TransUnion (NYSE: TRU) (the “Company”) today announced financial
results for the quarter ended June 30, 2020.
“TransUnion delivered results in line with our
Upside Case Scenario outlook as a result of improving economic
conditions in most of our markets as well as the outstanding work
of our associates around the world,” said Chris Cartwright,
President and CEO. “During the quarter, we remained focused on
delivering the right solutions and insights for our customers to
help them weather the COVID-19 pandemic.”
“At the same time, we continue to invest for the
long-term in our Global Solutions and Global Operations
organizations as well as our accelerated technology initiative,
Project Rise. All three made meaningful progress during the quarter
and we believe we are well positioned to deliver significant
results in the future.”
“While we are pleased with our recent
performance given the challenging environment, we remain diligent
in managing our costs and our liquidity position to ensure the
short-term and long-term health of the Company.”
Second Quarter 2020 Results
Revenue:
- Total revenue for the quarter was
$634 million, a decrease of 4 percent (3 percent on a constant
currency basis, 3 percent on an organic constant currency basis)
compared with the second quarter of 2019.
- Adjusted Revenue, which removes the
impact of deferred revenue purchase accounting reductions and other
adjustments to revenue for our recently acquired entities, was also
$634 million for the quarter, a decrease of 4 percent (3 percent on
a constant currency basis, 3 percent on an organic constant
currency basis) compared with the second quarter of 2019.
Earnings:
- Net income attributable to
TransUnion was $69 million for the quarter, compared with $101
million for the second quarter of 2019. Diluted earnings per share
was $0.36, compared with $0.53 for the second quarter of 2019.
- Adjusted Net Income was $127
million for the quarter, compared with $132 million for the
second quarter of 2019. Adjusted Diluted Earnings per Share for the
quarter was $0.66, compared with $0.69 for the
second quarter of 2019.
- Adjusted EBITDA was $243 million
for the quarter, a decrease of 8 percent (7 percent on a constant
currency basis, 7 percent on an organic constant currency basis)
compared with the second quarter of 2019. Adjusted EBITDA margin
was 38.2 percent, compared with 39.7 percent for the second quarter
of 2019.
Second Quarter 2020 Segment
Results
U.S. Markets:
U.S. Markets revenue was $405 million,
essentially flat compared with the second quarter of 2019 on both a
reported and an organic basis. U.S. Markets Adjusted Revenue was
also essentially flat compared with the second quarter of 2019 on
both a reported and organic basis.
- Financial Services revenue was $222
million, an increase of 4 percent (4 percent on an organic basis)
compared with the second quarter of 2019.
- Emerging Verticals revenue, which
includes Healthcare, Insurance and all other verticals, was $183
million, a decrease of 5 percent (5 percent on an organic basis)
compared with the second quarter of 2019. Emerging Verticals
Adjusted Revenue decreased 5 percent (6 percent on an organic
basis).
Adjusted EBITDA was $171 million, a decrease of
2 percent (2 percent on an organic basis) compared with the second
quarter of 2019.
International:
International revenue was $120 million, a
decrease of 21 percent (15 percent on a constant currency basis)
compared with the second quarter of 2019. International Adjusted
Revenue was also $120 million, a decrease of 22 percent (16 percent
on a constant currency basis) compared with the second quarter of
2019.
- Canada revenue was $24 million, a
decrease of 5 percent (2 percent on a constant currency basis)
compared with the second quarter of 2019.
- Latin America revenue was $17
million, a decrease of 34 percent (22 percent on a constant
currency basis) compared with the second quarter of 2019.
- United Kingdom revenue was $39
million, a decrease of 16 percent (13 percent on a constant
currency basis). Adjusted Revenue was also $39 million, a decrease
of 19 percent (16 percent on a constant currency basis) compared
with the second quarter of 2019. Excluding the impact of the
revenue from the divestment of assets held for sale, Adjusted
Revenue would have decreased 16 percent (13 percent on a constant
currency basis) compared with the second quarter of 2019.
- Africa revenue was $9 million, a
decrease of 36 percent (a decrease of 21 percent on a constant
currency basis) compared with the second quarter of 2019.
- India revenue was $18 million, a
decrease of 29 percent (23 percent on a constant currency basis)
compared with the second quarter of 2019.
- Asia Pacific revenue was $13
million, a decrease of 10 percent (12 percent on a constant
currency basis) compared with the second quarter of 2019.
Adjusted EBITDA was $37 million, a decrease of
37 percent (32 percent on a constant currency basis) compared with
the second quarter of 2019.
Consumer Interactive:
Consumer Interactive revenue was $128 million,
an increase of 4 percent compared with the second quarter of
2019.
Adjusted EBITDA was $62 million, an increase of
4 percent compared with the second quarter of 2019.
Liquidity and Capital Resources
Cash and cash equivalents were $432 million at
June 30, 2020 and $274 million at December 31, 2019. In
addition, we have $300 million of undrawn capacity on our Senior
Secured Revolving Credit Facility. For the six months ended June
30, 2020, cash provided by continuing operations was $379 million
compared with $308 million in 2019. The increase in cash was
due to a decrease in working capital and interest expense,
partially offset by a decrease in operating performance in the
second quarter as a result of COVID-19. Cash used in investing
activities was $117 million compared with $108 million in 2019. The
increase in cash used in investing activities was due primarily to
an increase in net purchase of other investments. Capital
expenditures were $88 million in both years. Cash used in financing
activities was $87 million compared with $187 million in 2019. The
decrease in cash used in financing activities was due primarily to
debt prepayments made in 2019.
Business Continuity COVID-19
Update
Our primary focus continues to be the health and
safety of our associates, our customers, and the wider communities
in which we operate. As we continue to successfully work from home
across the globe, we see no reason to rush our associates back into
the office. We will continue to closely monitor the situation in
all our markets.
In the meantime, we have recently begun offering
associates additional office equipment and accessories to enhance
their work from home experience to ensure we are all able to
continue serving our customers and consumers as effectively as
possible.
We have and will continue to be disciplined in
managing our cost structure and investment priorities as we adapt
to the changing macro-economic landscape and the impact it is
having on our business.
Full Year 2020 Guidance and Third
Quarter 2020 Scenario-Based Outlook
The global spread and unprecedented impact
of COVID-19 continues to be complex and rapidly-evolving.
Given the ongoing uncertainty across all our geographic and
vertical markets, we are continuing to suspend full year
guidance. We will continue to assess this decision, and intend
to reinstate full year guidance at the appropriate time once we
have sufficient visibility.
We are similarly unable to provide third quarter
2020 guidance. Instead, we believe that providing a scenario-based
outlook which contemplates a base case, an upside case and a
downside case is more appropriate at this time. Under this
scenario-based approach, our base case assumes the continuation of
current market trends through September 2020, our upside case
assumes a meaningful improvement in current trends and our downside
case assumes a meaningful deterioration in current trends. For more
details on each scenario, including the expected financial outcome
and balance sheet implications, please see our presentation
materials which are available on the TransUnion Investor Relations
website at www.transunion.com/tru.
The Company’s scenario-based outlook for the
third quarter is based on a number of assumptions that are subject
to change and many of which are outside of the control of the
Company. If actual results vary from these assumptions, the
Company’s expectations may change. There can be no assurance that
the Company will achieve these results expressed by the base case,
upside case or downside case.
Earnings Webcast Details
In conjunction with this release, TransUnion
will host a conference call and webcast today at 8:00 a.m. Central
Time to discuss the business results for the quarter and certain
forward-looking information. This session may be accessed at
www.transunion.com/tru. A replay of the call will also be available
at this website following the conclusion of the call.
