Reportable Segments - Level 3 Tag

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Selected Segment Financial Information and Disaggregated Revenue

Selected segment financial information and disaggregated revenue consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Gross Revenue:
U.S. Markets:
Financial Services	$	222.2	$	213.0	$	452.6	$	402.1
Emerging Verticals	183.2		192.9		374.7		372.6
Total U.S. Markets	405.5		405.9		827.3		774.7
International:
Canada	24.1		25.4		50.6		48.4
Latin America	17.2		26.2		41.5		51.5
United Kingdom	39.2		46.6		88.0		88.8
Africa	9.0		14.0		23.3		29.0
India	17.6		24.9		48.4		52.6
Asia Pacific	12.5		14.0		25.6		26.8
Total International	119.7		151.1		277.4		297.1
Total Consumer Interactive	128.4		123.6		255.1		246.9
Total revenue, gross	$	653.5	$	680.5	$	1,359.9	$	1,318.7
Intersegment revenue eliminations:
U.S. Markets	$	(17.4)	$	(17.2)	$	(34.5)	$	(34.7)
International	(1.2)		(1.3)		(2.5)		(2.5)
Consumer Interactive	(0.4)		(0.2)		(0.8)		(0.4)
Total intersegment eliminations	(19.1)		(18.6)		(37.8)		(37.5)
Total revenue as reported	$	634.4	$	661.9	$	1,322.0	$	1,281.2

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

Earning from Equity Method Investments Included in Other Income and Expense, Net

Earnings from equity method investments included in non-operating income and expense was as follows:

	Three Months Ended June 30,				Six Months Ended   June 30,
(in millions)	2020		2019		2020		2019
U.S. Markets	$	0.6	$	0.6	$	1.3	$	1.3
International	1.4		2.7		3.3		5.8
Total	$	2.1	$	3.3	$	4.6	$	7.1

Reconciliation of Other Significant Reconciling Items from Segments to Consolidated

A reconciliation of Segment Adjusted EBITDA to income from continuing operations before taxes for the periods presented is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
U.S. Markets Adjusted EBITDA	$	171.2	$	175.4	$	342.7	$	317.5
International Adjusted EBITDA	37.5		59.6		97.7		124.5
Consumer Interactive Adjusted EBITDA	61.7		59.1		119.1		119.3
Total	270.4		294.1		559.5		561.3
Adjustments to reconcile to income from continuing operations before income taxes:
Corporate expenses(1)	(27.7)		(30.4)		(53.5)		(58.7)
Net interest expense	(32.3)		(43.4)		(68.1)		(86.9)
Depreciation and amortization	(90.8)		(89.2)		(181.2)		(182.7)
Acquisition-related revenue adjustments(2)	—		(1.7)		—		(5.9)
Stock-based compensation(3)	(19.4)		(8.2)		(21.7)		(20.9)
Mergers and acquisitions, divestitures and business optimization(4)	(7.1)		23.9		(11.5)		12.6
Accelerated technology investment(5)	(3.3)		—		(5.8)		—
Other(6)	1.8		(1.3)		(33.8)		(1.9)
Net income attributable to non-controlling interests	1.5		2.5		5.6		4.9
Total adjustments	(177.4)		(147.8)		(369.9)		(339.4)
Income from continuing operations before income taxes	$	93.0	$	146.3	$	189.6	$	221.8

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

(1)Certain costs 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.

(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. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue.

(3)Consisted of stock-based compensation and cash-settled stock-based compensation.

(4)For the three months ended June 30, 2020, consisted of the following adjustments: a $4.8 million loss on the impairment of a Cost Method investment; $3.6 million of Callcredit integration costs; $1.2 million of acquisition expenses; and a ($2.5) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer.

For the six months ended June 30, 2020, consisted of the following adjustments: $7.5 million of Callcredit integration costs; a $4.8 million loss on the impairment of a Cost Method investment; $3.3 million of acquisition expenses; $0.3 million of adjustments to contingent consideration expense from previous acquisitions; a ($2.5) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer; a ($1.8) million gain on the disposal of assets of a small business in our United Kingdom region that are classified as held-for-sale; and a ($0.1) million reimbursement for transition services provided to the buyers of certain of our discontinued operations.

For the three months ended June 30, 2019, consisted of the following adjustments: a ($31.2) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer; a

($0.9) million adjustment to contingent consideration expense from previous acquisitions; a ($0.2) million reimbursement for transition services provided to the buyers of certain of our discontinued operations; $4.4 million of Callcredit integration costs; a $3.3 million loss on the impairment of a Cost Method investment; and $0.8 million of acquisition expenses.

For the six months ended June 30, 2019, consisted of the following adjustments: a ($31.2) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer; ($0.2) million reimbursement for transition services provided to the buyers of our discontinued operations; $8.6 million loss on the impairment of certain Cost Method investments; $8.5 million of Callcredit integration costs; and $1.6 million of acquisition expenses.

(5)Represents expenses associated with our accelerated technology investment to migrate to the cloud.

(6)For the three months ended June 30, 2020, consisted of the following adjustments: a ($2.0) million gain from currency remeasurement of our foreign operations; a ($0.3) million recovery from the Fraud Incident, net of additional administration expenses; $0.4 million of loan fees; and $0.1 million other.

For the six months ended June 30, 2020, consisted of the following adjustments: $30.5 million of expense incurred in connection with the Ramirez litigation; a $2.9 million loss from currency remeasurement of our foreign operations; $0.8 million of loan fees; $0.2 million of fees related to our new swap agreements; $0.1 million other; ($0.5) million reimbursement of fees associated with the refinancing of our Senior Secured Credit Facility; and a ($0.2) million recovery from the Fraud Incident, net of additional administration expense.

For the three months ended June 30, 2019, consisted of the following adjustments: $0.8 million of deferred loan fees written off as a result of the prepayments on our debt; $0.6 million of loan fees; and $(0.1) million from currency remeasurement.

For the six months ended June 30, 2019, consisted of the following adjustments: $1.0 million of loan fees; $0.8 million of deferred loan fees written off as a result of the prepayments on our debt; $0.2 million from currency remeasurement.