TransUnion (NYSE: TRU) (the “Company”) today announced financial
results for the quarter ended September 30, 2023.
Third Quarter
2023 Results
Revenue:
- Total revenue for
the quarter was $969 million, an increase of 3 percent (3 percent
on a constant currency basis), compared with the third quarter of
2022.
Earnings:
- Net income (loss)
attributable to TransUnion was $(400) million for the quarter,
compared with $79 million for the third quarter of 2022. Diluted
earnings (loss) per share was $(2.07), compared with $0.41 in the
third quarter of 2022. Net income (loss) attributable to TransUnion
margin was (41.3) percent, compared with 8.4 percent in the third
quarter of 2022. Our third quarter 2023 net income (loss)
attributable to TransUnion, diluted loss per share and net income
(loss) attributable to TransUnion margin were impacted by a $495
million non-cash goodwill impairment expense for our United Kingdom
reporting unit, as described in “U.K. Goodwill Impairment”
below.
- Adjusted Net Income
was $177 million for the quarter, compared with $180 million
for the third quarter of 2022. Adjusted Diluted Earnings per Share
was $0.91, compared with $0.93 in the third quarter of
2022.
- Adjusted EBITDA was
$356 million for the quarter, an increase of 5 percent (4 percent
on a constant currency basis), compared with the third quarter of
2022. Adjusted EBITDA margin was 36.8 percent, compared with 36.3
percent in the third quarter of 2022.
“TransUnion executed well against weakening
lending and marketing activity over the course of the quarter,”
said Chris Cartwright, President and CEO. “Despite these headwinds,
U.S. Markets continued to grow, highlighted by high-single digit
growth at Neustar. Our International segment again grew
double-digits, led by India, Canada and Asia Pacific.”
“We are revising our 2023 full-year guidance to
account for slowing volumes in the U.S. and United Kingdom. We
expect to deliver a good fourth quarter due to strong bookings and
our vertical, product and geographic diversification.”
“We remain focused on delivering innovative
solutions to help our customers navigate uncertain market
conditions. Additionally, we are proactively managing our cost
structure while continuing to invest for long-term revenue growth.
Finally, we prepaid $75 million of debt in the quarter for a
year-to-date total of $225 million.”
Third Quarter
2023 Segment Results
U.S. Markets:
U.S. Markets revenue was $634 million, an
increase of 2 percent compared with the third quarter of 2022.
- Financial Services
revenue was $323 million, a decrease of less than 1 percent
compared with the third quarter of 2022.
- Emerging Verticals
revenue was $311 million, an increase of 4 percent compared with
the third quarter of 2022.
Adjusted EBITDA was $223 million, an increase of
2 percent compared with the third quarter of 2022.
International:
International revenue was $211 million, an
increase of 12 percent (11 percent on a constant currency basis)
compared with the third quarter of 2022.
- Canada revenue was
$37 million, an increase of 13 percent (17 percent on a constant
currency basis) compared with the third quarter of 2022.
- Latin America
revenue was $31 million, an increase of 8 percent (3 percent on a
constant currency basis) compared with the third quarter of
2022.
- United Kingdom
revenue was $50 million, an increase of 3 percent (a decrease of 4
percent on a constant currency basis) compared with the third
quarter of 2022.
- Africa revenue was
$15 million, a decrease of 2 percent (an increase of 8 percent on a
constant currency basis) compared with the third quarter of
2022.
- India revenue was
$56 million, an increase of 26 percent (31 percent on a constant
currency basis) compared with the third quarter of 2022.
- Asia Pacific
revenue was $22 million, an increase of 13 percent (12 percent on a
constant currency basis) compared with the third quarter of
2022.
Adjusted EBITDA was $96 million, an increase of
14 percent (14 percent on a constant currency basis) compared with
the third quarter of 2022.
Consumer Interactive:
Consumer Interactive revenue was $143 million, a
decrease of 3 percent compared with the third quarter of 2022.
Adjusted EBITDA was $72 million, a decrease of 1
percent compared with the third quarter of 2022.
Liquidity and Capital
Resources
Cash and cash equivalents were $421 million at
September 30, 2023 and $585 million at December 31, 2022, of
which $335 million and $303 million was held outside the
United States in each respective period. For the nine months ended
September 30, 2023, we prepaid $225 million of debt, funded from
our cash-on-hand.
For the nine months ended September 30, 2023,
cash provided by operating activities of continuing operations was
$444 million, compared with cash used in operating activities of
continuing operations of $71 million in 2022. The increase in cash
provided by continuing operations was due primarily to prior year
taxes paid on the gain from the divestiture of our Healthcare
business and lower bonus and commission payments in the current
year, partially offset by an increase in interest expense. For the
nine months ended September 30, 2023, cash used in investing
activities of continuing operations was $231 million, compared with
$735 million in 2022. The decrease in cash used in investing
activities of continuing operations was due primarily to the
acquisition of Argus in the prior year. For the nine months ended
September 30, 2023, capital expenditures were $213 million,
compared with $193 million in 2022. For the nine months ended
September 30, 2023, cash used in financing activities of continuing
operations was $375 million, compared with $564 million in 2022.
The decrease in cash used in financing activities of continuing
operations was due primarily to a decrease in debt prepayments and
cash used to pay employee taxes on restricted stock units.
U.K. Goodwill Impairment
During the three months ended September 30,
2023, we identified a triggering event requiring an interim
impairment test for our United Kingdom reporting unit, which
resulted in a goodwill impairment of $495 million. The worsening
macroeconomic conditions during the third quarter from inflationary
pressures and rising interest rates increasingly impacted our
business for the current quarter and the near-term outlook. Due to
these factors, management now believes the U.K. recovery will take
longer, and will be at a slower pace, than previously expected. As
a result, we have revised our short-term and mid-term forecasts for
revenue and EBITDA expectations for our United Kingdom reporting
unit. These factors have particularly impacted the online-only
FinTech lenders that represent the largest vertical within our
United Kingdom reporting unit. These lenders have seen significant
declines in their access to capital impacting their ability to lend
and in some cases leading to bankruptcies.
See Part I, Item 1, “Notes to Unaudited
Consolidated Financial Statements,” Note 5, “Goodwill” and Part I,
Item 2, “Application of Critical Accounting Estimates - Goodwill
Impairment” included in our Quarterly Report on Form 10-Q for the
period ended September 30, 2023, to be filed with the Securities
and Exchange Commission (“SEC”) on or around October 24, 2023 for
further information regarding this matter.
Fourth Quarter and Full Year
2023 Outlook
Our guidance is based on a number of assumptions
that are subject to change, many of which are outside of the
control of the Company, including general macroeconomic conditions,
interest rates and inflation. There are 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.