About TransUnion
TransUnion is a global information and insights
company that makes trust possible in the modern economy. We do this
by providing a comprehensive picture of each person so they can be
reliably and safely represented in the marketplace. As a result,
businesses and consumers can transact with confidence and achieve
great things. We call this Information for Good.
A leading presence in more than 30 countries
across five continents, TransUnion provides solutions that help
create economic opportunity, great experiences and personal
empowerment for hundreds of millions of people.
http://www.transunion.com/business
Availability of Information on TransUnion’s
Website
Investors and others should note that TransUnion
routinely announces material information to investors and the
marketplace using SEC filings, press releases, public conference
calls, webcasts and the TransUnion Investor Relations website.
While not all of the information that the Company posts to the
TransUnion Investor Relations website is of a material nature, some
information could be deemed to be material. Accordingly, the
Company encourages investors, the media and others interested in
TransUnion to review the information that it shares on
www.transunion.com/tru.
Non-GAAP Financial Measures
This earnings release presents constant currency
growth rates assuming foreign currency exchange rates are
consistent between years. This allows financial results to be
evaluated without the impact of fluctuations in foreign currency
exchange rates. This earnings release also presents organic
constant currency growth rates, which assumes consistent foreign
currency exchange rates between years and also eliminates the
impact of our recent acquisitions. This allows financial results to
be evaluated without the impact of fluctuations in foreign currency
exchange rates and the impacts of recent acquisitions.
This earnings release also presents Adjusted
Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Effective Tax Rate, Adjusted Net Income (Loss) and Adjusted Diluted
Earnings per Share for all periods presented. These are important
financial measures for the Company but are not financial measures
as defined by GAAP. We present Adjusted Revenue as a supplemental
measure of revenue because we believe it provides a basis to
compare revenue between periods. We present Adjusted EBITDA and
Adjusted Net Income as supplemental measures of our operating
performance because these measures eliminate the impact of certain
items that we do not consider indicative of our cash operations and
ongoing operating performance. Adjusted EBITDA is also a measure
frequently used by securities analysts, investors and other
interested parties in their evaluation of the operating performance
of companies similar to ours. Our board of directors and executive
management team use Adjusted Revenue and Adjusted EBITDA as
compensation measures. Under the credit agreement governing our
Senior Secured Credit Facility, our ability to engage in activities
such as incurring additional indebtedness, making investments and
paying dividends is tied to a ratio based on Adjusted EBITDA. These
financial measures should be reviewed in conjunction with the
relevant GAAP financial measures and are not presented as
alternative measures of GAAP. Other companies in our industry may
define or calculate these measures differently than we do, limiting
their usefulness as comparative measures. Because of these
limitations, these non-GAAP financial measures should not be
considered in isolation or as substitutes for performance measures
calculated in accordance with GAAP, including operating income,
operating margin, effective tax rate, net income (loss)
attributable to the Company, earnings per share or cash provided by
operating activities. Reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP financial measures
are presented in the attached Schedules.
We define Adjusted Revenue as GAAP revenue
adjusted for certain acquisition-related deferred revenue and
non-core contract-related revenue as further discussed in the
footnotes of the attached Schedules 1, 2, and 3. Beginning in the
third quarter of 2019, we no longer have these adjustments to
revenue. We define Adjusted EBITDA as net income (loss)
attributable to TransUnion plus (less) loss (income) from
discontinued operations, plus net interest expense, plus (less)
provision (benefit) for income taxes, plus depreciation and
amortization, plus (less) the revenue adjustments included in
Adjusted Revenue, plus stock-based compensation, plus mergers,
acquisitions, divestitures and business optimization-related
expenses including Callcredit integration-related expenses, plus
certain accelerated technology investment expenses to migrate to
the cloud, plus (less) certain other expenses (income). We define
Adjusted Net Income as net income (loss) attributable to TransUnion
plus (less) loss (gain) from discontinued operations, plus (less)
the revenue adjustments included in Adjusted Revenue, plus
stock-based compensation, plus mergers, acquisitions, divestitures
and business optimization-related expenses including Callcredit
integration-related expenses, plus certain accelerated technology
investment expenses, plus (less) certain other expenses (income),
plus amortization of certain intangible assets, plus or minus the
related changes in provision for income taxes. We define Adjusted
Diluted Earnings per Share as Adjusted Net Income divided by the
weighted-average diluted shares outstanding. The above definitions
apply to our calculations for the periods shown on Schedules 1
through 5.
Forward-Looking Statements
This earnings release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on the current
beliefs and expectations of TransUnion’s management and are subject
to significant risks and uncertainties. Actual results may differ
materially from those described in the forward-looking statements.
Any statements made in this earnings release that are not
statements of historical fact, including statements about our
beliefs and expectations, are forward-looking statements.
Forward-looking statements include information concerning possible
or assumed future results of operations, including our
scenario-based outlook and descriptions of our business plans and
strategies. These statements often include words such as
“anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,”
“intend,” “estimate,” “target,” “project,” “should,” “could,”
“would,” “may,” “will,” “forecast,” “outlook,” “potential,”
“continues,” “seeks,” “predicts,” or the negative of these words
and other similar expressions. Factors that could cause actual
results to differ materially from those described in the
forward-looking statements include; the effects of the COVID-19
pandemic; the timing of the recovery from the COVID-19 pandemic;
macroeconomic and industry trends and adverse developments in the
debt, consumer credit and financial services markets; our ability
to provide competitive services and prices; our ability to retain
or renew existing agreements with large or long-term customers; our
ability to maintain the security and integrity of our data; our
ability to deliver services timely without interruption; our
ability to maintain our access to data sources; government
regulation and changes in the regulatory environment; litigation or
regulatory proceedings; regulatory oversight of “critical
activities”; our ability to effectively manage our costs; economic
and political stability in the United States and international
markets where we operate; our ability to effectively develop and
maintain strategic alliances and joint ventures; our ability to
timely develop new services and the market’s willingness to adopt
our new services; our ability to manage and expand our operations
and keep up with rapidly changing technologies; our ability to make
acquisitions, successfully integrate the operations of acquired
businesses and realize the intended benefits of such acquisitions;
our ability to protect and enforce our intellectual property, trade
secrets and other forms of unpatented intellectual property; our
ability to defend our intellectual property from infringement
claims by third parties; the ability of our outside service
providers and key vendors to fulfill their obligations to us;
further consolidation in our end-customer markets; the increased
availability of free or inexpensive consumer information; losses
against which we do not insure; our ability to make timely payments
of principal and interest on our indebtedness; our ability to
satisfy covenants in the agreements governing our indebtedness; our
ability to maintain our liquidity; share repurchase plans; our
reliance on key management personnel; and other one-time events and
other factors that can be found in our Annual Report on Form 10-K
for the year ended December 31, 2019, and any subsequent Quarterly
Report on Form 10-Q or Current Report on Form 8-K, which are filed
with the Securities and Exchange Commission and are available on
TransUnion’s website (www.transunion.com/tru) and on the Securities
and Exchange Commission’s website (www.sec.gov). Many of these
factors are beyond our control. The forward-looking statements
contained in this earnings release speak only as of the date of
this earnings release. We undertake no obligation to publicly
release the result of any revisions to these forward-looking
statements to reflect the impact of events or circumstances that
may arise after the date of this earnings release.
In addition to factors previously disclosed in
TransUnion’s reports filed with the Securities and Exchange
Commission and those identified elsewhere in this press release,
the following factors, among others, could cause actual results to
differ materially from forward-looking statements or historical
performance: failure to realize the benefits expected from the
recent business acquisitions; the effects of pending and future
legislation; risks related to disruption of management time from
ongoing business operations due to the recent business
acquisitions; macroeconomic factors beyond TransUnion’s control;
risks related to TransUnion’s indebtedness and other consequences
associated with mergers, acquisitions and divestitures, and
legislative and regulatory actions and reforms.
