Bay Street News

TransUnion Announces First Quarter 2024 Results

CHICAGO, April 25, 2024 (GLOBE NEWSWIRE) — TransUnion (NYSE: TRU) (the “Company”) today announced financial results for the quarter ended March 31, 2024.

First Quarter 2024 Results

Revenue:

Earnings:

“TransUnion exceeded first quarter financial guidance, delivering the first $1 billion revenue quarter in our history,” said Chris Cartwright, President and CEO. “U.S. Markets grew primarily due to mortgage and key Emerging Verticals such as Insurance and Media, as lending conditions remained largely consistent with the prior quarter. International again drove double-digit growth, led by India, Canada and Asia Pacific.”

“We made important progress in our transformation program, adding significant headcount to further build out our Global Capability Center network and consolidating key applications onto our OneTru platform. These actions add to our confidence in delivering against our savings commitments while increasing the pace and breadth of our innovation.”

“We are raising our 2024 guidance following first quarter outperformance and now expect to deliver 5 to 6.5 percent revenue growth for the year. We remain focused on driving strong results in a low-growth market environment, with no assumed in-year benefits from interest rate cuts.”

First Quarter 2024 Segment Results

During the quarter ended March 31, 2024, the Company reorganized its operations to merge its Consumer Interactive operating segment with its U.S. Markets operating segment, moved the responsibility for certain international operations previously managed within the U.S. Markets segment to certain regions within the International segment, and moved responsibility for certain revenue in our U.S. Markets segment previously managed within our Financial Services vertical to our Emerging Verticals. We have recast our historical segment financial information to reflect this reorganization as further described in our Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 23, 2024.

U.S. Markets:

U.S. Markets revenue was $789 million, an increase of 7 percent compared with the first quarter of 2023.

Adjusted EBITDA was $285 million, an increase of 6 percent compared with the first quarter of 2023.

International:

International revenue was $236 million, an increase of 16 percent (15 percent on a constant currency basis) compared with the first quarter of 2023.

Adjusted EBITDA was $107 million, an increase of 22 percent (21 percent on a constant currency basis) compared with the first quarter of 2023.

Liquidity and Capital Resources

Cash and cash equivalents was $434 million at March 31, 2024 and $476 million at December 31, 2023.

For the three months ended March 31, 2024, cash provided by operating activities was $54 million, compared with $77 million in 2023. The decrease in cash provided by operating activities was due primarily to payments made for our operating model optimization program. For the three months ended March 31, 2024, cash used in investing activities was $62 million, compared with $104 million in 2023. The decrease in cash used in investing activities was due primarily to a decrease in cash used for investments in nonconsolidated affiliates. For the three months ended March 31, 2024, capital expenditures were $62 million, compared with $67 million in 2023. Capital expenditures as a percent of revenue represented 6% and 7% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, cash used in financing activities was $31 million, compared with $122 million in 2023. The decrease in cash used in financing activities was due primarily to a decrease in debt prepayments. On February 8, 2024, the Company refinanced its Senior Secured Term Loan B-6 with Senior Secured Term Loan B-7.

Second Quarter and Full Year 2024 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
June 30, 2024
  Twelve Months Ended
December 31, 2024
(in millions, except per share data)   Low   High   Low   High
Revenue, as reported   $ 1,017     $ 1,026     $ 4,023     $ 4,083  
Revenue growth1:                
As reported     5 %     6.0 %     5 %     6.6 %
Constant currency1, 2     5 %     6.0 %     5 %     6.5 %
Organic constant currency1, 3     5 %     6.0 %     5 %     6.5 %
                 
Net income attributable to TransUnion   $ 48     $ 53     $ 228     $ 261  
Net income attributable to TransUnion growth     (11 )%     (2 )%     211 %     226 %
Net income attributable to TransUnion margin     4.7 %     5.2 %     5.7 %     6.4 %
                         