|
|
Three Months Ended December 31, 2023 |
|
Twelve Months Ended December 31, 2023 |
(in millions, except per share
data) |
|
Low |
|
High |
|
Low |
|
High |
Revenue, as reported |
|
$ |
917 |
|
|
$ |
932 |
|
|
$ |
3,794 |
|
|
$ |
3,809 |
|
Revenue growth1: |
|
|
|
|
|
|
|
|
As reported |
|
|
2 |
% |
|
|
3 |
% |
|
|
2 |
% |
|
|
3 |
% |
Constant currency1, 2 |
|
|
2 |
% |
|
|
3 |
% |
|
|
3 |
% |
|
|
3 |
% |
Organic constant currency1, 3 |
|
|
2 |
% |
|
|
3 |
% |
|
|
2 |
% |
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to TransUnion |
|
$ |
17 |
|
|
$ |
34 |
|
|
$ |
(277 |
) |
|
$ |
(259 |
) |
Net income (loss) attributable to TransUnion growth |
|
|
(64 |
)% |
|
|
(26 |
)% |
|
|
(203 |
)% |
|
|
(196 |
)% |
Net income (loss) attributable to TransUnion margin |
|
|
1.8 |
% |
|
|
3.7 |
% |
|
|
(7.3 |
)% |
|
|
(6.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Share |
|
$ |
0.08 |
|
|
$ |
0.18 |
|
|
$ |
(1.43 |
) |
|
$ |
(1.34 |
) |
Diluted Earnings per Share growth |
|
|
(65 |
)% |
|
|
(26 |
)% |
|
|
(202 |
)% |
|
|
(196 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, as
reported5 |
|
$ |
303 |
|
|
$ |
315 |
|
|
$ |
1,320 |
|
|
$ |
1,333 |
|
Adjusted EBITDA growth, as reported4 |
|
|
(6 |
)% |
|
|
(2 |
)% |
|
|
(2 |
)% |
|
|
(1 |
)% |
Adjusted EBITDA margin |
|
|
33.0 |
% |
|
|
33.8 |
% |
|
|
34.8 |
% |
|
|
35.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings per
Share5 |
|
$ |
0.67 |
|
|
$ |
0.72 |
|
|
$ |
3.24 |
|
|
$ |
3.28 |
|
Adjusted Diluted Earnings per Share growth |
|
|
(14 |
)% |
|
|
(8 |
)% |
|
|
(11 |
)% |
|
|
(9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional revenue growth assumptions:
- The impact of
changing foreign currency exchange rates is expected to have an
insignificant impact for Q4 2023 and approximately 1 point of
headwind for FY 2023.
- The impact of
recent acquisitions is expected to have no impact for Q4 2023 and
less than 1 point of benefit for FY 2023.
- The impact of
mortgage is expected to be approximately 2 points of benefit for Q4
2023 and 1 point of benefit for FY 2023. These impacts are
calculated by removing the U.S. mortgage revenue from both the
current year and prior year periods.
- Constant currency
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.
- Organic constant
currency growth rates are constant currency growth excluding
inorganic growth. Inorganic growth represents growth attributable
to the first twelve months of activity for recent business
acquisitions.
- Additional Adjusted
EBITDA assumptions:
- The impact of
changing foreign currency exchange rates is expected to have an
insignificant impact for Q4 2023 and approximately 1 point of
headwind for FY 2023.
- For a
reconciliation of the above non-GAAP financial measures to the most
directly comparable GAAP financial measures, refer to Schedule 7 of
this Earnings Release.
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 Events | TransUnion. 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 Consolidated
Adjusted EBITDA, Consolidated Adjusted EBITDA Margin, Adjusted Net
Income, Adjusted Diluted Earnings per Share, Adjusted Provision for
Income Taxes, Adjusted Effective Tax Rate and Leverage Ratio for
all periods presented. These are important financial measures for
the Company but are not financial measures as defined by GAAP.
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, diluted earnings per share or cash
provided by operating activities. Reconciliations of these non-GAAP
financial measures to their most directly comparable GAAP financial
measures are presented in the attached Schedules.
We present Consolidated Adjusted EBITDA,
Consolidated Adjusted EBITDA Margin, Adjusted Net Income, Adjusted
Diluted Earnings per Share, Adjusted Provision for Income Taxes and
Adjusted Effective Tax Rate 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. These are measures
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 EBITDA as an incentive compensation measure for
most eligible employees and Adjusted Diluted Earnings per Share as
an incentive compensation measure for certain of our senior
executives.
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 our Leverage Ratio, which is partially based
on Adjusted EBITDA. Investors also use our Leverage Ratio to assess
our ability to service our debt and make other capital allocation
decisions.
We define Consolidated Adjusted EBITDA as net
income (loss) attributable to TransUnion, less discontinued
operations, net of tax, plus net interest expense, plus (less)
provision (benefit) for income taxes, plus depreciation and
amortization, plus goodwill impairment, plus stock-based
compensation, plus mergers, acquisitions, divestitures and business
optimization-related expenses, including Neustar
integration-related expenses, plus certain accelerated technology
investment expenses to migrate to the cloud, plus (less) certain
other expenses (income). We define Consolidated Adjusted EBITDA
Margin as Consolidated Adjusted EBITDA divided by total revenue as
reported.
We define Adjusted Net Income as net income
(loss) attributable to TransUnion, less discontinued operations,
net of tax, plus goodwill impairment, plus stock-based
compensation, plus mergers, acquisitions, divestitures and business
optimization-related expenses, including Neustar
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
total adjustment for income taxes included in our Adjusted
Provision for Income Taxes. We define Adjusted Diluted Earnings per
Share as Adjusted Net Income divided by the weighted-average
diluted shares outstanding. We define Adjusted Provision for Income
Taxes as our provision for income taxes, plus or minus the tax
impact on the adjustment included in Adjusted Net Income, plus or
minus the impact of excess tax benefits for share compensation,
plus or minus other items that relate to prior periods such as
valuation allowance changes, deferred tax rate and return to
provision adjustments, and other unusual items that are included in
our provision for income taxes. We define Adjusted Effective Tax
Rate as Adjusted Provision for Income Taxes divided by Adjusted Net
Income.
We define Leverage Ratio as net debt divided by
Consolidated Adjusted EBITDA for the most recent twelve-month
period, including twelve months of Adjusted EBITDA from significant
acquisitions. Net debt is defined as total debt less cash and cash
equivalents as reported on the balance sheet as of the end of the
period.
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
negatives of these words and other similar expressions.
Factors that could cause actual results to
differ materially from those described in the forward-looking
statements, or that could materially affect our financial results
or such forward-looking statements include:
- macroeconomic
effects and changes in market conditions, including the impact of
inflation, risk of recession and industry trends and adverse
developments in the debt, consumer credit and financial services
markets, including the impact on the carrying value of our assets
in all of the markets where we operate;
- 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;
- 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
acquire businesses, successfully secure financing for our
acquisitions, timely consummate our acquisitions, successfully
integrate the operations of our acquisitions, control the costs of
integrating our acquisitions 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;
- geopolitical
conditions, including the war in Ukraine and the evolving conflict
in Israel and surrounding areas;
- 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; and
- our reliance on key
management personnel.
There may be other factors, many of which are
beyond our control, that may cause our actual results to differ
materially from the forward-looking statements, including factors
disclosed in our Annual Report on Form 10-K for the year ended
December 31, 2022, and any subsequent Quarterly Report on Form 10-Q
or Current Report on Form 8-K filed with the Securities and
Exchange Commission. You should evaluate all forward-looking
statements made in this report in the context of these risks and
uncertainties.
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.
