Good morning, ladies and gentlemen and welcome to the Cannae Holdings Second Quarter 2018 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Jamie Lillis, Investor Relations for Cannae Holdings. Please go-ahead, sir.

Thank you, Operator and good morning, everyone. We appreciate your participation in our Second Quarter 2018 Earnings Conference Call. Joining me today are Cannae's Chairman, Bill Foley; President, Brent Bickett; and Chief Financial Officer, Richard Cox. As a reminder, a replay of this call will be available through 11:59 PM Eastern Time on August 20, 2018. Before we begin, I would like to remind you that this conference call may contain forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts including statements about our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by and information currently available to Management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to the risks and other factors detailed in our press release dated this morning and in the statement regarding forward-looking information, risk factors and other sections of Cannae's Form S-4 and other filings with the SEC. As well as our ability together with the investment consortium to close the acquisition of Dun & Bradstreet, including our ability to fund and/or sell down our equity commitment pursuant to the definitive agreement entered into in connection therewith. Let me now turn the call over to Bill.

Thanks, Jamie. To start, we've made meaningful progress executing our strategy as we strive to create value for our shareholders by monetizing our existing investments and pursuing new investments in sectors with an attractive long-term growth potential. Ceridian has emerged as a market leader in the payroll and human capital management software sector and we are pleased with their continued strong performance. Ceridian's impressive growth over the last several years, combined with their market position in the HCM sector position the company for a successful initial public offering in April. Currently, Cannae owns 37.1 million shares Australian common stock, representing a 27% ownership position. Based on CDAY's closing price of $35.19 per share this past Friday August 10, Cannae, Steak [ph] and Ceridian has a market value of $1.31 billion. I am also pleased with our announcement on August 8 of our entry into a definitive agreement and partnership with an investment consortium including CC Capital and Thomas H. Lee Partners to acquire Dun & Bradstreet. The deal is valued at $6.9 billion and Cannae's investment commitment is $900 million. Importantly, we have agreed to use our reasonable best efforts to syndicate between $400 million and $600 million of our equity commitment of which we will receive a 3% syndication fee. We anticipate owning between $300 million and $500 million of D&B and expect to fund the commitment with cash on hand, availability in our line of credit and potentially with sales of Ceridian stock depending on market conditions. Looking forward, we believe that Dun & Bradstreet's insight-driven business model and interconnectivity across industries has positioned the company for continued success. Of note, we see a significant opportunity to grow the company, increase their operating efficiencies and improve the D&B customer experience by providing an enhanced business solution. This is a terrific opportunity for Cannae to make a scale investment in partnership with like-minded investors that we know well. As we execute upon the strategy, we believe that we will enhance the value of D&B and deliver value for our shareholders. I'll now turn the call over to Brent Bickett.

Thanks, Bill. Today, Cannae is comprised of three businesses which include Ceridian, our restaurant group and T-System. Bill will review the success that we have achieved with the Ceridian IPO and the subsequent trading performance of CDAY. As part of the IPO in April, Ceridian distributed equity interest and its LifeWorks joint venture to its shareholders. On July 9, 2018, LifeWorks announced the sale of the company to Morneau Shepell to $325 million in cash and the transaction closed on July 27. Cannae expects to receive approximately $56 million in cash for our interest in LifeWorks later this month. Turning to our restaurant group. As you will recall, we entered into a non-bonding letter of intent with Newport Holdings in March to reorganize our respective equity interest in American Blue Ribbon's Holdings. Currently the reorganization discussions have been put on hold. Despite the delay, we continue to work with ABRH's management team to improve the profitability in cash flow, generation of the restaurant group's operations. As Rick will discuss in more detail, we see significant room to drive operational improvement which we ultimately believe will be achieved to drive value for our shareholders. Turning to T-System. We announced on August 1 that Bob Wilhelm was named T-System's new Chief Executive Officer. Bob brings the right experience having spent over 20 years in leadership positions in the tech-enabled healthcare services industry including notable market leaders, Cerner and TriZetto. Most recently, Bob served as CEO of Adreima which is a revenue cycle management services company where he successfully scaled the business into a full service partner to healthcare organizations. Bob has the right skill set to build upon T-System's established documentation encoding businesses as he work to accelerate the company's organic growth and execute upon our acquisition strategy to extend T-System's capabilities.…

Thanks, Brent. To start off, Ceridian which includes both cloud and bear [ph] solutions generated second quarter revenue of $179.3 million which represents the 13.8% increase from $157.5 million in the second quarter of 2017. Adjusted EBITDA in the second quarter was $33.6 million, an $11 million increase or 48.7% growth over the year ago quarter. In the 2018 second quarter, cloud-based revenues grew 35.5% to $127.8 million as compared to $94.3 million in the year ago quarter. In total, more than 3,300 customers are now live on the platform, up from the 2,690 at the end of the second quarter of 2017. More details on Ceridian's second quarter financial results which were announced this past Thursday can be found on the Investor Relations section of their website. Turning to the restaurant group. American Blue Ribbon's Holdings generated revenue of $276.2 million in the second quarter of 2018 as compared to $287.6 million on the second quarter of 2017. The $11.4 million decline was primarily related to a 4.2% decline in revenue at Legendary Baking, the closure of 10 under-performing restaurants, as well as overall decline in same store sales of 1.5%. Our 99 brand continue to perform well, having delivered same-store sales growth of 0.9%. This strong performance was more than offset by O'Charley's which declined by 2.8%, [indiscernible] was declined by 1% and Baker's Square was declined by 4.2%. Of note, 99 same-store sales results outperform the Black Box Regional Index, same store sales decline of 1.6%. O'Charley's underperformed the Black Box National Index same store sales increase of 0.5% while Billi-Gen [ph] and Baker's Square underperformed MPD, mid-scale family index same store sales index decline of 0.7% ABRH delivered second quarter EBITDA at $8.6 million, representing an EBITDA margin or 3.1% in the second quarter of 2018…

At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of John Campbell from Stephens. Please proceed with your question.

