TRU 8-K
TransUnion (TRU)
8-K
2023-04-25
For: 2023-04-25
View Original
Added on
April 07, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date Earliest Event Reported): April 25, 2023
____________________
(Exact name of registrant as specified in its charter)
____________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (312 ) 985-2000
____________________
Check the appropriate box below if the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 25, 2023, TransUnion (the “Company”) issued a press release announcing results for the quarter ended March 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
Item 7.01 Regulation FD Disclosure.
On April 25, 2023, management reviewed a slide presentation during the Company’s fiscal 2023 first quarter earnings conference call. The presentation materials are attached hereto as Exhibit 99.2 and incorporated herein by reference. These materials may also be used by the Company at one or more subsequent conferences with analysts, investors, or other stakeholders.
The information contained in the attached presentation materials is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission filings and other public announcements. The Company undertakes no duty or obligation to publicly update or revise this information, although it may do so from time to time.
The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference in any filing made by the Company under the Securities Act or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| Press release of TransUnion dated April 25, 2023, announcing results for the quarter ended March 31, 2023. | ||||||||
| Earnings call presentation materials for the quarter ended March 31, 2023. | ||||||||
| 104 | Cover page Interactive Data File (embedded within the inline XBRL file). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.
| TRANSUNION | ||||||||
| Date: April 25, 2023 | By: | /s/ Todd M. Cello | ||||||
| Name: | Todd M. Cello | |||||||
| Title: | Executive Vice President, Chief Financial Officer | |||||||
Exhibit 99.1
 | News Release | |||||||
TransUnion Announces First Quarter 2023 Results
•Exceeded first quarter 2023 financial guidance
•Grew revenues by 2 percent driven by strength in International
•Drove meaningful progress in Neustar integration, including strong cross-sell wins and data integration milestones
•Prepaid $75 million in debt in the quarter and intend to make further prepayments in the second quarter and throughout the year
•Maintaining 2023 full-year guidance to account for continued market uncertainty
CHICAGO, April 25, 2023 - TransUnion (NYSE: TRU) (the “Company”) today announced financial results for the quarter ended March 31, 2023.
First Quarter 2023 Results
Revenue:
•Total revenue for the quarter was $940 million, an increase of 2 percent (4 percent on a constant currency basis and 2 percent on an organic constant currency basis), compared with the first quarter of 2022.
Earnings:
•Net income attributable to TransUnion was $53 million for the quarter, compared with $48 million for the first quarter of 2022. Diluted earnings per share was $0.27, compared with $0.25 in the first quarter of 2022. Net income attributable to TransUnion margin was 5.6 percent, compared with 5.2 percent in the first quarter of 2022.
•Adjusted Net Income was $155 million for the quarter, compared with $179 million for the first quarter of 2022. Adjusted Diluted Earnings per Share was $0.80, compared with $0.93 in the first quarter of 2022.
•Adjusted EBITDA was $322 million for the quarter, a decrease of 4 percent (1 percent on a constant currency basis, flat on an organic constant currency basis) compared with the first quarter of 2022. Adjusted EBITDA margin was 34.3 percent, compared with 36.3 percent in the first quarter of 2022.
“TransUnion exceeded first quarter financial guidance despite an uncertain economic backdrop,” said Chris Cartwright, President and CEO. “Our broad solution suite is resonating with the market, including with our financial services customers as they navigate a dynamic environment. Our International portfolio continues to deliver robust results, particularly in India, Asia Pacific, Africa and Latin America.”
“Our Neustar integration continues to track well with building cross-sell momentum across our U.S. verticals. Our data integration is creating meaningful value across our product suite with improved breadth and depth of identity data.”
“We remain highly confident in our ability to navigate this complex economic backdrop, focusing on customer partnership, acquisition integration, transformation progress and financial discipline. We are maintaining our 2023 full-year guidance to account for continued market challenges.”
First Quarter 2023 Segment Results
U.S. Markets:
U.S. Markets revenue was $620 million, an increase of 3 percent (less than 1 percent on an organic basis) compared with the first quarter of 2022.
•Financial Services revenue, which includes Argus Information and Advisory Services, Inc. and Commerce Signals, Inc. (collectively “Argus”), was $321 million, an increase of 5 percent (a decrease of 1 percent on an organic basis) compared with the first quarter of 2022.
•Emerging Verticals revenue was $300 million, an increase of 1 percent compared with the first quarter of 2022.
Adjusted EBITDA was $200 million, a decrease of 8 percent (6 percent on an organic basis) compared with the first quarter of 2022.
International:
International revenue was $197 million, an increase of 3 percent (12 percent on a constant currency basis) compared with the first quarter of 2022.
•Canada revenue was $31 million, an increase of 2 percent (9 percent on a constant currency basis) compared with the first quarter of 2022.
•Latin America revenue was $29 million, an increase of 5 percent (11 percent on a constant currency basis) compared with the first quarter of 2022.
•United Kingdom revenue was $47 million, a decrease of 16 percent (8 percent on a constant currency basis) compared with the first quarter of 2022.
•Africa revenue was $15 million, a decrease of 1 percent (an increase of 14 percent on a constant currency basis) compared with the first quarter of 2022.
•India revenue was $55 million, an increase of 21 percent (32 percent on a constant currency basis) compared with the first quarter of 2022.
•Asia Pacific revenue was $21 million, an increase of 23 percent (25 percent on a constant currency basis) compared with the first quarter of 2022.
Adjusted EBITDA was $86 million, an increase of 5 percent (14 percent on a constant currency basis) compared with the first quarter of 2022.
Consumer Interactive:
Consumer Interactive revenue was $142 million, a decrease of 5 percent compared with the first quarter of 2022.
Adjusted EBITDA was $70 million, an increase of 2 percent compared with the first quarter of 2022.
Liquidity and Capital Resources
Cash and cash equivalents were $439 million at March 31, 2023 and $585 million at December 31, 2022, of which $323 million and $303 million was held outside the United States in each respective period. In March 2023, we prepaid $75 million of debt, funded from our cash-on-hand.
For the three months ended March 31, 2023, cash provided by operating activities of continuing operations was $77 million, compared with $12 million in 2022. The increase in cash provided by continuing operations was due primarily to a decrease in working capital, partially offset by an increase in interest expense. For the three months ended March 31, 2023, cash used in investing activities of continuing operations was $104 million, compared with $91 million in 2022. The increase in cash used in investing activities of continuing operations was due primarily to an increase in cash used for investments in nonconsolidated affiliates. Capital expenditures were $67 million, compared with $59 million in 2022. For the three months ended March 31, 2023, cash used in financing activities of continuing operations was $122 million, compared with $468 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.