For More Information |
E-mail:Telephone: |
|
Investor.Relations@transunion.com312.985.2860 |
|
|
|
TRANSUNION AND
SUBSIDIARIESConsolidated Balance Sheets
(Unaudited)(in millions, except per share data)
|
|
September 30,2023 |
|
December 31,2022 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
420.9 |
|
|
$ |
585.3 |
|
Trade accounts receivable, net of allowance of $15.1 and $11.0 |
|
|
694.5 |
|
|
|
602.2 |
|
Other current assets |
|
|
286.5 |
|
|
|
262.7 |
|
Total current assets |
|
|
1,401.9 |
|
|
|
1,450.2 |
|
Property, plant and equipment,
net of accumulated depreciation and amortization of $781.8 and
$711.3 |
|
|
182.9 |
|
|
|
218.2 |
|
Goodwill |
|
|
5,085.5 |
|
|
|
5,551.4 |
|
Other intangibles, net of
accumulated amortization of $2,589.3 and $2,268.6 |
|
|
3,546.3 |
|
|
|
3,675.5 |
|
Other assets |
|
|
809.7 |
|
|
|
771.0 |
|
Total
assets |
|
$ |
11,026.4 |
|
|
$ |
11,666.3 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Trade accounts payable |
|
$ |
270.7 |
|
|
$ |
250.4 |
|
Short-term debt and current portion of long-term debt |
|
|
114.6 |
|
|
|
114.6 |
|
Other current liabilities |
|
|
525.9 |
|
|
|
540.5 |
|
Total current liabilities |
|
|
911.1 |
|
|
|
905.5 |
|
Long-term debt |
|
|
5,253.9 |
|
|
|
5,555.5 |
|
Deferred taxes |
|
|
666.2 |
|
|
|
762.0 |
|
Other liabilities |
|
|
154.6 |
|
|
|
173.9 |
|
Total
liabilities |
|
|
6,985.8 |
|
|
|
7,396.9 |
|
Stockholders’ equity: |
|
|
|
|
Common stock, $0.01 par value; 1.0 billion shares authorized at
September 30, 2023 and December 31, 2022,
199.9 million and 198.7 million shares issued at
September 30, 2023 and December 31, 2022, respectively,
and 193.7 million shares and 192.7 million shares outstanding
as of September 30, 2023 and December 31, 2022,
respectively |
|
|
2.0 |
|
|
|
2.0 |
|
Additional paid-in capital |
|
|
2,386.6 |
|
|
|
2,290.3 |
|
Treasury stock at cost; 6.2 million and 6.0 million shares at
September 30, 2023 and December 31, 2022,
respectively |
|
|
(302.2 |
) |
|
|
(284.5 |
) |
Retained earnings |
|
|
2,091.3 |
|
|
|
2,446.6 |
|
Accumulated other comprehensive loss |
|
|
(238.7 |
) |
|
|
(284.5 |
) |
Total TransUnion stockholders’
equity |
|
|
3,939.0 |
|
|
|
4,169.9 |
|
Noncontrolling interests |
|
|
101.6 |
|
|
|
99.5 |
|
Total stockholders’
equity |
|
|
4,040.6 |
|
|
|
4,269.4 |
|
Total liabilities and
stockholders’ equity |
|
$ |
11,026.4 |
|
|
$ |
11,666.3 |
|
|
|
|
|
|
|
|
|
|
TRANSUNION AND
SUBSIDIARIESConsolidated Statements of Income
(Unaudited)(in millions, except per share data)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
968.7 |
|
|
$ |
938.2 |
|
|
$ |
2,876.9 |
|
|
$ |
2,807.8 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
Cost of services (exclusive of depreciation and amortization
below) |
|
|
344.8 |
|
|
|
338.2 |
|
|
|
1,073.2 |
|
|
|
988.2 |
|
Selling, general and administrative |
|
|
314.8 |
|
|
|
301.0 |
|
|
|
931.3 |
|
|
|
943.6 |
|
Depreciation and amortization |
|
|
131.3 |
|
|
|
129.6 |
|
|
|
391.1 |
|
|
|
389.0 |
|
Goodwill impairment |
|
|
495.0 |
|
|
|
— |
|
|
|
495.0 |
|
|
|
— |
|
Total operating
expenses |
|
|
1,286.0 |
|
|
|
768.8 |
|
|
|
2,890.6 |
|
|
|
2,320.8 |
|
Operating income
(loss) |
|
|
(317.3 |
) |
|
|
169.5 |
|
|
|
(13.7 |
) |
|
|
487.0 |
|
Non-operating income
and (expense) |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(72.7 |
) |
|
|
(61.3 |
) |
|
|
(217.2 |
) |
|
|
(163.4 |
) |
Interest income |
|
|
5.0 |
|
|
|
1.1 |
|
|
|
15.1 |
|
|
|
3.1 |
|
Earnings from equity method investments |
|
|
3.7 |
|
|
|
3.5 |
|
|
|
11.7 |
|
|
|
9.7 |
|
Other income and (expense), net |
|
|
8.7 |
|
|
|
(2.0 |
) |
|
|
(16.3 |
) |
|
|
(20.2 |
) |
Total non-operating
income and (expense) |
|
|
(55.4 |
) |
|
|
(58.7 |
) |
|
|
(206.8 |
) |
|
|
(170.9 |
) |
Income (loss) from
continuing operations before income taxes |
|
|
(372.7 |
) |
|
|
110.8 |
|
|
|
(220.5 |
) |
|
|
316.1 |
|
Provision for income
taxes |
|
|
(22.2 |
) |
|
|
(30.6 |
) |
|
|
(60.1 |
) |
|
|
(84.1 |
) |
Income (loss) from
continuing operations |
|
|
(394.9 |
) |
|
|
80.3 |
|
|
|
(280.6 |
) |
|
|
232.0 |
|
Discontinued
operations, net of tax |
|
|
(0.5 |
) |
|
|
2.4 |
|
|
|
(0.7 |
) |
|
|
2.3 |
|
Net income
(loss) |
|
|
(395.4 |
) |
|
|
82.7 |
|
|
|
(281.3 |
) |
|
|
234.3 |
|
Less: net income
attributable to the noncontrolling interests |
|
|
(4.3 |
) |
|
|
(3.5 |
) |
|
|
(11.9 |
) |
|
|
(11.3 |
) |
Net income (loss)
attributable to TransUnion |
|
$ |
(399.8 |
) |
|
$ |
79.2 |
|
|
$ |
(293.2 |
) |
|
$ |
223.0 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
|
$ |
(394.9 |
) |
|
$ |
80.3 |
|
|
$ |
(280.6 |
) |
|
$ |
232.0 |
|
Less: income from
continuing operations attributable to noncontrolling
interests |
|
|
(4.3 |
) |
|
|
(3.5 |
) |
|
|
(11.9 |
) |
|
|
(11.3 |
) |
Income (loss) from
continuing operations attributable to TransUnion |
|
|
(399.3 |
) |
|
|
76.8 |
|
|
|
(292.5 |
) |
|
|
220.7 |
|
Discontinued
operations, net of tax |
|
|
(0.5 |
) |
|
|
2.4 |
|
|
|
(0.7 |
) |
|
|
2.3 |
|
Net income (loss)
attributable to TransUnion |
|
$ |
(399.8 |
) |
|
$ |
79.2 |
|
|
$ |
(293.2 |
) |
|
$ |
223.0 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share from: |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to
TransUnion |
|
$ |
(2.06 |
) |
|
$ |
0.40 |
|
|
$ |
(1.51 |
) |
|
$ |
1.15 |
|
Discontinued operations, net of tax |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Net Income (loss) attributable to TransUnion |
|
$ |
(2.07 |
) |
|
$ |
0.41 |
|
|
$ |
(1.52 |
) |
|
$ |
1.16 |
|
Diluted earnings per
common share from: |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to
TransUnion |
|
$ |
(2.06 |
) |
|
$ |
0.40 |
|
|
$ |
(1.51 |
) |
|
$ |
1.14 |
|
Discontinued operations, net of tax |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Net Income (loss) attributable to TransUnion |
|
$ |
(2.07 |
) |
|
$ |
0.41 |
|
|
$ |
(1.52 |
) |
|
$ |
1.15 |
|
Weighted-average
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
193.4 |
|
|
|
192.6 |
|
|
|
193.3 |
|
|
|
192.4 |
|
Diluted |
|
|
193.4 |
|
|
|
193.2 |
|
|
|
193.3 |
|
|
|
193.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, and for the
calculation of earnings per share, rounding differences may exist
in the table above.
