. Equity price risk is the risk that we will incur economic losses due to adverse changes in equity prices. At December 31, 2020, we held $1,799.1 million in equity securities which are recorded at fair value. The carrying values of investments subject to equity price risks are directly derived from, or valued in part using, quoted market prices. See Note C to our Consolidated Financial Statements for further discussion of our fair value measurements for equity securities. Market prices are subject to fluctuation and,

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consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the investee, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.

For purposes of this Annual Report, we perform a sensitivity analysis to determine the effects that market risk exposures may have on the fair values of our equity securities. At December 31, 2020, a 20% increase (decrease) in market prices, with all other variables held constant, would result in an increase (decrease) in the fair value of our equity securities portfolio of $359.8 million.

Commodity Price Risk

In our Restaurant Group segment, we are exposed to market price fluctuations in beef, seafood, produce and other food product prices. Given the historical volatility of beef, seafood, produce and other food product prices, these fluctuations can materially impact the food and beverage costs incurred in our Restaurant Group segment. While our Restaurant Group companies have taken steps to qualify multiple suppliers who meet our standards as suppliers for our restaurants and have entered into agreements with suppliers for some of the commodities used in our restaurant operations, there can be no assurance that future supplies and costs for such commodities will not fluctuate due to weather and other market conditions outside of our control. Consequently, such commodities can be subject to unforeseen supply and cost fluctuations. Dairy costs can also fluctuate due to government regulation. Because we typically set our menu prices in advance of our food product prices, our menu prices cannot immediately take into account changing costs of food items. To the extent that we are unable to pass the increased costs on to our guests through price increases, our results of operations would be adversely affected. We do not use financial instruments to hedge our risk to market price fluctuations in beef, seafood, produce and other food product prices at this time.

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Item 8. Financial Statements and Supplementary Data

CANNAE HOLDINGS, INC.

INDEX TO FINANCIAL INFORMATION

Page Number

Consolidated Balance Sheets as of December 31, 2020 and 2019 55

Notes to Consolidated Financial Statements 60

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Cannae Holdings, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Cannae Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 25, 2021, expressed an unqualified opinion on those financial statements and included an explanatory paragraph related to a change in accounting principle for leases due to the adoption of FASB ASC 842, Leases, on January 1, 2019.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Las Vegas, Nevada

February 25, 2021

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Cannae Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Cannae Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive earnings, equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Notes B and S to the financial statements, the Company has changed its method of accounting for leases due to the adoption of FASB ASC 842, Leases, on January 1, 2019.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisitions — Refer to Note I to the financial statements

Critical Audit Matter Description

On January 27, 2020, American Blue Ribbon Holdings, LLC ("Blue Ribbon") and its wholly-owned subsidiaries, which own the Village Inn, Bakers Square, and Legendary Baking concepts, filed for Chapter 11 bankruptcy (the "Blue Ribbon Reorganization"). As a result of the Blue Ribbon Reorganization, the Company deconsolidated Blue Ribbon as of January 27, 2020, which resulted in a deconsolidation gain of $26.5 million.

During the Blue Ribbon Reorganization, the Company accounted for their equity interest in Blue Ribbon under the equity method of accounting and as a result of the unprecedented social restrictions imposed by state and local governments related to the novel coronavirus (“COVID-19") pandemic the Company recorded an other-than-temporary impairment of $18.6 million as of March 31, 2020.

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On July 10, 2020, Blue Ribbon filed its Chapter 11 plan with the U.S. Bankruptcy Court which became effective on October 2, 2020. Subsequent to Blue Ribbon’s emergence from bankruptcy, the Company received 100% of the equity of the reorganized companies, VIBSQ Holdco, LLC and Legendary Baking I, LLC, in exchange for consideration transferred of $49.2 million that included the fair value of the Company’s equity method investment in Blue Ribbon and the notes receivable from Blue Ribbon of $15.2 million and $34.0 million, respectively. The consideration transferred was allocated to the net assets acquired of $52.1 million, and the Company recorded a bargain purchase gain of $2.9 million.

The deconsolidation and the related evaluation of the loss of control and the application of the equity method of accounting for the Company’s equity interest in Blue Ribbon required significant accounting judgments. Additionally, the Company determined the fair value of Blue Ribbon in connection with the deconsolidation and the other-than-temporary impairment and the fair value of the reorganized companies and the related consideration transferred at emergence using a combination of discounted cash flow analyses and market approaches. The determination of the fair value of Blue Ribbon and the reorganized companies involved significant management assumptions and estimates related to forecasts of future growth rates for revenues, costs, and earnings (collectively the “forecasts”) and the selection of discount rates and earnings multiples due to deteriorating operating results and cash flows resulting from declining same store sales, increased costs, and the impact of COVID-19. Changes in these significant management assumptions and estimates could have a significant impact on the determination of the fair values of Blue Ribbon and the reorganized companies.

Therefore, auditing management’s deconsolidation accounting judgments as well as the forecasts and the selection of discount rates and earnings multiples used to determine the fair value of Blue Ribbon and the reorganized companies, involved a higher degree of auditor judgment and subjectivity as well as an increased level of audit effort, including the involvement of specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s accounting judgments related to the deconsolidation of Blue Ribbon and the forecasts, discount rates, and earnings multiples used to determine the fair value of Blue Ribbon and the reorganized companies, included the following:

•We tested the effectiveness of the Company’s internal controls over management’s accounting judgments and the forecasts, discount rates, and earnings multiples for determining the fair value of Blue Ribbon and the reorganized companies.