Diluted Earnings per Share   $ 0.25     $ 0.27     $ 1.16     $ 1.33  
Diluted Earnings per Share growth     (11 )%     (2 )%     210 %     226 %
                         
Adjusted EBITDA, as reported5   $ 366     $ 372     $ 1,433     $ 1,475  
Adjusted EBITDA growth, as reported4     8 %     10 %     7 %     10 %
Adjusted EBITDA margin     36.0 %     36.3 %     35.6 %     36.1 %
                 
Adjusted Diluted Earnings per Share5   $ 0.95     $ 0.98     $ 3.69     $ 3.86  
Adjusted Diluted Earnings per Share growth     11 %     14 %     10 %     15 %
  1. Additional revenue growth assumptions:
    1. The impact of changing foreign currency exchange rates is expected to have an insignificant impact for Q2 2024 and FY 2024.
    2. There is no impact from recent acquisitions for Q2 2024 and FY 2024.
    3. The impact of mortgage is expected to be approximately 3 points of benefit for Q2 2024 and 3 points of benefit for FY 2024. These impacts are calculated by removing the U.S. mortgage revenue from both the current year and prior year periods.
  2. 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.
  3. 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. There is no impact from recent business acquisitions in Q2 2024 and FY 2024.
  4. Additional Adjusted EBITDA assumptions:
    1. The impact of changing foreign currency exchange rates is expected to have an insignificant impact for Q2 2024 and FY 2024.
  5. 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 www.transunion.com/tru. A replay of the call will also be available at this website following the conclusion of the call.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.

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.

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:

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, 2023, 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

TRANSUNION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(in millions, except per share data)
 
    March 31,
2024
  December 31,
2023
Assets        
Current assets:        
Cash and cash equivalents   $ 433.6     $ 476.2  
Trade accounts receivable, net of allowance of $17.6 and $16.4     774.6       723.0  
Other current assets     214.7       275.9  
Total current assets     1,422.9       1,475.1  
Property, plant and equipment, net of accumulated depreciation and amortization of $822.5 and $804.4     189.9       199.3  
Goodwill     5,170.4       5,176.0  
Other intangibles, net of accumulated amortization of $2,814.1 and $2,719.8     3,450.0       3,515.3  
Other assets     791.5       739.4  
Total assets   $ 11,024.7     $ 11,105.1  
Liabilities and stockholders’ equity        
Current liabilities:        
Trade accounts payable   $ 281.3     $ 251.3  
Short-term debt and current portion of long-term debt     77.5       89.6  
Other current liabilities     502.2       661.8  
Total current liabilities     861.0       1,002.7  
Long-term debt     5,253.1       5,250.8  
Deferred taxes     566.7       592.9  
Other liabilities     166.7       153.2  
Total liabilities     6,847.5       6,999.6  
Stockholders’ equity:        
Common stock, $0.01 par value; 1.0 billion shares authorized at March 31, 2024 and December 31, 2023, 200.6 million and 200.0 million shares issued at March 31, 2024 and December 31, 2023, respectively, and 194.2 million and 193.8 million shares outstanding as of March 31, 2024 and December 31, 2023, respectively     2.0       2.0  
Additional paid-in capital     2,450.5       2,412.9  
Treasury stock at cost, 6.4 million and 6.2 million shares at March 31, 2024 and December 31, 2023, respectively     (313.5 )     (302.9 )
Retained earnings     2,199.1       2,157.1  
Accumulated other comprehensive loss     (262.8 )     (260.9 )
Total TransUnion stockholders’ equity     4,075.3       4,008.2  
Noncontrolling interests     101.9       97.3  
Total stockholders’ equity     4,177.2       4,105.5  
Total liabilities and stockholders’ equity   $ 11,024.7     $ 11,105.1  
                 
TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
 
    Three Months Ended 
 March 31,
      2024       2023  
Revenue   $ 1,021.2     $ 940.3  
Operating expenses        
Cost of services (exclusive of depreciation and amortization below)     406.3       380.8  
Selling, general and administrative     305.6       284.6  
Depreciation and amortization     134.0       129.7  
Restructuring     18.2        
Total operating expenses     864.1       795.1  
Operating income     157.2       145.2  
Non-operating income and (expense)        
Interest expense     (68.7 )     (71.8 )
Interest income     5.4       5.8  
Earnings from equity method investments     4.7       3.1  
Other income and (expense), net     (15.7 )     (6.8 )
Total non-operating income and (expense)     (74.1 )     (69.6 )
Income from continuing operations before income taxes     83.0       75.6  
Provision for income taxes     (13.0 )     (18.6 )
Income from continuing operations     70.0       57.0  
Discontinued operations, net of tax           (0.1 )
Net income     70.0       56.9  
Less: net income attributable to the noncontrolling interests     (4.9 )     (4.3 )
Net income attributable to TransUnion   $ 65.1     $ 52.6  
         
Basic earnings per common share from:        
Income from continuing operations attributable to TransUnion   $ 0.34     $ 0.27  
Discontinued operations, net of tax            
Net income attributable to TransUnion   $ 0.34     $ 0.27  
Diluted earnings per common share from:        
Income from continuing operations attributable to TransUnion   $ 0.33     $ 0.27  
Discontinued operations, net of tax            
Net income attributable to TransUnion   $ 0.33     $ 0.27  
Weighted-average shares outstanding:        
Basic     194.1       193.0  
Diluted     195.3       193.9  

As a result of displaying amounts in millions, rounding differences may exist in the table above.

TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in millions)
 
    Three Months Ended March 31,
      2024       2023  
Cash flows from operating activities:        
Net income   $ 70.0     $ 56.9  
Less: Discontinued operations, net of tax           (0.1 )
Income from continuing operations     70.0       57.0  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     134.0       129.7  
Loss on repayment of loans     0.7       1.0  
Deferred taxes     (27.1 )     (27.4 )
Stock-based compensation     24.1       22.1  
Gain on investments     (4.7 )      
Other     3.5       (0.1 )
Changes in assets and liabilities:        
Trade accounts receivable     (60.7 )     (56.7 )
Other current and long-term assets     43.7       (12.2 )
Trade accounts payable     28.7       44.9  
Other current and long-term liabilities     (158.2 )     (80.9 )
Cash provided by operating activities     54.0       77.4  
Cash flows from investing activities:        
Capital expenditures     (62.4 )     (66.5 )
Proceeds from sale/maturities of other investments           17.5  
Purchases of other investments           (23.1 )
Investments in nonconsolidated affiliates     (1.2 )     (31.9 )
Other     1.2       0.4  
Cash used in investing activities     (62.4 )     (103.6 )
Cash flows from financing activities:        
Proceeds from Term Loans     264.1        
Repayments of Term Loans     (257.1 )      
Repayments of debt     (14.6 )     (103.6 )
Debt financing fees     (4.7 )      
Proceeds from issuance of common stock and exercise of stock options     12.4       9.8  
Dividends to shareholders     (20.8 )     (20.6 )
Employee taxes paid on restricted stock units recorded as treasury stock     (10.6 )     (7.6 )
Cash used in financing activities     (31.3 )     (122.0 )
Effect of exchange rate changes on cash and cash equivalents     (2.9 )     1.9  
Net change in cash and cash equivalents     (42.6 )     (146.3 )
Cash and cash equivalents, beginning of period     476.2       585.3  
Cash and cash equivalents, end of period   $ 433.6     $ 439.0  
                 

As a result of displaying amounts in millions, rounding differences may exist in the table above.

TRANSUNION AND SUBSIDIARIES
Non-GAAP Financial Measures

We present 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 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 tables below.

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.

