TransUnion (NYSE:TRU) (the “Company”) today announced financial
results for the quarter ended March 31, 2018.
Total revenue was $537 million, an increase of
18 percent (17 percent on a constant currency basis) compared with
the first quarter of 2017. Acquisitions accounted for a 3 percent
increase in revenue. Net income attributable to TransUnion was $73
million, compared with $62 million in the first quarter of 2017.
Diluted earnings per share was $0.38, compared with $0.33 in the
first quarter of 2017.
Adjusted EBITDA was $203 million, an increase of
18 percent (17 percent on a constant currency basis) compared with
the first quarter of 2017. Adjusted EBITDA margin was 37.7%, the
same as the first quarter of 2017. Adjusted Diluted Earnings per
Share was $0.57, an increase of 34 percent compared with the first
quarter of 2017.
“TransUnion is off to a good start in 2018, with
double-digit revenue, Adjusted EBITDA and Adjusted EPS growth in
the first quarter,” said Jim Peck, President and CEO. “This
was driven by strong performance in each of our segments,
highlighted by the ongoing success of our innovation pipeline,
attractive vertical markets and outstanding international
positions. As we look ahead, we are well positioned to continue to
deliver strong results in 2018 and beyond.”
“Today, we are also pleased to announce our
agreement to acquire U.K.-based Callcredit. TransUnion and
Callcredit have strong synergies across our business models and
solutions, and we share a commitment to using information to
benefit consumers and global economies alike. Callcredit is an
outstanding acquisition for TransUnion, and together, we’ll be a
powerful force to deliver value to shareholders, customers and
consumers across all the markets we serve,” Peck added.
First Quarter 2018 Segment Results
U.S. Information Services (USIS)
USIS revenue was $342 million, an increase of 21
percent compared with the first quarter of 2017.
- Online Data Services revenue was $228 million, an increase of
25 percent over the prior year.
- Marketing Services revenue was $52 million, an increase of 23
percent over the prior year.
- Decision Services revenue was $63 million, an increase of 8
percent over the prior year.
Operating income was $83 million, an increase of
15 percent compared with the first quarter of 2017. Adjusted
Operating Income was $114 million, an increase of 15 percent
compared with the first quarter of 2017.
International
International revenue was $96 million, an
increase of 15 percent (11 percent on a constant currency basis)
compared with the first quarter of 2017.
- Developed markets revenue was $31 million, an increase of 12
percent (8 percent on a constant currency basis) over the prior
year.
- Emerging markets revenue was $65 million, an increase of 17
percent (13 percent on a constant currency basis) over the prior
year.
Operating income was $14 million, an increase of
59 percent (51 percent on a constant currency basis) compared with
the first quarter of 2017. Adjusted Operating Income was $26
million, an increase of 8 percent (4 percent on a constant currency
basis) compared with the first quarter of 2017.
Consumer Interactive
Consumer Interactive revenue was $118 million,
an increase of 12 percent compared with the first quarter of 2017.
Revenue in the first quarter of 2018 included approximately $5
million of incremental credit monitoring revenue due to a breach at
a competitor.
Operating income was $53 million, an increase of
11 percent compared with the first quarter of 2017. Adjusted
Operating Income was $55 million, an increase of 11 percent
compared with the first quarter of 2017. Operating income and
Adjusted Operating Income for the first quarter of 2018 included
approximately $5 million of incremental credit monitoring income
due to a breach at a competitor.
Liquidity and Capital Resources
Cash and cash equivalents were $154 million at
March 31, 2018 and $116 million at December 31, 2017. Total debt,
including the current portion of long-term debt, was $2.4 billion
at March 31, 2018, compared with $2.5 billion at December 31,
2017.
For the three months ended March 31, 2018, cash
provided by operating activities increased to $101 million compared
with $65 million in 2017, due primarily to the increase in
operating performance. Cash used in investing activities was $31
million compared with $76 million in 2017, due primarily to
slightly lower cash used for acquisitions. Capital expenditures
were $27 million compared with $26 million in 2017. Cash used in
financing activities was $33 million compared with $41 million in
2017. The decrease in cash used in financing activities was due
primarily to cash used for our stock buy-back program, debt
financing and contingent fees in 2017, partially offset by higher
net principal debt outflows in 2018 compared with 2017.
2018 Full Year Outlook
For the full year of 2018, we are raising our
revenue, Adjusted EBITDA and Adjusted Diluted Earnings per Share
guidance as follows. Revenue is expected to be between $2.170
billion and $2.185 billion, an increase of 12 to 13 percent on a
constant currency basis. Adjusted EBITDA is expected to be between
$845 million and $855 million, an increase of 13 to 14 percent.
