10-Q 1 d543716d10q.htm FORM 10-Q Form 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

- OR -

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file numbers:

TransUnion Holding Company, Inc. 333-182948

TransUnion Corp. 333-172549

 

 

TRANSUNION HOLDING COMPANY, INC.

TRANSUNION CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   61-1678417
Delaware   74-3135689

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

555 West Adams, Chicago, IL   60661
(Address of principal executive offices)   (Zip code)

312-985-2000

(Registrants’ telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

TransUnion Holding Company, Inc.    Yes  ¨    No  x
TransUnion Corp.    Yes  ¨    No  x

(Note: TransUnion Holding Company, Inc.’s obligation to file periodic reports pursuant to Section 15(d) of the Securities Exchange Act of 1934 was suspended automatically on January 1, 2013 and resumed on July 17, 2013, the effective date of its Registration Statement on Form S-4 filed on June 26, 2013. TransUnion Holding Company, Inc. has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that such registrant would have been required to file such reports) either pursuant to its obligation under Section 15(d) of the Securities Exchange Act of 1934 or as a “voluntary filer” in compliance with the indentures governing its senior indebtedness. TransUnion Corp. has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that such registrant would have been required to file such reports) as a “voluntary filer” in compliance with the agreements governing its senior indebtedness.)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

TransUnion Holding Company, Inc.    Yes  x    No  ¨
TransUnion Corp.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

 

TransUnion Holding Company, Inc.       Large accelerated filer   ¨    Accelerated filer   ¨
      Non-accelerated filer   x      Smaller reporting company   ¨
TransUnion Corp.       Large accelerated filer   ¨    Accelerated filer   ¨
      Non-accelerated filer   x    Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

TransUnion Holding Company, Inc.    Yes  ¨    No  x
TransUnion Corp.    Yes  ¨    No  x

The number of shares of registrants’ common stock outstanding as of July 31, 2013:

TransUnion Holding Company, Inc. common stock outstanding: 109,834,808

TransUnion Corp. common stock outstanding: 100

 

 

 


Table of Contents

Explanatory Note

This Quarterly Report on Form 10-Q is a combined report being filed separately by TransUnion Holding Company, Inc. (“TransUnion Holding”) and TransUnion Corp. (“TransUnion Corp”), a direct 100% owned subsidiary of TransUnion Holding. Unless the context indicates otherwise, any reference in this report to “Company,” “we,” “us,” and “our” refers to TransUnion Holding with its direct and indirect subsidiaries, including TransUnion Corp, or to TransUnion Corp and its subsidiaries for periods prior to the formation of TransUnion Holding. Each registrant included herein is filing on its own behalf all of the information contained in this quarterly report that pertains to such registrant. When appropriate, TransUnion Holding and TransUnion Corp are named explicitly for their specific related disclosures. Each registrant included herein is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information. Where the information provided is substantially the same for both Companies, such information has been combined. Where information is not substantially the same for both Companies, we have provided separate information. In addition, separate financial statements for each Company are included in Part I, Item 1, “Financial Statements.”

We operate TransUnion Holding and TransUnion Corp as one business, with one management team. Management believes combining the Quarterly Reports on Form 10-Q of TransUnion Holding and TransUnion Corp provides the following benefits:

 

   

Enhances investors’ understanding of TransUnion Holding and TransUnion Corp by enabling investors to view the business as a whole, the same manner as management views and operates the business;

 

   

Provides a more readable presentation of required disclosures with less duplication, since a substantial portion of the disclosures apply to both TransUnion Holding and TransUnion Corp; and

 

   

Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

TransUnion Holding acquired 100% of the outstanding stock of TransUnion Corp on April 30, 2012. Substantially all of TransUnion Corp’s net assets are owned by TransUnion Holding and substantially all of TransUnion Holding’s operations are conducted by TransUnion Corp.

 

2


Table of Contents

TRANSUNION HOLDING COMPANY, INC. AND TRANSUNION CORP.

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, 2013

TABLE OF CONTENTS

 

     Page  

PART I. FINANCIAL INFORMATION

     4   

ITEM 1. FINANCIAL STATEMENTS

     4   

TransUnion Holding Company, Inc. and Subsidiaries:

  

Consolidated Balance Sheets

     4   

Consolidated Statements of Income

     5   

Consolidated Statements of Comprehensive Income

     6   

Consolidated Statements of Cash Flows

     7   

Consolidated Statement of Stockholders’ Equity

     8   

TransUnion Corp. and Subsidiaries:

  

Consolidated Balance Sheets

     9   

Consolidated Statements of Income

     10   

Consolidated Statements of Comprehensive Income

     11   

Consolidated Statements of Cash Flows

     12   

Consolidated Statement of Stockholders’ Equity

     13   

TransUnion Holding Company, Inc. and Subsidiaries and TransUnion Corp. and Subsidiaries:

  

Combined Notes to Unaudited Consolidated Financial Statements

     14   

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     43   

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     57   

ITEM 4. CONTROLS AND PROCEDURES

     57   

PART II. OTHER INFORMATION

     57   

ITEM 1. LEGAL PROCEEDINGS

     57   

ITEM 1A. RISK FACTORS

     58   

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     58   

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     59   

ITEM 4. MINE SAFEY DISCLOSURES

     59   

ITEM 5. OTHER INFORMATION

     59   

ITEM 6. EXHIBITS

     59   

SIGNATURES

     60   

SIGNATURES

     60   

INDEX TO EXHIBITS

     61   

 

3


Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in millions, except per share data)

 

     June 30,
2013
    December 31,
2012
 
     Unaudited        

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 130.2      $ 154.3   

Trade accounts receivable, net of allowance of $1.0 and $1.7

     179.4        163.6   

Other current assets

     76.5        82.7   
  

 

 

   

 

 

 

Total current assets

     386.1        400.6   

Property, plant and equipment, net of accumulated depreciation and amortization of $48.2 and $26.4

     108.9        121.2   

Other marketable securities

     10.9        11.4   

Goodwill

     1,792.9        1,804.2   

Other intangibles, net of accumulated amortization of $153.7 million and $86.6 million

     1,848.9        1,911.6   

Other assets

     127.4        129.8   
  

 

 

   

 

 

 

Total assets

   $ 4,275.1      $ 4,378.8   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Trade accounts payable

   $ 80.9      $ 78.4   

Current portion of long-term debt

     9.5        10.6   

Other current liabilities

     107.9        129.3   
  

 

 

   

 

 

 

Total current liabilities

     198.3        218.3   

Long-term debt

     2,657.2        2,670.3   

Other liabilities

     656.3        679.4   
  

 

 

   

 

 

 

Total liabilities

     3,511.8        3,568.0   

Redeemable noncontrolling interests

     20.4        14.7   

Stockholders’ equity:

    

Common stock, $0.01 par value; 200.0 million shares authorized at June 30, 2013, 110.2 million and 110.2 million shares issued at June 30, 2013 and December 31, 2012, respectively, and 109.8 million shares and 110.1 million shares outstanding as of June 30, 2013 and December 31, 2012, respectively

     1.1        1.1   

Additional paid-in capital

     1,113.2        1,109.4   

Treasury stock at cost; 0.4 million shares at June 30, 2013 and 0.1 million shares at December 31, 2012

     (2.7     (0.7

Retained earnings (accumulated deficit)

     (396.8     (382.6

Accumulated other comprehensive income (loss)

     (61.8     (24.4
  

 

 

   

 

 

 

Total TransUnion Holding Company, Inc. stockholders’ equity

     653.0        702.8   

Noncontrolling interests

     89.9        93.3   
  

 

 

   

 

 

 

Total stockholders’ equity

     742.9        796.1   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 4,275.1      $ 4,378.8   
  

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

4


Table of Contents

TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(in millions)

 

     Three Months Ended
June 30,
    Six
Months
Ended
June 30,
    From the
Date of
Inception
Through
June 30,
 
     2013     2012     2013     2012  

Revenue

   $ 300.8      $ 190.9      $ 591.3      $ 190.9   

Operating expenses

        

Cost of services (exclusive of depreciation and amortization below)

     121.3        74.6        239.0        74.6   

Selling, general and administrative

     94.8        50.8        178.2        50.8   

Depreciation and amortization

     45.2        29.0        90.5        29.0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     261.3        154.4        507.7        154.4   

Operating income

     39.5        36.5        83.6        36.5   

Non-operating income and expense

        

Interest expense

     (49.2     (33.3     (99.0     (34.8

Interest income

     0.2        0.1        0.5        0.1   

Other income and (expense), net

     1.5        (7.8     0.9        (14.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income and expense

     (47.5     (41.0     (97.6     (49.5

Income (loss) from operations before income taxes

     (8.0     (4.5     (14.0     (13.0

Benefit (provision) for income taxes

     1.9        2.2        2.7        2.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (loss)

     (6.1     (2.3     (11.3     (10.8

Less: net income attributable to the noncontrolling interests

     (1.7     (1.2     (2.9     (1.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to TransUnion Holding Company Inc.

