10-K 1 transunion-20181231x10k.htm 10-K Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-K
 
 
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
- 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 number 001-37470


 
 
TransUnion
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
61-1678417
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
555 West Adams, Chicago, Illinois
 
60661
(Address of principal executive offices)
 
(Zip Code)
312-985-2000
(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
 
 
 
Title of Each Class
 
  Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share
 
  New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:
None
 
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 
 
x  YES
 
o  NO

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
 
 
o  YES
 
x  NO

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.
 
 
x  YES
 
o  NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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).
 
 
x  YES
 
o  NO




Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
 
 
¨

 
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
 
x  Large accelerated filer
 
¨  Accelerated filer
 
 
¨   Non-accelerated filer
 
¨  Smaller reporting company
 
 
 
 
¨  Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
 
¨
 
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
 
 
o  YES
 
x  NO

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $13.2 billion as of June 30, 2018 (based on the closing stock price of such stock as quoted on the New York Stock Exchange).

As of January 31, 2019, there were 186.0 million shares of TransUnion common stock outstanding, par value $0.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of TransUnion for the Annual Meeting of Stockholders to be held May 8, 2019 are incorporated by reference to the extent specified in Part III of this Form 10-K.
 




TRANSUNION
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 2018
TABLE OF CONTENTS
 
EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 16. FORM 10-K SUMMARY




Cautionary Notice Regarding Forward-Looking Statements
This Annual Report on Form 10-K, including the exhibits hereto, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negatives of these words and other similar expressions.
Factors that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could materially affect our financial results or such forward-looking statements include:
macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets;
our ability to provide competitive services and prices;
our ability to retain or renew existing agreements with large or long-term customers;
our ability to maintain the security and integrity of our data;
our ability to deliver services timely without interruption;
our ability to maintain our access to data sources;
government regulation and changes in the regulatory environment;
litigation or regulatory proceedings;
regulatory oversight of “critical activities”;
our ability to effectively manage our costs;
economic and political stability in the United States and international markets where we operate;
our ability to effectively develop and maintain strategic alliances and joint ventures;
our ability to timely develop new services and the market’s willingness to adopt our new services;
our ability to manage and expand our operations and keep up with rapidly changing technologies;
our ability to make acquisitions and successfully integrate the operations of acquired businesses and realize the intended benefits of such acquisitions;
our ability to protect and enforce our intellectual property, trade secrets and other forms of unpatented intellectual property;
our ability to defend our intellectual property from infringement claims by third parties;
the ability of our outside service providers and key vendors to fulfill their obligations to us;
further consolidation in our end-customer markets;
the increased availability of free or inexpensive consumer information;
losses against which we do not insure;
our ability to make timely payments of principal and interest on our indebtedness;
our ability to satisfy covenants in the agreements governing our indebtedness;
our ability to maintain our liquidity;
share repurchase plans; and
our reliance on key management personnel.
There may be other factors, many of which are beyond our control, that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.
The forward-looking statements contained in this report speak only as of the date of this report. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements, to reflect the impact of events or circumstances that may arise after the date of this report.



PART I
Unless the context indicates otherwise, any reference to the “Company,” “we,” “us,” and “our” refers to TransUnion and its direct and indirect subsidiaries.
ITEM 1 BUSINESS
Overview
TransUnion is a leading global risk and information solutions provider to businesses and consumers. We provide consumer reports, risk scores, analytical services and decisioning capabilities to businesses. Businesses embed our solutions into their process workflows to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. Consumers use our solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft. We are differentiated by our comprehensive and unique datasets, our next-generation technology and our analytics and decisioning capabilities, which enable us to deliver insights across the entire consumer lifecycle. We believe we are the largest provider of risk and information solutions in the United States to possess both nationwide consumer credit data and comprehensive, diverse public records data, which allows us to better predict behaviors, assess risk and address a broader set of business issues for our customers. We have deep domain expertise across a number of attractive industries, which we also refer to as verticals, including financial services, healthcare, insurance and other markets we service. We have a global presence in over 30 countries and territories across North America, Latin America, the United Kingdom, Africa, Asia Pacific and India.
Our addressable market includes the big data and analytics market, which continues to grow as companies around the world recognize the benefits of building an analytical enterprise where decisions are made based on data and insights, and as consumers recognize the importance that data and analytics play in their ability to procure goods and services and protect their identities. International Data Corporation (“IDC”) estimates worldwide spending on big data and analytics services is projected to continue to grow at a CAGR of approximately 12% through 2022. There are several underlying trends supporting this market growth, including the creation of large amounts of data, advances in technology and analytics that enable data to be processed more quickly and efficiently to provide business insights, and growing demand for these business insights across industries and geographies. Leveraging our more than 50 year operating history and our established position as a leading provider of risk and information solutions, we have evolved our business by investing in a number of strategic initiatives, such as transitioning to the latest big data and analytics technologies, expanding the breadth and depth of our data, strengthening our analytics capabilities and enhancing our business processes. As a result, we believe we are well positioned to expand our share within the markets we currently serve and capitalize on the larger big data and analytics opportunity.
We believe that we have the capabilities and assets, including comprehensive and unique datasets, advanced technology and analytics to provide differentiated solutions to our customers. We have over 65 petabytes of data, growing at an average rate of approximately 25% per year since 2010, representing over one billion consumers globally. Our solutions are based on a foundation of financial, credit, alternative credit, identity, bankruptcy, lien, judgment, healthcare, insurance claims, automotive and other relevant information from approximately 90,000 data sources, including financial institutions, private databases and public records repositories. We refine, standardize and enhance this data using sophisticated algorithms to create proprietary databases. Our next-generation technology allows us to quickly and efficiently integrate our data with our analytics and decisioning capabilities to create and deliver innovative solutions to our customers and to quickly adapt to changing customer needs. Our deep analytics expertise, which includes our people as well as tools such as predictive modeling and scoring, customer segmentation, benchmarking and forecasting, enables businesses and consumers to gain better insights into their risk and financial data. Our decisioning capabilities, which are generally delivered on a software-as-a-service platform, allow businesses to interpret data and apply their specific qualifying criteria to make decisions and take actions. Collectively, our data, analytics and decisioning capabilities allow businesses to authenticate the identity of consumers, effectively determine the most relevant products for consumers, retain and cross-sell to existing consumers, identify and acquire new consumers and reduce loss from fraud. Similarly, our capabilities allow consumers to see how their credit profiles have changed over time, understand the impact of financial decisions on their credit scores, manage their personal information and take precautions against identity theft.
We leverage our differentiated capabilities in order to serve a broad set of customers across multiple geographies and industry verticals. We have a global customer base of over 75,000 businesses and millions of consumers use our data to help manage their personal finances and take precautions against identity theft. We offer our solutions to business customers in financial services, healthcare, insurance and other industries. Our customer base includes many of the largest companies in each of the primary industries we serve. For example, in the United States, we contract with the top ten largest consumer lending banks, the top ten credit card issuers, the top twenty largest auto insurance carriers, the top twenty-five auto lenders, and thousands of healthcare providers and federal, state and local government agencies. We have been successful in leveraging our brand, our expertise and our solutions in our global operations and have a leading presence in several high-growth international markets.

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We believe we have an attractive business model that has highly recurring and diversified revenue streams, low capital requirements, significant operating leverage and strong and stable cash flows. The proprietary and embedded nature of our solutions and the integral role that we play in our customers’ decision-making processes have historically translated into high customer retention and revenue visibility. For example, we have had ongoing relationships with our top ten financial institution customers for over ten years. We continue to demonstrate organic growth by further penetrating existing customers, innovating new solutions and gaining new customers. We have a diversified portfolio of businesses across our segments, reducing our exposure to cyclical trends in any particular industry vertical, or geography. We operate primarily on a contributory data model in which we typically obtain updated information at little or no cost and own most of our data. We augment this data with a growing set of public record and alternative data as we develop new solutions and expand into new industries and geographies. We also directly manage and control our technology, which provides us with an efficient cost structure and allows us to benefit from economies of scale. Additionally, our technology investments enable us to grow and expand our business with low incremental cost, providing significant operating leverage.
Our total revenues increased from $1,933.8 million for the year ended December 31, 2017 to $2,317.2 million for the year ended December 31, 2018, representing year-over-year growth of 19.8%. Our net income attributable to the Company decreased from $441.2 million for the year ended December 31, 2017, which included the onetime tax provision benefit of $174 million due to the Tax Cuts and Jobs Act, to $276.6 million for the year ended December 31, 2018. Our Adjusted EBITDA increased from $748.1 million for the year ended December 31, 2017 to $916.9 million for the year ended December 31, 2018, representing year-over-year growth of 22.6%. As of December 31, 2018, the book value of our debt was $4.0 billion. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Key Performance Measures,” for our definition of Adjusted EBITDA and the reconciliation to net income attributable to TransUnion.
Our Evolution
Our business has over a 50 year operating history and a long track record of providing risk and information solutions to businesses and consumers while continuing to innovate to meet their changing needs. Since our founding as a provider of regional credit reporting services, we have built a comprehensive database of U.S. consumers, which created a unique and highly valuable base to build solutions that span many industry verticals and customer processes. From this base, we expanded our operations by targeting new customers, industry verticals and geographies and also entered the consumer space. We have strengthened our analytics and decisioning capabilities and acquired complementary datasets and technologies enabling us to enhance our solutions, diversify our revenue base and expand into other verticals, such as healthcare and insurance. We have grown our global presence to over 30 countries and territories, creating and acquiring credit reporting agencies in new geographies and establishing strong international footholds from which we could expand into other emerging markets. We also expanded the reach of our consumer solutions by partnering with other market leaders and innovators.
As part of our continued evolution, we have invested in a number of strategic initiatives that we believe will allow us to cater to the growing demand for data and analytics, provide differentiated solutions and better serve our customers. These initiatives include:
Investing in our Technology:    Technology is at the core of the solutions we provide to our customers. We have made significant investments to modernize our infrastructure and to transition to the latest big data and analytics technologies which enable us to be quicker, more efficient and more cost-effective. Our next-generation technology enhances our ability to organize and handle high volumes of disparate data, improves delivery speeds, provides better availability and strengthens product development capabilities, while lowering our overall cost structure and allowing us to maintain our focus on information security. Our investment strategy has been to build capabilities and leverage them across multiple geographies and industry verticals.
Expanding our Data:    We have continued to invest in the breadth and depth of our data. We introduced the concept of trended data to provide the trajectory of a consumer’s risk profile, used public records data to enhance the scope of business issues we can address and incorporated alternative data into our databases to better assess risk for banked and unbanked consumers. We believe we are the largest provider of scale in the United States to possess both nationwide consumer credit data and comprehensive, diverse public records data. All of these initiatives improve the quality of our data, provide deeper insights into risk and allow us to create differentiated solutions for our customers.
Strengthening our Analytics Capabilities:    We have strengthened our analytics capabilities by leveraging our next-generation technology and expanded data, utilizing more advanced tools and growing our analytics team. This has allowed us to create solutions that produce greater insights and more predictive results, which help our customers make better decisions. In addition, our strengthened analytics capabilities have shortened our time-to-market to create and deliver these solutions to our customers.
Broadening our Target Markets:    We have grown our target markets by establishing a presence in attractive high-growth and strategic international markets such as the United Kingdom, India, Colombia and the Philippines, entering new verticals such as government and investigative services in the United States and expanding the reach of our consumer

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offerings by partnering with traditional and emerging providers in new verticals. Our capabilities enable us to develop scalable products that we are able to deploy across new markets and verticals.
Enhancing our Business Processes and Capabilities:    We have enhanced our business processes and capabilities to support our growth. We have hired additional industry experts, which has allowed us to create and sell new vertical-specific solutions that address our customers’ needs. Our global sales force structure increases our sales team’s coverage of customers across our target markets.
We believe that our ongoing focus on evolving with the market and with our customers’ needs ensures continued improvement in our overall services to businesses and consumers. Leveraging our trusted brand, global scale and strong market position in the verticals we serve will allow us to capitalize on business opportunities worldwide and contribute to our long-term growth.
Our Market Opportunity
We believe there is a long-term trend of businesses and consumers using data and analytics to make more informed decisions and manage risk more effectively, resulting in a large and rapidly growing market. According to an August 2018 report from IDC, worldwide spending on big data and analytics services projected to continue to grow at a CAGR of approximately 12% through 2022.
We believe there are several key trends in the global macroeconomic environment affecting the geographies and industry verticals we serve that will create increasing demand for our solutions:
Rapid Growth in Data Creation and Application:    Larger and more diversified datasets are now assembled faster while the breadth of analytical applications and solutions has expanded. Companies are increasingly relying on business analytics and big data technologies to help process this data in a cost-efficient manner. In addition, non-traditional sources of structured and unstructured data have become important in deriving alternative metrics. The proliferation of smartphones and other mobile devices also generates enormous amounts of data tied to consumers, activities and locations. We believe that the demand for targeted data and sophisticated analytical solutions will continue to grow meaningfully as businesses seek real-time access to more granular views of consumer populations and more holistic views on individual consumers.
Advances in Technology and Analytics Unlocking the Value of Data:    Ongoing advances in data collection, storage and analytics technology have contributed to the greater use and value of data and analytics in decision making. As businesses have gained the ability to rapidly aggregate and analyze data, they increasingly expect access to real-time data and analytics from their information providers as well as solutions that fully integrate into their workflows. We believe this has made sophisticated technology critical for gaining and retaining business in the risk and information services industry.
Greater Adoption of Big Data Solutions Across New and Existing Industry Verticals:    With the proliferation of data, we believe companies across new and existing industry verticals recognize the value of risk information and analytical tools, particularly when tailored to their specific needs.
Financial Services Industry:    The combination of increased regulatory capital, additional compliance costs and the overhang of legacy assets is pushing large segments of small-to-medium-sized business and consumer lending out of the banking sector, resulting in the creation of new specialty finance companies, such as peer-to-peer lending platforms and online balance sheet lenders, which are actively filling the void. These technology-enabled lending platforms provide access to credit in a fast and efficient manner by utilizing sophisticated risk assessment tools that leverage data, such as behavioral data, transactional data and employment and credit information. At the same time, traditional financial services companies are also increasing the use of applications and data in order to address regulatory requirements, lower operating costs and better serve their customers.
Healthcare Industry:    Greater patient financial responsibility, focus on cost management and regulatory supervision are all driving healthcare providers to use data and related analytics tools to better manage their revenue cycle. For example, to reduce collection risks, healthcare providers seek information about their patients’ insurance coverage and ability to pay at the time of registration. In addition, insurance discovery tools are being utilized to optimize accounts receivable management, maximize collections and minimize uncompensated care.
Insurance Industry:    As consumers increasingly obtain quotes from multiple insurers in an effort to lower their costs, insurers are trying to improve the accuracy of their risk assessments and initial quotes. For example, insurance carriers are using driver violation data to uncover offenses that will impact pricing earlier in the quoting process so consumers have a more accurate view of the premiums they will be charged.
Increasing Lending Activity in Emerging International Markets:    As economies in emerging markets continue to develop and mature, we believe there will continue to be favorable socio-economic trends, such as an increase in the size of the middle class and a significant increase in the use of financial services by under-served and under-banked consumers. In addition, credit penetration is relatively low in emerging markets when compared to developed markets. For example, using our database of information compiled from financial institutions as a benchmark of credit activity, we estimate that

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less than 25% of the adult population in India is currently credit active. Furthermore, the widespread adoption and use of mobile phones in emerging markets have enabled greater levels of financial inclusion and access to banking and credit. We expect the populations in emerging markets to continue to become more credit active, resulting in increased demand for our services.
Increased Management and Monitoring of Personal Financial Information and Identity Protection by Consumers:    Demand for consumer solutions is rising with greater consumer awareness of the importance and usage of their credit information, increased risk of identity theft due to data breaches and increasingly available free credit information. We estimate the number of consumer subscriptions to a credit monitoring or identity protection service has grown approximately 20% annually from 2015 through 2018. In addition, the proliferation of mobile devices has made data much more accessible, enabling consumers to manage their finances and monitor their information in real-time. We believe these trends will continue to drive growth for our consumer business.
Our Competitive Strengths
Comprehensive and Unique Datasets
Our long operating history and leadership in the industry have allowed us to build comprehensive and unique data assets that would be difficult for a new market entrant to replicate. We have over 65 petabytes of data, growing at an average rate of approximately 25% per year since 2010, representing over one billion consumers globally. Our solutions are based on a foundation of financial, credit, alternative credit, identity, bankruptcy, lien, judgment, healthcare, insurance claims, automotive and other relevant information from approximately 90,000 data sources, including financial institutions, private databases and public records repositories. We refine, standardize and enhance this data using sophisticated algorithms to create proprietary databases. We keep our data current by processing billions of updates each month, and we continue to identify opportunities to acquire additional data. We believe that our data is unique and differentiates us from our competitors. We own several proprietary datasets such as consumer credit information, driver violation history, healthcare eligibility information, business data and rental payment history. Internationally, our data assets also encompass alternative data, such as the voter registry in India with nearly 790 million records and the vehicle information database in South Africa with over 20 million vehicle records. We have also acquired public record datasets, which are time consuming and difficult for others to obtain and associate with the correct person. We believe we are the largest provider of scale in the United States to possess both nationwide consumer credit data and comprehensive, diverse public records data, which allows us to better predict behaviors, assess risk and address a broader set of business issues for our customers.
Next-generation Technology
Our next-generation technology allows us to continually improve our overall services to businesses and consumers and ensures that we are well positioned to differentiate our datasets and capabilities. We believe our next-generation technology capabilities has resulted in increased throughput, improved data matching, greater efficiency, advanced platform flexibility and lower operating costs.
Powerful Big Data Capabilities:    Our technology gives us the ability to process, organize and analyze high volumes of data across multiple operating systems, databases and file types as well as to deal with both structured and unstructured data that changes frequently. We process billions of transactions on a daily basis.
Enhanced Linking and Matching:    Because our data matching technology is able to interrelate data across disparate sources, industries and time periods, we believe that we are able to create differentiated datasets and provide our customers with comprehensive insights that allow them to better evaluate risk. For example, our TLOxp solution leverages these data matching capabilities across various datasets to identify and investigate relationships among people, assets, locations and businesses, allowing us to offer enhanced due diligence, threat assessment, identity authentication and fraud prevention and detection solutions.
Greater Efficiency:    From ingestion of data to distribution of analytics and insights, our next-generation technology enables a faster time to market. For example, a portion of our platform now allows for data profiling, cleansing and ingestion of data significantly faster and can be done in a self-service approach by non-IT power users, allowing us to significantly reduce overall production times for new products.
Advanced Platform Flexibility:    Our technology offers a high degree of flexibility, speed and customization of our solutions, via capabilities like graphical development and business rules environments, and allows easy integration with our customers’ workflows. We manage and control our technology instead of outsourcing it, which provides us with the flexibility to prioritize changes and to quickly implement any updates to our applications and solutions.
Lower Operating Costs:    Our technology investments have lowered our overall cost to maintain and develop our systems, allowing us to redeploy significantly more resources to support revenue generating initiatives, such as vertical expansion and new product development.

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 Sophisticated and Flexible Analytics and Decisioning Capabilities
We have developed sophisticated and flexible analytics and decisioning capabilities by investing in technology, tools and people. Our technology allows us to quickly build sophisticated analytics and decisioning functionality that caters to our customers’ evolving needs. Our analysts leverage our next-generation technology and data matching capabilities to gain real-time access to our entire dataset across different data sources and run analyses across this data while remaining compliant with permitted data use. Our analysts are typically able to create data samples for model development, model validations and custom analyses in less than one day using self-serve data access. Our analysts are equipped with a diverse modeling and analytical toolkit, such as visualization and machine learning, which allows them to quickly build and deploy these capabilities. For example, our team was able to build a new loan consolidation model in our CreditVision solution in less than one day using our advanced tools, a process that would have taken weeks with legacy tools and technology. We have an experienced analytics team with substantial industry experience, complemented by a deep knowledge of consumer credit data. Our team is highly qualified with advanced degrees or doctorates in statistics, math, finance or engineering, and is instrumental in understanding customer requirements, sourcing raw data and turning that data into solutions that provide insights and decisions to solve our customers’ problems.
Innovative and Differentiated Solutions
We consistently focus on innovation to develop new and enhanced solutions that meet the evolving needs of our customers. We believe our specialized data, analytics and decisioning services and collaborative approach with our customers differentiate us from our competitors. Our solutions are often scalable across different customers, geographies and verticals. Recent examples of our innovative and differentiated solutions include:
AdFuel:    AdFuel powers digital media campaigns with highly targeted audiences for the financial services and insurance industries.  TransUnion AdFuel audiences are found across the online advertising ecosystem on the industry’s leading publishers and platforms.  Our audiences leverage TransUnion data, delivering actionable data and insights to financial services and insurance companies and helping organizations identify new opportunities and assess risk.
CreditView:    CreditView is an interactive dashboard that provides consumers with credit information and educational tools in a comprehensive, user-friendly format. Consumers are able to easily see how their credit profiles have changed over time, receive alerts on key credit changes, simulate the impact of financial decisions on their credit score, and see relevant offers for financial products.
CreditVision:    We continue to enhance our credit data by including new data fields, enriching values in existing data fields and expanding account history. Our enhanced credit data has been combined with hundreds of algorithms to produce CreditVision and CreditVision LinkM, first to market and market-leading solutions that provide greater granularity and evaluate consumer behavior patterns over time. This results in a more predictive view of the consumer, increases the total population of consumers who can effectively be scored and helps consumers gain improved pricing.
DecisionEdge:    DecisionEdge is a software-as-a-service decisioning offering which allows businesses to identify and authenticate customers, interpret data and predictive model results, and apply customer-specific criteria to facilitate real-time, automated decisions at the point of consumer interaction.
DriverRisk: Leveraging our driver violation database, we developed DriverRisk, a data and analytic solution that helps auto insurance carriers cost effectively validate driving records and assess risk during the underwriting and renewal process to improve returns.
Insurance Coverage Discovery and Other Health Insurance:    For our healthcare customers, we offer insurance coverage discovery, coordination of benefits, and third party liability solutions, which enables the discovery of previously unidentified health insurance coverage to help both our provider and payer customers receive appropriate payment for uncompensated care and coordination of benefits payments. Our proprietary technology identifies patient accounts that qualify Disproportionate Share Hospitals (DSH), Medicare, TRICARE and commercial insurance benefits and monitors an account for up to three years for retroactive eligibility that providers may have missed.
IDVision with iovation: We have recently expanded the capabilities of IDVision with the acquisition of iovation, Inc. (“iovation”) in June 2018. iovation is one of the most advanced providers of device-based information in the world, with insight into nearly 5 billion unique devices. In October 2018 we announced the expansion of our IDVision product, which we now call IDVision with iovation. IDVision with iovation offers an enhanced suite of identity management, authentication and fraud prevention solutions that protect businesses from fraud while enabling great experiences for their online users. This results in a global network effect of fraud and risk insights that allow businesses to quickly and accurately determine good customers from fraudulent ones.
Prama: Prama Insights provides customers with on-demand, 24/7 customer access to massive, depersonalized data sets and key analytics for portfolio understandings, benchmarking and peer analysis. Prama Studio offers an environment for customers to create, test and manage attributes that support model development to achieve growth, risk and compliance goals.