Adjusted Diluted Earnings per Share is expected to be between $2.37
and $2.41, an increase of 26 to 28 percent. Adjusted Diluted
Earnings per Share includes a benefit of approximately $0.28 due to
the recently enacted Tax Cuts and Jobs Act.
Consistent with our previous full year guidance,
the revenue guidance includes approximately 2 points growth from
acquisitions that closed in the prior year, with no significant
impact on revenue and Adjusted EBITDA from foreign exchange
rates. Our guidance also includes approximately $15 million of
incremental monitoring revenue due to a breach at a competitor,
compared with $4 million in 2017. The expected increase in this
incremental revenue represents 0.5 percent of the total growth.
2018 Second Quarter Outlook
For the second quarter of 2018, revenue is
expected to be between $534 million and $539 million, an increase
of 12 to 13 percent on a constant currency basis compared with the
second quarter of 2017. Adjusted EBITDA is expected to be between
$208 million and $211 million, an increase of 12 to 14 percent.
Adjusted Diluted Earnings per Share is expected to be between $0.59
and $0.60, an increase of 26 to 29 percent. Adjusted Diluted
Earnings per share includes a benefit of approximately $0.07 due to
the recently enacted Tax Cuts and Jobs Act.
The second quarter revenue guidance includes
approximately 3 points of growth from acquisitions that closed in
the prior year, with no significant impact on revenue and Adjusted
EBITDA from foreign exchange rates. Our guidance includes
approximately $5 million of incremental credit monitoring revenue
due to a breach at a competitor.
Earnings Webcast Details
In conjunction with this release, TransUnion
will host a conference call and webcast today at 8:00 a.m. Central
Time to discuss the business results for the quarter and certain
forward-looking information. This session may be accessed at
www.transunion.com/tru. A replay of the call will also be available
at this website following the conclusion of the call.
About TransUnion
TransUnion is a leading global risk and
information solutions provider to businesses and consumers. The
Company provides consumer reports, risk scores, analytical services
and decisioning capabilities to businesses. Businesses embed its
solutions into their process workflows to acquire new customers,
assess consumer ability to pay for services, identify cross-selling
opportunities, measure and manage debt portfolio risk, collect
debt, verify consumer identities and investigate potential fraud.
Consumers use its solutions to view their credit profiles and
access analytical tools that help them understand and manage their
personal information and take precautions against identity
theft.
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 on Schedule 1 and in our 2018 full year and Second
Quarter Outlook sections 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 Adjusted
EBITDA, Adjusted EBITDA Margin, segment Adjusted Operating Income,
segment Adjusted Operating Margin, Adjusted Effective Tax Rate,
Adjusted Net Income (Loss) and Adjusted Diluted Earnings per Share.
These are important financial measures for the Company but are not
financial measures as defined by GAAP. We present these financial
measures as supplemental measures of our operating performance
because we believe they provide meaningful information regarding
our performance and provide a basis to compare operating results
between periods. We present Adjusted Operating Income, 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. Also, Adjusted EBITDA
is a measure frequently used by securities analysts, investors and
other interested parties in their evaluation of the operating
performance of companies similar to ours. In addition, our board of
directors and executive management team use Adjusted EBITDA as a
compensation measure. Furthermore, 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.
Adjusted EBITDA is defined as net income (loss)
attributable to TransUnion plus net interest expense, plus (less)
provision (benefit) for income taxes, plus depreciation and
amortization, plus stock-based compensation, plus mergers and
acquisitions, divestitures and business optimization expenses, plus
technology transformation expenses, plus (less) certain other
expenses (income). Adjusted Operating Income is defined as
operating income plus stock-based compensation, plus mergers and
acquisitions, divestitures and business optimization expenses, plus
technology transformation expenses, plus (less) certain other
expenses (income), plus amortization of certain intangible assets.
Adjusted Effective Tax Rate is defined as adjusted provision for
income taxes divided by adjusted income before income taxes.
Adjusted Net Income is defined as net income (loss) attributable to
TransUnion plus stock-based compensation, plus mergers and
acquisitions, divestitures and business optimization expenses, plus
technology transformation expenses, plus (less) certain other
expenses (income), plus amortization of certain intangible assets,
plus or minus the related changes in provision for income taxes,
less any one-time tax provision benefits from the Tax Cuts and Jobs
Act. Adjusted Diluted Earnings per Share is defined as Adjusted Net
Income divided by weighted-average diluted shares outstanding. The
above definitions apply to our calculations for the historical
periods shown on schedules 1 through 6 and for the periods covered
by our guidance shown on Schedule 7.