For More
InformationE-mail: Investor.Relations@transunion.comTelephone:
312.985.2860
|
|
|
|
|
TRANSUNION AND SUBSIDIARIESConsolidated
Balance Sheets (Unaudited)(in millions, except per share
data) |
|
|
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
432.2 |
|
|
$ |
274.1 |
|
Trade accounts receivable, net of allowance of $26.0 and $19.0 |
|
433.1 |
|
|
443.9 |
|
Other current assets |
|
199.4 |
|
|
170.2 |
|
Total current assets |
|
1,064.7 |
|
|
888.2 |
|
Property, plant and equipment,
net of accumulated depreciation and amortization of $497.6 and
$454.4 |
|
203.3 |
|
|
219.0 |
|
Goodwill |
|
3,280.7 |
|
|
3,377.8 |
|
Other intangibles, net of
accumulated amortization of $1,589.9 and $1,482.1 |
|
2,247.2 |
|
|
2,391.9 |
|
Other assets |
|
229.2 |
|
|
236.3 |
|
Total
assets |
|
$ |
7,025.1 |
|
|
$ |
7,113.2 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Trade accounts payable |
|
$ |
198.0 |
|
|
$ |
176.2 |
|
Short-term debt and current portion of long-term debt |
|
55.7 |
|
|
58.7 |
|
Other current liabilities |
|
328.5 |
|
|
336.5 |
|
Total current liabilities |
|
582.2 |
|
|
571.4 |
|
Long-term debt |
|
3,573.4 |
|
|
3,598.3 |
|
Deferred taxes |
|
401.8 |
|
|
439.1 |
|
Other liabilities |
|
231.1 |
|
|
165.0 |
|
Total
liabilities |
|
4,788.5 |
|
|
4,773.8 |
|
Stockholders’ equity: |
|
|
|
|
Common stock, $0.01 par value; 1.0 billion shares authorized at
June 30, 2020 and December 31, 2019, 195.3 million and 193.5
million shares issued at June 30, 2020 and December 31, 2019,
respectively, and 190.1 million shares and 188.7 million shares
outstanding as of June 30, 2020 and December 31, 2019,
respectively |
|
2.0 |
|
|
1.9 |
|
Additional paid-in capital |
|
2,056.4 |
|
|
2,022.3 |
|
Treasury stock at cost; 5.2 million and 4.8 million shares at
June 30, 2020 and December 31, 2019, respectively |
|
(212.2 |
) |
|
(179.2 |
) |
Retained earnings |
|
761.7 |
|
|
652.0 |
|
Accumulated other comprehensive loss |
|
(468.6 |
) |
|
(251.6 |
) |
Total TransUnion stockholders’
equity |
|
2,139.3 |
|
|
2,245.4 |
|
Noncontrolling interests |
|
97.3 |
|
|
94.0 |
|
Total stockholders’
equity |
|
2,236.6 |
|
|
2,339.4 |
|
Total liabilities and
stockholders’ equity |
|
$ |
7,025.1 |
|
|
$ |
7,113.2 |
|
|
TRANSUNION AND SUBSIDIARIESConsolidated
Statements of Income (Unaudited)(in millions, except per
share data) |
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
|
$ |
634.4 |
|
|
$ |
661.9 |
|
|
$ |
1,322.0 |
|
|
$ |
1,281.2 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services (exclusive of
depreciation and amortization below) |
|
218.6 |
|
|
216.2 |
|
|
443.7 |
|
|
424.3 |
|
Selling, general and
administrative |
|
201.1 |
|
|
196.7 |
|
|
436.4 |
|
|
392.4 |
|
Depreciation and
amortization |
|
90.8 |
|
|
89.2 |
|
|
181.2 |
|
|
182.7 |
|
Total operating
expenses |
|
510.5 |
|
|
502.2 |
|
|
1,061.3 |
|
|
999.4 |
|
Operating
income |
|
123.9 |
|
|
159.7 |
|
|
260.7 |
|
|
281.8 |
|
Non-operating income
and (expense) |
|
|
|
|
|
|
|
|
Interest expense |
|
(33.5 |
) |
|
(45.2 |
) |
|
(71.1 |
) |
|
(90.2 |
) |
Interest income |
|
1.1 |
|
|
1.8 |
|
|
3.0 |
|
|
3.3 |
|
Earnings from equity method investments |
|
2.1 |
|
|
3.3 |
|
|
4.6 |
|
|
7.1 |
|
Other income and (expense), net |
|
(0.7 |
) |
|
26.7 |
|
|
(7.7 |
) |
|
19.9 |
|
Total non-operating
income and (expense) |
|
(30.9 |
) |
|
(13.4 |
) |
|
(71.2 |
) |
|
(59.9 |
) |
Income from continuing
operations before income taxes |
|
93.0 |
|
|
146.3 |
|
|
189.6 |
|
|
221.8 |
|
Provision for income
taxes |
|
(23.0 |
) |
|
(39.4 |
) |
|
(45.2 |
) |
|
(39.9 |
) |
Income from continuing
operations |
|
70.0 |
|
|
107.0 |
|
|
144.3 |
|
|
181.9 |
|
Discontinued
operations, net of tax |
|
— |
|
|
(3.0 |
) |
|
— |
|
|
(4.6 |
) |
Net
income |
|
70.0 |
|
|
104.0 |
|
|
144.3 |
|
|
177.3 |
|
Less: net income
attributable to the noncontrolling interests |
|
(1.5 |
) |
|
(2.5 |
) |
|
(5.6 |
) |
|
(4.9 |
) |
Net income
attributable to TransUnion |
|
$ |
68.5 |
|
|
$ |
101.5 |
|
|
$ |
138.7 |
|
|
$ |
172.4 |
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations |
|
$ |
70.0 |
|
|
$ |
107.0 |
|
|
$ |
144.3 |
|
|
$ |
181.9 |
|
Less: net income from
continuing operations attributable to noncontrolling
interests |
|
(1.5 |
) |
|
(2.5 |
) |
|
(5.6 |
) |
|
(4.9 |
) |
Income from continuing
operations attributable to TransUnion |
|
68.5 |
|
|
104.5 |
|
|
138.7 |
|
|
177.0 |
|
Discontinued
operations, net of tax |
|
— |
|
|
(3.0 |
) |
|
— |
|
|
(4.6 |
) |
Net income
attributable to TransUnion |
|
$ |
68.5 |
|
|
$ |
101.5 |
|
|
$ |
138.7 |
|
|
$ |
172.4 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share from: |
|
|
|
|
|
|
|
|
Income from continuing operations attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.56 |
|
|
$ |
0.73 |
|
|
$ |
0.95 |
|
Discontinued operations, net of tax |
|
— |
|
|
(0.02 |
) |
|
— |
|
|
(0.02 |
) |
Net Income attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.54 |
|
|
$ |
0.73 |
|
|
$ |
0.92 |
|