TRANSUNION AND
SUBSIDIARIESConsolidated Statements of Cash Flows
(Unaudited)(in millions)
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
Net income (loss) |
|
$ |
(281.3 |
) |
|
$ |
234.3 |
|
Less: Discontinued operations, net of tax |
|
|
0.7 |
|
|
|
(2.3 |
) |
Income (loss) from continuing operations |
|
|
(280.6 |
) |
|
|
232.0 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
391.1 |
|
|
|
389.0 |
|
Goodwill impairment |
|
|
495.0 |
|
|
|
— |
|
Loss on repayment of loans |
|
|
3.0 |
|
|
|
6.5 |
|
Deferred taxes |
|
|
(101.3 |
) |
|
|
(60.7 |
) |
Stock-based compensation |
|
|
72.9 |
|
|
|
62.0 |
|
Other |
|
|
13.1 |
|
|
|
14.9 |
|
Changes in assets and liabilities: |
|
|
|
|
Trade accounts receivable |
|
|
(104.2 |
) |
|
|
(72.7 |
) |
Other current and long-term assets |
|
|
(42.4 |
) |
|
|
(31.0 |
) |
Trade accounts payable |
|
|
16.9 |
|
|
|
(20.4 |
) |
Other current and long-term liabilities |
|
|
(19.7 |
) |
|
|
(448.8 |
) |
Cash provided by operating activities of continuing
operations |
|
|
443.8 |
|
|
|
70.8 |
|
Cash
provided by operating activities of discontinued operations |
|
|
(0.2 |
) |
|
|
4.6 |
|
Cash provided by operating activities |
|
|
443.6 |
|
|
|
75.4 |
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
|
|
(213.2 |
) |
|
|
(192.5 |
) |
Proceeds from sale/maturities of other investments |
|
|
63.9 |
|
|
|
85.3 |
|
Purchases of other investments |
|
|
(43.7 |
) |
|
|
(103.9 |
) |
Investments in consolidated affiliates, net of cash acquired |
|
|
— |
|
|
|
(510.4 |
) |
Investments in nonconsolidated affiliates |
|
|
(36.9 |
) |
|
|
(14.8 |
) |
Payment related to disposal of discontinued operations |
|
|
(0.5 |
) |
|
|
— |
|
Other |
|
|
(0.1 |
) |
|
|
1.6 |
|
Cash used in investing activities of continuing
operations |
|
|
(230.5 |
) |
|
|
(734.7 |
) |
Cash
used in investing activities of discontinued operations |
|
|
— |
|
|
|
(1.9 |
) |
Cash used in investing activities |
|
|
(230.5 |
) |
|
|
(736.6 |
) |
Cash flows from financing activities: |
|
|
|
|
Repayments of debt |
|
|
(310.9 |
) |
|
|
(486.0 |
) |
Proceeds from issuance of common stock and exercise of stock
options |
|
|
23.1 |
|
|
|
18.7 |
|
Dividends to shareholders |
|
|
(61.4 |
) |
|
|
(57.5 |
) |
Employee taxes paid on restricted stock units recorded as treasury
stock |
|
|
(17.6 |
) |
|
|
(30.0 |
) |
Payment of contingent consideration |
|
|
— |
|
|
|
(2.8 |
) |
Distributions to noncontrolling interests |
|
|
(8.5 |
) |
|
|
(6.3 |
) |
Cash used in financing activities of continuing
operations |
|
|
(375.3 |
) |
|
|
(563.9 |
) |
Effect
of exchange rate changes on cash and cash equivalents |
|
|
(2.2 |
) |
|
|
(21.2 |
) |
Net
change in cash and cash equivalents |
|
|
(164.4 |
) |
|
|
(1,246.3 |
) |
Cash and
cash equivalents, beginning of period |
|
|
585.3 |
|
|
|
1,842.4 |
|
Cash and cash
equivalents, end of period |
|
$ |
420.9 |
|
|
$ |
596.1 |
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
SCHEDULE 1TRANSUNION AND
SUBSIDIARIESRevenue and Adjusted EBITDA growth
rates as Reported, CC, Inorganic, Organic and Organic
CC(Unaudited)
|
|
For the Three Months Ended September 30, 2023 compared withthe
Three Months Ended September 30, 2022 |
|
|
Reported |
|
CC Growth1 |
|
Inorganic2 |
|
Organic Growth3 |
|
Organic CC Growth4 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
3.2 |
% |
|
3.2 |
% |
|
— |
% |
|
3.2 |
% |
|
3.2 |
% |
U.S. Markets |
|
2.0 |
% |
|
2.0 |
% |
|
— |
% |
|
2.0 |
% |
|
2.0 |
% |
Financial Services |
|
(0.2 |
)% |
|
(0.2 |
)% |
|
— |
% |
|
(0.2 |
)% |
|
(0.2 |
)% |
Emerging Verticals |
|
4.4 |
% |
|
4.3 |
% |
|
— |
% |
|
4.4 |
% |
|
4.3 |
% |
International |
|
11.5 |
% |
|
11.3 |
% |
|
— |
% |
|
11.5 |
% |
|
11.3 |
% |
Canada |
|
13.3 |
% |
|
16.5 |
% |
|
— |
% |
|
13.3 |
% |
|
16.5 |
% |
Latin America |
|
8.2 |
% |
|
2.8 |
% |
|
— |
% |
|
8.2 |
% |
|
2.8 |
% |
United Kingdom |
|
2.6 |
% |
|
(4.5 |
)% |
|
— |
% |
|
2.6 |
% |
|
(4.5 |
)% |
Africa |
|
(2.3 |
)% |
|
7.9 |
% |
|
— |
% |
|
(2.3 |
)% |
|
7.9 |
% |
India |
|
26.4 |
% |
|
31.0 |
% |
|
— |
% |
|
26.4 |
% |
|
31.0 |
% |
Asia Pacific |
|
12.8 |
% |
|
12.3 |
% |
|
— |
% |
|
12.8 |
% |
|
12.3 |
% |
Consumer Interactive |
|
(2.9 |
)% |
|
(2.8 |
)% |
|
— |
% |
|
(2.9 |
)% |
|
(2.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
4.5 |
% |
|
4.5 |
% |
|
— |
% |
|
4.5 |
% |
|
4.5 |
% |
U.S. Markets |
|
2.1 |
% |
|
2.1 |
% |
|
— |
% |
|
2.1 |
% |
|
2.1 |
% |
International |
|
13.9 |
% |
|
13.7 |
% |
|
— |
% |
|
13.9 |
% |
|
13.7 |
% |
Consumer Interactive |
|
(1.3 |
)% |
|
(1.2 |
)% |
|
— |
% |
|
(1.3 |
)% |
|
(1.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 1TRANSUNION AND
SUBSIDIARIESRevenue and Adjusted EBITDA growth
rates as Reported, CC, Inorganic, Organic and Organic
CC(Unaudited)
|
|
For the Nine Months Ended September 30, 2023 compared withthe Nine
Months Ended September 30, 2022 |
|
|
Reported |
|
CC Growth1 |
|
Inorganic2 |
|
Organic Growth3 |
|
Organic CC Growth4 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
2.5 |
% |
|
3.4 |
% |
|
0.7 |
% |
|
1.7 |
% |
|
2.7 |
% |
U.S. Markets |
|
2.2 |
% |
|
2.2 |
% |
|
1.1 |
% |
|
1.1 |
% |
|
1.1 |
% |
Financial Services |
|
1.7 |
% |
|
1.7 |
% |
|
2.1 |
% |
|
(0.4 |
)% |
|
(0.4 |
)% |
Emerging Verticals |
|
2.8 |
% |
|
2.8 |
% |
|
— |
% |
|
2.8 |
% |
|
2.8 |
% |
International |
|
7.5 |
% |
|
12.1 |
% |
|
— |
% |
|
7.5 |
% |
|
12.1 |
% |
Canada |
|
7.2 |
% |
|
12.4 |
% |
|
— |
% |
|
7.2 |
% |
|
12.4 |
% |
Latin America |
|
4.7 |
% |
|
6.3 |
% |
|
— |
% |
|
4.7 |
% |
|
6.3 |
% |
United Kingdom |
|
(5.5 |
)% |
|
(4.4 |
)% |
|
— |
% |
|
(5.5 |
)% |
|
(4.4 |
)% |
Africa |
|
(3.6 |
)% |
|
10.7 |
% |
|
— |
% |
|
(3.6 |
)% |
|
10.7 |
% |
India |
|
24.7 |
% |
|
32.8 |
% |
|
— |
% |
|
24.7 |
% |
|
32.8 |
% |
Asia Pacific |
|
17.7 |
% |
|
18.8 |
% |
|
— |
% |
|
17.7 |
% |
|
18.8 |
% |
Consumer Interactive |
|
(3.3 |
)% |
|
(3.3 |
)% |
|
— |
% |
|
(3.3 |
)% |
|
(3.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
(0.7 |
)% |
|
0.3 |
% |
|
(0.3 |
)% |
|
(0.4 |
)% |
|
0.7 |
% |
U.S. Markets |
|
(3.6 |
)% |
|
(3.7 |
)% |
|
(0.5 |
)% |
|
(3.1 |
)% |
|
(3.2 |
)% |
International |
|
8.1 |
% |
|
12.6 |
% |
|
— |
% |
|
8.1 |
% |
|
12.6 |
% |
Consumer Interactive |
|
(0.1 |
)% |
|
0.1 |
% |
|
— |
% |
|
(0.1 |
)% |
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 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.