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. These
statements often include words such as “anticipate,” “expect,”
“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 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 and
integrate the operations of acquired businesses; 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, 2017, 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: ability to meet the closing conditions to our
announced agreement to acquire Callcredit; the risk that
regulatory approvals required for the acquisition
of Callcredit are not obtained or are obtained subject to
conditions that are not anticipated; delay in closing the
acquisition of Callcredit; failure to realize the benefits expected
from the proposed transaction; the effects of pending and future
legislation; risks related to disruption of management time from
ongoing business operations due to the proposed transaction;
business disruption following the acquisition; macroeconomic
factors beyond the TransUnion’s control; risks related to the
TransUnion’s indebtedness and other consequences associated with
mergers, acquisitions and divestitures and legislative and
regulatory actions and reforms.
TRANSUNION AND SUBSIDIARIES |
Consolidated Balance Sheets |
(in millions, except per share data) |
|
|
March 31, 2018 |
|
December 31, 2017 |
|
Unaudited |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
154.3 |
|
|
$ |
115.8 |
|
Trade
accounts receivable, net of allowance of $11.3 and $9.9 |
344.0 |
|
|
326.7 |
|
Other
current assets |
148.2 |
|
|
146.2 |
|
Total current
assets |
646.5 |
|
|
588.7 |
|
Property, plant and
equipment, net of accumulated depreciation and amortization of
$318.7 and $299.3 |
189.3 |
|
|
198.6 |
|
Goodwill, net |
2,377.5 |
|
|
2,368.8 |
|
Other intangibles, net
of accumulated amortization of $1,040.4 and $993.6 |
1,799.9 |
|
|
1,825.8 |
|
Other assets |
150.6 |
|
|
136.6 |
|
Total
assets |
$ |
5,163.8 |
|
|
$ |
5,118.5 |
|
Liabilities and
stockholders’ equity |
|
|
|
Current
liabilities: |
|
|
|
Trade
accounts payable |
$ |
128.8 |
|
|
$ |
131.3 |
|
Short-term debt and current portion of long-term debt |
89.2 |
|
|
119.3 |
|
Other
current liabilities |
182.4 |
|
|
207.8 |
|
Total current
liabilities |
400.4 |
|
|
458.4 |
|
Long-term debt |
2,334.7 |
|
|
2,345.3 |
|
Deferred taxes |
418.2 |
|
|
419.4 |
|
Other liabilities |
78.4 |
|
|
70.8 |
|
Total
liabilities |
3,231.7 |
|
|
3,293.9 |
|
Stockholders’
equity: |
|
|
|
Common
stock, $0.01 par value; 1.0 billion shares authorized at March 31,
2018 and December 31, 2017, 188.2 million and 187.4
million shares issued at March 31, 2018 and December 31,
2017, respectively, and 184.0 million shares and 183.2 million
shares outstanding as of March 31, 2018 and December 31,
2017, respectively |
1.9 |
|
|
1.9 |
|
Additional paid-in capital |
1,882.5 |
|
|
1,863.5 |
|
Treasury
stock at cost; 4.2 million shares at March 31, 2018 and
December 31, 2017, respectively |
(139.2 |
) |
|
(138.8 |
) |
Retained
earnings |
202.3 |
|
|
137.4 |
|
Accumulated other comprehensive loss |
(113.6 |
) |
|
(135.3 |
) |
Total TransUnion
stockholders’ equity |
1,833.9 |
|
|
1,728.7 |
|
Noncontrolling
interests |
98.2 |
|
|
95.9 |
|
Total
stockholders’ equity |
1,932.1 |
|
|
1,824.6 |
|
Total
liabilities and stockholders’ equity |
$ |
5,163.8 |
|
|
$ |
5,118.5 |
|
TRANSUNION AND SUBSIDIARIES |
Consolidated Statements of Income
(Unaudited) |
(in millions, except per share data) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Revenue |
$ |
537.4 |
|
|
$ |
455.0 |
|
Operating
expenses |
|
|
|
Cost of
services (exclusive of depreciation and amortization below) |
182.3 |
|
|
151.2 |
|
Selling,
general and administrative |
163.3 |
|