•With the assistance of specialists in our firm having expertise in deconsolidation accounting, we evaluated management’s accounting judgments related to the deconsolidation of Blue Ribbon under accounting principles generally accepted in the United States of America.

•We evaluated the reasonableness of management’s forecasts by: (1) evaluating management’s ability to accurately forecast by comparing the forecasts to historical results; (2) evaluating evidence for assumptions and estimates related to management’s planned operational initiatives, the effects of the Blue Ribbon Reorganization, and the impact of COVID-19 that were incorporated into the forecasts; (3) corroborating assumptions and estimates with management’s communications to the Board of Directors; and (4) comparing forecast assumptions and estimates with information included in Company press releases, analyst reports of the Company and companies in its peer group, and restaurant industry reports.

•With the assistance of our valuation specialists, we evaluated the discount rates and earnings multiples selected by management including assessing the impact of the uncertainty in management’s forecast due to deteriorating operating results and cash flows on these valuation assumptions, testing the underlying market-based source information and the mathematical accuracy of the valuation assumptions, and developing a range of independent valuation assumptions and comparing those to the discount rates and earnings multiples valuation assumptions and estimates selected by management.

/s/ Deloitte & Touche LLP

Las Vegas, Nevada

February 25, 2021

We have served as the Company’s auditor since 2017.

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CANNAE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in millions)

ASSETS

Current assets:

Cash and cash equivalents $ 724.7 $ 533.7

Fixed maturity securities available for sale, at fair value 35.2 —

Equity securities, at fair value 1,799.1 —

Investments in unconsolidated affiliates 1,453.0 836.5

Other intangible assets, net 51.8 63.1

Fixed maturity securities available for sale, at fair value — 19.2

Deferred tax assets — 54.5

Other long term investments and noncurrent assets 63.8 66.4

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable and other accrued liabilities, current $ 93.2 $ 86.4

Lease liabilities, current 26.2 41.5

Notes payable, current 11.3 7.0

Deferred tax liabilities 325.3 —

Accounts payable and other accrued liabilities, long-term 53.1 43.9

Commitments and contingencies - see Note M

Equity:

Accumulated other comprehensive loss (4.9) (45.9)

Noncontrolling interests 5.6 41.3

See Notes to Consolidated Financial Statements

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CANNAE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31,

(in millions)

Revenues:

Operating expenses:

Other operating expenses, including asset impairments 116.6 133.4 91.8

Other income (expense):

Interest, investment and other income 17.2 15.6 6.3

Equity in earnings (losses) of unconsolidated affiliates 59.1 (115.1) (16.1)

Earnings (loss) from continuing operations 1,759.8 98.6 (8.5)

Net loss from discontinued operations, net of tax - see Note N — (51.8) (2.1)

Less: Net loss attributable to non-controlling interests (26.4) (30.5) (38.2)

Amounts attributable to Cannae Holdings, Inc. common shareholders

Earnings per share

Basic

Net earnings per share from continuing operations $ 20.84 $ 1.77 $ 0.42

Net loss per share from discontinued operations — (0.70) (0.03)

Diluted

Net earnings per share from continuing operations $ 20.79 $ 1.76 $ 0.42

Net loss per share from discontinued operations — (0.69) (0.03)

See Notes to Consolidated Financial Statements

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CANNAE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

Year Ended December 31,

(in millions)

Other comprehensive earnings (loss), net of tax:

Comprehensive earnings attributable to Cannae $ 1,827.2 $ 103.6 $ 47.5

(1)Net of income tax expense of $2.9 million, less than $0.1 million and $0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

(2)Net of income tax (benefit) expense of $(4.2) million, $1.9 million and $(3.2) million for the years ended December 31, 2020, 2019 and 2018, respectively.

(3)Net of income tax expense of $12.3 million, $5.1 million and $6.4 million for the years ended December 31, 2020, 2019 and 2018, respectively.

(4)Net of income tax benefit of $1.9 million for the year ended December 31, 2018.

See Notes to Consolidated Financial Statements

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CANNAE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

Shares $ Shares $

(in millions)

Adjustment for adoption of ASU 2018-02 — — — 16.1 (16.1) — — — —

Stock-based compensation — — 2.0 — — — — — 2.0

Issuance of restricted stock 0.3 — — — — — — — —

Shares withheld for taxes and in treasury — — — — — — (0.2) — (0.2)

Contribution of CSA services from FNF — — 1.3 — — — — — 1.3

Ceridian stock-based compensation — — 6.5 — — — — — 6.5

Restaurant Group Restructuring — — (13.6) — — — — 15.6 2.0

Subsidiary dividends paid to noncontrolling interests — — — — — — — (0.1) (0.1)

Sale of noncontrolling interest in consolidated subsidiary — — — — — — — 4.1 4.1

Net earnings (loss) — — — 27.6 — — — (38.2) (10.6)

Proceeds from equity offering, net of offering costs 7.5 — 236.0 — — — — — 236.0

Dun & Bradstreet equity issuance costs — — (1.4) — — — — — (1.4)

Treasury stock repurchases — — — — — 0.2 (4.9) — (4.9)

Shares withheld for taxes and in treasury — — — — — — (0.8) — (0.8)

Stock-based compensation, consolidated subsidiaries — — 4.0 — — — — 0.6 4.6

Contribution of CSA services from FNF — — 1.3 — — — — — 1.3

Stock-based compensation, unconsolidated affiliates — — 10.6 — — — — — 10.6

Deconsolidation of T-System — — — — — — — (2.9) (2.9)

Subsidiary dividends paid to noncontrolling interests — — — — — — — (1.0) (1.0)

Net earnings (loss) — — — 77.3 — — — (30.5) 46.8

Equity offering, net of offering costs 12.7 — 455.0 — — — — — 455.0

Restaurant Group Reorganization — — 6.8 — — — — (12.3) (5.5)

Sale of noncontrolling interest in consolidated subsidiary — — — — — — — 3.7 3.7

Treasury stock repurchases — — — — — 0.5 (14.4) — (14.4)

Stock-based compensation, consolidated subsidiaries — — 4.2 — — — — — 4.2

Contribution of CSA services from FNF — — 1.2 — — — — — 1.2

Stock-based compensation, unconsolidated affiliates — — 11.9 — — — — — 11.9

Subsidiary dividends paid to noncontrolling interests — — — — — — — (0.7) (0.7)

Shares withheld for taxes and in treasury — — — — — — (0.8) — (0.8)

See Notes to Consolidated Financial Statements.

