Form 8-K TransUnion For: Oct 27
Exhibit 99.1
 | News Release | |||||||
TransUnion Announces Third Quarter 2020 Results
•TransUnion achieved third quarter 2020 results in line with its Upside Case as provided in its scenario-based outlook.
•Business performance continues to benefit from re-openings, government stimulus and our successful proactive efforts to support our associates, customers and consumers during the pandemic.
•We are reinstating our guidance, and based on the fourth quarter 2020 guidance, we expect to deliver modest revenue growth for the full year 2020.
CHICAGO, October 27, 2020 - TransUnion (NYSE: TRU) (the “Company”) today announced financial results for the quarter ended September 30, 2020.
Third Quarter 2020 Results
Revenue:
•Total revenue for the quarter was $696 million, an increase of 1 percent (2 percent on a constant currency basis, 1 percent on an organic constant currency basis) compared with the third quarter of 2019.
Earnings:
•Net income attributable to TransUnion was $103 million for the quarter, compared with $92 million for the third quarter of 2019. Diluted earnings per share was $0.53, compared with $0.48 for the third quarter of 2019.
•Adjusted Net Income was $156 million for the quarter, compared with $146 million for the third quarter of 2019. Adjusted Diluted Earnings per Share for the quarter was $0.81, compared with $0.76 for the third quarter of 2019.
•Adjusted EBITDA was $270 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 third quarter of 2019. Adjusted EBITDA margin was 38.8 percent, compared with 40.7 percent for the third quarter of 2019.
“TransUnion delivered a good quarter, achieving our Upside Case Outlook Scenario, including modest revenue growth at an attractive Adjusted EBITDA margin,” said Chris Cartwright, President and CEO. “We remain acutely focused on the welfare of our associates and communities while also providing outstanding service and solutions for our customers around the world.”
“We continue to invest in Global Operations, Global Solutions and Project Rise to drive further growth and efficiencies in our business. At the same time, we recently made strategic moves to build out our Media vertical through the acquisitions of Signal in the third quarter and Tru Optik early in the fourth quarter.”
“We also maintained a strong balance sheet position with $554 million of cash on hand at the end of the quarter, ensuring that we are well situated to fully operate our business in the current highly fluid macro environment while enabling our ongoing investment strategy,” Cartwright concluded.
Third Quarter 2020 Segment Results
U.S. Markets:
U.S. Markets revenue was $438 million, an increase of 4 percent (4 percent on an organic basis) compared with the third quarter of 2019.
•Financial Services revenue was $249 million, an increase of 11 percent (11 percent on an organic basis) compared with the third quarter of 2019.
•Emerging Verticals revenue, which includes Healthcare, Insurance and all other verticals, was $189 million, a decrease of 3 percent (4 percent on an organic basis) compared with the third quarter of 2019.
Adjusted EBITDA was $177 million, a decrease of 2 percent (2 percent on an organic basis) compared with the third quarter of 2019.
International:
International revenue was $145 million, a decrease of 9 percent (7 percent on a constant currency basis) compared with the third quarter of 2019.
•Canada revenue was $28 million, an increase of 2 percent (3 percent on a constant currency basis) compared with the third quarter of 2019.
•Latin America revenue was $22 million, a decrease of 18 percent (5 percent on a constant currency basis) compared with the third quarter of 2019.
•United Kingdom revenue was $44 million, a decrease of 7 percent (11 percent on a constant currency basis). Excluding the impact of the revenue from the divestment of assets held for sale, revenue would have decreased 4 percent (8 percent on a constant currency basis) compared with the third quarter of 2019.
•Africa revenue was $12 million, a decrease of 22 percent (a decrease of 10 percent on a constant currency basis) compared with the third quarter of 2019.
•India revenue was $24 million, a decrease of 13 percent (8 percent on a constant currency basis) compared with the third quarter of 2019.
•Asia Pacific revenue was $15 million, a decrease of 4 percent (6 percent on a constant currency basis) compared with the third quarter of 2019.
Adjusted EBITDA was $57 million, a decrease of 11 percent (8 percent on a constant currency basis) compared with the third quarter of 2019.
Consumer Interactive:
Consumer Interactive revenue was $132 million, an increase of 3 percent compared with the third quarter of 2019.
Adjusted EBITDA was $67 million, an increase of 1 percent compared with the third quarter of 2019.
Liquidity and Capital Resources
Cash and cash equivalents were $554 million at September 30, 2020 and $274 million at December 31, 2019. In addition, we had $300 million of undrawn capacity on our Senior Secured Revolving Credit Facility. For the nine months ended September 30, 2020, cash provided by continuing operations was $558 million compared with $588 million in 2019. The decrease in cash provided by continuing operations was due to a decrease in operating performance and a smaller increase in working capital compared to 2019 as a result of COVID-19, partially offset by lower interest expense. Cash used in investing activities was $154 million compared with $155 million in 2019. The decrease in cash used in investing activities was due primarily to a decrease in proceeds from the disposal of discontinued operations, partially offset by a decrease in cash used for acquisitions and purchases of noncontrolling interests. Capital expenditures were $132 million in both periods. Cash used in financing activities was $110 million compared with $373 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
As it has been from the beginning of the pandemic, our primary focus continues to be the health and safety of our associates, our customers, and the wider communities in which we operate. We are successfully working from home across the globe, and see no reason to rush our associates back into the office. We continue to closely monitor the situation in all our markets.
We will also remain 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 businesses throughout the markets we serve.
Fourth Quarter and Full Year 2020 Outlook
We are reinstating guidance for the fourth quarter and full year 2020. This guidance is based on a number of assumptions that are subject to change, many of which are outside of the control of the Company. The extent to which COVID-19 impacts our business and results of operations is inherently uncertain and will depend on numerous evolving factors that we may not be able to accurately predict. There can be no assurance that the Company will achieve the results expressed by this guidance.
2020 Full Year Outlook:
GAAP Outlook: For 2020, revenue is expected to be between $2.696 billion and $2.715 billion, an increase of 2 percent compared with 2019. Net income attributable to TransUnion is expected to be between $321 million and $333 million, a decrease of 4 to 8 percent. Diluted earnings per share is expected to be between $1.67 and $1.73, a decrease of 4 to 8 percent. The revenue growth includes an immaterial impact from acquisitions. The revenue growth rates include approximately 1 percent of headwind from foreign exchange rates.
Adjusted Outlook: For 2020, Adjusted Revenue is expected to be between $2.696 billion and $2.715 billion, an increase of 1 to 2 percent compared with 2019. Adjusted EBITDA is expected to be between $1.031 billion and $1.047 billion, a decrease of 1 to 3 percent. Adjusted Diluted Earnings per Share is expected to be between $2.94 and $3.01, an increase of 5 to 8 percent. The Adjusted Revenue growth includes an immaterial impact from acquisitions. The Adjusted Revenue and Adjusted EBITDA growth rates include approximately 1 percent of headwind from foreign exchange rates.