Diluted earnings per
common share from: |
|
|
|
|
|
|
|
|
Income from continuing operations attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.55 |
|
|
$ |
0.72 |
|
|
$ |
0.93 |
|
Discontinued operations, net of tax |
|
— |
|
|
(0.02 |
) |
|
— |
|
|
(0.02 |
) |
Net Income attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.53 |
|
|
$ |
0.72 |
|
|
$ |
0.90 |
|
Weighted-average
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
189.9 |
|
|
187.5 |
|
|
189.6 |
|
|
187.1 |
|
Diluted |
|
192.0 |
|
|
191.3 |
|
|
192.0 |
|
|
191.2 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
|
|
|
|
TRANSUNION AND SUBSIDIARIESConsolidated
Statements of Cash Flows (Unaudited)(in millions) |
|
|
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
|
|
|
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
144.3 |
|
|
$ |
177.3 |
|
Add: loss from discontinued operations, net of tax |
— |
|
|
4.6 |
|
Income from continuing operations |
144.3 |
|
|
181.9 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
181.2 |
|
|
182.7 |
|
Net loss/(gain) on investments in affiliated companies and
assets-held-for sale |
0.5 |
|
|
(22.6 |
) |
Net (earnings)/dividends, from equity method investments |
1.8 |
|
|
1.4 |
|
Deferred taxes |
(11.2 |
) |
|
0.1 |
|
Amortization of discount and deferred financing fees |
1.9 |
|
|
3.2 |
|
Stock-based compensation |
21.5 |
|
|
16.6 |
|
Provision for losses on trade accounts receivable |
10.3 |
|
|
5.6 |
|
Other |
3.8 |
|
|
1.6 |
|
Changes in assets and liabilities: |
|
|
|
Trade accounts receivable |
(12.5 |
) |
|
(32.6 |
) |
Other current and long-term assets |
(7.5 |
) |
|
(34.8 |
) |
Trade accounts payable |
28.8 |
|
|
6.1 |
|
Other current and long-term liabilities |
16.5 |
|
|
(0.9 |
) |
Cash provided by
operating activities of continuing operations |
379.4 |
|
|
308.3 |
|
Cash used in operating activities
of discontinued operations |
— |
|
|
(7.3 |
) |
Cash provided by
operating activities |
379.4 |
|
|
301.0 |
|
Cash flows from investing
activities: |
|
|
|
Capital expenditures |
(87.6 |
) |
|
(88.0 |
) |
Proceeds from sale/maturity of other investments |
24.7 |
|
|
10.5 |
|
Purchases of other investments |
(50.7 |
) |
|
(19.8 |
) |
Acquisitions and purchases of noncontrolling interests, net of cash
acquired |
(5.2 |
) |
|
(45.9 |
) |
Proceeds from disposals of assets held for sale |
1.6 |
|
|
40.3 |
|
Other |
0.7 |
|
|
(4.9 |
) |
Cash used in investing
activities of continuing operations |
(116.5 |
) |
|
(107.8 |
) |
Cash used in investing activities
of discontinued operations |
— |
|
|
— |
|
Cash used in investing
activities |
(116.5 |
) |
|
(107.8 |
) |
Cash flows from financing
activities: |
|
|
|
Repayments of debt |
(31.2 |
) |
|
(133.9 |
) |
Proceeds from issuance of common stock and exercise of stock
options |
12.9 |
|
|
12.8 |
|
Dividends to shareholders |
(29.0 |
) |
|
(28.5 |
) |
Distributions to noncontrolling interests |
— |
|
|
(0.8 |
) |
Employee taxes paid on restricted stock units recorded as treasury
stock |
(33.1 |
) |
|
(36.9 |
) |
Payment of contingent consideration |
(6.4 |
) |
|
— |
|
Cash used in financing
activities |
(86.8 |
) |
|
(187.3 |
) |
Effect of exchange rate changes
on cash and cash equivalents |
(18.0 |
) |
|
1.4 |
|
Net change in cash and cash
equivalents |
158.1 |
|
|
7.3 |
|
Cash and cash equivalents,
beginning of period |
274.1 |
|
|
187.4 |
|
Cash and cash
equivalents, end of period |
$ |
432.2 |
|
|
$ |
194.7 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
|
|
SCHEDULE 1TRANSUNION AND
SUBSIDIARIESRevenue, Adjusted Revenue, and
Adjusted EBITDA growth rates as Reported, CC, Inorganic, Organic
and Organic CC (Unaudited) |
|
|
|
For the Three Months Ended June 30, 2020 compared with the Three
Months Ended June 30, 2019 |
|
|
Reported |
|
CC Growth(1) |
|
Inorganic(2) |
|
OrganicGrowth(3) |
|
Organic CCGrowth(4) |
Revenue: |
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
(4.1 |
)% |
|
(2.8 |
)% |
|
0.1 |
% |
|
(4.3 |
)% |
|
(2.9 |
)% |
U.S. Markets |
|
(0.1 |
)% |
|
(0.1 |
)% |
|
0.2 |
% |
|
(0.3 |
)% |
|
(0.3 |
)% |
Financial Services |
|
4.3 |
% |
|
4.3 |
% |
|
— |
% |
|
4.3 |
% |
|
4.3 |
% |
Emerging Verticals |
|
(5.0 |
)% |
|
(5.0 |
)% |
|
0.5 |
% |
|
(5.4 |
)% |
|
(5.4 |
)% |
International |
|
(20.8 |
)% |
|
(14.7 |
)% |
|
— |
% |
|
(20.8 |
)% |
|
(14.7 |
)% |
Canada |
|
(4.9 |
)% |
|
(1.6 |
)% |
|
— |
% |
|
(4.9 |
)% |
|
(1.6 |
)% |
Latin America |
|
(34.4 |
)% |
|
(21.5 |
)% |
|
— |
% |
|
(34.4 |
)% |
|
(21.5 |
)% |
United Kingdom |
|
(15.9 |
)% |
|
(12.9 |
)% |
|
— |
% |
|
(15.9 |
)% |
|
(12.9 |
)% |
Africa |
|
(35.8 |
)% |
|
(20.9 |
)% |
|
— |
% |
|
(35.8 |
)% |
|
(20.9 |
)% |
India |
|
(29.1 |
)% |
|
(22.5 |
)% |
|
— |
% |
|
(29.1 |
)% |
|
(22.5 |
)% |
Asia Pacific |
|
(10.5 |
)% |
|
(11.7 |
)% |
|
— |
% |
|
(10.5 |
)% |
|
(11.7 |
)% |
Consumer Interactive |
|
3.9 |
% |
|
3.9 |
% |
|
— |
% |
|
3.9 |
% |
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
(4.4 |
)% |
|
(3.0 |
)% |
|
0.1 |