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CANNAE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,

(in millions)

Cash flows from operating activities:

Equity in (earnings) losses of unconsolidated affiliates (59.1) 115.1 16.1

Distributions from investments in unconsolidated affiliates 128.4 2.0 1.4

Loss on sale of consolidated subsidiaries — 6.4 —

Lease asset amortization 25.1 38.8 —

Stock-based compensation cost 4.2 4.6 21.8

Changes in assets and liabilities, net of effects from acquisitions:

Net (increase) decrease in trade receivables (1.6) 18.2 (7.3)

Net (increase) decrease in other assets (29.8) (36.2) 9.5

Net decrease in lease liabilities (28.3) (46.9) —

Net cash used in operating activities (113.9) (84.2) (22.9)

Cash flows from investing activities:

Proceeds from sales of equity securities — — 17.7

Proceeds from sale of LifeWorks — — 56.2

Additions to notes receivable (37.3) — —

Collections of notes receivable 7.2 — —

Purchases of investment securities (0.7) — (3.5)

Other investments in unconsolidated affiliates (323.8) (45.7) —

Investment in Optimal Blue (289.0) — —

Proceeds from the sale of other investments 9.9 4.8 7.8

Proceeds from the sale of property and equipment 4.4 21.4 4.9

Purchases of other long-term investments — (30.0) (7.4)

Distributions from investments in unconsolidated affiliates 48.3 1.0 0.4

Net proceeds from (purchases of) short term investments 0.5 30.9 (31.4)

Net other investing activities 0.1 3.0 0.1

Cash deconsolidated at the inception of the Blue Ribbon Reorganization (1.1) — —

Holdback proceeds received from sale of OneDigital — — 4.6

Net cash (used in) provided by investing activities (74.2) (24.2) 186.7

Cash flows from financing activities:

Borrowings, net of debt issuance costs 45.2 367.3 33.9

Equity offering proceeds, net of capitalized costs 455.0 236.0 —

Sale of noncontrolling interest in consolidated subsidiary 3.7 — 4.1

Payment for shares withheld for taxes and in treasury (0.8) (0.8) (0.2)

Purchases of treasury stock (14.4) (4.9) —

Net cash provided by (used in) financing activities 379.1 319.1 (86.4)

Net increase in cash and cash equivalents 191.0 210.7 77.4

See Notes to Consolidated Financial Statements

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CANNAE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A. Business and Summary of Significant Accounting Policies

The following describes the significant accounting policies of Cannae Holdings, Inc. and its subsidiaries (collectively, “we,” “us,” “our,” "Cannae," or the "Company”), which have been followed in preparing the accompanying Consolidated Financial Statements.

Description of Business

We are engaged in actively managing and operating a group of companies and investments, as well as making additional majority and minority equity portfolio investments in businesses, in order to achieve superior financial performance and maximize the value of these assets. Our primary investments as of December 31, 2020 include our minority ownership interests in Dun & Bradstreet Holdings, Inc. ("Dun & Bradstreet" or "D&B"), Ceridian HCM Holding, Inc. ("Ceridian"), Optimal Blue Holdco, LLC ("Optimal Blue") and AmeriLife Group, LLC ("AmeriLife"); majority equity ownership stakes in O'Charley's Holdings, LLC ("O'Charley's") and 99 Restaurants Holdings, LLC ("99 Restaurants"); and various other controlled portfolio companies and minority equity and debt investments.

See Note Q Segment Information for further discussion of the businesses comprising our reportable segments.

Split-off of Cannae from FNF

On November 17, 2017, Fidelity National Financial, Inc. (“FNF”) redeemed each outstanding share of its FNF Ventures ("FNFV") Group common stock, par value $0.0001, for one share of common stock, par value $0.0001, of a newly formed entity, Cannae (the "Split-Off"). In conjunction with the Split-Off, FNF contributed to us its portfolio of investments unrelated to its primary insurance and real estate operations, which included majority and minority equity investment stakes in a number of entities and certain fixed income investments. On November 20, 2017, Cannae common stock began “regular-way” trading on The New York Stock Exchange under the “CNNE” stock symbol.

Following the Split-Off, FNF and Cannae operate as separate, publicly-traded companies. In connection with the Split-Off, FNF and Cannae entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Split-Off and to provide for an orderly transition. These agreements include a reorganization agreement, a corporate services agreement, a registration rights agreement, a voting agreement and a tax matters agreement.

The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Split-Off, certain conditions to the Split-Off and provisions governing the relationship between Cannae and FNF with respect to and resulting from the Split-Off. The tax matters agreement provides for the allocation and indemnification of tax liabilities and benefits between FNF and Cannae and other agreements related to tax matters. The voting and registration rights agreements provide for certain appearance and voting restrictions and registration rights on shares of Cannae owned by FNF after consummation of the Split-Off. Pursuant to the corporate services agreement (the "CSA"), FNF will provide Cannae with certain "back office" services including legal, tax, accounting, treasury and investor relations support. Cannae will reimburse FNF for direct, out-of-pocket expenses incurred by FNF in providing these services.