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SmartMove:    SmartMove allows independent landlords to screen applicants on a real-time basis by pushing the screening information of the individual renter to the landlord, based on the consent of the renter. The solution is delivered through our mobile channel and through our partners and provides independent landlords with convenient access to the same quality information provided to large property management firms.
TLOxp:    TLOxp leverages our data matching capabilities across thousands of data sources to identify and investigate relationships among specific people, assets, locations and businesses. This allows us to offer enhanced due diligence, threat assessment, identity authentication and fraud prevention and detection solutions, and to expand our solutions into new verticals such as government and law enforcement.
 Deep and Specialized Industry Expertise
We have deep expertise in a number of attractive industry verticals including financial services, healthcare and insurance. Our expertise has allowed us to develop sophisticated vertical-specific solutions within these targeted industries that play an integral role in our customers’ decision-making processes and are often embedded into their workflows. Our team includes industry experts with significant experience in the verticals that we target and relationships with leading companies in those verticals. We also possess regulatory compliance expertise across the industries that we serve. Together, this provides us with a comprehensive understanding of business trends and insights for customers in these verticals, allowing us to build solutions that cater to these customers’ specific requirements. We have been able to apply our industry knowledge, data assets, technology and analytics capabilities to develop new solutions and revenue opportunities within key verticals. For example, in financial services, our differentiated position allowed us to anticipate the increased demand for alternative consumer lending providers such as peer-to-peer lending platforms, and we created solutions that catered to these emerging providers. In insurance, we partnered with a vehicle history data provider to launch a vehicle history score that helps insurance carriers further segment risk based on the attributes of a specific automobile. In healthcare, we developed a solution that allows healthcare providers to search for additional health insurance coverage and recover additional uncompensated care costs.
Leading Presence in Attractive International Markets
We have been operating internationally for over 30 years and have strong global brand recognition. We have strategically targeted attractive markets in both developed and emerging economies and have a diversified global presence in over 30 countries and territories and a leading presence in several attractive international markets North America, Latin America, the United Kingdom, Africa, Asia Pacific and India. We have local, senior management in many of our international markets, and we believe this provides us with deeper insights into these markets and stronger relationships with our customers. We have leveraged our brand, operating history, global footprint and technology infrastructure to establish new credit bureaus in several international markets, such as Canada in 1989, India in 2001 and the Philippines in 2011. Once established, our model is to expand the services we offer within these markets and then move into adjacent emerging markets. For example, we have used our operations in Hong Kong to expand into other Asia Pacific countries and provide analytic scoring models in the Philippines, Singapore, Malaysia and Thailand. We have used our operations in South Africa to expand into neighboring African countries. We have also entered new markets through strategic acquisitions, including the United Kingdom in 2018, Colombia in 2016, and Brazil in 2011. In addition, we have been able to leverage our technology and experience from our U.S. operations to develop and grow our international operations. For example, we have expanded our CreditVision product into Canada, Asia Pacific, India, Africa and Latin America and expect to launch CreditVision in the United Kingdom in 2019. We have also expanded our direct-to-consumer business into all of our regions, and have implemented DecisionEdge across more than 600 active solutions in over 10 countries.
Proven and Experienced Management Team
Our senior management team has a track record of strong performance and significant expertise in the markets we serve, with an average of over twenty years of industry experience. We continue to attract and retain experienced management talent for our businesses. Our team has deep knowledge of the data and analytics sector and expertise across the various industries that we serve. Our team has overseen our expansion into new industries and geographies while managing ongoing strategic initiatives, including our significant technology investments. As a result of the sustained focus of our management team, we have been successful in consistently driving growth, both organically and through acquiring and integrating businesses.


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Our Growth Strategy
Enhance Underlying Data, Technology and Analytics Capabilities to Develop Innovative Solutions
As the demand for big data and analytics solutions grows across industries and geographies, we will continue to expand the scope of our underlying data, improve our tools and technology and enhance our analytics and decisioning capabilities to provide innovative solutions that address this demand. As the needs of businesses and consumers evolve, we plan to continue to help them meet their challenges, which our recent investments in data, technology and analytics enable us to do more quickly and efficiently. For example, we enhanced our solutions with incremental data such as rental trade lines, additional contact data and auto asset data in order to address a broader set of customer requirements. Our recent technology investments have also reduced the time to market for new solutions, in certain instances from several weeks to a few days, which allow us to react quickly to customer requirements. We also intend to continue to take advantage of strategic partnerships to develop innovative services that differentiate us from our competitors.
Further Penetrate Existing Industry Verticals with Current and New Solutions
We are a leading provider of risk and information solutions in several industry verticals today, including financial services, healthcare and insurance. We believe there is significant opportunity for further growth within these industries by expanding the number of customers to whom we sell our current solutions as well as by creating innovative new solutions that we can use to grow our presence in these industries. We focus on developing new solutions that address evolving customer needs within our industry verticals. For example, in the financial services vertical, we launched Prama, an analytic workbench that enables access to massive anonymized data sets for benchmarking and attribute development. We also developed CreditVision, which provides customers with a time-based risk trend and increases the total eligible population of consumers. Similarly, in the insurance vertical, we introduced the DriverRisk solution that leverages our driver violation database to cost effectively identify drivers with ratable violations, resulting in unique insights into driver risk and reduced costs and higher returns for insurance carriers. In order to more effectively address these opportunities, we have redeployed and reallocated our sales resources to focus either on new customer opportunities or on selling additional services and solutions to existing customers. With our leading market positions, existing strong relationships in financial services, healthcare and insurance verticals and with our consumer partners, we believe we have the opportunity to further penetrate our existing customer base and capture a greater proportion of their spending across the consumer lifecycle.
Establish Positions in New, Adjacent Industry Verticals
In addition to increasing penetration in industries where we have a substantial presence, we also intend to create solutions that address customer needs in attractive new industries. Our strategy is to develop new solutions for a specific application, industry vertical or geography and then deploy them to other markets where they may be applicable. We believe that our capabilities allow us to quickly create and deliver solutions to new industries and geographies where information-based analytics and decisioning capabilities are currently underutilized. For example, our strong position in financial services and insurance verticals has allowed us to establish a presence in the healthcare vertical to capitalize on the increasing demand for data and analytics solutions. We have created innovative solutions that automate the insurance and payment processes at the beginning of the revenue cycle, help payers analyze claims-related data, facilitate performance reporting, help patients make informed decisions and optimize the collection of revenue. We continue to target other verticals such as public sector, rental screening, collections and investigative services, where we see an opportunity to leverage our existing data, analytics and decisioning capabilities.
Expand our Presence in Attractive International Markets
We believe international markets present a significant opportunity for growth, as these economies continue to develop and their populations become more credit active. We have significant scale in some of the world’s fastest growing markets, which positions us well to take advantage of the favorable dynamics in these regions. We leverage solutions developed in the United States and deploy them to international markets, after localizing them to individual market requirements. For example, after launching CreditVision in the United States, we have expanded our offerings with similar solutions in Canada, Asia Pacific, India, Africa and Latin America and expect to launch CreditVision in the United Kingdom in 2019. In markets where we have established a presence in a particular vertical, we will expand further into adjacent verticals, such as insurance and consumer solutions. We intend to continue to expand into new geographic markets by forming alliances with financial services institutions, industry associations and other local partners, and by pursuing strategic acquisitions. Across all our international expansion initiatives, we will continue to leverage our next-generation technology to drive speed to market, scale and differentiation.
Continue to Broaden Reach in Consumer Market through Direct and Indirect Channels
Our consumer business has delivered market-leading growth, driven by our innovative solutions and flexible and collaborative partnership model that has expanded the market for consumer services, along with greater consumer awareness of the value of their credit information and increased risk of identity theft. Our strategy is to grow our own member base in the direct channel as

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well as expand our reach through partnerships in the indirect channel. Across both channels, our focus is on delivering value-added solutions and features while continuing to improve the consumer experience with more user-friendly interfaces and better customer service and educational tools. Within our indirect channel, we will continue to leverage and enhance our flexible technology platform to expand our relationship with existing partners as well as develop relationships with new partners and enter new verticals. We believe that partnerships not only enable us to grow our own business, but they also expand the overall market and provide us access to new consumer segments. We will also continue to leverage our approach in the U.S. consumer market to expand our consumer operations globally.
Pursue Strategic Acquisitions
We will continue to pursue acquisitions to accelerate growth within our existing businesses and diversify into new businesses. We are focused primarily on opportunities that are strategic to us, including opportunities that expand our geographic footprint, increase the breadth and depth of our datasets, enhance our services, provide us with industry expertise in our key verticals and deepen our presence in our international markets.
In June 2018 we acquired iovation, one of the most advanced providers of device-based information in the world, strengthening our leadership position in fraud and identity management. iovation pioneered the device intelligence industry and provides a highly advanced digital device reputation consortium, with insight into nearly 5 billion unique devices from more than 35,000 leading brands across more than 50 countries. In October 2018 we announced the launch of IDVision with iovation. IDVision with iovation brings together a combination of TransUnion’s extensive personal data with iovation’s digital data. IDVision with iovation offers an enhanced suite of identity management, authentication and fraud prevention solutions that protect businesses from fraud while enabling great experiences for their online users. This results in a global network effect of fraud and risk insights that allow businesses to quickly and accurately determine good customers from fraudulent ones. In addition to other capabilities, iovation’s marquee FraudForce Device-based Reputation product has been integrated into our enhanced suite of solutions.
Further, our acquisition of FactorTrust, Inc. in 2017 reinforces our position as a provider of consumer reporting models that capture a wide range of positive payment behaviors. And our 2017 acquisition of eBureau, LLC, a leading provider of custom analytic solutions with both credit-risk and anti-fraud applications, demonstrates our commitment to build upon our success as a source of groundbreaking, versatile data and analytics capabilities.
We also have expanded into new countries such as the United Kingdom, Brazil, Chile, and Colombia. In June 2018, we acquired Callcredit Information Group, Ltd. (“Callcredit”), the second largest and fastest growing consumer credit bureau in the U.K. Founded in 2000, Callcredit is a U.K.-based information solutions company that, like TransUnion, provides data, analytics and technology solutions to help businesses and consumers make informed decisions. With a strong record of growth and innovation in both core credit and emerging solutions, Callcredit has achieved strong market success in the U.K.
We have also enhanced our domestic healthcare offerings through various acquisitions over the past few years. In June 2018, we acquired Healthcare Payment Specialists, Inc. (“HPS”), a leader in helping healthcare providers optimize Medicare reimbursement. The acquisition of HPS adds innovative technology that helps healthcare providers identify and recover Medicare reimbursements that they otherwise would not have received. Medicare accounts for 20% of total healthcare expenditures in the U.S., and the market for Medicare reimbursement optimization solutions is growing rapidly. HPS helps healthcare providers maximize Medicare reimbursement by focusing on payment areas where superior technology and deep domain expertise can drive significant improvements. The addition of HPS’s solutions further positions TransUnion as a market leader in post-discharge revenue recovery. TransUnion Healthcare’s Revenue Protection solutions help hospitals prevent revenue leakage by engaging patients early, ensuring that their earned revenue gets paid, and optimizing their collection strategies. The company partners with hospitals and health systems to protect billions in net revenue and cash to date for its entire client base.
In October 2018, we acquired Rubixis, Inc. (“Rubixis”), an innovative healthcare revenue cycle solutions company that helps providers maximize reimbursement from insurance payers. Rubixis brings specialized expertise in the management of denials and underpayments, two significant pain points for healthcare providers. Rubixis’ revenue cycle optimization capabilities, particularly around denials and underpayments, round out TransUnion Healthcare’s solutions and positions us as the leader in post-discharge revenue recovery for healthcare providers seeking to maximize reimbursement and prevent revenue leakage.
Our 2016 acquisitions of RTech Healthcare Revenue Technologies, Inc. (“RTech”) and Auditz, LLC, (“Auditz”), two entities with proprietary technology that helps healthcare providers protect revenue and identify and recover payments, further bolstered our healthcare revenue cycle solutions.
Other examples include our December 2015 acquisition of Trustev, Ltd., a provider of digital verification technology to multiple industries, our November 2014 acquisition of DHI, a provider of traffic violations and criminal court data, our October 2014 acquisition of L2C, an innovator in predictive analytics using alternative data that is able to provide risk perspectives on non-traditional and non-credit active consumers and our December 2013 acquisition of TLO’s assets, providing data solutions leveraging proprietary public records data for identity authentication, fraud prevention and debt recovery.

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From time to time, we may also seek to increase our investments in foreign entities in which we have less than a 100% equity interest, as we did with Credit Information Bureau (India) Limited (“CIBIL”) in India in 2014 through 2017, increasing our ownership to over 92%. We have a strong track record of integrating acquisitions and driving long-term value creation, and we will continue to maintain a disciplined approach to pursuing acquisitions.
Segment Overview
Over the past few years, we have completed a significant number of acquisitions that have transformed our business. We have also developed a significant number of new product offerings that have further diversified our portfolio of businesses. As a result of the evolution of our business, we have changed the disaggregated revenue and our measure of segment profit (Adjusted EBITDA) information that we provide to our chief operating decision makers (our “CODM”) to better align with how we manage the business. Accordingly, our disclosures around the disaggregation of our revenue and the measure of segment profit have been recast for all periods presented in this Annual Report on Form 10-K to conform to the information used by our CODM. We have not changed our reportable segments and these changes do not impact our consolidated results.
We manage our business and report our financial results in three reportable segments: U.S. Information Services (or “USIS”), International and Consumer Interactive. We also report expenses for Corporate, which provides shared services and conducts enterprise functions. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part II, Item 8 “Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements,” Note 16, “Reportable Segments,” for further information about our reportable segments.
USIS
Our USIS segment provides consumer reports, risk scores, analytical services and decisioning capabilities to businesses. These businesses use our services to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud.
We deliver our solutions across multiple industry vertical markets within USIS and report disaggregated revenue as follows:
Financial Services: The financial services vertical, which accounts for 53% of our 2018 USIS revenue, consists of our consumer lending, mortgage, auto and cards and payments lines of business. Our financial services clients consist of most banks, credit unions, finance companies, auto lenders, mortgage lenders, online-only lenders (FinTech), and other consumer lenders in the United States. We also distribute our solutions through most major resellers, secondary market players and sales agents. Beyond traditional lenders, we work with a variety of credit arrangers, such as auto dealers and peer-to-peer lenders. We provide solutions across every aspect of the lending lifecycle; customer acquisition and engagement, fraud and ID management, retention and recovery. Our products are focused on mitigating risk and include credit reporting, credit marketing, analytics and consulting, identity verification and authentication and debt recovery solutions.
Emerging Verticals: Emerging verticals include healthcare, insurance, collections, property management, public sector and other diversified markets. Our solutions in these verticals are also data-driven and address the entire customer lifecycle. We offer onboarding and transaction processing products, scoring and analytic products, marketing solutions, fraud and identity management solutions and customer retention solutions.
Within USIS, we leverage our comprehensive data assets, data matching expertise and predictive analytics to develop risk-based solutions:
Comprehensive Data Assets:    Our credit database contains the name and address of substantially all of the U.S. credit-active population, a listing of their existing credit relationships and their timeliness in repaying debt obligations. The information in our database is voluntarily provided by thousands of credit-granting institutions and other data furnishers. We enhance our data assets with alternative credit sources such as rental payments and utility payments. We also actively source information from courts, government agencies and other public records including suits, liens, judgments, bankruptcies, professional licenses, real property, vehicle ownership, other assets, driver violations, criminal records and contact information. Our databases are updated, reviewed and monitored on a regular basis.
Predictive Analytics:    Our predictive analytics capabilities allow us to analyze our proprietary datasets and provide insights to our customers to allow them to drive better business decisions. Our tools allow customers to investigate past behavior, reasonably predict the likelihood of future events and strategize actions based on those predictions. We have numerous tools such as predictive modeling and scoring, customer segmentation, benchmarking, forecasting, fraud modeling and campaign optimization, all of which cater to specific customer requirements. Our predictive analytics capabilities are developed by an analytics team with deep industry experience and a broad array of specialized qualifications.



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International
The International segment provides services similar to our USIS segment to businesses in select regions outside the United States. Depending on the maturity of the credit economy in each country, services may include credit reports, analytics and decisioning services and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. These services are offered to customers in a number of industries including financial services, retail credit, insurance, automotive, collections, public sector and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer solutions similar to those offered by our Consumer Interactive segment to help consumers proactively manage their personal finances. We report disaggregated revenue of our International segment for the following regions:
United Kingdom: In June 2018, we entered the world’s second largest credit market, the United Kingdom, when we acquired Callcredit. Callcredit is the second largest and fastest growing consumer credit bureau in the U.K. Founded in 2000, Callcredit is an information solutions company that, like TransUnion, provides data, analytics and technology solutions to help businesses and consumers make informed decisions across a diverse group of industries. Callcredit has achieved strong market success in the U.K. and serves a broad customer base of approximately 2,500 customers, including the top 10 banks and customers in attractive, high-growth segments such as alternative finance, digital commerce and the public sector. We expect to recognize substantial cost and revenue synergies as we continue to integrate Callcredit into our operations.
Canada: We have operated in Canada since 1989 and are one of only two nationwide consumer reporting agencies in the Canadian market. We operate across multiple verticals in Canada with leading positions in insurance and automotive with a strong and growing presence in financial services. Our Canadian customer base encompasses some of the largest companies in their verticals, including the top five largest banks, eight of the largest credit card issuers, eight of the top ten insurance companies and the top nine auto manufacturer lenders. We have recently grown our operations in Canada by acquiring new customers and we expect to continue to grow by introducing innovative new solutions, such as CreditVision and DecisionEdge, by increasing our presence with existing customers and by growing our market share with businesses and consumers.
Latin America: We have been active in Latin America since 1985 when we entered the Puerto Rican market, and we have operations in numerous Central and South American countries, including a strong presence in Colombia, where in February 2016 we acquired CIFIN, one of two primary credit bureaus in Colombia. Together with CIFIN, we collect data from more than 3,000 traditional and alternate data sources, process over 370 million transactions annually and can provide credit reports and scores on nearly all individuals and 2.8 million businesses. In Colombia, we have over three thousand customers across multiple industries, including the top five private banks and top two telecommunications companies and six of the top ten insurance companies. In Brazil, we are a leading provider in decisioning services with over 40 million transactions processed monthly across key industry verticals. We believe we have the most extensive alternative database in Brazil with information on over 200 million consumers and 39 million companies. Our customer base in Brazil includes seven of the top ten banks, fourteen of the top fifteen automotive insurance carriers, four of the top five telecommunications groups and the largest Latin America online sales site. We also have a significant credit bureau business in the Dominican Republic and a 25.69% ownership interest in Trans Union de México, S.A., the primary credit reporting agency in Mexico. In Guatemala, we maintain a centralized database that services Guatemala, Nicaragua and Costa Rica. We also acquired a Chilean credit reporting agency in 2010.
Africa: We launched our operations in Africa by entering South Africa in 1993. We are highly diversified and serve a variety of industries through traditional consumer credit reporting services, insurance solutions, auto information solutions, commercial credit information services and consumer solutions in South Africa. We provide risk and information solutions in Africa to the top four banks, six of the top seven retailers, five of the top six dealer groups, and the top six insurers. We manage the database of all personal claims, policy and vehicle information on behalf of the South African Insurance Association and offer innovative solutions throughout the policy lifecycle. Our extensive vehicle information database in South Africa, which has over 20 million vehicle records and includes unique vehicle identifier codes, differentiates us from other providers. Our leading presence in South Africa has allowed us to expand into surrounding countries including Kenya, Namibia, Swaziland, Botswana, Zambia, Rwanda, and Malawi. With the completion of our technology transformation in South Africa, we are able to leverage our big data platform to ingest, process and analyze data at increasingly higher speeds and volumes with greater accuracy and reliability.
India: In 2001, we partnered with prominent Indian financial institutions to create CIBIL, the first consumer and business credit reporting agency in India. In 2014, we acquired a majority interest in CIBIL and further increased our ownership interest to over 92% in 2017. We now include their results in our consolidated financial statements. We are CIBIL’s sole technology, analytics and decision services provider for its consumer risk information services business. In the absence of a comprehensive national ID, we created an innovative matching algorithm that allowed us to create the most extensive consumer credit database in India. Our credit database includes information on over 360 million consumers and over 20 million business entities.
In addition, we own or have access to several non-credit data sources that we use to enhance our solutions. These include the national voters’ registry with nearly 790 million records, as well as other sources such as the confirmed and suspected fraud registry,