2020 Fourth Quarter Outlook:
GAAP Outlook: For the fourth quarter of 2020, revenue is expected to be between $678 million and $698 million, a decrease of 1 percent to an increase of 2 percent compared with 2019. The revenue growth includes an approximate 1 percent of growth from acquisitions and 1 percent of headwind from foreign exchange rates. Net income attributable to TransUnion is expected to be between $79 million and $91 million, a decrease of 4 percent to an increase of 10 percent. Diluted earnings per share is expected to be between $0.41 and $0.47, a decrease of 5 percent to an increase of 10 percent.
Adjusted Outlook: For the fourth quarter of 2020, Adjusted EBITDA is expected to be between $255 million and $271 million, a decrease of 2 to 7 percent. Adjusted Diluted Earnings per Share is expected to be between $0.74 and $0.80, a decrease of 1 percent to an increase of 7 percent. The Adjusted EBITDA growth rates include approximately 1 percent of headwind from foreign exchange rates.
Earnings Webcast Details
In conjunction with this release, TransUnion will host a conference call and webcast today at 8:30 a.m. Central Time to discuss the business results for the quarter and certain forward-looking information. This session and the accompanying presentation materials 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 6.
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 guidance 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 Information
E-mail: Investor.Relations@transunion.com
Telephone: 312.985.2860
Exhibit 99.1
TRANSUNION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(in millions, except per share data)
| September 30, 2020 | December 31, 2019 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 554.0 | $ | 274.1 | ||||||||||
| Trade accounts receivable, net of allowance of $25.3 and $19.0 | 468.0 | 443.9 | ||||||||||||
| Other current assets | 194.6 | 170.2 | ||||||||||||
| Total current assets | 1,216.6 | 888.2 | ||||||||||||
| Property, plant and equipment, net of accumulated depreciation and amortization of $520.5 and $454.4 | 202.8 | 219.0 | ||||||||||||
| Goodwill | 3,313.4 | 3,377.8 | ||||||||||||
| Other intangibles, net of accumulated amortization of $1,660.8 and $1,482.1 | 2,235.7 | 2,391.9 | ||||||||||||
| Other assets | 229.3 | 236.3 | ||||||||||||
| Total assets | $ | 7,197.8 | $ | 7,113.2 | ||||||||||
| Liabilities and stockholders’ equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Trade accounts payable | $ | 186.7 | $ | 176.2 | ||||||||||
| Short-term debt and current portion of long-term debt | 55.4 | 58.7 | ||||||||||||
| Other current liabilities | 376.3 | 336.5 | ||||||||||||
| Total current liabilities | 618.4 | 571.4 | ||||||||||||
| Long-term debt | 3,560.6 | 3,598.3 | ||||||||||||
| Deferred taxes | 391.6 | 439.1 | ||||||||||||
| Other liabilities | 225.0 | 165.0 | ||||||||||||
| Total liabilities | 4,795.6 | 4,773.8 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Common stock, $0.01 par value; 1.0 billion shares authorized at September 30, 2020 and December 31, 2019, 195.5 million and 193.5 million shares issued at September 30, 2020 and December 31, 2019, respectively, and 190.3 million shares and 188.7 million shares outstanding as of September 30, 2020 and December 31, 2019, respectively | 2.0 | 1.9 | ||||||||||||
| Additional paid-in capital | 2,074.0 | 2,022.3 | ||||||||||||
| Treasury stock at cost; 5.2 million and 4.8 million shares at September 30, 2020 and December 31, 2019, respectively | (214.7) | (179.2) | ||||||||||||
| Retained earnings | 850.3 | 652.0 | ||||||||||||
| Accumulated other comprehensive loss | (409.7) | (251.6) | ||||||||||||
| Total TransUnion stockholders’ equity | 2,301.9 | 2,245.4 | ||||||||||||
| Noncontrolling interests | 100.3 | 94.0 | ||||||||||||
| Total stockholders’ equity | 2,402.2 | 2,339.4 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,197.8 | $ | 7,113.2 | ||||||||||
Exhibit 99.1
TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(in millions, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| Revenue | $ | 695.9 | $ | 689.3 | $ | 2,017.9 | $ | 1,970.5 | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Cost of services (exclusive of depreciation and amortization below) | 222.4 | 220.8 | 666.1 | 645.2 | ||||||||||||||||||||||
| Selling, general and administrative | 219.0 | 208.4 | 655.4 | 600.8 | ||||||||||||||||||||||
| Depreciation and amortization | 92.2 | 88.7 | 273.4 | 271.4 | ||||||||||||||||||||||
| Total operating expenses | 533.6 | 518.0 | 1,594.9 | 1,517.4 | ||||||||||||||||||||||
| Operating income | 162.3 | 171.3 | 423.0 | 453.1 | ||||||||||||||||||||||
| Non-operating income and (expense) | ||||||||||||||||||||||||||
| Interest expense | (27.6) | (43.5) | (98.7) | (133.7) | ||||||||||||||||||||||
| Interest income | 1.2 | 2.2 | 4.2 | 5.4 | ||||||||||||||||||||||
| Earnings from equity method investments | 2.1 | 3.1 | 6.7 | 10.2 | ||||||||||||||||||||||
| Other income and (expense), net | 0.8 | (20.6) | (6.9) | (0.7) | ||||||||||||||||||||||
| Total non-operating income and (expense) | (23.6) | (58.8) | (94.7) | (118.7) | ||||||||||||||||||||||
| Income from continuing operations before income taxes | 138.7 | 112.5 | 328.3 | 334.3 | ||||||||||||||||||||||
| Provision for income taxes | (32.1) | (24.2) | (77.3) | (64.2) | ||||||||||||||||||||||
| Income from continuing operations | 106.7 | 88.3 | 251.0 | 270.2 | ||||||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (4.6) | ||||||||||||||||||||||
| Net income | 106.7 | 88.3 | 251.0 | 265.6 | ||||||||||||||||||||||
| Less: net (income) loss attributable to the noncontrolling interests | (3.9) | 3.4 | (9.5) | (1.5) | ||||||||||||||||||||||
| Net income attributable to TransUnion | $ | 102.8 | $ | 91.7 | $ | 241.5 | $ | 264.1 | ||||||||||||||||||
| Income from continuing operations | $ | 106.7 | $ | 88.3 | $ | 251.0 | $ | 270.2 | ||||||||||||||||||
| Less: net (income) loss from continuing operations attributable to noncontrolling interests | (3.9) | 3.4 | (9.5) | (1.5) | ||||||||||||||||||||||
| Income from continuing operations attributable to TransUnion | 102.8 | 91.7 | 241.5 | 268.7 | ||||||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (4.6) | ||||||||||||||||||||||
| Net income attributable to TransUnion | $ | 102.8 | $ | 91.7 | $ | 241.5 | $ | 264.1 | ||||||||||||||||||
| Basic earnings per common share from: | ||||||||||||||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.54 | $ | 0.49 | $ | 1.27 | $ | 1.43 | ||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (0.02) | ||||||||||||||||||||||
| Net Income attributable to TransUnion | $ | 0.54 | $ | 0.49 | $ | 1.27 | $ | 1.41 | ||||||||||||||||||
| Diluted earnings per common share from: | ||||||||||||||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.53 | $ | 0.48 | $ | 1.26 | $ | 1.40 | ||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (0.02) | ||||||||||||||||||||||
| Net Income attributable to TransUnion | $ | 0.53 | $ | 0.48 | $ | 1.26 | $ | 1.38 | ||||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||
| Basic | 190.2 | 188.2 | 189.8 | 187.5 | ||||||||||||||||||||||
| Diluted | 192.3 | 192.0 | 192.1 | 191.6 | ||||||||||||||||||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above.