On October 7, 2020, the Company entered into an Extension of Corporate Services Agreement (the “Extension”) with FNF. Pursuant to the Extension, the term of the CSA is extended for two years until November 17, 2022 (the “Extended Term”). During the Extended Term, FNF will provide certain corporate services to Cannae at FNF’s Standard Allocation (as defined in the CSA), plus 10%, and Cannae agrees to pay or reimburse FNF for any fees, costs or other expenses paid by FNF to third parties in connection with the corporate services. The CSA will automatically renew for successive one-year terms, unless the parties mutually agree to terminate the CSA at least 30 days prior to the applicable termination date. No later than 30 days prior to such termination date, the parties shall negotiate mutually agreeable arm’s length terms for each additional one year term.

Principles of Consolidation and Basis of Presentation

The accompanying Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and include the historical accounts as well as wholly-owned and majority-owned subsidiaries of the Company. The Company is allocated certain corporate overhead and management services expenses from FNF based on the terms of the CSA and our proportionate share of the expense determined on actual usage and our best estimate of management's allocation of time. Both FNF and Cannae believe such allocations are reasonable; however, they may not be indicative of the actual results of operations or cash flows of the Company had the Company been operating as an

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

independent, publicly traded company for the periods presented or the amounts that will be incurred by the Company in the future.

All intercompany profits, transactions and balances have been eliminated. Our investments in non-majority-owned partnerships and affiliates are accounted for using the equity method. Earnings attributable to noncontrolling interests are recorded on the Consolidated Statements of Operations relating to majority-owned subsidiaries with the appropriate noncontrolling interest that represents the portion of equity not related to our ownership interest recorded on the Consolidated Balance Sheets in each period.

Management Estimates

The preparation of these Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include the carrying amount and depreciation of property and equipment (Note E), the valuation of acquired intangible assets (Note H and Note I), fair value measurements (Note C), and accounting for income taxes (Note L). Actual results could differ from estimates.

Recent Developments

Dun & Bradstreet

On July 6, 2020, Dun & Bradstreet closed its previously announced initial public offering of 90,047,612 shares of common stock, which includes 11,745,340 shares of common stock issued pursuant to the exercise by the underwriters of their option to purchase additional shares in full (the "D&B IPO"). The D&B IPO was priced at $22.00 per share, resulting in gross proceeds to Dun & Bradstreet of $2.4 billion when combined with $400.0 million of aggregate proceeds from a concurrent private placement offering (the "D&B Private Placement") and before deducting underwriting discounts and commissions and other offering expenses payable by Dun & Bradstreet. Shares of Dun & Bradstreet common stock began trading on the New York Stock Exchange ("NYSE") under the ticker symbol "DNB" on July 1, 2020. Dun & Bradstreet used a portion of the net proceeds from the D&B IPO to redeem all of its outstanding Series A Preferred Stock and repay a portion of its 10.250% Senior Unsecured Notes outstanding due 2027.

On July 6, 2020, we invested $200.0 million in the D&B Private Placement. Subsequent to the D&B IPO and the D&B Private Placement, we own 76.6 million shares of Dun & Bradstreet, which represented approximately 18.1% of its outstanding common stock as of December 31, 2020.

As a result of the D&B IPO, we recorded a net gain of $117.0 million (net of $2.3 million of before-tax losses reclassified from other comprehensive earnings).

See Note D for further discussion of our accounting for our investment in D&B.

On January 8, 2021, D&B completed its acquisition of Bisnode Business Information Group AB (the "Bisnode acquisition"). In connection with the Bisnode acquisition, an additional 6.2 million shares were issued by D&B, which resulted in a decrease in our ownership interest in D&B to approximately 15.6%.

Ceridian

During the year ended December 31, 2020, we completed the sale of an aggregate of 9.7 million shares of common stock of Ceridian to brokers pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the "Ceridian Share Sales"). In connection with the Ceridian Share Sales, we received aggregate proceeds of $720.9 million. As of December 31, 2020, we owned 9.5% of the outstanding common stock of Ceridian.

As of March 31, 2020 our voting agreement with Ceridian was terminated and, as a result, we are no longer able to exert influence over the composition and quantity of Ceridian's board of directors. In combination with the reduction in our ownership of Ceridian resulting from the sale of shares in February 2020, we no longer exercise significant influence over Ceridian. As of March 31, 2020, we account for our investment in Ceridian at fair value pursuant to the investment in equity security guidance of Accounting Standards Codification ("ASC") 321. The change resulted in the revaluation of our investment in Ceridian to its fair value of $993.4 million as of March 31, 2020 and recording a gain on such revaluation of $684.9 million (net of $47.1 million of before-tax losses reclassified from other comprehensive earnings), which is included in Recognized gains and losses, net on the Consolidated Statement of Operations for the year ended December 31, 2020.

See Notes C and D for further discussion of our accounting for our investment in Ceridian and other equity securities.

Restaurant Group

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

On January 27, 2020, American Blue Ribbon Holdings, LLC ("Blue Ribbon") and its wholly-owned subsidiaries, filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the "Blue Ribbon Reorganization"). The Blue Ribbon Reorganization does not involve or affect the operations of O’Charley’s or 99 Restaurants, which are not part of Blue Ribbon. As a result of the Blue Ribbon Reorganization, we deconsolidated Blue Ribbon as of January 27, 2020 because the bankruptcy court and committee of creditors were deemed to have control of Blue Ribbon.