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property registry and tax ID database. We offer a suite of risk and information solutions across the credit lifecycle for banks, telecommunication companies and insurance companies. Our suite of offerings includes analytics and decisioning solutions that enable our customers to make faster decisions. We are the primary risk and information solutions provider for financial institutions in India and our customers include all of the top twenty banks. We developed and launched the first generic credit score for India in 2007, which is the most widely used and adopted credit score across the financial services industry in India. In addition to our business solutions, we also offer consumer solutions such as online credit reports and scores.
Asia Pacific: Our operations in Asia Pacific include markets such as Hong Kong, Thailand, Singapore, Malaysia, China and the Philippines. We have had a majority ownership interest in the principal consumer credit reporting company in Hong Kong since 1998. We are a primary supplier of consumer credit data and value-added solutions to the top ten banks in Hong Kong. Additionally, we use our established operations in Hong Kong as a base to expand into other emerging markets in the Asia-Pacific region. We expect to continue to grow and transform the Hong Kong business by offering analytics, identity management, decisioning and consumer solutions. Asia Pacific is a growing market with increasing demand for credit driven by a rising middle class that offers significant growth potential in analytics and decisioning. Using Hong Kong as a base, we have leveraged our global intellectual property to expand to other countries in the Asia-Pacific region. For example, we launched the first consumer credit reporting agency in the Philippines in 2011 in partnership with the top-five credit card issuers in that market. We leverage our global intellectual property to scale very quickly and our solutions are now used for lending decisions by over 40% of the major banks in the Philippines. We have built credit risk scores for the National Credit Bureau of Thailand, in which we have a 12.25% ownership interest, Credit Bureau of Singapore and Credit Bureau of Malaysia. We also have a presence in China, where we currently provide fraud and authentication solutions to financial institutions.
Consumer Interactive
Consumer Interactive offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution and financial management. Our products are provided through user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.
Direct: We provide services directly to consumers, primarily on a subscription basis through websites and mobile applications. Product features include credit reports, credit scores and analysis, alerts to changes in credit information, debt analysis, debt and retirement calculators, identity protection services, and the ability to restrict third-party access to a consumer’s TransUnion and Equifax credit reports through our paid subscription offering. We complement these features with educational content that explains how credit and financial data is used in various industries to evaluate consumers and how a consumer’s financial choices impact this evaluation. Our integrated, data-driven marketing strategy spans multiple channels including paid search, online display and email, which allows us to efficiently acquire and retain high quality consumers.
Indirect: We also provide our services to partners who may offer them on a stand-alone basis or with their own or other branded services as a bundle to consumers, governmental agencies and businesses in support of fraud or credit protection, credit monitoring, identity authentication, or as a means to engage with and acquire consumers. We offer a broad suite of solutions that include many of the features, educational content and customer support available in our direct channel. We have taken a proactive and flexible partnership approach, which has resulted in long-term strategic relationships with some of the largest providers of credit information or identity protection services in the U.S. consumer market as well as with several large financial institutions. Through these partnerships, we have significantly expanded the overall market as well as the reach of our business.
Corporate
Corporate provides support services to each segment, holds investments and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the segments remain in Corporate. These costs are primarily enterprise-level costs and are administrative in nature.
Markets and Customers
We have a highly diversified customer base, with our largest customer accounting for approximately 4% of revenue in 2018 and 5% of revenue in 2017. Our top ten customers accounted for approximately 17% of revenue in 2018 and 19% in 2017. Our customers include companies across multiple industries, including financial services, healthcare and insurance. A substantial portion of our revenue is derived from companies in the financial services industry and from sales in the United States.
We leverage our comprehensive data assets, industry expertise and our next-generation common code-based technology, allowing us to build solutions once and deploy them multiple times across the different verticals and regions. We provide services to our customers through real-time, online delivery for services such as credit reports and predictive scores, in batch form for services that help our customers proactively acquire new customers, cross-sell to existing customers and help them monitor and manage risk, and through our software-as-a-service offerings, which include a number of solutions that help businesses interpret data,

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maximize reimbursements, visualize insights, predict model results and apply their customer-specific criteria to facilitate real-time automated decisions at the time of customer interaction, and through our websites to consumers, for various subscription-based and transaction-based products in the United States and in other regions we serve.
We have a presence in over 30 countries and territories across North America, Latin America, the United Kingdom, Africa, Asia Pacific and India. We market our services primarily through our own sales force. We have dedicated sales teams for our largest customers focused by industry group and geography. These dedicated sales teams provide strategic account management and direct support to customers. We use shared sales teams to sell our services to mid-size customers. These sales teams are based in our headquarters office and in field offices strategically located throughout the United States and abroad. Smaller customers’ sales needs are serviced primarily through call centers. We also market our services through indirect channels such as resellers, who sell directly to businesses and consumers. Our interactive direct-to-consumer services are sold primarily through our website.
Seasonality
Seasonality in the USIS segment is correlated to volumes of online credit data purchased by our financial services and mortgage customers, and our sales have generally been higher during the second and third quarters. Seasonality in our International segment is driven by local economic conditions and relevant macroeconomic market trends. In our Consumer Interactive segment, demand for our products is usually higher in the first half of the year, impacted by seasonality and our advertising spend.
Competition
The market for our services is highly competitive. We compete primarily on the basis of differentiated solutions, datasets, analytics capabilities, ease of integration with our customers’ technology, stability of services, customer relationships, innovation and price. We believe that we compete favorably in each of these categories. Our competitors vary based on the business segment, industry vertical and geographical market that our solutions address.
In our USIS segment, our competition generally includes Equifax, Experian and LexisNexis, in addition to certain competitors whom we only compete with in specific industry verticals. For example, we compete with FICO in the financial services vertical, with Solera and Verisk in the insurance vertical, with Experian Health, IMS Health, Inovalon and Trizetto in the healthcare vertical and with LifeLock and Experian in the fraud solutions market.
In our International segment, we generally compete with Equifax and Experian directly or indirectly through their subsidiaries or investments. We also compete with other competitors that may focus on a particular vertical, country or region.
In our Consumer Interactive segment, we generally compete with Equifax, Experian, FICO and LifeLock as well as emerging businesses, some of whom offer free credit information.
In addition to these competitors, we also compete with a number of other companies that may offer niche solutions catering to more specific customer requirements.
We believe the services we provide to our customers reflect our understanding of our customers’ businesses, the depth and breadth of our data and the quality of our analytics and decisioning capabilities. By integrating our services into our customers’ workflows, we ensure efficiency, continuous improvement and long-lasting relationships.
Information Technology
Technology
The continuous operation of our information technology systems is fundamental to our business. Our information technology systems collect, refine, access, process, deliver and store the data that is used to provide our solutions. Customers connect to our systems using a number of different technologies, including secured internet connections, virtual private networks and dedicated network connections. Control and management of the technology that operates our business is critical to our success and to this end, we directly control and manage all of our technology and infrastructure. Our technology relies on several third-party best-of-breed solutions as well as proprietary software and tools which we integrate into our platforms. Our control of our technology and infrastructure allows us to prioritize any changes and manage the roll-out of any upgrades or changes. We contract with various third-party providers to help us maintain and support our systems.
We have established technology Centers-of-Excellence that utilize similar tools and technology in order to provide scale and efficiency in modifying existing applications and developing new applications for our businesses. We deploy new development methodologies globally to enable rapid delivery of solutions and increase our speed-to-market. Our technology team includes both our own employees as well as additional resources from third-party providers.
 We believe that our technology is at the core of our innovative solutions, and we continually invest in our technology and thought leaders to be a market leader. We continue to make significant investments in our technology infrastructure to leverage the latest

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big data and analytics technologies. We believe that our next-generation platform enables us to be quicker, more efficient and more cost-effective across each step of our process chain, including receiving, consolidating and updating data, implementing analytics and decisioning capabilities, creating innovative solutions, delivering those solutions to our customers and incorporating customer feedback. Our platform has significant scale and capacity and enables us to deliver actionable information immediately to our customers. Our technology infrastructure gives us the ability to organize and handle high volumes of disparate data, maintain and improve our delivery speeds, increase availability and enhance our product development capabilities, while at the same time lowering our overall cost structure.
Data Centers and Business Continuity
In order to create redundancy and increase resiliency, we utilize multiple data centers in all of our major markets. We generally employ similar technologies and infrastructures in each data center to enable the optimal sharing of technical resources across geographies.
We maintain a framework for business continuity that includes written policies requiring each business and operating unit to identify critical functions. Our businesses and operating units have processes in place that are designed to maintain such functions in case there is a disruptive event. We also have a specific disaster recovery plan that will take effect if critical infrastructure or systems fail or become disabled.
As part of our program, each business unit’s continuity plan is periodically updated and stored in a centralized database. These plans are monitored and reviewed by our compliance team. From time to time, our compliance team tests one or more of these plans using desktop exercises or in connection with actual events. We also periodically confirm the state of preparedness of our most critical disaster recovery procedures. We maintain systems redundancy plans for our primary U.S. data centers that allow for the transfer of capacity between geographically disbursed environments in the event there is a failure of computer hardware or a loss of our primary telecommunications lines or power sources. On an enterprise basis, our systems are designed to recover most of our operational capacity in a scenario where our primary data centers become inoperable.
Security
The security and protection of non-public consumer information is one of our highest priorities. We have a written information security program based on the ISO/IEC 27001:2013 standard with dedicated personnel charged with overseeing that program. Our information security program incorporates continuous improvement methodology and evaluates threats, industry events and asset values to help us appropriately adjust security controls. We employ a wide range of physical and technical safeguards that are designed to provide security around the collection, storage, use, access and delivery of information we have in our possession. These safeguards include firewalls, intrusion protection and monitoring, anti-virus and malware protection, vulnerability threat analysis, management and testing, advanced persistent threat monitoring, forensic tools, encryption technologies, data transmission standards, contractual provisions, customer credentialing, identity and access management, data loss, access and anomaly reports and training programs for associates. We, with other global financial services organizations, including U.S. nationwide consumer credit reporting companies, share cyber threat and attack information through our participation in the Financial Information Sharing and Analysis Council (“FS-ISAC”) and other forums that may be targeted at our industry to better understand and monitor our systems and our connectivity to our customers, as well as how specific solutions that were implemented to protect against such attacks are performing. We undergo SSAE 16 reviews annually, and several of our major customers routinely audit our security controls. We conduct an annual Payment Card Industry Data Security Standard (PCI-DSS) compliance program and remain PCI certified. Additionally, we also hire third parties to conduct independent information security assessments.
Intellectual Property and Licensing Agreement
Our intellectual property is a strategic advantage and protecting it is critical to our business. Because of the importance of our intellectual property, we treat our brand, software, technology, know-how, concepts and databases as proprietary. We attempt to protect our intellectual property rights under the trademark, copyright, patent, trade secret and other intellectual property laws of the United States and other countries, as well as through the use of licenses and contractual agreements, such as nondisclosure agreements. While we hold various patents, we do not rely primarily on patents to protect our core intellectual property. Through contractual arrangements, disclosure controls and continual associate training programs, our principal focus is to treat our key proprietary information and databases as trade secrets. Also, we have registered certain trademarks, trade names, service marks, logos, internet URLs and other marks of distinction in the United States and foreign countries, the most important of which is the trademark TransUnion name and logo. This trademark is used in connection with most of the services we sell and we believe it is a known mark in the industry.
We own proprietary software that we use to maintain our databases and to develop and deliver our services. We develop and maintain business-critical software that transforms data furnished by various sources into databases upon which our services are built. We also develop and maintain software to manage our consumer interactions, including providing disclosures and resolving disputes. In all business segments, we develop and maintain software applications that we use to deliver services to our customers,

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through a software-as-a-service model. In particular, we develop and maintain decisioning technology infrastructure that we host and integrate into our customers’ workflow systems to improve the efficiency of their operations.
We license certain data and other intellectual property to other companies on arms-length terms that are designed to protect our rights to our intellectual property. We generally use standard licensing agreements and do not provide our intellectual property to third parties without a nondisclosure and license agreement in place.
We also license certain intellectual property that is important for our business from third parties. For example, we license credit-scoring algorithms and the right to sell credit scores derived from those algorithms from third parties for a fee.
Employees
As of December 31, 2018, we employed approximately 7,100 employees throughout the world. Other than certain employees in Brazil, none of our employees is currently represented by a labor union or have terms of employment that are subject to a collective bargaining agreement. We consider our relationships with our employees to be good and have not experienced any work stoppages.
Our History
TransUnion Corp. was spun-off from its parent, Marmon Holdings, Inc. in 2005 to the Pritzker family. On June 15, 2010, an affiliate of Madison Dearborn Partners, LLC, on behalf of certain of its investment funds, acquired 51.0% of our outstanding common stock from the Pritzker family and certain employee and director stockholders of TransUnion Corp. On April 30, 2012, TransUnion Corp. was acquired by TransUnion Holding Company, Inc., substantially all the common stock of which was owned by Advent-TransUnion Acquisition Limited Partnership, and GS Capital Partners VI Fund, L.P., GS Capital Partners VI Parallel, L.P., Spartan Shield Holdings, GS Capital Partners Offshore Fund, L.P., GS Capital Partners VI GmbH & Co. KG, MBD 2011 Holding, L.P., Opportunity Partners Offshore-B Co-Invest AIV, L.P., and became TransUnion Holding Company, Inc.’s wholly-owned subsidiary. On March 26, 2015, TransUnion Holding Company, Inc. was renamed TransUnion and TransUnion Corp. was renamed TransUnion Intermediate Holdings, Inc. On June 30, 2015, we completed the initial public offering of 33,977,273 shares of our common stock, including shares sold to the underwriters pursuant to their over-allotment option, at a public offering price of $22.50 per share. Our stock trades on the New York Stock Exchange under the ticker “TRU.”
Legal and Regulatory Matters
Compliance with legal and regulatory requirements is a top priority. We are subject to numerous laws governing the collection, protection, dissemination and use of the non-public personal information we have in our possession. These laws are enforced by U.S. federal, state and local regulatory agencies, foreign regulatory authorities and, in some instances, through private civil litigation. Our failure to comply with applicable legal and regulatory requirements could have a negative impact on our financial condition or overall operations.
We proactively manage our compliance with laws and regulations through a dedicated legal and compliance team that is generally locally sourced and tasked to ensure that enterprise standards are followed. To that end, we have legal and compliance personnel situated at business operations in the United States, the United Kingdom, Canada, Brazil, Colombia, Hong Kong, India and South Africa. All such personnel report to the functional department leaders, who are located in our corporate offices in Chicago, Illinois. Through the legal and compliance functions, we provide training to our associates, monitor all material laws and regulations, establish compliance policies, routinely review internal processes to determine whether business practice changes are warranted, assist in the development of new services, and promote regular meetings with principal regulators and legislators to establish transparency in our operations and create a means to understand and react should any issues arise.

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U.S. Data and Privacy Protection
Our U.S. operations are subject to numerous laws and regulations that regulate, among other areas, privacy, data security, consumer protection and the use of consumer credit or an individual’s healthcare information. Certain of these laws provide for civil and criminal penalties for the unauthorized release of, or access to, this protected information. The laws and regulations that affect our U.S. business include, but are not limited to, the following:
Fair Credit Reporting Act (the FCRA): FCRA applies to consumer credit reporting agencies, including us, as well as data furnishers and users of consumer reports. FCRA promotes the accuracy, fairness and privacy of information in the files of consumer reporting agencies that engage in the practice of assembling or evaluating information relating to consumers for certain specified purposes. FCRA limits what information may be reported by consumer reporting agencies, limits the distribution and use of consumer reports, establishes consumer rights to access and dispute their own credit files, requires consumer reporting agencies to make a free annual credit report available to consumers and imposes many other requirements on consumer reporting agencies, data furnishers and users of consumer report information. Violation of FCRA can result in civil and criminal penalties. The law contains an attorney fee shifting provision to provide an incentive to consumers to bring individual or class action lawsuits against a consumer reporting agency for violations of FCRA. Regulatory enforcement of FCRA is under the purview of the Federal Trade Commission (the “FTC”), the Consumer Financial Protection Bureau (the “CFPB”) and state attorneys general, acting alone or in concert with one another.
State Fair Credit Reporting Acts: Many states have enacted laws with requirements similar to FCRA. Some of these state laws impose additional, or more stringent, requirements than FCRA. FCRA preempts some of these state laws but the scope of preemption continues to be defined by the courts.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”): A central purpose of the Dodd-Frank Act is to “protect consumers from abusive financial services practices, and for other purposes.” Title X of the Dodd-Frank Act created the CFPB. The CFPB, through rulemaking, confirmed that the Company is subject to the examination and supervision of the CFPB, and such examinations began in 2012. In addition to transferring authority under certain existing laws to the CFPB and providing it with examination and supervisory authority, the Dodd-Frank Act also prohibits unfair, deceptive or abusive acts or practices (“UDAAP”) with respect to consumer financial products and provides the CFPB with authority to enforce those provisions. The CFPB has stated that its UDAAP authority may allow it to find statutory violations even where a specific regulation does not prohibit the relevant conduct, or prior published regulatory guidance or judicial interpretation has found the activity to be in accordance with law.
The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “EGRRCPA”): In May 2018, Congress passed the EGRRCPA, which amended certain parts of the Dodd-Frank Act, FCRA and other U.S. federal laws applicable to us. Specifically, FCRA was amended to require that a credit reporting agency provide consumers with at least one year to submit a fraud alert to the credit reporting agency. The law also amended the FCRA for purposes of implementing a national security freeze that credit reporting agencies must provide free of charge upon formal request by a consumer. The credit freeze prevents credit reporting agencies from disclosing the content of a consumer report. Credit reporting agencies must also notify consumers of this right and provide instructions on how to implement and lift a credit freeze. The law increases veteran credit protection by implementing a process to remove inaccurate medical information and veteran medical debt and creates standards for verifying veteran medical debt. In addition, credit reporting agencies are required to provide free credit reporting monitoring, which requires notifying the consumer of any changes to his or her file, to any active duty military consumer.
State unfair and deceptive practices acts and practices laws: Many state have enacted statutes that prohibit unfair and deceptive acts and practices, relating to, among other things, marketing, disclosures and billing practices within the state or directed to consumers within the state. The Company and others in the industry may be subject to these laws with respect to the marketing of consumer credit information products.
Gramm-Leach Bliley Act (the “GLBA”): The GLBA regulates, among other things, the receipt, use and disclosure of non-public personal information of consumers that is held by financial institutions, including us. Several of our datasets are subject to GLBA provisions, including limitations on the use or disclosure of the underlying data and rules relating to the technological, physical and administrative safeguarding of non-public personal information. Violation of the GLBA can result in civil and criminal liability. Regulatory enforcement of the GLBA is under the purview of the FTC, the CFPB, the federal prudential banking regulators, the SEC and state attorneys general, acting alone or in concert with each other.
Drivers’ Privacy Protection Act (the “DPPA”): The DPPA requires all states to safeguard certain personal information included in licensed drivers’ motor vehicle records from improper use or disclosure. Protected information includes the driver’s name, address, phone number, Social Security Number, driver identification number, photograph, height, weight, gender, age, certain medical or disability information and, in some states, fingerprints, but does not include information on vehicular accidents, driving violations and driver’s status. The DPPA limits the use of this information sourced from State departments of motor vehicles to certain specified purposes, and does not apply if a driver has consented to the