Second 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 June 30, 2023 | Twelve Months Ended December 31, 2023 | |||||||||||||||||||||||||
| (in millions, except per share data) | Low | High | Low | High | ||||||||||||||||||||||
| Revenue, as reported | $ | 948 | $ | 958 | $ | 3,825 | $ | 3,885 | ||||||||||||||||||
Revenue growth1: | ||||||||||||||||||||||||||
| As reported | — | % | 1 | % | 3 | % | 5 | % | ||||||||||||||||||
Constant currency1, 2 | 1 | % | 2 | % | 4 | % | 5 | % | ||||||||||||||||||
Organic constant currency1, 3 | 1 | % | 2 | % | 3 | % | 5 | % | ||||||||||||||||||
| Net income attributable to TransUnion | $ | 57 | $ | 61 | $ | 283 | $ | 308 | ||||||||||||||||||
| Net income attributable to TransUnion growth | (40) | % | (36) | % | 5 | % | 14 | % | ||||||||||||||||||
| Net income attributable to TransUnion margin | 6.0 | % | 6.4 | % | 7.4 | % | 7.9 | % | ||||||||||||||||||
| Diluted Earnings per Share | $ | 0.29 | $ | 0.32 | $ | 1.45 | $ | 1.58 | ||||||||||||||||||
| Diluted Earnings per Share growth | (40) | % | (36) | % | 4 | % | 14 | % | ||||||||||||||||||
Adjusted EBITDA, as reported5 | $ | 330 | $ | 335 | $ | 1,388 | $ | 1,421 | ||||||||||||||||||
Adjusted EBITDA growth, as reported4 | (6) | % | (4) | % | 3 | % | 5 | % | ||||||||||||||||||
| Adjusted EBITDA margin | 34.8 | % | 35.0 | % | 36.3 | % | 36.6 | % | ||||||||||||||||||
Adjusted Diluted Earnings per Share5 | $ | 0.81 | $ | 0.83 | $ | 3.49 | $ | 3.62 | ||||||||||||||||||
| Adjusted Diluted Earnings per Share growth | (18) | % | (15) | % | (4) | % | — | % | ||||||||||||||||||
1.Additional revenue growth assumptions:
a.The impact of changing foreign currency exchange rates is expected to have approximately 1 point of headwind for Q2 2023 and 1 point of headwind for FY 2023.
b.The impact of recent acquisitions is expected to have no impact for Q2 2023 and less than 1 point of benefit for FY 2023.
c.The impact of mortgage is expected to be approximately 1 point of benefit for Q2 2023 and 1 point benefit for FY 2023. 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.
4.Additional Adjusted EBITDA assumptions:
a.The impact of changing foreign currency exchange rates is expected to have approximately 1 point of headwind for Q2 2023 and 1 point of headwind for FY 2023.
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 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 stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-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 stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-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;
•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;
•the war in Ukraine and escalating geopolitical tensions as a result of Russia’s invasion of Ukraine;
•the effects of the COVID-19 pandemic, including the prevalence and severity of variants;
•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;
•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: [email protected]
Telephone: 312.985.2860
TRANSUNION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(in millions, except per share data)
| March 31, 2023 | December 31, 2022 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 439.0 | $ | 585.3 | ||||||||||
| Trade accounts receivable, net of allowance of $11.2 and $11.0 | 652.6 | 602.2 | ||||||||||||
| Other current assets | 289.5 | 262.7 | ||||||||||||
| Total current assets | 1,381.1 | 1,450.2 | ||||||||||||
| Property, plant and equipment, net of accumulated depreciation and amortization of $736.9 and $711.3 | 209.5 | 218.2 | ||||||||||||
| Goodwill | 5,569.8 | 5,551.4 | ||||||||||||
| Other intangibles, net of accumulated amortization of $2,380.1 and $2,268.6 | 3,636.7 | 3,675.5 | ||||||||||||
| Other assets | 766.0 | 771.0 | ||||||||||||
| Total assets | $ | 11,563.1 | $ | 11,666.3 | ||||||||||
| Liabilities and stockholders’ equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Trade accounts payable | $ | 298.4 | $ | 250.4 | ||||||||||
| Short-term debt and current portion of long-term debt | 114.6 | 114.6 | ||||||||||||
| Other current liabilities | 465.3 | 540.5 | ||||||||||||
| Total current liabilities | 878.4 | 905.5 | ||||||||||||
| Long-term debt | 5,455.0 | 5,555.5 | ||||||||||||
| Deferred taxes | 726.7 | 762.0 | ||||||||||||
| Other liabilities | 171.4 | 173.9 | ||||||||||||
| Total liabilities | 7,231.6 | 7,396.9 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Common stock, $0.01 par value; 1.0 billion shares authorized at March 31, 2023 and December 31, 2022, 199.2 million and 198.7 million shares issued at March 31, 2023 and December 31, 2022, respectively, and 193.2 million shares and 192.7 million shares outstanding as of March 31, 2023 and December 31, 2022, respectively | 2.0 | 2.0 | ||||||||||||
| Additional paid-in capital | 2,322.3 | 2,290.3 | ||||||||||||
| Treasury stock at cost; 6.0 million and 6.0 million shares at March 31, 2023 and December 31, 2022, respectively | (292.1) | (284.5) | ||||||||||||
| Retained earnings | 2,478.4 | 2,446.6 | ||||||||||||
| Accumulated other comprehensive loss | (282.2) | (284.5) | ||||||||||||
| Total TransUnion stockholders’ equity | 4,228.3 | 4,169.9 | ||||||||||||
| Noncontrolling interests | 103.2 | 99.5 | ||||||||||||
| Total stockholders’ equity | 4,331.5 | 4,269.4 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 11,563.1 | $ | 11,666.3 | ||||||||||
TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(in millions, except per share data)
| Three Months Ended March 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Revenue | $ | 940.3 | $ | 921.3 | ||||||||||
| Operating expenses | ||||||||||||||
| Cost of services (exclusive of depreciation and amortization below) | 324.9 | 298.0 | ||||||||||||
| Selling, general and administrative | 340.5 | 359.5 | ||||||||||||
| Depreciation and amortization | 129.7 | 128.8 | ||||||||||||
| Total operating expenses | 795.1 | 786.3 | ||||||||||||
| Operating income | 145.2 | 135.0 | ||||||||||||
| Non-operating income and (expense) | ||||||||||||||
| Interest expense | (71.8) | (50.2) | ||||||||||||
| Interest income | 5.8 | 0.7 | ||||||||||||
| Earnings from equity method investments | 3.1 | 3.0 | ||||||||||||
| Other income and (expense), net | (6.8) | (11.8) | ||||||||||||
| Total non-operating income and (expense) | (69.6) | (58.3) | ||||||||||||
| Income from continuing operations before income taxes | 75.6 | 76.7 | ||||||||||||
| Provision for income taxes | (18.6) | (24.4) | ||||||||||||
| Income from continuing operations | 57.0 | 52.3 | ||||||||||||
| Discontinued operations, net of tax | (0.1) | (0.4) | ||||||||||||
| Net income | 56.9 | 52.0 | ||||||||||||
| Less: net income attributable to the noncontrolling interests | (4.3) | (3.7) | ||||||||||||
| Net income attributable to TransUnion | $ | 52.6 | $ | 48.3 | ||||||||||
| Income from continuing operations | $ | 57.0 | $ | 52.3 | ||||||||||
| Less: income from continuing operations attributable to noncontrolling interests | (4.3) | (3.7) | ||||||||||||
| Income from continuing operations attributable to TransUnion | 52.7 | 48.7 | ||||||||||||
| Discontinued operations, net of tax | (0.1) | (0.4) | ||||||||||||
| Net income attributable to TransUnion | $ | 52.6 | $ | 48.3 | ||||||||||