Exhibit 99.1
TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in millions)
| Nine Months Ended September 30, | ||||||||||||||
| 2020 | 2019 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | 251.0 | $ | 265.6 | ||||||||||
| Add: loss from discontinued operations, net of tax | — | 4.6 | ||||||||||||
| Income from continuing operations | 251.0 | 270.2 | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | 273.4 | 271.4 | ||||||||||||
| Net loss/(gain) on investments in affiliated companies and assets-held-for sale | 0.5 | (20.6) | ||||||||||||
Net (earnings)/dividends, from equity method investments | 0.9 | (1.2) | ||||||||||||
| Deferred taxes | (25.2) | (9.7) | ||||||||||||
| Amortization of discount and deferred financing fees | 2.9 | 4.7 | ||||||||||||
| Stock-based compensation | 29.6 | 29.7 | ||||||||||||
| Provision for losses on trade accounts receivable | 11.4 | 7.9 | ||||||||||||
| Other | 2.3 | 3.9 | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Trade accounts receivable | (43.4) | (13.2) | ||||||||||||
| Other current and long-term assets | (9.6) | (35.4) | ||||||||||||
| Trade accounts payable | 7.3 | 10.8 | ||||||||||||
| Other current and long-term liabilities | 57.1 | 69.2 | ||||||||||||
| Cash provided by operating activities of continuing operations | 558.2 | 587.7 | ||||||||||||
| Cash used in operating activities of discontinued operations | — | (7.3) | ||||||||||||
| Cash provided by operating activities | 558.2 | 580.4 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | (131.7) | (132.1) | ||||||||||||
| Proceeds from sale/maturity of other investments | 52.3 | 18.2 | ||||||||||||
| Purchases of other investments | (65.0) | (31.4) | ||||||||||||
| Acquisitions and purchases of noncontrolling interests, net of cash acquired | (12.3) | (46.2) | ||||||||||||
| Proceeds from disposals of assets held for sale | 1.6 | 40.3 | ||||||||||||
| Other | 1.6 | (3.9) | ||||||||||||
| Cash used in investing activities of continuing operations | (153.5) | (155.1) | ||||||||||||
| Cash used in investing activities of discontinued operations | — | — | ||||||||||||
| Cash used in investing activities | (153.5) | (155.1) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Repayments of debt | (45.0) | (313.9) | ||||||||||||
| Proceeds from issuance of common stock and exercise of stock options | 21.7 | 22.4 | ||||||||||||
| Dividends to shareholders | (43.3) | (42.6) | ||||||||||||
| Distributions to noncontrolling interests | (1.4) | (1.2) | ||||||||||||
| Employee taxes paid on restricted stock units recorded as treasury stock | (35.5) | (37.7) | ||||||||||||
| Payment of contingent consideration | (6.4) | — | ||||||||||||
| Cash used in financing activities | (109.9) | (373.0) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (14.9) | (3.8) | ||||||||||||
| Net change in cash and cash equivalents | 279.9 | 48.5 | ||||||||||||
| Cash and cash equivalents, beginning of period | 274.1 | 187.4 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 554.0 | $ | 235.9 | ||||||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above.
Exhibit 99.1
SCHEDULE 1
TRANSUNION AND SUBSIDIARIES
Revenue, Adjusted Revenue, and Adjusted EBITDA growth rates as Reported, CC, Inorganic, Organic and Organic CC (Unaudited)
| For the Three Months Ended September 30, 2020 compared with the Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
| Reported | CC Growth(1) | Inorganic(2) | Organic Growth(3) | Organic CC Growth(4) | ||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||
| Consolidated | 1.0 | % | 1.6 | % | 0.2 | % | 0.8 | % | 1.4 | % | ||||||||||||||||||||||
| U.S. Markets | 4.3 | % | 4.3 | % | 0.3 | % | 4.0 | % | 4.0 | % | ||||||||||||||||||||||
| Financial Services | 10.6 | % | 10.6 | % | — | % | 10.6 | % | 10.6 | % | ||||||||||||||||||||||
| Emerging Verticals | (2.8) | % | (2.9) | % | 0.7 | % | (3.5) | % | (3.6) | % | ||||||||||||||||||||||
| International | (9.5) | % | (6.6) | % | — | % | (9.5) | % | (6.6) | % | ||||||||||||||||||||||
| Canada | 2.1 | % | 3.1 | % | — | % | 2.1 | % | 3.1 | % | ||||||||||||||||||||||
| Latin America | (17.8) | % | (5.2) | % | — | % | (17.8) | % | (5.2) | % | ||||||||||||||||||||||
| United Kingdom | (7.2) | % | (11.4) | % | — | % | (7.2) | % | (11.4) | % | ||||||||||||||||||||||
| Africa | (21.7) | % | (9.9) | % | — | % | (21.7) | % | (9.9) | % | ||||||||||||||||||||||
| India | (12.8) | % | (7.7) | % | — | % | (12.8) | % | (7.7) | % | ||||||||||||||||||||||
| Asia Pacific | (4.2) | % | (6.0) | % | — | % | (4.2) | % | (6.0) | % | ||||||||||||||||||||||
| Consumer Interactive | 3.0 | % | 3.0 | % | — | % | 3.0 | % | 3.0 | % | ||||||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||||||||||
| Consolidated | (3.9) | % | (3.2) | % | (0.1) | % | (3.8) | % | (3.1) | % | ||||||||||||||||||||||
| U.S. Markets | (2.1) | % | (2.2) | % | (0.2) | % | (1.9) | % | (2.0) | % | ||||||||||||||||||||||
| International | (11.4) | % | (7.9) | % | — | % | (11.4) | % | (7.9) | % | ||||||||||||||||||||||
| Consumer Interactive | 0.8 | % | 0.8 | % | — | % | 0.8 | % | 0.8 | % | ||||||||||||||||||||||
Exhibit 99.1
SCHEDULE 1
TRANSUNION AND SUBSIDIARIES
Revenue, Adjusted Revenue, and Adjusted EBITDA growth rates as Reported, CC, Inorganic, Organic and Organic CC (Unaudited)
| For the Nine Months Ended September 30, 2020 compared with the Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
| Reported | CC Growth(1) | Inorganic(2) | Organic Growth(3) | Organic CC Growth(4) | ||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||
| Consolidated | 2.4 | % | 3.4 | % | 0.2 | % | 2.2 | % | 3.1 | % | ||||||||||||||||||||||
| U.S. Markets | 5.9 | % | 5.9 | % | 0.4 | % | 5.6 | % | 5.6 | % | ||||||||||||||||||||||