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release of their data. The DPPA imposes criminal fines for non-compliance and grants individuals a private right of action, including actual and punitive damages and attorneys’ fees. The DPPA provides a federal baseline of protections for individuals, and is only partially preemptive, meaning that except in a few narrow circumstances, state legislatures may pass laws to supplement the protections made by the DPPA. Many States are more restrictive than the federal law.
Data security breach laws: All states have adopted data security breach laws that may require notice be given to affected consumers in the event of a breach of personal information, and in some cases the provision of additional benefits such as free credit monitoring to affected individuals. Some of these laws require additional data protection measures over and above the GLBA data safeguarding requirements. If data within our system is compromised by a breach, we may be subject to provisions of various state security breach laws, including regulatory investigations or enforcement actions from state attorneys general, who enforce state data breach or unfair and deceptive practices laws.
Identity theft laws: Under the federal EGRRCPA, consumers can place a security freeze on their credit reports to prevent others from opening new accounts or obtaining new credit in their name and obtain one-year of fraud alerts free of charge. In addition, most states and the District of Columbia have passed laws that give consumers the right to place a security freeze on their credit report. Generally, these state laws require us to respond to requests for a freeze within a certain period of time, to send certain notices or confirmations to consumers in connection with a security freeze and to unfreeze files upon request within a specified time period.
Federal Trade Commission Act (the “FTC Act”): The FTC Act prohibits unfair methods of competition and unfair or deceptive acts or practices. We must comply with the FTC Act when we market our services, such as consumer credit monitoring services through our Consumer Interactive segment. Our data collection, use and disclosure practices and the security measures we employ to safeguard the personal data of consumers could also be subject to the FTC Act, and our data practices or our failure to safeguard data adequately may subject us to regulatory scrutiny or enforcement action. There is no private right of action under the FTC Act.
 The Credit Repair Organizations Act (“CROA”): CROA regulates companies that claim to be able to assist consumers in improving their credit standing. Some courts have applied CROA to credit monitoring services offered by consumer reporting agencies and others. CROA allows for a private right of action and permits consumers to recover all money paid for alleged “credit repair” services in the event of violation. We, and others in our industry, have settled purported consumer class actions alleging violations of CROA without admitting or denying liability.
The Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”): HIPAA and HITECH require companies to implement reasonable safeguards to prevent intentional or unintentional misuse or wrongful disclosure of protected health information. In connection with receiving data from and providing services to healthcare providers, we may handle data subject to HIPAA and HITECH requirements. We obtain protected health information from healthcare providers and payers of healthcare claims that are subject to the privacy, security and transactional requirements imposed by HIPAA. We are frequently required to secure HIPAA-compliant “business associate” agreements with the providers and payers who supply data to us. As a business associate, we are obligated to limit our use and disclosure of health-related data to certain statutorily permitted purposes, HIPAA regulations, as outlined in our business associate agreements, and to preserve the confidentiality, integrity and availability of this data. HIPAA and HITECH also require, in certain circumstances, the reporting of breaches of protected health information to affected individuals and to the United States Department of Health and Human Services. A violation of any of the terms of a business associate agreement or noncompliance with HIPAA or HITECH data privacy or security requirements could result in administrative enforcement action and/or imposition of statutory penalties by the United States Department of Health and Human Services or a state Attorney General. HIPAA and HITECH requirements supplement but do not preempt state laws regulating the use and disclosure of health-related information; state law remedies, which can include a private right of action, remain available to individuals affected by an impermissible use or disclosure of health-related data.
We are also subject to U.S. federal and state laws that are generally applicable to any U.S. business with national or international operations, such as antitrust laws, the Foreign Corrupt Practices Act, the Americans with Disabilities Act and various employment laws. We continuously monitor U.S. federal and state legislative and regulatory activities that involve credit reporting, data privacy and security, and other relevant subjects to identify issues in order to remain in compliance with all applicable laws and regulations.
International Data and Privacy Protection
We are subject to data protection, privacy and consumer credit laws and regulations in the foreign countries where we conduct business. These laws and regulations include, but are not limited to, the following:
United Kingdom: Data Protection Act (the “DPA”) and the Privacy and Electronic Communications Regulation (the “PECR”) - The DPA is the key legislation that governs all credit reporting agency (“CRA”) activities and the PECR compliments it, setting out more specific privacy rights on electronic communications. PECR was most recently amended in 2016, limiting use cases of personal data for prospecting/origination purposes. The provision of credit referencing

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services is a regulated activity which is authorized by the Financial Conduct Authority (the “FCA”). The FCA has regulated CRAs since 2014 with the objectives of protecting consumers, protecting financial markets and promoting competition. Callcredit, Experian and Equifax were granted full FCA authorization in early 2016. The Information Commissioners Office (the “ICO”) is an independent body set up to uphold information rights, and oversees the DPA and the PECR. In addition to the DPA and the PECR, there are two key changes to be implemented within the regulatory environment: the General Data Protection Regulation (the “GDPR”); and Open Banking. Overall these changes are expected to have a neutral to positive impact on the CRA market. GDPR, which became effective May 25, 2018, aims to strengthen and unify data protection for all individuals within the European Union, and will replace the existing DPA. The GDPR will change the way personal data can be used and gives individuals significantly more power to access their information, bolsters consumers rights around automated processing of data (i.e., lenders will be required to provide an explanation on decisions), and also gives individuals the power to get their personal data erased if it is no longer necessary for the purpose it was collected, if consent is withdrawn, or if it was unlawfully processed. Ultimately, the GDPR will increase the cost of customer data management and data collection due to more rigorous regulations. Data retention periods are already defined and deletions automated so there will be no impact to CRA’s operations. The GDPR will enable the ICO to fine non-compliant businesses. The GDPR states offenses could result in fines up 2% to 4% of a firm’s global revenue, depending on severity of the offense. TransUnion was already subject to the GDPR and is working to become fully compliant. Open Banking aims to improve customer experience and to increase competition in the banking sector. Consumers can share transaction data with third parties via application program interfaces (“APIs”) to identify best products and take up multi-bank products. As part of Open Banking, the Second Payment Services Directive came in effect in January 2018 and affects the payments industry, allowing merchants to retrieve a customer’s account data from their bank with their consent. The implementation of Open Banking platforms will increase the number of payment service providers available to consumers and will expand beyond traditional banks.
South Africa: National Credit Act of 2005 (the “NCA”) - The NCA and its implementing regulations govern credit bureaus and consumer credit information. The NCA sets standards for filing, retaining and reporting consumer credit information. The NCA also defines consumers’ rights with respect to accessing their own information and addresses the process for disputing information in a credit file. The NCA is enforced by The National Credit Regulator who has authority to supervise and examine credit bureaus.
Canada: Personal Information Protection and Electronic Documents Act of 2000 (“PIPEDA”) - The PIPEDA and substantially similar provincial laws govern how private sector organizations collect, use and disclose personal information in the course of commercial activities. The PIPEDA gives individuals the right to access and request correction of their personal information collected by such organizations. The PIPEDA requires compliance with the Canadian Standard Association Model Code for the Protection of Personal Information. Most Canadian provinces also have laws dealing with consumer reporting. These laws typically impose an obligation on credit reporting agencies to have reasonable processes in place to maintain the accuracy of the information, place limits on the disclosure of the information and give consumers the right to have access to, and challenge the accuracy of, the information.
India: Credit Information Companies Regulation Act of 2005 (“CICRA”) - The CICRA requires entities that collect and maintain personal credit information to ensure that it is complete, accurate and protected. Entities must adopt certain privacy principles in relation to collecting, processing, preserving, sharing and using credit information. In addition, India has privacy legislation that would allow individuals to sue for damages in the case of a data breach, if the entity negligently failed to implement “reasonable security practices and procedures” to protect personal data.
Hong Kong: Personal Data (Privacy) Ordinance (“PDPO”) and The Code of Practice on Consumer Credit Data (“COPCCD”) - The PDPO and the COPCCD regulate the operation of consumer credit reference agencies. They prescribe the methods and security controls under which credit providers and credit reference agencies may collect, access and manage credit data. In April 2011, the COPCCD was amended to permit credit providers to share limited positive mortgage payment data. In June 2012, the PDPO was amended to increase penalties and create criminal liabilities for repeat contravention of PDPO under which enforcement notices have been served.
Colombia: The Colombian Financial Data Protection Regime (Law 1266 of 2008) regulates the collection, use and transfer of personal data pertaining to financial services, including credit reporting. The Colombian General Data Protection Regime (Law 1581 of 2012 and Decree 1377 of 2013) covers regulation of all other personal data.  Both of these regimes have applicability to credit reporting services in Colombia and together address obligations of information furnishers, database owners, consumer right of access, consumer consent and permitted information disclosures. Regulatory enforcement primarily rests with the Financial Superintendence of Colombia and the Colombia Data Protection Authority (Superintendence of Industry and Commerce).
We are also subject to various laws and regulations generally applicable to all businesses in the other countries where we operate.



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Available Information
Through our corporate website under the heading “About Us - Investor Relations,” at http://www.transunion.com, you can access electronic copies of our governing documents free of charge, including our Corporate Governance Guidelines and the charters of the committees of our Board of Directors. In addition, through our website, you can access the documents we file with the U.S. Securities and Exchange Commission (SEC), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and all amendments thereto, as soon as reasonably practicable after we file or furnish them. You also may request printed copies of our SEC filings or governance documents, free of charge, by writing to our corporate secretary at the address on the cover of this report. Information contained on our website is not incorporated herein by reference and should not be considered part of this report.
In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Our corporate headquarters are located at 555 West Adams Street, Chicago, Illinois 60661, and our telephone number is (312) 985-2000.


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ITEM 1A. RISK FACTORS
You should carefully consider the following risks as well as the other information included in this report, including “Selected Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. However, the selected risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations.
We have a substantial amount of debt which could adversely affect our financial position and prevent us from fulfilling our obligations under the debt instruments.
As of December 31, 2018, the book value of our debt was approximately $4.0 billion consisting of outstanding borrowings under Trans Union LLC’s senior secured credit facility. We may also incur significant additional indebtedness in the future. Our substantial indebtedness may:
make it difficult for us to satisfy our financial obligations, including with respect to our indebtedness;
limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes;
limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes;
require us to use a substantial portion of our cash flow from operations to make debt service payments;
expose us to the risk of increased interest rates as certain of our borrowings, including Trans Union LLC’s senior secured credit facility, are at variable rates of interest;
limit our ability to pay dividends;
limit our flexibility to plan for, or react to, changes in our business and industry;
place us at a competitive disadvantage compared with our less-leveraged competitors; and
increase our vulnerability to the impact of adverse economic and industry conditions.
In addition, the credit agreement governing Trans Union LLC’s senior secured credit facility contains restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our debt.
Despite our current level of indebtedness, we may still be able to incur additional indebtedness. This could further the risks associated with our substantial indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the credit agreement governing our debt limit, but do not prohibit, us or our subsidiaries from incurring additional indebtedness, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If we incur any additional debt, the priority of that debt may impact the ability of existing debt holders to share ratably in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of us, subject to collateral arrangements. These restrictions will also not prevent us from incurring obligations that do not constitute indebtedness. We also have the ability to request incremental loans on the same terms under the existing senior secured credit facility up the greater of $675.0 million and 100% of consolidated EBITDA, and may incur additional incremental loans so long as the senior secured net leverage ratio does not exceed 4.25 to 1.0, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings. If new indebtedness is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.
We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments due on our debt obligations or to refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic, industry and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control as discussed above. Our total scheduled principal repayments of debt made in 2018 and 2017 were $54.3 million and $32.5 million, respectively. Our total interest expense for 2018 and 2017 was $137.5 million and $87.6 million, respectively. We may be unable to maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
If our cash flow and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The credit agreement governing Trans Union LLC’s senior secured credit facility

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restricts our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. In addition, under the covenants of the credit agreement governing our senior secured credit facility, TransUnion Intermediate is restricted from making certain payments, including dividend payments to TransUnion, subject to certain exceptions.
Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations.
If we cannot make our scheduled debt payments, we will be in default and all outstanding principal and interest on our debt may be declared due and payable, the lenders under Trans Union LLC’s senior secured credit facility could terminate their commitments to loan money, Trans Union LLC’s secured lenders (including the lenders under Trans Union LLC’s senior secured credit facility) could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.
Our revenues are concentrated in the U.S. consumer credit and financial services industries. When these industries or the broader financial markets experience a downturn, demand for our services and revenues may be adversely affected.
Our largest customers, and therefore our business and revenues, depend on favorable macroeconomic conditions and are impacted by the availability of credit, the level and volatility of interest rates, inflation, employment levels, consumer confidence and housing demand. In addition, a significant amount of our revenues are concentrated among certain customers and in distinct geographic regions, particularly in the United States. Our product offerings are also concentrated by varying degrees across different industries, particularly the financial services, healthcare and insurance industries in the United States where we derived more than 75% of our USIS segment revenues in 2018. Our customer base suffers when financial markets experience volatility, illiquidity and disruption, which has occurred in the past and which could reoccur, and the potential for increased and continuing disruptions going forward, present considerable risks to our business and revenue. Changes in the economy have resulted, and may continue to result, in fluctuations in volumes, pricing and operating margins for our services. If businesses in these industries experience economic hardship, we cannot assure you that we will be able to generate future revenue growth. In addition, if consumer demand for financial services and products and the number of credit applications decrease, the demand for our services could also be materially reduced. These types of disruptions could lead to a decline in the volumes of services we provide our customers and could negatively impact our revenue and results of operations.
We are subject to significant competition in the markets in which we operate and we may face significant competition in the new markets that we plan to enter.
The market for our services is highly competitive, and we may not be able to compete successfully against our competitors, which could impair our ability to sell our services. We compete on the basis of differentiated solutions, datasets, analytics capabilities, ease of integration with our customers’ technology, stability of services, customer relationships, innovation and price. Our regional and global competitors vary in size, financial and technical capability, and in the scope of the products and services they offer. Some of our competitors may be better positioned to develop, promote and sell their products. Larger competitors may benefit from greater cost efficiencies and may be able to win business simply based on pricing. We consistently face downward pressure on the pricing of our products, which could result in reduced prices for certain products, or a loss of market share. Our competitors may also be able to respond to opportunities before we do, by taking advantage of new technologies, changes in customer requirements or market trends.
Our Consumer Interactive segment experiences competition from emerging companies. For example, prior to 2008, Equifax and Experian were our top competitors for direct-to-consumer credit services, such as credit reports and identity theft protection services. In the past several years, there has been an influx of other companies offering similar services, some of whom leverage the free services mandated by law to be provided by nationwide credit reporting agencies. These developments have resulted in increased competition.
Many of our competitors have extensive customer relationships, including relationships with our current and potential customers. New competitors, or alliances among competitors, may emerge and gain significant market share. Existing or new competitors may develop products and services that are superior to ours or that achieve greater market acceptance. If we are unable to respond to changes in customer requirements as quickly and effectively as our competition, our ability to expand our business and sell our services may be adversely affected.
Our competitors may be able to sell services at lower prices than us, individually or as part of integrated suites of several related services. This ability may cause our customers to purchase from our competitors rather than from us. Price reductions by our competitors could also negatively impact our operating margins or harm our ability to obtain new long-term contracts or renewals of existing contracts on favorable terms. Additionally, some of our customers may develop products of their own that replace the products they currently purchase from us, which would result in lower revenue.

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We also expect that there will be significant competition in the new markets that we plan to enter. We cannot assure you that we will be able to compete effectively against current and future competitors. If we fail to successfully compete, our business, financial condition and results of operations may be adversely affected.
Our relationships with key long-term customers may be materially diminished or terminated.
We have long-standing relationships with a number of our customers, many of whom could unilaterally terminate their relationship with us or materially reduce the amount of business they conduct with us at any time. Our customer agreements relating to our core credit reporting service offered through our USIS segment are terminable upon advance written notice (typically ranging from 30 days to six months) by either us or the customer, which provides our customers with the opportunity to renegotiate their contracts with us or to award more business to our competitors.
We also provide our services to business partners who may combine them with their own or other branded services to be offered as a bundle to consumers, governmental agencies and businesses in support of fraud or credit protection, credit monitoring, identity authentication, insurance or credit underwriting, and collections. Some of these partners are the largest providers of credit information or identity protection services to the U.S. consumer market.
Market competition, business requirements, financial condition and consolidation through mergers or acquisitions, could adversely affect our ability to continue or expand our relationships with our customers and business partners. There is no guarantee that we will be able to retain or renew existing agreements, maintain relationships with any of our customers or business partners on acceptable terms or at all, or collect amounts owed to us from insolvent customers or business partners. The loss of one or more of our major customers or business partners could adversely affect our business, financial condition and results of operations.
Data security and integrity are critically important to our business, and cybersecurity incidents, including cyberattacks, breaches of security, unauthorized access to or disclosure of confidential information, business disruption, or the perception that confidential information is not secure, could result in a material loss of business, regulatory enforcement, substantial legal liability and/or significant harm to our reputation.
As a nationwide consumer credit reporting company in the United States and a global provider of risk and information solutions, we collect, store and transmit a large amount of sensitive and confidential consumer information on over one billion consumers, including financial information, personally identifiable information and protected health information. We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting highly obscure security vulnerabilities or sophisticated attack methods. These cyberattacks can take many forms, but they typically have one or more of the following objectives, among others:
obtain unauthorized access to confidential consumer information;
manipulate or destroy data; or
disrupt, sabotage or degrade service on our systems.
We experience numerous attempts to access our computer systems, software, networks, data and other technology assets on a daily basis, none of which has resulted in a material data incident or otherwise had any material impact on our business, operations or financial results.
The security and protection of non-public consumer information is a top priority for TransUnion. We devote significant resources to maintain and regularly upgrade the wide array of physical, technical, and contractual safeguards we employ to provide security around the collection, storage, use, access and delivery of information we have in our possession. We cannot assure you that our systems, databases and services will not be compromised or disrupted in the future, whether as a result of deliberate attacks by malicious actors, breaches due to employee error or malfeasance, or other disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophic events. We work to monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.
While recent, highly publicized cybersecurity incidents, including the data incident announced by Equifax on September 7, 2017, have heightened consumer awareness of cybersecurity risks, they have also emboldened individuals or groups to target our systems even more aggressively.
The preventive actions we take to address cybersecurity risk, including protection of our systems and networks, may be insufficient to repel or mitigate the effects of cyberattacks in the future as it may not always be possible to anticipate, detect or recognize threats to our systems, or to implement effective preventive measures against all cybersecurity risks. This is because, among other things:
the techniques used in cyberattacks change frequently and may not be recognized until after the attacks have succeeded;
cyberattacks can originate from a wide variety of sources, including sophisticated threat actors involved in organized crime, sponsored by nation-states, or linked to terrorist or hacktivist organizations; and

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third parties may seek to gain access to our systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers or other users.
Unauthorized disclosure, loss or corruption of our data or inability of our customers to access our systems could disrupt our operations, subject us to substantial regulatory and legal proceedings and potential liability, result in a material loss of business and/or significantly harm our reputation.
We may not be able to immediately address the consequences of a cybersecurity incident because a successful breach of our computer systems, software, networks or other technology assets could occur and persist for an extended period of time before being detected due to, among other things:
the breadth and complexity of our operations and the high volume of transactions that we process;
the large number of customers, counterparties and third-party service providers with which we do business;
the proliferation and increasing sophistication of cyberattacks; and
the possibility that a third party, after establishing a foothold on an internal network without being detected, might obtain access to other networks and systems.
The extent of a particular cybersecurity incident and the steps that we may need to take to investigate it may not be immediately clear, and it may take a significant amount of time before such an investigation can be completed and full and reliable information about the incident is known. While such an investigation is ongoing, we may not necessarily know the extent of the harm or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, any or all of which could further increase the costs and consequences of a cybersecurity incident.
Due to concerns about data security and integrity, a growing number of legislative and regulatory bodies have adopted consumer notification and other requirements in the event that consumer information is accessed by unauthorized persons and additional regulations regarding the use, access, accuracy and security of such data are possible. In the United States, we are subject to federal and state laws that provide for more than 50 disparate notification regimes. In the event of unauthorized access, our failure to comply with the complexities of these various regulations could subject us to regulatory scrutiny and additional liability.
If we experience system failures, personnel disruptions or capacity constraints, or our customers do not modify their systems to accept new releases of our distribution programs, the delivery of our services to our customers could be delayed or interrupted, which could harm our business and reputation and result in the loss of revenues or customers.
Our ability to provide reliable service largely depends on our ability to maintain the efficient and uninterrupted operation of our computer network, systems and data centers, some of which have been outsourced to third-party providers. In addition, we generate a significant amount of our revenues through channels that are dependent on links to telecommunications providers. Our systems, personnel and operations could be exposed to damage or interruption from fire, natural disasters, power loss, war, terrorist acts, civil disobedience, telecommunication failures, computer viruses, DDoS attacks or human error. We may not have sufficient redundant operations to cover a loss or failure of our systems in a timely manner. Any significant interruption could severely harm our business and reputation and result in a loss of revenue and customers. Additionally, from time to time we send our customers new releases of our distribution programs, some of which contain security updates. Any failure by our customers to install these new releases could expose our customers to computer security risks.
We could lose our access to data sources which could prevent us from providing our services.
Our services and products depend extensively upon continued access to and receipt of data from external sources, including data received from customers, strategic partners and various government and public records repositories. In some cases, we compete with our data providers. Our data providers could stop providing data, provide untimely data or increase the costs for their data for a variety of reasons, including a perception that our systems are insecure as a result of a data security incidents, budgetary constraints, a desire to generate additional revenue or for regulatory or competitive reasons. We could also become subject to increased legislative, regulatory or judicial restrictions or mandates on the collection, disclosure or use of such data, in particular if such data is not collected by our providers in a way that allows us to legally use the data. If we were to lose access to this external data or if our access or use were restricted or were to become less economical or desirable, our ability to provide services could be negatively impacted, which would adversely affect our reputation, business, financial condition and results of operations. We cannot provide assurance that we will be successful in maintaining our relationships with these external data source providers or that we will be able to continue to obtain data from them on acceptable terms or at all. Furthermore, we cannot provide assurance that we will be able to obtain data from alternative sources if our current sources become unavailable.
Our business is subject to various governmental regulations, laws and orders, compliance with which may cause us to incur significant expenses or reduce the availability or effectiveness of our solutions, and the failure to comply with which could subject us to civil or criminal penalties or other liabilities.
Our businesses are subject to regulation under the FCRA, the GLBA, the DPPA, HIPAA, HITECH, the Dodd-Frank Act, the FTC Act and various other international, federal, state and local laws and regulations. See “Business-Legal and Regulatory Matters”