Hi, guys. Good morning.

Good morning, John.

Hi. So if I took the books out of everything outside of Ceridian, if I add in the tax effect and I guess the market value of the CDAY position, I get to around $24 of share value, vicinity stock here at $17 [ph] in change. That's almost a 40% premium. First, are we thinking about that right? And then secondly, I know you got to set aside some capital from the D&B deal, but what are your other thoughts from the buybacks, just given that implied discount to your stock?

This is Brent, John. Your map is right. We own 37.1 million shares times Ceridian price, we have about $390 million or so in tax basis. We have a 21% federal break. That all adds up to around $15.50, $16 per share after tax and he add in the other stuff and it does get up to about $24. That discounts there. In terms of buying back the shares, it's obviously something that we would look at. We found a terrific deal in Dun & Bradstreet that we think can drive great future value for us, so we're going to set aside our capital to pursue that transaction.

Okay, that makes sense. And then on key systems. Can you guys just give a broader update on outlook? Just with regards to the revenue growth. Can you carry that kind of low double-digit growth rate? And then anything to call out as far as margins and how that might look next year. You're looking for any kind of expansion in margins as you get into 2019?

Yes. Importantly on T-system, we announced that we've put in the new CEO. We wanted somebody who's going to be with us for the next three to five years, however long this journey takes us to go. Bob settling into the company here in August and we typically work in tandem with our CEO and the management team to pursue it. Yes, they're going to continue to organically grow, but as we said, we believe this is a strong platform that we could look some add-on M&A to really accelerate the business, which was our thesis when we bought it. But we need Bob to get in the saddle and evaluate the company and with his leadership, help him to accomplish those objectives. But we still think the company's position for organic growth, but again, we see a lot of attractive add-on opportunities and we'll work with Bob to try to execute on those.

Great. Thanks, guys.

[Operator Instructions] Our next question comes from the line of Jason Deleeuw from Piper Jaffray. Please proceed with your question.

Thank you. Good morning and congrats on the D&B deal. I just want to make sure I kind of understand all the funding sources. So first of all, how much cash on hand does Cannae have right now after LifeWorks and how much do you think is needed just to keep on the balance sheet just for Cannae, the cash that couldn't be used for to fund D&B?

If we think of the perspective that this transaction probably closes in February or March of next year by the time we're through with the [indiscernible], filing a proxy, getting approved by the SEC, doing our shareholder meeting and finally closing. We anticipate other cash resources coming forth during this next six or seven month period. We have always maintained enough cash to keep a decent amount of liquidity. What we really intend to do is we intend to settle down our $900 million commitment to somewhere between $300 million and $500 million. So the funding required is not quite as steep of hill as you might otherwise think and we have several hundred million dollars of expressed interest already in terms of buying down our position. So we're really not concerned about the sell down piece. We also earned that 3% fee on that portion to be sell down. That's another source -- another source of cash. We also anticipate having some resolution to the restaurant situation over the next six months and generating some cash. And then finally being at three or four different alternatives relative to the CDAY stock, whether just to sell it out right, to do a forward sale, to do a convert where we basically sell stock and sell a convert and receive about 130% of the proceeds to the value of the shares. So honestly, we're not very, very concerned about the cash rates to accomplish the $500 million equity commitment to D&B.

Okay. Thanks for all that and it sounds like there are enough sources of funding here where you could pretty easily be able to fund this without raising additional Cannae equity. Is that a fair way to think about it and the Cannae equity rates would maybe just be as part of an option? But there seems like there's enough alternatives here to give you plenty of capital to take down your commitment.

We actually like our cap structure in terms of shares outstanding. It's fairly low, it's from 71 million or 72 million shares outstanding. We really don't want to get through any more shares. It just isn't part of our game plan. We'd rather self-fund these kind of acquisitions and we feel fortunate that this one came our direction. We've been working on about six months, five months and it came together very quickly at the end based upon the desires of D&B to have a transaction they could depend upon to be closed. Fortunately for us, the time we were negotiating the competition if it was, if you call it that, sort of steps aside because of the short time frame that we're involved with. So long as your question, but we don't intend to issue more equity as part of this.

Thank you. And then there's a long history with the management team being good operators and driving a lot of value for shareholders on these acquisitions by just smart and improving the operations. Will Cannae be involved in the D&B operations?

Cannae is actually the present plan is that I would be Executive Chairman. They don't have a CEO. They have a temporary CEO, acting CEO, we're bringing in the CEO and some other individuals. We're going to have a pretty robust management team that will look a lot like the black night program when we got that going.

Got it. And then just the last one. The D&B opportunity, we've done a little bit of color in the press release in the commentary today and maybe there's not much more you can say, but is there anything else you can add in helping investors kind of think about this opportunity with Dun & Bradstreet?

Well, just think, if you look back at the black night [ph] acquisition or LPS acquisition, this is a company that's similarly situated. Their sales efforts are siloed as opposed you being cross-selling. They've had a series of CEOs over the last seven or eight years. So, leadership has been a little bit of an issue with the company. I just believe that we can bring some focused leadership to the organization will generate fairly significant synergies as part of our acquisition. And then another key element is to grow the business and get the business growing at 3% to 5% a year. We've spent enough time in the company that we're confident we can get all of those things accomplished.

Thank you for all that.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Mr. Bill Foley for closing remarks.

Thanks very much for joining us today. We appreciate your time and we look forward to talking to you next quarter.