   $ (7.8   $ (3.5   $ (14.2   $ (12.0
  

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

5


Table of Contents

TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

(in millions)

 

     Three Months Ended
June 30,
    Six
Months
Ended
June 30
    From the
Date of
Inception
Through
June 30,
 
     2013     2012     2013     2012  

Net income (loss)

   $ (6.1   $ (2.3   $ (11.3   $ (10.8

Other comprehensive income (loss), net of tax

        

Foreign currency translation adjustment

     (26.3     (6.4     (43.7     (6.4

Net unrealized gain (loss) on hedges

     2.9        (2.0     3.1        (2.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

     (23.4     (8.4     (40.6     (8.4

Comprehensive income (loss)

     (29.5     (10.7     (51.9     (19.2

Less: comprehensive income (loss) attributable to noncontrolling interests

     0.7        (0.4     0.3        (0.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to TransUnion Holding Company, Inc.

   $ (28.8   $ (11.1   $ (51.6   $ (19.6
  

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

6


Table of Contents

TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(in millions)

 

     Six Months
Ended June

30, 2013
    From the
Date of
Inception
Through
June 30,
2012
 

Cash flows from operating activities:

    

Net income (loss)

   $ (11.3   $ (10.8

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     90.5        29.0   

Deferred financing fees

     5.2        0.5   

Stock-based compensation

     3.5        0.4   

Provision for losses on trade accounts receivable

     0.4        0.1   

Equity in net income of affiliates, net of dividends

     —          3.8   

Deferred taxes

     (10.1     (6.1

Amortization of senior notes purchase accounting fair value adjustment and note discount

     (8.4     (2.6

Loss (gain) on sale of assets

     (1.3     —     

Other

     (0.1     0.2   

Changes in assets and liabilities:

    

Trade accounts receivable

     (12.2     (9.1

Other current and long-term assets

     1.1        (79.4

Trade accounts payable

     9.2        (5.2

Other current and long-term liabilities

     (19.2     (5.4
  

 

 

   

 

 

 

Cash provided by (used in) operating activities

     47.3        (84.6

Cash flows from investing activities:

    

Capital expenditures for property and equipment

     (30.2     (7.4

Proceeds from sale of trading securities

     2.2        —     

Investments in trading securities

     (1.4     (0.1

Acquisition of TransUnion Corp., net of cash acquired

     —          (1,485.9

Other acquisitions and purchases of noncontrolling interests, net of cash acquired

     (30.3     (10.5

Proceeds from sale of other assets

     4.2        —     

Other

     1.1        —     
  

 

 

   

 

 

 

Cash used in investing activities

     (54.4     (1,503.9

Cash flows from financing activities:

    

Proceeds from 9.625% notes

     —          600.0   

Proceeds from senior secured credit facility

     923.4        —     

Extinguishment of senior secured credit facility

     (923.4     —     

Repayments of debt

     (5.8     (2.4

Proceeds from issuance of common stock

     0.3        1,094.2   

Debt financing fees

     (3.7     (16.3

Treasury stock purchases

     (2.0     —     

Distributions to noncontrolling interests

     (1.1     (0.3

Other

     0.1        0.1   
  

 

 

   

 

 

 

Cash (used in) provided by financing activities

     (12.2     1,675.3   

Effect of exchange rate changes on cash and cash equivalents

     (4.8     (0.8
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (24.1     86.0   

Cash and cash equivalents, beginning of period

     154.3        —     
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 130.2      $ 86.0   
  

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

7


Table of Contents

TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity (Unaudited)

(in millions)

 

    Common Stock     Paid-In     Treasury    

Retained
Earnings

(Accumulated

   

Accumulated
Other Comp

Income

    Non-controlling          

Redeemable
Non-
controlling
Interests

(Temporary

 
  Shares     Amount     Capital     Stock     Deficit)     (Loss)     Interests     Total     Equity)  

Balance, December 31, 2012

    110.1      $ 1.1      $ 1,109.4      $ (0.7   $ (382.6   $ (24.4   $ 93.3      $ 796.1      $ 14.7   

Net income (loss)

            (14.2       2.8        (11.4     0.1   

Other comprehensive income (loss)

              (37.4     (1.4     (38.8     (1.8

Acquisition of Brazil subsidiary

                  —          7.6   

Distributions to noncontrolling interests

                (0.9     (0.9     (0.2

Stock-based compensation

        3.5                3.5     

Issuance of stock

        0.3                0.3     

Treasury stock purchased

    (0.3         (2.0           (2.0  

Purchase accounting adjustments related to acquisition of TransUnion Corp. subsidiaries

                (3.3     (3.3  

Disposal of noncotrolling interests

                (0.6     (0.6  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, June 30, 2013

    109.8      $ 1.1      $ 1,113.2      $ (2.7   $ (396.8   $ (61.8   $ 89.9      $ 742.9      $ 20.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

8


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(in millions, except per share data)

 

     Successor
June 30,

2013
    Successor
December 31,

2012
 
     Unaudited        

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 130.2      $ 154.3   

Trade accounts receivable, net of allowance of $1.0 and $1.7

     179.4        163.6   

Other current assets

     43.6        58.7   
  

 

 

   

 

 

 

Total current assets

     353.2        376.6   

Property, plant and equipment, net of accumulated depreciation and amortization of $48.2 and $26.4

     108.9        121.2   

Other marketable securities

     10.9        11.4   

Goodwill

     1,792.9        1,804.2   

Other intangibles, net of accumulated amortization of $153.7 million and $86.6 million

     1,848.9        1,911.6   

Other assets

     96.2        95.7   
  

 

 

   

 

 

 

Total assets

   $ 4,211.0      $ 4,320.7   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Trade accounts payable

   $ 80.7      $ 77.5   

Current portion of long-term debt

     9.5        10.6   

Other current liabilities

     89.6        107.0   
  

 

 

   

 

 

 

Total current liabilities

     179.8        195.1   

Long-term debt

     1,659.0        1,672.3   

Other liabilities

     646.6        667.4   
  

 

 

   

 

 

 

Total liabilities

     2,485.4        2,534.8   

Redeemable noncontrolling interests

     20.4        14.7   

Stockholders’ equity:

    

Preferred stock, $0.01 par value; 0 shares authorized; no shares issued or outstanding

     —          —     

Common stock, $0.01 par value; one thousand shares authorized, one hundred shares issued at June 30, 2013, and December 31, 2012; one hundred shares outstanding as of June 30, 2013, and December 31, 2012

     —          —     

Additional paid-in capital

     1,690.7        1,687.2   

Treasury stock at cost; 0 shares at June 30, 2013, and December 31, 2012

     —          —     

Retained earnings

     (13.6     15.1   

Accumulated other comprehensive income (loss)

     (61.8     (24.4
  

 

 

   

 

 

 

Total TransUnion Corp. stockholders’ equity

     1,615.3        1,677.9   

Noncontrolling interests

     89.9        93.3   
  

 

 

   

 

 

 

Total stockholders’ equity

     1,705.2        1,771.2   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 4,211.0      $ 4,320.7   
  

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

9


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(in millions)

 

     Successor     Predecessor  
     Three
Months Ended
June 30, 2013
    Six Months
Ended June 30,
2013
    Two Months
Ended June 30,
2012
    One Month
Ended
April 30,
2012
    Four
Months
Ended
April 30,
2012
 

Revenue

   $ 300.8      $ 591.3      $ 190.9      $ 92.4      $ 373.0   

Operating expenses

            

Cost of services (exclusive of depreciation and amortization below)

     121.3        239.0        74.6        57.0        172.0   

Selling, general and administrative

     94.5        177.5        50.3        93.9        172.0   

Depreciation and amortization

     45.2        90.5        29.0        7.3        29.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     261.0        507.0        153.9        158.2        373.2   

Operating income (loss)

     39.8        84.3        37.0        (65.8     (0.2

Non-operating income and expense

            

Interest expense

     (25.2     (51.0     (18.4     (9.8     (40.5

Interest income

     0.2        0.5        0.1        0.2        0.6   

Other income and (expense), net

     1.6        0.9        0.4        (20.9     (23.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income and expense

     (23.4     (49.6     (17.9     (30.5     (63.7

Income (loss) from continuing operations before income taxes

     16.4        34.7        19.1        (96.3     (63.9

(Provision) benefit for income taxes

     (4.5     (11.4     (8.3     31.8        11.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     11.9        23.3        10.8        (64.5     (52.4

Less: net income attributable to noncontrolling interests

     (1.7     (2.9     (1.2     (0.6     (2.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to TransUnion Corp.

   $ 10.2      $ 20.4      $ 9.6      $ (65.1   $ (54.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

10


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

(in millions)

 

     Successor     Predecessor  
     Three
Months
Ended June

30, 2013
    Six Months
Ended June

30, 2013
    Two
Months
Ended June

30, 2012
    One Month
Ended
April 30,
2012
    Four
Months
Ended
April 30,
2012
 

Net income (loss)

   $ 11.9      $ 23.3      $ 10.8      $ (64.5   $ (52.4

Other comprehensive income (loss), net of tax

            

Foreign currency translation adjustment

     (26.3     (43.7     (6.4     (2.9     2.5   

Net unrealized gain (loss) on hedges

     2.9        3.1        (2.0     —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

     (23.4     (40.6     (8.4     (2.9     2.5   

Comprehensive income (loss)

     (11.5     (17.3     2.4        (67.4     (49.9

Less: comprehensive income (loss) attributable to noncontrolling interests

     0.7        0.3        (0.4     (0.1     (2.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to TransUnion Corp.