|
144.7 |
|
Depreciation and amortization |
66.6 |
|
|
58.0 |
|
Total operating
expenses |
412.2 |
|
|
353.9 |
|
Operating
income |
125.2 |
|
|
101.1 |
|
Non-operating
income and (expense) |
|
|
|
Interest
expense |
(22.6 |
) |
|
(21.5 |
) |
Interest
income |
0.8 |
|
|
1.3 |
|
Earnings
from equity method investments |
2.3 |
|
|
1.7 |
|
Other
income and (expense), net |
(2.7 |
) |
|
(6.6 |
) |
Total
non-operating income and (expense) |
(22.2 |
) |
|
(25.1 |
) |
Income before
income taxes |
103.0 |
|
|
76.0 |
|
Provision for
income taxes |
(27.6 |
) |
|
(11.5 |
) |
Net
income |
75.4 |
|
|
64.5 |
|
Less: net
income attributable to the noncontrolling interests |
(2.3 |
) |
|
(2.2 |
) |
Net income
attributable to TransUnion |
$ |
73.1 |
|
|
$ |
62.3 |
|
|
|
|
|
Earnings per
share: |
|
|
|
Basic |
$ |
0.40 |
|
|
$ |
0.34 |
|
Diluted |
$ |
0.38 |
|
|
$ |
0.33 |
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
Basic |
183.7 |
|
|
182.7 |
|
Diluted |
190.1 |
|
|
190.3 |
|
TRANSUNION AND SUBSIDIARIES |
Consolidated Statements of Cash Flows
(Unaudited) |
(in millions) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Cash flows from
operating activities: |
|
|
|
Net
income |
$ |
75.4 |
|
|
$ |
64.5 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
66.6 |
|
|
58.0 |
|
Loss on
refinancing transaction |
— |
|
|
5.0 |
|
Amortization and loss on fair value of hedge instrument |
(0.7 |
) |
|
— |
|
Impairment of Cost Method Investment |
1.6 |
|
|
— |
|
Equity in
net income of affiliates, net of dividends |
(1.6 |
) |
|
(1.4 |
) |
Deferred
taxes |
0.2 |
|
|
(14.0 |
) |
Amortization of discount and deferred financing fees |
0.7 |
|
|
0.7 |
|
Stock-based compensation |
9.5 |
|
|
8.0 |
|
Payment
of contingent obligation |
— |
|
|
(2.0 |
) |
Provision
for losses on trade accounts receivable |
1.8 |
|
|
1.2 |
|
Other |
(0.2 |
) |
|
(2.3 |
) |
Changes
in assets and liabilities: |
|
|
|
Trade
accounts receivable |
(18.6 |
) |
|
(10.7 |
) |
Other
current and long-term assets |
(2.2 |
) |
|
(11.3 |
) |
Trade
accounts payable |
(3.7 |
) |
|
(0.9 |
) |
Other
current and long-term liabilities |
(27.8 |
) |
|
(29.5 |
) |
Cash provided
by operating activities |
101.0 |
|
|
65.3 |
|
Cash flows from
investing activities: |
|
|
|
Capital
expenditures |
(26.9 |
) |
|
(26.0 |
) |
Proceeds
from sale of trading securities |
1.8 |
|
|
1.0 |
|
Purchases
of trading securities |
(1.5 |
) |
|
(1.3 |
) |
Proceeds
from sale of other investments |
3.4 |
|
|
35.7 |
|
Purchases
of other investments |
(7.2 |
) |
|
(26.9 |
) |
Acquisitions and purchases of noncontrolling interests, net of cash
acquired |
(0.1 |
) |
|
(58.7 |
) |
Cash used in
investing activities |
(30.5 |
) |
|
(76.2 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds
from senior secured revolving line of credit |
— |
|
|
40.0 |
|
Payments
of senior secured revolving line of credit |
(30.0 |
) |
|
— |
|
Repayments of debt |
(11.5 |
) |
|
(14.3 |
) |
Debt
financing fees |
— |
|
|
(5.0 |
) |
Proceeds
from issuance of common stock and exercise of stock options |
9.4 |
|
|
10.1 |
|
Treasury
stock purchased |
— |
|
|
(68.3 |
) |
Payment
of contingent obligation |
— |
|
|
(3.9 |
) |
Other |
(0.4 |
) |
|
— |
|
Cash used in
financing activities |
(32.5 |
) |
|
(41.4 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
0.5 |
|
|
1.3 |
|
Net change in cash and
cash equivalents |
38.5 |
|
|
(51.0 |
) |
Cash and cash
equivalents, beginning of period |
115.8 |
|
|
182.2 |
|
Cash and cash
equivalents, end of period |
$ |
154.3 |
|
|
$ |
131.2 |
|
SCHEDULE 1 |
TRANSUNION AND SUBSIDIARIES |
As Reported and Constant Currency Growth Rates
- Unaudited |
|
|
|
Three Months Ended March 31, 2018 Percent Change |
Consolidated: |
|
|
Revenue as
reported |
|