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for a description of select regulatory regimes to which we are subject. These laws and regulations, which generally are designed to protect the privacy of the public and to prevent the misuse of personal information available in the marketplace, are complex, change frequently and have tended to become more stringent over time. We already incur significant expenses in our attempt to ensure compliance with these laws.
Currently, public concern is high with regard to the operation of credit reporting agencies in the United States, as well as the collection, use, accuracy, correction and sharing of personal information, including Social Security numbers, dates of birth, financial information, medical information, department of motor vehicle data and other behavioral data. In addition, many consumer advocates, privacy advocates, legislatures and government regulators believe that existing laws and regulations do not adequately protect privacy and have become increasingly concerned with the collection and use of this type of personal information. As a result, several U.S. states have recently introduced and passed legislation to expand data security breach notification rules and to mirror some of the protections provided by the General Data Protection Regulation (“GDPR”) in the United Kingdom. These state laws are intended to provide consumers with greater transparency and control over their personal data. For example, the California Consumer Privacy Act of 2018 (the “CCPA”), when effective, will apply to certain businesses that collect personal information from California residents and establishes several consumer rights, including a right to know what personal information is being collected about them and whether and to whom it is sold, a right to access their personal information and have it deleted, a right to opt out of the sale of their personal information, and a right to equal service and price regardless of exercise of these rights. While the CCPA includes specific exemptions for practices and activities regulated by GLBA or FCRA, including our credit reporting and financial services business lines, it will, among other things, require new disclosures to California consumers, impose new rules for collecting or using information about minors, and afford consumers new abilities to opt out of certain disclosures of personal information in other portions of our business that are not regulated by GLBA or FCRA. California legislators have stated that they intend to propose amendments to the CCPA before it goes into effect, and it remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. The U.S. Congress may also pass a law to pre-empt all or part of the CCPA. Implementing regulations from the Attorney General that may clarify the CCPA are not due until July 1, 2020 and additional amendments to the CCPA may be signed into law before then.
The data incident announced by Equifax on September 7, 2017, resulted in significantly increased legislative and regulatory activity at the federal and state levels as lawmakers and regulators continue to propose a wide range of further restrictions on the collection, dissemination or commercial use of personal information, information security standards, data security incident disclosure standards and requirements to provide certain of our services to consumers free of charge. This and additional legislative or regulatory efforts in the United States, or action by Executive Order of the President of the United States, could further regulate credit reporting agencies and the collection, use, communication, access, accuracy, obsolescence, sharing, correction and security of this personal information. Similar initiatives are underway in various other countries in which we do business. In addition, any perception that our practices or products are an invasion of privacy, whether or not consistent with current or future regulations and industry practices, may subject us to public criticism, private class actions, reputational harm, or claims by regulators, which could disrupt our business and expose us to increased liability.
Public concern regarding identity theft also has led to more transparency for consumers as to what is in their credit reports. We provide credit reports and scores and monitoring services to consumers for a fee, and this income stream could be reduced or restricted by legislation that requires us to provide these services to consumers free of charge. For example, under U.S. federal law today, we are required to provide consumers with one credit report per year free of charge.
The following legal and regulatory developments also could have a material adverse effect on our business, financial condition or results of operations:
amendment, enactment or interpretation of laws and regulations that restrict the access and use of personal information and reduce the availability or effectiveness of our solutions or the supply of data available to customers;
changes in cultural and consumer attitudes in favor of further restrictions on information collection and sharing, which may lead to regulations that prevent full utilization of our solutions;
failure of data suppliers or customers to comply with laws or regulations, where mutual compliance is required;
failure of our solutions to comply with current laws and regulations; and
failure of our solutions to adapt to changes in the regulatory environment in an efficient, cost-effective manner.
Changes in applicable legislation or regulations that restrict or dictate how we collect, maintain, combine and disseminate information, or that require us to provide services to consumers or a segment of consumers without charge, could adversely affect our business, financial condition or results of operations. In the future, we may be subject to significant additional expense to ensure continued compliance with applicable laws and regulations and to investigate, defend or remedy actual or alleged violations. Any failure by us to comply with applicable laws or regulations could also result in significant liability to us, including liability to private plaintiffs as a result of individual or class action litigation, or may result in the cessation of our operations or portions of our operations or impositions of fines and restrictions on our ability to carry on or expand our operations. Moreover, our compliance with privacy laws and regulations and our reputation depend in part on our customers’ adherence to privacy laws and

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regulations and their use of our services in ways consistent with consumer expectations and regulatory requirements. Certain of the laws and regulations governing our business are subject to interpretation by judges, juries and administrative entities, creating substantial uncertainty for our business. We cannot predict what effect the interpretation of existing or new laws or regulations may have on our business. See “Business-Legal and Regulatory Matters.”
The Consumer Financial Protection Bureau has supervisory and examination authority over our business and may initiate enforcement actions with regard to our compliance with federal consumer financial laws.
The CFPB, which was established under the Dodd-Frank Act and commenced operations in July 2011, has broad authority over our business. This includes authority to issue regulations under federal consumer financial protection laws, such as under FCRA and other laws applicable to us and our financial customers. The CFPB is authorized to prevent “unfair, deceptive or abusive acts or practices” through its regulatory, supervisory and enforcement authority.
In 2012, credit reporting companies like us became subject to a federal supervision program for the first time under the CFPB’s authority to supervise and examine certain non-depository institutions that are “larger participants” of the consumer credit reporting market. The CFPB conducts examinations and investigations, and may issue subpoenas and bring civil actions in federal court for violations of the federal consumer financial laws including FCRA. In these proceedings, the CFPB can seek relief that includes: rescission or reformation of contracts, restitution, disgorgement of profits, payment of damages, limits on activities and civil money penalties of up to $1.0 million per day for knowing violations. The CFPB conducts periodic examinations of us and the consumer credit reporting industry, which could result in new regulations or enforcement actions or proceedings.
There continues to be uncertainty as to how the CFPB’s strategies and priorities, including in both its examination and enforcement processes, will impact our business and our results of operations going forward. Actions by the CFPB could result in requirements to alter or cease offering affected products and services, making them less attractive and restricting our ability to offer them. In December 2016, as part of an agreed settlement with the CFPB, we agreed among other things, to implement certain agreed practice changes in the way we advertise, market and sell products and services offered directly to consumers.
Although we have committed resources to enhancing our compliance programs, actions by the CFPB or other regulators against us could result in reputational harm. Our compliance costs and legal and regulatory exposure could increase materially if the CFPB or other regulators enact new regulations, change regulations that were previously adopted, modify through supervision or enforcement past regulatory guidance, or interpret existing regulations in a manner different or stricter than have been previously interpreted.
Regulatory oversight of our contractual relationships with certain of our customers may adversely affect our business.
The Office of the Comptroller of the Currency’s (the “OCC”) guidance to national banks and federal savings associations on assessing and managing risks associated with third-party relationships, which include all business arrangements between a bank and another entity, by contract or otherwise, requires banks to exercise comprehensive oversight throughout each phase of a bank’s business arrangement with third-party service providers, and instructs banks to adopt risk management processes commensurate with the level of risk and complexity of its third-party relationships. The OCC expects especially rigorous oversight of third-party relationships that involve certain “critical activities.” In light of this guidance, our existing or potential financial services customers subject to OCC regulation may continue to revise their third-party risk management policies and processes and the terms on which they do business with us, which may adversely affect our relationship with such customers.
The outcome of litigation, inquiries, investigations, examinations or other legal proceedings in which we are involved, in which we may become involved, or in which our customers or competitors are involved could subject us to significant monetary damages or restrictions on our ability to do business.
Legal proceedings arise frequently as part of the normal course of our business. These may include individual consumer cases, class action lawsuits and inquiries, investigations, examinations, regulatory proceedings or other actions brought by federal (e.g., the CFPB and the United States Federal Trade Commission (“FTC”)) or state (e.g., state attorneys general) authorities or by consumers. The scope and outcome of these proceedings is often difficult to assess or quantify. Plaintiffs in lawsuits may seek recovery of large amounts and the cost to defend such litigation may be significant. There may also be adverse publicity and uncertainty associated with investigations, litigation and orders (whether pertaining to us, our customers or our competitors) that could decrease customer acceptance of our services or result in material discovery expenses. In addition, a court-ordered injunction or an administrative cease-and-desist order or settlement may require us to modify our business practices or may prohibit conduct that would otherwise be legal and in which our competitors may engage. Many of the technical and complex statutes to which we are subject, including state and federal credit reporting, medical privacy and financial privacy requirements, may provide for civil and criminal penalties and may permit consumers to maintain individual or class action lawsuits against us and obtain statutorily prescribed damages. Additionally, our customers might face similar proceedings, actions or inquiries, which could affect their business and, in turn, our ability to do business with those customers. While we do not believe that the outcome of any pending or threatened legal proceeding, investigation, examination or supervisory activity will have a material adverse effect on our financial

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position, such events are inherently uncertain and adverse outcomes could result in significant monetary damages, penalties or injunctive relief against us.
See “Legal Proceedings” for further information regarding other material pending litigation or investigations.
Our ability to expand our operations in, and the portion of our revenue derived from, markets outside the United States is subject to economic, political and other inherent risks, which could adversely impact our growth rate and financial performance.
Over the last several years, we have derived a growing portion of our revenues from customers outside the United States, and it is our intent to continue to expand our international operations. We have sales and technical support personnel in numerous countries worldwide. We expect to continue to add personnel internationally to expand our abilities to deliver differentiated services to our international customers. Expansion into international markets will require significant resources and management attention and will subject us to new regulatory, economic and political risks. Moreover, the services we offer in developed and emerging markets must match our customers’ demand for those services. Due to price, limited purchasing power and differences in the development of consumer credit markets, there can be no assurance that our services will be accepted in any particular developed or emerging market, and we cannot be sure that our international expansion efforts will be successful. The results of our operations and our growth rate could be adversely affected by a variety of factors arising out of international commerce, some of which are beyond our control. These factors include:
currency exchange rate fluctuations;
foreign exchange controls that might prevent us from repatriating cash to the United States;
difficulties in managing and staffing international offices;
increased travel, infrastructure, legal and compliance costs of multiple international locations;
foreign laws and regulatory requirements;
terrorist activity, natural disasters and other catastrophic events;
restrictions on the import and export of technologies;
difficulties in enforcing contracts and collecting accounts receivable;
longer payment cycles;
failure to meet quality standards for outsourced work;
unfavorable tax rules;
political and economic conditions in foreign countries, particularly in emerging markets;
the presence and acceptance of varying level of business corruption in international markets;
varying business practices in foreign countries; and
reduced protection for intellectual property rights.
For example, in 2018, the revenue from our International segment decreased 2.5% due to the impact of weakening foreign currencies, and in 2017 the revenue from our International segment increased by 3.5% due to the impact of strengthening foreign currencies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Twelve Months Ended December 31, 2018, 2017 and 2016-Revenue-International Segment.” As we continue to expand our business, our success will partially depend on our ability to anticipate and effectively manage these and other risks. Our failure to manage these risks could adversely affect our business, financial condition and results of operations.
We depend, in part, on strategic alliances, joint ventures and acquisitions to grow our business. If we are unable to make strategic acquisitions and develop and maintain these strategic alliances and joint ventures, our growth may be adversely affected.
An important focus of our business is to identify business partners who can enhance our services and enable us to develop solutions that differentiate us from our competitors. We have entered into several alliance agreements or license agreements with respect to certain of our datasets and services and may enter into similar agreements in the future. These arrangements may require us to restrict our use of certain of our technologies among certain customer industries, or to grant licenses on terms that ultimately may prove to be unfavorable to us, either of which could adversely affect our business, financial condition or results of operations. Relationships with our alliance agreement partners may include risks due to incomplete information regarding the marketplace and commercial strategies of our partners, and our alliance agreements or other licensing agreements may be the subject of contractual disputes. If we or our alliance agreements’ partners are not successful in maintaining or commercializing the alliance agreements’ services, such commercial failure could adversely affect our business.
In addition, a significant strategy for our international expansion is to establish operations through strategic alliances or joint ventures with local financial institutions and other partners. We cannot provide assurance that these arrangements will be successful or that our relationships with our partners will continue to be mutually beneficial. If these relationships cannot be established or

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maintained, it could negatively impact our business, financial condition and results of operations. Moreover, our ownership in and control of our foreign investments may be limited by local law.
We also selectively evaluate and consider acquisitions as a means of expanding our business and entering into new markets. We may not be able to acquire businesses we target due to a variety of factors such as competition from companies that are better positioned to make the acquisition. Our inability to make such strategic acquisitions could restrict our ability to expand our business and enter into new markets which would limit our ability to generate future revenue growth. Additionally, given some of our equity interests in various companies, we may be limited in our ability to require or influence such companies to make acquisitions or take other actions that we believe to be in our or their best interests. Our inability to take such actions could have a material impact on our revenues or earnings.
If we are unable to develop successful new services in a timely manner, or if the market does not adopt our new services, our ability to maintain or increase our revenue could be adversely affected.
In order to keep pace with customer demands for increasingly sophisticated service offerings, to sustain expansion into growth industries and to maintain our profitability, we must continue to innovate and introduce new services to the market. The process of developing new services is complex and uncertain. Our industry solutions require extensive experience and knowledge from within the relevant industry. We must commit significant resources to this effort before knowing whether the market will accept new service offerings. Additionally, our business strategy is dependent on our ability to expand into new markets and to bring new products to market. We may not successfully enter into new markets or execute on our new services because of challenges in planning or timing, technical hurdles, difficulty in predicting market demand, changes in regulation or a lack of appropriate resources. Additionally, even if we successfully develop new products, our existing customers might not accept these new products or new markets might not adopt our products due to operational constraints, high switching costs or general lack of market readiness. Failure to successfully introduce new services to the market could adversely affect our reputation, business, financial condition and results of operations.
If we fail to maintain and improve our systems, our data matching technology, and our interfaces with data sources and customers, demand for our services could be adversely affected.
In our markets, there are continuous improvements in computer hardware, network operating systems, programming tools, programming languages, operating systems, data matching, data filtering and other database technologies and the use of the internet. These improvements, as well as changes in customer preferences or regulatory requirements, may require changes in the technology used to gather and process our data and deliver our services. Our future success will depend, in part, upon our ability to:
internally develop and implement new and competitive technologies;
use leading third-party technologies effectively;
respond to changing customer needs and regulatory requirements, including being able to bring our new products to the market quickly; and
transition customers and data sources successfully to new interfaces or other technologies.
We cannot provide assurance that we will successfully implement new technologies, cause customers or data furnishers to implement compatible technologies or adapt our technology to evolving customer, regulatory and competitive requirements. If we fail to respond, or fail to cause our customers or data furnishers to respond, to changes in technology, regulatory requirements or customer preferences, the demand for our services, the delivery of our services or our market reputation could be adversely affected. Additionally, our failure to implement important updates could affect our ability to successfully meet the timeline for us to generate cost savings resulting from our investments in improved technology. Failure to achieve any of these objectives would impede our ability to deliver strong financial results.
When we engage in acquisitions, investments in new businesses or divestitures of existing businesses, we will face risks that may adversely affect our business.
We may acquire or make investments in businesses that offer complementary services and technologies. Acquisitions may not be completed on favorable terms and acquired assets, data or businesses may not be successfully integrated into our operations. Any acquisitions or investments will include risks commonly encountered in acquisitions of businesses, including:
failing to achieve the financial and strategic goals for the acquired business;
paying more than fair market value for an acquired company or assets;
failing to integrate the operations and personnel of the acquired businesses in an efficient and timely manner;
disrupting our ongoing businesses;
distracting management focus from our existing businesses;
acquiring unanticipated liabilities;
failing to retain key personnel;

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incurring the expense of an impairment of assets due to the failure to realize expected benefits;
damaging relationships with employees, customers or strategic partners;
diluting the share value of existing stockholders; and
incurring additional debt or reducing available cash to service our existing debt.
Any divestitures will be accompanied by the risks commonly encountered in the sale of businesses, which may include:
disrupting our ongoing businesses;
reducing our revenues;
losing key personnel;
distracting management focus from our existing businesses;
indemnification claims for breaches of representations and warranties in sale agreements;
damaging relationships with employees and customers as a result of transferring a business to new owners; and
failure to close a transaction due to conditions such as financing or regulatory approvals not being satisfied.
These risks could harm our business, financial condition or results of operations, particularly if they occur in the context of a significant acquisition or divestiture. Acquisitions of businesses having a significant presence outside the United States will increase our exposure to the risks of conducting operations in international markets.
We may be unable to protect our intellectual property adequately or cost-effectively, which may cause us to lose market share or force us to reduce our prices. We also rely on trade secrets and other forms of unpatented intellectual property that may be difficult to protect.
Our success depends, in part, on our ability to protect and preserve the proprietary aspects of our technology and services. If we are unable to protect our intellectual property, including trade secrets and other unpatented intellectual property, our competitors could use our intellectual property to market and deliver similar services, decreasing the demand for our services. We rely on the patent, copyright, trademark, trade secret and other intellectual property laws of the United States and other countries, as well as contractual restrictions, such as nondisclosure agreements, to protect and control access to our proprietary intellectual property. These measures afford limited protection, however, and may be inadequate. We may be unable to prevent third parties from using our proprietary assets without our authorization or from breaching any contractual restrictions with us. Enforcing our rights could be costly, time-consuming, distracting and harmful to significant business relationships. Claims that a third party illegally obtained and is using trade secrets can be difficult to prove, and courts outside the United States may be less willing to protect trade secrets. Additionally, others may independently develop non-infringing technologies that are similar or superior to ours. Any significant failure or inability to adequately protect and control our proprietary assets may harm our business and reduce our ability to compete.
We may face claims for intellectual property infringement, which could subject us to monetary damages or limit us in using some of our technologies or providing certain services.
There has been substantial litigation in the United States regarding intellectual property rights in the information technology industry. We cannot be certain that we do not infringe on the intellectual property rights of third parties, including the intellectual property rights of third parties in other countries, which could result in a liability to us. Historically, patent applications in the United States and some foreign countries have not been publicly disclosed until eighteen months following submission of the patent application, and we may not be aware of currently filed patent applications that relate to our products or processes. If patents are later issued on these applications, we may be liable for infringement. In the event that claims are asserted against us, we may be required to obtain licenses from third parties (if available on acceptable terms or at all). Any such claims, regardless of merit, could be time consuming and expensive to litigate or settle, divert the attention of management and materially disrupt the conduct of our business, and we may not prevail. Intellectual property infringement claims against us could subject us to liability for damages and restrict us from providing services or require changes to certain products or services. Although our policy is to obtain licenses or other rights where necessary, we cannot provide assurance that we have obtained all required licenses or rights. If a successful claim of infringement is brought against us and we fail to develop non-infringing products or services, or to obtain licenses on a timely and cost-effective basis, our reputation, business, financial condition and results of operations could be adversely affected.
If our outside service providers and key vendors are not able to or do not fulfill their service obligations, our operations could be disrupted and our operating results could be harmed.
We depend on a number of service providers and key vendors such as telecommunication companies, software engineers, data processors, software and hardware vendors and providers of credit score algorithms, who are critical to our operations. These service providers and vendors are involved with our service offerings, communications and networking equipment, computer hardware and software and related support and maintenance. Although we have implemented service-level agreements and have established monitoring controls, our operations could be disrupted if we do not successfully manage relationships with our service

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providers, if they do not perform or are unable to perform agreed-upon service levels, or if they are unwilling to make their services available to us at reasonable prices. If our service providers and vendors do not perform their service obligations, it could adversely affect our reputation, business, financial condition and results of operations.
There may be further consolidation in our end-customer markets, which may adversely affect our revenues.
There has been, and we expect there will continue to be, merger, acquisition and consolidation activity in our customer markets. If our customers merge with, or are acquired by, other entities that are not our customers, or that use fewer of our services, our revenue may be adversely impacted. In addition, industry consolidation could affect the base of recurring transaction-based revenue if consolidated customers combine their operations under one contract, since most of our contracts provide for volume discounts. In addition, our existing customers might leave certain geographic markets, which would no longer require them to purchase certain products from us and, consequently, we would generate less revenue than we currently expect.
To the extent the availability of free or relatively inexpensive consumer information increases, the demand for some of our services may decrease.
Public and commercial sources of free or relatively inexpensive consumer information have become increasingly available and this trend is expected to continue. Public and commercial sources of free or relatively inexpensive consumer information, including free credit information from lead generation companies and from banks, may reduce demand for our services. To the extent that our customers choose not to obtain services from us and instead rely on information obtained at little or no cost from these public and commercial sources, our business, financial condition and results of operations may be adversely affected.
If we experience changes in tax laws or adverse outcomes resulting from examination of our tax returns, it could adversely affect our results of operations.
We are subject to federal, state and local income and other taxes in the United States and in foreign jurisdictions. From time to time the United States federal, state, local and foreign governments make substantive changes to tax rules and the application thereof, which could result in materially different corporate taxes than would be incurred under existing tax law or interpretation and could adversely impact profitability. Governments have strengthened their efforts to increase revenues through changes in tax law, including laws regarding transfer pricing, economic presence and apportionment to determine the tax base.
Consequently, significant judgment is required in determining our worldwide provision for income taxes. Our future effective tax rates and the value of our deferred tax assets could be adversely affected by changes in tax laws. In addition, we are subject to the examination of our income tax returns and other tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from such examinations to determine the adequacy of our provision for income taxes and reserves for other taxes. Although we believe we have made appropriate provisions for taxes in the jurisdictions in which we operate, changes in tax laws, or challenges from tax authorities under existing tax laws could adversely affect our business, financial condition and results of operations.
On December 22, 2017, a law commonly known as the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States. Among other things, the Act reduces the U.S. corporate income tax rate to 21 percent and implements a new system of taxation for non-U.S. earnings, including by imposing a one-time tax on the deemed repatriation of undistributed earnings of non-U.S. subsidiaries. For the year ended December 31, 2017, our tax provision included adjustments for certain items for which the accounting was incomplete but for which we made reasonable estimates that we finalized in 2018. Our 2017 tax provision did not include adjustments for certain items for which the accounting was incomplete and for which we were unable to make a reasonable estimate. We refined and completed these adjustments in 2018. In the absence of guidance on various uncertainties and ambiguities in the application of certain provisions of the Act, we have used what we believe are reasonable interpretations and assumptions in applying the Act, but it is possible that the IRS or the FASB could issue subsequent guidance or take positions that differ from our prior interpretations and assumptions, which could have a material adverse effect on our cash tax liabilities, results of operations, and financial condition.
Our stock price has been and may continue to be volatile or may decline regardless of our operating performance, and you may not be able to resell shares of our common stock at or above the price you paid or at all.
The trading price of our common stock has been and may continue to be volatile. The stock market routinely experiences price and volume fluctuations that are often unrelated or disproportionate to the operating performance of the underlying businesses. This market volatility, as well as general economic, market or political conditions, could adversely affect the market price of our common stock, regardless of our actual operating performance, and you may not be able to resell your shares at or above the price you paid. In addition to the risks described in this section, several factors that could cause the price of our common stock to fluctuate significantly include, among others, the following, most of which we cannot control:
quarterly variations in our operating results compared to market expectations;
guidance that we provide to the public, any changes in this guidance or our failure to meet this guidance;
changes in preferences of our customers;