We recorded a gain of $26.5 million on January 27, 2020 as a result of the deconsolidation of Blue Ribbon, which is included in Recognized gains and losses, net on the Condensed Consolidated Statement of Operations. The recorded gain was measured as the excess of the fair value of our retained equity investment in Blue Ribbon over our book value of Blue Ribbon as of January 27, 2020. In conjunction with the Blue Ribbon Reorganization, we provided debtor-in-possession financing (the "DIP Loan") of $27.5 million to Blue Ribbon and its subsidiaries.

During the Blue Ribbon Reorganization, we accounted for our retained equity interest in Blue Ribbon under the equity method of accounting because (1) we continued to exert significant influence over Blue Ribbon through our majority equity ownership and position as the single largest post-petition creditor of Blue Ribbon through the DIP Loan, (2) the Blue Ribbon Reorganization was limited in scope and expected to be short in duration, and (3) we expected to retain a majority equity interest upon completion of the Blue Ribbon Reorganization. We recorded an investment of $33.6 million as of January 27, 2020. The fair value of the investment was determined by performing a combination of discounted cash flow and market approaches.

As a result of unprecedented social restrictions imposed by state and local government authorities related to the novel coronavirus ("COVID-19") pandemic, our Restaurant Group brands experienced a significant reduction in guest counts beginning in the last two weeks of March 2020. In response to the outbreak and these changing conditions, our Restaurant Group brands initially closed the dining rooms in substantially all of our restaurants. Due to increased uncertainty in the operating environment for restaurants and a significant reduction in forecasted cash flows for Blue Ribbon, we recorded an other-than-temporary impairment of our investment of $18.6 million as of March 31, 2020.

On July 10, 2020, Blue Ribbon filed its Debtor's Chapter 11 Plan (the "Chapter 11 Plan") with the U.S. Bankruptcy Court of Delaware (the "Bankruptcy Court").

On October 2, 2020, the Chapter 11 Plan became effective and Blue Ribbon emerged from bankruptcy as a set of reorganized companies (the "Blue Ribbon Emergence"). Subsequent to Blue Ribbon's emergence from bankruptcy we own 100% of Legendary Baking Holdings I, LLC ("Legendary Baking") and VIBSQ Holdco, LLC ("VIBSQ"), which were formerly part of Blue Ribbon.

See Note I for further discussion of our accounting for our acquisition of Legendary Baking and VIBSQ.

AmeriLife

On March 18, 2020, we closed on the previously announced $125.0 million investment in a partnership (the “AmeriLife Joint Venture”) that invested in the recapitalization of AmeriLife. Cannae and other investors provided an aggregate of $617.0 million in equity financing to the AmeriLife Joint Venture to acquire AmeriLife. AmeriLife is a leader in marketing and distributing life, health, and retirement solutions. We account for our investment in the AmeriLife Joint Venture under the equity method of accounting and the investment is included in Investments in unconsolidated affiliates on our Consolidated Balance Sheet as of December 31, 2020.

Refer to Note D for further discussion of our investments in unconsolidated affiliates.

CoreLogic

On December 12, 2019, we entered into a joint venture (the "Senator JV") with affiliates of Senator Investment Group, LP ("Senator") designed to provide a mechanism to allow us and Senator to jointly invest in CoreLogic, Inc. ("CoreLogic"). In December 2019, we initially contributed $90.9 million of cash in exchange for a 49.0% in the Senator JV and a deposit on hand with Senator JV. Affiliates of Senator are the general partner of the Senator JV and hold the balance of the limited partnership interests of the Senator JV. In the year ended December 31, 2020, we invested an additional $201.2 million in the Senator JV.We account for our investment in the Senator JV under the equity method of accounting and the investment is included in Investments in unconsolidated affiliates on our Consolidated Balance Sheet as of December 31, 2020.

During the year ended December 31, 2020, we received from the Senator JV a distribution of 2.3 million shares of common stock of CoreLogic and the Senator JV distributed $232.4 million of securities to other limited partners affiliated with Senator.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

On June 26, 2020, Cannae and Senator submitted a jointly signed letter to CoreLogic’s board of directors pursuant to which Cannae and Senator proposed to acquire CoreLogic for $65.00 per share in cash. On July 7, 2020, CoreLogic announced that its board of directors unanimously rejected the proposal.

On July 29, 2020, Cannae and Senator sent an open letter to CoreLogic shareholders announcing that we initiated the process to call a special meeting of CoreLogic's shareholders to elect nine independent directors to the CoreLogic board of directors.

On September 14, 2020, Senator and Cannae informed the board of directors of CoreLogic of the decision by Senator and Cannae to increase the proposed purchase price to $66.00 per share in cash. On September 15, 2020, the CoreLogic board of directors delivered to Senator and Cannae a letter in which CoreLogic's board of directors rejected the revised offer and again rejected Senator’s and Cannae’s request for access to targeted due diligence information regarding CoreLogic.

On October 30, 2020, we distributed the 2.3 million shares of CoreLogic previously held directly by us back to the Senator JV.

In November 2020 and December 2020, we received an aggregate of $198.6 million of distributions from the Senator JV resulting from the Senator JV's sales of CoreLogic Shares.

Subsequent to December 31, 2020 through the date of this Annual Report, we have received distributions of $280.6 million from the Senator JV, the Senator JV has exited our investment in CoreLogic completely and we have no further material interest in the Senator JV.

Refer to Notes C and D for further discussion of our accounting for our investment in the Senator JV.