- Inorganic growth
rate represents growth attributable to the first twelve months of
activity for recent business acquisitions.
- Organic growth rate
is the reported growth rate less the inorganic growth rate.
- Organic CC growth
rate is the CC growth rate less inorganic growth rate.
SCHEDULE 2TRANSUNION AND
SUBSIDIARIESConsolidated and Segment Revenue,
Adjusted EBITDA, and Adjusted EBITDA Margin
(Unaudited)(dollars in millions)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
|
U.S. Markets gross
revenue |
|
|
|
|
|
|
|
Financial Services |
$ |
322.6 |
|
|
$ |
323.3 |
|
|
$ |
975.1 |
|
|
$ |
958.6 |
|
Emerging Verticals |
|
310.9 |
|
|
|
297.8 |
|
|
|
920.9 |
|
|
|
895.8 |
|
U.S.
Markets gross revenue |
$ |
633.5 |
|
|
$ |
621.1 |
|
|
$ |
1,896.1 |
|
|
$ |
1,854.4 |
|
|
|
|
|
|
|
|
|
International gross revenue |
|
|
|
|
|
|
|
Canada |
$ |
36.7 |
|
|
$ |
32.4 |
|
|
$ |
103.1 |
|
|
$ |
96.2 |
|
Latin America |
|
30.9 |
|
|
|
28.6 |
|
|
|
89.4 |
|
|
|
85.3 |
|
United Kingdom |
|
49.8 |
|
|
|
48.5 |
|
|
|
146.0 |
|
|
|
154.5 |
|
Africa |
|
15.2 |
|
|
|
15.5 |
|
|
|
44.3 |
|
|
|
45.9 |
|
India |
|
56.1 |
|
|
|
44.4 |
|
|
|
161.8 |
|
|
|
129.8 |
|
Asia Pacific |
|
22.3 |
|
|
|
19.8 |
|
|
|
65.6 |
|
|
|
55.7 |
|
International gross revenue |
$ |
211.0 |
|
|
$ |
189.2 |
|
|
$ |
610.1 |
|
|
$ |
567.4 |
|
|
|
|
|
|
|
|
|
Consumer Interactive gross
revenue |
$ |
143.1 |
|
|
$ |
147.3 |
|
|
$ |
429.4 |
|
|
$ |
444.3 |
|
|
|
|
|
|
|
|
|
Total gross revenue |
$ |
987.6 |
|
|
$ |
957.6 |
|
|
$ |
2,935.6 |
|
|
$ |
2,866.1 |
|
|
|
|
|
|
|
|
|
Intersegment revenue eliminations |
|
|
|
|
|
|
|
U.S. Markets |
$ |
(18.0 |
) |
|
$ |
(17.6 |
) |
|
$ |
(54.0 |
) |
|
$ |
(53.1 |
) |
International |
|
(1.5 |
) |
|
|
(1.5 |
) |
|
|
(4.3 |
) |
|
|
(4.5 |
) |
Consumer Interactive |
|
0.5 |
|
|
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
(0.8 |
) |
Total
intersegment revenue eliminations |
$ |
(19.0 |
) |
|
$ |
(19.4 |
) |
|
$ |
(58.7 |
) |
|
$ |
(58.4 |
) |
|
|
|
|
|
|
|
|
Total revenue as reported |
$ |
968.7 |
|
|
$ |
938.2 |
|
|
$ |
2,876.9 |
|
|
$ |
2,807.8 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
U.S. Markets |
$ |
223.0 |
|
|
$ |
218.4 |
|
|
$ |
645.1 |
|
|
$ |
669.5 |
|
International |
|
95.5 |
|
|
|
83.9 |
|
|
|
266.9 |
|
|
|
246.9 |
|
Consumer Interactive |
|
72.1 |
|
|
|
73.1 |
|
|
|
209.9 |
|
|
|
210.0 |
|
Corporate |
|
(34.5 |
) |
|
|
(34.7 |
) |
|
|
(104.3 |
) |
|
|
(101.2 |
) |
Adjusted EBITDA margin:1 |
|
|
|
|
|
|
|
U.S. Markets |
|
35.2 |
% |
|
|
35.2 |
% |
|
|
34.0 |
% |
|
|
36.1 |
% |
International |
|
45.3 |
% |
|
|
44.3 |
% |
|
|
43.7 |
% |
|
|
43.5 |
% |
Consumer Interactive |
|
50.4 |
% |
|
|
49.6 |
% |
|
|
48.9 |
% |
|
|
47.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Segment Adjusted
EBITDA margins are calculated using segment gross revenue and
segment Adjusted EBITDA.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of net
income attributable to TransUnion to consolidated Adjusted
EBITDA: |
|
|
|
|
|
|
|
Net income (loss) attributable
to TransUnion |
$ |
(399.8 |
) |
|
$ |
79.2 |
|
|
$ |
(293.2 |
) |
|
$ |
223.0 |
|
Discontinued operations, net
of tax |
|
0.5 |
|
|
|
(2.4 |
) |
|
|
0.7 |
|
|
|
(2.3 |
) |
Income (loss) from continuing
operations attributable to TransUnion |
$ |
(399.3 |
) |
|
$ |
76.8 |
|
|
$ |
(292.5 |
) |
|
$ |
220.7 |
|
Net interest expense |
|
67.8 |
|
|
|
60.2 |
|
|
|
202.1 |
|
|
|
160.4 |
|
Provision for income taxes |
|
22.2 |
|
|
|
30.6 |
|
|
|
60.1 |
|
|
|
84.1 |
|
Depreciation and amortization |
|
131.3 |
|
|
|
129.6 |
|
|
|
391.1 |
|
|
|
389.0 |
|
EBITDA |
$ |
(178.0 |
) |
|
$ |
297.1 |
|
|
$ |
360.8 |
|
|
$ |
854.1 |
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Goodwill impairment1 |
$ |
495.0 |
|
|
$ |
— |
|
|
$ |
495.0 |
|
|
$ |
— |
|
Stock-based compensation2 |
|
27.0 |
|
|
|
19.9 |
|
|
|
73.3 |
|
|
|
60.8 |
|
Mergers and acquisitions, divestitures and business
optimization3 |
|
(6.0 |
) |
|
|
7.8 |
|
|
|
24.5 |
|
|
|
36.4 |
|
Accelerated technology investment4 |
|
16.3 |
|
|
|
12.1 |
|
|
|
53.5 |
|
|
|
32.2 |
|
Net other5 |
|
1.8 |
|
|
|
3.8 |
|
|
|
10.6 |
|
|
|
41.7 |
|
Total adjustments to
EBITDA |
$ |
534.1 |
|
|
$ |
43.6 |
|
|
$ |
656.8 |
|
|
$ |
171.1 |
|
Consolidated Adjusted
EBITDA |
$ |
356.1 |
|
|
$ |
340.7 |
|
|
$ |
1,017.6 |
|
|
$ |
1,025.2 |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to TransUnion margin |
|
(41.3 |
)% |
|
|
8.4 |
% |
|
|
(10.2 |
)% |
|
|
7.9 |
% |
Consolidated Adjusted EBITDA
margin6 |
|
36.8 |
% |
|
|
36.3 |
% |
|
|
35.4 |
% |
|
|
36.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, rounding
differences may exist in the tables above and footnotes below.