| Financial Services | 11.8 | % | 11.8 | % | — | % | 11.8 | % | 11.8 | % | ||||||||||||||||||||||
| Emerging Verticals | (0.6) | % | (0.6) | % | 0.8 | % | (1.4) | % | (1.4) | % | ||||||||||||||||||||||
| International | (7.6) | % | (3.5) | % | — | % | (7.6) | % | (3.5) | % | ||||||||||||||||||||||
| Canada | 3.7 | % | 5.5 | % | — | % | 3.7 | % | 5.5 | % | ||||||||||||||||||||||
| Latin America | (18.9) | % | (7.1) | % | — | % | (18.9) | % | (7.1) | % | ||||||||||||||||||||||
| United Kingdom | (3.1) | % | (3.1) | % | — | % | (3.1) | % | (3.1) | % | ||||||||||||||||||||||
| Africa | (20.4) | % | (8.7) | % | — | % | (20.4) | % | (8.7) | % | ||||||||||||||||||||||
| India | (9.6) | % | (4.7) | % | — | % | (9.6) | % | (4.7) | % | ||||||||||||||||||||||
| Asia Pacific | (4.6) | % | (6.0) | % | — | % | (4.6) | % | (6.0) | % | ||||||||||||||||||||||
| Consumer Interactive | 3.2 | % | 3.2 | % | — | % | 3.2 | % | 3.2 | % | ||||||||||||||||||||||
| Adjusted Revenue: | ||||||||||||||||||||||||||||||||
| Consolidated | 2.1 | % | 3.1 | % | 0.2 | % | 1.9 | % | 2.8 | % | ||||||||||||||||||||||
| U.S. Markets | 5.9 | % | 5.9 | % | 0.4 | % | 5.5 | % | 5.5 | % | ||||||||||||||||||||||
| Financial Services | 11.8 | % | 11.8 | % | — | % | 11.8 | % | 11.8 | % | ||||||||||||||||||||||
| Emerging Verticals | (0.6) | % | (0.7) | % | 0.8 | % | (1.4) | % | (1.4) | % | ||||||||||||||||||||||
| International | (8.7) | % | (4.6) | % | — | % | (8.7) | % | (4.6) | % | ||||||||||||||||||||||
| Canada | 3.7 | % | 5.5 | % | — | % | 3.7 | % | 5.5 | % | ||||||||||||||||||||||
| Latin America | (18.9) | % | (7.1) | % | — | % | (18.9) | % | (7.1) | % | ||||||||||||||||||||||
| United Kingdom | (6.9) | % | (6.9) | % | — | % | (6.9) | % | (6.9) | % | ||||||||||||||||||||||
| Africa | (20.4) | % | (8.7) | % | — | % | (20.4) | % | (8.7) | % | ||||||||||||||||||||||
| India | (9.6) | % | (4.7) | % | — | % | (9.6) | % | (4.7) | % | ||||||||||||||||||||||
| Asia Pacific | (4.6) | % | (6.0) | % | — | % | (4.6) | % | (6.0) | % | ||||||||||||||||||||||
| Consumer Interactive | 3.2 | % | 3.2 | % | — | % | 3.2 | % | 3.2 | % | ||||||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||||||||||
| Consolidated | (1.0) | % | — | % | (0.1) | % | (0.9) | % | 0.1 | % | ||||||||||||||||||||||
| U.S. Markets | 4.3 | % | 4.3 | % | (0.2) | % | 4.5 | % | 4.4 | % | ||||||||||||||||||||||
| International | (18.1) | % | (14.2) | % | — | % | (18.1) | % | (14.2) | % | ||||||||||||||||||||||
| 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.
Exhibit 99.1
SCHEDULE 2
TRANSUNION AND SUBSIDIARIES
Consolidated and Segment Revenue, Adjusted Revenue, Adjusted EBITDA, and Adjusted EBITDA Margins (Unaudited)
(dollars in millions)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Revenue and Adjusted Revenue: | |||||||||||||||||||||||
| U.S. Markets gross revenue | |||||||||||||||||||||||
| Financial Services | $ | 249.1 | $ | 225.3 | $ | 701.7 | $ | 627.4 | |||||||||||||||
| Emerging Verticals | 189.4 | 194.9 | 564.1 | 567.5 | |||||||||||||||||||
| Total U.S. Markets gross revenue | 438.5 | 420.2 | 1,265.8 | 1,194.9 | |||||||||||||||||||
Acquisition revenue - related adjustments(1) | — | — | — | 0.4 | |||||||||||||||||||
| U.S. Markets gross Adjusted Revenue | $ | 438.5 | $ | 420.2 | $ | 1,265.8 | $ | 1,195.2 | |||||||||||||||
| International gross revenue | |||||||||||||||||||||||
| Canada | $ | 27.9 | $ | 27.3 | $ | 78.5 | $ | 75.7 | |||||||||||||||
| Latin America | 21.7 | 26.4 | 63.2 | 77.9 | |||||||||||||||||||
| UK | 44.2 | 47.6 | 132.1 | 136.4 | |||||||||||||||||||
| Africa | 12.3 | 15.7 | 35.6 | 44.7 | |||||||||||||||||||
| India | 23.9 | 27.4 | 72.4 | 80.0 | |||||||||||||||||||
| Asia Pacific | 14.9 | 15.6 | 40.5 | 42.4 | |||||||||||||||||||
| Total International gross revenue | 144.8 | 160.0 | 422.2 | 457.1 | |||||||||||||||||||
Acquisition revenue - related adjustments(1) | — | — | — | 5.6 | |||||||||||||||||||
| International Adjusted Revenue | $ | 144.8 | $ | 160.0 | $ | 422.2 | $ | 462.7 | |||||||||||||||
| Consumer Interactive gross revenue | $ | 131.6 | $ | 127.8 | $ | 386.7 | $ | 374.7 | |||||||||||||||
| Less: intersegment eliminations | |||||||||||||||||||||||
| U.S. Markets | $ | (17.2) | $ | (17.1) | $ | (51.7) | $ | (51.8) | |||||||||||||||
| International | (1.4) | (1.3) | (3.9) | (3.8) | |||||||||||||||||||
| Consumer Interactive | (0.5) | (0.2) | (1.3) | (0.6) | |||||||||||||||||||
| Total intersegment eliminations | $ | (19.0) | $ | (18.7) | $ | (56.8) | $ | (56.2) | |||||||||||||||
| Total revenue, as reported | $ | 695.9 | $ | 689.3 | $ | 2,017.9 | $ | 1,970.5 | |||||||||||||||
Acquisition revenue-related adjustments(1) | — | — | — | 5.9 | |||||||||||||||||||
| Consolidated Adjusted Revenue | $ | 695.9 | $ | 689.3 | $ | 2,017.9 | $ | 1,976.4 | |||||||||||||||
| Adjusted EBITDA: | |||||||||||||||||||||||
| U.S. Markets | $ | 177.3 | $ | 181.0 | $ | 520.0 | $ | 498.5 | |||||||||||||||
| International | 56.7 | 64.0 | 154.4 | 188.6 | |||||||||||||||||||
| Consumer Interactive | 67.1 | 66.5 | 186.2 | 185.8 | |||||||||||||||||||
| Corporate | (31.2) | (30.7) | (84.7) | (89.4) | |||||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 269.9 | $ | 280.9 | $ | 775.9 | $ | 783.5 | |||||||||||||||
| Adjusted EBITDA margin: | |||||||||||||||||||||||
| U.S. Markets | 40.4 | % | 43.1 | % | 41.1 | % | 41.7 | % | |||||||||||||||
| International | 39.2 | % | 40.0 | % | 36.6 | % | 40.8 | % | |||||||||||||||
| Consumer Interactive | 51.0 | % | 52.1 | % | 48.1 | % | 49.6 | % | |||||||||||||||
| Consolidated | 38.8 | % | 40.7 | % | 38.5 | % | 39.6 | % | |||||||||||||||
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.