Optimal Blue

On September 15, 2020, Black Knight, Inc. (“Black Knight”) closed on its acquisition of Optimal Blue, a leading provider of secondary market solutions and actionable data services. Cannae, in connection with the closing of the acquisition by Black Knight, funded its previously announced commitment to purchase 20% of the equity of Optimal Blue for $289.0 million. We account for our investment in Optimal Blue under the equity method of accounting and the investment is included in Investments in unconsolidated affiliates on our Consolidated Balance Sheet as of December 31, 2020.

Refer to Note D for further discussion of our investments in unconsolidated affiliates.

Forward Purchases of Equity of Special Purpose Acquisition Companies

On May 8, 2020, we entered into a forward purchase agreement (the "FTAC FPA") with Foley Trasimene Acquisition Corp. (“FTAC”), a newly incorporated blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities (the "FTAC Initial Business Combination"). FTAC is co-sponsored by entities affiliated with the chairman of our Board of Directors ("Board"), William P. Foley II. Under the FTAC FPA, we will purchase an aggregate of 15,000,000 shares of FTAC’s Class A common stock, plus an aggregate of 5,000,000 redeemable warrants to purchase one share of FTAC's Class A common stock at $11.50 per share for an aggregate purchase price of $150.0 million in a private placement to occur concurrently with the closing of the FTAC Initial Business Combination. The forward purchase is contingent upon the closing of the FTAC Initial Business Combination.

On June 5, 2020, we entered into a forward purchase agreement (the "Trebia FPA") with Trebia Acquisition Corp. (“Trebia”), a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the "Trebia Initial Business Combination"). Trebia is co-sponsored by entities affiliated with the chairman and a member of our Board, William P. Foley II and Frank R. Martire, respectively. Under the Trebia FPA, we will purchase an aggregate of 7,500,000 Class A ordinary shares of Trebia, plus an aggregate of 2,500,000 redeemable warrants to purchase one Class A ordinary share of Trebia at $11.50 per share for an aggregate purchase price of $75.0 million in a private placement to occur concurrently with the closing of the Trebia Initial Business Combination. The forward purchase is contingent upon the closing of the Trebia Initial Business Combination.

On July 31, 2020, we entered into a forward purchase agreement (the "FTAC II FPA" and together with the FTAC FPA and Trebia FPA, the "Forward Purchase Agreements") with Foley Trasimene Acquisition Corp. II (“FTAC II”), a newly incorporated blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities (the "FTAC II Initial Business Combination"). FTAC II is sponsored by an entity affiliated with the chairman of our Board, William P. Foley II. Under the FTAC II FPA, we will purchase an aggregate of 15,000,000 shares of FTAC II’s Class A common stock, plus an aggregate of 5,000,000 redeemable warrants to purchase one share of FTAC II's Class A common stock at $11.50 per share for

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an aggregate purchase price of $150.0 million in a private placement to occur concurrently with the closing of the FTAC II Initial Business Combination. The forward purchase is contingent upon the closing of the FTAC II Initial Business Combination.

On December 7, 2020, FTAC II entered into a definitive agreement and plan of merger with Paysafe Limited (“Paysafe”), a leading integrated payments platform (the "FTAC II Paysafe Merger"). Upon closing of the FTAC II Paysafe Merger, the newly combined company will operate as Paysafe and plans to list on the New York Stock Exchange under the symbol PSFE. The FTAC II Paysafe Merger reflects an implied pro-forma enterprise value for Paysafe of approximately $9.0 billion. The FTAC II Paysafe Merger will be funded with the cash held in trust at FTAC II, forward purchase commitments, private investment in public equity ("PIPE") commitments and equity of Paysafe. Completion of the FTAC II Paysafe Merger is subject to approval by FTAC II stockholders, the effectiveness of a registration statement to be filed with the SEC in connection with the transaction, and other customary closing conditions, including the receipt of certain regulatory approvals. The FTAC II Paysafe Merger is expected to close in the first half of 2021.

In conjunction with the FTAC II Paysafe Merger, Cannae entered into an agreement to purchase 35,000,000 shares of Paysafe for $350.0 million as part of a subscription to the PIPE (the "Paysafe Subscription Agreement"). Paysafe has agreed to pay us a placement fee of $5.6 million as consideration for our subscription. Upon consummation of the FTAC II Paysafe Merger, our aggregate investment in Paysafe is expected to be $504.7 million, inclusive of Cannae's investment commitments under the FTAC II FPA and Paysafe Subscription Agreement and our prior $4.7 million investment in the sponsor of FTAC II, and we are expected to receive 54,290,000 shares of common stock of Paysafe which represents approximately 7.5% of the pro forma outstanding common equity of Paysafe and 8,134,067 warrants to purchase one share of Paysafe common stock at $11.50 per share.

Refer to Note C and G for further discussion of our accounting for the Forward Purchase Agreements and Paysafe Subscription Agreement.

On January 25, 2021, FTAC entered into a business combination agreement with Alight Solutions ("Alight"), a leading cloud-based provider of integrated digital human capital and business solutions (the "FTAC Alight Business Combination"). Under the terms of the FTAC Alight Business Combination, FTAC will combine with Alight and Alight will become a publicly traded entity under the name “Alight, Inc.” and symbol ALIT. The FTAC Alight Business Combination reflects an implied pro-forma enterprise value for Alight of approximately $7.3 billion at closing. The FTAC Alight Business Combination will be funded with the cash held in trust at FTAC, forward purchase commitments, PIPE commitments and equity of Alight. Completion of the FTAC Alight Business Combination is subject to approval by FTAC stockholders, the effectiveness of a registration statement to be filed with the SEC in connection with the transaction, and other customary closing conditions of SPAC business combinations, including the receipt of certain regulatory approvals.

