Delaware | 333-182948 | 61-1678417 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
555 West Adams Street, Chicago, Illinois | 60661 | |
(Address of Principal Executive Offices) | (Zip Code) |
⃞ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
⃞ | Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12) |
⃞ | Pre−commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b)) |
⃞ | Pre−commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e− 4(c)) |
Exhibit No. | Description | ||
Exhibit 99.1 | Press release of TransUnion Holding Company, Inc. dated August 7, 2014, announcing results for the quarter ended June 30, 2014. |
Contact | Lindsey Whitehead |
TransUnion | |
E-mail | investor.relations@transunion.com |
Telephone | 312 985 2860 |
• | Revenue in the Interactive segment increased 11.4% compared with the second quarter of 2013, driven by an increase in the average number of subscribers and volume in our indirect channel. |
• | Revenue in the USIS segment increased 10.1% compared with the second quarter of 2013, with increases in revenue in all platforms. |
• | Excluding the impact of weakening foreign currencies and acquisitions, Emerging Market revenue increased by 8.2% compared with the second quarter of 2013. |
• | Adjusted EBITDA(1) was $101.7 million, an increase of 7.7% compared with the second quarter of 2013, driven by broad-based revenue growth. |
• | On May 20, 2014, TransUnion acquired an additional 7.5% equity interest in Credit Information Bureau (India) Limited ("CIBIL"), increasing our ownership interest to 55%, resulting in consolidation of the results of operations of CIBIL as part of our International segment. |
• | Online Data Services revenue was $140.1 million, an increase of 6.1% compared with the second quarter of 2013, driven by our acquisition of TLO and slight increase in online credit report volume. |
• | Credit Marketing Services revenue was $32.4 million, an increase of 4.9% compared with the second quarter of 2013, due primarily to an increase in demand for custom data |
• | Decision Services revenue was $34.3 million , an increase of 37.2% compared with the second quarter of 2013, driven by revenue from our acquisition of eScan Data Systems and other increases in the healthcare market. |
• | Developed markets revenue was $24.3 million, essentially flat when compared with the second quarter of 2013. Excluding the impact of foreign currencies, revenue increased 2.0% compared with the second quarter of 2013. |
• | Emerging markets revenue was $38.8 million, an increase of 5.4% compared with the second quarter of 2013. Excluding the impact of weakening foreign currencies and acquisitions, revenue increased by 8.2% compared with the second quarter of 2013. |
• | Revenue for U.S. Information Services was $400.9 million, an increase of 7.9% compared with the first six months of 2013. |
• | Revenue for International was $117.4 million, essentially flat when compared with the first six months of 2013. Excluding the impact of foreign currencies and acquisitions, revenue increased 6.2%. Weakening foreign currencies accounted for a reduction in revenue of 9.2%, while acquisitions accounted for an increase in revenue of 3.3%. |
• | Revenue for Interactive was $ 112.6 million, an increase of 9.6% compared with the first six months of 2013. |
June 30, 2014 | December 31, 2013 | ||||||
Unaudited | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 93.2 | $ | 111.2 | |||
Trade accounts receivable, net of allowance of $1.1 and $0.7 | 193.0 | 165.0 | |||||
Other current assets | 71.7 | 73.5 | |||||
Total current assets | 357.9 | 349.7 | |||||
Property, plant and equipment, net of accumulated depreciation and amortization of $93.8 and $70.2 | 165.4 | 150.4 | |||||