Exhibit 99.1
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Reconciliation of net income attributable to TransUnion to consolidated Adjusted EBITDA: | |||||||||||||||||||||||
| Net income attributable to TransUnion | $ | 102.8 | $ | 91.7 | $ | 241.5 | $ | 264.1 | |||||||||||||||
| Discontinued operations, net of tax | — | — | — | 4.6 | |||||||||||||||||||
| Net income from continuing operations attributable to TransUnion | 102.8 | 91.7 | 241.5 | 268.7 | |||||||||||||||||||
| Net interest expense | 26.5 | 41.3 | 94.6 | 128.2 | |||||||||||||||||||
| Provision for income taxes | 32.1 | 24.2 | 77.3 | 64.2 | |||||||||||||||||||
| Depreciation and amortization | 92.2 | 88.7 | 273.4 | 271.4 | |||||||||||||||||||
| EBITDA | 253.5 | 246.0 | 686.7 | 732.5 | |||||||||||||||||||
| Adjustments to EBITDA: | |||||||||||||||||||||||
Acquisition-related revenue adjustments(1) | — | — | — | 5.9 | |||||||||||||||||||
Stock-based compensation(2) | 7.8 | 14.7 | 29.5 | 35.6 | |||||||||||||||||||
Mergers and acquisitions, divestitures and business optimization(3) | 1.5 | 4.8 | 12.9 | (7.8) | |||||||||||||||||||
Accelerated technology investment(4) | 4.5 | — | 10.3 | — | |||||||||||||||||||
Other(5) | 2.6 | 15.4 | 36.4 | 17.3 | |||||||||||||||||||
| Total adjustments to EBITDA | 16.4 | 34.9 | 89.2 | 51.0 | |||||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 269.9 | $ | 280.9 | $ | 775.9 | $ | 783.5 | |||||||||||||||
| Net income attributable to TransUnion as a percentage of revenue | 14.8 | % | 13.3 | % | 12.0 | % | 13.4 | % | |||||||||||||||
| Consolidated Adjusted EBITDA margin | 38.8 | % | 40.7 | % | 38.5 | % | 39.6 | % | |||||||||||||||
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. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue. 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 September 30, 2020, consisted of the following adjustments: $1.5 million of acquisition expenses.
For the nine months ended September 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; $4.8 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 September 30, 2019, consisted of the following adjustments: a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; $2.0 million of Callcredit integration costs; a $0.6 million adjustment to contingent consideration expense from previous acquisitions; $0.5 million of acquisition expenses; and a $(0.2) million reimbursement for transition services provided to the buyers of certain of our discontinued operations.
Exhibit 99.1
For the nine months ended September 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; $(0.4) million reimbursement for transition services provided to the buyers of our discontinued operations; $10.5 million of Callcredit integration costs; a $8.6 million loss on the impairment of certain Cost Method investments; $2.1 million of acquisition expenses; a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; and a $0.6 million adjustment to contingent consideration expense from previous acquisitions.
(4)Represents expenses associated with our accelerated technology investment.
(5)For the three months ended September 30, 2020, consisted of the following adjustments: $4.2 million for certain legal expenses; $0.4 million of loan fees; a $(0.8) million gain from currency remeasurement of our foreign operations; a $(0.9) million recovery from the Fraud Incident (as defined in our Annual Report on Form 10-K for the year ended December 31, 2019), net of additional administration expenses; and $(0.3) million other.
For the nine months ended September 30, 2020, consisted of the following adjustments: $34.7 million for certain legal expenses; a $2.1 million loss from currency remeasurement of our foreign operations; $1.2 million of loan fees; $0.2 million of fees related to our new swap agreements; a $(1.1) million recovery from the Fraud Incident, net of additional administration expense; $(0.5) million reimbursement of fees associated with the refinancing of our Senior Secured Credit Facility; and $(0.3) million of other.
For the three months ended September 30, 2019, consisted of the following adjustments: $19.7 million of expenses (including $1.8 million of administrative expenses) associated with the Fraud Incident offset by the $(7.1) million portion that is attributable to the non-controlling interest; $1.6 million from currency remeasurement; $0.7 million of deferred loan fees written off as a result of the prepayments on our debt; and $0.5 million of loan fees.
For the nine months ended September 30, 2019, consisted of the following adjustments: $19.7 million of expenses (including $1.8 million of administrative expenses) associated with the Fraud Incident offset by the $(7.1) million portion that is attributable to the non-controlling interest; $1.9 million from currency remeasurement; $1.5 million of loan fees; $1.5 million of deferred loan fees written off as a result of the prepayments on our debt; and $(0.1) million of miscellaneous.