On January 25, 2021, Cannae entered into an agreement to purchase 25,000,000 shares of Alight for $250.0 million as part of a subscription to the PIPE (the "Alight Subscription Agreement"). Alight has agreed to pay us a placement fee of $6.3 million as consideration for our subscription. Upon consummation of the FTAC Alight Business Combination, our aggregate investment in Alight is expected to be $404.5 million, inclusive of Cannae's investment commitments under the FTAC FPA and Alight Subscription Agreement and our previous $4.5 million investment in a sponsor of FTAC, and we are expected to receive 44,639,500 shares of common stock of Alight which represents approximately 8.6% of the pro forma outstanding common equity of Alight and 8,026,666 warrants to purchase one share of Alight common stock at $11.50 per share.

Other Developments

In June 2020, we completed an underwritten public offering of an aggregate of 12,650,000 shares of our common stock, including 1,650,000 shares of our common stock pursuant to the full exercise of the underwriter's overallotment option (the "Offering"), pursuant to a prospectus supplement, dated June 10, 2020, and the base prospectus, dated November 27, 2019, included in our registration statement on Form S-3 ASR (File No. 333-235303), which was initially filed with the Securities and Exchange Commission on November 27, 2019. We received net proceeds from the Offering of approximately $455.0 million, after deducting the underwriting discount and capitalized offering expenses payable by the Company. We intend to use the net proceeds of the Offering to fund future acquisitions or investments, including potential investments in existing portfolio companies, and for general corporate purposes.

Cash and Cash Equivalents

Highly liquid instruments, including money market instruments, purchased as part of cash management with original maturities of three months or less, and certain amounts in transit from credit and debit card processors, are considered cash equivalents. The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair value.

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Restricted Cash

The Restaurant Group is required to hold cash collateralizing its outstanding letters of credit. Included in Cash and cash equivalents on our Consolidated Balance Sheets as of December 31, 2020 and 2019 is $12.5 million and $11.4 million, respectively, of such restricted cash.

Investments

Equity securities primarily include our investments in Ceridian, the Forward Purchase Agreements and the Paysafe Subscription Agreement and are carried at fair value.

Investments in unconsolidated affiliates are recorded using the equity method of accounting.

Fixed maturity securities, which may be sold prior to maturity, are carried at fair value and are classified as available for sale as of the balance sheet dates. Fair values for fixed maturity securities are principally a function of current market conditions and are valued based on quoted prices in markets that are not active or model inputs that are unobservable. See Note C. Discount or premium is recorded for the difference between the purchase price and the principal amount. The discount or premium is amortized or accrued using the interest method and is recorded as an adjustment to interest, investment and other income. The interest method results in the recognition of a constant rate of return on the investment equal to the prevailing rate at the time of purchase or at the time of subsequent adjustments of book value.

Recognized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold and are credited or charged to income on a trade date basis. Unrealized gains or losses on fixed maturity securities, which are classified as available for sale, net of applicable deferred income tax expenses (benefits), are excluded from earnings and credited or charged directly to a separate component of equity. If any unrealized losses on available for sale fixed maturity securities are determined to be other-than-temporary, such unrealized losses are recognized as realized losses. Unrealized losses are considered other-than-temporary if factors exist that cause us to believe that the value will not increase to a level sufficient to recover our cost basis. Some factors considered in evaluating whether or not a decline in fair value is other-than-temporary include (i) our need and intent to sell the investment prior to a period of time sufficient to allow for a recovery in value; (ii) the duration and extent to which the fair value has been less than cost; and (iii) the financial condition and prospects of the issuer. Such reviews are inherently uncertain and the value of the investment may not fully recover or may decline in future periods resulting in a realized loss.

See Notes C and D for further discussion of our accounting for equity securities and investments in unconsolidated affiliates.

Fair Value of Financial Instruments

The fair values of financial instruments presented in the Consolidated Financial Statements are estimates of the fair values at a specific point in time using available market information and appropriate valuation methodologies. Estimates that use unobservable inputs are subjective in nature and involve uncertainties and significant judgment in the interpretation of current market data. We do not necessarily intend to dispose of or liquidate such instruments prior to maturity. See Note C for further details.

Other Current Assets

Prepaid expenses and other current assets consist of trade receivables, inventory, prepaid operating expenses, the current portion of notes receivable, deposits and other miscellaneous current assets. As of December 31, 2019, Prepaid expenses and other current assets also includes cash on depost with the Senator JV.

Trade receivables are primarily for the Restaurant Group and consist primarily of billings to third-party customers of Legendary Baking, business to business gift card sales, insurance-related reimbursement, rebates, tenant improvement allowances, and billings to franchisees for royalties, initial and renewal fees, equipment sales and rent. Trade receivables are recorded net of an allowance for doubtful accounts, which is our best estimate of the amount of probable credit losses related to existing receivables. The carrying values reported in the Consolidated Balance Sheets for trade receivables approximate their fair value.

Inventory primarily consists of raw materials, finished pies, food, beverages packaging and supplies in our Restaurant Group segment and is stated at the lower of cost or net realizable value. Cost is determined using the first in, first out method for restaurant inventory and standard cost that approximates actual cost on a first in, first out basis for the bakery operations.

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Other Long Term Investments and Non-Current Assets

Other long-term investments consist of land held for investment purposes and investments in equity securities without a readily determinable fair value. Land is carried at historical cost. See Note D for further discussion of our accounting for equity securities without a readily determinable fair value.

Other non-current assets include notes receivable from third-parties and other miscellaneous non-current assets.

Leases

Refer to Note B.