   $ (10.8   $ (17.0   $ 2.0      $ (67.5   $ (52.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

11


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(in millions)

 

     Successor     Predecessor  
     Six Months
Ended June

30, 2013
    Two Months
Ended June

30, 2012
    Four Months
Ended April

30, 2012
 

Cash flows from operating activities:

        

Net income (loss)

   $ 23.3      $ 10.8      $ (52.4

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

        

Change in control transaction fees

     —          0.3        20.9   

Depreciation and amortization

     90.5        29.0        29.2   

Deferred financing fees

     2.4        —          3.9   

Amortization of senior notes purchase accounting fair value adjustment

     (8.5     (2.6     —     

Stock-based compensation

     3.5        —          2.0   

Provision for losses on trade accounts receivable

     0.4        0.1        3.1   

Equity in net income of affiliates, net of dividends

     —          3.8        (3.7

Deferred taxes

     3.2        3.5        (18.3

Loss (gain) on sale of assets

     (1.3     —          0.1   

Other

     (0.1     0.3        (0.7

Changes in assets and liabilities:

        

Trade accounts receivable

     (12.2     (9.1     (24.7

Other current and long-term assets

     (1.2     1.3        1.5   

Trade accounts payable

     9.4        (5.3     1.6   

Other current and long-term liabilities

     (15.2     (20.8     89.9   
  

 

 

   

 

 

   

 

 

 

Cash provided by operating activities

     94.2        11.3        52.4   

Cash flows from investing activities:

        

Capital expenditures for property and equipment

     (30.2     (7.4     (20.4

Proceeds from sale of trading securities

     2.2        —          1.1   

Investments in trading securities

     (1.4     (0.1     (1.1

Acquisitions and purchases of noncontrolling interests, net of cash acquired

     (30.3     (10.5     (0.1

Proceeds from sale of other assets

     4.2        —          0.2   

Other

     1.1        —          0.7   
  

 

 

   

 

 

   

 

 

 

Cash used in investing activities

     (54.4     (18.0     (19.6

Cash flows from financing activities:

        

Proceeds from senior secured credit facility

     923.4        —          —     

Extinguishment of senior secured credit facility

     (923.4     —          —     

Repayments of debt

     (5.8     (2.4     (14.6

Debt financing fees

     (3.2     —          (6.1

Distribution of merger consideration

     —          —          (1.3

Change in control transaction fees

     —          (0.3     (20.9

Distributions to noncontrolling interests

     (1.1     (0.3     (0.4

Dividends to TransUnion Holding

     (49.1     —          —     

Other

     0.1        0.1        (1.7
  

 

 

   

 

 

   

 

 

 

Cash used in financing activities

     (59.1     (2.9     (45.0

Effect of exchange rate changes on cash and cash equivalents

     (4.8     (0.8     0.8   
  

 

 

   

 

 

   

 

 

 

Net change in cash and cash equivalents

     (24.1     (10.4     (11.4

Cash and cash equivalents, beginning of period

     154.3        96.4        107.8   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 130.2      $ 86.0      $ 96.4   
  

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

12


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity (Unaudited)

(in millions)

 

     Common Stock      Paid-In      Treasury      Retained
Earnings
(Accumulated
    Accumulated
Other Comp
    Non-controlling          

Redeemable
Non-
controlling
Interests

(Temporary

 
   Shares      Amount      Capital      Stock      Deficit)     Income (Loss)     Interests     Total     Equity)  

Successor balance, December 31, 2012

     —         $ —         $ 1,687.2       $ —         $ 15.1      $ (24.4   $ 93.3      $ 1,771.2      $ 14.7   

Net income (loss)

                 20.4          2.8        23.2        0.1   

Other comprehensive income (loss)

                   (37.4     (1.4     (38.8     (1.8

Acquisition of Brazil subsidiary

                       —          7.6   

Distributions to noncontrolling interests

                     (0.9     (0.9     (0.2

Stock-based compensation

           3.5                  3.5     

Dividends to TransUnion Holding

                 (49.1         (49.1  

Purchase accounting adjustments related to acquisition of TransUnion Corp. subsidiaries

                     (3.3     (3.3  

Disposal of noncotrolling interests

                     (0.6     (0.6  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, June 30, 2013

     —         $ —         $ 1,690.7       $ —         $ (13.6   $ (61.8   $ 89.9      $ 1,705.2      $ 20.4   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying combined notes to unaudited consolidated financial statements.

 

13


Table of Contents

TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES

TRANSUNION CORP. AND SUBSIDIARIES

Combined Notes to Unaudited Consolidated Financial Statements

1. Significant Accounting and Reporting Policies

Basis of Presentation

This Quarterly Report on Form 10-Q is a combined report being filed separately by TransUnion Holding Company, Inc. (“TransUnion Holding”) and TransUnion Corp. (“TransUnion Corp), a direct 100% owned subsidiary of TransUnion Holding. Unless the context indicates otherwise, any reference in this report to “Company,” “we,” “us,” and “our” refers to TransUnion Holding and its direct and indirect subsidiaries, including TransUnion Corp, or to TransUnion Corp and its subsidiaries for periods prior to the formation of TransUnion Holding. Each registrant included herein is filing on its own behalf all of the information contained in this quarterly report that pertains to such registrant. When appropriate, TransUnion Holding and TransUnion Corp are named explicitly for their specific related disclosures. Each registrant included herein is not filing any information that does not relate to such registrant and, therefore, makes no representation as to any such information. Where the information provided is substantially the same for both Companies, such information has been combined in this Quarterly Report on Form 10-Q. Where information is not substantially the same for both Companies, we have provided separate information. In addition, separate financial statements for each Company are included in Part I, Item 1, “Financial Statements.”

The accompanying unaudited consolidated financial statements of TransUnion Holding and TransUnion Corp have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany transactions and balances have been eliminated. Operating results of TransUnion Holding and TransUnion Corp for the periods presented are not necessarily indicative of the results that may be expected for the full year ending December 31, 2013. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements of TransUnion Holding and TransUnion Corp as of and for the period ended December 31, 2012, included in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission (“SEC”) on February 25, 2013.

2012 Change in Control Transaction

TransUnion Holding was formed by affiliates of Advent International Corporation (“Advent”) and Goldman Sachs & Co. (“GSC”) on February 15, 2012 as a vehicle to acquire 100% of the outstanding common stock of TransUnion Corp. On April 30, 2012, pursuant to an Agreement and Plan of Merger, TransUnion Holding acquired TransUnion Corp. To partially fund the acquisition, TransUnion Holding issued $600.0 million aggregate principal amount of 9.625%/10.375% senior PIK toggle notes due 2018 (9.625% notes). We refer to these transactions collectively as the “2012 Change in Control Transaction.”

The 2012 Change in Control Transaction was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The guidance prescribes that the basis of the assets acquired and liabilities assumed be recorded at fair value on the acquirer’s books to reflect the purchase price. Under the guidance provided by the SEC Staff Accounting Bulletin Topic 5J, “New Basis of Accounting Required in Certain Circumstances,” the fair value adjustments of the assets acquired and liabilities assumed have also been pushed-down and recorded on TransUnion Corp’s books.

TransUnion Corp continues to operate as the same legal entity subsequent to the 2012 Change in Control Transaction. On TransUnion Corp’s financial statements, periods prior to May 1, 2012, reflect the financial position, results of operations, and changes in financial position of TransUnion Corp prior to the 2012 Change in Control Transaction (referred to herein as the “Predecessor”) and periods after April 30, 2012, reflect the financial position, results of operations, and changes in financial position of TransUnion Corp after the 2012 Change in Control Transaction (referred to herein as the “Successor”). Periods after the 2012 Change in Control Transaction are not comparable to prior periods due primarily to additional amortization of intangibles resulting from the fair value adjustments of the assets acquired and liabilities assumed.

Principles of Consolidation

The consolidated financial statements of TransUnion Holding include the accounts of TransUnion Holding and its 100% owned subsidiary, TransUnion Corp. The consolidated financial statements of TransUnion Corp include the accounts of TransUnion Corp and all of its majority-owned or controlled subsidiaries. Investments in unconsolidated entities in which the Company has at least a 20% ownership interest, or where it is able to exercise significant influence, are accounted for using the equity method. Nonmarketable investments in unconsolidated entities in which the Company has less than a 20% ownership interest, or where it is not able to exercise significant influence, are accounted for using the cost method and periodically reviewed for impairment.

 

14


Table of Contents

Subsequent Events

Events and transactions occurring through the date of issuance of the financial statements have been evaluated by management and, when appropriate, recognized or disclosed in the financial statements or notes to the financial statements.