18.1 |
% |
Revenue constant
currency |
|
17.4 |
% |
|
|
|
Operating income |
|
24.0 |
% |
Operating income
constant currency |
|
23.3 |
% |
Adjusted Operating
Income |
|
17.1 |
% |
Adjusted Operating
Income constant currency |
|
16.5 |
% |
|
|
|
Adjusted EBITDA |
|
18.1 |
% |
Adjusted EBITDA
constant currency |
|
17.3 |
% |
|
|
|
|
|
|
International: |
|
|
International
Consolidated |
|
|
Revenue as
reported |
|
15.0 |
% |
Revenue constant
currency |
|
11.2 |
% |
|
|
|
Operating income |
|
58.8 |
% |
Operating income
constant currency |
|
51.1 |
% |
Adjusted Operating
Income |
|
7.5 |
% |
Adjusted Operating
Income constant currency |
|
3.9 |
% |
|
|
|
Developed Markets |
|
|
Revenue as
reported |
|
11.6 |
% |
Revenue constant
currency |
|
8.5 |
% |
|
|
|
Emerging Markets |
|
|
Revenue as
reported |
|
16.8 |
% |
Revenue constant
currency |
|
12.6 |
% |
Constant currency percentage changes 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.
SCHEDULE 2 |
TRANSUNION AND SUBSIDIARIES |
EBITDA, Adjusted EBITDA, EBITDA Margin and
Adjusted EBITDA Margin - Unaudited |
(dollars in millions) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Revenue |
$ |
537.4 |
|
|
$ |
455.0 |
|
Reconciliation of net
income attributable to TransUnion to Adjusted EBITDA: |
|
|
|
Net income attributable
to TransUnion |
$ |
73.1 |
|
|
$ |
62.3 |
|
Net interest
expense |
21.8 |
|
|
20.2 |
|
Provision for income
taxes |
27.6 |
|
|
11.5 |
|
Depreciation and
amortization |
66.6 |
|
|
58.0 |
|
EBITDA |
189.2 |
|
|
152.1 |
|
Adjustments to
EBITDA: |
|
|
|
Stock-based
compensation(1) |
10.8 |
|
|
13.1 |
|
Mergers and
acquisitions, divestitures and business optimization(2) |
3.3 |
|
|
2.5 |
|
Other(3) |
(0.6 |
) |
|
3.9 |
|
Total adjustments to
EBITDA |
13.5 |
|
|
19.5 |
|
Adjusted EBITDA |
$ |
202.6 |
|
|
$ |
171.6 |
|
|
|
|
|
EBITDA margin |
35.2 |
% |
|
33.4 |
% |
Adjusted EBITDA
Margin |
37.7 |
% |
|
37.7 |
% |
As a result of displaying amounts in millions,
rounding differences may exist in the table above.
(1) Consisted of stock-based compensation
and cash-settled stock-based compensation.
(2) For the three months ended March 31,
2018, consisted of the following adjustments to non-operating
income and expense: $1.7 million of acquisition expenses; and a
$1.6 million loss on the impairment of an investment in a
nonconsolidated affiliate.
For the three months ended March 31, 2017,
consisted of the following adjustments to operating income: a
$(0.1) million reduction to contingent consideration expense from
previous acquisitions. For the three months ended March 31, 2017,
consisted of the following adjustments to non-operating income and
expense: $2.6 million of acquisition expenses.
(3) For the three months ended March 31,
2018, consisted of the following adjustments to non-operating
income and expense: a $(0.7) million gain from currency
remeasurement of our foreign operations; a $(0.7) million
mark-to-market gain related to ineffectiveness of our interest rate
hedge; $0.4 million of fees incurred in connection with a secondary
offering of shares of TransUnion common stock by certain of our
stockholders; and $0.4 million of loan fees.
For the three months ended March 31, 2017,
consisted of the following adjustments to non-operating income and
expense: $5.0 million of fees related to the refinancing of our
senior secured credit facility; $0.4 million of fees incurred in
connection with a secondary offering of shares of TransUnion common
stock by certain of our stockholders; $0.3 million of loan fees;
$(1.5) million of currency remeasurement of our foreign operations;
a $(0.1) million mark-to-market gain related to ineffectiveness of
our interest rate hedge; and $(0.2) million of miscellaneous.
SCHEDULE 3 |
TRANSUNION AND SUBSIDIARIES |
Adjusted Net Income and Adjusted Earnings Per
Share - Unaudited |
(in millions, except per share data) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Net income attributable
to TransUnion |
$ |
73.1 |
|
|
$ |
62.3 |
|
Adjustments before
income tax items: |
|
|
|
Stock-based compensation(1) |
10.8 |
|
|
13.1 |
|
Mergers
and acquisitions, divestitures and business optimization(2) |
3.3 |
|
|
2.5 |
|
Other(3) |
(1.0 |
) |
|
3.9 |
|
Amortization of certain intangible assets (4) |
36.6 |
|
|
33.5 |
|
Total adjustments
before income tax items |
49.7 |
|
|
53.0 |
|
Change in
provision for income taxes per schedule 4 |
(15.3 |
) |
|
(35.2 |
) |
Adjusted Net
Income |
$ |
107.5 |
|
|
$ |
80.2 |
|
|
|
|
|
Adjusted Earnings per
Share: |
|
|
|
Basic |
$ |
0.59 |
|
|
$ |
0.44 |
|
Diluted(5) |
$ |
0.57 |
|
|
$ |
0.42 |
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
Basic |
183.7 |
|
|
182.7 |
|
Diluted(5) |
190.1 |
|
|
190.3 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
(1) Consisted of stock-based compensation and cash-settled
stock-based compensation.
(2) For the three months ended March 31, 2018, consisted
of the following adjustments to non-operating income and expense:
$1.7 million of acquisition expenses; and a $1.6 million loss on
the impairment of an investment in a nonconsolidated affiliate.
For the three months ended March 31, 2017,
consisted of the following adjustments to operating income: a
$(0.1) million reduction to contingent consideration expense from
previous acquisitions. For the three months ended March 31, 2017,
consisted of the following adjustments to non-operating income and
expense: $2.6 million of acquisition expenses.
(3) For the three months ended March 31, 2018, consisted
of the following adjustments to non-operating income and expense: a
$(0.7) million gain from currency remeasurement of our foreign
operations; a $(0.7) million mark-to-market gain related to
ineffectiveness of our interest rate hedge; and $0.4 million of
fees incurred in connection with a secondary offering of shares of
TransUnion common stock by certain of our stockholders.
For the three months ended March 31, 2017,
consisted of the following adjustments to non-operating income and
expense: $5.0 million of fees related to the refinancing of our
senior secured credit facility; $0.4 million of fees incurred in
connection with a secondary offering of shares of TransUnion common
stock by certain of our stockholders; $(1.5) million of currency
remeasurement of our foreign operations; a $(0.1) million
mark-to-market gain related to ineffectiveness of our interest rate
hedge; and $0.1 million of miscellaneous.
(4) Consisted of amortization of intangible assets from
our 2012 change in control and amortization of intangible assets
established in business acquisitions after our 2012 change in
control.
(5) As of March 31, 2018, there were 0.1 million
anti-dilutive weighted stock-based awards outstanding for the
three-month period. There were no contingently issuable stock-based
awards outstanding that were excluded from the diluted earnings per
share calculation.
As of March 31, 2017, there were 0.2 million
anti-dilutive weighted shares outstanding and 0.3 million
contingently issuable market-based stock awards excluded from the
diluted earnings per share calculations because the market
conditions had not been met.
SCHEDULE 4 |
TRANSUNION AND SUBSIDIARIES |
Effective Tax Rate and Adjusted Effective Tax
Rate - Unaudited |
(dollars in millions) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Income before income
taxes |
$ |
103.0 |
|
|
$ |
76.0 |
|
Total
adjustments before income taxes per Schedule 3 |
49.7 |
|
|
53.0 |
|
Adjusted income before
income taxes |
$ |
152.7 |
|
|
$ |
129.0 |
|
|
|
|
|
Provision for income
taxes |
$ |
(27.6 |
) |
|
$ |
(11.5 |
) |
Adjustments for income
taxes: |
|
|
|
Tax
effect of above adjustments(1) |
(11.5 |
) |
|
(17.9 |
) |
Eliminate
impact of adjustments for unremitted foreign earnings(2) |
— |
|
|
(4.3 |
) |
Eliminate
impact of excess tax benefits for share compensation(3) |
(8.2 |
) |
|
(11.6 |
) |
Other(4) |
4.4 |
|
|
(1.4 |
) |
Total adjustments for
income taxes |
(15.3 |
) |
|
(35.2 |
) |
Adjusted provision for
income taxes |
$ |
(43.0 |
) |
|
$ |
(46.6 |
) |
|
|
|
|
Effective tax rate |
26.8 |
% |
|
15.1 |
% |
Adjusted Effective Tax
Rate |
28.1 |
% |
|
36.2 |
% |
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 impact of certain adjustments related to
our deferred tax liability for unremitted earnings.