| Basic earnings per common share from: | ||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Discontinued operations, net of tax | — | — | ||||||||||||
| Net Income attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Diluted earnings per common share from: | ||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Discontinued operations, net of tax | — | — | ||||||||||||
| Net Income attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Weighted-average shares outstanding: | ||||||||||||||
| Basic | 193.0 | 192.1 | ||||||||||||
| Diluted | 193.9 | 193.2 | ||||||||||||
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, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | 56.9 | $ | 52.0 | ||||||||||
| Less: Discontinued operations, net of tax | (0.1) | (0.4) | ||||||||||||
| Income from continuing operations | 57.0 | 52.3 | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | 129.7 | 128.8 | ||||||||||||
| Loss on repayment of loans | 1.0 | 6.5 | ||||||||||||
| Deferred taxes | (27.4) | (4.5) | ||||||||||||
| Stock-based compensation | 22.1 | 20.9 | ||||||||||||
| Other | (0.1) | 2.8 | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Trade accounts receivable | (56.7) | (32.6) | ||||||||||||
| Other current and long-term assets | (12.2) | (36.1) | ||||||||||||
| Trade accounts payable | 44.9 | (10.3) | ||||||||||||
| Other current and long-term liabilities | (80.9) | (116.2) | ||||||||||||
| Cash provided by operating activities of continuing operations | 77.4 | 11.6 | ||||||||||||
| Cash used in operating activities of discontinued operations | — | (0.4) | ||||||||||||
| Cash provided by operating activities | 77.4 | 11.2 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | (66.5) | (58.6) | ||||||||||||
| Proceeds from sale/maturities of other investments | 17.5 | 37.1 | ||||||||||||
| Purchases of other investments | (23.1) | (53.0) | ||||||||||||
| Investments in nonconsolidated affiliates | (31.9) | (14.8) | ||||||||||||
| Other | 0.4 | (1.7) | ||||||||||||
| Cash used in investing activities of continuing operations | (103.6) | (91.0) | ||||||||||||
| Cash (used in) provided by investing activities of discontinued operations | — | — | ||||||||||||
| Cash used in investing activities | (103.6) | (91.0) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Repayments of debt | (103.6) | (428.6) | ||||||||||||
| Proceeds from issuance of common stock and exercise of stock options | 9.8 | 8.7 | ||||||||||||
| Dividends to shareholders | (20.6) | (19.0) | ||||||||||||
| Employee taxes paid on restricted stock units recorded as treasury stock | (7.6) | (28.7) | ||||||||||||
| Cash used in financing activities of continuing operations | (122.0) | (467.6) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1.9 | 1.8 | ||||||||||||
| Net change in cash and cash equivalents | (146.3) | (545.6) | ||||||||||||
| Cash and cash equivalents, beginning of period | 585.3 | 1,842.4 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 439.0 | $ | 1,296.8 | ||||||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above.
SCHEDULE 1
TRANSUNION AND SUBSIDIARIES
Revenue and Adjusted EBITDA growth rates as Reported, CC, Inorganic, Organic and Organic CC
(Unaudited)
For the Three Months Ended March 31, 2023 compared with the Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||
| Reported | CC Growth(1) | Inorganic(2) | Organic Growth(3) | Organic CC Growth(4) | ||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||
| Consolidated | 2.1 | % | 3.9 | % | 2.2 | % | (0.2) | % | 1.7 | % | ||||||||||||||||||||||
| U.S. Markets | 3.4 | % | 3.5 | % | 3.4 | % | — | % | 0.1 | % | ||||||||||||||||||||||
| Financial Services | 5.4 | % | 5.4 | % | 6.7 | % | (1.3) | % | (1.3) | % | ||||||||||||||||||||||
| Emerging Verticals | 1.4 | % | 1.5 | % | — | % | 1.4 | % | 1.5 | % | ||||||||||||||||||||||
| International | 3.1 | % | 11.8 | % | — | % | 3.1 | % | 11.8 | % | ||||||||||||||||||||||
| Canada | 2.4 | % | 9.3 | % | — | % | 2.4 | % | 9.3 | % | ||||||||||||||||||||||
| Latin America | 4.7 | % | 11.3 | % | — | % | 4.7 | % | 11.3 | % | ||||||||||||||||||||||
| United Kingdom | (16.4) | % | (7.7) | % | — | % | (16.4) | % | (7.7) | % | ||||||||||||||||||||||
| Africa | (0.9) | % | 14.3 | % | — | % | (0.9) | % | 14.3 | % | ||||||||||||||||||||||
| India | 21.0 | % | 32.5 | % | — | % | 21.0 | % | 32.5 | % | ||||||||||||||||||||||
| Asia Pacific | 22.7 | % | 25.0 | % | — | % | 22.7 | % | 25.0 | % | ||||||||||||||||||||||
| Consumer Interactive | (4.8) | % | (4.7) | % | — | % | (4.8) | % | (4.7) | % | ||||||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||||||||||
| Consolidated | (3.6) | % | (1.4) | % | (1.0) | % | (2.6) | % | (0.3) | % | ||||||||||||||||||||||
| U.S. Markets | (7.7) | % | (7.8) | % | (1.6) | % | (6.1) | % | (6.1) | % | ||||||||||||||||||||||
| International | 5.0 | % | 13.9 | % | — | % | 5.0 | % | 13.9 | % | ||||||||||||||||||||||
| Consumer Interactive | 1.6 | % | 1.8 | % | — | % | 1.6 | % | 1.8 | % | ||||||||||||||||||||||
1.Constant Currency (“CC”) growth rates assume foreign currency exchange rates are consistent between years. This allows financial results to be evaluated without the impact of fluctuations in foreign currency exchange rates.
2.Inorganic growth rate represents growth attributable to the first twelve months of activity for recent business acquisitions.
3.Organic growth rate is the reported growth rate less the inorganic growth rate.
4.Organic CC growth rate is the CC growth rate less inorganic growth rate.
SCHEDULE 2
TRANSUNION AND SUBSIDIARIES
Consolidated and Segment Revenue, Adjusted EBITDA, and Adjusted EBITDA Margins (Unaudited)
(dollars in millions)
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Revenue: | |||||||||||
| U.S. Markets gross revenue | |||||||||||
| Financial Services | $ | 320.6 | $ | 304.2 | |||||||
| Emerging Verticals | 299.8 | 295.7 | |||||||||
| U.S. Markets gross revenue | $ | 620.4 | $ | 599.9 | |||||||
| International gross revenue | |||||||||||
| Canada | $ | 31.4 | $ | 30.7 | |||||||
| Latin America | 28.6 | 27.3 | |||||||||
| United Kingdom | 47.2 | 56.4 | |||||||||
| Africa | 14.6 | 14.7 | |||||||||
| India | 54.7 | 45.2 | |||||||||
| Asia Pacific | 20.8 | 16.9 | |||||||||
| International gross revenue | $ | 197.2 | $ | 191.2 | |||||||
| Consumer Interactive gross revenue | $ | 142.3 | $ | 149.6 | |||||||
| Total gross revenue | $ | 960.0 | $ | 940.7 | |||||||
| Intersegment revenue eliminations | |||||||||||
| U.S. Markets | $ | (17.9) | $ | (17.7) | |||||||
| International | (1.4) | (1.5) | |||||||||
| Consumer Interactive | (0.4) | (0.2) | |||||||||
| Total intersegment revenue eliminations | $ | (19.7) | $ | (19.4) | |||||||
| Total revenue as reported | $ | 940.3 | $ | 921.3 | |||||||
| Adjusted EBITDA: | |||||||||||
| U.S. Markets | $ | 200.0 | $ | 216.7 | |||||||
| International | 86.0 | 82.0 | |||||||||
| Consumer Interactive | 70.0 | 68.9 | |||||||||
| Corporate | (33.8) | (33.4) | |||||||||
Adjusted EBITDA margin:1 | |||||||||||
| U.S. Markets | 32.2 | % | 36.1 | % | |||||||
| International | 43.6 | % | 42.9 | % | |||||||
| Consumer Interactive | 49.2 | % | 46.1 | % | |||||||
1.Segment Adjusted EBITDA margins are calculated using segment gross revenue and segment Adjusted EBITDA.