Recently Adopted Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-02 (“ASU 2013-02”) Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income, however it increases disclose requirements for amounts that are reclassified out of accumulated other comprehensive income into net income. ASU 2013-02 is effective for annual and interim periods beginning after December 15, 2012. This guidance was adopted by the Company effective January 1, 2013, and did not have a significant impact on the Company’s consolidated financial statements.

Recent Accounting Pornouncements Not Yet Adopted

On July 18, 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exist. ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits to better reflect the manner in which an entity would settle at the reporting date any income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses or tax credit carryforwards exist. The objective of ASU 2013-11 is to eliminate the diversity in practice of how companies present unrecognized tax benefits under these circumstances. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are currently assessing the impact the adoption of ASU 2013-11 will have on our presentation of unrecognized tax benefits.

2. 2012 Change in Control Transaction

On April 30, 2012, pursuant to the Merger Agreement, TransUnion Corp was acquired by affiliates of Advent and GSC for the aggregate purchase price of $1,592.7 million, plus the assumption of existing debt. As a result, TransUnion Corp became a wholly-owned subsidiary of TransUnion Holding. In connection with the acquisition, all existing stockholders of TransUnion Corp received cash consideration for their shares and all existing option holders received cash consideration based on the value of their options. To partially fund the acquisition, TransUnion Holding issued $600 million aggregate principal amount of the 9.625% notes. At that time, TransUnion Holding was owned 49.5% by affiliates of Advent, 49.5% by affiliates of GSC and 1% by members of management.

Purchase Price Allocation

The fair value of identifiable intangible assets acquired and liabilities assumed was based on many factors including an analysis of historical financial performance and estimates of future performance, and was determined using analytical approaches appropriate to the facts and circumstances, including discounted cash flow and market-based approaches. The allocation of the purchase price to the identifiable assets acquired and liabilities assumed as of April 30, 2012, consisted of the following:

 

(in millions)

   Fair Value  

Trade accounts receivable

   $ 162.4   

Property and equipment

     112.9   

Identifiable intangible assets

     1,986.4   

Goodwill(1)

     1,794.8   

All other assets

     302.3   
  

 

 

 

Total assets acquired

   $ 4,358.8   

Existing debt (including fair value adjustment)

     (1,710.8

All other liabilities

     (945.4

Noncontrolling interests

     (109.9
  

 

 

 

Net assets of acquired company

   $ 1,592.7   
  

 

 

 

 

(1) 

For tax purposes, $128.8 million of goodwill is tax deductible.

 

15


Table of Contents

The excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed was recorded as goodwill. The purchase price of TransUnion Corp exceeded the fair value of the net assets acquired due primarily to growth opportunities and operational efficiencies.

Identifiable Intangible Assets

The fair values of the intangible assets acquired consisted of the following:

 

(in millions)

   Fair Value      Estimated
Useful Life
 

Database and credit files

   $ 765.0         15 years   

Technology and software

     364.6         7 years   

Trade names and trademarks

     546.1         40 years   

Customer relationships

     308.0         20 years   

Other

     2.7         5 years   
  

 

 

    

Total identifiable intangible assets

   $ 1,986.4      
  

 

 

    

The weighted-average useful life of identifiable intangible assets is approximately 21.2 years.

3. Fair Value

The following table summarizes financial instruments measured at fair value, on a recurring basis, as of June 30, 2013:

 

(in millions)

   Total     Level 1      Level 2     Level 3  

Trading securities

   $ 10.9      $ 10.9       $ —        $ —     

Interest rate swaps

     (1.0     —           (1.0     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Total financial instruments at fair value

   $ 9.9      $ 10.9       $ (1.0   $ —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Level 1 investments consist of exchange-traded mutual funds and publicly traded equity investments valued at their current market prices, with unrealized gains and losses included in net income. These securities relate to a nonqualified deferred compensation plan held in trust for the benefit of plan participants and are included in other marketable securities on our balance sheet. There were no significant realized or unrealized gains or losses for these securities for any of the periods presented. Level 2 investments consist of interest rate swaps that are further discussed in Note 9, “Debt.” We determined the fair value of the interest rate swaps using standard valuation models with market-based observable inputs including forward and spot exchange rates and interest rate curves. At June 30, 2013, we did not have any investments valued using Level 3 inputs.

4. Other Current Assets

TransUnion Holding

Other current assets consisted of the following:

 

(in millions)

   TransUnion
Holding
June 30,
2013
     TransUnion
Holding
December 31,
2012
 

Deferred income tax assets

   $ 32.4       $ 36.3   

Prepaid expenses

     30.1         33.8   

Income taxes receivable

     6.5         4.7   

Deferred financing fees

     6.2         5.7   

Other

     1.3         2.2   
  

 

 

    

 

 

 

Total other current assets

   $ 76.5       $ 82.7   
  

 

 

    

 

 

 

 

16


Table of Contents

TransUnion Corp

Other current assets consisted of the following:

 

(in millions)

   TransUnion
Corp
Successor
June 30,
2013
     TransUnion
Corp
Successor
December 31,
2012
 

Prepaid expenses

   $ 30.1       $ 33.8   

Deferred financing fees

     0.2         —     

Deferred income tax assets

     4.0         18.9   

Income taxes receivable

     4.7         3.8   

Receivable from TransUnion Holding

     3.6         0.3   

Other

     1.0         1.9   
  

 

 

    

 

 

 

Total other current assets

   $ 43.6       $ 58.7   
  

 

 

    

 

 

 

Deferred income tax assets decreased $14.9 million from December 31, 2012, due primarily to the utilization of U.S. federal tax loss carryforwards. The receivable from TransUnion Holding represents amounts advanced by TransUnion Corp to TransUnion Holding. This amount eliminates on the TransUnion Holding consolidated balance sheet but does not eliminate on the TransUnion Corp consolidated balance sheet.

5. Other Assets

TransUnion Holding

Other assets consisted of the following:

 

(in millions)

   TransUnion
Holding
June 30,
2013
     TransUnion
Holding
December 31,
2012
 

Investments in affiliated companies

   $ 88.6       $ 88.6   

Deferred financing fees

     31.7         34.0   

Deposits

     6.3         6.3   

Other

     0.8         0.9   
  

 

 

    

 

 

 

Total other assets

   $ 127.4       $ 129.8   
  

 

 

    

 

 

 

TransUnion Corp

Other assets consisted of the following:

 

(in millions)

   TransUnion
Corp
Successor

June  30,
2013
     TransUnion
Corp
Successor

December  31,
2012
 

Investments in affiliated companies

   $ 88.6       $ 88.6   

Deferred financing fees

     0.6         —     

Deposits

     6.3         6.3   

Other

     0.7         0.8   
  

 

 

    

 

 

 

Total other assets

   $ 96.2       $ 95.7   
  

 

 

    

 

 

 

 

17


Table of Contents

6. Investments in Affiliated Companies

Investments in affiliated companies represent our investment in non-consolidated domestic and foreign entities. These entities are in businesses similar to ours, such as credit reporting, credit scoring and credit monitoring services. All of the investments in affiliated companies are owned by TransUnion Corp. TransUnion Holding has no equity method investments other than the equity method investments owned by TransUnion Corp. These investments are included in other assets on the balance sheet.

We use the equity method to account for investments in affiliates where we have at least a 20% ownership interest or where we are able to exercise significant influence. For these investments, we adjust the carrying value for our proportionate share of the affiliates’ earnings, losses and distributions, as well as for purchases and sales of our ownership interest.

We use the cost method to account for all other nonmarketable investments. For these investments, we adjust the carrying value for purchases and sales of our ownership interests.

For all investments, we adjust the carrying value if we determine that an other-than-temporary impairment in value has occurred. There were no impairments of investments in affiliated companies taken in the six months ended June 30, 2013 or 2012.

Investments in affiliated companies consisted of the following:

 

(in millions)

   TransUnion Holding and
TransUnion Corp
Successor June

30, 2013
     TransUnion Holding and
TransUnion Corp
Successor December

31, 2012
 

Total equity method investments

   $ 80.7       $ 80.7   

Total cost method investments

     7.9         7.9   
  

 

 

    

 

 

 

Total investments in affiliated companies

   $ 88.6       $ 88.6   
  

 

 

    

 

 

 

Earnings from equity method investments, included in other income, and dividends received from equity method investments consisted of the following

 

(in millions)

   TransUnion
Holding and
TransUnion
Corp Successor
Six Months
Ended

June 30, 2013
     TransUnion
Holding
From the Date of
Inception through
June 30, 2012
     TransUnion
Corp –
Successor
Two Months
Ended

June 30, 2012
     TransUnion Corp
– Predecessor
Four Months
Ended

April 30, 2012
 

Earnings from equity method investments

   $ 7.3       $ 2.4       $ 2.4       $ 4.1   

Dividends received from equity method investments

   $ 7.4       $ 6.2       $ 6.2       $ 0.4   

Under SEC Regulation S-X, Rule 4-08(g), our investments in TransUnion de Mexico, S.A. and Credit Information Bureau (India) Ltd. are considered significant equity method investments for TransUnion Holding, but not for TransUnion Corp. The summarized financial information required by SEC Regulation S-X, Rule 1-02(bb)(2) consisted of the following:

 

(in millions)

   Significant Equity
Method
Investments Six
Months Ended
June 30, 2013
 

Revenue

   $ 27.2   

Operating Income

   $ 14.5   

Income from continuing operations

   $ 11.9   

Net income

   $ 11.9   

 

18


Table of Contents

7. Other Current Liabilities

TransUnion Holding

Other current liabilities consisted of the following:

 

(in millions)

   TransUnion
Holding
June 30,
2013
     TransUnion
Holding
December 31,
2012
 

Accrued payroll

   $ 48.0       $ 64.2   

Accrued interest

     23.0         25.8   

Deferred revenue

     8.6         12.5   

Accrued employee benefits

     7.2         10.6   

Accrued liabilities

     6.5         5.6   

Other

     14.6         10.6   
  

 

 

    

 

 

 

Total other current liabilities

   $ 107.9       $ 129.3   
  

 

 

    

 

 

 

Accrued payroll decreased $16.2 million from year end 2012 due primarily to the payment of accrued 2012 bonuses during the six months ended June 30, 2013.