Marketable securities | 13.9 | 9.9 | |||||
Goodwill | 2,012.6 | 1,909.7 | |||||
Other intangibles, net of accumulated amortization of $308.5 and $227.5 | 1,974.2 | 1,934.0 | |||||
Other assets | 109.7 | 138.6 | |||||
Total assets | $ | 4,633.7 | $ | 4,492.3 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 107.0 | $ | 100.3 | |||
Short-term debt and current portion of long-term debt | 29.0 | 13.8 | |||||
Other current liabilities | 121.4 | 133.5 | |||||
Total current liabilities | 257.4 | 247.6 | |||||
Long-term debt | 2,874.5 | 2,853.1 | |||||
Deferred taxes | 661.5 | 636.9 | |||||
Other liabilities | 23.2 | 22.6 | |||||
Total liabilities | 3,816.6 | 3,760.2 | |||||
Redeemable noncontrolling interests | 17.8 | 17.6 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value; 200.0 million shares authorized at June 30, 2014 and December 31, 2013, 110.9 million and 110.7 shares issued at June 30, 2014 and December 31, 2013, respectively, and 110.4 million shares and 110.2 million shares outstanding as of June 30, 2014 and December 31, 2013, respectively | 1.1 | 1.1 | |||||
Additional paid-in capital | 1,126.2 | 1,121.8 | |||||
Treasury stock at cost; 0.5 million shares at June 30, 2014 and December 31, 2013, respectively | (4.2 | ) | (4.1 | ) | |||
Accumulated deficit | (414.5 | ) | (417.7 | ) | |||
Accumulated other comprehensive loss | (78.9 | ) | (73.2 | ) | |||
Total TransUnion Holding Company, Inc. stockholders’ equity | 629.7 | 627.9 | |||||
Noncontrolling interests | 169.6 | 86.6 | |||||
Total stockholders’ equity | 799.3 | 714.5 | |||||
Total liabilities and stockholders’ equity | $ | 4,633.7 | $ | 4,492.3 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenue | $ | 327.5 | $ | 300.8 | $ | 630.9 | $ | 591.3 | |||||||
Operating expenses | |||||||||||||||
Cost of services (exclusive of depreciation and amortization below) | 132.4 | 121.3 | 253.3 | 239.0 | |||||||||||
Selling, general and administrative | 107.4 | 94.8 | 203.6 | 178.2 | |||||||||||
Depreciation and amortization | 55.3 | 45.2 | 106.8 | 90.5 | |||||||||||
Total operating expenses | 295.1 | 261.3 | 563.7 | 507.7 | |||||||||||
Operating income | 32.4 | 39.5 | 67.2 | 83.6 | |||||||||||
Non-operating income and expense | |||||||||||||||
Interest expense | (50.0 | ) | (49.2 | ) | (100.8 | ) | (99.0 | ) | |||||||
Interest income | 0.7 | 0.2 | 1.2 | 0.5 | |||||||||||
Earnings from equity method investments | 3.1 | 4.2 | 6.7 | 7.3 | |||||||||||
Other income and (expense), net | 48.0 | (2.7 | ) | 46.3 | (6.4 | ) | |||||||||
Total non-operating income and expense | 1.8 | (47.5 | ) | (46.6 | ) | (97.6 | ) | ||||||||
Income (loss) before income taxes | 34.2 | (8.0 | ) | 20.6 | (14.0 | ) | |||||||||
(Provision) benefit for income taxes | (14.3 | ) | 1.9 | (14.2 | ) | 2.7 | |||||||||
Net income (loss) | 19.9 | (6.1 | ) | 6.4 | (11.3 | ) | |||||||||
Less: net income attributable to the noncontrolling interests | (2.0 | ) | (1.7 | ) | (3.2 | ) | (2.9 | ) | |||||||
Net income (loss) attributable to TransUnion Holding Company, Inc. | $ | 17.9 | $ | (7.8 | ) | $ | 3.2 | $ | (14.2 | ) |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 6.4 | $ | (11.3 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 106.8 | 90.5 | |||||
Net gain on 2014 Refinancing Transaction | (32.7 | ) | — | ||||
Gain on fair value adjustment of equity method investment | (21.7 | ) | — | ||||
Impairment of cost method investment | 4.5 | — | |||||
Loss on fair value of interest rate swaps | 0.7 | — | |||||
Amortization of deferred financing fees | 3.5 | 5.2 | |||||
Stock-based compensation | 4.2 | 3.5 | |||||
Provision for losses on trade accounts receivable | 0.9 | 0.4 | |||||
Equity in net income of affiliates, net of dividends | 0.5 | — | |||||