% |
|
(4.5 |
)% |
|
(3.1 |
)% |
U.S. Markets |
|
(0.1 |
)% |
|
(0.1 |
)% |
|
0.2 |
% |
|
(0.3 |
)% |
|
(0.3 |
)% |
Financial Services |
|
4.3 |
% |
|
4.3 |
% |
|
— |
% |
|
4.3 |
% |
|
4.3 |
% |
Emerging Verticals |
|
(5.1 |
)% |
|
(5.1 |
)% |
|
0.5 |
% |
|
(5.5 |
)% |
|
(5.5 |
)% |
International |
|
(21.6 |
)% |
|
(15.6 |
)% |
|
— |
% |
|
(21.6 |
)% |
|
(15.6 |
)% |
Canada |
|
(4.9 |
)% |
|
(1.6 |
)% |
|
— |
% |
|
(4.9 |
)% |
|
(1.6 |
)% |
Latin America |
|
(34.4 |
)% |
|
(21.5 |
)% |
|
— |
% |
|
(34.4 |
)% |
|
(21.5 |
)% |
United Kingdom |
|
(18.7 |
)% |
|
(15.8 |
)% |
|
— |
% |
|
(18.7 |
)% |
|
(15.8 |
)% |
Africa |
|
(35.8 |
)% |
|
(20.9 |
)% |
|
— |
% |
|
(35.8 |
)% |
|
(20.9 |
)% |
India |
|
(29.1 |
)% |
|
(22.5 |
)% |
|
— |
% |
|
(29.1 |
)% |
|
(22.5 |
)% |
Asia Pacific |
|
(10.5 |
)% |
|
(11.7 |
)% |
|
— |
% |
|
(10.5 |
)% |
|
(11.7 |
)% |
Consumer Interactive |
|
3.9 |
% |
|
3.9 |
% |
|
— |
% |
|
3.9 |
% |
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
(8.0 |
)% |
|
(6.8 |
)% |
|
— |
% |
|
(8.0 |
)% |
|
(6.8 |
)% |
U.S. Markets |
|
(2.4 |
)% |
|
(2.4 |
)% |
|
0.1 |
% |
|
(2.5 |
)% |
|
(2.5 |
)% |
International |
|
(37.1 |
)% |
|
(31.9 |
)% |
|
— |
% |
|
(37.1 |
)% |
|
(31.9 |
)% |
Consumer Interactive |
|
4.4 |
% |
|
4.4 |
% |
|
— |
% |
|
4.4 |
% |
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 1TRANSUNION AND
SUBSIDIARIESRevenue, Adjusted Revenue, and
Adjusted EBITDA growth rates as Reported, CC, Inorganic, Organic
and Organic CC (Unaudited) |
|
|
|
|
|
|
For the Six Months Ended June 30, 2020 compared with the Six Months
Ended June 30, 2019 |
|
|
|
|
|
Reported |
|
CC Growth(1) |
|
Inorganic(2) |
|
OrganicGrowth(3) |
|
Organic CCGrowth(4) |
Revenue: |
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
3.2 |
% |
|
4.3 |
% |
|
0.2 |
% |
|
3.0 |
% |
|
4.1 |
% |
U.S. Markets |
|
6.8 |
% |
|
6.8 |
% |
|
0.4 |
% |
|
6.4 |
% |
|
6.4 |
% |
Financial Services |
|
12.6 |
% |
|
12.6 |
% |
|
— |
% |
|
12.6 |
% |
|
12.6 |
% |
Emerging Verticals |
|
0.6 |
% |
|
0.6 |
% |
|
0.8 |
% |
|
(0.2 |
)% |
|
(0.2 |
)% |
International |
|
(6.6 |
)% |
|
(1.8 |
)% |
|
— |
% |
|
(6.6 |
)% |
|
(1.8 |
)% |
Canada |
|
4.7 |
% |
|
6.8 |
% |
|
— |
% |
|
4.7 |
% |
|
6.8 |
% |
Latin America |
|
(19.4 |
)% |
|
(8.0 |
)% |
|
— |
% |
|
(19.4 |
)% |
|
(8.0 |
)% |
United Kingdom |
|
(0.9 |
)% |
|
1.4 |
% |
|
— |
% |
|
(0.9 |
)% |
|
1.4 |
% |
Africa |
|
(19.7 |
)% |
|
(8.1 |
)% |
|
— |
% |
|
(19.7 |
)% |
|
(8.1 |
)% |
India |
|
(7.9 |
)% |
|
(3.2 |
)% |
|
— |
% |
|
(7.9 |
)% |
|
(3.2 |
)% |
Asia Pacific |
|
(4.8 |
)% |
|
(6.0 |
)% |
|
— |
% |
|
(4.8 |
)% |
|
(6.0 |
)% |
Consumer
Interactive |
|
3.3 |
% |
|
3.3 |
% |
|
— |
% |
|
3.3 |
% |
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
2.7 |
% |
|
3.8 |
% |
|
0.2 |
% |
|
2.5 |
% |
|
3.6 |
% |
U.S. Markets |
|
6.8 |
% |
|
6.8 |
% |
|
0.4 |
% |
|
6.4 |
% |
|
6.4 |
% |
Financial Services |
|
12.6 |
% |
|
12.6 |
% |
|
— |
% |
|
12.6 |
% |
|
12.6 |
% |
Emerging Verticals |
|
0.5 |
% |
|
0.5 |
% |
|
0.8 |
% |
|
(0.3 |
)% |
|
(0.3 |
)% |
International |
|
(8.4 |
)% |
|
(3.6 |
)% |
|
— |
% |
|
(8.4 |
)% |
|
(3.6 |
)% |
Canada |
|
4.7 |
% |
|
6.8 |
% |
|
— |
% |
|
4.7 |
% |
|
6.8 |
% |
Latin America |
|
(19.4 |
)% |
|
(8.0 |
)% |
|
— |
% |
|
(19.4 |
)% |
|
(8.0 |
)% |
United Kingdom |
|
(6.8 |
)% |
|
(4.6 |
)% |
|
— |
% |
|
(6.8 |
)% |
|
(4.6 |
)% |
Africa |
|
(19.7 |
)% |
|
(8.1 |
)% |
|
— |
% |
|
(19.7 |
)% |
|
(8.1 |
)% |
India |
|
(7.9 |
)% |
|
(3.2 |
)% |
|
— |
% |
|
(7.9 |
)% |
|
(3.2 |
)% |
Asia Pacific |
|
(4.8 |
)% |
|
(6.0 |
)% |
|
— |
% |
|
(4.8 |
)% |
|
(6.0 |
)% |
Consumer
Interactive |
|
3.3 |
% |
|
3.3 |
% |
|
— |
% |
|
3.3 |
% |
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
0.7 |
% |
|
1.7 |
% |
|
(0.1 |
)% |
|
0.8 |
% |
|
1.8 |
% |
U.S. Markets |
|
8.0 |
% |
|
8.0 |
% |
|
(0.2 |
)% |
|
8.1 |
% |
|
8.1 |
% |
International |
|
(21.5 |
)% |
|
(17.5 |
)% |
|
— |
% |
|
(21.5 |
)% |
|
(17.5 |
)% |
Consumer
Interactive |
|
(0.2 |
)% |
|
(0.2 |
)% |
|
— |
% |
|
(0.2 |
)% |
|
(0.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm: not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Constant Currency (“CC”) growth rates assume foreign currency
exchange rates are consistent between years. This allows financial
results to be evaluated without the impact of fluctuations in
foreign currency exchange rates. |
|
(2) |
|
Inorganic growth rate represents growth attributable to the first
twelve months of activity for recent business acquisitions. |
|
(3) |
|
Organic growth rate is the reported growth rate less the inorganic
growth rate. |
|
(4) |
|
Organic CC growth rate is the CC growth rate less inorganic growth
rate. |
|
SCHEDULE 2TRANSUNION AND
SUBSIDIARIESConsolidated and Segment Revenue,
Adjusted Revenue, Adjusted EBITDA, and Adjusted EBITDA Margins
(Unaudited)(dollars in millions) |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue and Adjusted
Revenue: |
|
|
|
|
|
|
|
U.S. Markets gross
revenue |
|
|
|
|
|
|
|