TransUnion Corp

Other current liabilities consisted of the following:

 

(in millions)

   TransUnion
Corp
Successor
June 30,
2013
     TransUnion
Corp
Successor
December 31,
2012
 

Accrued payroll

   $ 48.0       $ 64.2   

Accrued interest

     4.9         3.7   

Deferred revenue

     8.6         12.5   

Accrued liabilities

     6.5         5.6   

Accrued employee benefits

     7.2         10.6   

Other

     14.4         10.4   
  

 

 

    

 

 

 

Total other current liabilities

   $ 89.6       $ 107.0   
  

 

 

    

 

 

 

Accrued payroll decreased $16.2 million from year end 2012 due primarily to the payment of accrued 2012 bonuses during the six months ended June 30, 2013.

8. Other liabilities

TransUnion Holding

Other liabilities consisted of the following:

 

(in millions)

   TransUnion
Holding
June 30,
2013
     TransUnion
Holding
December 31,
2012
 

Deferred income taxes

   $ 639.0       $ 657.5   

Retirement benefits

     10.1         10.0   

Unrecognized tax benefits

     4.8         4.9   

Other

     2.4         7.0   
  

 

 

    

 

 

 

Total other liabilities

   $ 656.3       $ 679.4   
  

 

 

    

 

 

 

 

19


Table of Contents

Deferred income taxes decreased $18.5 million from year end 2012 due primarily to the amortization and depreciation for financial statements purposes of the purchase price allocation resulting from the 2012 Change in Control Transaction.

TransUnion Corp

Other liabilities consisted of the following:

 

(in millions)

   TransUnion
Corp
Successor
June 30,
2013
     TransUnion
Corp
Successor
December 31,
2012
 

Deferred income taxes

   $ 629.5       $ 645.8   

Retirement benefits

     10.1         10.0   

Unrecognized tax benefits

     4.7         4.8   

Other

     2.3         6.8   
  

 

 

    

 

 

 

Total other liabilities

   $ 646.6       $ 667.4   
  

 

 

    

 

 

 

Deferred income taxes decreased $16.3 million from year end 2012 due primarily to the amortization and depreciation for financial statements purposes of the purchase price allocation resulting from the 2012 Change in Control Transaction.

 

20


Table of Contents

9. Debt

Debt outstanding consisted of the following:

 

(in millions)

   TransUnion
Holding
June 30,
2013
    TransUnion
Holding
December 31,
2012
    TransUnion
Corp
Successor
June 30,
2013
    TransUnion
Corp
Successor
December 31,
2012
 

Senior secured term loan, payable in quarterly installments through February 10, 2019, including variable interest (4.25% at June 30, 2013) at LIBOR or alternate base rate, plus applicable margin

   $ 918.6      $ 923.4      $ 918.6      $ 923.4   

Senior secured revolving line of credit, due on February 10, 2017, variable interest (4.63% weighted average at June 30, 2013) at LIBOR or alternate base rate, plus applicable margin

     —          —          —          —     

11.375% notes—senior notes, principal due June 15, 2018, semi-annual interest payments, 11.375% fixed interest per annum, includes unamortized fair value adjustment at June 30, 2013 of $104.8

     749.8        758.4        749.8        758.4   

9.625% notes—senior unsecured PIK toggle notes, principal due June 15, 2018, semi-annual interest payments, 9.625% fixed interest per annum

     600.0        600.0        —          —     

8.125% notes—senior unsecured PIK toggle notes, principal due June 15, 2018, semi-annual interest payments, 8.125% fixed interest per annum, includes original issuance discount at June 30, 2013 of $1.8

     398.2        398.0        —          —     

Note payable for 2011 acquisition, payable in annual installments through April 15, 2013, excluding imputed interest of 10.0%

     —          0.9        —          0.9   

Capital lease obligations

     0.1        0.2        0.1        0.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total debt

   $ 2,666.7      $ 2,680.9      $ 1,668.5      $ 1,682.9   

Less short-term debt and current maturities

     (9.5     (10.6     (9.5     (10.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Total long-term debt

   $ 2,657.2      $ 2,670.3      $ 1,659.0      $ 1,672.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

21


Table of Contents

Interest expense consisted of the following:

 

(in millions)

   TransUnion
Holding
Six Months
Ended
June 30,
2013
     TransUnion
Holding
From
Inception
Date
Through
June 30,
2012
     TransUnion
Corp
Successor
Six Months
Ended
June 30,
2013
     TransUnion
Corp
Successor
Two
Months
Ended
June 30,
2012
     TransUnion
Corp
Predecessor
Four
Months
Ended
April 30,
2012
 

Senior secured term loan

   $ 22.3       $ 8.8       $ 22.3       $ 8.8       $ 15.6   

11.375% notes

     28.1         9.6         28.1         9.6         25.1   

9.625% notes:

     31.0         16.4         —           —           —     

8.125 % notes:

     17.0         —           —           —           —     

Other

     0.6         —           0.6         —           (0.2
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total interest

   $ 99.0       $ 34.8       $ 51.0       $ 18.4       $ 40.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TransUnion Holding

9.625% Notes

In connection with the acquisition of TransUnion Corp, on March 21, 2012, TransUnion Holding issued $600.0 million principal amount of 9.625%/10.375% senior unsecured PIK toggle notes (“9.625% notes”) due June 15, 2018. Pursuant to a registration rights agreement, these notes were registered with the SEC. TransUnion Holding is required to pay interest on the 9.625% notes in cash unless certain conditions described in the indenture governing the notes are satisfied, in which case the TransUnion Holding will be entitled to pay interest for such period by increasing the principal amount of the notes or by issuing new notes (such increase being referred to as “PIK,” or paid-in-kind interest) to the extent described in the indenture.

The indenture governing the 9.625% notes contains nonfinancial covenants that include restrictions on our ability to pay dividends or distributions, repurchase equity, prepay junior debt, make certain investments, incur additional debt, issue certain stock, incur liens on property, merge, consolidate or sell certain assets, enter into transactions with affiliates, and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments to TransUnion Holding. We are in compliance with all covenants under the indenture.

8.125% Notes

On November 1, 2012, TransUnion Holding issued $400.0 million principal amount of 8.125%/8.875% senior unsecured PIK toggle notes (“8.125% notes”) due June 15, 2018, at an offering price of 99.5% in a private placement to certain investors. TransUnion Holding is required to pay interest on the 8.125% notes in cash unless certain conditions described in the indenture governing the notes are satisfied, in which case TransUnion Holding will be entitled to pay interest for such period by increasing the principal amount of the notes or by issuing new notes to the extent described in the indenture.

In connection with the issuance of the notes, we entered into a registration rights agreement that required us to exchange the notes for an equal amount of notes registered with the SEC. We filed the Registration Statement on Form S-4 for the notes with the SEC on June 26, 2013, and the related prospectus on July 18, 2013. As of the date of this filing, the exchange offer is still open and will expire on August 15, 2013, unless extended. The terms of the registered notes are substantially identical to the outstanding notes except for the transfer restrictions and registration rights relating to the outstanding notes will not apply to the registered notes.

The indenture governing the 8.125% notes and the nonfinancial covenants are substantially similar to those governing the 9.625% notes. We are in compliance with all covenants under the indenture.

TransUnion Corp

Senior Secured Credit Facility

TransUnion LLC entered into a senior secured credit facility with various lenders that consists of a seven-year $950.0 million senior secured term loan and a $210.0 million senior secured revolving line of credit. Interest rates on the borrowings are based on the London Interbank Offered Rate (“LIBOR”) unless otherwise elected. On February 5, 2013, TransUnion LLC signed amendment No. 4 to its senior secured credit facility, which became effective March 1, 2013 and expensed $2.4 million of related loan fees. The amendment, among other things, lowered the floor on the term loan from 1.50% to 1.25%, lowered the margin on the term loan from 4.00% to 3.00%, extended the term loan maturity date one year to February 2019, delayed the first required excess cash payments until 2014, and relaxed certain covenant requirements.

 

22


Table of Contents

With certain exceptions, the obligations are secured by a first-priority security interest in substantially all of the assets of Trans Union LLC, including its investments in subsidiaries. The credit facility contains various restrictions and nonfinancial covenants, along with a senior secured net leverage ratio test that only applies to periods in which we have outstanding amounts drawn on the revolving line of credit. The nonfinancial covenants include restrictions on dividends, investments, dispositions, future borrowings and other specified payments, as well as additional reporting and disclosure requirements. The credit facility restrictions and covenants exclude any impact of the purchase accounting fair value adjustments or the increased amortization expense resulting from the 2012 Change in Control Transaction. We are in compliance with all of the covenants under the credit facility.

On April 30, 2012, we entered into swap agreements that effectively fixed the interest payments on a portion of the term loan at 2.033%, plus the applicable margin, beginning March 28, 2013. Under the swap agreements, which we have designated as cash flow hedges, we pay a fixed rate of interest of 2.033% and receive a variable rate of interest equal to the greater of 1.50% or the 3-month LIBOR. The net amount to be paid or received will be recorded as an adjustment to interest expense. The change in fair value of the swap instrument is recorded in accumulated other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income to the extent the hedge is effective, and in other income and expense in the consolidated statements of income to the extent the hedge is ineffective. The total notional amount of the swaps at June 30, 2013 was $487.5 million and is scheduled to decrease as scheduled principal payments are made on the term loan. The total fair value of the swap instruments as of June 30, 2013, was a liability of $1.0 million and was included in other liabilities on our consolidated balance sheet. The net of tax unrealized loss on the swap instruments as of June 30, 2013, of $0.6 million was included in accumulated other comprehensive income (loss). For the six months ended June 30, 2013, there was no ineffectiveness recorded in the statement of income. The cash flows on the hedge instrument began on June 28, 2013, and we do not currently expect to elect a non-LIBOR loan or to pay down our term loan below the notional amount of the swaps in the next 12 months.

11.375% Notes

In connection with the 2010 Change in Control Transaction, on June 15, 2010, Trans Union LLC and its wholly-owned subsidiary TransUnion Financing Corporation, issued $645.0 million of senior 11.375% notes due June 15, 2018 (“11.375% notes”). The 11.375% notes are guaranteed by TransUnion Corp and certain wholly owned domestic subsidiaries of TransUnion LLC. Pursuant to a registration rights agreement, these notes have been registered with the SEC. As a result of the 2012 Change in Control Transaction, a purchase accounting fair value adjustment increase of $124.2 million was allocated to the senior notes and is being amortized. The indenture governing the 11.375% notes contains nonfinancial covenants that include restrictions on dividends, investments, dispositions, future borrowings and other specified payments, as well as additional reporting and disclosure requirements. The covenants exclude the impact of the purchase accounting fair value adjustment and the increased amortization expense resulting from the 2012 Change in Control Transaction. We are in compliance with all covenants under the indenture.

Fair Value of Debt

The estimated fair values of our 9.625%, 8.125% and 11.375% notes as of June 30, 2013, were $643.5 million, $424.3 million and $716.0 million, respectively, compared to book values of $600.0 million, $398.2 million and $749.8 million, respectively. The fair value of these fixed-rate notes, as determined under Level 2 of the fair-value hierarchy, is measured using quoted market prices. The book value of our variable-rate debt approximates its fair value. The estimated fair value of our debt may not represent the actual settlement value due to redemption premiums and prepayment penalties that we may incur in connection with extinguishing our debt before its stated maturity.

10. Income Taxes

On January 2, 2013, the look-through rule under subpart F of the U.S. Internal Revenue Code was retroactively reinstated to January 1, 2012. Consequently, in the first quarter of 2013, we reversed the tax expense we recorded for Subpart F in 2012 due to the expiration of the look-through rule, resulting in a $4.6 million deferred tax benefit. We also recorded a $5.5 million deferred tax expense under ASC 740-30 for the effect that retroactively reinstating the look-through rule had on our deferred tax liability for pre-acquisition unremitted earnings accumulated as of April 30, 2012.

TransUnion Holding

For the three months ended June 30, 2013, we reported a loss before income taxes and an effective tax benefit rate of 23.8%. This rate was lower than the 35% U.S. federal statutory rate due primarily to the impact of lower foreign tax rates on interim period tax expense. For the three months ended June 30, 2012, we also reported a loss and an effective tax benefit rate of 48.9%. This rate was higher than the statutory rate due primarily to the reversal of a valuation allowance on a net operating loss resulting from the acquisition of TransUnion Corp and the ability to use the loss carryforward against future taxable income.

 

23


Table of Contents

For the six months ended June 30, 2013, we reported a loss before income taxes and an effective tax benefit rate of 19.3%. This rate was lower than the 35% U.S. federal statutory rate due primarily to the net impact on deferred tax of the look-through rule reinstatement as discussed above, an increase to deferred tax expense from the update of our state income tax rate and the effect of lower foreign tax rates on interim period tax expense. From the date of inception through June 30, 2012, we also reported a loss and an effective tax benefit rate of 16.9%. This rate was lower than the statutory rate due primarily to the application of ASC 740-30 to unremitted foreign earnings and the non-deductibility of certain costs incurred in connection with the 2012 Change in Control Transaction.

The total amount of unrecognized tax benefits as of June 30, 2013, and December 31, 2012, was $4.8 million and $4.9 million, respectively. These same amounts would affect the effective tax rate, if recognized. The accrued interest payable for taxes as of June 30, 2013, and December 31, 2012, was $0.6 million and $0.5 million, respectively. There was no significant liability for tax penalties as of June 30, 2013, or December 31, 2012. We are regularly audited by federal, state and foreign taxing authorities. Given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits.

TransUnion Corp

For the three months ended June 30, 2013, the effective tax rate of 27.4% was lower than the 35% U.S. federal statutory rate due primarily to the favorable tax rate differential on foreign earnings. For the six months ended June 30, 2013, the effective tax rate of 32.9% was lower than the statutory rate due primarily to the favorable tax rate differential on foreign earnings partially offset by the increase in our deferred state income tax rate.

For TransUnion Corp Successor, the effective tax rate of 43.5% for the two months ended June 30, 2012, was higher than the 35% U.S. federal statutory rate due primarily to the application of ASC 740-30 to unremitted foreign earnings. For the one month ended April 30, 2012, TransUnion Corp Predecessor reported a loss before income taxes. The effective tax benefit rate for this period of 33.0% was slightly lower than the 35% statutory rate primarily due to the non-deductibility of certain costs incurred in connection with the 2012 Change in Control Transaction and limitations on our foreign tax credits.

For the four months ended April 30, 2012, TransUnion Corp Predecessor reported a loss from before income taxes. The effective tax benefit rate for this period of 18.0% was lower than the 35% statutory rate due primarily to the application of ASC 740-30 to our unremitted foreign earnings, the non-deductibility of certain costs incurred in connection with the 2012 Change in Control Transaction and limitations on our foreign tax credits.

The total amount of unrecognized tax benefits as of June 30, 2013, and December 31, 2012, was $4.7 million and $4.8 million, respectively. These same amounts would affect the effective tax rate, if recognized. The accrued interest payable for taxes as of June 30, 2013, and December 31, 2012, was $0.6 million and $0.5 million, respectively. There was no significant liability for tax penalties as of June 30, 2013 or December 31, 2012. We are regularly audited by federal, state and foreign taxing authorities. Given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits.

11. Operating Segments

Operating segments are businesses for which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources. This segment financial information is reported on the basis that is used for the internal evaluation of operating performance. The accounting policies of the segments are the same as described in Note 1, “Significant Accounting and Reporting Policies.”

We evaluate the performance of segments based on revenue and operating income. Intersegment sales and transfers have been eliminated and were not material.

 

24


Table of Contents

The following is a more detailed description of the three operating segments and the Corporate unit, which provides support services to each operating segment:

U.S. Information Services

U.S. Information Services (“USIS”) provides consumer reports, credit scores, verification services, analytical services and decisioning technology to businesses in the United States through both direct and indirect channels. These services are offered to customers in the financial services, insurance, healthcare and other markets. These business customers use our products and services to acquire new customers, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, and manage fraud. This segment also provides mandated consumer services, including dispute investigations, free annual credit reports and other requirements of the United States Fair Credit Reporting Act (“FCRA”), the Fair and Accurate Credit Transactions Act of 2003 (“FACTA”), and other credit-related legislation.

International

The International segment provides services similar to our USIS segment to business customers outside the United States and automotive information and commercial data services to customers in select geographies. Depending on the maturity of the credit economy in each location, services may include credit reports, analytical and decision services, and risk management services. These services are offered to customers in a number of industries, including financial services, insurance, automotive, collections and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer services similar to those offered in our Interactive segment, such as credit reports, credit scores and credit monitoring services. The two market groups in the International segment are developed markets, which includes Canada, Hong Kong and Puerto Rico, and emerging markets, which includes South Africa, Mexico, Brazil, the Dominican Republic, India and other emerging markets.