Consolidated Adjusted EBITDA

Management has excluded the following items from net income attributable to TransUnion in order to calculate Adjusted EBITDA for the periods presented:

Consolidated Adjusted EBITDA Margin

Management defines Consolidated Adjusted EBITDA Margin as Consolidated Adjusted EBITDA divided by total revenue as reported.

Adjusted Net Income

Management has excluded the following items from net income attributable to TransUnion in order to calculate Adjusted Net Income for the periods presented:

Adjusted Diluted Earnings Per Share

Management defines Adjusted Diluted Earnings per Share as Adjusted Net Income divided by the weighted-average diluted shares outstanding.

Adjusted Provision for Income Taxes

Management has excluded the following items from our provision for income taxes for the periods presented:

Adjusted Effective Tax Rate

Management defines Adjusted Effective Tax Rate as Adjusted Provision for Income Taxes divided by Adjusted income from continuing operations before income taxes. We calculate adjusted income from continuing operations before income taxes by excluding the pre-tax adjustments in the calculation of Adjusted Net Income discussed above and noncontrolling interest related to these pre-tax adjustments from income from continuing operations before income taxes.

Leverage Ratio

Management defines 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. Since the Leverage Ratio is calculated on a trailing twelve month basis, prior period goodwill impairment is excluded as this expense may not directly correlate to the underlying performance of our business operations during that period and may vary significantly between periods. 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.

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.

Free cash flow is defined as cash provided by operating activities less capital expenditures and is a measure we may refer to.

Refer to Schedules 1 through 7 for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measure.

SCHEDULE 1
TRANSUNION AND SUBSIDIARIES
Revenue and Adjusted EBITDA growth rates as Reported, CC, and Organic CC
(Unaudited)
 
    For the Three Months Ended March 31, 2024 compared with
the Three Months Ended March 31, 2023
    Reported   CC Growth1   Organic CC Growth2
Revenue:            
Consolidated   8.6 %   8.3 %   8.3 %
U.S. Markets   6.6 %   6.6 %   6.6 %
Financial Services   12.6 %   12.6 %   12.6 %
Emerging Verticals   4.4 %   4.3 %   4.3 %
Consumer Interactive   (2.1 )%   (2.1 )%   (2.1 )%
International   16.1 %   14.9 %   14.9 %
Canada   18.8 %   18.3 %   18.3 %
Latin America   14.2 %   6.8 %   6.8 %
United Kingdom   3.9 %   (0.2 )%   (0.2 )%
Africa   3.5 %   11.8 %   11.8 %
India   30.1 %   31.3 %   31.3 %
Asia Pacific   16.7 %   17.2 %   17.2 %
             
Adjusted EBITDA:            
Consolidated   11.1 %   10.8 %   10.8 %
U.S. Markets   6.1 %   6.1 %   6.1 %
International   22.3 %   21.3 %   21.3 %

1. Constant Currency (“CC”) growth rates assume foreign currency exchange rates are consistent between years. This allows financial results to be evaluated without the impact of fluctuations in foreign currency exchange rates.

2. We have no inorganic revenue or Adjusted EBITDA for the periods presented. Organic CC growth rate is the CC growth rate less the inorganic growth rate.

SCHEDULE 2
TRANSUNION AND SUBSIDIARIES
Consolidated and Segment Revenue, Adjusted EBITDA, and Adjusted EBITDA Margin (Unaudited)
(dollars in millions)
 
  Three Months Ended March 31,
    2024       2023  
Revenue:      
U.S. Markets gross revenue      
Financial Services $ 351.7     $ 312.3  
Emerging Verticals   297.5       285.1  
Consumer Interactive   139.3       142.3  
U.S. Markets gross revenue $ 788.6     $ 739.7  
       
International gross revenue      
Canada $ 37.7     $ 31.7  
Latin America   32.9       28.8  
United Kingdom   54.2       52.1  
Africa   15.1       14.6  
India   71.1       54.7  
Asia Pacific   25.3       21.7  
International gross revenue $ 236.3     $ 203.6  
       