Deferred taxes | 6.5 | (10.1 | ) | ||||
Amortization of senior notes purchase accounting fair value adjustment and note discount | (6.2 | ) | (8.4 | ) | |||
Gain on sale of other assets | — | (1.3 | ) | ||||
Other | 0.5 | (0.1 | ) | ||||
Changes in assets and liabilities: | |||||||
Trade accounts receivable | (24.4 | ) | (12.2 | ) | |||
Other current and long-term assets | 0.7 | 1.1 | |||||
Trade accounts payable | 12.0 | 9.2 | |||||
Other current and long-term liabilities | (16.6 | ) | (19.2 | ) | |||
Cash provided by operating activities | 45.6 | 47.3 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (74.3 | ) | (30.2 | ) | |||
Proceeds from sale of trading securities | 1.1 | 2.2 | |||||
Investments in trading securities | (1.8 | ) | (1.4 | ) | |||
Acquisitions and purchases of noncontrolling interests, net of cash acquired | (54.8 | ) | (28.9 | ) | |||
Proceeds from sale of other assets | — | 4.2 | |||||
Acquisition-related deposits | 8.8 | (0.3 | ) | ||||
Cash used in investing activities | (121.0 | ) | (54.4 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from senior secured term loan | 1,895.3 | 923.4 | |||||
Extinguishment of senior secured term loan | (1,120.5 | ) | (923.4 | ) | |||
Extinguishment of 11.375% senior unsecured notes | (645.0 | ) | — | ||||
Proceeds from revolving line of credit | 28.5 | — | |||||
Repayment of revolving line of credit | (28.5 | ) | — | ||||
Repayments of debt | (10.4 | ) | (5.8 | ) | |||
Proceeds from issuance of common stock | 1.7 | 0.3 | |||||
Debt financing fees including prepayment premium on early termination of 11.375% notes | (61.9 | ) | (3.7 | ) | |||
Treasury stock purchases | (0.1 | ) | (2.0 | ) | |||
Distributions to noncontrolling interests | (1.4 | ) | (1.1 | ) | |||
Other | 0.1 | 0.1 | |||||
Cash provided by (used in) financing activities | 57.8 | (12.2 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (0.4 | ) | (4.8 | ) | |||
Net change in cash and cash equivalents | (18.0 | ) | (24.1 | ) | |||
Cash and cash equivalents, beginning of period | 111.2 | 154.3 | |||||
Cash and cash equivalents, end of period | $ | 93.2 | $ | 130.2 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
(in millions) | 2014 | 2013 | $ Change | % Change | 2014 | 2013 | $ Change | % Change | ||||||||||||||||||||||
U.S. Information Services: | ||||||||||||||||||||||||||||||
Online Data Services | $ | 140.1 | $ | 132.0 | $ | 8.1 | 6.1 | % | $ | 271.1 | $ | 259.1 | $ | 12.0 | 4.6 | % | ||||||||||||||
Credit Marketing Services | 32.4 | 30.9 | 1.5 | 4.9 | % | 63.3 | 62.7 | 0.6 | 1.0 | % | ||||||||||||||||||||
Decision Services | 34.3 | 25.0 | 9.3 | 37.2 | % | 66.5 | 49.8 | 16.7 | 33.5 | % | ||||||||||||||||||||
Total U.S. Information Services | 206.8 | 187.9 | 18.9 | 10.1 | % | 400.9 | 371.6 | 29.3 | 7.9 | % | ||||||||||||||||||||
International: | ||||||||||||||||||||||||||||||
Developed markets | 24.3 | 24.5 | (0.2 | ) | (0.8 | )% | 46.1 | 46.5 | (0.4 | ) | (0.9 | )% | ||||||||||||||||||
Emerging markets | 38.8 | 36.8 | 2.0 | 5.4 | % | 71.3 | 70.5 | 0.8 | 1.1 | % | ||||||||||||||||||||
Total International | 63.2 | 61.3 | 1.9 | 3.1 | % | 117.4 | 117.0 | 0.4 | 0.3 | % | ||||||||||||||||||||
Interactive | 57.5 | 51.6 | 5.9 | 11.4 | % | 112.6 | 102.7 | 9.9 | 9.6 | % | ||||||||||||||||||||
Total revenue | $ | 327.5 | $ | 300.8 | $ | 26.7 | 8.9 | % | $ | 630.9 | $ | 591.3 | $ | 39.6 | 6.7 | % |
Operating Income(1) | ||||||||||||||||||||||||||||||
U.S. Information Services | $ | 26.5 | $ | 37.3 | $ | (10.8 | ) | (29.0 | )% | $ | 58.7 | $ | 80.3 | $ | (21.6 | ) | (26.9 | )% | ||||||||||||
International | 4.7 | 4.1 | 0.6 | 14.6 | % | 7.0 | 6.5 | 0.5 | 7.7 | % | ||||||||||||||||||||
Interactive | 20.3 | 15.9 | 4.4 | 27.7 | % | 39.4 | 31.3 | 8.1 | 25.9 | % | ||||||||||||||||||||