Financial Services |
$ |
222.2 |
|
|
$ |
213.0 |
|
|
$ |
452.6 |
|
|
$ |
402.1 |
|
Emerging Verticals |
183.2 |
|
|
192.9 |
|
|
374.7 |
|
|
372.6 |
|
Total U.S. Markets gross
revenue |
405.5 |
|
|
405.9 |
|
|
827.3 |
|
|
774.7 |
|
Acquisition revenue - related adjustments(1) |
— |
|
|
0.2 |
|
|
— |
|
|
0.4 |
|
U.S. Markets gross Adjusted
Revenue |
$ |
405.5 |
|
|
$ |
406.0 |
|
|
$ |
827.3 |
|
|
$ |
775.0 |
|
|
|
|
|
|
|
|
|
International gross
revenue |
|
|
|
|
|
|
|
Canada |
24.1 |
|
|
25.4 |
|
|
50.6 |
|
|
48.4 |
|
Latin America |
17.2 |
|
|
26.2 |
|
|
41.5 |
|
|
51.5 |
|
UK |
39.2 |
|
|
46.6 |
|
|
88.0 |
|
|
88.8 |
|
Africa |
9.0 |
|
|
14.0 |
|
|
23.3 |
|
|
29.0 |
|
India |
17.6 |
|
|
24.9 |
|
|
48.4 |
|
|
52.6 |
|
Asia Pacific |
12.5 |
|
|
14.0 |
|
|
25.6 |
|
|
26.8 |
|
Total International gross
revenue |
119.7 |
|
|
151.1 |
|
|
277.4 |
|
|
297.1 |
|
Acquisition revenue - related adjustments(1) |
— |
|
|
1.6 |
|
|
— |
|
|
5.6 |
|
International Adjusted
Revenue |
$ |
119.7 |
|
|
$ |
152.7 |
|
|
$ |
277.4 |
|
|
$ |
302.7 |
|
|
|
|
|
|
|
|
|
Consumer Interactive gross
revenue |
$ |
128.4 |
|
|
$ |
123.6 |
|
|
$ |
255.1 |
|
|
$ |
246.9 |
|
|
|
|
|
|
|
|
|
Less: intersegment
eliminations |
|
|
|
|
|
|
|
U.S. Markets |
(17.4 |
) |
|
(17.2 |
) |
|
(34.5 |
) |
|
(34.7 |
) |
International |
(1.2 |
) |
|
(1.3 |
) |
|
(2.5 |
) |
|
(2.5 |
) |
Consumer Interactive |
(0.4 |
) |
|
(0.2 |
) |
|
(0.8 |
) |
|
(0.4 |
) |
Total intersegment
eliminations |
(19.1 |
) |
|
(18.6 |
) |
|
(37.8 |
) |
|
(37.5 |
) |
|
|
|
|
|
|
|
|
Total revenue, as
reported |
$ |
634.4 |
|
|
$ |
661.9 |
|
|
$ |
1,322.0 |
|
|
$ |
1,281.2 |
|
Acquisition revenue-related adjustments(1) |
— |
|
|
1.7 |
|
|
— |
|
|
5.9 |
|
Consolidated Adjusted
Revenue |
$ |
634.4 |
|
|
$ |
663.6 |
|
|
$ |
1,322.0 |
|
|
$ |
1,287.1 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
U.S. Markets |
$ |
171.2 |
|
|
$ |
175.4 |
|
|
$ |
342.7 |
|
|
$ |
317.5 |
|
International |
37.5 |
|
|
59.6 |
|
|
97.7 |
|
|
124.5 |
|
Consumer Interactive |
61.7 |
|
|
59.1 |
|
|
119.1 |
|
|
119.3 |
|
Corporate |
(27.7 |
) |
|
(30.4 |
) |
|
(53.5 |
) |
|
(58.7 |
) |
Consolidated Adjusted
EBITDA |
$ |
242.7 |
|
|
$ |
263.7 |
|
|
$ |
506.0 |
|
|
$ |
502.6 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin: |
|
|
|
|
|
|
|
U.S. Markets |
42.2 |
% |
|
43.2 |
% |
|
41.4 |
% |
|
41.0 |
% |
International |
31.3 |
% |
|
39.0 |
% |
|
35.2 |
% |
|
41.1 |
% |
Consumer Interactive |
48.1 |
% |
|
47.8 |
% |
|
46.7 |
% |
|
48.3 |
% |
Consolidated |
38.2 |
% |
|
39.7 |
% |
|
38.3 |
% |
|
39.1 |
% |
Segment Adjusted EBITDA margins are calculated
using segment gross Adjusted Revenue and segment Adjusted EBITDA.
Consolidated Adjusted EBITDA margin is calculated using
consolidated Adjusted Revenue and consolidated Adjusted EBITDA.
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Reconciliation of net income
attributable to TransUnion to consolidated Adjusted EBITDA: |
|
|
|
|
|
|
|
Net income attributable to TransUnion |
$ |
68.5 |
|
|
$ |
101.5 |
|
|
$ |
138.7 |
|
|
$ |
172.4 |
|
Discontinued operations, net
of tax |
— |
|
|
3.0 |
|
|
— |
|
|
4.6 |
|
Net income from continuing
operations attributable to TransUnion |
68.5 |
|
|
104.5 |
|
|
138.7 |
|
|
177.0 |
|
Net interest expense |
32.3 |
|
|
43.4 |
|
|
68.1 |
|
|
86.9 |
|
Provision for income taxes |
23.0 |
|
|
39.4 |
|
|
45.2 |
|
|
39.9 |
|
Depreciation and amortization |
90.8 |
|
|
89.2 |
|
|
181.2 |
|
|
182.7 |
|
EBITDA |
214.7 |
|
|
276.4 |
|
|
433.2 |
|
|
486.5 |
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Acquisition-related revenue adjustments(1) |
— |
|
|
1.7 |
|
|
— |
|
|
5.9 |
|
Stock-based compensation(2) |
19.4 |
|
|
8.2 |
|
|
21.7 |
|
|
20.9 |
|
Mergers and acquisitions, divestitures and business
optimization(3) |
7.1 |
|
|
(23.9 |
) |
|
11.5 |
|
|
(12.6 |
) |
Accelerated technology investment(4) |
3.3 |
|
|
— |
|
|
5.8 |
|
|
— |
|
Other(5) |
(1.8 |
) |
|
1.3 |
|
|
33.8 |
|
|
1.9 |
|
Total adjustments to
EBITDA |
28.0 |
|
|
(12.7 |
) |
|
72.8 |
|
|
16.2 |
|
Consolidated Adjusted
EBITDA |
$ |
242.7 |
|
|
$ |
263.7 |
|
|
$ |
506.0 |
|
|
$ |
502.6 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the tables above and footnotes below.
|
(1) |
|
This adjustment represents certain non-cash adjustments related to
acquired entities, predominantly adjustments to increase revenue
resulting from purchase accounting reductions to deferred revenue
we record on the opening balance sheets of acquired entities.
Deferred revenue results when a company receives payment in advance
of fulfilling their performance obligations under contracts.
Business combination accounting rules require us to record deferred
revenue of acquired entities at fair value if we are obligated to
perform any future services under these contracts. The fair value
of this deferred revenue is determined based on the direct and
indirect incremental costs of fulfilling our performance
obligations under these contracts, plus a normal profit margin.