Total gross revenue $ 1,024.9     $ 943.4  
       
Intersegment revenue eliminations      
U.S. Markets $ (2.3 )   $ (1.7 )
International   (1.5 )     (1.4 )
Total intersegment revenue eliminations $ (3.7 )   $ (3.1 )
       
Total revenue as reported $ 1,021.2     $ 940.3  
       
Adjusted EBITDA:      
U.S. Markets $ 285.2     $ 268.8  
International   106.8       87.3  
Corporate   (33.9 )     (33.8 )
Adjusted EBITDA Margin:1      
U.S. Markets   36.2 %     36.3 %
International   45.2 %     42.9 %

1. Segment Adjusted EBITDA Margins are calculated using segment gross revenue and segment Adjusted EBITDA. Consolidated Adjusted EBITDA Margin is calculated using total revenue as reported and consolidated Adjusted EBITDA.

  Three Months Ended March 31,
    2024       2023  
Reconciliation of Net income attributable to TransUnion to consolidated Adjusted EBITDA:      
Net income attributable to TransUnion $ 65.1     $ 52.6  
Discontinued operations, net of tax         0.1  
Income from continuing operations attributable to TransUnion $ 65.1     $ 52.7  
Net interest expense   63.2       66.0  
Provision for income taxes   13.0       18.6  
Depreciation and amortization   134.0       129.7  
EBITDA $ 275.4     $ 267.0  
Adjustments to EBITDA:      
Operating model optimization program1   24.4        
Stock-based compensation   24.1       22.2  
Accelerated technology investment2   18.5       19.7  
Mergers and acquisitions, divestitures and business optimization3   9.2       8.9  
Net other4   6.5       4.6  
Total adjustments to EBITDA $ 82.8     $ 55.4  
Consolidated Adjusted EBITDA $ 358.2     $ 322.3  
       
Net income attributable to TransUnion margin   6.4 %     5.6 %
Consolidated Adjusted EBITDA margin5   35.1 %     34.3 %

As a result of displaying amounts in millions, rounding differences may exist in the tables above and footnotes below.

1. Consists of restructuring expenses of $16.8 million related to employee separation costs and $1.4 million related to non-cash facility lease impairments, as well as $6.2 million related to business process optimization expenses included primarily in selling, general and administrative.

2. Represents expenses associated with our accelerated technology investment to migrate to the cloud. There are three components of the accelerated technology investment: (i) building foundational capabilities, which includes establishing a modern, API-based and services-oriented software architecture, (ii) the migration of each application and customer data to the new enterprise platform, including the redundant software costs during the migration period, as well as the efforts to decommission the legacy system, and (iii) program enablement, which includes dedicated resources to support the planning and execution of the program. The amounts for each category of cost are as follows:

    Three Months Ended March 31,
      2024       2023  
Foundational Capabilities   $ 6.8     $ 10.2  
Migration Management     10.1       7.9  
Program Enablement     1.7       1.6  
Total accelerated technology investment   $ 18.5     $ 19.7  
                 

3. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments:

    Three Months Ended March 31,
      2024       2023  
Transaction and integration costs   $ 2.2     $ 7.4  
Post-acquisition adjustments     6.9       2.5  
Fair value and impairment adjustments     0.1       (0.4 )
Transition services agreement income           (0.6 )
Total mergers and acquisitions, divestitures and business optimization   $ 9.2     $ 8.9  
 

4. Net other consisted of the following adjustments:

    Three Months Ended March 31,
      2024       2023  
Deferred loan fee expense from debt prepayments and refinancing   $ 3.1     $ 1.1  
Currency remeasurement on foreign operations     2.6       2.7  
Other debt financing expenses     0.6       0.6  
Other non-operating expense     0.2       0.2  
Total other adjustments   $ 6.5     $ 4.6  
                 