- For the three and nine months ended September 30, 2023, we
recorded a goodwill impairment of $495 million related to our
United Kingdom reporting unit in our International segment.
- Consisted of stock-based compensation, including amounts which
are cash settled.
- Mergers and acquisitions, divestitures and business
optimization consisted of the following adjustments:For the three
months ended September 30, 2023, $4.1 million of Neustar
integration costs; $1.7 million of acquisition expenses; a $1.0
million adjustment to fair value of a note receivable; an $(11.7)
million adjustment to the fair value of a put option liability
related to a minority investment; and $(1.1) million of
reimbursements for transition services related to divested
businesses, net of separation expenses.For the three months ended
September 30, 2022, $8.7 million of Neustar integration costs; $3.4
million of acquisition expenses; a $(3.4) million gain related to a
government tax reimbursement from a recent business acquisition;
$(0.7) million of reimbursements for transition services related to
divested businesses, net of separation expenses; and a $(0.3)
million adjustment to the fair value of a put option liability
related to a minority investment.For the nine months ended
September 30, 2023, $15.6 million of Neustar integration costs; a
$9.1 million loss on the impairment of a Cost Method Investment;
$5.5 million of acquisition expenses; $5.1 million of adjustments
to liabilities from a recent acquisition; a $(6.2) million
adjustment to the fair value of a put option liability related to a
minority investment; $(2.4) million of reimbursements for
transition services related to divested businesses, net of
separation expenses; a $(1.3) million adjustment to the fair value
of a note receivable; and a $(0.8) million gain on the disposal of
a Cost Method Investment.For the nine months ended September 30,
2022, $25.5 million of Neustar integration costs; $21.4 million of
acquisition expenses; $(6.0) million of reimbursements for
transition services related to divested businesses, net of
separation expenses; a $(3.4) million gain related to a government
tax reimbursement from a recent business acquisition; and a $(1.0)
million adjustment to the fair value of a put option liability
related to a minority investment.
- Represents expenses associated with our accelerated technology
investment to migrate to the cloud.
- Net other consisted of the following adjustments:For the three
months ended September 30, 2023, $1.0 million of deferred loan fees
written off as a result of the prepayment on our debt; and a
$0.9 million net loss from currency remeasurement of our
foreign operations, loan fees and other.For the three months ended
September 30, 2022, a $3.8 million net loss from currency
remeasurement of our foreign operations, loan fees and other.For
the nine months ended September 30, 2023, $3.1 million of
deferred loan fees written off as a result of the prepayment on our
debt; and a $7.5 million net loss from currency remeasurement
of our foreign operations, loan fees and other.For the nine months
ended September 30, 2022, $28.4 million for certain legal and
regulatory expenses; $6.5 million of deferred loan fees written off
as a result of the prepayments on our debt; and a $6.8 million net
loss from currency remeasurement of our foreign operations, loan
fees and other.
- Consolidated Adjusted EBITDA margin is calculated by dividing
Consolidated Adjusted EBITDA by total revenue.
SCHEDULE 3TRANSUNION AND
SUBSIDIARIESAdjusted Net Income and Adjusted
Diluted Earnings Per Share (Unaudited)(in millions, except
per share data)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Income (loss) from continuing
operations attributable to TransUnion |
|
$ |
(399.3 |
) |
|
$ |
76.8 |
|
|
$ |
(292.5 |
) |
|
$ |
220.7 |
|
Discontinued operations, net
of tax |
|
|
(0.5 |
) |
|
|
2.4 |
|
|
|
(0.7 |
) |
|
|
2.3 |
|
Net income (loss) attributable
to TransUnion |
|
$ |
(399.8 |
) |
|
$ |
79.2 |
|
|
$ |
(293.2 |
) |
|
$ |
223.0 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
193.4 |
|
|
|
192.6 |
|
|
|
193.3 |
|
|
|
192.4 |
|
Diluted |
|
|
193.4 |
|
|
|
193.2 |
|
|
|
193.3 |
|
|
|
193.1 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share1 from: |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to
TransUnion |
|
$ |
(2.06 |
) |
|
$ |
0.40 |
|
|
$ |
(1.51 |
) |
|
$ |
1.15 |
|
Discontinued operations, net of tax |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Net Income (loss) attributable to TransUnion |
|
$ |
(2.07 |
) |
|
$ |
0.41 |
|
|
$ |
(1.52 |
) |
|
$ |
1.16 |
|
Diluted earnings per common
share1 from: |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to
TransUnion |
|
$ |
(2.06 |
) |
|
$ |
0.40 |
|
|
$ |
(1.51 |
) |
|
$ |
1.14 |
|
Discontinued operations, net of tax |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Net Income (loss) attributable to TransUnion |
|
$ |
(2.07 |
) |
|
$ |
0.41 |
|
|
$ |
(1.52 |
) |
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of net
income (loss) attributable to TransUnion to Adjusted Net
Income: |
|
|
|
|
|
|
|
|
Net income (loss) attributable to TransUnion |
|
$ |
(399.8 |
) |
|
$ |
79.2 |
|
|
$ |
(293.2 |
) |
|
$ |
223.0 |
|
Discontinued operations, net of tax |
|
|
0.5 |
|
|
|
(2.4 |
) |
|
|
0.7 |
|
|
|
(2.3 |
) |
Income (loss) from continuing operations attributable to
TransUnion |
|
$ |
(399.3 |
) |
|
$ |
76.8 |
|
|
$ |
(292.5 |
) |
|
$ |
220.7 |
|
Adjustments before income tax
items: |
|
|
|
|
|
|
|
|
Goodwill impairment2 |
|
$ |
495.0 |
|
|
$ |
— |
|
|
$ |
495.0 |
|
|
$ |
— |
|
Stock-based compensation3 |
|
|
27.0 |
|
|
|
19.9 |
|
|
|
73.3 |
|
|
|
60.8 |
|
Mergers and acquisitions, divestitures and business
optimization4 |
|
|
(6.0 |
) |
|
|
7.8 |
|
|
|
24.5 |
|
|
|
36.4 |
|
Accelerated technology investment5 |
|
|
16.3 |
|
|
|
12.1 |
|
|
|
53.5 |
|
|
|
32.2 |
|
Net other6 |
|
|
1.8 |
|
|
|
3.4 |
|
|
|
9.6 |
|
|
|
40.5 |
|
Amortization of certain intangible assets7 |
|
|
72.1 |
|
|
|
76.7 |
|
|
|
221.2 |
|
|
|
231.1 |
|
Total adjustments before
income tax items |
|
$ |
606.2 |
|
|
$ |
119.9 |
|
|
$ |
877.0 |
|
|
$ |
401.0 |
|
Change in provision for income
taxes per Schedule 4 |
|
|
(29.5 |
) |
|
|
(16.5 |
) |
|
|
(85.2 |
) |
|
|
(73.2 |
) |
Adjusted Net Income |
|
$ |
177.4 |
|
|
$ |
180.2 |
|
|
$ |
499.3 |
|
|
$ |
548.5 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
193.4 |
|
|
|
192.6 |
|
|
|
193.3 |
|
|
|
192.4 |
|
Diluted8 |
|
|
194.6 |
|
|
|
193.2 |
|
|
|
194.8 |
|
|
|
193.1 |
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per
Share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.92 |
|
|
$ |
0.94 |
|
|
$ |
2.58 |
|
|
$ |
2.85 |
|
Diluted |
|
$ |
0.91 |
|
|
$ |
0.93 |
|
|
$ |
2.56 |
|
|
$ |
2.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of
diluted earnings per share from net income attributable to
TransUnion to Adjusted Diluted Earnings per Share: |
|
|
|
|
|
|
|
|
Diluted earnings per common
share1 from: |
|
|
|
|
|
|
|
|
Net income (loss) attributable to TransUnion |
|
$ |