Exhibit 99.1
SCHEDULE 3
TRANSUNION AND SUBSIDIARIES
Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)
(in millions, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| Net income from continuing operations attributable to TransUnion | $ | 102.8 | $ | 91.7 | $ | 241.5 | $ | 268.7 | ||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (4.6) | ||||||||||||||||||||||
| Net income attributable to TransUnion | $ | 102.8 | $ | 91.7 | $ | 241.5 | $ | 264.1 | ||||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||
| Basic | 190.2 | 188.2 | 189.8 | 187.5 | ||||||||||||||||||||||
| Diluted | 192.3 | 192.0 | 192.1 | 191.6 | ||||||||||||||||||||||
| Basic earnings per common share from: | ||||||||||||||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.54 | $ | 0.49 | $ | 1.27 | $ | 1.43 | ||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (0.02) | ||||||||||||||||||||||
| Net Income attributable to TransUnion | $ | 0.54 | $ | 0.49 | $ | 1.27 | $ | 1.41 | ||||||||||||||||||
| Diluted earnings per common share from: | ||||||||||||||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.53 | $ | 0.48 | $ | 1.26 | $ | 1.40 | ||||||||||||||||||
| Discontinued operations, net of tax | — | — | — | (0.02) | ||||||||||||||||||||||
| Net Income attributable to TransUnion | $ | 0.53 | $ | 0.48 | $ | 1.26 | $ | 1.38 | ||||||||||||||||||
| Reconciliation of net income attributable to TransUnion to Adjusted Net Income: | ||||||||||||||||||||||||||
| Net income attributable to TransUnion | $ | 102.8 | $ | 91.7 | $ | 241.5 | $ | 264.1 | ||||||||||||||||||
| Discontinued operations | — | — | — | 4.6 | ||||||||||||||||||||||
| Net income from continuing operations attributable to TransUnion | 102.8 | 91.7 | 241.5 | 268.7 | ||||||||||||||||||||||
| Adjustments before income tax items: | ||||||||||||||||||||||||||
Acquisition revenue-related adjustments (1) | — | — | — | 5.9 | ||||||||||||||||||||||
Stock-based compensation(2) | 7.8 | 14.7 | 29.5 | 35.6 | ||||||||||||||||||||||
Mergers and acquisitions, divestitures and business optimization(3) | 1.5 | 4.8 | 12.9 | (7.8) | ||||||||||||||||||||||
Accelerated technology investment(4) | 4.5 | — | 10.3 | — | ||||||||||||||||||||||
Other(5) | 2.5 | 14.9 | 35.5 | 15.9 | ||||||||||||||||||||||
Amortization of certain intangible assets(6) | 48.1 | 48.4 | 144.7 | 157.6 | ||||||||||||||||||||||
| Total adjustments before income tax items | 64.4 | 82.8 | 232.9 | 207.2 | ||||||||||||||||||||||
| Change in provision for income taxes per schedule 4 | (11.1) | (28.8) | (50.6) | (83.4) | ||||||||||||||||||||||
| Adjusted Net Income | $ | 156.2 | $ | 145.7 | $ | 423.8 | $ | 392.5 | ||||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||
| Basic | 190.2 | 188.2 | 189.8 | 187.5 | ||||||||||||||||||||||
Diluted(7) | 192.3 | 192.0 | 192.1 | 191.6 | ||||||||||||||||||||||
| Adjusted Earnings per Share: | ||||||||||||||||||||||||||
| Basic | $ | 0.82 | $ | 0.77 | $ | 2.23 | $ | 2.09 | ||||||||||||||||||
Diluted(7) | $ | 0.81 | $ | 0.76 | $ | 2.21 | $ | 2.05 | ||||||||||||||||||
| Anti-dilutive weighted stock-based awards outstanding | 0.1 | 0.1 | 0.3 | 0.2 | ||||||||||||||||||||||
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
Exhibit 99.1
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. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue. 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 September 30, 2020, consisted of the following adjustments: $1.5 million of acquisition expenses.
For the nine months ended September 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; $4.8 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 September 30, 2019, consisted of the following adjustments: a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; $2.0 million of Callcredit integration costs; a $0.6 million adjustment to contingent consideration expense from previous acquisitions; $0.5 million of acquisition expenses; and a $(0.2) million reimbursement for transition services provided to the buyers of certain of our discontinued operations.
For the nine months ended September 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; $(0.4) million reimbursement for transition services provided to the buyers of our discontinued operations; $10.5 million of Callcredit integration costs; a $8.6 million loss on the impairment of certain Cost Method investments; $2.1 million of acquisition expenses; a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; and a $0.6 million adjustment to contingent consideration expense from previous acquisitions.
(4)Represents expenses associated with our accelerated technology investment.
(5)For the three months ended September 30, 2020, consisted of the following adjustments: $4.2 million for certain legal expenses; a ($0.8) million gain from currency remeasurement of our foreign operations; and a ($0.9) million recovery from the Fraud Incident, net of additional administration expenses.
For the nine months ended September 30, 2020, consisted of the following adjustments: $34.7 million for certain legal expenses; a $2.1 million loss from currency remeasurement of our foreign operations; $0.2 million of fees related to our new swap agreements; ($0.5) million reimbursement of fees associated with the refinancing of our Senior Secured Credit Facility; and a ($1.1) million recovery from the Fraud Incident, net of additional administration expense.
For the three months ended September 30, 2019, consisted of the following adjustments: $19.7 million of expenses (including $1.8 million of administrative expenses) associated with the Fraud Incident offset by the ($7.1) million portion that is attributable to the non-controlling interest; $1.6 million from currency remeasurement; and $0.7 million of deferred loan fees written off as a result of the prepayments on our debt.
For the nine months ended September 30, 2019, consisted of the following adjustments: $19.7 million of expenses (including $1.8 million of administrative expenses) associated with the Fraud Incident offset by the ($7.1) million portion that is attributable to the non-controlling interest; $1.9 million from currency remeasurement; and $1.5 million of deferred loan fees written off as a result of the prepayments on our debt.
(6)Consisted of amortization of intangible assets from our 2012 change in control transaction and amortization of intangible assets established in business acquisitions after our 2012 change in control transaction.
Exhibit 99.1
(7)As of September 30, 2020 and September 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.
Exhibit 99.1
SCHEDULE 4
TRANSUNION AND SUBSIDIARIES
Effective Tax Rate and Adjusted Effective Tax Rate (Unaudited)
(dollars in millions)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Income before income taxes | $ | 138.7 | $ | 112.5 | $ | 328.3 | $ | 334.3 | |||||||||||||||
| Total adjustments before income tax items from schedule 3 | 64.4 | 82.8 | 232.9 | 207.2 | |||||||||||||||||||
| Noncontrolling interest portion of Adjusted Net Income adjustments | (0.5) | 7.1 | (0.5) | 7.1 | |||||||||||||||||||
| Adjusted income before income taxes | $ | 202.6 | $ | 202.4 | $ | 560.8 | $ | 548.7 | |||||||||||||||
| (Provision) benefit for income taxes | $ | (32.1) | $ | (24.2) | $ | (77.3) | $ | (64.2) | |||||||||||||||
| Adjustments for income taxes: | |||||||||||||||||||||||
Tax effect of above adjustments(1) | (13.8) | (17.6) | (49.5) | (43.2) | |||||||||||||||||||
Eliminate impact of excess tax benefits for share compensation(2) | (1.4) | (4.6) | (22.4) | (31.9) | |||||||||||||||||||
Other(3) | 4.2 | (6.6) | 21.3 | (8.3) | |||||||||||||||||||
| Total adjustments for income taxes | (11.1) | (28.8) | (50.6) | (83.4) | |||||||||||||||||||
| Adjusted provision for income taxes | $ | (43.1) | $ | (53.1) | $ | (127.9) | $ | (147.6) | |||||||||||||||
| Effective tax rate | 23.1 | % | 21.6 | % | 23.5 | % | 19.2 | % | |||||||||||||||
| Adjusted Effective Tax Rate | 21.3 | % | 26.2 | % | 22.8 | % | 26.9 | % | |||||||||||||||
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.