5. Consolidated Adjusted EBITDA margin is calculated by dividing Consolidated Adjusted EBITDA by total revenue.

SCHEDULE 3
TRANSUNION AND SUBSIDIARIES
Adjusted Net Income and Adjusted Diluted Earnings Per Share (Unaudited)
(in millions, except per share data)
 
    Three Months Ended March 31,
      2024       2023  
Income from continuing operations attributable to TransUnion   $ 65.1     $ 52.7  
Discontinued operations, net of tax           (0.1 )
Net income attributable to TransUnion   $ 65.1     $ 52.6  
         
Weighted-average shares outstanding:        
Basic     194.1       193.0  
Diluted     195.3       193.9  
         
Basic earnings per common share from:        
Income from continuing operations attributable to TransUnion   $ 0.34     $ 0.27  
Discontinued operations, net of tax            
Net income attributable to TransUnion   $ 0.34     $ 0.27  
Diluted earnings per common share from:        
Income from continuing operations attributable to TransUnion   $ 0.33     $ 0.27  
Discontinued operations, net of tax            
Net income attributable to TransUnion   $ 0.33     $ 0.27  
         
Reconciliation of Net income attributable to TransUnion to Adjusted Net Income:        
Net income attributable to TransUnion   $ 65.1     $ 52.6  
Discontinued operations, net of tax           0.1  
Income from continuing operations attributable to TransUnion   $ 65.1     $ 52.7  
Adjustments before income tax items:        
Amortization of certain intangible assets1     72.0       75.2  
Operating model optimization program2     24.4        
Stock-based compensation     24.1       22.2  
Accelerated technology investment3     18.5       19.7  
Mergers and acquisitions, divestitures and business optimization4     9.2       8.9  
Net other4     5.9       3.8  
Total adjustments before income tax items   $ 154.3     $ 129.7  
Total adjustments for income taxes5     (40.4 )     (26.9 )
Adjusted Net Income   $ 179.0     $ 155.4  
         
Weighted-average shares outstanding:        
Basic     194.1       193.0  
Diluted     195.3       193.9  
         
Adjusted Earnings per Share:        
Basic   $ 0.92     $ 0.81  
Diluted   $ 0.92     $ 0.80  
                 
    Three Months Ended March 31,
      2024       2023  
Reconciliation of Diluted earnings per share from Net income attributable to TransUnion to Adjusted Diluted Earnings per Share:        
Diluted earnings per common share from:        
Net income attributable to TransUnion   $ 0.33     $ 0.27  
Discontinued operations, net of tax            
Income from continuing operations attributable to TransUnion   $ 0.33     $ 0.27  
Adjustments before income tax items:        
Amortization of certain intangible assets1     0.37       0.39  
Operating model optimization program2     0.13        
Stock-based compensation     0.12       0.11  
Accelerated technology investment3     0.09       0.10  
Mergers and acquisitions, divestitures and business optimization4     0.05       0.05  
Net other5     0.03       0.02  
Total adjustments before income tax items   $ 0.79     $ 0.67  
Total adjustments for income taxes6     (0.21 )     (0.14 )
Adjusted Diluted Earnings per Share   $ 0.92     $ 0.80  

Each component of earnings per share is calculated independently, therefore, rounding differences exist in the table above.

1. Consists 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.

2. Consists of restructuring expenses of $16.8 million related to employee separation costs and $1.4 million related to non-cash facility lease impairments, as well as $6.2 million related to business process optimization expenses included primarily in selling, general and administrative.