Interactive

Interactive provides services to consumers, including credit reports, scores and credit and identity monitoring services, primarily through the internet. The majority of revenue is derived from subscribers who pay a monthly fee for access to their credit report and score, and for alerts related to changes in their credit reports.

Corporate

Corporate provides shared services for the Company and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the operating segments remain in Corporate. These costs are typically for enterprise-level functions and are primarily administrative in nature.

Selected financial information consisted of the following:

 

      TransUnion Corp Successor  
      Three Months Ended
June 30, 2013
    Six Months Ended
June 30, 2013
 

(in millions)

   Revenue      Operating
income
(loss)
    Revenue      Operating
income
(loss)
 

U.S. Information Services

   $ 187.9       $ 37.3      $ 371.6       $ 80.3   

International

     61.3         4.1        117.0         6.5   

Interactive

     51.6         15.9        102.7         31.3   

Corporate

     —           (17.5     —           (33.8
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 300.8       $ 39.8      $ 591.3       $ 84.3   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

      TransUnion Corp Successor     TransUnion Corp Predecessor  
      Two Months Ended
June 30, 2012
    One Month Ended
April 30, 2012
    Four Months Ended
April 30, 2012
 

(in millions)

   Revenue      Operating
income
(loss)
    Revenue      Operating
income
(loss)
    Revenue      Operating
income
(loss)
 

U.S. Information Services

   $ 123.2       $ 33.2      $ 57.3       $ (22.4   $ 238.1       $ 33.2   

International

     37.5         3.1        20.0         (9.5     76.6         5.3   

Interactive

     30.2         11.1        15.1         3.1        58.3         13.0   

Corporate

     —           (10.4     —           (37.0     —           (51.7
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 190.9       $ 37.0      $ 92.4       $ (65.8   $ 373.0       $ (0.2
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

25


Table of Contents

On a stand-alone, non-consolidated basis, TransUnion Holding incurred $0.3 million and $0.7 million of Corporate expenses for the three and six months ended June 30, 2013, respectively, and $0.5 million of Corporate expenses for the three months ended June 30, 2012.

A reconciliation of operating income to income from operations before income taxes for the periods ended as presented was as follows:

 

     TransUnion Corp Successor     TransUnion Corp Predecessor  

(in millions)

   Three
Months
Ended
June 30,
2013
    Six
Months
Ended
June 30,
2013
    Two
Months
Ended
June 30,
2012
    One Month
Ended
April 30,
2012
    Four Months
Ended
April 30,
2012
 

Operating income (loss) from segments

   $ 39.8      $ 84.3      $ 37.0      $ (65.8   $ (0.2

Non-operating income and expense

     (23.4     (49.6     (17.9     (30.5     (63.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

   $ 16.4      $ 34.7      $ 19.1      $ (96.3   $ (63.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earning from equity method investments included in other income and expense, net, for the periods presented was as follows:

 

     TransUnion Corp Successor      TransUnion Corp Predecessor  

(in millions)

   Three
Months
Ended
June 30,
2013
     Six
Months
Ended
June 30,
2013
     Two
Months
Ended
June 30,
2012
     One Month
Ended
April 30,
2012
     Four Months
Ended
April 30,
2012
 

U.S. Information Services

   $ 0.4       $ 0.8       $ 0.3       $ 0.1       $ 0.5   

International

     3.8         6.5         2.1         0.9         3.6   

Interactive

     —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 4.2       $ 7.3       $ 2.4       $ 1.0       $ 4.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TransUnion Holding has no equity method investments other than the equity method investments owned by TransUnion Corp.

 

26


Table of Contents

12. Financial Statements of Guarantors

As discussed in Note 9, “Debt,” the obligations under the 11.375% notes are unsecured obligations of Trans Union LLC and TransUnion Financing Corporation. However they are guaranteed by TransUnion Corp and certain wholly owned domestic subsidiaries of Trans Union LLC. TransUnion Holding does not guarantee the 11.375% notes. The guarantees of the guarantors are joint, several, full and unconditional. The accompanying consolidating financial information presents the financial position, results of operations and cash flows of the parent guarantor, the issuers, the guarantor subsidiaries as a group, and the non-guarantor subsidiaries as a group. Each entity’s investments in its subsidiaries, if any, are presented under the equity method. The domestic tax provision and related taxes receivable and payable, and the domestic deferred tax assets and liabilities, are prepared on a consolidated basis and are not fully allocated to individual legal entities. As a result, the information presented is not intended to present the financial position or results of operations of those entities on a stand-alone basis.

 

27


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Balance Sheet – Successor (Unaudited)

June 30, 2013

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     TransUnion
Corp.
Consolidated
 

Assets

           

Current assets:

           

Cash and cash equivalents

  $ 45.9      $ —        $ —        $ 84.3      $ —        $ 130.2   

Trade accounts receivable, net

    —          107.4        23.9        48.1        —          179.4   

Due from (to) affiliates

    (37.8     (81.3     76.0        61.1        (18.0     —     

Other current assets

    (10.7     48.6        (0.7     6.4        —          43.6   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    (2.6     74.7        99.2        199.9        (18.0     353.2   

Property, plant and equipment, net

    —          84.9        7.3        16.7        —          108.9   

Other marketable securities

    —          10.9        —          —          —          10.9   

Goodwill

    —          1,145.6        136.2        511.1        —          1,792.9   

Other intangibles, net

    —          1,584.5        74.6        189.8        —          1,848.9   

Other assets

    1,606.7        1,064.3        2.5        41.8        (2,619.1     96.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $ 1,604.1      $ 3,964.9      $ 319.8      $ 959.3      $ (2,637.1   $ 4,211.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and stockholders’ equity

           

Current liabilities:

           

Trade accounts payable

  $ —        $ 42.5      $ 22.8      $ 15.4      $ —        $ 80.7   

Current portion of long-term debt

    —          9.5        —          18.0        (18.0     9.5   

Other current liabilities

    8.5        58.1        5.2        17.8        —          89.6   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

    8.5        110.1        28.0        51.2        (18.0     179.8   

Long-term debt

    —          1,659.0        —          6.5        (6.5     1,659.0   

Other liabilities

    (19.7     585.6        2.3        78.4        —          646.6   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    (11.2     2,354.7        30.3        136.1        (24.5     2,485.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Redeemable noncontrolling interests

    —          —          —          20.4        —          20.4   

Total TransUnion Corp. stockholders’ equity

    1,615.3        1,610.2        289.5        712.9        (2,612.6     1,615.3   

Noncontrolling interests

    —          —          —          89.9        —          89.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

    1,615.3        1,610.2        289.5        802.8        (2,612.6     1,705.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 1,604.1      $ 3,964.9      $ 319.8      $ 959.3      $ (2,637.1   $ 4,211.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

28


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Balance Sheet – Successor (Audited)

December 31, 2012

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     TransUnion
Corp.
Consolidated
 

Assets

           

Current assets:

           

Cash and cash equivalents

  $ 75.3      $ —        $ —        $ 79.0      $ —        $ 154.3   

Trade accounts receivable, net

    —          98.0        19.5        46.1        —          163.6   

Due from (to) affiliates

    (14.9     (82.5     46.2        56.7        (5.5     —     

Other current assets

    (0.3     52.7        (0.7     7.0        —          58.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    60.1        68.2        65.0        188.8        (5.5     376.6   

Property, plant and equipment, net

    —          95.8        7.8        17.6        —          121.2   

Other marketable securities

    —          11.4        —          —          —          11.4   

Goodwill

    —          961.6        324.6        518.0        —          1,804.2   

Other intangibles, net

    —          1,629.6        75.8        206.2        —          1,911.6   

Other assets

    1,611.8        1,235.2        2.2        42.4        (2,795.9     95.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $ 1,671.9      $ 4,001.8      $ 475.4      $ 973.0      $ (2,801.4   $ 4,320.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and stockholders’ equity

           

Current liabilities:

           

Trade accounts payable

  $ —        $ 43.2      $ 18.9      $ 15.4      $ —        $ 77.5   

Current portion of long-term debt

    —          9.5        —          6.6        (5.5     10.6   

Other current liabilities

    7.9        68.4        7.2        23.5        —          107.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

    7.9        121.1        26.1        45.5        (5.5     195.1   

Long-term debt

    —          1,672.3        —          6.5        (6.5     1,672.3   

Other liabilities

    (13.9     589.6        2.0        89.7        —          667.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    (6.0     2,383.0        28.1        141.7        (12.0     2,534.8   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Redeemable noncontrolling interests

    —          —          —          14.7        —          14.7   

Total TransUnion Corp. stockholders’ equity

    1,677.9        1,618.8        447.3        723.3        (2,789.4     1,677.9   

Noncontrolling interests

    —          —          —          93.3        —          93.3   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

    1,677.9        1,618.8        447.3        816.6        (2,789.4     1,771.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 1,671.9      $ 4,001.8      $ 475.4      $ 973.0      $ (2,801.4   $ 4,320.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

29


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Income – Successor (Unaudited)

For the Three Months Ended June 30, 2013

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     TransUnion
Corp.
Consolidated
 

Revenue

  $ —        $ 180.8      $ 67.6      $ 67.1      $ (14.7   $ 300.8   

Operating expenses

           

Cost of services

    —          78.6        31.7        20.8        (9.8     121.3   

Selling, general and administrative

    —          57.6        19.4        22.7        (5.2     94.5   

Depreciation and amortization

    —          35.9        3.3        6.0        —          45.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    —          172.1        54.4        49.5        (15.0     261.0   

Operating income

    —          8.7        13.2        17.6        0.3        39.8   

Non-operating income and expense

           

Interest expense

    —          (25.2     —          (0.2     0.2        (25.2

Interest income

    —          0.2        —          0.2        (0.2     0.2   

Other income and (expense), net

    11.3        27.9        1.7        0.3        (39.6     1.6   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income and expense

    11.3        2.9        1.7        0.3        (39.6     (23.4

Income (loss) from operations before income taxes

    11.3        11.6        14.9        17.9        (39.3     16.4   

Provision for income taxes

    (1.1     (0.3     —          (3.1     —          (4.5
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    10.2        11.3        14.9        14.8        (39.3     11.9   

Less: net income attributable to noncontrolling interests

    —          —          —          (1.7     —          (1.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to TransUnion Corp.