(2.07 |
) |
|
$ |
0.41 |
|
|
$ |
(1.52 |
) |
|
$ |
1.15 |
|
Discontinued operations, net of tax |
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
|
(0.01 |
) |
Income (loss) from continuing operations attributable to
TransUnion |
|
$ |
(2.06 |
) |
|
$ |
0.40 |
|
|
$ |
(1.51 |
) |
|
$ |
1.14 |
|
Adjustments before income tax
items: |
|
|
|
|
|
|
|
|
Goodwill impairment2 |
|
|
2.54 |
|
|
|
— |
|
|
|
2.54 |
|
|
|
— |
|
Stock-based compensation3 |
|
|
0.14 |
|
|
|
0.10 |
|
|
|
0.38 |
|
|
|
0.31 |
|
Mergers and acquisitions, divestitures and business
optimization4 |
|
|
(0.03 |
) |
|
|
0.04 |
|
|
|
0.13 |
|
|
|
0.19 |
|
Accelerated technology investment5 |
|
|
0.08 |
|
|
|
0.06 |
|
|
|
0.27 |
|
|
|
0.17 |
|
Net other6 |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.21 |
|
Amortization of certain intangible assets7 |
|
|
0.37 |
|
|
|
0.40 |
|
|
|
1.14 |
|
|
|
1.20 |
|
Total adjustments before
income tax items |
|
$ |
3.11 |
|
|
$ |
0.62 |
|
|
$ |
4.50 |
|
|
$ |
2.08 |
|
Change in provision for income
taxes per Schedule 4 |
|
|
(0.15 |
) |
|
|
(0.09 |
) |
|
|
(0.44 |
) |
|
|
(0.38 |
) |
Impact of additional dilutive
shares8 |
|
|
0.01 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
Adjusted Diluted Earnings per
Share |
|
$ |
0.91 |
|
|
$ |
0.93 |
|
|
$ |
2.56 |
|
|
$ |
2.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions,
rounding differences may exist in the table above and footnotes
below.
- For the three and nine months ended
September 30, 2023, each component of earnings per share is
calculated independently, therefore, rounding differences exist in
the table above.
- For the three and nine months ended
September 30, 2023, we recorded a goodwill impairment of $495
million related to our United Kingdom reporting unit in our
International segment.
- Consisted of stock-based
compensation, including amounts which are cash settled.
- Mergers and acquisitions,
divestitures and business optimization consisted of the following
adjustments:For the three months ended September 30, 2023, $4.1
million of Neustar integration costs; $1.7 million of acquisition
expenses; a $1.0 million adjustment to fair value of a note
receivable; an $(11.7) million adjustment to the fair value of a
put option liability related to a minority investment; and $(1.1)
million of reimbursements for transition services related to
divested businesses, net of separation expenses.For the three
months ended September 30, 2022, $8.7 million of Neustar
integration costs; $3.4 million of acquisition expenses; a $(3.4)
million gain related to a government tax reimbursement from a
recent business acquisition; $(0.7) million of reimbursements for
transition services related to divested businesses, net of
separation expenses; and a $(0.3) million adjustment to the fair
value of a put option liability related to a minority
investment.For the nine months ended September 30, 2023, $15.6
million of Neustar integration costs; a $9.1 million loss on the
impairment of a Cost Method Investment; $5.5 million of acquisition
expenses; $5.1 million of adjustments to liabilities from a recent
acquisition; a $(6.2) million adjustment to the fair value of a put
option liability related to a minority investment; $(2.4) million
of reimbursements for transition services related to divested
businesses, net of separation expense; a $(1.3) million adjustment
to the fair value of a note receivables; and a $(0.8) million gain
on the disposal of a Cost Method Investment.For the nine months
ended September 30, 2022, $25.5 million of Neustar integration
costs; $21.4 million of acquisition expenses; $(6.0) million of
reimbursements for transition services related to divested
businesses, net of separation expenses; a $(3.4) million gain
related to a government tax reimbursement from a recent business
acquisition; and a $(1.0) million adjustment to the fair value of a
put option liability related to a minority investment.
- Represents expenses associated with
our accelerated technology investment to migrate to the cloud.
- Net other consisted of the
following adjustments:For the three months ended September 30,
2023, $1.0 million of deferred loan fees written off as a result of
the prepayment on our debt; and a $0.8 million net loss from
currency remeasurement of our foreign operations and other.For the
three months ended September 30, 2022, a $3.4 million net loss from
currency remeasurement of our foreign operations and other.For the
nine months ended September 30, 2023, $3.1 million of deferred
loan fees written off as a result of the prepayment on our debt;
and a $6.5 million net loss from currency remeasurement of our
foreign operations and other.For the nine months ended September
30, 2022, a $28.4 million net increase in certain legal and
regulatory expenses; $6.5 million of deferred loan fees written off
as a result of the prepayments on our debt; and a $5.6 million net
loss from currency remeasurement of our foreign operations and
other.
- 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.
- Diluted share counts for Adjusted
Diluted Earnings Per Share includes an additional 1.2 million and
1.5 million of dilutive securities for the three months and nine
months ended September 30, 2023, respectively, which are not
included in GAAP diluted weighted-average shares outstanding due to
the Company’s net loss position for the three and nine months ended
September 30, 2023.
SCHEDULE 4TRANSUNION AND
SUBSIDIARIESAdjusted Provision for Income Taxes
and Adjusted Effective Tax Rate (Unaudited)(dollars in
millions)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Income (loss) from continuing
operations before income taxes |
$ |
(372.7 |
) |
|
$ |
110.8 |
|
|
$ |
(220.5 |
) |
|
$ |
316.1 |
|
Total adjustments before income tax items from Schedule 3 |
|
606.2 |
|
|
|
119.9 |
|
|
|
877.0 |
|
|
|
401.0 |
|
Adjusted income from
continuing operations before income taxes |
$ |
233.5 |
|
|
$ |
230.8 |
|
|
$ |
656.5 |
|
|
$ |
717.0 |
|
|
|
|
|
|
|
|
|
Reconciliation of
provision for income taxes to Adjusted Provision for Income
Taxes: |
|
|
|
|
|
|
|
Provision for income
taxes |
|
(22.2 |
) |
|
|
(30.6 |
) |
|
|
(60.1 |
) |
|
|
(84.1 |
) |
Adjustments for income
taxes: |
|
|
|
|
|
|
|
Tax effect of above adjustments1 |
|
(27.9 |
) |
|
|
(26.1 |
) |
|
|
(90.1 |
) |
|
|
(82.7 |
) |
Eliminate impact of excess tax expenses/(benefits) for stock-based
compensation |
|
0.7 |
|
|
|
(0.6 |
) |
|
|
2.7 |
|
|
|
(5.6 |
) |
Other2 |
|
(2.2 |
) |
|
|
10.2 |
|
|
|
2.2 |
|
|
|
15.1 |
|
Total adjustments for income
taxes |
$ |
(29.5 |
) |
|
$ |
(16.5 |
) |
|
$ |
(85.2 |
) |
|
$ |
(73.2 |
) |
Adjusted Provision for
Income Taxes |
$ |
(51.7 |
) |
|
$ |
(47.1 |
) |
|
$ |
(145.3 |
) |
|
$ |
(157.3 |
) |
|
|
|
|
|
|
|
|
Effective tax rate |
|
(6.0 |
)% |
|
|
27.6 |
% |
|
|
(27.2 |
)% |
|
|
26.6 |
% |
Adjusted Effective Tax
Rate |
|
22.2 |
% |
|
|
20.4 |
% |
|
|
22.1 |
% |
|
|
21.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
- Tax rates used to
calculate the tax expense impact are based on the nature of each
item.