3. Represents expenses associated with our accelerated technology investment to migrate to the cloud. There are three components of the accelerated technology investment: (i) building foundational capabilities which includes establishing a modern, API-based and services-oriented software architecture, (ii) the migration of each application and customer data to the new enterprise platform, including the redundant software costs during the migration period, as well as the efforts to decommission the legacy system, and (iii) program enablement, which includes dedicated resources to support the planning and execution of the program. The amounts for each category of cost are as follows:

    Three Months Ended March 31,
      2024       2023  
Foundational Capabilities   $ 6.8     $ 10.2  
Migration Management     10.1       7.9  
Program Enablement     1.7       1.6  
Total accelerated technology investment   $ 18.5     $ 19.7  
                 

4. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments:

    Three Months Ended March 31,
      2024       2023  
Transaction and integration costs   $ 2.2     $ 7.4  
Post-acquisition adjustments     6.9       2.5  
Fair value and impairment adjustments     0.1       (0.4 )
Transition services agreement income           (0.6 )
Total mergers and acquisitions, divestitures and business optimization   $ 9.2     $ 8.9  
                 

5. Net other consisted of the following adjustments:

    Three Months Ended March 31,
      2024       2023  
Deferred loan fee expense from debt prepayments and refinancing   $ 3.1     $ 1.1  
Currency remeasurement on foreign operations     2.6       2.7  
Other non-operating (income) and expense     0.2        
Total other adjustments   $ 5.9     $ 3.8  
                 

6. Total adjustments for income taxes represents the total of adjustments discussed to calculate the Adjusted Provision for Income Taxes.

SCHEDULE 4
TRANSUNION AND SUBSIDIARIES
Adjusted Provision for Income Taxes and Adjusted Effective Tax Rate (Unaudited)
(dollars in millions)
 
  Three Months Ended March 31,
    2024       2023  
Income from continuing operations before income taxes $ 83.0     $ 75.6  
Total adjustments before income tax items from Schedule 3   154.3       129.7  
Adjusted income from continuing operations before income taxes $ 237.3     $ 205.2  
       
Reconciliation of Provision for income taxes to Adjusted Provision for Income Taxes:      
Provision for income taxes   (13.0 )     (18.6 )
Adjustments for income taxes:      
Tax effect of above adjustments   (35.0 )     (29.6 )
Eliminate impact of excess tax expenses for stock-based compensation   1.0       1.5  
Other1   (6.4 )     1.2  
Total adjustments for income taxes $ (40.4 )   $ (26.9 )
Adjusted Provision for Income Taxes $ (53.4 )   $ (45.5 )
       
Effective tax rate   15.7 %     24.6 %
Adjusted Effective Tax Rate   22.5 %     22.2 %

As a result of displaying amounts in millions, rounding differences may exist in the table above.

  1. Other adjustments for income taxes include:
    Three Months Ended March 31,
      2024       2023  
Deferred tax adjustments   $ (5.1 )   $ 0.4  
Valuation allowance adjustments     0.2       (0.1 )
Return to provision, audit adjustments, and reserves related to prior periods     (0.9 )     0.9  
Other adjustments     (0.5 )      
Total other adjustments   $ (6.4 )   $ 1.2  
                 
SCHEDULE 5
TRANSUNION AND SUBSIDIARIES
Leverage Ratio (Unaudited)
(dollars in millions)
 
    Trailing Twelve Months Ended March 31, 2024
Reconciliation of net loss attributable to TransUnion to Consolidated Adjusted EBITDA:    
Net loss attributable to TransUnion   $ (193.6 )
Discontinued operations, net of tax     0.7  
Loss from continuing operations attributable to TransUnion   $ (193.0 )
Net interest expense     264.7  
Provision for income taxes     39.2  
Depreciation and amortization     528.7  
EBITDA   $ 639.6  
Adjustments to EBITDA:    
Goodwill impairment1   $ 414.0  
Stock-based compensation     102.5  
Operating model optimization program2     102.0  
Accelerated technology investment3     69.4  
Mergers and acquisitions, divestitures and business optimization4     34.9  
Net other5     17.0  
Total adjustments to EBITDA   $ 739.9  
Leverage Ratio Adjusted EBITDA   $ 1,379.5  
     
Total debt   $ 5,330.6  
Less: Cash and cash equivalents     433.6  
Net Debt   $ 4,897.0  
     
Ratio of Net Debt to Net loss attributable to TransUnion     (25.3 )
Leverage Ratio     3.5  

As a result of displaying amounts in millions, rounding differences may exist in the table above.