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announcements of new products or significant price reductions by us or our competitors;
size of our public float;
stock price performance of our competitors;
publication of research reports about our industry;
changes in market valuations of our competitors;
fluctuations in stock market prices and volumes;
default on our indebtedness;
actions by our competitors;
changes in senior management or key personnel;
changes in financial estimates by securities analysts;
negative earnings or other announcements by us or other credit reporting agencies;
downgrades in our credit ratings or the credit ratings of our competitors;
issuances of capital stock or future sales of our common stock or other securities;
investor perceptions or the investment opportunity associated with our common stock relative to other investment alternatives;
the public response to press releases or other public announcements by us or third parties, including our filings with the SEC;
announcements relating to litigation;
the sustainability of an active trading market for our stock;
changes in accounting principles;
global economic, legal and regulatory factors unrelated to our performance; and
other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.
In addition, price volatility may be greater if the public float and trading volume of our common stock is low, and the amount of public float on any given day can vary depending on whether our stockholders choose to hold for the long term.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
We are subject to losses from risks for which we do not insure.
For certain risks, we do not maintain insurance coverage because of cost and/or availability. Because we retain some portion of insurable risks, and in some cases retain our risk of loss completely, unforeseen or catastrophic losses in excess of insured limits could materially adversely affect our business, financial condition and results of operations.
We may not be able to attract and retain the skilled employees that we need to support our business.
Our success depends on our ability to attract and retain experienced management, sales, research and development, analytics, marketing and technical support personnel. If any of our key personnel were unable or unwilling to continue in their present positions, it may be difficult to replace them and our business could be seriously harmed. If we are unable to find qualified successors to fill key positions as needed, our business could be seriously harmed. The complexity of our services requires trained customer service and technical support personnel. We may not be able to hire and retain such qualified personnel at compensation levels consistent with our compensation structure. Some of our competitors may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expense replacing employees and our ability to provide quality services could diminish, resulting in a material adverse effect on our business.
Anti-takeover provisions in our organizational documents might discourage, delay or prevent acquisition attempts for us that you might consider favorable.
Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.
These provisions provide for, among other things:

29



a classified Board of Directors with staggered three year terms;
the ability of our Board of Directors to issue one or more series of preferred stock;
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
certain limitations on convening special stockholder meetings;
the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 23% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class; and
that certain provisions may be amended only by the affirmative vote of at least 66 23% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class.
 These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
Our ability to pay cash dividends may be limited by the terms of our secured credit facility.
On February 13, 2018, we announced that our board of directors approved a dividend policy pursuant to which we intend to pay quarterly cash dividends on our common stock. We commenced paying dividends pursuant to this policy in the second quarter of 2018. The terms of our senior secured credit facility impose certain limitations on our ability to pay dividends. We may, however, declare and pay cash dividends up to an unlimited amount unless a default or event of default exists under the senior secured credit facility. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which would adversely affect our business and our stock price.
Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be reevaluated frequently. Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. general accepted accounting principles. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company will have been detected. Effective internal controls are necessary for us to produce reliable financial reports and are important to prevent fraud. As a result, any failure to maintain the adequacy of internal control over financial reporting, or any consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and could materially impair our ability to operate our business, which in turn, could cause the market value of our stock to decline.
The United Kingdom’s vote to exit from the European Union could adversely impact us.
On June 23, 2016, in a referendum vote commonly referred to as “Brexit,” a majority of British voters voted to exit the European Union. In March 2017, the U.K. government officially triggered the process to formally initiate negotiations for the terms of separation from the European Union. In June 2017, the U.K. government began negotiations to leave the European Union. A withdrawal could potentially disrupt the free movement of goods, services and people between the U.K. and the European Union, undermine bilateral cooperation in key geographic areas and significantly disrupt trade between the U.K. and the European Union or other nations as the U.K. pursues independent trade relations. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which European Union laws to replace or replicate. The effects of Brexit will depend on any agreements the U.K. makes to retain access to European Union or other markets either during a transitional period or more permanently. Because this is an unprecedented event, it is unclear what long-term economic, financial, trade and legal implications the withdrawal of the U.K. from the European Union would have and how such withdrawal would affect our business globally and in the region. In addition, Brexit may lead other European Union member countries to consider referendums regarding their European Union membership. Any of these events, along with any political, economic and regulatory changes that may occur, could cause political and economic uncertainty in Europe and internationally and harm our business and financial results.



30



ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Properties
Our corporate headquarters and main data center are located in Chicago, Illinois, in an office building that we own. We also own a data center building in Hamilton, Ontario, Canada. As of December 31, 2018, we lease space in over 100 other locations, including office space and additional data centers. These locations are geographically dispersed to meet our sales and operating needs. We anticipate that suitable additional or alternative space will be available at commercially reasonably terms for future expansion.
ITEM 3. LEGAL PROCEEDINGS
General
In addition to the matters described below, we are routinely named as defendants in, or parties to, various legal actions and proceedings relating to our current or past business operations. These actions generally assert claims for violations of federal or state credit reporting, consumer protection or privacy laws, or common law claims related to privacy, libel, slander or the unfair treatment of consumers, and may include claims for substantial or indeterminate compensatory or punitive damages, or injunctive relief, and may seek business practice changes. We believe that most of these claims are either without merit or we have valid defenses to the claims, and we vigorously defend these matters or seek non-monetary or small monetary settlements, if possible. However, due to the uncertainties inherent in litigation, we cannot predict the outcome of each claim in each instance.
In the ordinary course of business, we also are subject to governmental and regulatory examinations, information-gathering requests, investigations and proceedings (both formal and informal), certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. In connection with formal and informal inquiries by these regulators, we routinely receive requests, subpoenas and orders seeking documents, testimony and other information in connection with various aspects of our activities. See “Legal and Regulatory Matters.”
In view of the inherent unpredictability of litigation and regulatory matters, particularly where the damages sought are substantial or indeterminate or when the proceedings or investigations are in the early stages, we cannot determine with any degree of certainty the timing or ultimate resolution of litigation and regulatory matters or the eventual loss, fines, penalties or business impact, if any, that may result. We establish reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The actual costs of resolving litigation and regulatory matters, however, may be substantially higher than the amounts reserved for those matters, and an adverse outcome in certain of these matters could have a material adverse effect on our consolidated financial statements in particular quarterly or annual periods.
On a regular basis, we accrue reserves for litigation and regulatory matters based on our historical experience and our ability to reasonably estimate and ascertain the probability of any liability. See Part II, Item 8, “Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements,” Note [18], “Contingencies,” for additional information about these reserves. However, for certain of the matters described below, we are not able to reasonably estimate our exposure because damages have not been specified and (i) the proceedings are in early stages, (ii) there is uncertainty as to the likelihood of a class being certified or the ultimate size of the class, (iii) there is uncertainty as to the outcome of similar matters pending against our competitors, (iv) there are significant factual issues to be resolved, and/or (v) there are legal issues of a first impression being presented. However, for these matters we do not believe based on currently available information that the outcomes will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period.
To reduce our exposure to an unexpected significant monetary award resulting from an adverse judicial decision, we maintain insurance that we believe is appropriate and adequate based on our historical experience. We regularly advise our insurance carriers of the claims (threatened or pending) against us in the course of litigation and generally receive a reservation of rights letter from the carriers when such claims exceed applicable deductibles. We are not aware of any significant monetary claim that has been asserted against us in the course of pending litigation that would not have some level of coverage by insurance after the relevant deductible, if any, is met.
OFAC Alert Service
As a result of a decision by the United States Third Circuit Court of Appeals (Cortez v. Trans Union LLC) in 2010, we modified one of our add-on services we offer to our business customers that was designed to alert our customer that the consumer, who was seeking to establish a business relationship with the customer, may potentially be on the Office of Foreign Assets Control, Specifically Designated National and Blocked Persons alert list (the “OFAC Alert”). The OFAC Alert service is meant to assist our customers with their compliance obligations in connection with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001.

31



In Ramirez v. Trans Union LLC, (No. 3:12-cv-00632-JSC, United States District Court for the Northern District of California), filed in 2012, the plaintiff has alleged that: the OFAC Alert service does not comply with the Cortez ruling; we have willfully violated the Fair Credit Reporting Act (“FCRA”) and the corresponding California state-FCRA based on the Cortez ruling by continuing to offer the OFAC Alert service; and there are one or more classes of individuals who should be entitled to statutory damages (i.e., $100 to $5,000 per person) based on the allegedly willful violations. In addition to the Ramirez action, the same lawyers representing Ramirez (who also represented the plaintiff in Cortez) filed two additional alleged class actions in 2012 (Miller v. Trans Union, LLC, No. 12-1715-WJN, United States District Court for the Middle District of Pennsylvania; and Larson v. Trans Union, LLC, No. 12-5726-JSC, United States District Court for the Northern District of California) and one in 2014 (Amit Patel, et al. v. TransUnion LLC, TransUnion Rental Screening Solutions, Inc. and TransUnion Background Data Solutions, No. 14-cv-0522-LB, United States District Court for the Northern District of California) claiming that our process for disclosing OFAC information to consumers, or how we match OFAC information to a consumer’s name or other identifying information, violates the FCRA and, in some instances, the corresponding California state-FCRA. In addition to the OFAC allegations, the plaintiff in the Patel action sought to collapse all TransUnion FCRA regulated entities into a single entity. In July 2014, the Court in Ramirez certified a class of approximately 8,000 individuals solely for purposes of statutory damages if TransUnion is ultimately found to have willfully violated the FCRA, and a sub-class of California residents solely for purposes of injunctive relief under the California Consumer Credit Reporting Agencies Act. While the Court noted that the plaintiff is not seeking any actual monetary damage, the class certification order was predicated on a disputed question of Ninth Circuit law (currently there is a conflict between the federal circuits) that was awaiting action by the United States Supreme Court. Our motions to stay the Ramirez, Miller and Larson proceedings were granted and the proceedings stayed pending action by the U.S. Supreme Court in Spokeo v. Robins. In June 2015, the Court in Patel certified a national class of approximately 11,000 individuals with respect to allegations that TransUnion willfully violated the FCRA by failing to maintain and follow reasonable procedures to ensure the maximum possible accuracy of their information, and a national subclass of approximately 3,000 individuals with respect to allegations that TransUnion willfully violated the FCRA by failing to provide consumers with all information in their files. In September 2015, our motion to stay the Patel proceedings was granted and the proceedings stayed pending action by the U.S. Supreme Court in Spokeo v. Robins.
On May 16, 2016, the U.S. Supreme Court issued its decision in Spokeo v. Robins, holding that the injury-in-fact requirement for standing under Article III of the United States Constitution requires a plaintiff to allege an injury that is both “concrete and particularized.” The Court held that the Ninth Circuit’s analysis failed to consider concreteness in its analysis and vacated the decision and remanded to the Ninth Circuit to consider both aspects of the injury-in-fact requirement. Following the U.S. Supreme Court’s decision, the stays in the Ramirez, Miller, Larson and Patel matters were lifted. In August 2016, the Court in Larson certified a class of approximately 18,000 California residents with respect to allegations that TransUnion failed to provide consumers with all information in their files in violation of the Fair Credit Reporting Act. In October 2016, the Court in Larson denied our petition for permission to appeal the class certification decision to the Ninth Circuit, and the Courts in Ramirez and Patel denied our motions to decertify the classes based on the implications of Spokeo. In January 2017, the magistrate in Miller recommended that the Court find that the plaintiff has standing to bring suit in federal court, and that the motion for class certification should be granted.
As a result of mediation in May 2017 and without admitting any wrongdoing, we agreed, with the consent of our insurance carrier, to the terms of an $8.0 million settlement of all class, subclass and individual claims in the Patel matter, which was primarily accrued in the prior year. In March 2018, the Court granted final approval of the settlement and the final settlement was paid to the settlement administrator on May 17, 2018.
The Miller and Larson cases were consolidated in the United States District Court for the Northern District of California, and on May 1, 2018, we agreed to the terms of a settlement of all class and individual claims, pursuant to which we will pay attorneys’ fees and representative plaintiffs’ awards, which are not material, mail corrective disclosures to class members and provide them three years of single-bureau credit monitoring. On November 29, 2018, the Court granted final approval of the settlement and letters were mailed to all class members on December 19, 2018, containing information about credit monitoring services.
On June 21, 2017, the jury in Ramirez returned a verdict in favor of a class of 8,185 individuals in the amount of approximately $8.1 million ($984.22 per class member) in statutory damages and approximately $52.0 million ($6,353.08 per class member) in punitive damages. In November 2017, the trial court denied our post-trial motions for judgment as a matter of law, a new trial and a reduction on the jury verdict, and we appealed the Ramirez ruling to the United States Court of Appeals for the Ninth Circuit. We have posted a bond at nominal cost to stay the execution of the judgment pending resolution of our appeal.
The timing and outcome of the ultimate resolution of this matter is uncertain. Despite the jury verdict, we continue to believe that we have not willfully violated any law and have meritorious grounds for seeking modification of the judgment on appeal. Given the complexity and uncertainties associated with the outcome of the current and any subsequent appeals, there is a wide range of potential results, from vacating the judgment in its entirety to upholding some or all aspects of the judgment. As of December 31, 2018, we have recorded a charge for this matter equal to our current estimate of probable losses and our costs of defending this matter, net of amounts we expect to receive from our insurance carriers, the impact of which is not material to our financial

32



condition or results of operations. That charge does not include any accrual with respect to the punitive damages awarded by the jury since it is not probable, based on current legal precedent, that an award for punitive damages in conjunction with statutory damages for the alleged conduct will survive the post-judgment actions. We currently estimate, however, that the reasonably possible loss in future periods for punitive damages falls within a range from zero to something less than the amount of the statutory damages awarded by the jury. This estimate is based on currently available information. As available information changes, our estimates may change as well. We believe we will have full insurance coverage for our current estimate of probable losses and the legal fees and expenses we have incurred and will incur for defending this matter should this matter be unfavorably resolved against us after exhaustion of our post-judgment options.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.

33



EXECUTIVE OFFICERS
Our executive officers, and their positions and ages as of February 12, 2019, are set forth below:
Name
Age
Position
James M. Peck
55
Director, President & Chief Executive Officer
Todd M. Cello
43
Executive Vice President & Chief Financial Officer
Christopher A. Cartwright
53
Executive Vice President-U.S. Information Services
John T. Danaher
54
Executive Vice President-Consumer Interactive
Abhi Dhar
47
Executive Vice President & Chief Information and Technology Officer
David M. Neenan
53
Executive Vice President-International
Heather J. Russell
47
Executive Vice President & Chief Legal Officer
David E. Wojczynski
46
Executive Vice President, Healthcare
James M. Peck joined the Company in December 2012 as President and Chief Executive Officer. On November 14, 2018, the Company announced that Mr. Peck will retire as President and CEO, effective on May 8, 2019. Mr. Peck will be succeeded by Christopher A. Cartwright, effective on his retirement date. Mr. Peck has more than 20 years of information management, global product development and engineering experience. He has led TransUnion through a transformation into a higher-growth, higher-margin business by setting and executing a strong strategy focused on enhancing the Company’s data, technology and analytics capabilities and achieving growth in key industry verticals and international markets. Prior to TransUnion, Mr. Peck was with Reed Elsevier, a FTSE 100 company, where he served as CEO of the LexisNexis Risk Solutions business from 2004-2012. Prior to 2004, Mr. Peck was the Senior Vice President and Chief Product Officer for the LexisNexis group. Previously, Mr. Peck was the Senior Vice President of Product Development with Celera Genomics, a bio-technology firm that sequenced the human genome. Prior to that, he spent a decade at LexisNexis in engineering and executive roles to manage and build information solutions. He also serves on the boards of Sun Life Financial, CCC Information Services and the Museum of Science and Industry, Chicago.
Todd M. Cello joined the Company in October 1997 and has held numerous roles with increasing levels of responsibility in the corporate finance department. Mr. Cello has served as our Executive Vice President and Chief Financial Officer since August 2017. Prior to his current role, Mr. Cello served as Senior Vice President and International CFO from August 2015 to August 2017, overseeing financial operations for the International segment. Prior to that, Mr. Cello served as Vice President, Financial Planning and Analysis from January 2009 to August 2015, overseeing the enterprise financial planning and analysis function, where he played a lead role in the two leveraged buyouts of TransUnion in 2010 and 2012 and the initial public offering of TransUnion in 2015. Prior to that, Mr. Cello served as Vice President and US Information Services CFO from October 2005 to December 2008, overseeing financial operations of our USIS segment. Mr. Cello also serves on the board of Kaleidoscope, a Chicago-based non-profit child welfare agency.
Christopher A. Cartwright joined the Company in August 2013 as Executive Vice President-U.S. Information Services. On November 14, 2018, the Company announced that Mr. Cartwright will succeed Mr. Peck as the Company’s President and CEO, effective on May 8, 2019. Mr. Cartwright will be a nominee for election to the Company’s Board of Directors at the Company’s annual meeting of stockholders. From December 2010 through March 2013, he was the Chief Executive Officer of Decision Insight Information Group, a portfolio of independent businesses providing real property information, software and services to insurance, finance, legal and real estate professionals in the United States, Canada and Europe. From June 1997 through October 2010, he held a variety of positions at Wolters Kluwer, a global information services and workflow solutions company, where he was CEO of Corporate Legal and Financial Services Division of North America and Shared Services. Prior to Wolters Kluwer, he was Senior Vice President, Strategic Planning & Operations for Christie’s Inc. and Strategy Consultant for Coopers and Lybrand.
John T. Danaher joined the Company in November 2002 and is currently Executive Vice President-Consumer Interactive. Mr. Danaher has more than 25 years of financial services industry expertise and direct marketing experience and has served as the president of the consumer subsidiary of TransUnion since 2004. Prior to TransUnion, from 2001 to 2002, Mr. Danaher was Chief Operating Officer of TrueLink, Inc., which was acquired by TransUnion. Mr. Danaher joined TrueLink, Inc. from Citibank, where he held several roles including Vice President of E-Commerce, where he was responsible for planning and executing Citibank’s e-commerce strategy for home equity loan products. He also served in a variety of leadership roles in operations and technology.
Abhi Dhar joined the Company in January 2019 as Executive Vice President and Chief Information and Technology Officer. In this role, Mr. Dhar is responsible for all aspects of the company’s technology including strategy, security, applications, operations, infrastructure and delivery of solutions that support TransUnion’s global information systems. Prior to TransUnion, Mr. Dhar co-founded Packyge, Inc., a last-mile delivery startup focused on enabling last step in-store digital experiences. Prior to Packyge, he held technology leadership roles at Walgreen Boots Alliance (WBA), TravelCLICK, Inc.; Cendant Corporation / Travelport; PricewaterhouseCoopers; and several engineering roles with AT&T. Mr. Dhar serves on the Board of Directors of

34



Hawaiian Airlines which trades on NASDAQ under the ticker symbol HA. He has been serving on Hawaiian Airlines’ Board of Directors since September 2017 and is a member of its Compensation Committee.
David M. Neenan joined the Company in September 2012 as Executive Vice President-International. From October 1998 through September 2012, he held a variety of positions at HSBC. From 2011 through August 2012, he served as the Global Chief Operations Officer for HSBC’s insurance division. From 2009 through 2011, he served as the Global Head of Sales and marketing for the insurance division. From July 2006 through 2008, he served as President and CEO of HSBC Finance, Canada.
Heather J. Russell joined the Company in June 2018 as Executive Vice President and Chief Legal Officer. In this role, Ms. Russell is responsible for all legal, government relations, corporate governance and compliance, and consumer privacy functions of TransUnion and its subsidiaries. Ms. Russell is an accomplished legal executive with more than 20 years of diverse experience across the global financial services sector. Prior to joining TransUnion, she was a partner at the law firm of Buckley Sandler, LLP, from October 2016 until May 2018, where she led the firm’s Financial Institutions Regulation, Supervision and FinTech practices. Previously, she served as Executive Vice President, Chief Legal Officer and Corporate Secretary at Fifth Third Bancorp from September 2015 until July 2016. From July 2011 until August 2015, Ms. Russell was Managing Director and Global Head of Public Policy and Regulatory Affairs at Bank of New York Mellon. Prior to that, she spent five years as Senior Vice President and Associate General Counsel at Bank of America. She also spent eight years at Skadden, Arps in Washington, DC and London.
David E. Wojczynski joined the company in 2010 and is currently Executive Vice President-Healthcare. Before his current role, Mr. Wojczynski served as Senior Vice President and Chief Operating Officer-Healthcare for approximately 8 years where he was responsible for leading the operations and service delivery teams. Prior to joining TransUnion, Mr. Wojczynski served as the Chief Operating Officer at DAXKO, a member-based health and wellness industry software and payments provider. He has also held senior positions at Emageon, a diagnostic imaging software business, Source Medical Solutions, the leading provider of ambulatory surgery center software solutions, and General Electric. Mr. Wojczynski began his career as a military officer and helicopter pilot.
Our executive officers are elected annually by our Board of Directors. There are no family relationships among any of the Company’s executive officers.