  $ 10.2      $ 11.3      $ 14.9      $ 13.1      $ (39.3   $ 10.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

30


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Comprehensive Income – Successor (Unaudited)

For the Three Months Ended June 30, 2013

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     TransUnion
Corp.
Consolidated
 

Net income (loss)

  $ 10.2      $ 11.3      $ 14.9      $ 14.8      $ (39.3   $ 11.9   

Other comprehensive income (loss), net of tax

           

Foreign currency translation adjustment

    (23.9     (23.9     —          (26.3     47.8        (26.3

Net unrealized gain on hedges

    2.9        2.9        —          —          (2.9     2.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

    (21.0     (21.0     —          (26.3     44.9        (23.4
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

    (10.8     (9.7     14.9        (11.5     5.6        (11.5

Less: comprehensive income attributable to noncontrolling interests

    —          —          —          0.7        —          0.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to TransUnion Corp.

  $ (10.8   $ (9.7   $ 14.9      $ (10.8   $ 5.6      $ (10.8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

31


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Income – Successor (Unaudited)

For the Six Months Ended June 30, 2013

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     TransUnion
Corp.
Consolidated
 

Revenue

  $ —        $ 356.5      $ 136.0      $ 129.1      $ (30.3   $ 591.3   

Operating expenses

           

Cost of services

    —          157.8        60.8        40.9        (20.5     239.0   

Selling, general and administrative

    —          107.3        39.2        41.4        (10.4     177.5   

Depreciation and amortization

    —          71.1        7.2        12.2        —          90.5   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    —          336.2        107.2        94.5        (30.9     507.0   

Operating income

    —          20.3        28.8        34.6        0.6        84.3   

Non-operating income and expense

           

Interest expense

    —          (51.0     —          (0.5     0.5        (51.0

Interest income

    —          0.5        —          0.5        (0.5     0.5   

Other income and (expense), net

    25.4        56.2        1.6        (0.3     (82.0     0.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income and expense

    25.4        5.7        1.6        (0.3     (82.0     (49.6

Income (loss) from operations before income taxes

    25.4        26.0        30.4        34.3        (81.4     34.7   

Provision for income taxes

    (5.0     (0.6     —          (5.8     —          (11.4
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    20.4        25.4        30.4        28.5        (81.4     23.3   

Less: net income attributable to noncontrolling interests

    —          —          —          (2.9     —          (2.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to TransUnion Corp.

  $ 20.4      $ 25.4      $ 30.4      $ 25.6      $ (81.4   $ 20.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

32


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Comprehensive Income – Successor (Unaudited)

For the Six Months Ended June 30, 2013

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     TransUnion
Corp.
Consolidated
 

Net income (loss)

  $ 20.4      $ 25.4      $ 30.4      $ 28.5      $ (81.4   $ 23.3   

Other comprehensive income (loss), net of tax

           

Foreign currency translation adjustment

    (40.5     (40.5     —          (43.7     81.0        (43.7

Net unrealized gain on hedges

    3.1        3.1        —          —          (3.1     3.1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

    (37.4     (37.4     —          (43.7     77.9        (40.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

    (17.0     (12.0     30.4        (15.2     (3.5     (17.3

Less: comprehensive income attributable to noncontrolling interests

    —          —          —          0.3        —          0.3   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to TransUnion Corp.

  $ (17.0   $ (12.0   $ 30.4      $ (14.9   $ (3.5   $ (17.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

33


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Income – Successor (Unaudited)

For the Two Months Ended June 30, 2012

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Revenue

  $ —        $ 117.0      $ 42.4      $ 43.6      $ (12.1   $ 190.9   

Operating expenses

           

Cost of services

    —          51.5        18.0        13.3        (8.2     74.6   

Selling, general and administrative

    —          31.2        11.3        11.9        (4.1     50.3   

Depreciation and amortization

    —          23.8        3.1        2.1        —          29.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    —          106.5        32.4        27.3        (12.3     153.9   

Operating income

    —          10.5        10.0        16.3        0.2        37.0   

Non-operating income and expense

           

Interest expense

    —          (18.4     —          (0.1     0.1        (18.4

Interest income

    —          —          —          0.2        (0.1     0.1   

Other income and (expense), net

    14.0        22.2        —          (0.2     (35.6     0.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income and expense

    14.0        3.8        —          (0.1     (35.6     (17.9

Income (loss) before income taxes

    14.0        14.3        10.0        16.2        (35.4     19.1   

Provision for income taxes

    (4.4     —          —          (3.9     —          (8.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    9.6        14.3        10.0        12.3        (35.4     10.8   

Less: net income attributable to noncontrolling interests

    —          —          —          (1.2     —          (1.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to TransUnion Corp.

  $ 9.6      $ 14.3      $ 10.0      $ 11.1      $ (35.4   $ 9.6   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

34


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Comprehensive Income – Successor (Unaudited)

For the Two Months Ended June 30, 2012

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net income (loss)

  $ 9.6      $ 14.3      $ 10.0      $ 12.3      $ (35.4   $ 10.8   

Other comprehensive income (loss), net of tax

           

Foreign currency translation adjustment

    (5.6     (5.6     —          (6.4     11.2        (6.4

Net unrealized loss on hedges

    (2.0     (2.0     —          —          2.0        (2.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

    (7.6     (7.6     —          (6.4     13.2        (8.4

Comprehensive income (loss)

    2.0        6.7        10.0        5.9        (22.2     2.4   

Less: comprehensive income attributable to noncontrolling interests

    —          —          —          (0.4     —          (0.4
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to TransUnion Corp.

  $ 2.0      $ 6.7      $ 10.0      $ 5.5      $ (22.2   $ 2.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

35


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Income – Predecessor (Unaudited)

For the One Month Ended April 30, 2012

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Revenue

  $ —        $ 54.9      $ 21.2      $ 22.4      $ (6.1   $ 92.4   

Operating expenses

           

Cost of services

    —          42.7        9.2        9.4        (4.3     57.0   

Selling, general and administrative

    —          75.0        8.6        12.1        (1.8     93.9   

Depreciation and amortization

    —          4.9        1.4        1.0        —          7.3   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    —          122.6        19.2        22.5        (6.1     158.2   

Operating income (loss)

    —          (67.7     2.0        (0.1     —          (65.8

Non-operating income and expense

           

Interest expense

    —          (9.8     —          (0.1     0.1        (9.8

Interest income

    —          —          —          0.2        —          0.2   

Other income and (expense), net

    (96.9     0.3        —          (0.5     76.2        (20.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income and expense

    (96.9     (9.5     —          (0.4     76.3        (30.5

Income (loss) before income taxes

    (96.9     (77.2     2.0        (0.5     76.3        (96.3

(Provision) benefit for income taxes

    31.8        (1.3     —          1.3        —          31.8   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    (65.1     (78.5     2.0        0.8        76.3        (64.5

Less: net income attributable to noncontrolling interests

    —          —          —          (0.6     —          (0.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to TransUnion Corp.

  $ (65.1   $ (78.5   $ 2.0      $ 0.2      $ 76.3      $ (65.1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

36


Table of Contents

TRANSUNION CORP. AND SUBSIDIARIES

Consolidating Statement of Comprehensive Income – Predecessor (Unaudited)

For the One Month Ended April 30, 2012

(in millions)

 

    Parent
TransUnion
Corp.
    Issuers
Trans Union
LLC and
TransUnion
Financing
Corporation
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net income (loss)

  $ (65.1   $ (78.5   $ 2.0      $ 0.8      $ 76.3      $ (64.5

Other comprehensive income (loss), net of tax

           

Foreign currency translation adjustment

    (2.4     (2.4     —          (2.9     4.8        (2.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

    (2.4     (2.4     —          (2.9     4.8