1. During the quarter ended September 30, 2023, we recorded a goodwill impairment of $414.0 million related to our United Kingdom reporting unit in our International segment.

2. Consists of restructuring expenses of $88.7 million related to employee separation costs and $4.8 million related to non-cash facility lease impairments, as well as $8.5 million related to business process optimization expenses included primarily in selling, general and administrative.

3. Represents expenses associated with our accelerated technology investment to migrate to the cloud. There are three components of the accelerated technology investment: (i) building foundational capabilities which includes establishing a modern, API-based and services-oriented software architecture, (ii) the migration of each application and customer data to the new enterprise platform including the redundant software costs during the migration period, as well as the efforts to decommission the legacy system, and (iii) program enablement, which includes dedicated resources to support the planning and execution of the program. The amounts for each category of cost are as follows:

    Trailing Twelve Months Ended March 31, 2024
Foundational Capabilities   $ 32.4  
Migration Management     31.8  
Program Enablement     5.3  
Total accelerated technology investment   $ 69.4  
         

4. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments:

    Trailing Twelve Months Ended March 31, 2024
Transaction and integration costs   $ 25.7  
Post-acquisition adjustments     6.0  
Fair value and impairment adjustments     4.8  
Transition services agreement income     (1.9 )
Loss on business disposal     0.3  
Total mergers and acquisitions, divestitures and business optimization   $ 34.9  
         

5. Net other consisted of the following adjustments:

    Trailing Twelve Months Ended March 31, 2024
Deferred loan fee expense from debt prepayments and refinancing   $ 11.3  
Currency remeasurement on foreign operations     4.7  
Other debt financing expenses     2.1  
Other non-operating (income) and expense     (1.0 )
Total other adjustments   $ 17.0  
         
SCHEDULE 6
TRANSUNION AND SUBSIDIARIES
Segment Depreciation and Amortization (Unaudited)
(in millions)
 
  Three Months Ended March 31,
    2024       2023  
       
U.S. Markets $ 100.8     $ 96.6  
International   32.2       32.0  
Corporate   1.0       1.1  
Total depreciation and amortization $ 134.0     $ 129.7  

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)
(in millions, except per share data)
 
  Three Months Ended
June 30, 2024
  Twelve Months Ended
December 31, 2024
  Low   High   Low   High
Guidance reconciliation of net income attributable to TransUnion to Adjusted EBITDA:              
Net income attributable to TransUnion $ 48     $ 53     $ 228     $ 261  
Interest, taxes and depreciation and amortization   212       214       851       860  
EBITDA $ 261     $ 267     $ 1,079     $ 1,120  
Stock-based compensation, mergers, acquisitions divestitures and business optimization-related expenses and other adjustments1   105       105       355       355  
Adjusted EBITDA $ 366     $ 372     $ 1,433     $ 1,475  
               
Net income attributable to TransUnion margin   4.7 %     5.2 %     5.7 %     6.4 %
Consolidated Adjusted EBITDA margin2   36.0 %     36.3 %     35.6 %     36.1 %
               
Guidance reconciliation of diluted earnings per share to Adjusted Diluted Earnings per Share:              
Diluted earnings per share $ 0.25     $ 0.27     $ 1.16     $ 1.33  
Adjustments to diluted earnings per share1   0.71       0.71       2.53       2.53  
Adjusted Diluted Earnings per Share $ 0.95     $ 0.98     $ 3.69     $ 3.86  

As a result of displaying amounts in millions, rounding differences may exist in the table above.

1. These adjustments include the same adjustments we make to our Adjusted EBITDA and Adjusted Net Income as discussed in the Non-GAAP Financial Measures section of our Earnings Release.

2. Consolidated Adjusted EBITDA margin is calculated by dividing Consolidated Adjusted EBITDA by total revenue.


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