Exhibit 99.1
SCHEDULE 5
TRANSUNION AND SUBSIDIARIES
Segment Depreciation and Amortization (Unaudited)
(in millions)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| U.S. Markets | $ | 56.8 | $ | 56.3 | $ | 169.7 | $ | 169.4 | |||||||||||||||
| International | 30.5 | 27.8 | 88.5 | 88.5 | |||||||||||||||||||
| Consumer Interactive | 3.5 | 3.3 | 10.9 | 9.7 | |||||||||||||||||||
| Corporate | 1.5 | 1.3 | 4.2 | 3.8 | |||||||||||||||||||
| Total depreciation and amortization | $ | 92.2 | $ | 88.7 | $ | 273.4 | $ | 271.4 | |||||||||||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above.
Exhibit 99.1
SCHEDULE 6
TRANSUNION AND SUBSIDIARIES
Reconciliation of Non-GAAP Guidance (Unaudited)
(in millions)
| Three Months Ended December 31, 2020 | Twelve Months Ended December 31, 2020 | ||||||||||||||||||||||
| Low | High | Low | High | ||||||||||||||||||||
| Guidance reconciliation of net income attributable to TransUnion to Adjusted EBITDA: | |||||||||||||||||||||||
| Net income (loss) attributable to TransUnion | $ | 79 | $ | 91 | $ | 321 | $ | 333 | |||||||||||||||
| Interest, taxes and depreciation and amortization | 141 | 145 | 586 | 590 | |||||||||||||||||||
| EBITDA | 220 | 236 | 907 | 923 | |||||||||||||||||||
Acquisitions revenue related adjustment(1) | — | — | — | — | |||||||||||||||||||
Stock-based compensation, mergers, acquisitions divestitures and business optimization-related expenses and other adjustments(1) | 35 | 35 | 124 | 124 | |||||||||||||||||||
| Adjusted EBITDA | $ | 255 | $ | 271 | $ | 1,031 | $ | 1,047 | |||||||||||||||
| Reconciliation of diluted earnings per share to Adjusted Diluted Earnings per Share: | |||||||||||||||||||||||
| Diluted earnings per share | $ | 0.41 | $ | 0.47 | $ | 1.67 | $ | 1.73 | |||||||||||||||
Adjustments to diluted earnings per share(1) | 0.33 | 0.33 | 1.28 | 1.28 | |||||||||||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.74 | $ | 0.80 | $ | 2.94 | $ | 3.01 | |||||||||||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above.
(1)These adjustments include the same adjustments we make to our Adjusted Revenue, Adjusted EBITDA and Adjusted Net Income as discussed in the Non-GAAP Financial Measures section of our Earnings Release.
v Exhibit 99.2 v v TransUnion Third Quarter 2020 Earnings Chris Cartwright, President and CEO Todd Cello, CFO
Forward-Looking Statement This presentation 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. Factors that could cause TransUnion’s actual results to differ materially from those described in the forward-looking statements, including the effects of the COVID-19 pandemic and the timing of the recovery from the COVID-19 pandemic, can be found in TransUnion’s Annual Report on Form 10-K for the year ended December 31, 2019, as modified in 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). TransUnion undertakes no obligation to update the forward-looking statements to reflect the impact of events or circumstances that may arise after the date of the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements. Non-GAAP Financial Information This investor presentation includes certain non-GAAP measures that are more fully described in Exhibit 99.1, “Non-GAAP Financial Measures,” of our Current Report on Form 8-K filed on October 27, 2020. 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. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are presented in the tables of Exhibit 99.1 of our Current Report on Form 8-K filed on October 27, 2020. © 2020 Trans Union LLC All Rights Reserved | 2
• Focus on the welfare of our associates, customers, consumers and communities • Continue to work from home globally • Making progress against commitment to foster greater diversity and inclusion for all associates and promote greater financial inclusion © 2020 Trans Union LLC All Rights Reserved | 3
Review third quarter 2020 results 1 and current business trends Update on strategic long-term 2 investments Detail third quarter 2020 3 financial performance Discuss reinstated fourth quarter and 4 full year 2020 guidance © 2020 Trans Union LLC All Rights Reserved | 4
U.S. Markets – Financial Services Trend Online Credit Report Unit Volumes Total U.S. Markets Financial Services Volume Additional trend data since Q2 2020 Earnings Release +8% January February March April May June July August September Oct.(1) 2019 2020 © 2020 Trans Union LLC All Rights Reserved | 5 (1) Volume growth/decline reflects year-over-year change for 7-day period ended October 23rd.
U.S. Markets – Financial Services End-Market Trends Online Credit Report Unit Volumes Mortgage Auto Additional trend data since Additional trend data since Q2 2020 Earnings Release Q2 2020 Earnings Release +59% (4%) January February March April May June July August September Oct.(1) January February March April May June July August September Oct.(1) Consumer Lending Card and Banking Additional trend data since Additional trend data since Q2 2020 Earnings Release Q2 2020 Earnings Release +10% Participation in significant new card launch (3%) January February March April May June July August September Oct.(1) January February March April May June July August September Oct.(1) (1) Volume growth/decline reflects year-over-year 2019 2020 © 2020 Trans Union LLC All Rights Reserved | 6 change for 7-day period ended October 23rd.