(3) Eliminates the impact of excess tax
benefits for share compensation resulting from adoption of ASU
2016-09, Compensation - Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting.
(4) Eliminates the impact of state
tax rate changes on deferred taxes, valuation allowances on foreign
net operating losses, and valuation allowances on capital losses
and other discrete adjustments.
SCHEDULE 5 |
TRANSUNION AND SUBSIDIARIES |
Adjusted Operating Income, Operating Margin and
Adjusted Operating Margin - Unaudited |
(dollars in millions) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Revenue: |
|
|
|
Online
Data Services |
$ |
228.3 |
|
|
$ |
182.4 |
|
Marketing
Services |
51.5 |
|
|
42.0 |
|
Decision
Services |
62.5 |
|
|
57.8 |
|
Total USIS |
342.3 |
|
|
282.2 |
|
Developed
Markets |
31.3 |
|
|
28.0 |
|
Emerging
Markets |
64.6 |
|
|
55.4 |
|
Total
International |
95.9 |
|
|
83.4 |
|
Consumer
Interactive |
117.9 |
|
|
105.0 |
|
Total revenue,
gross |
$ |
556.1 |
|
|
$ |
470.6 |
|
|
|
|
|
Intersegment revenue
eliminations: |
|
|
|
USIS
Online |
$ |
(17.4 |
) |
|
$ |
(14.5 |
) |
International Developed Markets |
(1.2 |
) |
|
(1.0 |
) |
International Emerging Markets |
— |
|
|
(0.1 |
) |
Consumer
Interactive |
(0.2 |
) |
|
— |
|
Total intersegment
revenue eliminations |
(18.8 |
) |
|
(15.6 |
) |
Total revenue as
reported |
$ |
537.4 |
|
|
$ |
455.0 |
|
|
|
|
|
Gross operating income
by segment: |
|
|
|
USIS operating
income |
$ |
82.8 |
|
|
$ |
72.3 |
|
International operating
income |
14.1 |
|
|
8.9 |
|
Consumer Interactive
operating income |
53.4 |
|
|
48.0 |
|
Corporate operating
loss |
(25.1 |
) |
|
(28.1 |
) |
Total operating
income |
$ |
125.2 |
|
|
$ |
101.1 |
|
|
|
|
|
Intersegment operating
income eliminations: |
|
|
|
USIS |
$ |
(17.1 |
) |
|
$ |
(14.1 |
) |
International |
(0.7 |
) |
|
(0.8 |
) |
Consumer
Interactive |
17.8 |
|
|
14.9 |
|
Corporate |
— |
|
|
— |
|
Total eliminations |
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Reconciliation of
operating income to Adjusted Operating Income: |
|
|
|
USIS operating
income |
$ |
82.8 |
|
|
$ |
72.3 |
|
Stock-based compensation(1) |
5.1 |
|
|
4.1 |
|
Mergers
and acquisitions, divestitures and business optimization(2) |
— |
|
|
(0.1 |
) |
Amortization of certain intangible assets(3) |
25.7 |
|
|
22.7 |
|
Adjusted USIS Operating
Income |
113.6 |
|
|
99.0 |
|
|
|
|
|
International operating
income |
14.1 |
|
|
8.9 |
|
Stock-based compensation(1) |
2.0 |
|
|
5.6 |
|
Amortization of certain intangible assets(3) |
9.6 |
|
|
9.5 |
|
Adjusted International
Operating Income |
25.8 |
|
|
24.0 |
|
|
|
|
|
Consumer Interactive
operating income |
53.4 |
|
|
48.0 |
|
Stock-based compensation(1) |
0.5 |
|
|
0.4 |
|
Amortization of certain intangible assets(3) |
1.3 |
|
|
1.3 |
|
Adjusted Consumer
Interactive Operating Income |
55.2 |
|
|
49.7 |
|
|
|
|
|
Corporate operating
loss |
(25.1 |
) |
|
(28.1 |
) |
Stock-based compensation(1) |
3.2 |
|
|
3.0 |
|
Adjusted Corporate
Operating Income |
(21.9 |
) |
|
(25.1 |
) |
|
|
|
|
Total operating
income |
125.2 |
|
|
101.0 |
|
Stock-based compensation(1) |
10.8 |
|
|
13.1 |
|
Mergers
and acquisitions, divestitures and business optimization(2) |
— |
|
|
(0.1 |
) |
Amortization of certain intangible assets(3) |