Generally, this fair value calculation results in a reduction to
the purchased deferred revenue balance. The above adjustment
includes an estimate for the increase in revenue equal to the
difference between what the acquired entities would have recorded
as revenue and the lower revenue we record as a result of the
reduced deferred revenue balance. This increase is partially offset
by an estimated decrease to revenue for certain acquired non-core
customer contracts that are not classified as discontinued
operations that will expire within approximately one year from the
date of acquisition. We present Adjusted Revenue as a supplemental
measure of our revenue because we believe it provides meaningful
information regarding our revenue and provides a basis to compare
revenue between periods. In addition, our board of directors and
executive management team use Adjusted Revenue as a compensation
measure under our incentive compensation plans. The table above
provides a reconciliation for revenue to Adjusted
Revenue. |
|
(2) |
|
Consisted of stock-based compensation and cash-settled stock-based
compensation. |
|
(3) |
|
For the three months ended June 30, 2020, consisted of the
following adjustments: a $4.8 million loss on the impairment of a
Cost Method investment; $3.6 million of Callcredit integration
costs; $1.2 million of acquisition expenses; and a ($2.5) million
gain on a Cost Method investment resulting from an observable price
change for a similar investment of the same issuer. |
|
|
|
For the six months ended June 30, 2020, consisted of the following
adjustments: $7.5 million of Callcredit integration costs; a $4.8
million loss on the impairment of a Cost Method investment; $3.3
million of acquisition expenses; $0.3 million of adjustments to
contingent consideration expense from previous acquisitions; a
($2.5) million gain on a Cost Method investment resulting from an
observable price change for a similar investment of the same
issuer; a ($1.8) million gain on the disposal of assets of a small
business in our United Kingdom region that are classified as
held-for-sale; and a ($0.1) million reimbursement for transition
services provided to the buyers of certain of our discontinued
operations. |
|
|
|
For the three months ended June 30, 2019, consisted of the
following adjustments: a ($31.2) million gain on a Cost Method
investment resulting from an observable price change for a similar
investment of the same issuer; a ($0.9) million adjustment to
contingent consideration expense from previous acquisitions; a
($0.2) million reimbursement for transition services provided to
the buyers of certain of our discontinued operations; $4.4 million
of Callcredit integration costs; a $3.3 million loss on the
impairment of a Cost Method investment; and $0.8 million of
acquisition expenses. |
|
|
|
For the six months ended June 30, 2019, consisted of the following
adjustments: a ($31.2) million gain on a Cost Method investment
resulting from an observable price change for a similar investment
of the same issuer; ($0.2) million reimbursement for transition
services provided to the buyers of our discontinued operations;
$8.6 million loss on the impairment of certain Cost Method
investments; $8.5 million of Callcredit integration costs; and $1.6
million of acquisition expenses. |
|
(4) |
|
Represents expenses associated with our accelerated technology
investment. |
|
(5) |
|
For the three months ended June 30, 2020, consisted of the
following adjustments: a ($2.0) million gain from currency
remeasurement of our foreign operations; a ($0.3) recovery from the
Fraud Incident, net of additional administration expenses; $0.4
million of loan fees; and $0.1 million other. |
|
|
|
For the six months ended June 30, 2020, consisted of the following
adjustments: $30.5 million of expense incurred in connection with
the Ramirez litigation; a $2.9 million loss from currency
remeasurement of our foreign operations; $0.8 million of loan fees;
$0.2 million of fees related to our new swap agreements; $0.1
million other; ($0.5) million reimbursement of fees associated with
the refinancing of our Senior Secured Credit Facility; and a ($0.2)
recovery from the Fraud Incident, net of additional administration
expense. |
|
|
|
For the three months ended June 30, 2019, consisted of the
following adjustments: $0.8 million of deferred loan fees written
off as a result of the prepayments on our debt; $0.6 million of
loan fees; and $(0.1) million from currency remeasurement. |
|
|
|
For the six months ended June 30, 2019, consisted of the following
adjustments: $1.0 million of loan fees; $0.8 million of deferred
loan fees written off as a result of the prepayments on our debt;
$0.2 million from currency remeasurement. |
|
|
|
|
|
SCHEDULE 3TRANSUNION AND
SUBSIDIARIESAdjusted Net Income and Adjusted
Earnings Per Share (Unaudited)(in millions, except per
share data) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income from continuing operations attributable to
TransUnion |
|
$ |
68.5 |
|
|
$ |
104.5 |
|
|
$ |
138.7 |
|
|
$ |
177.0 |
|
Discontinued operations, net
of tax |
|
— |
|
|
(3.0 |
) |
|
— |
|
|
(4.6 |
) |
Net income attributable to
TransUnion |
|
$ |
68.5 |
|
|
$ |
101.5 |
|
|
$ |
138.7 |
|
|
$ |
172.4 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
189.9 |
|
|
187.5 |
|
|
189.6 |
|
|
187.1 |
|
Diluted |
|
192.0 |
|
|
191.3 |
|
|
192.0 |
|
|
191.2 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share from: |
|
|
|
|
|
|
|
|
Income from continuing operations attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.56 |
|
|
$ |
0.73 |
|
|
$ |
0.95 |
|
Discontinued operations, net of tax |
|
— |
|
|
(0.02 |
) |
|
— |
|
|
(0.02 |
) |
Net Income attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.54 |
|
|
$ |
0.73 |
|
|
$ |
0.92 |
|
Diluted earnings per common
share from: |
|
|
|
|
|
|
|
|
Income from continuing operations attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.55 |
|
|
$ |
0.72 |
|
|
$ |
0.93 |
|
Discontinued operations, net of tax |
|
— |
|
|
(0.02 |
) |
|
— |
|
|
(0.02 |
) |
Net Income attributable to TransUnion |
|
$ |
0.36 |
|
|
$ |
0.53 |
|
|
$ |
0.72 |
|
|
$ |
0.90 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income
attributable to TransUnion to Adjusted Net Income: |
|
|
|
|
|
|
|
|
Net income attributable to
TransUnion |
|
$ |
68.5 |
|
|
$ |
101.5 |
|
|
$ |
138.7 |
|
|
$ |
172.4 |
|
Discontinued operations |
|
— |
|
|
3.0 |
|
|
— |
|
|
4.6 |
|
Net income from continuing
operations attributable to TransUnion |
|
68.5 |
|
|
104.5 |
|
|
138.7 |
|
|
177.0 |
|
Adjustments before income tax
items: |
|
|
|
|
|
|
|
|
Acquisition revenue-related adjustments (1) |
|
— |
|
|
1.7 |
|
|
— |
|
|
5.9 |
|
Stock-based compensation(2) |
|
19.4 |
|
|
8.2 |
|
|
21.7 |
|
|
20.9 |
|
Mergers and acquisitions, divestitures and business
optimization(3) |
|
7.1 |
|
|
(23.9 |
) |
|
11.5 |
|
|
(12.6 |
) |
Accelerated technology investment(4) |
|
3.3 |
|
|
— |
|
|
5.8 |
|
|
— |
|
Other(5) |
|
(2.3 |
) |
|
0.7 |
|
|
33.0 |
|
|
1.0 |
|
Amortization of certain intangible assets(6) |
|
47.9 |
|
|
52.5 |
|
|
96.5 |
|
|
109.2 |
|
Total adjustments before
income tax items |
|
75.4 |
|
|
39.2 |
|
|
168.5 |
|
|
124.4 |
|
Change in provision for income taxes per schedule 4 |
|
(17.0 |
) |
|
(11.8 |
) |
|
(39.6 |
) |
|
(54.6 |
) |
Adjusted Net Income |
|
$ |
126.9 |
|
|
$ |
131.8 |
|
|
$ |
267.6 |
|
|
$ |
246.8 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
189.9 |
|
|
187.5 |
|
|
189.6 |
|
|
187.1 |
|
Diluted(7) |
|
192.0 |
|
|
191.3 |
|
|
192.0 |
|
|
191.2 |
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per
Share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.67 |
|
|
$ |
0.70 |
|
|
$ |
1.41 |
|
|
$ |
1.32 |
|
Diluted(7) |
|
$ |
0.66 |
|
|
$ |
0.69 |
|
|
$ |
1.39 |
|
|
$ |
1.29 |
|
|
|
|
|
|
|
|
|
|
Anti-dilutive weighted
stock-based awards outstanding |
|
0.3 |
|
|
— |
|
|
0.3 |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above and footnotes below.
|
(1) |
|
This adjustment represents certain non-cash adjustments related to
acquired entities, predominantly adjustments to increase revenue
resulting from purchase accounting reductions to deferred revenue
we record on the opening balance sheets of acquired entities.
Deferred revenue results when a company receives payment in advance
of fulfilling their performance obligations under contracts.