Goodwill

Goodwill represents the excess of cost over fair value of identifiable net assets acquired and assumed in business combinations. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if circumstances indicate potential impairment, through a comparison of fair value to the carrying amount. We have the option to first assess goodwill for impairment based on a review of qualitative factors to determine if events and circumstances exist that will lead to a determination that the fair value of a reporting unit is greater than its carrying amount, prior to performing a full fair-value assessment. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. However, if the Company concludes otherwise, then it is required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. Goodwill impairment, if any, is measured as the amount by which a reporting unit’s carrying value exceeds its fair value.

For the year ended December 31, 2020, we recorded $7.8 million of impairment to goodwill in our Restaurant Group segment. The impairment charge is a result of deteriorating operating results and cash flow resulting from declining same store sales and increased costs at O'Charley's. The impairment recorded was calculated as the deficit between the carrying value of our O'Charley's reporting unit of our Restaurant Group compared to the fair value of the reporting unit determined by performing a combination of discounted cash flow and market approaches.

For the year ended December 31, 2019 we recorded $35.1 million of impairment to goodwill in our former T-System segment and $10.4 million of impairment to goodwill in our Restaurant Group segment. The impairment in our former T-System segment is primarily a result of a decline in earnings multiples from comparable public companies and lower forecasted cash flows for its reporting units. The impairment charge in our Restaurant Group is a result of deteriorating operating results and cash flow resulting from declining same store sales and increased costs, primarily in our Village Inn and Bakers Square branded stores. The impairments recorded were calculated as the deficit between the carrying value of the reporting units of each segment compared to the fair value of the reporting unit determined by performing a combination of discounted cash flow and market approaches.

Impairment to goodwill in our former T-System segment is included in Net loss from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019. See Note N.

For the year ended December 31, 2018, we recorded $26.7 million of impairment to goodwill in our Restaurant Group segment. The impairment charge was a result of deteriorating operating results and cash flow resulting from declining same store sales and increased costs. The impairment recorded was calculated as the deficit between the carrying value of a reporting unit of the Restaurant Group segment compared to the fair value of the reporting unit determined by performing a combination ofdiscounted cash flow and market approaches.

Other Intangible Assets

We have other intangible assets, not including goodwill, which consist primarily of customer relationships and contracts, trademarks and tradenames that are generally recorded in connection with acquisitions at their fair value, franchise rights, the fair value of purchased software and capitalized software development costs. Intangible assets with estimable lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In general, customer relationships are amortized over their estimated useful lives using an accelerated method, which takes into consideration expected customer attrition rates. Contractual relationships are generally amortized over their respective contractual lives. Useful lives of computer software range from three to ten years. Capitalized software development costs and purchased software are recorded at cost and amortized using the straight-line method over their estimated useful life.

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Trademarks and tradenames were generally considered intangible assets with indefinite lives and reviewed for impairment at least annually. In conjunction with our annual testing for impairment of tradenames during the fourth quarter of 2020 and in light of the deteriorating operating environment for restaurants, we changed our estimate of the useful lives of our tradenames for all of our restaurant brands from indefinite to 15 years. The impact of such change on the Company's consolidated income is not considered material.

We recorded $11.8 million of impairment expense related to the O'Charley's tradename within our Restaurant Group in the year ended December 31, 2020. We recorded $17.1 million of impairment expense related to the Village Inn and Bakers Square tradenames within our Restaurant Group in the year ended December 31, 2019. We recorded $5.8 million of impairment expense related to a tradename and an abandoned software project in our Restaurant Group in the year ended December 31, 2018. The impairments are recorded within Other operating expenses, including asset impairments, on our Consolidated Statement of Operations for the years then ended.

Property and Equipment, net

Property and equipment, net are recorded at cost, less accumulated depreciation. Depreciation is computed primarily using the straight-line method based on the estimated useful lives of the related assets: thirty to forty years for buildings and three to twenty-five years for furniture, fixtures and equipment. Leasehold improvements are amortized on a straight-line basis over the lesser of the term of the applicable lease or the estimated useful lives of such assets.

In our Restaurant Group, all direct external costs associated with obtaining the land, building and equipment for each new restaurant, as well as construction period interest, are capitalized. Direct external costs associated with obtaining the dining room and kitchen equipment, signage and other assets and equipment are also capitalized. In addition, for each new restaurant and re-branded restaurant, a portion of the internal direct costs of its real estate and construction department are also capitalized.

Property and equipment are reviewed for impairment when events or circumstances indicate that the carrying amounts may not be recoverable. We recorded $3.5 million, $6.6 million, and $8.1 million of impairment expense related to Property and equipment in our Restaurant Group segment in the years ended December 31, 2020, 2019 and 2018, respectively, which is recorded within Other operating expenses, including asset impairments, on our Consolidated Statements of Operations for the years then ended.

Insurance Reserves

Our Restaurant Group companies are currently self-insured for a portion of its workers' compensation, general liability, and liquor liability losses (collectively, casualty losses) as well as certain other insurable risks. To mitigate the cost of the Restaurant Group's exposures for certain property and casualty losses, we make annual decisions to either retain the risks of loss up to a certain maximum per occurrence, aggregate loss limits negotiated with its insurance carriers, or fully insure those risks. Our Restaurant Group companies are also self-insured for healthcare claims for eligible participating employees subject to certain deductibles and limitations. We have accounted for such retained liabilities for casualty losses and healthcare claims, including reported and incurred but not reported claims, based on information provided by third-party actuaries. As of December 31, 2020, our Restaurant Group companies were committed under letters of credit totaling $14.7 million issued primarily in connection with casualty insurance programs.

Income Taxes