36.6 |
|
|
33.5 |
|
Total operating income
adjustments |
47.4 |
|
|
46.5 |
|
Total Adjusted
Operating Income |
$ |
172.7 |
|
|
$ |
147.5 |
|
|
|
|
|
Operating
margin(4): |
|
|
|
USIS |
24.2 |
% |
|
25.6 |
% |
International |
14.7 |
% |
|
10.7 |
% |
Consumer
Interactive |
45.3 |
% |
|
45.7 |
% |
Total operating
margin |
23.3 |
% |
|
22.2 |
% |
|
|
|
|
Adjusted Operating
Margin(4): |
|
|
|
USIS |
33.2 |
% |
|
35.1 |
% |
International |
26.9 |
% |
|
28.7 |
% |
Consumer
Interactive |
46.8 |
% |
|
47.3 |
% |
Total Adjusted
Operating Margin |
32.1 |
% |
|
32.4 |
% |
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
(1) Consisted of stock-based compensation and cash-settled
stock-based compensation.
(2) For the three months ended March 31, 2017, consisted
of the following adjustments to operating income: a $(0.1) million
reduction in contingent consideration expense from previous
acquisitions (USIS).
(3) Consisted of amortization of intangible assets from
our 2012 change in control transaction and amortization intangible
assets established in business acquisitions after our 2012 change
in control.
(4) Segment operating margins and Adjusted Operating
Margins are calculated using segment gross revenue and operating
income. Consolidated operating margin and Adjusted Operating Margin
is calculated using as-reported revenue and operating income.
SCHEDULE 6 |
TRANSUNION AND SUBSIDIARIES |
Segment Depreciation and Amortization -
Unaudited |
(dollars in millions) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Depreciation and
amortization: |
|
|
|
USIS |
$ |
44.8 |
|
|
$ |
39.3 |
|
International |
17.6 |
|
|
14.8 |
|
Consumer
Interactive |
3.0 |
|
|
2.6 |
|
Corporate |
1.3 |
|
|
1.3 |
|
Total depreciation and
amortization |
$ |
66.6 |
|
|
$ |
58.0 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
SCHEDULE 7 |
TRANSUNION AND SUBSIDIARIES |
Reconciliation of Non-GAAP Guidance -
Unaudited |
(dollars in millions) |
|
|
Three Months Ended June 30, 2018 |
|
Twelve Months Ended December 31, 2018 |
|
Low |
|
High |
|
Low |
|
High |
Guidance
reconciliation of net income attributable to TransUnion to Adjusted
EBITDA: |
|
|
|
|
|
|
|
Net Income attributable
to TransUnion |
$ |
76 |
|
|
$ |
79 |
|
|
$ |
313 |
|
|
$ |
320 |
|
Interest, taxes and
depreciation and amortization |
113 |
|
|
114 |
|
|
465 |
|
|
468 |
|
EBITDA |
189 |
|
|
193 |
|
|
778 |
|
|
788 |
|
Stock-based
compensation, mergers, acquisitions and divestitures and other
adjustments |
19 |
|
|
19 |
|
|
67 |
|
|
67 |
|
Adjusted EBITDA |
$ |
208 |
|
|
$ |
211 |
|
|
$ |
845 |
|
|
$ |
855 |
|
|
|
|
|
|
|
|
|
Reconciliation
of diluted earnings per share to Adjusted Diluted Earnings per
Share: |
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.40 |
|
|
$ |
0.41 |
|
|
$ |
1.63 |
|
|
$ |
1.67 |
|
Adjustments to diluted
earnings per share |
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.73 |
|
|
$ |
0.73 |
|
Adjusted Diluted
Earnings per Share |
$ |
0.59 |
|
|
$ |
0.60 |
|
|
$ |
2.37 |
|
|
$ |
2.41 |
|
As a result of displaying amounts in millions, rounding
differences may exist in the table above.
For More Information
E-mail: Investor.Relations@transunion.com
Telephone: 312.985.2860
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