- For the three
months ended September 30, 2023, ($1.8) million of valuation
allowances related to prior periods; ($0.5) million of return to
provision, audit adjustments, and reserves related to prior
periods; and $0.1 of other adjustments.For the three months ended
September 30, 2022, $6.7 million of valuation allowances related to
prior periods; $1.8 million of return to provision and audit
adjustments related to prior periods; and $1.7 million of other
adjustments.For the nine months ended September 30, 2023, $2.6
million of return to provision, audit adjustments, and reserves
related to prior periods; ($0.7) million of valuation allowances
related to prior periods; and $0.3 million of other adjustments.For
the nine months ended September 30, 2022, $7.3 million of valuation
allowances related to prior periods; $2.8 million of return to
provision and audit adjustments related to prior periods; $2.0
million of deferred tax rate adjustments, and $3.0 million of other
adjustments.
SCHEDULE 5TRANSUNION AND
SUBSIDIARIESLeverage Ratio
(Unaudited)(dollars in millions)
|
|
Trailing Twelve Months Ended September 30, 2023 |
Reconciliation of net
income (loss) attributable to TransUnion to Adjusted
EBITDA: |
|
|
Net income (loss) attributable to TransUnion |
|
$ |
(246.8 |
) |
Discontinued operations, net
of tax |
|
|
(14.3 |
) |
Income (loss) from continuing
operations attributable to TransUnion |
|
$ |
(261.1 |
) |
Net interest expense |
|
|
268.0 |
|
Provision for income
taxes |
|
|
95.9 |
|
Depreciation and
amortization |
|
|
521.2 |
|
EBITDA |
|
$ |
623.9 |
|
Adjustments to
EBITDA: |
|
|
Goodwill impairment1 |
|
$ |
495.0 |
|
Stock-based compensation2 |
|
|
93.6 |
|
Mergers and acquisitions, divestitures and business
optimization3 |
|
|
38.8 |
|
Accelerated technology investment4 |
|
|
72.7 |
|
Net other5 |
|
|
14.9 |
|
Total adjustments to
EBITDA |
|
$ |
715.0 |
|
Leverage Ratio
Adjusted EBITDA |
|
$ |
1,338.9 |
|
|
|
|
Total debt |
|
$ |
5,368.5 |
|
Less: Cash and cash
equivalents |
|
|
420.9 |
|
Net Debt |
|
$ |
4,947.7 |
|
|
|
|
Ratio of Net Debt to Net
income (loss) attributable to TransUnion |
|
|
(20.0 |
) |
Leverage Ratio |
|
|
3.7 |
|
|
|
|
|
|
As a result of displaying amounts in millions,
rounding differences may exist in the table above.
- For the three and
nine months ended September 30, 2023, we recorded a goodwill
impairment of $495.0 million related to our United Kingdom
reporting unit in our International segment.
- Consisted of
stock-based compensation, including amounts which are cash
settled.
-
Mergers and acquisitions, divestitures and business optimization
consisted of the following adjustments: $23.3 million of Neustar
integration costs; a $13.7 million loss on the impairment of Cost
Method Investments; $7.9 million of acquisition expenses; a $5.8
million adjustment to the fair value of a put option liability
related to a minority investment; a $5.0 million adjustment to a
liability from a recent acquisition; $(3.2) million of
reimbursements for transition services related to divested
businesses, net of separation expenses; a $(1.3) million adjustment
to the fair value of a note receivable; and a $(0.8) million gain
on disposal of a Cost Method investment.
-
Represents expenses associated with our accelerated technology
investment to migrate to the cloud.
-
Net other consisted of the following adjustments: a $7.4 million
net loss from currency remeasurement of our foreign operations,
loan fees and other; and $7.4 million of deferred loan fees written
off as a result of the prepayments on our debt.
SCHEDULE 6TRANSUNION AND
SUBSIDIARIESSegment Depreciation and Amortization
(Unaudited)(in millions)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
U.S. Markets |
$ |
90.5 |
|
|
$ |
88.9 |
|
|
$ |
266.7 |
|
|
$ |
263.2 |
|
International |
|
31.0 |
|
|
|
30.8 |
|
|
|
95.5 |
|
|
|
95.7 |
|
Consumer Interactive |
|
8.8 |
|
|
|
8.6 |
|
|
|
25.6 |
|
|
|
26.2 |
|
Corporate |
|
1.1 |
|
|
|
1.2 |
|
|
|
3.3 |
|
|
|
3.8 |
|
Total depreciation and
amortization |
$ |
131.3 |
|
|
$ |
129.6 |
|
|
$ |
391.1 |
|
|
$ |
389.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
SCHEDULE 7TRANSUNION AND
SUBSIDIARIESReconciliation of Non-GAAP Guidance
(Unaudited)(in millions, except per share data)
|
Three Months Ended December 31, 2023 |
|
Twelve Months Ended December 31, 2023 |
|
Low |
|
High |
|
Low |
|
High |
Guidance
reconciliation of net income attributable to TransUnion to Adjusted
EBITDA: |
|
|
|
|
|
|
|
Net income (loss) attributable to TransUnion |
$ |
17 |
|
|
$ |
34 |
|
|
$ |
(277 |
) |
|
$ |
(259 |
) |
Discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Income (loss) from continuing
operations attributable to TransUnion |
$ |
16 |
|
|
$ |
34 |
|
|
$ |
(276 |
) |
|
$ |
(258 |
) |
Interest, taxes and
depreciation and amortization |
|
218 |
|
|
|
213 |
|
|
|
871 |
|
|
|
866 |
|
EBITDA |
$ |
235 |
|
|
$ |
247 |
|
|
$ |
595 |
|
|
$ |
608 |
|
Stock-based compensation,
mergers, acquisitions divestitures and business
optimization-related expenses and other adjustments1 |
|
68 |
|
|
|
68 |
|
|
|
725 |
|
|
|
725 |
|
Adjusted EBITDA |
$ |
303 |
|
|
$ |
315 |
|
|
$ |
1,320 |
|
|
$ |
1,333 |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to TransUnion margin |
|
1.8 |
% |
|
|
3.7 |
% |
|
|
(7.3 |
)% |
|
|
(6.8 |
)% |
Adjusted EBITDA margin2 |
|
33.0 |
% |
|
|
33.8 |
% |
|
|
34.8 |
% |
|
|
35.0 |
% |
|
|
|
|
|
|
|
|
Guidance
reconciliation of diluted earnings per share to Adjusted Diluted
Earnings per Share: |
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.08 |
|
|
$ |
0.18 |
|
|
$ |
(1.43 |
) |
|
$ |
(1.34 |
) |
Adjustments to diluted
earnings per share1 |
|
0.59 |
|
|
|
0.55 |
|
|
|
4.67 |
|
|
|
4.62 |
|
Adjusted Diluted Earnings per
Share |
$ |
0.67 |
|
|
$ |
0.72 |
|
|
$ |
3.24 |
|
|
$ |
3.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
- These adjustments
include the same adjustments we make to our Adjusted EBITDA and
Adjusted Net Income as discussed in the Non-GAAP Financial Measures
section of our Earnings Release.
- Consolidated
Adjusted EBITDA margin is calculated by dividing Consolidated
Adjusted EBITDA by total revenue.
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