Emerging Markets Vertical Trends Vertical Current Trends TransUnion Outlook Improved performance in front-end offset by Near-term soft volumes on front-end will impact back- Healthcare lower volumes on back-end end, but no long-term structural change to market Success with innovative products and continued benefit Expect continued solid performance Insurance from diversifying across other insurance end markets Government agencies largely continue to Expect continued strong performance Public Sector operate unabated Tenant: expect trends to persist Tenant and Tenant: solid performance as leasing companies remain active Employment: expect modest recovery as economies Employment: remains strained given increased unemployment Employment slowly re-open Continued improvement as retail stores have reopened and Expect trends to persist Telco consumers have resumed a more normal purchase cadence Volume declines due to collections moratoriums, Don’t expect to see any significant uptick Collections forbearance programs and government stimulus until at least early 2021 © 2020 Trans Union LLC All Rights Reserved | 7
Consumer Interactive Trends Consumers recognize value of credit and identity protection, credit monitoring and related financial education tools • Direct channel: ─ Revenue acceleration behind continued successful marketing to consumers focused on their credit health • Indirect channel: ─ Indirect partners curtailing marketing programs, resulting in a decline in subscribers; now expect this slightly larger decline to persist in future quarters ─ Continue to have meaningful discussions with potential new partners © 2020 Trans Union LLC All Rights Reserved | 8
International Quarterly Trends Year-over-Year Constant Currency Adj. Revenue Growth / (Decline) 16% 14% 10% 6% 3% Canada 4% Latin America 0% (2%) (5%) Asia Pacific (6%) India (8%) (12%) (8%) U.K. ex. Disposition (10%) (13%) Africa (21%) (22%) (23%) Q1 2020 Q2 2020 Q3 2020 Note: quarterly adjusted revenue performance shown in constant currency. © 2020 Trans Union LLC All Rights Reserved | 9
International Trends Country or Portfolio Diversification Current Trends Region (Beyond Financial Services) Fraud solutions, government, Weak lending markets offset partially through U.K. gaming, affordability suite TU-specific strategies Fraud solutions, DTC offerings, Weak lending markets offset by Canada insurance and government verticals portfolio diversification Analytics and decisioning, fraud solutions, Progressive improvement India DTC offerings, commercial credit as the country has slowly re-opened Latin Improvement in Chile and Colombia from Q2; Data analytics business (Brazil) America limited in other countries Diversified portfolio with leading positions Economy remains challenged Africa in retail, auto information, insurance despite recent government stimulus Asia Portfolio and risk management, Hong Kong: market has stabilized Pacific fraud solutions, DTC offerings Philippines: facing significant headwinds © 2020 Trans Union LLC All Rights Reserved | 10
Global Operations Allows Us to Expand Our Core Capabilities, Enhancing the Customer Experience and Driving Greater Efficiencies Global Procurement: renegotiated largest supplier agreements, enabling us to better focus our spend and add new features or services to facilitate growth Global Capability Centers (GCC): opening second GCC in Pune, India by end of year ─ Primarily focused on Project Rise and other tech. initiatives Process Optimization: implementing tools to further enhance the customer experience © 2020 Trans Union LLC All Rights Reserved | 11
Global Solutions Will Improve Our Ability to Aggressively and Strategically Develop and Diffuse Innovation Globally Partnered with MX Technologies to incorporate consumer contributed data into our solutions Made minority equity investment and formed a commercial partnership agreement with FinLocker, a white label tool to facilitate online mortgage applications © 2020 Trans Union LLC All Rights Reserved | 12
We Have Built an Industry-leading Position in Media to Deliver Meaningful, Sustained Growth Acquisition May 2019 August 2020 October 2020 Date • Modern cloud-based platform • Products that allow us to work • Acquisition deepens our that marketers and media with clients to structure and understanding of connected Acquired companies use to build and activate their own audience consumers via a household distribute precisely defined intelligence identity graph, adding another Capabilities audience segments dimension to our ability to • Platform for real-time data match an individual to a broad and • Platform can be accessed collection and distribution that array of data as well as directly or integrated via API is already connected to Offerings persistent digital identifiers within other technology complementary advertising platforms and marketing technologies © 2020 Trans Union LLC All Rights Reserved | 13
Project Rise is Our Accelerated Technology Initiative to Ensure that We Are Even More Effective, Efficient, Secure, Reliable, and Performant Project Rise enables: Global Operations: migrating our consumer call center to the cloud in Q4 Global Solutions: partnerships benefit from modern technology stack and data architecture; Media vertical build would not have been possible without the cloud capabilities We remain confident in our timeline, anticipated investment and the benefits of Project Rise © 2020 Trans Union LLC All Rights Reserved | 14
Year-over-Year Change Revenue 1% Constant Currency Revenue 2% Consolidated Q3 2020 Organic Revenue 1% Highlights Organic Constant Currency Revenue 1% Adjusted EBITDA (4)% Constant Currency Adjusted EBITDA (3)% Organic Constant Currency Adjusted EBITDA (3)% Adjusted Diluted EPS 7% Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2. © 2020 Trans Union LLC All Rights Reserved | 15
Inorganic Organic Constant Reported FX Impact Impact Currency U.S. Markets Q3 2020 Revenue 4% — — 4% Financial 11% — — 11% Year-over-Year Services Financial Emerging (3)% — (1)% (4)% Highlights Verticals Adjusted (2)% — — (2)% EBITDA Note: Rows may not foot due to rounding. For additional information, refer to the “Non-GAAP Financial Information” section on slide 2. © 2020 Trans Union LLC All Rights Reserved | 16
Organic Organic CC Inorganic Reported FX Impact Constant ex. Recipero Impact Currency Disposition International Revenue (9)% +3% — (7)% (6)% Q3 2020 Canada 2% +1% — 3% — Latin (18)% +13% — (5)% — Year-over-Year America Financial U.K. (7)% (4)% — (11)% (8)% Highlights Africa (22)% +12% — (10)% — India (13)% +5% — (8)% — Asia (4)% (2)% — (6)% — Pacific Adjusted (11)% +4% — (8)% — EBITDA Note: Rows may not foot due to rounding. For additional information, refer to the “Non-GAAP Financial Information” section on slide 2. © 2020 Trans Union LLC All Rights Reserved | 17
Consumer Inorganic Organic Constant Reported FX Impact Interactive Impact Currency Q3 2020 Revenue 3% — — 3% Year-over-Year Adjusted 1% — — 1% Financial EBITDA Highlights Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2. © 2020 Trans Union LLC All Rights Reserved | 18
TransUnion Has a Strong Balance Sheet and the Ability to Rapidly Build Cash ($ in millions) $1,059 $1,083 $1,062 $1,032 $1,051 $996 $1,000 $953 $917 $864 6x $814 • Ended Q3 with $554M of cash $800 $779 on hand and have been able to 5x 4.9x avoid drawing on our revolver $600 4.5x • Significant de-levering since 4.2x 4x 4.0x completing meaningful $400 3.7x acquisitions in mid-2018 3.4x 3.2x 3x • Will continue to take prudent $200 3.1x 3.0x 2.9x approach to cash retention, but 2.9x actively pursuing additional $- 2x attractive investments Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 TTM Adjusted EBITDA Net Leverage © 2020 Trans Union LLC All Rights Reserved | 19 Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2.
Q4 2020 Financial Guidance Revenue $678M to $698M, down 1% to up 2% Reinstating • Organic CC down 1% to up 2% • Assumption: 1 point of M&A contribution, 1 point of Q4 and FY 2020 FX headwind Financial Adjusted EBITDA $255M to $271M, down 2 to 7% Guidance • Adjusted EBITDA margin down 140 to 260 bps • Assumption: 1 point of FX headwind Adjusted EPS of $0.74 to $0.80, down 1% to up 7% Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2. © 2020 Trans Union LLC All Rights Reserved | 20
FY 2020 Financial Guidance Adjusted Revenue $2.696B to $2.715B, up 1 to 2% • Organic CC up 2 to 3% • Assumption: 1 point of FX headwind Adjusted EBITDA $1.031B to $1.047B, down 1 to 3% Reinstating • Adjusted EBITDA margin down 130 to 160 bps Q4 and FY 2020 • Assumption: 1 point of FX headwind Financial Adjusted EPS of $2.94 to $3.01, up 5 to 8% Guidance Adjusted Tax Rate: ~23% Total D&A: ~$365M • D&A ex. step-up from 2012 change in control and subsequent acquisitions: ~$170M Net Interest Exp.: ~$120M CapEx: ~7.5% of revenue Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2. © 2020 Trans Union LLC All Rights Reserved | 21
• Continuing to effectively manage through the global stresses created by COVID-19 • Investing to position TransUnion for continued best-in-class growth • Prioritizing welfare of associates and broader communities © 2020 Trans Union LLC All Rights Reserved | 22
Q&A © 2020 Trans Union LLC All Rights Reserved | 23