Business combination accounting rules require us to record deferred
revenue of acquired entities at fair value if we are obligated to
perform any future services under these contracts. The fair value
of this deferred revenue is determined based on the direct and
indirect incremental costs of fulfilling our performance
obligations under these contracts, plus a normal profit margin.
Generally, this fair value calculation results in a reduction to
the purchased deferred revenue balance. The above adjustment
includes an estimate for the increase in revenue equal to the
difference between what the acquired entities would have recorded
as revenue and the lower revenue we record as a result of the
reduced deferred revenue balance. This increase is partially offset
by an estimated decrease to revenue for certain acquired non-core
customer contracts that are not classified as discontinued
operations that will expire within approximately one year from the
date of acquisition. We present Adjusted Revenue as a supplemental
measure of our revenue because we believe it provides meaningful
information regarding our revenue and provides a basis to compare
revenue between periods. In addition, our board of directors and
executive management team use Adjusted Revenue as a compensation
measure under our incentive compensation plans. The table above
provides a reconciliation for revenue to Adjusted
Revenue. |
|
(2) |
|
Consisted of stock-based compensation and cash-settled stock-based
compensation. |
|
(3) |
|
For the three months ended June 30, 2020, consisted of the
following adjustments: a $4.8 million loss on the impairment of a
Cost Method investment; $3.6 million of Callcredit integration
costs; $1.2 million of acquisition expenses; and a ($2.5) million
gain on a Cost Method investment resulting from an observable price
change for a similar investment of the same issuer. |
|
|
|
For the six months ended June 30, 2020, consisted of the following
adjustments: $7.5 million of Callcredit integration costs; a $4.8
million loss on the impairment of a Cost Method investment; $3.3
million of acquisition expenses; $0.3 million of adjustments to
contingent consideration expense from previous acquisitions; a
($2.5) million gain on a Cost Method investment resulting from an
observable price change for a similar investment of the same
issuer; a ($1.8) million gain on the disposal of assets of a small
business in our United Kingdom region that are classified as
held-for-sale; and a ($0.1) million reimbursement for transition
services provided to the buyers of certain of our discontinued
operations. |
|
|
|
For the three months ended June 30, 2019, consisted of the
following adjustments: a ($31.2) million gain on a Cost Method
investment resulting from an observable price change for a similar
investment of the same issuer; a ($0.9) million adjustment to
contingent consideration expense from previous acquisitions; a
($0.2) million reimbursement for transition services provided to
the buyers of certain of our discontinued operations; $4.4 million
of Callcredit integration costs; a $3.3 million loss on the
impairment of a Cost Method investment; and $0.8 million of
acquisition expenses. |
|
|
|
For the six months ended June 30, 2019, consisted of the following
adjustments: a ($31.2) million gain on a Cost Method investment
resulting from an observable price change for a similar investment
of the same issuer; ($0.2) million reimbursement for transition
services provided to the buyers of our discontinued operations;
$8.6 million loss on the impairment of certain Cost Method
investments; $8.5 million of Callcredit integration costs; and $1.6
million of acquisition expenses. |
|
(4) |
|
Represents expenses associated with our accelerated technology
investment. |
|
(5) |
|
For the three months ended June 30, 2020, consisted of the
following adjustments: a ($2.0) million gain from currency
remeasurement of our foreign operations; and a $(0.3) million
recovery from the Fraud Incident, net of additional administrative
expenses. |
|
|
|
For the six months ended June 30, 2020, consisted of the following
adjustments: $30.5 million of expense incurred in connection with
the Ramirez litigation; a $2.9 million loss from currency
remeasurement of our foreign operations; and ($0.5) million
reimbursement of fees associated with the refinancing of our Senior
Secured Credit Facility. |
|
|
|
For the three months ended June 30, 2019, consisted of the
following adjustments: $0.8 million of deferred loan fees written
off as a result of the prepayments on our debt and a ($0.1) million
gain from currency remeasurement of our foreign operations. |
|
|
|
For the six months ended June 30, 2019, consisted of the following
adjustments: $0.8 million of deferred loan fees written off as a
result of the prepayments on our debt and a $0.2 million loss from
currency remeasurement of our foreign operations. |
|
(6) |
|
Consisted of amortization of intangible assets from our 2012 change
in control and amortization of intangible assets established in
business acquisitions after our 2012 change in control. |
|
(7) |
|
As of June 30, 2020 and June 30, 2019, there were 1.3
million and 1.1 million contingently-issuable performance-based
stock awards outstanding that were excluded from the diluted
earnings per share calculation, respectively, because the
contingencies had not been met. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 4TRANSUNION AND
SUBSIDIARIESEffective Tax Rate and Adjusted
Effective Tax Rate (Unaudited)(dollars in millions) |
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Income
before income taxes |
$ |
93.0 |
|
|
$ |
146.3 |
|
|
$ |
189.6 |
|
|
$ |
221.8 |
|
Total adjustments before income tax items from schedule 3 |
75.4 |
|
|
39.2 |
|
|
168.5 |
|
|
124.4 |
|
Noncontrolling interest portion of Adjusted Net Income
adjustments |
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted income
before income taxes |
$ |
168.3 |
|
|
$ |
185.5 |
|
|
$ |
358.1 |
|
|
$ |
346.3 |
|
|
|
|
|
|
|
|
|
|
|
|
(Provision)
benefit for income taxes |
(23.0 |
) |
|
(39.4 |
) |
|
(45.2 |
) |
|
(39.9 |
) |
Adjustments for
income taxes: |
|
|
|
|
|
|
|
Tax effect of above adjustments(1) |
(16.5 |
) |
|
(5.8 |
) |
|
(35.7 |
) |
|
(25.6 |
) |
Eliminate impact of excess tax benefits for share
compensation(2) |
(4.7 |
) |
|
(6.3 |
) |
|
(21.0 |
) |
|
(27.3 |
) |
Other(3) |
4.3 |
|
|
0.2 |
|
|
17.1 |
|
|
(1.7 |
) |
Total adjustments
for income taxes |
(17.0 |
) |
|
(11.8 |
) |
|
(39.6 |
) |
|
(54.6 |
) |
Adjusted provision
for income taxes |
$ |
(39.9 |
) |
|
$ |
(51.2 |
) |
|
$ |
(84.8 |
) |
|
$ |
(94.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate |
24.7 |
% |
|
26.9 |
% |
|
23.9 |
% |
|
18.0 |
% |
Adjusted Effective
Tax Rate |
23.7 |
% |
|
27.6 |
% |
|
23.7 |
% |
|
27.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of
displaying amounts in millions, rounding differences may exist in
the table above. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Tax rates used to
calculate the tax expense impact are based on the nature of each
item. |
|
(2) |
|
Eliminates the
impact of excess tax benefits for share compensation. |
|
(3) |
|
Eliminates impact of state tax rate changes on deferred taxes,
valuation allowances on foreign net operating losses and valuation
allowances on capital losses and other discrete adjustments. |
|
|
|
|
|
SCHEDULE 5TRANSUNION AND
SUBSIDIARIESSegment Depreciation and Amortization
(Unaudited)(in millions) |
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
U.S. Markets |
$ |
56.9 |
|
|
$ |
56.1 |
|
|
$ |
112.8 |
|
|
$ |
113.1 |
|
International |
28.6 |
|
|
28.6 |
|
|
58.1 |
|
|
60.6 |
|
Consumer Interactive |
3.8 |
|
|
3.2 |
|
|
7.5 |
|
|
6.5 |
|
Corporate |
1.4 |
|
|
1.2 |
|
|
2.8 |
|
|
2.5 |
|
Total depreciation and
amortization |
$ |
90.8 |
|
|
$ |
89.2 |
|
|
$ |
181.2 |
|
|
$ |
182.7 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
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