Corporate | (19.1 | ) | (17.8 | ) | (1.3 | ) | 7.3 | % | (37.9 | ) | (34.5 | ) | (3.4 | ) | 9.9 | % | ||||||||||||||
Total operating income | $ | 32.4 | $ | 39.5 | $ | (7.1 | ) | (18.0 | )% | $ | 67.2 | $ | 83.6 | $ | (16.4 | ) | (19.6 | )% | ||||||||||||
Operating Margin | ||||||||||||||||||||||||||||||
U.S. Information Services | 12.8 | % | 19.9 | % | (7.0 | )% | 14.6 | % | 21.6 | % | (7.0 | )% | ||||||||||||||||||
International | 7.4 | % | 6.7 | % | 0.7 | % | 6.0 | % | 5.6 | % | 0.4 | % | ||||||||||||||||||
Interactive | 35.3 | % | 30.8 | % | 4.5 | % | 35.0 | % | 30.5 | % | 4.5 | % | ||||||||||||||||||
Total operating margin | 9.9 | % | 13.1 | % | (3.2 | )% | 10.7 | % | 14.1 | % | (3.5 | )% | ||||||||||||||||||
Adjusted Operating Income(2) | ||||||||||||||||||||||||||||||
U.S. Information Services | $ | 36.7 | $ | 39.9 | $ | (3.2 | ) | (8.0 | )% | $ | 68.9 | $ | 81.9 | $ | (13.0 | ) | (15.9 | )% | ||||||||||||
International | 4.7 | 6.4 | (1.7 | ) | (26.6 | )% | 7.0 | 8.8 | (1.8 | ) | (20.5 | )% | ||||||||||||||||||
Interactive | 20.3 | 15.9 | 4.4 | 27.7 | % | 39.4 | 31.3 | 8.1 | 25.9 | % | ||||||||||||||||||||
Corporate | (19.1 | ) | (17.5 | ) | (1.6 | ) | (9.1 | )% | (37.9 | ) | (34.3 | ) | (3.6 | ) | (10.5 | )% | ||||||||||||||
Total Adjusted Operating Income | $ | 42.6 | $ | 44.7 | $ | (2.1 | ) | (4.7 | )% | $ | 77.4 | $ | 87.7 | $ | (10.3 | ) | (11.7 | )% | ||||||||||||
Adjusted Operating Margin | ||||||||||||||||||||||||||||||
U.S. Information Services | 17.7 | % | 21.2 | % | (3.5 | )% | 17.2 | % | 22.0 | % | (4.8 | )% | ||||||||||||||||||
International | 7.4 | % | 10.4 | % | (3.0 | )% | 6.0 | % | 7.5 | % | (1.5 | )% | ||||||||||||||||||
Interactive | 35.3 | % | 30.8 | % | 4.5 | % | 35.0 | % | 30.5 | % | 4.5 | % | ||||||||||||||||||
Total adjusted operating margin | 13.0 | % | 14.9 | % | (1.9 | )% | 12.3 | % | 14.8 | % | (2.5 | )% |
(1) | For the three and six months ended June 30, 2014, operating income included $10.2 million of accelerated fees for a data matching service contract that we have terminated and in-sourced that was recorded in our USIS segment. For the three months ended June 30, 2013, operating income included a $2.3 million loss on the disposal of a small operating company recorded in our International segment and a $2.9 million adjustment for tax expense related to prior years that was recorded in each segment and in Corporate as follows: USIS $2.6 million; and Corporate $0.3 million. For the six months ended June 30, 2013, operating income also included a $1.1 million gain on the disposal of a product line recorded in our USIS segment. |
(2) | See footnote 2 to the "Key Performance Measures" table for a discussion about Adjusted Operating Income, why we use it, its limitations, and the reconciliation to its most directly comparable GAAP measure, operating income. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
(in millions) | 2014 | 2013 | $ Change | % Change | 2014 | 2013 | $ Change | % Change | ||||||||||||||||||||||
Revenue | $ | 327.5 | $ | 300.8 | $ | 26.7 | 8.9 | % | $ | 630.9 | $ | 591.3 | $ | 39.6 | 6.7 | % | ||||||||||||||
Reconciliation of operating income to Adjusted Operating Income: | ||||||||||||||||||||||||||||||
Operating income | $ | 32.4 | $ | 39.5 | $ | (7.1 | ) | (18.0 | )% | $ | 67.2 | $ | 83.6 | $ | (16.4 | ) | (19.6 | )% | ||||||||||||
Adjustments(1) | 10.2 | 5.2 | 5.0 | 96.2 | % | 10.2 | 4.1 | 6.1 | 148.8 | % | ||||||||||||||||||||
Adjusted Operating Income(2) | $ | 42.6 | $ | 44.7 | $ | (2.1 | ) | (4.7 | )% | $ | 77.4 | $ | 87.7 | $ | (10.3 | ) | (11.7 | )% | ||||||||||||
Reconciliation of net income (loss) attributable to the Company to Adjusted EBITDA: | ||||||||||||||||||||||||||||||
Net income (loss) attributable to the Company | $ | 17.9 | $ | (7.8 | ) | $ | 25.7 | 329.5 | % | $ | 3.2 | $ | (14.2 | ) | $ | 17.4 | 122.5 | % | ||||||||||||
Net interest expense | 49.3 | 49.0 | 0.3 | 0.6 | % | 99.6 | 98.5 | 1.1 | 1.1 | % | ||||||||||||||||||||
Income tax (benefit) provision | 14.3 | (1.9 | ) | 16.2 | nm | 14.2 | (2.7 | ) | 16.9 | nm | ||||||||||||||||||||
Depreciation and amortization | 55.3 | 45.2 | 10.1 | 22.3 | % | 106.8 | 90.5 | 16.3 | 18.0 | % | ||||||||||||||||||||
Stock-based compensation | 2.2 | 1.7 | 0.5 | 29.4 | % | 4.2 | 3.5 | 0.7 | 20.0 | % | ||||||||||||||||||||
Other (income) and expense(3) | (47.5 | ) | 3.0 | (50.5 | ) | nm | (45.8 | ) | 6.9 | (52.7 | ) | nm | ||||||||||||||||||
Adjustments(1) | 10.2 | 5.2 | 5.0 | 96.2 | % | 10.2 | 4.1 | 6.1 | 148.8 | % | ||||||||||||||||||||
Adjusted EBITDA(2) | $ | 101.7 | $ | 94.4 | $ | 7.3 | 7.7 | % | $ | 192.4 | $ | 186.6 | $ | 5.8 | 3.1 | % | ||||||||||||||
Other metrics: | ||||||||||||||||||||||||||||||
Cash provided by operating activities | $ | 51.7 | $ | 33.8 | $ | 17.9 | 53.0 | % | $ | 45.6 | $ | 47.3 | $ | (1.7 | ) | (3.6 | )% | |||||||||||||
Capital expenditures | $ | 35.5 | $ | 13.8 | $ | 21.7 | 157.2 | % | $ | 74.3 | $ | 30.2 | $ | 44.1 | 146.0 | % |
(1) | For the three and six months ended June 30, 2014, adjustments consisted of $10.2 million of accelerated fees for a data matching service contract that we have terminated and in-sourced in our USIS segment as part of the upgrade to our technology platform. For the three months ended June 30, 2013, adjustments consisted of a $2.3 million loss on the disposal of a small operating company recorded in our International segment, and a $2.9 million adjustment for tax expense related to prior years that was recorded in each segment and in Corporate as follows: USIS $2.6 million; and Corporate $0.3 million. For the six months ended June 30, 2013, adjustments also included a $1.1 million gain on the disposal of a product line recorded in our USIS segment. |
(2) | Adjusted Operating Income and Adjusted EBITDA are non-GAAP measures. We present Adjusted Operating Income and Adjusted EBITDA as supplemental measures of our operating performance because they eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance. In addition to its use as a measure of our operating performance, our board of directors and executive management team use Adjusted EBITDA as a compensation measure. Adjusted Operating Income does not reflect certain other income and expense. Adjusted EBITDA does not reflect our capital expenditures, interest, income tax, depreciation, amortization, stock-based compensation and certain other income and expense. Other companies in our industry may calculate Adjusted Operating Income and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. Because of these limitations, Adjusted Operating Income and Adjusted EBITDA should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. Adjusted Operating Income and Adjusted EBITDA are not measures of financial condition or profitability under GAAP and should not be considered alternatives to cash flow from operating activities, as measures of liquidity or as alternatives to operating income or net income as indicators of operating performance. We believe that the most directly comparable GAAP measure to Adjusted Operating Income is operating income and the most directly comparable GAAP measure to Adjusted EBITDA is net income attributable to the Company. The reconciliations of Adjusted Operating Income and Adjusted EBITDA to their nearest GAAP measures are included in the table above. |
(3) | Other income and expense above includes all amounts included in our consolidated statement of income in other income |