35



PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock has been listed on The New York Stock Exchange under the symbol “TRU” since June 25, 2015.
Holders of Record
As of January 31, 2019, we had 26 stockholders of record. We have a greater number of beneficial owners of our stock who own their shares through brokerage firms and other nominees.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
Period
 
Total Number of
Shares  Purchased
 
Average Price
Paid Per  Share
 
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs(2)
 
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under
the Plans or Programs(1)
October 1 to October 31
 

 
$

 

 
$
166.6

November 1 to November 30
 

 

 

 
$
166.6

December 1 to December 31
 
6,526

 
56.80

 

 
$
166.6

Total
 
6,526

 
$
56.80

 

 
 
(1)
On February 13, 2017, our board of directors authorized the repurchase of up to $300.0 million of our common stock through February 13, 2020. Our board of directors removed the three-year time limitation on February 8, 2018. Prior to the fourth quarter of 2017, we had purchased approximately $133.4 million of common stock under the program and may purchase up to an additional $166.6 million. Additional repurchases may be made from time to time at management’s discretion at prices management considers to be attractive through open market purchases or through privately negotiated transactions, subject to availability. Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Exchange Act and other applicable legal requirements.        
Performance Graph
This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of TransUnion under the Securities Act of 1933, as amended, or the Exchange Act.
The following graph shows a comparison of cumulative total return for the Company’s common stock, the Russell 3000 and the Dow Jones U.S. Financials Index from June 25, 2015, the date the Company’s common stock commenced trading on the NYSE, through December 31, 2018. The graph assumes that $100 was invested at market close on June 25, 2015, in each of the Company’s common stock, the Russell 3000 and the Dow Jones U.S. Financial Index. The cumulative total returns for the Russell 3000 and the Dow Jones U.S. Financial Index assume reinvestment of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.


36



performancegraph2018v2a02.jpg


37



ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth our selected historical consolidated financial data for the periods ended and as of the dates indicated below.
We have derived the selected historical consolidated financial data as of December 31, 2018 and 2017, and for each of the twelve months ended December 31, 2018, 2017 and 2016 from our audited consolidated financial statements included elsewhere in this report. We have derived the selected historical consolidated financial data as of December 31, 2016, 2015 and 2014 and for the twelve months ended December 31, 2015 and 2014, from our audited consolidated financial statements, which are not included in this report. Our historical results are not necessarily indicative of the results expected for any future period.
You should read the following financial data together with Part I, Item 1A, “Risk Factors,” Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements and related notes appearing elsewhere in this report, and our audited consolidated financial statements and related notes included in our annual reports on Form 10-K for the years ended December 31, 2015 and December 31, 2016 previously filed with the SEC.































38



Selected financial data consists of the following:
 
 
TransUnion
 
 
For the Twelve Months Ended December 31,
(dollars in millions)
 
2018
 
2017
 
2016
 
2015
 
2014
Income Statement Data:
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
2,317.2

 
$
1,933.8

 
$
1,704.9

 
$
1,506.8

 
$
1,304.7

Operating expenses
 
 
 
 
 
 
 
 
 
 
Cost of services
 
790.1

 
645.7

 
579.1

 
531.6

 
500.2

Selling, general and administrative
 
707.7

 
585.4

 
560.1

 
499.7

 
434.9

Depreciation and amortization
 
306.9

 
238.0

 
265.2

 
278.4

 
241.2

Total operating expense
 
1,804.7

 
1,469.1

 
1,404.4

 
1,309.7

 
1,176.3

Operating income (loss)
 
512.5

 
464.7

 
300.5

 
197.1

 
128.4

Non-operating income and expense
 
(169.0
)
 
(92.2
)
 
(95.1
)
 
(170.5
)
 
(130.2
)
Income from continuing operations before income taxes
 
343.5

 
372.5

 
205.4

 
26.6

 
(1.8
)
(Provision) benefit for income taxes
 
(54.5
)
 
79.1

 
(74.0
)
 
(11.3
)
 
(2.6
)
Income (loss) from continuing operations
 
289.0

 
451.6

 
131.4

 
15.3

 
(4.4
)
Discontinued operations, net of tax
 
(1.5
)
 

 

 

 

Net income
 
287.5

 
451.5

 
131.4

 
15.3

 
(4.4
)
Less: net income attributable to noncontrolling interests
 
(10.9
)
 
(10.4
)
 
(10.8
)
 
(9.4
)
 
(8.1
)
Net income (loss) attributable to the Company
 
$
276.6

 
$
441.2

 
$
120.6

 
$
5.9

 
$
(12.5
)
 
 
 
 
 
 
 
 
 
 
 
Net earnings (loss) per share from continuing operations:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.51

 
$
2.42

 
$
0.66

 
$
0.04

 
$
(0.09
)
Diluted
 
$
1.46

 
$
2.32

 
$
0.65

 
$
0.04

 
$
(0.09
)
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
184.6

 
182.4

 
182.6

 
165.3

 
147.3

Diluted
 
190.9

 
189.9

 
184.6

 
166.8

 
147.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends per common share:
 
$
0.23

 
$

 
$

 
$

 
$

 
 
As of December 31,
(dollars in millions)
 
2018
 
2017
 
2016
 
2015
 
2014
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
Total assets(1)
 
$
7,039.8

 
$
5,118.5

 
$
4,781.2

 
$
4,442.8

 
$
4,633.8

Total debt(1)
 
$
4,048.1

 
$
2,464.6

 
$
2,375.6

 
$
2,204.6

 
$
2,907.9

Total stockholders’ equity(1)
 
$
1,982.2

 
$
1,824.6

 
$
1,473.0

 
$
1,367.0

 
$
747.7

(1) 
The change in total assets at December 31, 2018, compared with December 31, 2017, is due primarily to businesses we acquired in 2018. The change in total debt at December 31, 2018, compared with December 2017, is due to new borrowings to fund our 2018 business acquisitions. The change in total debt and total stockholders’ equity at December 31, 2015, compared with December 31, 2014 reflects the impact of our initial public offering and the use of those proceeds to retire our public debt.

39



ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of TransUnion’s financial condition and results of operations is provided as a supplement to, and should be read in conjunction with Part I, Item 1A, “Risk Factors,” Part II, Item 6, “Selected Financial Data,” and Part II, Item 8, “Financial Statements and Supplementary Information,” including TransUnion’s audited consolidated financial statements and the accompanying notes. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed in “Cautionary Notice Regarding Forward-Looking Statements” and Part I, Item 1A, “Risk Factors.”
References in this discussion and analysis to the “Company,” “we,” “us,” and “our” refer to TransUnion and its direct and indirect subsidiaries, including TransUnion Intermediate Holdings, Inc.
Overview
TransUnion is a leading global risk and information solutions provider to businesses and consumers. We provide consumer reports, risk scores, analytical services and decisioning capabilities to businesses. Businesses embed our solutions into their process workflows to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. Consumers use our solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft. We are differentiated by our comprehensive and unique datasets, our next-generation technology and our analytics and decisioning capabilities, which enable us to deliver insights across the entire consumer lifecycle. We believe we are the largest provider of risk and information solutions in the United States to possess both nationwide consumer credit data and comprehensive, diverse public records data, which allows us to better predict behaviors, assess risk and address a broader set of business issues for our customers. We have deep domain expertise across a number of attractive industries, which we also refer to as verticals, including financial services, healthcare, insurance and specialized risk. We have a global presence in over 30 countries and territories across North America, Latin America, the United Kingdom, Africa, Asia Pacific and India.
Our solutions are based on a foundation of financial, credit, alternative credit, identity, bankruptcy, lien, judgment, insurance claims, automotive and other relevant information from approximately 90,000 data sources, including financial institutions, private databases and public records repositories. We refine, standardize and enhance this data using sophisticated algorithms to create proprietary databases. Our deep analytics expertise, which includes our people as well as tools such as predictive modeling and scoring, customer segmentation, benchmarking and forecasting, enables businesses and consumers to gain better insights into their risk and financial data. Our decisioning capabilities, which are generally delivered on a software-as-a-service platform, allow businesses to interpret data and apply their specific qualifying criteria to make decisions and take action with respect to their customers. Collectively, our data, analytics and decisioning capabilities allow businesses to authenticate the identity of consumers, effectively determine the most relevant products for consumers, retain and cross-sell to existing consumers, identify and acquire new consumers and reduce loss from fraud. Similarly, our capabilities allow consumers to see how their credit profiles have changed over time, understand the impact of financial decisions on their credit scores and manage their personal information as well as to take precautions against identity theft.
Segments
Over the past few years, we have completed a significant number of acquisitions that have transformed our business. We have also developed a significant number of new product offerings that have further diversified our portfolio of businesses. As a result of the evolution of our business, we have changed the disaggregated revenue and our measure of segment profit (Adjusted EBITDA) information that we provide to our chief operating decision makers (our “CODM”) to better align with how we manage the business. Accordingly, our disclosures around the disaggregation of our revenue and the measure of segment profit have been recast for all periods presented in this Annual Report on Form 10-K to conform to the information used by our CODM. We have not changed our reportable segments and these changes do not impact our consolidated results. See Part II, Item 8, “Financial Statements and Supplementary Data,” Note 18, “Reportable Segments,” for further information about this change.
We manage our business and report disaggregated revenue and financial results in three reportable segments: U.S. Information Services, International and Consumer Interactive.
The U.S. Information Services (or “USIS”) segment provides consumer reports, risk scores, analytical and decisioning services to businesses. These businesses use our services to acquire new customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery methods in our USIS segment allow us to serve a broad set of customers across industries. We report disaggregated revenue of our USIS segment for the financial services and emerging verticals.

40



The International segment provides services similar to our USIS segment to businesses in select regions outside the United States. Depending on the maturity of the credit economy in each country, services may include credit reports, analytics and decisioning services, and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. 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 by our Consumer Interactive segment that help consumers proactively manage their personal finances.
We report disaggregated revenue of our International segment for the following regions: Canada, Latin America, the United Kingdom, Africa, India, and Asia Pacific.
The Consumer Interactive segment offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution, and financial management. Our products are provided through user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.
In addition, Corporate provides shared services for each of the segments, holds investments, raises capital, and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature.
Factors Affecting Our Results of Operations
The following are certain key factors that affect, or have recently affected, our results of operations:
Macroeconomic and Industry Trends
Our revenues can be significantly influenced by general macroeconomic conditions, including the availability of credit and capital, interest rates, inflation, employment levels, consumer confidence and housing demand. In the markets where we compete, we have generally seen good economic conditions and increased market stabilization over the past few years. In the United States, we continue to see a healthy, well-functioning consumer lending market driven by the exceptionally strong labor market and strong consumer confidence. We have also seen solid demand for our marketing services, and in our Consumer Interactive segment, strong demand for our credit and identity theft solutions. These positive signs have been tempered by softness in mortgage originations, which is driven in part by higher interest rates, significant increases in home prices, and a lack of affordable inventory at the entry level. Further, recent volatility in the financial markets and the uncertainty around trade policies and global economic growth add to the concern. Internationally, we continue to see strong growth in key markets, tempered by uncertainty in our Africa region as South Africa emerges from a recession. Also, weakening foreign currencies, primarily in India and Latin America, resulted in a slight decline in results for 2018 compared with 2017.
Our revenues are also significantly influenced by industry trends, including the demand for information services in financial services, healthcare, insurance and other industries we serve. Companies are increasingly relying on business analytics and big-data technologies to help process data in a cost-efficient manner. As customers have gained the ability to rapidly aggregate and analyze data generated by their own activities, they are increasingly expecting access to real-time data and analytics from their information providers as well as solutions that fully integrate into their workflows. As economies in emerging markets continue to develop and mature, we believe there will continue to be favorable socio-economic trends, such as an increase in the size of the middle class and a significant increase in the use of financial services by currently under-served and under-banked customers. Demand for consumer solutions is rising, with higher consumer awareness of the importance and usage of their credit information, increased risk of identity theft due to data breaches, and more readily available free credit information. The complexity of regulations, including from the Consumer Financial Protection Bureau (“CFPB”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act and new capital requirements, continue to make operations for businesses more challenging.
Effects of Inflation
We do not believe that inflation has had a material effect on our business, results of operations or financial condition.
Recent Developments
On December 31, 2018, we made a prepayment of $60.0 million towards our Senior Secured Term Loan B-3, funded from our cash on hand.
On December 17, 2018, we entered into interest rate swap agreements with various counter-parties that fixes our LIBOR exposure on an additional portion of our existing senior secured term loans or similar replacement debt at approximately 2.647% to 2.706%. We have designated these swap agreements as cash flow hedges. The current aggregate notional amount under these agreements is $1,450.0 million, decreasing each quarter until the second agreement terminates on December 30, 2022.

41



During the third quarter of 2018, we repaid the remaining outstanding Senior Secured Revolving Line of Credit balance of $75.0 million.
During the second quarter of 2018, we borrowed a significant amount of additional debt against our senior secured credit facility to fund the purchase of three acquisitions as discussed in “Recent Acquisitions and Partnerships” below. During the second quarter of 2018, we borrowed a total of $125.0 million under the Senior Secured Revolving Line of Credit to fund an acquisition and for general corporate purposes. On June 19, 2018, we borrowed an additional $800.0 million against our Senior Secured Term Loan A-2 and $600.0 million against a new tranche 4 of our Senior Secured Term Loan B (“Senior Secured Term Loan B-4”) to fund the acquisition of Callcredit. On June 29, 2018, we borrowed an additional $400.0 million of our Senior Secured Term Loan B-4 to fund another acquisition and to repay a portion of our Senior Secured Revolving Line of Credit. Our net incremental borrowings during the second quarter of 2018 was $20.0 million under the Senior Secured Revolving Line of Credit.
On March 12, 2018, we repaid $30.0 million of our outstanding Senior Secured Revolving Line of Credit.
On February 13, 2018, we announced that our board of directors approved a dividend policy pursuant to which we intend to pay quarterly cash dividends on our common stock. During 2018, the board of directors declared three quarterly dividends in May, August and November of $0.075 per share, that we paid in June, September and December. In total, we declared $42.6 million of dividends and paid $41.6 million, with the remainder dues as dividend equivalents to employees who hold restricted stock units when and if those units vest.
On February 8, 2018, our board of directors removed the three-year time limitation of our previously announced $300.0 million stock repurchase program. The remaining authorized $166.6 million of repurchases may be made from time to time at management’s discretion at prices management considers to be attractive through open market purchase or through privately negotiated transactions.
On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606), using the modified retrospective approach. Under the modified retrospective approach, we recognized the cumulative effect of adopting ASC Topic 606 in the opening balance of retained earnings. There was no material impact on our consolidated financial statements or on how we recognize revenue upon adoption. See Part II, Item 8 - Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 1, “Significant Accounting Policies,” and Note 13, “Revenue,” for additional information about the adoption of Topic 606.
Recent Acquisitions and Partnerships
We selectively evaluate acquisitions and partnerships as a means to expand our business and international footprint and to enter new markets. During 2018 we completed the following acquisitions:
On October 15, 2018, we acquired 100% of the equity of Rubixis, Inc. (“Rubixis”). Rubixis is an innovative healthcare revenue cycle solutions company that helps providers maximize reimbursement from insurance payers. Rubixis brings specialized expertise in the management of denials and underpayments, two significant pain points for healthcare providers. The results of operations of Rubixis, which are not material to our consolidated financial statements, have been included as part of our USIS segment in our consolidated statements of income since the date of the acquisition. 
On June 29, 2018, we acquired 100% of the equity of iovation, Inc. (“iovation”). iovation is a provider of advanced device identity and consumer authentication services that helps businesses and consumers safely transact in a digital world. The results of operations of iovation, which are not material to our consolidated financial statements, have been included as part of our USIS segment in our consolidated statements of income since the date of the acquisition. 
On June 22, 2018, we increased our noncontrolling interest investment in SavvyMoney, Inc. (“SavvyMoney”). Our initial investment in SavvyMoney was made on August 30, 2016. SavvyMoney is a provider of credit information services for bank and credit union users. We measure our investment in SavvyMoney at our initial cost, minus any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments in SavvyMoney, with any adjustments recorded in other income and expense. We will record any future dividends in other income and expense when received.
On June 19, 2018, we acquired 100% of the equity of Callcredit Information Group, Ltd. (“Callcredit”). Callcredit is a U.K. based information solutions company founded in 2000 that provides data, analytics and technology solutions to help businesses and consumers make informed decisions. The results of operations of Callcredit have been included as part of our International segment in our consolidated statements of income since the date of the acquisition. See Part II, Item 8, “Notes to Consolidated Financial Statements,” Note 2, “Business Acquisitions,” for further information about this acquisition.
On June 1, 2018, we acquired 100% of the equity of Healthcare Payment Specialists, LLC (“HPS”). HPS provides expertise and technology solutions to help medical care providers maximize Medicare reimbursements. The results of

42



operations of HPS, which are not material to our consolidated financial statements, have been included as part of our USIS segment in our consolidated statements of income since the date of the acquisition. 
Key Components of Our Results of Operations
Revenue
The following is a more detailed description of how we derive and report revenue for our three reportable segments:
U.S. Information Services
U.S. Information Services (or “USIS”) provides consumer reports, risk scores, analytical and decisioning services to businesses. These businesses use our services to acquire new customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery methods in our USIS segment allow us to serve a broad set of customers across industries. We report disaggregated revenue of our USIS segment for the following verticals:
Financial Services: The financial services vertical, which accounts for 53% of our 2018 USIS revenue, consists of our consumer lending, mortgage, auto and cards and payments lines of business. Our financial services clients consist of most banks, credit unions, finance companies, auto lenders, mortgage lenders, online-only lenders (FinTech), and other consumer lenders in the United States. We also distribute our solutions through most major resellers, secondary market players and sales agents. Beyond traditional lenders, we work with a variety of credit arrangers, such as auto dealers and peer-to-peer lenders. We provide solutions across every aspect of the lending lifecycle; customer acquisition and engagement, fraud and ID management, retention and recovery. Our products are focused on mitigating risk and include credit reporting, credit marketing, analytics and consulting, identity verification and authentication and debt recovery solutions.
Emerging Verticals: Emerging verticals include healthcare, insurance, collections, property management, public sector and other diversified markets. Our solutions in these verticals are similar to the solutions in our financial services vertical and also address the entire customer lifecycle. We offer onboarding and retention solutions, transaction processing products, scoring products, marketing solutions, analytics and consulting, identity management and fraud solutions, and revenue optimization and collections solutions.
International
The International segment provides services similar to our USIS segment to businesses in select regions outside the United States. Depending on the maturity of the credit economy in each country, services may include credit reports, analytics and decisioning services, and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. 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 by our Consumer Interactive segment that help consumers proactively manage their personal finances.
We report disaggregated revenue of our International segment for the following regions: Canada, Latin America, the United Kingdom, Africa, India, and Asia Pacific.
Consumer Interactive
Consumer Interactive offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution, and financial management. Our products are provided through user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.
Cost of Services
Costs of services include data acquisition and royalty fees, personnel costs related to our databases and software applications, consumer and call center support costs, hardware and software maintenance costs, telecommunication expenses and occupancy costs associated with the facilities where these functions are performed.
Selling, General and Administrative
Selling, general and administrative expenses include personnel-related costs for sales, administrative and management employees, costs for professional and consulting services, advertising and occupancy and facilities expense of these functions.