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Reconciliation of net income attributable to TransUnion to consolidated Adjusted EBITDA: | |||||||||||
| Net income attributable to TransUnion | $ | 52.6 | $ | 48.3 | |||||||
| Discontinued operations, net of tax | 0.1 | 0.4 | |||||||||
| Income from continuing operations attributable to TransUnion | $ | 52.7 | $ | 48.7 | |||||||
| Net interest expense | 66.0 | 49.5 | |||||||||
| Provision for income taxes | 18.6 | 24.4 | |||||||||
| Depreciation and amortization | 129.7 | 128.8 | |||||||||
| EBITDA | $ | 267.0 | $ | 251.3 | |||||||
| Adjustments to EBITDA: | |||||||||||
Stock-based compensation1 | $ | 22.2 | $ | 20.6 | |||||||
Mergers and acquisitions, divestitures and business optimization2 | 8.9 | 14.6 | |||||||||
Accelerated technology investment3 | 19.7 | 12.0 | |||||||||
Net other4 | 4.6 | 35.7 | |||||||||
| Total adjustments to EBITDA | $ | 55.4 | $ | 82.9 | |||||||
| Consolidated Adjusted EBITDA | $ | 322.3 | $ | 334.2 | |||||||
| Net income attributable to TransUnion margin | 5.6 | % | 5.2 | % | |||||||
Consolidated Adjusted EBITDA margin5 | 34.3 | % | 36.3 | % | |||||||
As a result of displaying amounts in millions, rounding differences may exist in the tables above and footnotes below.
1.Consisted of stock-based compensation, including amounts which are cash settled.
2.Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments:
For the three months ended March 31, 2023, $6.0 million of Neustar integration costs; a $2.5 million adjustment to a liability from a recent acquisition; $1.4 million of acquisition expenses; a $0.4 million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the settlement of a Cost Method Investment; and $(0.6) million of reimbursements for transition services related to divested businesses, net of separation expenses.
For the three months ended March 31, 2022, $9.0 million of Neustar integration costs; $8.9 million of acquisition expenses; a $0.2 million adjustment to fair value of put options; and a $(3.5) million reimbursement for transition services related to divested businesses, net of separation expenses.
3.Represents expenses associated with our accelerated technology investment to migrate to the cloud.
4.Net other consisted of the following adjustments:
For the three months ended March 31, 2023, $1.1 million of deferred loan fees written off as a result of the prepayment on our debt; and a $3.5 million net loss from currency remeasurement of our foreign operations, loan fees and other.
For the three months ended March 31, 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 $0.7 million of net other, which includes net losses from currency remeasurement of our foreign operations, loan fees and other.
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 Earnings Per Share (Unaudited)
(in millions, except per share data)
| Three Months Ended March 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 52.7 | $ | 48.7 | ||||||||||
| Discontinued operations, net of tax | (0.1) | (0.4) | ||||||||||||
| Net income attributable to TransUnion | $ | 52.6 | $ | 48.3 | ||||||||||
| Weighted-average shares outstanding: | ||||||||||||||
| Basic | 193.0 | 192.1 | ||||||||||||
| Diluted | 193.9 | 193.2 | ||||||||||||
| Basic earnings per common share from: | ||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Discontinued operations, net of tax | — | — | ||||||||||||
| Net Income attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Diluted earnings per common share from: | ||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Discontinued operations, net of tax | — | — | ||||||||||||
| Net Income attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Reconciliation of net income attributable to TransUnion to Adjusted Net Income: | ||||||||||||||
| Net income attributable to TransUnion | $ | 52.6 | $ | 48.3 | ||||||||||
| Discontinued operations, net of tax | 0.1 | 0.4 | ||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 52.7 | $ | 48.7 | ||||||||||
| Adjustments before income tax items: | ||||||||||||||
Stock-based compensation1 | 22.2 | 20.6 | ||||||||||||
Mergers and acquisitions, divestitures and business optimization2 | 8.9 | 14.6 | ||||||||||||
Accelerated technology investment3 | 19.7 | 12.0 | ||||||||||||
Net other4 | 3.8 | 35.3 | ||||||||||||
Amortization of certain intangible assets5 | 75.2 | 76.2 | ||||||||||||
| Total adjustments before income tax items | $ | 129.7 | $ | 158.7 | ||||||||||
| Change in provision for income taxes per schedule 4 | (26.9) | (28.5) | ||||||||||||
| Adjusted Net Income | $ | 155.4 | $ | 178.8 | ||||||||||
| Weighted-average shares outstanding: | ||||||||||||||
| Basic | 193.0 | 192.1 | ||||||||||||
| Diluted | 193.9 | 193.2 | ||||||||||||
| Adjusted Earnings per Share: | ||||||||||||||
| Basic | $ | 0.81 | $ | 0.93 | ||||||||||
| Diluted | $ | 0.80 | $ | 0.93 | ||||||||||
| Three Months Ended March 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| 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 | $ | 0.27 | $ | 0.25 | ||||||||||
| Discontinued operations, net of tax | — | — | ||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 0.27 | $ | 0.25 | ||||||||||
| Adjustments before income tax items: | ||||||||||||||
Stock-based compensation1 | 0.11 | 0.11 | ||||||||||||
Mergers and acquisitions, divestitures and business optimization2 | 0.05 | 0.08 | ||||||||||||
Accelerated technology investment3 | 0.10 | 0.06 | ||||||||||||
Net other4 | 0.02 | 0.18 | ||||||||||||
Amortization of certain intangible assets5 | 0.39 | 0.39 | ||||||||||||
| Total adjustments before income tax items | $ | 0.67 | $ | 0.82 | ||||||||||
| Change in provision for income taxes per schedule 4 | (0.14) | (0.15) | ||||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.80 | $ | 0.93 | ||||||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above and footnotes below.
1.Consisted of stock-based compensation, including amounts which are cash settled.
2.Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments:
For the three months ended March 31, 2023, $6.0 million of Neustar integration costs; a $2.5 million adjustment to a liability from a recent acquisition; $1.4 million of acquisition expenses; a $0.4 million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the settlement of a Cost Method Investment; and $(0.6) million of reimbursements for transition services related to divested businesses, net of separation expenses.
For the three months ended March 31, 2022, $9.0 million of Neustar integration costs; $8.9 million of acquisition expenses; a $0.2 million adjustment to fair value of put options; and a $(3.5) million reimbursement for transition services related to divested businesses, net of separation expenses.
3.Represents expenses associated with our accelerated technology investment to migrate to the cloud.
4.Net other consisted of the following adjustments:
For the three months ended March 31, 2023, $1.1 million of deferred loan fees written off as a result of the prepayment on our debt; and a $2.7 million net loss from currency remeasurement of our foreign operations, loan fees and other.
For the three months ended March 31, 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 $0.4 million of net other, which includes net losses from currency remeasurement of our foreign operations and other.
5.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.
SCHEDULE 4
TRANSUNION AND SUBSIDIARIES
Effective Tax Rate and Adjusted Effective Tax Rate (Unaudited)
(dollars in millions)
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Income from continuing operations before income taxes | $ | 75.6 | $ | 76.7 | |||||||
| Total adjustments before income tax items from schedule 3 | 129.7 | 158.7 | |||||||||
| Adjusted income from continuing operations before income taxes | $ | 205.2 | $ | 235.4 | |||||||
| Provision for income taxes | (18.6) | (24.4) | |||||||||
| Adjustments for income taxes: | |||||||||||
Tax effect of above adjustments1 | (29.6) | (28.4) | |||||||||
| Eliminate impact of excess tax expenses/(benefits) for stock-based compensation | 1.5 | (4.2) | |||||||||
Other2 | 1.2 | 4.1 | |||||||||
| Total adjustments for income taxes | $ | (26.9) | $ | (28.5) | |||||||
| Adjusted Provision for Income Taxes | $ | (45.5) | $ | (52.9) | |||||||
| Effective tax rate | 24.6 | % | 31.8 | % | |||||||
| Adjusted Effective Tax Rate | 22.2 | % | 22.5 | % | |||||||
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.For the three months ended March 31, 2023, $0.9 million of other adjustments, $0.4 million of deferred tax rate adjustments, and ($0.1) million of valuation allowances related to prior periods.
For the three months ended March 31, 2022, $2.1 million of deferred tax rate adjustments; $0.6 million of return to provision and audit adjustments related to prior periods; $0.9 million of other adjustments, and $0.5 million of valuation allowances.
SCHEDULE 5
TRANSUNION AND SUBSIDIARIES
Leverage Ratio (Unaudited)
(dollars in millions)
| (dollars in millions) | Trailing Twelve Months Ended March 31, 2023 | |||||||
| Reconciliation of net income attributable to TransUnion to Adjusted EBITDA: | ||||||||
| Net income attributable to TransUnion | $ | 273.8 | ||||||
| Discontinued operations, net of tax | (17.7) | |||||||
| Income from continuing operations attributable to TransUnion | $ | 256.1 | ||||||
| Net interest expense | 242.7 | |||||||
| Provision for income taxes | 114.1 | |||||||
| Depreciation and amortization | 519.9 | |||||||
| EBITDA | $ | 1,132.8 | ||||||
| Adjustments to EBITDA: | ||||||||
Stock-based compensation1 | $ | 82.7 | ||||||
Mergers and acquisitions, divestitures and business optimization2 | 45.0 | |||||||
Accelerated technology investment3 | 59.1 | |||||||
Net other4 | 15.0 | |||||||
| Total adjustments to EBITDA | $ | 201.8 | ||||||
| Leverage Ratio Adjusted EBITDA | $ | 1,334.6 | ||||||
| Total debt | $ | 5,569.6 | ||||||
| Less: Cash and cash equivalents | 439.0 | |||||||
| Net Debt | $ | 5,130.6 | ||||||
| Ratio of Net Debt to Net income attributable to TransUnion | 18.7 | |||||||
| Leverage Ratio | 3.8 | |||||||
As a result of displaying amounts in millions, rounding differences may exist in the table above.
1.Consisted of stock-based compensation, including amounts which are cash settled.
2.Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments: $30.1 million of Neustar integration costs; $16.3 million of acquisition expenses; $4.6 loss on the impairment of a cost method investment; a $2.5 million adjustment to a liability from a recent acquisition; a $(0.4) million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the settlement of a Cost Method Investment; $(3.4) million gain related to a government tax reimbursement from a recent business acquisition; and $(3.9) million of reimbursements for transition services related to divested businesses, net of separation expense.
3.Represents expenses associated with our accelerated technology investment to migrate to the cloud.
4.Net other consisted of the following adjustments: $3.9 million of deferred loan fees written off as a result of the prepayments on our debt; and $11.1 million net loss from currency remeasurement of our foreign operations, loan fees and other.
SCHEDULE 6
TRANSUNION AND SUBSIDIARIES
Segment Depreciation and Amortization (Unaudited)
(in millions)
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| U.S. Markets | $ | 88.3 | $ | 85.6 | |||||||
| International | 32.0 | 33.1 | |||||||||
| Consumer Interactive | 8.2 | 8.8 | |||||||||
| Corporate | 1.1 | 1.3 | |||||||||
| Total depreciation and amortization | $ | 129.7 | $ | 128.8 | |||||||
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, 2023 | Twelve Months Ended December 31, 2023 | ||||||||||||||||||||||
| Low | High | Low | High | ||||||||||||||||||||
| Guidance reconciliation of net income attributable to TransUnion to Adjusted EBITDA: | |||||||||||||||||||||||
| Net income attributable to TransUnion | $ | 57 | $ | 61 | $ | 283 | $ | 308 | |||||||||||||||
| Discontinued operations, net of tax | 1 | 1 | 3 | 3 | |||||||||||||||||||
| Income from continuing operations attributable to TransUnion | $ | 59 | $ | 63 | $ | 285 | $ | 311 | |||||||||||||||
| Interest, taxes and depreciation and amortization | 215 | 216 | 881 | 888 | |||||||||||||||||||
| EBITDA | $ | 274 | $ | 279 | $ | 1,166 | $ | 1,199 | |||||||||||||||
Stock-based compensation, mergers, acquisitions divestitures and business optimization-related expenses and other adjustments1 | 56 | 56 | 222 | 222 | |||||||||||||||||||
| Adjusted EBITDA | $ | 330 | $ | 335 | $ | 1,388 | $ | 1,421 | |||||||||||||||
| Net income attributable to TransUnion margin | 6.0 | % | 6.4 | % | 7.4 | % | 7.9 | % | |||||||||||||||
Adjusted EBITDA margin2 | 34.8 | % | 35.0 | % | 36.3 | % | 36.6 | % | |||||||||||||||
| Guidance reconciliation of diluted earnings per share to Adjusted Diluted Earnings per Share: | |||||||||||||||||||||||
| Diluted earnings per share | $ | 0.29 | $ | 0.32 | $ | 1.45 | $ | 1.58 | |||||||||||||||
Adjustments to diluted earnings per share1 | 0.51 | 0.51 | 2.04 | — | 2.03 | ||||||||||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.81 | $ | 0.83 | $ | 3.49 | $ | 3.62 | |||||||||||||||
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.
vFirst Quarter 2023 Earnings Chris Cartwright, President and CEO Todd Cello, CFO April 25, 2023 Exhibit 99.2
© 2023 TransUnion LLC All Rights Reserved | 2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Factors that could cause TransUnion’s actual results to differ materially from those described in the forward-looking statements 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; 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; the war in Ukraine and escalating geopolitical tensions as a result of Russia’s invasion of Ukraine; the effects of the COVID-19 pandemic, including the prevalence and severity of variants; 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; risks related to our indebtedness, including our ability to make timely payments of principal and interest and our ability to satisfy covenants in the agreements governing our indebtedness; our ability to maintain our liquidity; and other one-time events and other factors that can be found in TransUnion’s 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, which are filed with the Securities and Exchange Commission and are available on TransUnion’s website (www.transunion.com/tru) and on the Securities and Exchange Commission’s website (www.sec.gov). TransUnion undertakes no obligation to 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 presentation. Non-GAAP Financial Information This investor presentation includes certain non-GAAP measures that are more fully described in the appendices to the presentation. Exhibit 99.1, “Press release of TransUnion dated April 25, 2023, announcing results for the quarter ended March 31, 2023,” under the heading ‘Non-GAAP Financial Measures,’” furnished to the Securities and Exchange Commission (“SEC”) on April 25, 2023. These financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures of GAAP. Other companies in our industry may define or calculate these measures differently than we do, limiting their usefulness as comparative measures. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures for each of the periods included in this presentation are included in the Appendices at the back of this investor presentation.
© 2023 TransUnion LLC All Rights Reserved | 3 Economic perspectives and financial highlights Neustar integration progress First quarter 2023 financial results 1 2 3 Second quarter and full-year 2023 guidance4
© 2023 TransUnion LLC All Rights Reserved | 4 Economic conditions across TransUnion’s markets Inflation and interest rates elevated in U.S., Canada and U.K., pressuring consumers and lowering growth, although inflation and rates easing modestly Emerging markets growth continues with loan volume increases driven by strong consumer demand Lending institutions tightening credit standards given slowing economic outlook U.S. consumer credit demand remains healthy. Employment and wages remain strong; however, credit metrics returning to historical levels
© 2023 TransUnion LLC All Rights Reserved | 5 First quarter 2023 highlights Neustar integration tracking well with cross-sell momentum and data integration milestones Prepayment of $75M in debt; intend to make further prepayments throughout 2023 Revenue, Adjusted EBITDA and Adjusted Diluted EPS all exceeded guidance 2% organic revenue growth* excluding U.S. mortgage 8th straight quarter of double-digit International revenue growth,* led by India, Asia Pacific, Africa and Latin America *Revenue growth figures referenced above are organic constant currency.
© 2023 TransUnion LLC All Rights Reserved | 6 Neustar delivering strong financial results Financial results ► Q1 2023: ~3% revenue growth versus 9% growth in Q1 2022 ► Maintaining 2023 Guidance: High-single digit revenue growth with Adjusted EBITDA margin improving to ~32% • All three product lines contributed to Q1 revenue growth – Acceleration throughout 2023 supported by strong bookings • Cross-selling momentum building across verticals – Several marketing wins in Financial Services – Trusted Call Solutions ramping up with top 10 U.S. retailer • Resilient product portfolio – Marketing solutions solving customer needs for cost-effective customer acquisition in privacy-enhanced, compliant manner – Fraud and Communications solutions less cyclical and highly relevant for current market needs
© 2023 TransUnion LLC All Rights Reserved | 7 TransUnion + Neustar integration and innovation roadmap to create meaningful shareholder value Migrated to Google Cloud and consolidated data centers to save significant cost Infrastructure Consolidation Launched TruAudience Cleanroom, merging with PRAMA on OneID Customer Analytics Enablement Increased identity coverage and quality by utilizing offline consumer data and real-time digital interactions Data Integration Launched TruAudience Marketplace, an integrated and globally scaled marketing platform Product Consolidation Deploying enterprise identity graph across heritage TransUnion solutions Unified Identity Graph Expanded enterprise capabilities in data linkage, analytics and governance Enterprise Data & Analytics Platform
© 2023 TransUnion LLC All Rights Reserved | 8 Communications • Scale Trusted Call Solutions (TCS) – $50M in 2022 revenue, growing ~50% in 2023F – Branded Call Display expecting to triple revenue in 2023 • Deliver leading Right-Party Contact solution – Leveraged combined Contact Center and SRG data assets Marketing • Expand TruAudience – Combined expansive consumer data, advanced identity resolution, audience building and targeting capabilities on a unified platform – Clients seeing 40% reduction in duplicative CRM records and 30% increases in audience conversions Fraud • Build comprehensive Fraud platform – Bringing together best-in-class solutions and data assets between Neustar and TU – Early tests showing substantial lift in match rates, reduction in false positives and increased fraud detection – Expect offering in market by end of year Consolidating TransUnion and Neustar products onto market-leading platforms
© 2023 TransUnion LLC All Rights Reserved | 9 DriverRisk ResidentScore …and many more Marketing Fraud Prevention Risk Management Advanced Analytics Investigation Communications TodayPrevious Consumer Engagement TruPortfolio unifies dozens of brands into 7 lines — defined by business need
© 2023 TransUnion LLC All Rights Reserved | 10 2022 Diversity Report and 2022 Sustainability Report now available on our website
© 2023 TransUnion LLC All Rights Reserved | 11 For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation. ►Organic constant currency revenue growth, excluding mortgage, of +2% ►Excluding Argus, organic Adjusted EBITDA margin of 35.4%, down ~90bps Consolidated first quarter 2023 highlights Reported ($M) Y/Y Change Revenue $940 2% Organic Constant Currency Revenue 2% Adjusted EBITDA $322 (4)% Adjusted EBITDA Margin 34.3% (200bps) Adjusted Diluted EPS $0.80 (13)%
© 2023 TransUnion LLC All Rights Reserved | 12 Reported ($M) Reported Y/Y FX Impact Inorganic Impact Organic Constant Currency Revenue $620 3% — (3)% 0% Financial Services 321 5% — (7)% (1)% Emerging Verticals 300 1% — — 1% Adjusted EBITDA $200 (8)% — 2% (6)% U.S. Markets first quarter 2023 highlights ►U.S. Markets organic revenue growth (ex-mortgage) of +1% ►U.S. Financial Services organic revenue (ex- mortgage) was flat ▬ Auto grew +8% ▬ Card flat and Consumer Lending -12% vs. challenging comparisons ▬ Mortgage -6% due to lower origination volumes ►Emerging Verticals growth led by Insurance, Services & Collections and Tech, Retail & E-Commerce Note: Rows may not foot due to rounding. For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation.
© 2023 TransUnion LLC All Rights Reserved | 13 Reported ($M) Reported Y/Y FX Impact Inorganic Impact Organic Constant Currency Revenue $142 (5)% — — (5)% Adjusted EBITDA $70 2% — — 2% Consumer Interactive first quarter 2023 highlights ►Modest growth in indirect channel offset by continued declines in direct channel ►Adjusted EBITDA margins of 49.2%, up 310bps YoY, driven by lower advertising Note: Rows may not foot due to rounding. For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation.
© 2023 TransUnion LLC All Rights Reserved | 14 Reported ($M) Reported Y/Y FX Impact Inorganic Impact Constant Currency Revenue $197 3% 9% — 12% Canada 31 2% 7% — 9% Latin America 29 5% 7% — 11% U.K. 47 (16)% 9% — (8)% Africa 15 (1)% 15% — 14% India 55 21% 12% — 32% Asia Pacific 21 23% 2% — 25% Adjusted EBITDA $86 5% 9% — 14% International first quarter 2023 highlights ►India revenue growth driven by consumer, commercial, fraud and direct-to-consumer ►Both Canada (+9% constant- currency) and U.K. (+2% constant-currency, excluding one-time contracts) outgrowing market volumes, driven by new business wins Note: Rows may not foot due to rounding. For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation.
© 2023 TransUnion LLC All Rights Reserved | 15 • Roughly $5.6 billion of debt and $439 million cash at quarter-end • $75 million of debt prepayment in March; Leverage Ratio of ~3.8x at the end of Q1 2023 • Intend to further prepay debt in Q2 and throughout 2023 • Targeting <3.5x Leverage Ratio by end of 2023; <3.0x by end of 2024 Leverage Ratio1 1We 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. 4.3x 3.9x 3.4x 3.1x 4.1x 3.5x 3.1x 3.5x 3.8x 3.8x <3.5x <3.0x 2015 IPO 2015 2016 2017 2018 2019 2020 2021 2022 Q1 2023 2023F 2024F Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation. Intend to deleverage and use excess cash for debt prepayment
© 2023 TransUnion LLC All Rights Reserved | 16 Reported Revenue: $948M to $958M Flat to +1% Assumed M&A contribution: No impact Assumed FX contribution: ~(1)pt. headwind Organic Constant Currency Revenue: +1% to +2% Assumed mortgage impact: ~1pt. benefit Organic CC Revenue ex. mortgage: Flat to +1% Adjusted EBITDA: $330M to $335M (6)% to (4)% Assumed FX contribution: ~(1)pt. headwind Adjusted EBITDA margin 34.8% to 35.0% Adjusted EBITDA margin bps change: (220)bps to (200)bps Adjusted Diluted EPS: $0.81 to $0.83 (18)% to (15)% Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation. Second quarter 2023 guidance ►Revenue: International expected to again deliver strong growth ►Adjusted EBITDA: Sequential margin improvement with expansion expected in H2 2023, driven by higher revenues, Neustar synergies and proactive cost actions
© 2023 TransUnion LLC All Rights Reserved | 17 Reported Revenue: $3.825B to $3.885B +3% to +5% Assumed M&A contribution: <1pt. benefit Assumed FX contribution: ~(1)pt. headwind Organic Constant Currency Revenue: +3% to +5% Assumed mortgage impact: ~1pt. benefit Organic CC Revenue ex. mortgage: +2% to +4% Organic Growth Assumptions • U.S. Markets up mid-single digit (up low-single digit excluding mortgage) – Financial Services up low-single digit (down low-single digit excluding mortgage) – Emerging Verticals up mid-single digit • International up low-double digit (constant-currency) • Consumer Interactive down low-single digit Market Assumptions ►Maintaining FY guidance despite Q1 outperformance to account for uncertain market conditions ▬ In U.S., expecting incremental softness in Card and Consumer Lending, offset by better than expected Mortgage ▬ Raising International outlook ►U.S. mortgage: Now expect mid-20s percent revenue growth based on 20 percent inquiry decline; U.S. mortgage was ~6% of LTM revenues Full-year 2023 revenue guidance Note: For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation.
© 2023 TransUnion LLC All Rights Reserved | 18 ►Raised Adjusted Diluted EPS guidance by $0.03 for $75 million debt prepayment in Q1 and changes in forward curve ▬ Intend to use excess cash for debt prepayment; however, guidance assumes no further debt prepayment ▬ Every $100M of prepayment yields annualized interest savings of ~$7M ($0.03 EPS) Adjusted EBITDA: $1.388B to $1.421B +3% to +5% Assumed FX contribution: ~(1)pt. headwind Adjusted EBITDA margin 36.3% to 36.6% Adjusted EBITDA margin bps change: Flat to +30bps Adjusted Diluted EPS: $3.49 to $3.62 (4)% to Flat Adjusted Tax Rate: ~23% Total D&A: ~$525M D&A ex. step-up from 2012 change in control and subsequent acquisitions: ~$225M Net Interest Expense: ~$275M CapEx: ~8% of revenue The adjusted tax rate guidance of ~23% reflects expected full year GAAP effective rate of ~21.5% plus the elimination of discrete adjustments and other items totaling ~1.5%. For additional information, refer to the “Non-GAAP Financial Information” section on slide 2 and the Appendix at the back of this investor presentation. Full-year 2023 Adjusted EBITDA, Adjusted Diluted EPS and other guidance
© 2023 TransUnion LLC All Rights Reserved | 19 Drove meaningful progress in Neustar integration, including strong cross-sell wins and data and technology integration milestones Exceeded Q1 guidance, led by strong growth in International Maintaining 2023 guidance to account for continued market uncertainty
© 2023 TransUnion LLC All Rights Reserved | 20 Q&A
© 2023 TransUnion LLC All Rights Reserved | 21 Appendices: Non-GAAP Reconciliations
© 2023 TransUnion LLC All Rights Reserved | 22 Adjusted EBITDA and Adjusted EBITDA Margin $ in millions Three Months Ended March 31, 2023 2022 Reconciliation of net income attributable to TransUnion to consolidated Adjusted EBITDA: Net income attributable to TransUnion $ 52.6 $ 48.3 Discontinued operations, net of tax 0.1 0.4 Income from continuing operations attributable to TransUnion $ 52.7 $ 48.7 Net interest expense 66.0 49.5 Provision for income taxes 18.6 24.4 Depreciation and amortization 129.7 128.8 EBITDA $ 267.0 $ 251.3 Adjustments to EBITDA: Stock-based compensation1 $ 22.2 $ 20.6 Mergers and acquisitions, divestitures and business optimization2 8.9 14.6 Accelerated technology investment3 19.7 12.0 Net other4 4.6 35.7 Total adjustments to EBITDA $ 55.4 $ 82.9 Consolidated Adjusted EBITDA $ 322.3 $ 334.2 Net income attributable to TransUnion margin 5.6% 5.2% Consolidated Adjusted EBITDA margin5 34.3% 36.3% As a result of displaying amounts in millions, rounding differences may exist in the tables and footnotes. 1. Consisted of stock-based compensation, including amounts which are cash settled. 2. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments: For the three months ended March 31, 2023, $6.0 million of Neustar integration costs; a $2.5 million adjustment to a liability from a recent acquisition; $1.4 million of acquisition expenses; a $0.4 million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the impairment of a Cost Method Investment; $(0.6) million of reimbursements for transition services related to divested businesses, net of separation expenses. For the three months ended March 31, 2022, $9.0 million of Neustar integration costs; $8.9 million of acquisition expenses; a $0.2 million adjustment to fair value of put options; and a $(3.5) million reimbursement for transition services related to divested businesses, net of separation expenses. 3. Represents expenses associated with our accelerated technology investment to migrate to the cloud. 4. Net other consisted of the following adjustments: For the three months ended March 31, 2023, $1.1 million of deferred loan fees written off as a result of the prepayment on our debt; and a $3.5 million net loss from currency remeasurement of our foreign operations, loan fees and other. For the three months ended March 31, 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 $0.7 million of net other, which includes net losses from currency remeasurement of our foreign operations, loan fees and other. 5. Consolidated Adjusted EBITDA margin is calculated by dividing Consolidated Adjusted EBITDA by total revenue.
© 2023 TransUnion LLC All Rights Reserved | 23 Adjusted Net Income and Adjusted EPS $ in millions, except per share data Three Months Ended March 31, 2023 2022 Reconciliation of net income attributable to TransUnion to Adjusted Net Income: Net income attributable to TransUnion $ 52.6 $ 48.3 Discontinued operations, net of tax 0.1 0.4 Income from continuing operations attributable to TransUnion $ 52.7 $ 48.7 Adjustments before income tax items: Stock-based compensation1 22.2 20.6 Mergers and acquisitions, divestitures and business optimization2 8.9 14.6 Accelerated technology investment3 19.7 12.0 Net other4 3.8 35.3 Amortization of certain intangible assets5 75.2 76.2 Total adjustments before income tax items $ 129.7 $ 158.7 Change in provision for income taxes $ (26.9) $ (28.5) Adjusted Net Income $ 155.4 $ 178.8 Weighted-average shares outstanding: Basic 193.0 192.1 Diluted 193.9 193.2 Adjusted Earnings per Share: Basic $ 0.81 $ 0.93 Diluted $ 0.80 $ 0.93 As a result of displaying amounts in millions, rounding differences may exist in the table and footnotes. 1. Consisted of stock-based compensation, including amounts which are cash settled. 2. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments: For the three months ended March 31, 2023, $6.0 million of Neustar integration costs; a $2.5 million adjustment to a liability from a recent acquisition; $1.4 million of acquisition expenses; a $0.4 million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the impairment of a Cost Method Investment; $(0.6) million of reimbursements for transition services related to divested businesses, net of separation expenses. For the three months ended March 31, 2022, $9.0 million of Neustar integration costs; $8.9 million of acquisition expenses; a $0.2 million adjustment to fair value of put options; and a $(3.5) million reimbursement for transition services related to divested businesses, net of separation expenses. 3. Represents expenses associated with our accelerated technology investment to migrate to the cloud. 4. Net other consisted of the following adjustments: For the three months ended March 31, 2023, $1.1 million of deferred loan fees written off as a result of the prepayment on our debt; and a $2.7 million net loss from currency remeasurement of our foreign operations, loan fees and other. For the three months ended March 31, 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 $0.4 million of net other, which includes net losses from currency remeasurement of our foreign operations and other. 5. 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.
© 2023 TransUnion LLC All Rights Reserved | 24 Adjusted Diluted EPS Three Months Ended March 31, 2023 2022 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 $ 0.27 $ 0.25 Discontinued operations, net of tax - - Income from continuing operations attributable to TransUnion $ 0.27 $ 0.25 Adjustments before income tax items: Stock-based compensation1 0.11 0.11 Mergers and acquisitions, divestitures and business optimization2 0.05 0.08 Accelerated technology investment3 0.10 0.06 Net other4 0.02 0.18 Amortization of certain intangible assets5 0.39 0.39 Total adjustments before income tax items $ 0.67 $ 0.82 Change in provision for income taxes $ (0.14) $ (0.15) Adjusted Diluted Earnings per Share $ 0.80 $ 0.93 As a result of displaying amounts in millions, rounding differences may exist in the table and footnotes. 1. Consisted of stock-based compensation, including amounts which are cash settled. 2. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments: For the three months ended March 31, 2023, $6.0 million of Neustar integration costs; a $2.5 million adjustment to a liability from a recent acquisition; $1.4 million of acquisition expenses; a $0.4 million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the impairment of a Cost Method Investment; $(0.6) million of reimbursements for transition services related to divested businesses, net of separation expenses. For the three months ended March 31, 2022, $9.0 million of Neustar integration costs; $8.9 million of acquisition expenses; a $0.2 million adjustment to fair value of put options; and a $(3.5) million reimbursement for transition services related to divested businesses, net of separation expenses. 3. Represents expenses associated with our accelerated technology investment to migrate to the cloud. 4. Net other consisted of the following adjustments: For the three months ended March 31, 2023, $1.1 million of deferred loan fees written off as a result of the prepayment on our debt; and a $2.7 million net loss from currency remeasurement of our foreign operations, loan fees and other. For the three months ended March 31, 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 $0.4 million of net other, which includes net losses from currency remeasurement of our foreign operations and other. 5. 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.
© 2023 TransUnion LLC All Rights Reserved | 25 Adjusted Effective Tax Rate $ in millions Three Months Ended March 31, 2023 2022 Income from continuing operations before income taxes $ 75.6 $ 76.7 Total adjustments before income tax items 129.7 158.7 Adjusted income from continuing operations before income taxes $ 205.2 $ 235.3 Provision for income taxes (18.6) (24.4) Adjustments for income taxes: Tax effect of above adjustments1 (29.6) (28.4) Eliminate impact of excess tax expenses/(benefits) for share compensation 1.5 (4.2) Other2 1.2 4.1 Total adjustments for income taxes $ (26.9) $ (28.5) Adjusted provision for income taxes $ (45.5) $ (52.9) Effective tax rate 24.6% 31.8% Adjusted Effective Tax Rate 22.2% 22.5% As a result of displaying amounts in millions, rounding differences may exist in the table. 1. Tax rates used to calculate the tax expense impact are based on the nature of each item. 2. For the three months ended March 31, 2023, $0.9 million of other adjustments, $0.4 million of deferred tax rate adjustments, and ($0.1) million of valuation allowances related to prior periods. For the three months ended March 31, 2022, $2.1 million of deferred tax rate adjustments; $0.6 million of return to provision and audit adjustments related to prior periods; $0.9 million of other adjustments, and $0.5 million of valuation allowances.
© 2023 TransUnion LLC All Rights Reserved | 26 Leverage Ratio $ in millions Trailing Twelve Months Ended March 31, 2023 Reconciliation of net income attributable to TransUnion to Adjusted EBITDA: Net income attributable to TransUnion $ 273.8 Discontinued operations, net of tax (17.7) Income from continuing operations attributable to TransUnion1 $ 256.1 Net interest expense 242.7 Provision for income taxes 114.1 Depreciation and amortization 519.9 EBITDA $ 1,132.8 Adjustments to EBITDA: Stock-based compensation1 82.7 Mergers and acquisitions, divestitures and business optimization2 45.0 Accelerated technology investment3 59.1 Net other4 15.0 Total adjustments to EBITDA $ 201.8 Leverage Ratio Adjusted EBITDA $ 1,334.6 Total debt $ 5,569.6 Less: Cash and cash equivalents 439.0 Net Debt $ 5,130.6 Ratio of Net Debt to Net income attributable to TransUnion 18.7 Leverage Ratio 3.8 As a result of displaying amounts in millions, rounding differences may exist in the table above. 1. Consisted of stock-based compensation, including amounts which are cash settled. 2. Mergers and acquisitions, divestitures and business optimization consisted of the following adjustments: $30.1 million of Neustar integration costs; $16.3 million of acquisition expenses; $4.6 loss on the impairment of a cost method investment; a $2.5 million adjustment to a liability from a recent acquisition; a $(0.4) million adjustment to the fair value of a put option liability related to a minority investment; a $(0.8) million gain on the settlement of a Cost Method Investment; $(3.4) million gain related to a government tax reimbursement from a recent business acquisition; and $(3.9) million of reimbursements for transition services related to divested businesses, net of separation expense. 3. Represents expenses associated with our accelerated technology investment to migrate to the cloud. 4. Net other consisted of the following adjustments: $3.9 million of deferred loan fees written off as a result of the prepayments on our debt; a $11.1 million net loss from currency remeasurement of our foreign operations, loan fees and other.
© 2023 TransUnion LLC All Rights Reserved | 27 Adjusted EBITDA and Adjusted EPS Guidance $ in millions, except per share data Three Months Ended June 30, 2023 Twelve Months Ended December 31, 2023 Low High Low High Guidance reconciliation of net income attributable to TransUnion to Adjusted EBITDA: Net income attributable to TransUnion $ 57 $ 61 $ 283 $ 308 Discontinued operations, net of tax 1 1 3 3 Income from continuing operations attributable to TransUnion $ 59 $ 63 $ 285 $ 311 Interest, taxes, depreciation and amortization 215 216 881 888 EBITDA $ 274 $ 279 $ 1,166 $ 1,199 Stock-based compensation, mergers, acquisitions, divestitures and business optimization-related expenses and other adjustments1 56 56 222 222 Adjusted EBITDA $ 330 $ 335 $ 1,388 $ 1,421 Net income attributable to TransUnion margin 6.0% 6.4 % 7.4% 7.9% Adjusted EBITDA margin2 34.8% 35.0% 36.3% 36.6% Reconciliation of diluted earnings per share to Adjusted Diluted Earnings per Share: Diluted earnings per share $ 0.29 $ 0.32 $ 1.45 $ 1.58 Adjustments to diluted earnings per share1 0.51 0.51 2.04 2.03 Adjusted Diluted Earnings per Share $ 0.81 $ 0.83 $ 3.49 $ 3.62 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.