43





Non-Operating Income and Expense
Non-operating income and expense includes interest expense, interest income, earnings from equity-method investments, dividends from cost-method investments, impairments of equity-method and cost-method investments, if any, expenses related to successful and unsuccessful business acquisitions, loan fees, debt refinancing expenses, certain acquisition-related gains and losses and other non-operating income and expenses.
Results of Operations—Twelve Months Ended December 31, 2018, 2017 and 2016
Key Performance Measures
Over the past few years, we have completed a significant number of acquisitions, including the two largest acquisitions in our company’s history. We have also developed a significant number of new product offerings that have further diversified our portfolio of businesses. As a result of the evolution of our business, we have changed the information that we provide to our CODM to better align with how we currently manage the business. Accordingly, we are also aligning our disclosures around the disaggregation of our revenue and the measure of segment profit, and have recast all periods presented to conform to this new presentation in this Annual Report on Form 10-K. We have not changed our segments and these changes do not impact our consolidated results. See Part II, Item 8, “Financial Statements and Supplementary Data,” Note 18, “Reportable Segments,” for further information about this change.
Management, including our CODM, evaluates the financial performance of our businesses based on a variety of key indicators. These indicators include the non-GAAP measures Adjusted Revenue and consolidated Adjusted EBITDA, and the GAAP measures of revenue, segment Adjusted EBITDA, cash provided by operating activities and cash paid for capital expenditures. For the twelve months ended December 31, 2018, 2017 and 2016, these key indicators were as follows:
 
 
 
 
 
 
 
Change
 
Twelve months ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
(dollars in millions)
2018
 
2017
 
2016
 
$
 
%
 
$
 
%
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated revenue as reported
$
2,317.2

 
$
1,933.8

 
$
1,704.9

 
$
383.4

 
19.8
 %
 
$
229.0

 
13.4
 %
Acquisition revenue related adjustments(2)
28.1

 

 

 
28.1

 
100.0
 %
 

 
 %
Consolidated Adjusted Revenue(1)
$
2,345.3

 
$
1,933.8

 
$
1,704.9

 
$
411.5

 
21.3
 %
 
$
229.0

 
13.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USIS gross revenue
$
1,444.7

 
$
1,204.1

 
$
1,045.1

 
$
240.6

 
20.0
 %
 
$
159.0

 
15.2
 %
Acquisition revenue related adjustments(2)
2.0

 

 

 
2.0

 
nm

 

 
nm

USIS gross Adjusted Revenue
$
1,446.7

 
$
1,204.1

 
$
1,045.1

 
$
242.6

 
20.1
 %
 
$
159.0

 
15.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International gross revenue
$
472.4

 
$
361.9

 
$
313.9

 
$
110.5

 
30.5
 %
 
$
48.0

 
15.3
 %
Acquisition revenue related adjustments(2)
26.1

 

 

 
26.1

 
nm

 

 
nm

International gross Adjusted Revenue
$
498.5

 
$
361.9

 
$
313.9

 
$
136.6

 
37.7
 %
 
$
48.0

 
15.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Interactive gross revenue
$
475.8

 
$
432.1

 
$
407.1

 
$
43.8

 
10.1
 %
 
$
25.0

 
6.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
USIS
$
576.1

 
$
492.3

 
$
428.6

 
$
83.8

 
17.0
 %
 
$
63.7

 
14.9
 %
International
193.0

 
135.0

 
113.7

 
58.0

 
43.0
 %
 
21.3

 
18.7
 %
Consumer Interactive
237.6

 
211.0

 
181.6

 
26.6

 
12.6
 %
 
29.4

 
16.2
 %
Corporate
(89.8
)
 
(90.2
)
 
(87.2
)
 
0.3

 
0.4
 %
 
(2.9
)
 
(3.4
)%

44



Consolidated Adjusted EBITDA(1)
$
916.9

 
$
748.1

 
$
636.8

 
$
168.8

 
22.6
 %
 
$
111.4

 
17.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of net income (loss) attributable to TransUnion to consolidated Adjusted EBITDA(1):
 
 
 
 
 
 
 
Change
 
Twelve months ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
(dollars in millions)
2018
 
2017
 
2016
 
$
 
%
 
$
 
%
Net income (loss) attributable to TransUnion
$
276.6

 
$
441.2

 
$
120.6

 
$
(164.6
)
 
(37.3
)%
 
$
320.6

 
nm
Discontinued operations
1.5

 

 

 
1.5

 
nm
 

 
—%
Net income from continuing operations attributable to Transunion
278.1

 
441.2

 
120.6

 
(163.1
)
 
(37.0
)%
 
320.6

 
nm
Net interest expense
132.0

 
82.1

 
80.9

 
49.9

 
60.7
 %
 
1.3

 
1.5
 %
(Benefit) Provision for income taxes
54.5

 
(79.1
)
 
74.0

 
133.6

 
nm
 
(153.1
)
 
nm
Depreciation and amortization
306.9

 
238.0

 
265.2

 
68.9

 
28.9
 %
 
(27.2
)
 
(10.2
)%
EBITDA
771.5

 
682.2

 
540.7

 
89.3

 
13.1
 %
 
141.5

 
26.2
 %
Adjustments to EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related revenue adjustments(2)
28.1

 

 

 
28.1

 
nm

 

 
 %
Stock-based compensation(3)
61.4

 
47.7

 
31.2

 
13.7

 
28.7
 %
 
16.5

 
52.7
 %
Mergers and acquisitions, divestitures and business optimization(4)
38.7

 
8.5

 
18.5

 
30.2

 
nm

 
(10.0
)
 
(53.9
)%
Technology transformation(5)

 

 
23.3

 

 
 %
 
(23.3
)
 
(100.0
)%
Other(6)
17.2

 
9.7

 
23.1

 
7.5

 
77.0
 %
 
(13.4
)
 
(57.9
)%
Total adjustments to EBITDA
145.4

 
65.9

 
96.1

 
79.5

 
120.6
 %
 
(30.2
)
 
(31.4
)%
Consolidated Adjusted EBITDA(1)
$
916.9

 
$
748.1

 
$
636.8

 
$
168.8

 
22.6
 %
 
$
111.4

 
17.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash provided by operating activities
$
559.4

 
$
465.8

 
$
389.9

 
$
93.6

 
20.1
 %
 
$
75.9

 
19.5
 %
Capital expenditures
$
(180.1
)
 
$
(135.3
)
 
$
(124.0
)
 
$
(44.8
)
 
33.1
 %
 
$
(11.3
)
 
9.1
 %
nm: not meaningful
As a result of displaying amounts in millions, rounding differences may exist in the table above.
1.
We define Adjusted Revenue as GAAP revenue adjusted for certain acquisition-related deferred revenue and non-core contract-related revenue. We define Adjusted EBITDA as net income (loss) attributable to the Company before net interest expense, income tax provision (benefit), depreciation and amortization and other adjustments noted in the table above. We present Adjusted Revenue as a supplemental measure of revenue because we believe its provides a basis to compare revenue between periods. We present Adjusted EBITDA as a supplemental measure of our operating performance because it eliminates the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. Also, Adjusted EBITDA is a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours. In addition, our board of directors and executive management team use Adjusted EBITDA as a compensation measure under our incentive compensation plan. Furthermore, under the credit agreement governing our senior secured credit facility, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is tied to a ratio based on Adjusted EBITDA. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Debt.” Adjusted EBITDA does not reflect our capital expenditures, interest, income tax, depreciation, amortization, stock-based compensation and certain other income and expense. Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. Adjusted EBITDA is not a measure of financial condition or profitability under GAAP and should not be considered as an alternative to cash flows from operating activities, as a measure of liquidity or as an alternative to operating income or net income as indicators of operating

45



performance. We believe that the most directly comparable GAAP measure to Adjusted EBITDA is net income attributable to TransUnion. The table above provides a reconciliation from our net income (loss) attributable to TransUnion to consolidated Adjusted EBITDA for the twelve months ended December 31, 2018, 2017 and 2016.
2.
This adjustment represents certain non-cash adjustments related to acquired entities, predominantly adjustments to increase revenue resulting from purchase accounting reductions to deferred revenue we record on the opening balance sheets of acquired entities. Deferred revenue results when a company receives payment in advance of fulfilling their performance obligations under contracts. Business combination accounting rules require us to record deferred revenue of acquired entities at fair value if we are obligated to perform any future services under these contracts. The fair value of this deferred revenue is determined based on the direct and indirect incremental costs of fulfilling our performance obligations under these contracts, plus a normal profit margin. Generally, this fair value calculation results in a reduction to the purchased deferred revenue balance. The above adjustment includes an estimate for the increase in revenue equal to the difference between what the acquired entities would have recorded as revenue and the lower revenue we record as a result of the reduced deferred revenue balance. This increase is partially offset by an estimated decrease to revenue for certain acquired non-core customer contracts that are not classified as discontinued operations that will expire within approximately one year from the date of acquisition. We present Adjusted Revenue as a supplemental measure of our revenue because we believe it provides meaningful information regarding our revenue and provides a basis to compare revenue between periods. In addition, our board of directors and executive management team use Adjusted Revenue as a compensation measure under our incentive compensation plans. The table above provides a reconciliation for revenue to Adjusted Revenue. The estimated adjustments to revenue are subject to change as we finalize the fair value assessments of the deferred revenue acquired with recent acquisitions and as we complete our assessment of the non-core customer contracts.
3.
Consisted of stock-based compensation and cash-settled stock-based compensation.
4.
For the twelve months ended December 31, 2018, consisted of the following adjustments: $29.3 million of acquisition expenses; $6.8 million of Callcredit integration costs; a $2.3 million loss on the divestiture of a small business operation; a $0.4 million adjustment to contingent consideration expense from previous acquisitions; and $(0.1) million of miscellaneous.
For the twelve months ended December 31, 2017, consisted of the following adjustments: $8.3 million of acquisition expenses; a $0.5 million loss on the divestiture of a small business operation; and a $(0.3) million reduction to contingent consideration expense from previous acquisitions.
For the twelve months ended December 31, 2016, consisted of the following adjustments: $17.6 million of acquisition expenses; a $2.0 million loss on the impairment of a cost method investment; a $0.2 million loss on the closure and divestiture of certain business operations; a $(0.7) million net gain from exiting a business relationship and the closure and divestiture of certain business operations; a $(0.5) million adjustment to business optimization expenses; and a $(0.1) million reduction in contingent consideration expense from previous acquisitions.
5.
Represented costs associated with a project to transform our technology infrastructure.
6.
For the twelve months ended December 31, 2018, consisted of the following adjustments: $12.0 million of fees related to new financing under our senior secured credit facility, $3.8 million of currency remeasurement of our foreign operations; $1.6 million of loan fees; $0.5 million of fees incurred in connection with a secondary offering of shares of TransUnion common stock by certain of our stockholders; and a $(0.7) million mark-to-market gain related to ineffectiveness of our interest rate hedge.
For the twelve months ended December 31, 2017, consisted of the following adjustments: $10.5 million of fees related to the refinancing of our senior secured credit facility; $1.7 million of fees incurred in connection with secondary offerings of shares of TransUnion common stock by certain of our stockholders; $1.4 million of loan fees; a $0.3 million mark-to-market loss related to ineffectiveness of our interest rate hedge; $(2.2) million of currency remeasurement of our foreign operations; a $(1.3) million reduction to expense for certain legal and regulatory matters; a $(0.6) million reduction to expense for sales and use tax matters; and $(0.1) million of miscellaneous.
For the twelve months ended December 31, 2016, consisted of the following adjustments: $19.4 million for the settlement with the CFPB and related costs; $2.7 million of fees connected to the filing of secondary registration statements filed on behalf of certain stockholders; $1.4 million of loan fees; a $0.5 million mark-to-market loss related to ineffectiveness of our interest rate hedge; $0.3 million for certain legal and regulatory matters; $(0.3) million of currency remeasurement of our foreign operations; and $(0.9) million of miscellaneous.

46



Revenue
For 2018, revenue increased $383.4 million compared with 2017, due to strong organic growth in all of our segments, including both the USIS financial services and emerging verticals and all of the International regions, revenue from our recent acquisitions in our USIS and International segments, and revenue from new product initiatives, partially offset by the impact of weakening foreign currencies on the 2018 revenue of our International segment. Acquisitions accounted for an increase in revenue of 7.9%. The impact of weakening foreign currencies accounted for a decrease in revenue of 0.5%.
For 2017, revenue increased $229.0 million compared with 2016, due to strong organic growth in all of our segments, including
both the USIS financial services and emerging verticals and all International regions, revenue from our 2016 and 2017 acquisitions in our USIS and International segments, and by the impact of strengthening foreign currencies on the 2017 revenue of our International segment. Acquisitions accounted for an increase in revenue of 1.6%. The impact of strengthening foreign currencies accounted for an increase in revenue of 0.6%.
Revenue by segment and a more detailed explanation of revenue within each segment are as follows:
 
 
 
 
 
 
 
Change
 
Twelve months ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
(dollars in millions)
2018
 
2017
 
2016
 
$
 
%
 
$
 
%
USIS:
 
 
 
 
 
 
 
 
 
 
 
 
 
     Financial Services
$
765.1

 
$
620.0

 
$
551.7

 
$
145.1

 
23.4
 %
 
$
68.3

 
12.4
 %
     Emerging Verticals
679.6

 
584.1

 
493.4

 
95.5

 
16.4
 %
 
90.7

 
18.4
 %
USIS gross revenue
1,444.7

 
1,204.1

 
1,045.1

 
240.6

 
20.0
 %
 
159.0

 
15.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International:
 
 
 
 
 
 
 
 
 
 
 
 
 
     Canada
96.0

 
85.8

 
73.9

 
10.3

 
12.0
 %
 
11.9

 
16.1
 %
     Latin America
102.3

 
98.4

 
86.9

 
3.9

 
3.9
 %
 
11.5

 
13.2
 %
     UK
71.3

 

 

 
71.3

 
nm

 

 
nm

     Africa
64.2

 
61.3

 
60.6

 
2.9

 
4.8
 %
 
0.7

 
1.1
 %
     India
81.8

 
64.6

 
47.5

 
17.2

 
26.7
 %
 
17.1

 
36.0
 %
     Asia Pacific
56.7

 
51.9

 
45.0

 
4.8

 
9.3
 %
 
6.9

 
15.3
 %
International gross revenue
472.4

 
361.9

 
313.9

 
110.5

 
30.5
 %
 
48.0

 
15.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Interactive gross revenue
475.8

 
432.1

 
407.1

 
43.8

 
10.1
 %
 
25.0

 
6.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross revenue
$
2,392.9

 
$
1,998.1

 
$
1,766.0

 
$
394.9

 
19.8
 %
 
$
232.0

 
13.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intersegment revenue eliminations:
 
 
 
 
 
 
 
 
 
 
 
 
 
USIS
$
(70.0
)
 
$
(59.3
)
 
$
(57.0
)
 
$
(10.7
)
 
(18.0
)%
 
$
(2.3
)
 
(4.0
)%
International
(5.1
)
 
(4.8
)
 
(4.0
)
 
(0.3
)
 
(5.3
)%
 
(0.7
)
 
(17.0
)%
Consumer Interactive
(0.7
)
 
(0.2
)
 

 
(0.5
)
 
nm

 
(0.1
)
 
nm

Total intersegment revenue eliminations
(75.7
)
 
(64.2
)
 
(61.1
)
 
(11.5
)
 
(17.9
)%
 
(3.1
)
 
(5.1
)%
Total revenue as reported
$
2,317.2

 
$
1,933.8

 
$
1,704.9

 
$
383.4

 
19.8
 %
 
$
229.0

 
13.4
 %
nm: not meaningful
As a result of displaying amounts in millions, rounding differences may exist in the table above.
USIS Segment
For 2018, USIS revenue increased $240.6 million compared with 2017, due to increases in revenue from both verticals, including an increase of 6.8% from recent acquisitions.
For 2017, USIS revenue increased $159.0 million compared with 2016, due to increases in revenue from both verticals, including revenue from recent acquisitions.

47



Financial Services: For 2018, financial services revenue increased $145.1 million due primarily to a 13.8% increase in credit report unit volume, an increase of 6.0% from our recent acquisitions, and an increase from new product initiatives, partially offset by a decrease in the average price per credit report due to a change in the mix of customer volumes. Credit report unit volume increased in 2018 despite softness in the mortgage market, including refinance volume, particularly in the fourth quarter of 2018, which was more than offset by an increase in volume in consumer lending.
For 2017, financial services revenue increased $68.3 million due primarily to a 3.9% increase in online credit report unit volume, an increase from new product initiatives, revenue from recent acquisitions, and an increase in the average price per credit report due to a change in the mix of customer volumes.
Emerging Verticals: For 2018, emerging verticals revenue increased $95.5 million due primarily to an increase of 7.6% from recent acquisitions, an increase from new product initiatives, and organic growth in our emerging verticals, particularly our insurance and public sector verticals, driven by a 7.8% increase in credit report unit volume.
For 2017, emerging vertical revenue increased $90.7 million due primarily to organic growth in our emerging verticals, particularly our healthcare and property management verticals, revenue from recent acquisitions, revenue from new product initiatives and a 2.8% increase in credit report unit volume.
International Segment
For 2018, International revenue increased $110.5 million, or 30.5%, compared with 2017. The increase was due to a 19.7% increase from our acquisition of Callcredit and higher local currency revenue in all regions from increased volumes, partially offset by a decrease of 2.5% from the impact of weakening foreign currencies.
For 2017, International revenue increased $48.0 million, or 15.3%, compared with 2016. The increase was due to higher local currency revenue in most regions from increased volumes, the inclusion of revenue from our acquisition of CIFIN in 2016 and by an increase of 3.5% from the impact of strengthening foreign currencies.
Canada: For 2018, Canada revenue increased $10.3 million, or 12.0%, due to higher local currency revenue from increased volumes including new product initiatives.
For 2017, Canada revenue increased $11.9 million, or 16.1%, due to higher local currency revenue from increased volumes including new product initiatives and an increase of 2.3% from the impact of strengthening foreign currencies.
Latin America: For 2018, Latin America revenue increased $3.9 million, or 3.9%, due to higher local currency revenue from increased volumes including new product initiatives, partially offset by a decrease of 4.5% from the impact of weakening foreign currencies.
For 2017, Latin America revenue increased $11.5 million, or 13.2%, due to higher local currency revenue from increased volumes including new product initiatives, the inclusion of revenue from our acquisition of CIFIN in 2016, and an increase of 3.0% from the impact of strengthening foreign currencies.
United Kingdom: For 2018, our United Kingdom revenue from continuing operations was $71.3 million, all attributable to Callcredit. We did not have revenue in the United Kingdom in 2017.
Africa: For 2018, Africa revenue increased $2.9 million, or 4.8%, due to an increase in local currency revenue from increased volumes including new product initiatives and a 0.8% increase due to the impact of strengthening foreign currencies.
For 2017, Africa revenue increased $0.7 million, or 1.1%, compared with 2016, due to an increase of 8.5% from the impacts of strengthening foreign currencies, partially offset by lower local currency revenue from a decrease in volume resulting from general economic headwinds.
India: For 2018, India revenue increased $17.2 million, or 26.7%, due to higher local currency revenue from increased volumes including new product initiatives, partially offset by a decrease of 6.9% from the impact of weakening foreign currencies.
For 2017, India revenue increased $17.1 million, or 36.0%, due to higher local currency revenue from increased volumes including new product initiatives and an increase of 4.4% from the impact of strengthening foreign currencies.
Asia Pacific: For 2018, Asia Pacific revenue increased $4.8 million, or 9.3%, due to higher local currency revenue from increased volumes including new product initiatives, partially offset by a decrease of 1.4% from the impact of weakening foreign currencies.
For 2017, Asia Pacific revenue increased $6.9 million, or 15.3%, due to higher local currency revenue from increased volumes including new product initiatives, partially offset by a decrease of 1.4% from the impact of weakening foreign currencies.

48



Consumer Interactive Segment
For 2018, Consumer Interactive revenue increased $43.8 million compared with 2017, due primarily to an increase in revenue from our direct channel and from our indirect channel, which includes incremental credit monitoring revenue due to a breach at a competitor.
For 2017, Consumer Interactive revenue increased $25.0 million, compared with 2016, due primarily to an increase in revenue from our indirect channel.
Operating Expenses
Operating expenses for the periods reported were as follows:  
 
 
 
 
 
 
 
Change
 
Twelve months ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
(dollars in millions)
2018
 
2017
 
2016
 
$
 
%
 
$
 
%
Cost of services
$
790.1

 
$
645.7

 
$
579.1

 
$
144.5

 
22.4
%
 
$
66.6


11.5
 %
Selling, general and administrative
707.7

 
585.4

 
560.1

 
122.2

 
20.9
%
 
25.3

 
4.5
 %
Depreciation and amortization
306.9

 
238.0

 
265.2

 
68.9

 
28.9
%
 
(27.2
)
 
(10.3
)%
Total operating expenses
$
1,804.7

 
$
1,469.1

 
$
1,404.4

 
$
335.6

 
22.8
%
 
$
64.7

 
4.6
 %
As a result of displaying amounts in millions, rounding differences may exist in the table above.
Cost of Services
For 2018, cost of services increased $144.5 million compared with 2017. The increase was due primarily to:
operating and integration-related costs relating to the business acquisitions in our USIS and International segments;
an increase in labor costs, primarily in our USIS and International segments, as we continue to invest in key strategic growth initiatives; and
an increase in product costs resulting from the increase in revenue, primarily in our USIS segment.
For 2017, cost of services increased $66.6 million compared with 2016. The increase was due primarily to:
an increase in product costs resulting from the increase in revenue, primarily in our USIS segment;
an increase in labor costs, primarily in our USIS and International segments, as we continue to invest in key strategic growth initiatives;
operating costs related to our acquisitions in our USIS and International segments; and
the impact of strengthening foreign currencies on the expenses of our International segment,
partially offset by:
savings enabled by our technology transformation and other key productivity initiatives; and
a decrease in product costs from a favorable shift in the mix of revenue in our Consumer Interactive segment.
Selling, General and Administrative
For 2018, selling, general and administrative expenses increased $122.2 million compared with 2017. The increase was due primarily to:
operating and integration-related costs relating to the business acquisitions in our USIS and International segments; and
an increase in labor costs, primarily in our USIS segment and in Corporate, as we continue to invest in key strategic growth initiatives.
For 2017, selling, general and administrative expenses increased $25.3 million compared with 2016. The increase was due primarily to:
an increase in labor costs, primarily in our USIS and International segments, as we continue to invest in key strategic growth initiatives, and higher stock-based compensation;
the impact of strengthening foreign currencies on the expenses of our International segment; and
operating costs related to our acquisitions in our USIS and International segments,

49



partially offset by:
a decrease in litigation expense in Corporate as a result of recording the settlement with the CFPB in 2016; and
the benefit of focusing our marketing spend on more efficient channels in our Consumer Interactive.
Depreciation and amortization
For 2018, depreciation and amortization increased $68.9 million compared with 2017, primarily in our International and USIS segments, due to fixed assets and intangible assets acquired with our recent USIS and International segment business acquisitions.
For 2017, depreciation and amortization decreased $27.2 million compared with 2016, primarily in our USIS segment, due to the useful lives of certain USIS internal-use software and equipment assets ending June 30, 2016, in conjunction with our strategic initiative to transform our technology platform. The decrease related to these technology assets was partially offset by additional depreciation and amortization from the new capital expenditures related to our technology transformation initiative and from assets acquired with our recent business acquisitions.
Adjusted EBITDA and Adjusted EBITDA margin
 
 
 
 
 
 
 
Change
 
Twelve months ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
(dollars in millions)
2018
 
2017
 
2016
 
$
 
%
 
$
 
%
Adjusted Revenue: