Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 10-Q
 
 
 
 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2016
- 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, IL
 
60661
(Address of principal executive offices)
 
(Zip code)
312-985-2000
(Registrants’ telephone number, including area code)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
Yes   x
No   ¨
 
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
 
Yes   x     No   ¨
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
 
 
Large accelerated filer
 
¨
 
Accelerated filer
 
¨
 
 
 
 
 
 
 
 
 
Non-accelerated filer
 
x   
 
Smaller reporting company
 
¨
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 
Yes   ¨     No   x
 
 
The number of shares of registrants’ common stock outstanding as of June 30, 2016 , was 182,725,313 .



Table of Contents

TRANSUNION
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED JUNE 30, 2016
TABLE OF CONTENTS
 
 
Page

2
Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

TRANSUNION AND SUBSIDIARIES
Consolidated Balance Sheets
(in millions, except per share data)

 
June 30,
2016
 
December 31,
2015
 
Unaudited
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
141.3

 
$
133.2

Trade accounts receivable, net of allowance of $4.4 and $4.2
256.5

 
228.3

Other current assets
100.3

 
65.3

Total current assets
498.1

 
426.8

Property, plant and equipment, net of accumulated depreciation and amortization of $202.9 and $174.3
192.6

 
183.0

Goodwill, net
2,120.5

 
1,983.4

Other intangibles, net of accumulated amortization of $730.7 and $615.3
1,820.9

 
1,770.1

Other assets
91.8

 
79.5

Total assets
$
4,723.9

 
$
4,442.8

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Trade accounts payable
$
112.2

 
$
105.4

Short-term debt and current portion of long-term debt
50.8

 
43.9

Other current liabilities
163.3

 
146.7

Total current liabilities
326.3

 
296.0

Long-term debt
2,350.3

 
2,160.7

Deferred taxes
612.3

 
588.4

Other liabilities
54.4

 
27.8

Total liabilities
3,343.3

 
3,072.9

Redeemable noncontrolling interests
—

 
2.9

Stockholders’ equity:
 
 
 
Common stock, $0.01 par value; 1.0 billion shares authorized at June 30, 2016 and December 31, 2015, 183.4 million and 183.0 million shares issued at June 30, 2016 and December 31, 2015, respectively, and 182.7 million shares and 182.3 million shares outstanding as of June 30, 2016 and December 31, 2015, respectively
1.8

 
1.8

Additional paid-in capital
1,832.2

 
1,850.3

Treasury stock at cost; 0.7 million shares at June 30, 2016 and December 31, 2015
(4.6
)
 
(4.6
)
Accumulated deficit
(394.4
)
 
(424.3
)
Accumulated other comprehensive loss
(184.8
)
 
(191.8
)
Total TransUnion stockholders’ equity
1,250.2

 
1,231.4

Noncontrolling interests
130.4

 
135.6

Total stockholders’ equity
1,380.6

 
1,367.0

Total liabilities and stockholders’ equity
$
4,723.9

 
$
4,442.8


See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Income (Loss) (Unaudited)
(in millions, except per share data)
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Revenue
$
425.7

 
$
378.5

 
$
831.4

 
$
731.6

Operating expenses
 
 
 
 
 
 
 
Cost of services (exclusive of depreciation and amortization below)
143.8

 
131.5

 
292.9

 
257.1

Selling, general and administrative
144.4

 
127.0

 
276.6

 
248.9

Depreciation and amortization
74.0

 
68.6

 
146.5

 
137.7

Total operating expenses
362.2

 
327.1

 
716.0

 
643.7

Operating income
63.5

 
51.4

 
115.4

 
87.9

Non-operating income and expense
 
 
 
 
 
 
 
Interest expense
(21.3
)
 
(44.9
)
 
(41.7
)
 
(89.6
)
Interest income
1.1

 
1.2

 
1.9

 
2.1

Earnings from equity method investments
2.0

 
2.3

 
3.9

 
4.6

Other income and (expense), net
(9.3
)
 
(5.3
)
 
(16.9
)
 
(7.7
)
Total non-operating income and expense
(27.5
)
 
(46.7
)
 
(52.8
)
 
(90.6
)
Income (loss) before income taxes
36.0

 
4.7

 
62.6

 
(2.7
)
Provision for income taxes
(16.3
)
 
(5.1
)
 
(28.3
)
 
(2.1
)
Net income (loss)
19.7

 
(0.4
)
 
34.3

 
(4.8
)
Less: net income attributable to the noncontrolling interests
(2.4
)
 
(2.2
)
 
(4.4
)
 
(4.4
)
Net income (loss) attributable to TransUnion
$
17.3

 
$
(2.6
)
 
$
29.9

 
$
(9.2
)
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.09

 
$
(0.02
)
 
$
0.16

 
$
(0.06
)
Diluted
$
0.09

 
$
(0.02
)
 
$
0.16

 
$
(0.06
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
182.5

 
148.5

 
182.4

 
148.2

Diluted
184.4

 
148.5

 
184.2

 
148.2

See accompanying notes to unaudited consolidated financial statements.


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TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(in millions)
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net income (loss)
$
19.7

 
$
(0.4
)
 
$
34.3

 
$
(4.8
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
         Foreign currency translation:
 
 
 
 
 
 
 
               Foreign currency translation adjustment
3.8

 
(1.4
)
 
30.1

 
(28.7
)
               Benefit for income taxes
3.0

 
1.2

 
3.1

 
1.3

         Foreign currency translation, net
6.8

 
(0.2
)
 
33.2

 
(27.4
)
         Hedge instruments:
 
 
 
 
 
 
 
               Net unrealized loss
(11.4
)
 
—

 
(34.9
)
 
—

               Amortization of accumulated loss
0.1

 
0.1

 
0.2

 
0.2

               Benefit (expense) for income taxes
4.2

 
(0.1
)
 
12.9

 
(0.1
)
         Hedge instruments, net
(7.1
)
 
—

 
(21.8
)
 
0.1

Total other comprehensive income (loss), net of tax
(0.3
)
 
(0.2
)
 
11.4

 
(27.3
)
Comprehensive income (loss)
19.4

 
(0.6
)
 
45.7

 
(32.1
)
Less: comprehensive income attributable to noncontrolling interests
(1.7
)
 
(0.7
)
 
(8.9
)
 
(3.3
)
Comprehensive income (loss) attributable to TransUnion
$
17.7

 
$
(1.3
)
 
$
36.8

 
$
(35.4
)
See accompanying notes to unaudited consolidated financial statements.


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TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in millions)
 
Six Months Ended 
 June 30,
 
2016
 
2015
Cash flows from operating activities:
 
 
 
Net income (loss)
$
34.3

 
$
(4.8
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
146.5

 
137.7

Net loss on refinancing transactions
—

 
3.8

Amortization and loss on fair value of hedge instrument
1.2

 
0.9

Equity in net income of affiliates, net of dividends
1.7

 
(3.0
)
Deferred taxes
(4.1
)
 
(11.2
)
Amortization of discount and deferred financing fees
1.5

 
4.5

Stock-based compensation
8.9

 
5.2

Provision for losses on trade accounts receivable
1.8

 
1.6

Other
0.9

 
0.3

Changes in assets and liabilities:
 
 
 
Trade accounts receivable
(22.9
)
 
(32.7
)
Other current and long-term assets
(28.6
)
 
7.2

Trade accounts payable
2.2

 
6.4

Other current and long-term liabilities
6.1

 
0.6

Cash provided by operating activities
149.5

 
116.5

Cash flows from investing activities:
 
 
 
Capital expenditures
(54.9
)
 
(68.3
)
Proceeds from sale of trading securities
0.9

 
0.6

Purchases of trading securities
(1.2
)
 
(1.2
)
Proceeds from sale of other investments
19.7

 
8.3

Purchases of other investments
(17.3
)
 
(11.6
)
Acquisitions and purchases of noncontrolling interests, net of cash acquired
(270.6
)
 
(13.8
)
Acquisition-related deposits
—

 
9.1

Cash used in investing activities
(323.4
)
 
(76.9
)
Cash flows from financing activities:
 
 
 
Proceeds from senior secured term loan B
150.0

 
1,881.0

Extinguishment of senior secured term loan B
—

 
(1,881.0
)
Proceeds from senior secured term loan A
55.0

 
—

Proceeds from senior secured revolving line of credit
145.0

 
35.0

Payments of senior secured revolving line of credit
(145.0
)
 
(85.0
)
Repayments of debt
(23.8
)
 
(14.4
)
Proceeds from initial public offering
—

 
764.5

Underwriter fees and other costs on initial public offering
—

 
(49.4
)
Proceeds from issuance of common stock and exercise of stock options
2.3

 
2.0

Debt financing fees
(3.4
)
 
(8.7
)
Excess tax benefit
2.2

 
—

Distributions to noncontrolling interests
(1.0
)
 
(1.9
)
Payment of contingent obligation
(0.3
)
 
—

Cash provided by financing activities
181.0

 
642.1

Effect of exchange rate changes on cash and cash equivalents
1.0

 
(1.6
)
Net change in cash and cash equivalents
8.1

 
680.1

Cash and cash equivalents, beginning of period
133.2

 
77.9

Cash and cash equivalents, end of period
$
141.3

 
$
758.0

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES
Consolidated Statement of Stockholders’ Equity (Unaudited)
(in millions)
 
 
Common Stock
 
Paid-In Capital
 
Treasury Stock
 
Accumulated Deficit
 
Accumulated
Other Comprehensive Loss
 
Non-controlling Interests
 
Total
 
Redeemable
Non-
controlling
Interests
 
 
Shares
 
Amount
 
 
 
 
 
 
 
Balance December 31, 2015
 
182.3

 
$
1.8

 
$
1,850.3

 
$
(4.6
)
 
$
(424.3
)
 
$
(191.8
)
 
$
135.6

 
$
1,367.0

 
$
2.9

Net income
 
—

 
—

 
—

 
—

 
29.9

 
—

 
4.4

 
34.3

 
—

Other comprehensive income
 
—

 
—

 
—

 
—

 
—

 
7.0

 
(0.2
)
 
6.8

 
4.6

Distributions to noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
—

 
(1.6
)
 
(1.6
)
 
—

Adjustment of redeemable noncontrolling interest
 
—

 
—

 
(10.0
)
 
—

 
—

 
—

 
—

 
(10.0
)
 
15.8

Establishment of noncontrolling interests
 
—

 
—

 
—

 
—

 
—

 
—

 
10.2

 
10.2

 
43.7

Excess tax benefit
 
—

 
—

 
2.2

 
—

 
—

 
—

 
—

 
2.2

 
—

Stock-based compensation
 
—

 
—

 
8.9

 
—

 
—

 
—

 
—

 
8.9

 
—

Exercise of stock options
 
0.4

 
—

 
2.3

 
—

 
—

 
—

 
—

 
2.3

 
—

Purchase of noncontrolling interest
 
—

 
—

 
(21.5
)
 
—

 
—

 
—

 
(18.0
)
 
(39.5
)
 
(67.0
)
Balance June 30, 2016
 
182.7

 
$
1.8

 
$
1,832.2

 
$
(4.6
)
 
$
(394.4
)
 
$
(184.8
)
 
$
130.4

 
$
1,380.6

 
$
—

See accompanying notes to unaudited consolidated financial statements.


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TRANSUNION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
1. Significant Accounting and Reporting Policies
Basis of Presentation
Any reference in this report to “the Company”, “we”, “our”, “us”, and “its’” are to TransUnion and its consolidated subsidiaries, collectively.
The accompanying unaudited consolidated financial statements of TransUnion and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany transactions and balances have been eliminated. The operating results of TransUnion for the periods presented are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016 . These unaudited consolidated financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2015 , included in Exhibit 99.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on June 1, 2016.
Principles of Consolidation
The consolidated financial statements of TransUnion include the accounts of TransUnion and all of its majority-owned or controlled subsidiaries. Investments in unconsolidated entities in which the Company has at least a 20% ownership interest, or where it is able to exercise significant influence, are accounted for using the equity method. Nonmarketable investments in unconsolidated entities in which the Company has less than a 20% ownership interest, or where it is not able to exercise significant influence, are accounted for using the cost method and periodically reviewed for impairment.
Subsequent Events
Events and transactions occurring through the date of issuance of the financial statements have been evaluated by management and, when appropriate, recognized or disclosed in the financial statements or notes to the consolidated financial statements.
Recently Adopted Accounting Pronouncements
On April 7, 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs . The amendments in this update require that unamortized debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. The new guidance is required to be applied on a retrospective basis, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance. Accordingly, we have presented our debt as of June 30, 2016 , and December 31, 2015 , net of unamortized debt issue costs of $5.2 million and $3.9 million , respectively, on our balance sheet and in Footnote 8, “Debt .”

On August 18, 2015, the FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting). The ASU indicates the SEC staff would not object to presenting deferred debt issuance costs for a line of credit arrangement as an asset in the balance sheet. We continue to present our deferred line of credit fees as an asset in the consolidated balance sheet. See Note 3 “Other Current Assets” and Note 4 “Other Assets.”
Recent Accounting Pronouncements Not Yet Adopted
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . This comprehensive guidance will replace all existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. During 2016, the FASB issued additional guidance: ASU No. 2016-09 Revenue from Contracts with Customers (Topic 606) : Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-11 Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update) and ASU No. 2016-12 Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. This additional guidance updates and clarifies the guidance in certain sub-sections of Topic 606. We are currently assessing the impact this revenue recognition guidance will have on our consolidated financial statements.
On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU is intended to improve the recognition and measurement

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of financial instruments. Among other things, the ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein. We are currently assessing the impact this guidance will have on our consolidated financial statements.
On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU, among other things, will require lessee’s to record a lease liability, which is an obligation to make lease payments arising from a lease, and right-of-use asset, which is an asset that represents the right to use, or control the use of, a specified asset for the lease term, for all long-term leases. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently assessing the impact this guidance will have on our consolidated financial statements.
On March 30, 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards, and classification on the statement of cash flows. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods therein. We are currently assessing the impact this guidance will have on our consolidated financial statements.
On June 16, 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In addition, these amendments require the measurement of all expected credit losses for financial assets, including trade accounts receivable, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim period therein. We are currently assessing the impact this guidance will have on our consolidated financial statements.
2. Fair Value
The following table summarizes financial instruments measured at fair value, on a recurring basis, as of June 30, 2016 :
(in millions)
 
Total
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
Trading securities
 
$
11.8

 
$
7.6

 
$
4.2

 
$
—

Available for sale securities
 
2.9

 
—

 
2.9

 
—

Total
 
$
14.7

 
$
7.6

 
$
7.1

 
$
—

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Interest rate caps
 
$
(35.5
)
 
$
—

 
$
(35.5
)
 
$
—

Contingent obligations
 
(7.9
)
 
—

 
—

 
(7.9
)
Total
 
$
(43.4
)
 
$
—

 
$
(35.5
)
 
$
(7.9
)
Level 1 instruments consist of exchange-traded mutual funds. Exchange-traded mutual funds are trading securities valued at their current market prices. These securities relate to the nonqualified deferred compensation plan held in trust for the benefit of plan participants.
Level 2 instruments consist of pooled separate accounts, foreign exchange-traded corporate bonds and interest rate caps. Pooled separate accounts are designated as trading securities valued at net asset values. These securities relate to the nonqualified deferred compensation plan held in trust for the benefit of plan participants. Foreign exchange-traded corporate bonds are available-for-sale securities valued at their current quoted prices. These securities mature between 2027 and 2033 . The interest rate caps fair values are determined by discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps in conjunction with the cash payments related to financing the premium of the interest rate caps. The variable interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. See Note 8, “Debt” for additional information regarding interest rate caps.
Unrealized gains and losses on trading securities are included in net income, while unrealized gains and losses on available for sale securities are included in other comprehensive income. There were no significant realized or unrealized gains or losses on our securities for any of the periods presented.

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Level 3 instruments consist of contingent obligations related to companies we have acquired with maximum payouts totaling $35.5 million . These obligations are contingent upon meeting certain performance requirements in 2015 through 2018. The fair values of these obligations were determined based on an income approach, using our current expectations of the future earnings of the acquired entities. We assess the fair value of these obligations each reporting period with any changes reflected as gains or losses in selling, general and administrative expenses in the consolidated statements of income. During the three months ended June 30, 2016 , we recorded a gain of $0.1 million as a result of changes to the fair value of these obligations. During the six months ended June 30, 2016 , there was no significant gain or loss as a result of changes to the fair value of these obligations.
3. Other Current Assets
Other current assets consisted of the following:
(in millions)
 
June 30, 
 2016
 
December 31, 2015
Prepaid expenses
 
$
52.0

 
$
41.9

Income taxes receivable
 
18.7

 
0.1

Other investments
 
17.1

 
12.5

Marketable securities
 
2.9

 
2.9

Deferred financing fees
 
0.5

 
0.5

Other
 
9.1

 
7.4

Total other current assets
 
$
100.3

 
$
65.3

Other investments include non-negotiable certificates of deposit of which the majority are in denominations of greater than $0.1 million . These investments are recorded at their carrying value. As of June 30, 2016 , other investments also include investments we acquired with the purchase of Central de Informacion Financiera S.A. (“CIFIN”).
4. Other Assets
Other assets consisted of the following:
(in millions)
 
June 30, 
 2016
 
December 31, 2015
Investments in affiliated companies
 
$
61.0

 
$
50.5

Other investments
 
13.6

 
13.0

Marketable securities
 
11.8

 
11.2

Deposits
 
2.8

 
1.8

Deferred financing fees
 
1.5

 
1.7

Other
 
1.1

 
1.3

Total other assets
 
$
91.8

 
$
79.5

Other investments include non-negotiable certificates of deposit of which the majority are in denominations of greater than $0.1 million . These investments are recorded at their carrying value.
5. Investments in Affiliated Companies
Investments in affiliated companies represent our investment in non-consolidated domestic and foreign entities. These entities are in businesses similar to ours, such as credit reporting, credit scoring and credit monitoring services. These investments are included in other assets in the consolidated balance sheets.
We use the equity method to account for investments in affiliates where we have at least a 20% ownership interest or where we are able to exercise significant influence. For these investments, we adjust the carrying value for our proportionate share of the affiliates’ earnings, losses and distributions, as well as for purchases and sales of our ownership interest.
We use the cost method to account for nonmarketable investments in affiliates where we have less than a 20% ownership interest or where we are not able to exercise significant influence. For these investments, we adjust the carrying value for purchases and sales of our ownership interests.

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For all investments, we adjust the carrying value if we determine that an other-than-temporary impairment has occurred. There were no other-than-temporary impairments of investments in affiliated companies during the three and six months ended June 30, 2016 or 2015 .
Investments in affiliated companies consisted of the following:
(in millions)
 
June 30, 
 2016
 
December 31, 2015
Total equity method investments
 
$
40.8

 
$
45.5

Total cost method investments
 
20.2

 
5.0

Total investments in affiliated companies
 
$
61.0

 
$
50.5


Earnings from equity method investments, which are included in non-operating income and expense, and dividends received from equity method investments consisted of the following:
(in millions)
 
Three Months Ended 
 June 30, 2016
 
Three Months Ended 
 June 30, 2015
 
Six Months Ended 
 June 30, 2016
 
Six Months Ended 
 June 30, 2015
Earnings from equity method investments
 
$
2.0

 
$
2.3

 
$
3.9

 
$
4.6

Dividends received from equity method investments
 
$
5.2

 
$
0.2

 
$
5.6

 
$
1.6

Dividends received from cost method investments for the three and six months ended June 30, 2016 was $0.6 million in each period and for the three and six months ended June 30, 2015 was $0.3 million in each period.
6. Other Current Liabilities
Other current liabilities consisted of the following:

(in millions)
 
June 30, 
 2016
 
December 31, 2015
Accrued payroll
 
$
76.2

 
$
74.5

Accrued employee benefits
 
26.5

 
24.2

Accrued legal and regulatory
 
16.4

 
16.3

Deferred revenue
 
10.8

 
10.6

Income taxes payable
 
8.3

 
2.6

Accrued interest
 
1.2

 
1.0

Other
 
23.9

 
17.5

Total other current liabilities
 
$
163.3

 
$
146.7

7. Other Liabilities
Other liabilities consisted of the following:
(in millions)
 
June 30, 
 2016
 
December 31, 2015
Interest rate caps
 
$
35.5

 
$
—

Retirement benefits
 
11.7

 
11.2

Unrecognized tax benefits
 
0.3

 
0.3

Other
 
6.9

 
16.3

Total other liabilities
 
$
54.4

 
$
27.8


See note 8, “Debt,” for additional information about the interest rate caps.

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8. Debt
Debt outstanding consisted of the following:
(in millions)
 
June 30, 
 2016
 
December 31, 2015
Senior Secured Term Loan B, payable in quarterly installments through April 9, 2021, including variable interest (3.50% at June 30, 2016) at LIBOR or alternate base rate, plus applicable margin, including original issue discount and deferred financing fees of $8.4 million and $4.9 million, respectively, at June 30, 2016, and original issue discount and deferred financing fees of $7.3 million and $3.8 million, respectively, at December 31, 2015
 
$
1,993.6

 
$
1,855.6

Senior Secured Term Loan A, payable in quarterly installments through June 30, 2020, including variable interest (2.71% at June 30, 2016) at LIBOR or alternate base rate, plus applicable margin, including original issue discount and deferred financing fees of $0.8 million and $0.3 million, respectively, at June 30, 2016, and original issue discount and deferred financing fees of $0.7 million and $0.1 million, respectively, at December 31, 2015
 
385.7

 
340.4

Other notes payable
 
20.1

 
6.2

Capital lease obligations
 
1.7

 
2.4

Total debt
 
2,401.1

 
2,204.6

Less short-term debt and current portion of long-term debt
 
(50.8
)
 
(43.9
)
Total long-term debt
 
$
2,350.3

 
$
2,160.7

Excluding potential additional principal payments due on the senior secured credit facility based on excess cash flows of the prior year, scheduled future maturities of total debt at June 30, 2016 , were as follows:  
(in millions)
 
June 30, 2016
2016
 
$
25.7

2017
 
50.9

2018
 
54.9

2019
 
54.7

2020
 
314.7

Thereafter
 
1,914.6

Unamortized original issue discounts and unamortized deferred financing fee
 
(14.4
)
Total debt
 
$
2,401.1

Senior Secured Credit Facility
On June 15, 2010, we entered into a senior secured credit facility with various lenders. This facility has been amended several times and currently consists of the Senior Secured Term Loan A, the Senior Secured Term Loan B and the senior secured revolving line of credit. On July 15, 2015, we used the net proceeds from our initial public offering (“IPO”), along with $350.0 million of borrowings from the Senior Secured Term Loan A, to redeem all of our then outstanding 9.625% and 8.125% Senior Notes, including a prepayment premium, accrued interest and certain transaction costs.
On March 31, 2016, we borrowed an additional $150.0 million of our Senior Secured Term Loan B, on the same terms as the original Senior Secured Term Loan B, to pay off the balance on our senior secured revolving line of credit that we had drawn on in February 2016 to fund the acquisition of CIFIN and for general corporate purposes. On May 31, 2016, we borrowed an additional $55.0 million of our Senior Secured Term Loan A, on the same terms as the original Senior Secured Term Loan A, to fund an additional acquisitions of CIFIN and for general corporate purposes. As of June 30, 2016 , we had no amounts outstanding under the senior secured revolving line of credit and could have borrowed up to the entire $210.0 million available. As of June 30, 2016, TransUnion has the ability to borrow incremental term loans or increase the revolving credit commitments in one or more tranches, subject to certain additional conditions, so long as the Senior Secured Net Leverage ratio does not exceed 4.25 -to-1. TransUnion also has the ability to borrow up to an additional $450.0 million under the senior secured credit facility, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings. 


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With certain exceptions, the senior secured credit facility obligations are secured by a first-priority security interest in substantially all of the assets of Trans Union LLC, including its investment in subsidiaries. The senior secured credit facility contains various restrictions and nonfinancial covenants, along with a senior secured net leverage ratio test. The nonfinancial covenants include restrictions on dividends, investments, dispositions, future borrowings and other specified payments, as well as additional reporting and disclosure requirements. The senior secured net leverage test must be met as a condition to incur additional indebtedness and at the end of each fiscal quarter. As of June 30, 2016 , this covenant required us to maintain a net leverage ratio on a pro forma basis equal to, or less than, 6.5 -to-1. As of June 30, 2016 , we were in compliance with all debt covenants.
On April 30, 2012, we entered into swap agreements to effectively fix the interest payments on a portion of the then existing senior secured term loan at 2.033% , plus the applicable margin, beginning March 28, 2013. As a result of the amendment to our senior secured credit facility dated April 9, 2014, the swaps no longer were expected to be highly effective and no longer qualified for hedge accounting. At that time, the total net of tax loss of $1.0 million was recorded in accumulated other comprehensive income and is being amortized to interest expense on a straight-line basis through December 29, 2017, the initial expiration date of the swaps. On December 18, 2015, we terminated the interest rate swaps by paying off the outstanding liability balance of $2.7 million . Prior to terminating the swaps, changes in the fair value of the swaps for the three and six months ended June 30, 2015 , resulted in a gain of $0.2 million and a loss of $0.7 million , respectively, recorded in other income and expense.
On December 18, 2015, we entered into interest rate cap agreements with various parties that will effectively cap our LIBOR exposure on a portion of our existing senior secured term loans at 0.75% beginning June 30, 2016 . We have designated these cap agreements as cash flow hedges. The initial aggregate notional amount under these agreements is $1,526.4 million and is scheduled to decrease each quarter beginning September 30, 2016, until the agreement terminates on June 30, 2020. Beginning July 2016, we will pay the various counter-parties a fixed rate of interest on the outstanding notional amounts of between 0.98% and 0.994% and receive payments to the extent LIBOR exceeds 0.75% . We will record the net payments paid or received as interest expense. The change in fair value of the caps is recorded in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income to the extent the caps are effective, and in other income and expense in the consolidated statements of income to the extent the caps are ineffective. During the three and six months ended June 30, 2016 , the change in the fair value of the caps resulted in a loss of $7.1 million and $21.9 million , respectively, net of tax, recorded in other comprehensive income and a loss of $0.3 million and $1.0 million , respectively, recorded in other income and expense. Ineffectiveness is due to, and will continue to result from, financing the estimated cap premium payments. Amounts in other comprehensive income will be reclassified into earnings in the same period in which the hedged forecasted transaction affects earnings.
Fair Value of Debt
As of June 30, 2016 , the fair value of our variable-rate Senior Secured Term Loan A, excluding original issue discounts and deferred fees, approximates the carrying value. As of June 30, 2016 the fair value of our Senior Secured Term Loan B, excluding original issue discounts and deferred fees, was approximately $1,986.8 million . The fair values of our variable-rate term loans are determined using Level 2 inputs, quoted market prices for these publicly traded instruments.
9. Stockholders’ Equity
Stock Split
During 2015, we effected a 1.333 to 1 stock split of our common stock. All periods presented in these financial statements reflect this split. The impact of the split resulted in a reclassification of the beginning balance of additional paid-in capital to common stock to reflect the increase in par value.
Preferred Stock
We have 100.0 million shares of preferred stock authorized. No preferred stock had been issued or was outstanding as of June 30, 2016 .
Redeemable Non-controlling Interest
During the first quarter of 2016, redeemable noncontrolling interest increased $59.5 million , due to our purchase of CIFIN and our exercise of our call rights on the Drivers History Information Sales, LLC (“DHI”) noncontrolling interest. During the second quarter of 2016, we redeemed all of our redeemable noncontrolling interest in CIFIN and DHI, resulting in no redeemable noncontrolling interest at June 30, 2016.

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10. Earnings Per Share
Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the reported period. Diluted earnings per share reflects the effect of the increase in shares outstanding determined by using the treasury stock method for awards issued under our long-term incentive stock plans.
For the three and six months ended June 30, 2016 , there were less than 0.1 million anti-dilutive stock-based awards outstanding. In addition, there were 6.5 million contingently issuable stock-based awards outstanding that were excluded from the diluted earnings per share calculation because the contingencies had not been met. As of June 30, 2015 , there were 3.9 million anti-dilutive stock-based awards outstanding. These awards were anti-dilutive because we reported a net loss in each period. In addition, there were 6.5 million contingently issuable market-based stock awards outstanding that were excluded from the diluted earnings per share calculation because the contingencies had not been met.
Basic and diluted weighted average shares outstanding and earnings per share were as follows:
(in millions, except per share data)
 
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
 
 
 
 
 
 
 
 
 
Earnings per share - basic
 
 
 
 
 
 
 
 
Earnings available to common shareholders
 
$
17.3

 
$
(2.6
)
 
$
29.9

 
$
(9.2
)
Weighted average basic shares outstanding
 
182.5

 
148.5

 
182.4

 
148.2

Earnings per share - basic
 
$
0.09

 
$
(0.02
)
 
$
0.16

 
$
(0.06
)
 
 
 
 
 
 
 
 
 
Earnings per share - diluted
 
 
 
 
 
 
 
 
Earnings available to common shareholders
 
$
17.3

 
$
(2.6
)
 
$
29.9

 
$
(9.2
)
 
 
 
 
 
 
 
 
 
Weighted average basic shares outstanding
 
182.5

 
148.5

 
182.4

 
148.2

Dilutive impact of stock based awards
 
1.9

 
—

 
1.8

 
—

Weighted average dilutive shares outstanding
 
184.4

 
148.5

 
184.2

 
148.2

Earnings per share - diluted
 
$
0.09

 
$
(0.02
)
 
$
0.16

 
$
(0.06
)

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11. Income Taxes
For the three months ended June 30, 2016 , we reported an effective tax rate of 45.3% , which was higher than the 35% U.S. federal statutory rate due primarily to the tax expense on unremitted foreign earnings not considered permanently reinvested, the impact of valuation allowances on the losses of certain foreign subsidiaries, and changes in state tax rates. For the six months ended June 30, 2016 , we reported an effective tax rate of 45.2% , which was higher than the 35% U.S. federal statutory rate due primarily to the tax expense on unremitted foreign earnings not considered permanently reinvested and the impact of valuation allowances on the losses of certain foreign subsidiaries.
For the three months ended June 30, 2015 , we reported an effective tax rate of 108.1% , which was higher than the 35% U.S. federal statutory rate due primarily to the expiration of the look-through rule, tax expenses on unremitted foreign earnings not considered permanently reinvested, and the impact of valuation allowances on the losses of certain foreign subsidiaries. For the six months ended June 30, 2015 , we reported a loss before income taxes and an effective tax rate benefit of (79.8)% , which was different than the 35% U.S. federal statutory rate due primarily to these same reasons.
Effective January 1, 2015, the look-through rule under Subpart F of the U.S. Internal Revenue Code noted above expired but was reinstated in December 2015 retroactive to January 1, 2015. Subpart F requires U.S. corporate shareholders to recognize current U.S. taxable income from passive income, including earnings of certain foreign subsidiaries, regardless of whether that income is remitted to the United States. The look-through rule of Subpart F grants an exception for any passive income of certain foreign subsidiaries that is attributable to an active business. When the look-through exception is not in effect, we are required to accrue a tax liability for those foreign earnings as if those earnings were distributed to the United States. Consequently, in the first quarter of 2015, we recorded the additional tax expense we would have incurred in the absence of the look-through rule.
The total amount of unrecognized tax benefits was $2.0 million as of June 30, 2016 , and $1.9 million as of December 31, 2015 . These same amounts would affect the effective tax rate, if recognized. The accrued interest payable for taxes was $0.1 million as of June 30, 2016 and December 31, 2015 . There was no significant liability for tax penalties as of June 30, 2016 or December 31, 2015 . We are regularly audited by federal, state and foreign taxing authorities. Given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits. An estimate of the range of the increase or decrease in unrecognized tax benefits due to audit results cannot be made at this time. Tax years 2008 and forward remain open for examination in some state and foreign jurisdictions, and tax years 2012 and forward remain open for examination for U.S. federal purposes.

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12. Operating Segments
Operating segments are businesses for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources. This segment financial information is reported on the basis that is used for the internal evaluation of operating performance. The accounting policies of the segments are the same as described in Note 1, “Significant Accounting and Reporting Policies” included in our audited financial statements for the year ended December 31, 2015 , included in Exhibit 99.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on June 1, 2016.
In the first quarter of 2016, we moved our direct to consumer reseller business and reallocated certain other costs related to our consumer facing business in the U.S. from our USIS segment to our Consumer Interactive segment. These changes better reflect the evolution of our consumer facing business in the U.S. and how we manage that business. As a result, we modified our segment reporting effective the first quarter of 2016. In conjunction with this change we also reclassified $105.0 million of goodwill from our USIS segment to our Consumer Interactive segment. The segment results below have been recast to reflect these changes for all periods presented. These changes do not impact our consolidated results.
We evaluate the performance of segments based on revenue and operating income. The following is a more detailed description of the three operating segments and the Corporate unit, which provides support services to each operating segment:
U.S. Information Services
U.S. Information Services (“USIS”) provides consumer reports, risk scores, analytical and decisioning services 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. The core capabilities and delivery platforms in our USIS segment allow us to serve a broad set of customers and business issues. We offer our services to customers in financial services, insurance, healthcare and other industries.
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.
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.
Corporate
In addition, Corporate provides support services for each of the operating segments, holds investments, and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the operating segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature.


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Selected segment financial information consisted of the following:
(in millions)
 
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
Gross revenues:
 
 
 
 
 
 
 
 
U.S. Information Services
 
$
256.8

 
$
233.1

 
$
503.8

 
$
452.1

International
 
77.6

 
67.5

 
145.4

 
131.0

Consumer Interactive
 
106.5

 
92.2

 
212.6

 
176.8

Total revenues, gross
 
440.9

 
392.8

 
861.8

 
759.9

 
 
 
 
 
 
 
 
 
Intersegment revenue eliminations:
 
 
 
 
 
 
 
 
U.S. Information Services
 
(14.2
)
 
(13.5
)
 
(28.4
)
 
(26.8
)
International
 
(1.0
)
 
(0.8
)
 
(1.9
)
 
(1.5
)
Consumer Interactive
 
—

 
—

 
—

 
—

Total intersegment eliminations
 
(15.2
)
 
(14.3
)
 
(30.3
)
 
(28.3
)
Total revenues, net
 
$
425.7

 
$
378.5

 
$
831.4

 
$
731.6

 
 
 
 
 
 
 
 
 
Operating income:
 
 
 
 
 
 
 
 
U.S. Information Services
 
$
41.4

 
$
38.4

 
$
71.6

 
$
66.1

International
 
8.1

 
1.9

 
13.1

 
4.6

Consumer Interactive
 
43.6

 
33.2

 
84.0

 
59.9

Corporate
 
(29.5
)
 
(22.0
)
 
(53.3
)
 
(42.8
)
Total operating income
 
$
63.5

 
$
51.4

 
$
115.4

 
$
87.9

 
 
 
 
 
 
 
 
 
Intersegment operating income eliminations:
 
 
 
 
 
 
 
 
U.S. Information Services
 
$
(13.8
)
 
$
(13.1
)
 
$
(27.7
)
 
$
(26.1
)
International
 
(0.7
)
 
(0.5
)
 
(1.4
)
 
(0.9
)
Consumer Interactive
 
14.6

 
13.6

 
29.1

 
27.0

Total intersegment eliminations
 
$
—

 
$
—

 
$
—

 
$
—


As a result of displaying amounts in millions, rounding differences may exist in the table above.
A reconciliation of operating income to income (loss) before income taxes for the periods presented is as follows:
(in millions)
 
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
Operating income from segments
 
$
63.5

 
$
51.4

 
$
115.4

 
$
87.9

Non-operating income and expense
 
(27.5
)
 
(46.7
)
 
(52.8
)
 
(90.6
)
Income (loss) before income taxes
 
$
36.0


$
4.7

 
$
62.6

 
$
(2.7
)




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Earnings from equity method investments included in non-operating income and expense for the periods presented were as follows:
 
(in millions)
 
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
USIS
 
$
0.6

 
$
0.5

 
$
1.0

 
$
0.9

International
 
1.4

 
1.8

 
2.9

 
3.7

Total
 
$
2.0

 
$
2.3

 
$
3.9

 
$
4.6


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ITEM 2. 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, TransUnion’s audited consolidated financial statements, the accompanying notes, “Risk Factors”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 of our Current Report on Form 8-K filed with the SEC on June 1, 2016, as well as the unaudited consolidated financial statements and the related notes presented in Part I, Item 1 of this Quarterly Report on Form 10-Q.
References in this discussion and analysis to “the Company”, “we”, “our”, “us”, and “its’” are to TransUnion and its consolidated subsidiaries, collectively.
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 II, Item 1A, “Risk Factors.”
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, sometimes referred to as verticals, including financial services, insurance and healthcare. We have a global presence in over 30 countries across North America, Africa, Latin America and Asia.
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 obtain financial, credit, alternative credit, identity, bankruptcy, lien, judgment, insurance claims, automotive and other relevant information from an average of 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 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
We manage our business and report our financial results in three operating segments: USIS, International and Consumer Interactive. In the first quarter of 2016, we moved our direct to consumer reseller business and reallocated certain other costs related to our consumer facing business in the U.S. from our USIS segment to our Consumer Interactive segment. These changes better reflect the evolution of our consumer facing business in the U.S. and how we manage that business. As a result, we modified our segment reporting effective the first quarter of 2016. In conjunction with this change we also reclassified $105.0 million of goodwill from our USIS segment to our Consumer Interactive segment. The segment results below have been recast to reflect these changes for all periods presented. These changes do not impact our consolidated results.
•
USIS provides consumer reports, risk scores, analytical and decisioning services 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. The core capabilities

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and delivery platforms in our USIS segment allow us to serve a broad set of customers and business issues. We offer our services to customers in financial services, insurance, healthcare and other industries.
•
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.
•
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 supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.
In addition, Corporate provides support services for each of the operating segments, holds investments, and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the operating segments remain in Corporate. These costs are typically 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 are significantly influenced by general macroeconomic conditions, including the demand and availability of affordable credit and capital, interest rates, inflation, employment levels, consumer confidence and housing demand. Since the beginning of 2015, we have seen continuing signs of improved economic conditions and increased market stabilization. In the United States, we also saw improvement in the consumer lending market, including mortgage refinancings resulting from low long-term mortgage rates, an improving housing market, increased auto loans, improvements in the labor market, an increase in consumer confidence and an increase in demand for our marketing services. In our Consumer Interactive segment, we continue to see increased demand for our credit and identity theft solutions. The economic and market improvements in all of our segments were tempered by continuing concern about economic conditions that has limited consumer spending and has put pressure on growth in our businesses. Also, the continuing strengthening of the U.S. dollar has diminished the operating results reported by our International segment compared with the prior year.
Our revenues are also significantly influenced by industry trends, including the demand for information services in financial services, insurance, healthcare and other industries we serve. Companies are increasingly relying on business analytics and big-data technologies to help process this 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 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 increasing number and complexity of regulations, including new capital requirements and the Dodd-Frank Act, 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 May 31, 2016 we borrowed an additional $55.0 million of our Senior Secured Term Loan A, on the same terms as the original Senior Secured Term Loan A, to fund an additional investment in Central de Informacion Financiera S.A. (“CIFIN”). On March 31, 2016, we borrowed an additional $150.0 million of our Senior Secured Term Loan B, on the same terms as the original Senior Secured Term Loan B, to pay off the balance on our senior secured revolving line of credit that we had drawn on in February 2016 to fund the initial acquisition of CIFIN and for general corporate purposes.

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On March 14, 2016, certain of our stockholders completed a secondary public offering of approximately 17.9 million shares of TransUnion common stock. On June 10, 2016, one of these stockholders completed another secondary public offering of approximately 18.0 million shares of TransUnion common stock. These secondary offerings had no impact on our financial statements, other than approximately $0.9 million and $1.9 million of transactions costs recorded in other income and expense for the three and six months ended June 30, 2016, respectively. We were obligated to pay these costs in accordance with an agreement with these stockholders. We did not receive any proceeds from these offerings as all shares were sold by these stockholders.
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. Since January 1, 2015, we completed the following acquisitions:
•
In June 2016, we increased our equity interest in Credit Information Bureau (India) Limited (“CIBIL”) from 66.1% to 77.1% with additional purchases totaling 11%. During 2015, we increased our equity interest from 55% to 66.1%, with the purchase of 5% on September 24, 2015 and an additional 6.1% on November 5, 2015.
•
On June 15, 2016, we acquired 100% of the equity of Auditz, LLC (“Auditz”). Auditz is a U.S. based healthcare services organization that uses sophisticated proprietary technology to help healthcare providers identify and recover payments. The results of operations of Auditz, 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 April 29, 2016, we acquired the remaining 12.5% ownership interest in Drivers History Information Sales, LLC ("DHI"). We no longer record net income attributable to the noncontrolling interests in our consolidated statements of income or redeemable noncontrolling interests on our consolidated balance sheets from the date we acquired the remaining interest.
•
On April 15, 2016, we made a minority interest investment in Dashlane, Inc. (“Dashlane”). Dashlane is a password management company that enables users to monitor their online identities across multiple sites and applications. We account for Dashlane on the cost method of accounting. Any future dividends will be recorded in other income and expense when received.
•
On February 8, 2016, we acquired a 71% equity interest in CIFIN. On May 31, 2016, we increased our interest to 94.67% with an additional equity purchase of 23.67%. CIFIN is one of two primary credit bureaus in Colombia. The results of operations of CIFIN, which are not material to our consolidated financial statements, have been included as part of our International segment in our consolidated statements of income since the date of the acquisition.
•
On December 9, 2015, we acquired 100% of the voting share capital in Trustev Limited (“Trustev”). Trustev is a registered company in the Republic of Ireland that provides digital verification technology to multiple industries. The results of operations of Trustev, 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 October 21, 2015, we acquired the remaining 49% equity interest in Databusiness S.A., our Chile subsidiary. We no longer record net income attributable to the noncontrolling interests in our consolidated statements of income or redeemable noncontrolling interests on our consolidated balance sheets from the date we acquired the remaining interest.
•
During January 2015, we acquired the remaining equity interests in our two Brazilian subsidiaries, Data Solutions Serviços de Informática Ltda. (“ZipCode”) and Crivo Sistemas em Informática S.A. (“Crivo”). We no longer record net income attributable to the noncontrolling interests in our consolidated statements of income or redeemable noncontrolling interests in our consolidated balance sheet from the date we acquired the remaining interests.
Key Components of Our Results of Operations
Revenue
We derive our USIS segment revenue from three operating platforms: Online Data Services, Marketing Services and Decision Services. Online Data Services encompass services delivered in real-time using both credit and public record datasets. We also provide online reports that link public record datasets for qualified businesses seeking to locate consumers, specific assets or investigate relationships among consumers, businesses and locations. Collectively, the reports, characteristics and scores, with variations tailored for specific industries, form the basis of Online Data Services. We also provide online services to help businesses manage fraud and authenticate a consumer’s identity when they initiate a new business relationship. Additionally, we provide data to businesses to help them satisfy “know your customer” compliance requirements and to confirm an individual’s identity. Marketing Services help our customers develop marketing lists of prospects via direct mail, web and mobile. Our databases are used by our customers to contact individuals to extend firm offers of credit or insurance. We provide portfolio review services, which are periodic reviews of our customers’ existing accounts, to help our customers develop cross-selling offers to their existing customers and monitor and manage risk in their existing consumer portfolios. We also provide trigger services which are daily notifications

21
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of changes to a consumer profile. Decision Services, our software-as-a-service offerings, includes a number of platforms that help businesses interpret data and predictive model results and apply their customer-specific criteria to facilitate real-time automated decisions at the time of customer interaction. Our customers use Decision Services to evaluate business risks and opportunities, including those associated with new consumer credit and checking accounts, insurance applications, account collection, patient registrations and apartment rental requests.
We report our International segment revenue in two categories: developed markets and emerging markets. Our developed markets are Canada and Hong Kong. Our emerging markets include Africa, Latin America, Asia Pacific and India.
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 supported by educational content and customer support.
Cost of Services
Costs of services include data acquisition and royalty fees, 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.
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, 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
Key Performance Measures
Management, including our chief operating decision maker, evaluates the financial performance of our businesses based on a variety of key indicators. These indicators include the non-GAAP measure Adjusted EBITDA and the GAAP measures revenue, cash provided by operating activities and cash paid for capital expenditures. For the three and six months ended June 30, 2016 and 2015 , these key indicators were as follows:

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Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
 
2016
 
2015
 
$
Change
 
%
Change
 
2016
 
2015
 
$
Change
 
%
Change
Revenue
 
$
425.7

 
$
378.5

 
$
47.2

 
12.5
 %
 
$
831.4

 
$
731.6

 
$
99.8

 
13.6
 %
Reconciliation of net income (loss) attributable to TransUnion to Adjusted
EBITDA (1) :
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to TransUnion
 
$
17.3

 
$
(2.6
)
 
$
19.9

 
nm

 
$
29.9

 
$
(9.2
)
 
$
39.1

 
nm

Net interest expense
 
20.2

 
43.7

 
(23.5
)
 
(53.8
)%
 
39.8

 
87.5

 
(47.7
)
 
(54.6
)%
Provision (benefit) for income taxes
 
16.3

 
5.1

 
11.2

 
220.8
 %
 
28.3

 
2.1

 
26.2

 
nm

Depreciation and amortization
 
74.0

 
68.6

 
5.4

 
7.8
 %
 
146.5

 
137.7

 
8.8

 
6.4
 %
EBITDA
 
127.8

 
114.8

 
13.0

 
11.3
 %
 
244.4

 
218.1

 
26.3

 
12.1
 %
Adjustments to EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation (2)
 
10.4

 
8.4

 
2.0

 
24.5
 %
 
15.7

 
11.4

 
4.3

 
37.5
 %
Mergers and acquisitions, divestitures and business optimization (3)
 
7.6

 
1.3

 
6.3

 
nm

 
13.1

 
1.8

 
11.3

 
nm

Technology transformation (4)
 
11.3

 
5.9

 
5.4

 
92.4
 %
 
23.3

 
11.6

 
11.7

 
100.4
 %
Other (5)
 
2.3

 
4.4

 
(2.1
)
 
(48.0
)%
 
4.3

 
6.7

 
(2.4
)
 
(35.2
)%
Total adjustments to EBITDA
 
31.7

 
20.0

 
11.6

 
58.1
 %
 
56.4

 
31.5

 
24.9

 
79.1
 %
Adjusted EBITDA (1)
 
$
159.5

 
$
134.8

 
$
24.7

 
18.3
 %
 
$
300.9

 
$
249.6

 
$
51.3

 
20.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash provided by operating activities
 
$
107.8

 
$
100.0

 
$
7.8

 
7.8
 %
 
$
149.5

 
$
116.5

 
$
33.0

 
28.3
 %
Capital expenditures
 
24.0

 
38.2

 
(14.2
)
 
(37.2
)%
 
54.9

 
68.3

 
(13.4
)
 
(19.6
)%
nm: not meaningful
As a result of displaying amounts in millions, rounding differences may exist in the table above.
(1)
Adjusted EBITDA is defined 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 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 and the indentures governing our senior notes, 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 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 Adjusted EBITDA for the three and six months ended June 30, 2016 and 2015 .
(2)
Consisted of stock-based compensation and cash-settled stock-based compensation.
(3)
For the three months ended June 30, 2016 , consisted of the following adjustments to operating income: a $(0.1) million adjustment to contingent consideration expense from previous acquisitions and a $(0.2) million adjustment to business

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optimization expenses. For the three months ended June 30, 2016 , consisted of the following adjustments to non-operating income and expense: $7.9 million of acquisition expenses. For the six months ended June 30, 2016 , consisted of the following adjustments to operating income: a $0.1 million loss on the divestitures of two small business operations, and a $(0.5) million adjustment to business optimization expenses. For the six months ended June 30, 2016 , consisted of the following adjustments to non-operating income and expense: $13.5 million of acquisition expenses.
For the three months ended June 30, 2015, consisted of the following adjustments to operating income: a $0.2 million adjustment to contingent consideration expense from previous acquisitions. For the three months ended June 30, 2015, consisted of the following adjustments to non-operating income and expense: $1.1 million of acquisition expenses. For the six months ended June 30, 2015, consisted of the following adjustments to operating income: a $0.6 million adjustment to contingent consideration expense from previous acquisitions. For the six months ended June 30, 2015, consisted of the following adjustments to non-operating income and expense: $1.2 million of acquisition expenses.
(4)
Represented costs associated with a project to transform our technology infrastructure.
(5)
For the three months ended June 30, 2016 , consisted of the following adjustments to operating income: a $0.3 million charge for certain legal and regulatory matters. For the three months ended June 30, 2016 , consisted of the following adjustments to non-operating income and expense: $0.3 million of currency remeasurement of our foreign operations; a $0.3 million mark-to-market loss related to ineffectiveness of our interest rate hedge; $0.5 million of loan fees; and $0.9 million of fees connected to the filing of secondary registration statements filed on behalf of certain shareholders. For the six months ended June 30, 2016 , consisted of the following adjustments to operating income: a $0.3 million charge for certain legal and regulatory matters. For the six months ended June 30, 2016 , consisted of the following adjustments to non-operating income and expense: $0.3 million of currency remeasurement of our foreign operations; a $1.0 million mark-to-market loss related to ineffectiveness of our interest rate hedge; $0.8 million of loan fees; and $1.9 million of fees connected to the filing of secondary registration statements filed on behalf of certain shareholders.
(6)
For the three months ended June 30, 2015, consisted of the following adjustments to non-operating income and expense: $3.8 million of debt refinancing expenses; $0.2 million of currency remeasurement of our foreign operations; a $(0.2) million mark-to-market gain related to ineffectiveness on our interest rate hedge; $0.3 million of loan fees; and $0.3 million of miscellaneous. For the six months ended June 30, 2015, consisted of the following adjustments to non-operating income and expense: $3.8 million of debt refinancing expenses; $1.0 million of currency remeasurement of our foreign operations; a $0.7 million mark-to-market loss related to ineffectiveness on our interest rate hedge; $0.7 million of loan fees; and $0.5 million of miscellaneous.

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Table of Contents

Revenue
Total revenue increased $47.2 million and $99.8 million for the three and six months ended June 30, 2016 , compared with the same period in 2015 , due to strong organic growth in all of our segments, across all platforms and markets, and revenue from our recent acquisitions in our USIS and International segments, partially offset by the impact of weakening foreign currencies on the 2016 revenue of our International segment. Revenue for our recent acquisitions accounted for an increase in revenue of 1.9% and 1.5% in each respective period. The impact of weakening foreign currencies accounted for a decrease in revenue of 1.6% and 2.2% in each respective period. Revenue by segment in the three- and six -month periods were as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
 
2016
 
2015
 
$
Change
 
%
Change
 
2016
 
2015
 
$
Change
 
%
Change
U.S. Information Services:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Online Data Services
 
$
168.1

 
$
154.0

 
$
14.1

 
9.2
%
 
$
329.2

 
$
300.7

 
$
28.5

 
9.5
%
  Marketing Services
 
37.9

 
35.2

 
2.7

 
7.7
%
 
74.9

 
68.2

 
6.7

 
9.8
%
  Decision Services
 
50.7

 
43.9

 
6.8

 
15.6
%
 
99.8

 
83.2

 
16.6

 
19.9
%
Total U.S. Information Services
 
256.8

 
233.1

 
23.7

 
10.2
%
 
503.8

 
452.1

 
51.7

 
11.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Developed Markets
 
27.8

 
23.9

 
3.9

 
16.4
%
 
51.0

 
44.9

 
6.1

 
13.8
%
  Emerging Markets
 
49.8

 
43.6

 
6.2

 
14.1
%
 
94.4

 
86.2

 
8.2

 
9.5
%
Total International
 
77.6

 
67.5

 
10.1

 
14.9
%
 
145.4

 
131.0

 
14.4

 
11.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Consumer Interactive
 
106.5

 
92.2

 
14.3

 
15.5
%
 
212.6

 
176.8

 
35.8

 
20.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue, gross
 
440.9

 
392.8

 
48.1

 
12.2
%
 
861.8

 
759.9

 
101.9

 
13.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intersegment eliminations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   USIS Online
 
(14.2
)
 
(13.5
)
 
(0.7
)
 
 
 
(28.4
)
 
(26.8
)
 
(1.6
)
 
 
   International Developed Markets
 
(0.9
)
 
(0.7
)
 
(0.2
)
 
 
 
(1.6
)
 
(1.2
)
 
(0.4
)
 
 
   International Emerging Markets
 
(0.1
)
 
(0.1
)
 
—

 
 
 
(0.3
)
 
(0.3
)
 
—

 
 
   Consumer Interactive
 
—

 
—

 
—

 
 
 
—

 
—

 
—

 
 
Total intersegment eliminations
 
(15.2
)
 
(14.3
)
 
(0.9
)
 
 
 
(30.3
)
 
(28.3
)
 
(2.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue as reported
 
$
425.7

 
$
378.5

 
$
47.2

 
12.5
%
 
$
831.4

 
$
731.6

 
$
99.8

 
13.6
%
As a result of displaying amounts in millions, rounding differences may exist in the table above.
USIS Segment
USIS revenue increased $23.7 million and $51.7 million for the three and six months ended June 30, 2016 , compared with the same period in 2015 , due to increases in revenue from all platforms.
Online Data Services
Online Data Services revenue increased $14.1 million and $28.5 million for the three- and six -month periods, compared with the same periods in 2015 , due primarily to a 3.7% and 5.8% increase in credit report unit volume. Also, a change in the mix of customer volumes resulted in an increase in average pricing for online credit reports compared to the same period in 2015.

25
Table of Contents

Marketing Services
Marketing Services revenue increased $2.7 million and $6.7 million for the three- and six -month periods, compared with the same periods in 2015 , due primarily to an increase in custom data sets and archive information.
Decision Services
Decision Services revenue increased $6.8 million and $16.6 million for the three- and six -month periods, compared with the same periods in 2015 , due primarily to an organic increase in revenue in healthcare and insurance markets.
International Segment
International revenue increased $10.1 million , or 14.9% , and $14.4 million , or 11.0% , for the three and six months ended June 30, 2016 , compared with the same periods in 2015 . Higher local currency revenue from increased volumes in all regions and the inclusion of revenue from our recent acquisition was partially offset by a 9.2% and 12.1% decrease in revenue in each respective period from the impact of weakening foreign currencies. Incremental revenue from our acquisition accounted for a 10.3% and 7.8% increase in revenue in each respective period.
Developed Markets
Developed markets revenue increased $3.9 million , or 16.4% , and $6.1 million , or 13.8% , for the three- and six -month periods, compared with the same periods in 2015 , due to higher local currency revenue in both regions partially offset by a 3.8% and 5.9% decrease in revenue in each respective period from the impact of a weakening Canadian dollar.
Emerging Markets
Emerging markets revenue increased $6.2 million , or 14.1% , and $8.2 million , or 9.5% , for the three- and six -month periods, compared with the same periods in 2015 . Higher local currency revenue in all regions and incremental revenue from our recent acquisition was partially offset by an 12.2% and 15.3% decrease in revenue in each respective period from the impact of weakening foreign currencies, primarily the South African rand, Brazilian real and Indian rupee. Incremental revenue from our acquisition accounted for a 15.9% and 11.9% increase in revenue in each respective period.
Consumer Interactive Segment
Consumer Interactive revenue increased $14.3 million and $35.8 million for the three and six months ended June 30, 2016 , compared with the same period in 2015 . This increase was due primarily to an increase in revenue from our indirect channel, and an increase in revenue in our direct channel driven by an increase in the average number of direct subscribers.
Operating Expenses
Operating expenses for the three and six months ended June 30, 2016 were as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
 
2016
 
2015
 
$
Change
 
%
Change
 
2016
 
2015
 
$
Change
 
%
Change
Cost of services
 
$
143.8

 
$
131.5

 
$
12.3

 
9.4
%
 
$
292.9

 
$
257.1

 
$
35.8

 
13.9
%
Selling, general and administrative
 
144.4

 
127.0

 
17.4

 
13.7
%
 
276.6

 
248.9

 
27.7

 
11.1
%
Depreciation and amortization
 
74.0

 
68.6

 
5.4

 
7.8
%
 
146.5

 
137.7

 
8.8

 
6.4
%
Total operating expenses
 
$
362.2

 
$
327.1

 
$
35.1

 
10.7
%
 
$
716.0

 
$
643.7

 
$
72.3

 
11.2
%
Cost of Services
Cost of services increased $12.3 million and $35.8 million for the three- and six -month periods, compared with the same periods in 2015 .
The increase in both periods was due primarily to:
•
an increase in product costs resulting from the increase in revenue;
•
an increase in labor costs as we continue to invest in key strategic growth initiatives;
•
an acceleration of maintenance costs in our USIS segment related to our strategic initiatives to transform our technology platform; and
•
operating costs relating to our acquisitions in our USIS and International segments,

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Table of Contents

partially offset by:
•
savings enabled by our technology transformation and other key productivity initiatives; and
•
the impact of weakening foreign currencies on the expenses of our International segment.
Selling, General and Administrative
Selling, general and administrative expenses increased $17.4 million and $27.7 million for the three- and six -month periods, compared with the same periods in 2015 .
The increase in both periods was due primarily to:
•
an increase in labor costs, primarily in our USIS segment and in Corporate, attributed to higher incentive and stock-based compensation and an increase in headcount as we continue to invest in key strategic growth initiatives;
•
an increase in advertising costs in our Consumer Interactive segment; and
• operating costs relating to our acquisitions in our USIS and International segments,
partially offset by:
•
the impact of weakening foreign currencies on the expenses of our International segment.
Depreciation and Amortization
Depreciation and amortization increased $5.4 million and $8.8 million for the three- and six -month periods, compared with the same periods in 2015 , primarily in our USIS segment due to increased capital expenditures related to our ongoing strategic initiatives and from assets acquired with our recent business acquisitions.



27
Table of Contents

Operating Income and Operating Margins
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
 
2016
 
2015
 
$
Change
 
%
Change
 
2016
 
2015
 
$
Change
 
%
Change
Gross operating income by segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USIS operating income
 
$
41.4

 
$
38.4

 
$
3.0

 
7.8
 %
 
$
71.6

 
$
66.1

 
$
5.5

 
8.3
 %
International operating income
 
8.1

 
1.9

 
6.2

 
330.3
 %
 
13.1

 
4.6

 
8.5

 
184.7
 %
Consumer Interactive operating income
 
43.6

 
33.2

 
10.4

 
31.4
 %
 
84.0

 
59.9

 
24.1

 
40.3
 %
Corporate operating loss
 
(29.5
)
 
(22.0
)
 
(7.5
)
 
(34.2
)%
 
(53.3
)
 
(42.8
)
 
(10.5
)
 
(24.7
)%
Total gross operating income
 
$
63.5

 
$
51.4

 
$
12.1

 
23.5
 %
 
$
115.4

 
$
87.9

 
$
27.5

 
31.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intersegment operating income eliminations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USIS
 
$
(13.8
)
 
$
(13.1
)
 
$
(0.7
)
 
 
 
$
(27.7
)
 
$
(26.1
)
 
$
(1.6
)
 
 
International
 
(0.7
)
 
(0.5
)
 
(0.2
)
 
 
 
(1.4
)
 
(0.9
)
 
(0.5
)
 
 
Consumer Interactive
 
14.6

 
13.6

 
1.0

 
 
 
29.1

 
27.0

 
2.1

 
 
Corporate
 
—

 
—

 
—

 
 
 
—

 
—

 
—

 
 
Total operating income eliminations
 
$
—

 
$
—

 
$
—

 
 
 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USIS
 
16.1
%
 
16.5
%
 
 
 
(0.4
)%
 
14.2
%
 
14.6
%
 
 
 
(0.4
)%
International
 
10.4
%
 
2.8
%
 
 
 
7.6
 %
 
9.0
%
 
3.5
%
 
 
 
5.5
 %
Consumer Interactive
 
40.9
%
 
36.0
%
 
 
 
4.9
 %
 
39.5
%
 
33.9
%
 
 
 
5.6
 %
Total operating margin
 
14.9
%
 
13.5
%
 
 
 
1.4
 %
 
13.9
%
 
12.0
%
 
 
 
1.9
 %
nm: not meaningful
As a result of displaying amounts in millions, rounding differences may exist in the table above. Segment operating margins are calculated using segment gross revenue. Consolidated operating margin is calculated using as reported revenue.
Total operating income increased $12.1 million and $27.5 million for the three and six months ended June 30, 2016 , compared with the same periods in 2015 . The increase in both periods was due primarily to:
•
the increase in revenue in all segments, including revenue from recent acquisitions,
partially offset by:
•
an increase in product costs resulting from the increase in revenue;
•
an increase in labor costs, primarily in our USIS segment and in Corporate, attributed to higher incentive and stock-based compensation and an increase in headcount as we continue to invest in key strategic growth initiatives;
•
an acceleration of maintenance costs in our USIS segment related to our strategic initiative to transform our technology platform;
•
an increase in advertising in our Consumer Interactive segment;
•
an increase in depreciation and amortization, primarily in our USIS segment;
•
operating costs from our acquisitions in our USIS and International segments; and
•
the impact of weakening foreign currencies on the 2015 results of our International segment.
Margins for the USIS segment decreased in both periods due to the acceleration of maintenance costs related to our technology transformation initiative, the increase in compensation costs, and the increase in depreciation and amortization, partially offset by the increase in revenue. Margins for the International segment increased in both periods due primarily to the increase in revenue

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and cost savings from our key productivity initiatives. Margins for the Consumer Interactive segment increased in both periods due to the increase in revenue, partially offset by the increase in advertising costs.
Non-Operating Income and Expense
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
 
2016
 
2015
 
$
Change
 
%
Change
 
2016
 
2015
 
$
Change
 
%
Change
Interest expense
 
$
(21.3
)
 
$
(44.9
)
 
$
23.6

 
52.5
 %
 
$
(41.7
)
 
$
(89.6
)
 
$
47.9

 
53.4
 %
Interest income
 
1.1

 
1.2

 
(0.1
)
 
(3.0
)%
 
1.9

 
2.1

 
(0.2
)
 
(4.6
)%
Earnings from equity method investments
 
2.0

 
2.3

 
(0.3
)
 
(13.9
)%
 
3.9

 
4.6

 
(0.7
)
 
(14.8
)%
Other income and expense, net:
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
Acquisition fees
 
(7.9
)
 
(1.1
)
 
(6.8
)
 
nm

 
(13.5
)
 
(1.2
)
 
(12.3
)
 
nm

Loan fees
 
(0.5
)
 
(4.1
)
 
3.6

 
88.3
 %
 
(0.8
)
 
(4.5
)
 
3.7

 
82.5
 %
Dividends from cost method investments
 
0.6

 
0.3

 
0.3

 
100.0
 %
 
0.6

 
0.3

 
0.3

 
100.0
 %
Other income, net
 
(1.5
)
 
(0.4
)
 
(1.1
)
 
(283.7
)%
 
(3.2
)
 
(2.3
)
 
(0.9
)
 
(40.6
)%
Total other income and expense, net
 
(9.3
)
 
(5.3
)
 
(4.1
)
 
(77.4
)%
 
(16.9
)
 
(7.7
)
 
(9.2
)
 
(119.5
)%
Non-operating income and expense
 
$
(27.5
)
 
$
(46.7
)
 
$
19.2

 
41.1
 %
 
$
(52.8
)
 
$
(90.6
)
 
$
37.8

 
41.7
 %
As a result of displaying amounts in millions, rounding differences may exist in the table above.
nm: not meaningful
Our 9.625% and 8.125% Senior Notes were redeemed on July 15, 2015, using the net proceeds from our IPO, along with $350.0 million borrowings from the Senior Secured Term Loan A. In addition, during the first six months of 2016, we borrowed additional funds against our senior secured credit facility. As a result of these changes to our debt, interest expense decreased $23.6 million and $47.9 million for the three- and six -month periods, compared with the same periods in 2015 . Lower interest expense on the Senior Notes was partially offset by additional interest expense resulting from the increase in the average outstanding principal balance of the senior secured credit facility in 2016, compared with 2015.
Acquisition fees represent costs we have incurred for acquisition-related efforts. The increase in 2016 was due to our acquisition of CIFIN and other ongoing acquisition efforts.
For the three and six months ended June 30, 2015 , loan fees included $3.8 million from the refinance of our senior secured credit facility in June of 2015.
For the three and six months ended June 30, 2016 , other income, net, included $0.9 million and $1.9 million of fees connected to the filing of secondary registration statements filed on behalf of certain shareholders and a $0.3 million and $1.0 million loss related to ineffectiveness on our current interest rate hedge. For the three and six months ended June 30, 2015 , other income, net, included a gain of $0.2 million and a loss of $0.7 million on a swap that no longer qualified for hedge accounting. We terminated the swap in December 2015.
Provision for Income Taxes
For the three months ended June 30, 2016 , we reported an effective tax rate of 45.3% , which was higher than the 35% U.S. federal statutory rate due primarily to the tax expense on unremitted foreign earnings not considered permanently reinvested, the impact of valuation allowances on the losses of certain foreign subsidiaries, and changes in state tax rates. For the six months ended June 30, 2016 , we reported an effective tax rate of 45.2% , which was higher than the 35% U.S. federal statutory rate due primarily to the tax expense on unremitted foreign earnings not considered permanently reinvested and the impact of valuation allowances on the losses of certain foreign subsidiaries.
For the three months ended June 30, 2015 , we reported an effective tax rate of 108.1% , which was higher than the 35% U.S. federal statutory rate due primarily to the expiration of the look-through rule, tax expenses on unremitted foreign earnings not considered permanently reinvested, and the impact of valuation allowances on the losses of certain foreign subsidiaries. For the six months ended June 30, 2015 , we reported a loss before income taxes and an effective tax rate benefit of (79.8)% , which was different than the 35% U.S. federal statutory rate due primarily to these same reasons.

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Effective January 1, 2015, the look-through rule under Subpart F of the U.S. Internal Revenue Code noted above expired but was reinstated in December 2015 retroactive to January 1, 2015. Subpart F requires U.S. corporate shareholders to recognize current U.S. taxable income from passive income, including earnings of certain foreign subsidiaries, regardless of whether that income is remitted to the United States. The look-through rule of Subpart F grants an exception for any passive income of certain foreign subsidiaries that is attributable to an active business. When the look-through exception is not in effect, we are required to accrue a tax liability for those foreign earnings as if those earnings were distributed to the United States. Consequently, in the first quarter of 2015, we recorded the additional tax expense we would have incurred in the absence of the look-through rule.
Significant Changes in Assets and Liabilities
The increase in goodwill and gross other intangibles assets at June 30, 2016 , compared to December 31, 2015, included an increase of $115.4 million and $119.5 million, respectively, as a result of recording estimates of fair value of the assets acquired with our 2016 acquisitions. The increase in debt due to additional borrowings in the first six months of 2016, compared to December 31, 2015, included $196.5 million primarily as a result of funding our acquisition of CIFIN. See “Recent Developments” above for additional information.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity are cash flows provided by operating activities, cash and cash equivalents on hand, and our senior secured revolving line of credit. Our principal uses of liquidity are working capital, capital expenditures, debt service, business acquisitions and other general corporate purposes. We believe our cash on hand, cash generated from operations, and funds available under the senior secured revolving line of credit will be sufficient to fund our planned capital expenditures, debt service obligations and operating needs for the foreseeable future. We may, however, elect to raise funds through debt or equity financing in the future to fund significant investments or acquisitions that are consistent with our growth strategy.
Cash and cash equivalents totaled $141.3 million and $133.2 million at June 30, 2016 , and December 31, 2015 , respectively, of which $90.3 million and $79.7 million was held outside the United States. As of June 30, 2016 , we had no amounts outstanding under the senior secured revolving line of credit and could have borrowed up to the entire $210.0 million available. As of June 30, 2016, TransUnion has the ability to borrow incremental term loans or increase the revolving credit commitments in one or more tranches, subject to certain additional conditions, so long as the Senior Secured Net Leverage ratio does not exceed 4.25 -to-1. TransUnion also has the ability to borrow up to an additional $450.0 million under the senior secured credit facility, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings. 
The balance retained in cash and cash equivalents is consistent with our short-term cash needs and investment objectives. The Company is required to make additional principal payments on the Senior Secured Term Loan B based on excess cash flows of the prior year as defined in the agreement. There were no excess cash flows for 2015 and therefore no additional payment was required in 2016. See Part I, Item 1, Note 8 “Debt,” for additional information about our debt.
Sources and Uses of Cash
 
 
Six Months Ended June 30,
(in millions)
 
2016
 
2015
 
Change
Cash provided by operating activities
 
$
149.5

 
$
116.5

 
$
33.0

Cash used in investing activities
 
(323.4
)
 
(76.9
)
 
(246.5
)
Cash provided by financing activities
 
181.0

 
642.1

 
(461.1
)
Effect of exchange rate changes on cash and cash equivalents
 
1.0

 
(1.6
)
 
2.6

Net change in cash and cash equivalents
 
$
8.1

 
$
680.1

 
$
(672.0
)
Operating Activities
The increase in cash provided by operating activities was due primarily to the increase in operating income excluding depreciation and amortization as well as a decrease in cash paid for interest.
Investing Activities
The increase in cash used in investing activities was due primarily to an increase in cash used to fund acquisitions.


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Financing Activities
The decrease in cash provided by financing activities was due primarily to the IPO proceeds that were received in 2015, partially offset by additional borrowing in 2016 to fund our acquisitions.
Capital Expenditures
We make capital expenditures to grow our business by developing new and enhanced capabilities, to increase the effectiveness
and efficiency of the organization and to reduce risks. We make capital expenditures for product development, disaster recovery, security enhancements, regulatory compliance, and the replacement and upgrade of existing equipment at the end of its useful life.
Cash paid for capital expenditures decreased $13.4 million, from $68.3 million for the six months ended June 30, 2015 , to $54.9 million for the six months ended June 30, 2016 . We expect total capital expenditures to be lower in 2016 than in 2015 as a percentage of revenue as we completed the improvements to our corporate headquarters facility in the first half of 2015 and effectively completed the transformation of our technology platform in the first half of 2016.
Debt
Senior Secured Credit Facility
On June 15, 2010, we entered into a senior secured credit facility with various lenders. This facility has been amended several times and currently consists of the Senior Secured Term Loan A, the Senior Secured Term Loan B and the senior secured revolving line of credit. On July 15, 2015, we used the net proceeds from our initial public offering (“IPO”), along with $350.0 million of borrowings from the Senior Secured Term Loan A, to redeem all of the outstanding 9.625% and 8.125% Senior Notes, including a prepayment premium, accrued interest and certain transaction costs.
On March 31, 2016, we borrowed an additional $150.0 million of our Senior Secured Term Loan B, on the same terms as the original Senior Secured Term Loan B, to pay off the balance on our senior secured revolving line of credit that we had drawn on in February 2016 to fund the acquisition of CIFIN and for general corporate purposes. On May 31, 2016 we borrowed an additional $55.0 million of our Senior Secured Term Loan A, on the same terms as the original Senior Secured Term Loan A, to fund an additional investment in CIFIN and for general corporate purposes.
Hedge
On December 18, 2015, we entered into interest rate cap agreements with various parties that will effectively cap our LIBOR exposure on a portion of our existing senior secured term loans at 0.75% beginning June 30, 2016. We have designated these cap agreements as cash flow hedges. The initial aggregate notional amount under these agreements is $1,526.4 million and is scheduled to decrease each quarter beginning September 30, 2016, until the agreement terminates on June 30, 2020. Beginning July 2016, we will pay the various counter-parties a fixed rate of interest on the outstanding notional amounts of between 0.98% and 0.994% and receive payments to the extent LIBOR exceeds 0.75% . We will record the net payments paid or received as interest expense. The change in fair value of the caps is recorded in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income to the extent the caps are effective, and in other income and expense in the consolidated statements of income to the extent the caps are ineffective. During the three and six months ended June 30, 2016 , the change in the fair value of the caps resulted in a loss of $7.1 million and $21.9 million, respectively, net of tax, recorded in other comprehensive income and a loss of $0.3 million and $1.0 million, respectively, recorded in other income and expense. Ineffectiveness is due to, and will continue to result from, financing the estimated cap premium payments. Amounts in other comprehensive income will be reclassified into earnings in the same period in which the hedged forecasted transaction affects earnings.
Effect of Certain Debt Covenants
A breach of any of the covenants under the agreements governing our debt could limit our ability to borrow funds under the senior secured revolving line of credit and could result in a default under the senior secured credit facility. Upon the occurrence of an event of default under the senior secured credit facility the lenders could elect to declare all amounts then outstanding to be immediately due and payable, and the lenders could terminate all commitments to extend further credit. If we were unable to repay the amounts declared due, the lenders could proceed against any collateral granted to them to secure that indebtedness.
With certain exceptions, the obligations under the senior secured credit facility are secured by a first-priority security interest in substantially all of the assets of Trans Union LLC, including its investment in subsidiaries. The senior secured credit facility contains various restrictions and nonfinancial covenants, along with a senior secured net leverage ratio test. The nonfinancial covenants include restrictions on dividends, investments, dispositions, future borrowings and other specified payments, as well as additional reporting and disclosure requirements. The senior secured net leverage test must be met as a condition to incur additional indebtedness and at the end of each fiscal quarter. As of June 30, 2016, this covenant required us to maintain a net

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leverage ratio on a pro forma basis equal to, or less than, 6.50-to-1. As of June 30, 2016, we were in compliance with all debt covenants.
TransUnion’s ability to meet its liquidity needs or to pay dividends on its common stock depends on its subsidiaries’ earnings, the terms of their indebtedness, and other contractual restrictions. Trans Union LLC, the borrower under the senior secured credit facility, is not permitted to declare any dividend or make any other distribution subject to certain exceptions, including compliance with a fixed charge coverage ratio and a basket that depends on TransUnion Intermediate Holding, Inc.’s consolidated net income.
9.625% and 8.125% Senior Notes
These notes were repaid in full on July 15, 2015, from the net proceeds from our IPO, along with $350.0 million borrowings from the Senior Secured Term Loan A as discussed above.
For additional information about our debt, see Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements, Note 8, “Debt.”
Recent Accounting Pronouncements
See Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements,” Note 1, “Significant Accounting and Reporting Policies,” for information about recent accounting pronouncements and the potential impact on our consolidated financial statements.
Application of Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. These accounting principles require us to make certain judgments and estimates in reporting our operating results and our assets and liabilities. Although we believe that our estimates and judgments are reasonable, they are based on information available at the time, and actual results may differ significantly from these estimates under different conditions. See the “Application of Critical Accounting Estimates” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 1, “Significant Accounting and Reporting Policies” to our audited financial statements included in Exhibit 99.1 of our Current Report on Form 8-K filed with the SEC on June 1, 2016, for a description of the significant accounting estimates used in the preparation of our consolidated financial statements.
Cautionary Notice Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of federal securities laws. Any statements made in this quarterly 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,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” and the negatives of these words and other similar expressions.
Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that factors affecting our actual financial results could cause actual results to differ materially from those expressed in the forward-looking statements. Factors that could materially affect our financial results or such forward-looking statements include among others, the risks, uncertainties and factors set forth below under Item 1A, “Risk Factors”, and the following factors:
•
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 certain “critical activities”;
•
our ability to effectively manage our costs;
•
economic and political stability in international markets where we operate;

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•
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 timely complete our multi-year technology transformation;
•
our ability to make acquisitions and integrate the operations of acquired businesses;
•
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;
•
our reliance on key management personnel; and
•
our controlling stockholders.
There may be other factors, many of which are beyond our control, that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015 and 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 events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.


33
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We operate internationally and are subject to various market risks, including those caused by potentially adverse movements in foreign currency exchange rates. We also have a significant amount of variable rate debt and funds invested in interest bearing accounts.
There have been no material changes from the quantitative and qualitative disclosures about market risk included in our Annual Report on Form 10-K for the year ended December 31, 2015.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this report, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Controls Over Financial Reporting
During the quarter covered by this report, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. 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.
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.

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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. 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.
Bankruptcy Tradeline Litigation
In a matter captioned White, et al, v. Experian Information Solutions, Inc. (No. 05-cv-01070-DOC/MLG, filed in 2005 in the United States District Court for the Central District of California), plaintiffs sought class action status against Equifax, Experian and us in connection with the reporting of delinquent or charged-off consumer debt obligations on a consumer report after the consumer was discharged in a bankruptcy proceeding. The claims allege that each national consumer reporting company did not automatically update a consumer’s file after their discharge from bankruptcy and such non-action was a failure to employ reasonable procedures to assure maximum file accuracy, a requirement of the FCRA.
Without admitting any wrongdoing, we have agreed to a settlement of this matter. In August 2008, the Court approved an agreement whereby we and the other industry defendants voluntarily changed certain operational practices. These changes require us to update certain delinquent records when we learn, through the collection of public records, that the consumer has received an order of discharge in a bankruptcy proceeding. These business practice changes did not have a material adverse impact on our operations or those of our customers.
In 2009, we also agreed, with the other two defendants, to settle the monetary claims associated with this matter for $17.0 million each ($51.0 million in total), which amount will be distributed from a settlement fund to pay the class counsel’s attorney fees, all administration and notice costs of the fund to the purported class, and a variable damage amount to consumers within the class based on the level of harm the consumer is able to confirm. Our share of this settlement was fully covered by insurance. Final approval of this monetary settlement by the Court occurred in July 2011. Certain objecting plaintiffs appealed the Court’s final approval of the monetary settlement and, in April 2013, the United States Court of Appeals for the Ninth Circuit reversed the final approval order and remanded the matter to the District Court. The rationale provided by the Court of Appeals was not that the proposed settlement was unfair or defective, but that named class counsel and certain named plaintiffs did not adequately represent the interests of the class because of certain identified conflicts. Objecting counsel to the settlement has sought to become new class counsel and the District Court denied that request. The Court of Appeals affirmed the ruling on interlocutory appeal and on May 5, 2016 denied plaintiffs’ petition for rehearing en banc. The parties expect to attend one or more mediation sessions in 2016 to determine whether the agreed settlement should still be pursued. Depending on the progress of those sessions, the Court will determine the timing of this matter.
If the monetary settlement is not ultimately upheld or modified in a manner that is acceptable to us, we intend to vigorously litigate this matter and to assert what we believe are valid defenses to the claims made by the plaintiffs. Regardless of what occurs next, we believe we have not violated any law, have valid defenses and are willing to aggressively litigate this matter. We do not believe any final resolution of this matter will have a material adverse effect on our financial condition.
OFAC Alert Service
As a result of a decision by the United States Third Circuit Court of Appeals in 2010 ( Cortez v. Trans Union LLC ), 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.
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

35
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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. The same lawyers representing Ramirez (who also represented the plaintiff in Cortez) have also filed in 2012 two additional alleged class actions ( 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 a third 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 seeks 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.  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 all of the above actions the plaintiffs’ did not alleged any actual or concrete damages for their alleged injuries. As a result we sought and were granted a stay in each of proceedings pending a decision 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 Court of Appeals (where most of the identified matters are pending) 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. On May 31, 2016, the stay in the Miller matter was lifted. We are reviewing the impact of the decision in Spokeo v. Robins on the Ramirez, Miller, Larson and Pate l matters and discussing next steps with the applicable plaintiffs’ counsel. We intend to continue to defend these matters vigorously as we believe we have acted in a lawful manner.
Consumer Disclosure
In Tyrone Henderson, et al. v. TransUnion LLC and TransUnion Rental Screening Solutions, Inc. (No. 3:14-cv-00679-JAG, United States District Court for the Eastern District of Virginia (Richmond Division)), the plaintiffs have alleged that TransUnion’s process for mailing required notices to consumers at the time it furnishes a consumer report to a reseller of those reports for employment purposes, when that report contains adverse public record information, violates the FCRA. On May 3, 2016, the Court in Henderson certified a national class of individuals with respect to these allegations, the size of which is unknown. We intend to continue to defend this matter vigorously as we believe we have acted in a lawful manner.
AG Investigations
In 2012, the Columbus Dispatch, a daily newspaper in Columbus, Ohio, published a series of four articles allegedly exposing improper or questionable practices by the three nationwide credit reporting agencies (the “NCRAs”), including us. As a result of these articles, the Attorney General of the State of Ohio initiated a multi-state Attorneys General investigation into certain practices of the nationwide consumer reporting agencies, which was commenced in late 2012. In connection with this effort, the Attorneys General for the State of New York and the State of Mississippi commenced separate investigations into the same matters being reviewed by the multi-state attorney general investigation. Beginning in late 2013, TransUnion and the other nationwide consumer reporting agencies engaged in active discussions with the multi-state group and with the New York Attorney General with respect to industry-wide initiatives addressing the concerns of the various attorneys general.
In March 2015, the NCRAs, announced a National Consumer Assistance Plan that will enhance the NCRAs’ ability to collect complete and accurate consumer information and will provide consumers more transparency and a better experience interacting with credit bureaus about their credit reports. The plan was announced after cooperative discussions and an agreement with New York Attorney General Eric Schneiderman, and focuses on enhancements in two primary areas: consumer interaction with the NCRAs and data accuracy and quality. In May 2015, the NCRAs, announced that the attorneys general of 31 states had agreed to join in the National Consumer Assistance Plan launched in March 2015. With the exception of the financial payments the NCRAs made to the attorneys general to cover the costs of their investigations, consumer education and other purposes, the settlement of the multi-state matter essentially adopted the National Consumer Assistance Plan as announced with the New York Attorney General in March 2015.

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In April 2015, the Attorney General for the State of Mississippi filed an action in the Chancery Court of Jackson County, Mississippi with respect to the certain of the matters reviewed in its investigation. The complaint in State of Mississippi ex rel. Jim Hood, Attorney General of the State of Mississippi v. TransUnion Corp., Trans Union LLC and TransUnion Interactive, Inc. (No. 2015-0716-MLF) alleges that certain marketing practices with respect to credit monitoring services sold to Mississippi residents, and certain procedures used to ensure the accuracy of the information in the credit reports of Mississippi residents, constitute unfair and deceptive practices in violation of Mississippi law. We have entered into settlement discussions with counsel representing the Mississippi Attorney General’s office. Although we are fully prepared to litigate the alleged claims in the above referenced complaint as we do not believe we have violated any law and believe we have acted in a lawful manner, if a settlement substantially along the parameters of the National Consumer Assistance Plan can be negotiated, we would consider such an option.
CFPB Investigation
In September 2015, we received a Civil Investigative Demand (a “CID”) from the Consumer Financial Protection Bureau (“CFPB”). The CID is focused on common industry practices and is part of the CFPB’s investigation to determine whether consumer reporting agencies or other persons have been or are engaging in unlawful acts or practices relating to the advertising, marketing, sale or provision of consumer reports, credit scores or credit monitoring products, or similar products or services. We are cooperating with the CFPB with respect to this matter and we believe we have followed all published authority with respect to our practices. We have had preliminary discussions with the CFPB regarding a potential agreed settlement of these matters. At this time, we are unable to predict the outcome of these discussions or this CFPB investigation, including whether the investigation will result in any action or proceeding against us.
ITEM 1A. RISK FACTORS
In addition to the other information included in this report, you should carefully consider the factors discussed in “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2015, as well as the factors identified under “Cautionary Statement Regarding Forward-Looking Statements” at the end of Part I, Item 2 of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2015, and this Quarterly Report on Form 10-Q are not the only risks facing TransUnion. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or operating results.

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ITEM 6. EXHIBITS
10.1 
 
Amendment No. 11 to Credit Agreement dated as of May 31, 2016 (incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed on June 1, 2016).
 
 
 
10.2
 
TransUnion 2015 Omnibus Incentive Plan Award Agreement with respect to Restricted Stock Units and Performance Share Units (U.S. Employees).
 
 
 
10.3
 
TransUnion 2015 Omnibus Incentive Plan Award Agreement with respect to Restricted Stock (Outside Directors).
 
 
 
10.4
 
First Amendment to Registration Rights Agreement, dated March 2, 2016, by and among TransUnion (successor to TransUnion Holding Company, Inc.), the Advent Investor (as defined therein), the GS Investors (as defined therein) and certain Key Individuals (as defined therein).
 
 
 
31.1
  
TransUnion Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
31.2
  
TransUnion Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
32**
  
TransUnion Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
101.INS
  
XBRL Instance Document.
 
 
 
101.SCH
  
XBRL Taxonomy Extension Schema Document.
 
 
 
101.CAL
  
XBRL Taxonomy Extension Calculation Linkbase Document.
 
 
 
101.LAB
  
XBRL Taxonomy Extension Label Linkbase Document.
 
 
 
101.PRE
  
XBRL Taxonomy Extension Presentation Linkbase Document.
 
 
 
101.DEF
  
XBRL Taxonomy Extension Definition Linkbase Document.
**
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
TransUnion
 
 
 
July 27, 2016
By
 
/s/ Samuel A. Hamood
 
 
 
Samuel A. Hamood
 
 
 
Executive Vice President, Chief Financial Officer
 
 
 
July 27, 2016
By
 
/s/ Timothy Elberfeld
 
 
 
Timothy Elberfeld
 
 
 
Vice President, Chief Accounting Officer
 
 
 
(Principal Accounting Officer)


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INDEX TO EXHIBITS
10.1
 
Amendment No. 11 to Credit Agreement dated as of May 31, 2016 (incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed on June 1, 2016).
 
 
 
10.2
 
TransUnion 2015 Omnibus Incentive Plan Award Agreement with respect to Restricted Stock Units and Performance Share Units (U.S. Employees).
 
 
 
10.3
 
TransUnion 2015 Omnibus Incentive Plan Award Agreement with respect to Restricted Stock (Outside Directors).
 
 
 
10.4
 
First Amendment to Registration Rights Agreement, dated March 2, 2016, by and among TransUnion (successor to TransUnion Holding Company, Inc.), the Advent Investor (as defined therein), the GS Investors (as defined therein) and certain Key Individuals (as defined therein).
 
 
 
31.1
  
TransUnion Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
31.2
  
TransUnion Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
32**
  
TransUnion Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
101.INS
  
XBRL Instance Document.
 
 
 
101.SCH
  
XBRL Taxonomy Extension Schema Document.
 
 
 
101.CAL
  
XBRL Taxonomy Extension Calculation Linkbase Document.
 
 
 
101.LAB
  
XBRL Taxonomy Extension Label Linkbase Document.
 
 
 
101.PRE
  
XBRL Taxonomy Extension Presentation Linkbase Document.
 
 
 
101.DEF
  
XBRL Taxonomy Extension Definition Linkbase Document.
**
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.



40


Exhibit 10.2

TRANSUNION
2015 OMNIBUS INCENTIVE PLAN
GRANT NOTICE
RESTRICTED STOCK UNITS
AND
PERFORMANCE SHARE UNITS
U.S. Employees
TransUnion (the “ Company ”), pursuant to the TransUnion 2015 Omnibus Incentive Plan (the “ Plan ”), hereby grants to the Participant identified below an award of (i) Restricted Stock Units that are contingent upon the Participant’s continued employment (the “ Restricted Stock Units ”), and (ii) Restricted Stock Units that are contingent upon the Participant’s continued employment and satisfaction of Performance Goals (the “ Performance Share Units ”) in such numbers as set forth below. Any reference hereunder to an “Award” shall mean, collectively or individually, Restricted Stock Units and Performance Share Units. Awards are subject to all of the terms and conditions as set forth herein, in the Award Agreement (attached hereto), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.
Participant:
[•]
Date of Grant:
[•]
Number of Restricted Stock Units:
[•]
Number of Performance Share Units:
[•]
Performance Period for Performance Share Units:
[•]
Dividend Equivalents:
The holder of an outstanding Award shall be entitled to be paid dividend equivalent payments (in respect of the payment by the Company of dividends on shares of Common Stock) either in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends. Such dividend equivalents shall be subject to the vesting of the applicable Award to which the dividend equivalent relates and shall be payable at the same time as such applicable Award is settled (and, with respect to Performance Share Units, the applicable number of Performance Share Units that are earned). If such Award is forfeited without vesting, the Participant shall have no right to such dividend equivalent payments.
Vesting Schedule:
 
1. Vesting of Restricted Stock Units . Except as provided otherwise in Sections 3 and 4 below, Restricted Stock Units will become vested if and only if the Participant remains continuously employed by the Company Group through [•].




2. Vesting of Performance Share Units . The extent to which the Performance Components are satisfied and the number of Performance Share Units that become vested shall be calculated with respect to each Performance Component as identified below. All determinations with respect to each Performance Component shall be made by the Committee in its sole discretion and, in the absence of manifest error, such determinations shall be binding and conclusive (except as required by applicable law). The applicable Performance Components shall not be achieved and the Performance Share Units shall not vest (i) until the Committee certifies that such Performance Components have been met and (ii) except as provided otherwise in Sections 3 and 4 below, unless the Participant has remained continuously employed by the Company Group through [•].
(a) Revenue CAGR Performance Component . The total number of Performance Share Units that become vested based on the achievement of cumulative revenue compound annual growth rate (“ Revenue CAGR ”) performance levels shall be equal to (x) the total number of Performance Share Units multiplied by (y) a Performance Component relative weighting factor equal to [•]%, multiplied by (z) the applicable Achievement Percentage, determined as follows, and rounded down to the nearest whole Performance Share Unit:
Level of Achievement
Cumulative 3-year Revenue CAGR
Percentage of Award Earned
Below Threshold
Less than [•]%
[•]%
Primary Threshold
[•]%
[•]%
Secondary Threshold
[•]%
[•]%
Target
[•]%
[•]%
Maximum
[•]%
[•]%

(b) Relative Total Shareholder Return Position Performance Component . The total number of Performance Share Units that become vested based on the achievement of relative total shareholder return position (“ Relative Total Shareholder Return ”) performance levels shall be equal to (x) the total number of Performance Share Units multiplied by (y) a Performance Component relative weighting factor equal to [•]%, multiplied by (z) the applicable Achievement Percentage, determined as follows, and rounded down to the nearest whole Performance Share Unit:
Level of Achievement
Relative TSR Percentile Rank
Percentage of Award Earned
Below Threshold
Less than [•] Percentile
[•]%
Threshold
[•] Percentile
[•]%
Target
[•] Percentile
[•]%
Maximum
[•] Percentile and above
[•]%

The Committee shall determine (i) the Total Shareholder Return for the Company for the Performance Period, (ii) the Total Shareholder Return for each Peer Group Member for the Performance Period, and (iii) the Relative TSR Percentile Rank for the Company. Notwithstanding anything to the contrary herein, if the Total Shareholder Return for the Company is negative over the Performance Period, then the Achievement Percentage in respect of the Company’s Relative Total Shareholder Return Position shall not exceed 100%.





(c) Adjusted EBITDA CAGR Performance Component . The total number of Performance Share Units that become vested based on the achievement of cumulative Adjusted EBITDA compound annual growth rate (“ Adjusted EBITDA CAGR ”) performance levels shall be equal to (x) the total number of Performance Share Units multiplied by (y) a Performance Component relative weighting factor equal to [•]%, multiplied by (z) the applicable Achievement Percentage, determined as follows, and rounded down to the nearest whole Performance Share Unit:
Level of Achievement
Cumulative 3-year Adjusted EBITDA CAGR
Percentage of Award Earned
Below Threshold
Less than [•]%
[•]%
Primary Threshold
[•]%
[•]%
Secondary Threshold
[•]%
[•]%
Target
[•]%
[•]%
Maximum
[•]%
[•]%

(d) With respect to Adjusted EBITDA CAGR and Revenue CAGR, the cumulative compound annual growth rate, which represents the constant rate by which the Base Year must grow such that the sum of the compounded years equals the sum of the actual years, shall be determined using Adjusted EBITDA or Revenue, as applicable, for the [•] fiscal year (the “ Base Year ”) as the initial measurement amounts, and Adjusted EBITDA or Revenue, as applicable, for the [•] fiscal year as the final measurement amount.
3. Termination of Employment . If the Participant’s employment with the Company Group terminates for any reason while any Award remains outstanding and eligible to vest, the Participant shall forfeit all unvested Awards (and, as a result, shall forfeit all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid pursuant to such Award); provided , however , that
(a) if termination results from Participant’s Disability or death, (i) the Restricted Stock Units granted hereunder will vest immediately in full on the date of such termination (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Restricted Stock Units), and (ii) the Performance Share Units granted hereunder will vest immediately at the “Target” level of performance on the date of such termination (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Performance Share Units); and
(b) if termination results from the Participant’s Retirement, then with respect to any Award that was granted in a calendar year prior to the calendar year of Retirement (i) a prorated portion of the Restricted Stock Units, based on the number of full and partial months worked during the period beginning on [•] and ending [•], will vest immediately (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Restricted Stock Units), and (ii) a prorated portion of the Performance Share Units, based on the number of full and partial months worked during the period beginning on [•] and ending [•], will remain outstanding and will vest in accordance with the terms and provisions hereof in the same manner as if the Participant’s employment had continued through [•] in accordance with the terms of Section 1 , to the extent that such conditions to vesting other than continued employment have been met and Performance Components satisfied (and, as a result, Participant shall be entitled to




a prorated portion of the shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Performance Share Units).
4. Change in Control . If a Change in Control occurs, the following provisions shall apply with respect to the vesting of the Awards:
(a) To the extent the successor entity in the Change in Control does not assume the Awards or substitute the Awards with an equivalent award on terms that are no less favorable to the Participant as compared to the Award:
(i) the Restricted Stock Units granted hereunder will vest immediately in full upon the effective date of the Change in Control (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Restricted Stock Units); and
(ii) if the Change in Control occurs prior to the Committee’s certification of the achievement of the Performance Components as provided under Section 2 herein, then the Performance Share Units granted hereunder will vest immediately upon the effective date of the Change in Control based on the achievement (or deemed achievement) of the Performance Components, as follows: (x) the Relative Total Shareholder Return Performance Component will be measured and the corresponding Level of Achievement determined as of the effective date of the Change in Control, and (y) the Revenue CAGR and Adjusted EBITDA CAGR Performance Components shall be deemed achieved at the “Target” Level of Achievement (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Performance Share Units).
(b) To the extent the successor entity in the Change in Control assumes the Awards or substitutes the Awards with an equivalent award on terms that are no less favorable to the Participant as compared to the Award, a “Qualifying Termination” (as such term is used in Section 12(c) of the Plan) shall mean a Triggering Event occurring prior to the second anniversary of the effective date of such Change in Control, and
(i) the Restricted Stock Units granted hereunder will vest immediately in full upon a Triggering Event (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Restricted Stock Units); and
(ii) if the Change in Control occurs prior to the Committee’s certification of the achievement of the Performance Components, the Performance Share Units granted hereunder will vest immediately upon a Triggering Event based on the achievement (or deemed achievement) of the Performance Components at the levels determined in accordance with clauses (x) and (y) of Section 4(a)(ii) above (and, as a result, Participant shall be entitled to all shares of Common Stock, or cash, and any related dividend equivalents that may otherwise have been delivered or paid in connection with such Performance Share Units).
5. Definitions . For the purposes of this Grant Notice:
(a) “ Achievement Percentage ” means the “Percentage of Award Earned” specified with respect to the “Below Threshold,” “Primary Threshold,” “Secondary Threshold,” “Threshold,” “Target” and “Maximum” levels for each Performance Component, or a percentage determined using linear interpolation if actual performance falls between any two levels (and rounded to the nearest whole percentage point and, if equally between two percentage points, rounded up). In the event that actual performance does not meet the “Primary Threshold” or “Threshold” level for any Performance Component, as applicable, the “Achievement




Percentage” with respect to such Performance Component shall be zero. The Committee shall have the discretion pursuant Section 11(d) of the Plan to make equitable adjustments to the Performance Components to account for certain events including, but not limited to, acquisitions or divestitures, acquisition of new technologies, or resolution of legal disputes.
(b) “ Adjusted EBITDA ” means adjusted earnings before interest, taxes, depreciation and amortization, as reported in the Company’s Form 10-Ks and Form 10-Qs as filed with the Securities and Exchange Commission with such adjustments as are recommended by management and approved by the Committee for items that are infrequent in occurrence and/or unusual in nature and consistent with similar adjustments made for purposes of annual bonus compensation.
(c) “ Constructive Termination ” means the occurrence of any one or more of the following events without the Participant's written consent: (i) with respect to any Participant holding the title of Vice President or above, any reduction in position, overall responsibilities, level of authority, title or level of reporting; (ii) a reduction in the Participant’s base compensation and annual incentive compensation opportunity, measured in the aggregate, which is not the result of a uniformly applied adjustment across all similarly situated personnel within the Company; or (iii) a requirement that the Participant's location of employment be relocated by more than fifty (50) miles from the Participant’s then-current location, provided , that any such event shall constitute a Constructive Termination only if the Participant gives written notice to the Committee within ten (10) days of the later of its occurrence or Executive’s knowledge thereof, the circumstances giving rise to the Constructive Termination are not cured within thirty (30) business days of such notice, and the Participant resigns from employment within sixty (60) days following such failure to cure. In the event that the Participant is a party to an employment or severance agreement with the Company (or a successor entity) that defines a termination on account of “Constructive Termination,” “Good Reason” or “Breach of Agreement” (or a term having similar meaning), such definition shall apply as the definition of “Constructive Termination” for purposes hereof in lieu of the foregoing.
(d) “ Revenue ” means revenue as reported in the Company’s Form 10-Ks and Form 10-Qs as filed with the Securities and Exchange Commission with such adjustments as are recommended by management and approved by the Committee for items that are infrequent in occurrence and/or unusual in nature and consistent with similar adjustments made for purposes of annual bonus compensation.
(e) “ Peer Group Members ” means all of [•], including the Company, on the date that is 20 trading days prior to the commencement of the Performance Period, with the following modifications: (i) except as provided in clause (ii) below, only those entities that continue to trade throughout the Performance Period without interruption on a National Exchange shall be included; and (ii) any such entity that files for bankruptcy (“ Bankrupt Peer ”) during the Performance Period shall continue to be included.
(f) “ Relative TSR Percentile Rank ” means the percentile performance of the Company as compared to the Peer Group Members. Relative TSR Percentile Rank is determined by ranking the Company and all other Peer Group Members according to their respective Total Shareholder Return for the Performance Period. The ranking is in order from minimum to maximum, with the lowest performing entity assigned a rank of one. Peer Group Members with the same Total Shareholder Return (calculated to four decimal places) will share the same rank and subsequent rankings will reflect the number of Peer Group Members sharing preceding rankings. The Company’s ranking is then divided by the total number of Peer Group Members to get the Company’s Relative TSR Percentile Rank.
(g) “ Retirement ” means termination of employment with the Company Group (for any reason other than Disability, death or Cause) at a time when (i) the Participant has




attained the age of 55, (ii) the sum of the Participant’s age plus completed years of service with the Company Group is at least 65, (iii) the Participant has completed at least five (5) years of service with the Company Group, and (iv) the Participant does not have an offer for and has not accepted employment with any other for profit business on financial terms and conditions substantially similar to those provided by the Company before the end of the Performance Period; provided, however, that unless the Committee agrees otherwise, no termination of employment shall be a Retirement unless the Participant has provided at least sixty (60) days’ advance written notice of the Participant’s intent to retire.
(h) “ Performance Components ” means the Performance Criteria applicable to an Award.
(i) “ Total Shareholder Return ” of either the Company or a Peer Group Member means the result of dividing (1) the sum of the cumulative value of an entity’s dividends for the Performance Period, plus the entity’s Ending Price, minus the Beginning Price, by (2) the Beginning Price, calculated to four decimal places. For purposes of determining the cumulative value of an entity’s dividends during the Performance Period, it will be assumed that all dividends declared and paid with respect to a particular entity during the Performance Period were reinvested in such entity at the ex-dividend date, using the closing price on such date. The aggregate shares, or fractional shares thereof, that will be assumed to be purchased as part of the reinvestment calculation will be multiplied by the Ending Price to determine the cumulative value of an entity’s dividends for the Performance Period. For these purposes:
(i) “ Price ” is the principal stock exchange or quotation system closing prices on the date in question;
(ii) “ Beginning Price ” is the average Price for the period of 20 trading days immediately preceding the first day of the Performance Period; provided , however , that if the applicable common stock has not been trading for a full 20 trading day period prior to the applicable measurement date, the average closing price shall be determined based on such shorter number of days that such common stock has been trading as of such measurement date;
(iii) “ Ending Price ” is the average Price for the period of 20 trading days immediately preceding and including the final day of the Performance Period; and
(iv) any Bankrupt Peer and any Peer Group Member that (A) merges with or is acquired by another Peer Group Member, or (B) is acquired by a company who is not a Peer Group Member shall have a Total Shareholder Return of negative one hundred percent (-100%);
in each case, with such adjustments as are necessary, in the judgment of the Committee to equitably calculate Total Shareholder Return in light of any stock splits, reverse stock splits, stock dividends, and other extraordinary transactions or other changes in the capital structure of the Company or the Peer Group Member, as applicable.
(j) “ Triggering Event ” means (i) the Participant’s employment with the Company Group is terminated by the Company Group for any reason other than on account of death, Disability or Cause or (ii) the occurrence of a Constructive Termination.

*    *    *






THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS GRANT NOTICE WITH RESPECT TO RESTRICTED STOCK UNITS AND PERFORMANCE SHARE UNITS, THE AWARD AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF AWARDS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS GRANT NOTICE, THE AWARD AGREEMENT AND THE PLAN.

To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute the Participant’s signature hereof.
TRANSUNION
 
Participant
 
 
 

By:
Title:
 
 






















TRANSUNION
2015 OMNIBUS INCENTIVE PLAN
AWARD AGREEMENT WITH RESPECT TO
RESTRICTED STOCK UNITS AND PERFORMANCE SHARE UNITS
Pursuant to the Grant Notice with respect to Restricted Stock Units and Performance Share Units (the “ Grant Notice ”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Award Agreement (including any addenda or exhibits) (this “ Award Agreement ”) and the TransUnion 2015 Omnibus Incentive Plan (the “ Plan ”), TransUnion (the “ Company ”) and the Participant agree as follows. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.
1. Grant of Restricted Stock Units and Performance Share Units . Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Restricted Stock Units (“ Restricted Stock Units ”) and Performance Share Units (“ Performance Share Units ”) provided in the Grant Notice (with each Restricted Stock Unit and each Performance Share Unit representing an unfunded, unsecured right to receive one share of Common Stock upon vesting). Any reference hereunder to an “Award” shall mean, collectively or individually, Restricted Stock Units and Performance Share Units. The Company may make one or more additional grants of Awards to the Participant under this Award Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Award Agreement to the extent provided therein. The Company reserves all rights with respect to the granting of additional Awards hereunder and makes no implied promise to grant additional Awards.
2. Vesting . Subject to the conditions contained herein and in the Plan, the Awards shall vest and the restrictions on such Awards shall lapse as provided in the Grant Notice.
3. Settlement of Awards . The provisions of Section 9(d) of the Plan are incorporated herein by reference and made a part hereof.
4. Treatment of Awards Upon Termination . Except as provided in the Grant Notice, the provisions of Section 9(c)(ii) of the Plan are incorporated herein by reference and made a part hereof.
5. Noncompetition . Participant acknowledges and agrees with the Company that Participant’s services to the Company are unique in nature and that the Company would be irreparably damaged if Participant were to provide similar services to any person or entity competing with the Company. Participant accordingly covenants and agrees with the Company that during the period commencing with the date of this Award Agreement and ending, on (i) if termination of the Participant’s employment results from the Participant’s Retirement, the later of (A) the conclusion of any Performance Period (as set forth in the Grant Notice) and (B) the first anniversary of Participant’s Termination, or (ii) otherwise, the first anniversary of Participant’s Termination (the “ Noncompetition Period ”), Participant shall not, directly or indirectly, either for himself or for any other individual, corporation, partnership, joint venture or other entity, participate in any Competitive Business (including, without limitation, any division, group or franchise of a larger organization). For purposes of this Award Agreement, the term “participate in” (with the term “participating in” having a correlative meaning with the foregoing) shall include, without limitation, having any direct or indirect interest in any corporation, partnership, joint venture or other entity, whether as a sole proprietor, owner, stockholder, partner, joint venturer, creditor or otherwise, or rendering any direct or indirect service or assistance to any individual, corporation, partnership, joint venture or other business entity (whether as a director, officer, manager, supervisor, employee, agent, consultant or otherwise). The foregoing restrictions on the Participant are not




applicable (i) if the Participant’s employment with the Company Group is terminated by the Company without Cause, and (ii) to any passive investment made by the Participant in any public entity that is or includes a Competitive Business, provided such investment is not greater than 3% of market value of such public entity.
6. Nonsolicitation . Participant further covenants and agrees that during the Noncompetition Period, Participant shall not, directly or indirectly (i) induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any such employee, (ii) hire directly or through another entity any person who is then an employee of the Company or was an employee of the Company within six months preceding the date of such attempted hiring, (iii) induce or attempt to induce any customer or client of the Company to (A) cease doing business with the Company or (B) acquire any Competitive Service from any person or entity other than the Company or its Affiliates or (iv) in any way interfere with the relationship between any such customer or client and the Company.
7. Geographic Scope . The provisions of Section 5 and Section 6 shall apply, while Participant is employed, to countries in which the Company conducts business during the period from the date of this Award Agreement to the date of Termination and, with respect to portions of the Noncompetition Period following the date of Termination, to the countries in which (i) the Company conducted business at Termination or (ii) at the time of Participant’s Termination, the Company had approved plans to conduct business within the following 12 months.
8. Nondisparagement . Participant shall not, directly or indirectly, disparage the Company and/or communicate, either in writing or orally, any statement that bears negatively on the Company’s reputation, services, products, principals, customers, policies, adherence to the law (unless otherwise required by law), shareholders, officers, directors, officials, executives, employees, agents, representatives, business or other legitimate interests of the Company.
9. Acknowledgments . Participant acknowledges that the restrictions contained in this Award Agreement do not preclude Participant from earning a livelihood, nor do they unreasonably impose limitations on Participant’s ability to earn a living. Participant agrees and acknowledges that the potential harm to the Company resulting from the non-enforcement of Section 5, Section 6, or Section 8 outweighs any potential harm to Participant of the enforcement of such provisions by injunction or otherwise. Participant acknowledges that Participant has carefully read this Award Agreement and has given careful consideration to the restraints imposed upon Participant by this Award Agreement and is in full agreement regarding their necessity for the reasonable and proper protection of the business goodwill and competitive positions of the Company now existing or to be developed in the future and that each and every restraint imposed by this Award Agreement is reasonable with respect to subject matter, time period and geographical area. The Company agrees that it will provide notice of any purported violations of this Award Agreement by Participant, as well as an opportunity during the 30 days thereafter to cure the purported violations; provided that the violations are not willful violations and can reasonably be cured within 30 days. Notwithstanding the foregoing or anything else to the contrary contained herein, in the event that the Participant is a party to an employment, retention or severance agreement with the Company (or a successor entity) that contains provisions that conflict with Section 5, Section 6, or Section 8, the corresponding provisions of such employment, retention or severance agreement shall apply and control.
10. Certain Definitions . For purposes of this Award Agreement, the following definitions will apply:
a. “ Company ” as used in this Award Agreement with reference to employment shall include the Company and its subsidiaries.
b. “ Competitive Business ” means any business or person that has operations that generates a significant portion of its annual revenues from any line of business, product or service that competes with, or is meant to compete with, any Company Group line of business,




product or service offered by the Company Group as of the date of termination or planned to be offered by the Company Group within the 12 months following termination, including, but not limited to, the following: [•].
c. “ Participant ,” when used under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Awards may be transferred in accordance with the Plan, shall be deemed to include such person or persons.
11. Non-Transferability . The Awards are not transferable by the Participant except to Permitted Transferees in accordance with Section 14(b) of the Plan. Except as otherwise provided herein, no assignment or transfer of the Awards, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Awards shall terminate and become of no further effect.
12. Rights as Stockholder; Additional Agreements . The Participant or a permitted transferee of the Awards shall have no rights as a stockholder with respect to any share of Common Stock underlying an Award unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock and, subject to Section 12 of the Plan, no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, the Awards, or settlement of the Awards, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
13. Tax Withholding . The provisions of Section 14(d) of the Plan are incorporated herein by reference and made a part hereof; provided, that the Committee may allow a withholding of shares in excess of the minimum required statutory liability if the Committee determines that such excess withholding would not result in adverse accounting consequences.
14. Clawback/Repayment . All Awards shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (1) any clawback, forfeiture or other similar policy adopted by the Board or the Committee and as in effect from time to time, and (2) applicable law. In addition, if the Participant receives any amount in excess of the amount that the Participant should have otherwise received under the terms of the Awards for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the Committee may provide that the Participant shall be required to repay any such excess amount to the Company.
15. Detrimental Activity . Notwithstanding anything to the contrary contained in the Plan, the Grant Notice or this Award Agreement, if the Participant has engaged or engages in any Detrimental Activity, the Committee may, in its sole discretion, (1) cancel any or all of the Awards, and (2) the Participant will forfeit any gain realized on the vesting of such Awards, and must repay the gain to the Company.
16. Notice . Every notice or other communication relating to this Award Agreement between the Company and the Participant shall be in writing, and shall be mailed, transmitted or delivered to the party for whom it is intended at such physical or electronic (e-mail) address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed, transmitted or delivered to the Company at its principal executive office, to the attention of the Company Secretary, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed or transmitted to the Participant at the Participant’s last known address or e-mail address, as




reflected in the Company’s records. Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.
17. No Right to Continued Service . This Award Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Company.
18. Binding Effect . This Award Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto, and each member of the Company Group, and each of their respective Affiliates, shall have the right to enforce Section 5, Section 6, and Section 8 hereof.
19. Waiver and Amendments . Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Award Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however , that any such waiver, alteration, amendment or modification may be consented to on the Company’s behalf by the Committee. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
20. Governing Law . This Award Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Notwithstanding anything contained in this Award Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Award Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware.
21. Plan . The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Award Agreement, the Plan shall govern and control.
22. Section 409A. It is intended that the Awards granted hereunder shall be exempt from Section 409A of the Code pursuant to the “short-term deferral” rule applicable to such section, as set forth in the regulations or other guidance published by the Internal Revenue Service thereunder. The certification by the Compensation Committee and payment with respect to the Awards will occur between January 1 and March 15 of the calendar year following the end of the Performance Period. The Company does not guarantee any particular tax effect with respect to the Awards.

*    *    *






Exhibit 10.3

TRANSUNION
2015 OMNIBUS INCENTIVE PLAN
GRANT NOTICE
RESTRICTED STOCK
[Outside Directors]
TransUnion (the “ Company ”), pursuant to the TransUnion 2015 Omnibus Incentive Plan (the “ Plan ”), hereby grants to the Participant identified below an award (the “ Award ”) of the number of shares of Restricted Stock (the “ Restricted Shares ”) set forth below. The Award is subject to all of the terms and conditions as set forth herein, in the Award Agreement (attached hereto), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.
Participant:
[•]
Date of Grant:
[•]
Number of Restricted Shares:
[•]
Vesting Schedule:
100% of the Restricted Shares shall vest and become non-forfeitable, and the Vesting Period shall lapse with respect to the Restricted Shares, on the first anniversary of the Date of Grant.
Forfeiture:
The Restricted Shares shall be forfeited to the Company for no consideration as of the date of any termination of the Participant’s service as a member of the Board of Directors of the Company (“Director”) if such termination occurs prior to the time that the Restricted Shares have vested (as set forth above). Notwithstanding the foregoing, to the extent not then vested, any unvested Restricted Shares shall vest in full either (a) upon the termination of the Participant’s service as a Director if such termination is not due to the Participant’s resignation or removal as a Director at the request of a majority of the Board, or (b) upon the consummation of a Change in Control prior to a Termination, effective as of immediately prior to such consummation.
***













THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS GRANT NOTICE WITH RESPECT TO RESTRICTED STOCK, THE AWARD AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF THE AWARD HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS GRANT NOTICE, THE AWARD AGREEMENT AND THE PLAN.

TRANSUNION
Participant

By:
Title:
 

























TRANSUNION
2015 OMNIBUS INCENTIVE PLAN
AWARD AGREEMENT WITH RESPECT TO
RESTRICTED STOCK
Pursuant to the Grant Notice with respect to Restricted Stock (the “ Grant Notice ”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Award Agreement (including any addenda or exhibits) (this “ Award Agreement ”) and the TransUnion 2015 Omnibus Incentive Plan (the “ Plan ”), TransUnion (the “ Company ”) and the Participant agree as follows. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.
1. Grant of Shares of Restricted Stock . Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of shares of Restricted Stock (the “ Restricted Shares ”) provided in the Grant Notice.
2. Vesting . Subject to the conditions contained herein and in the Plan, the Restricted Shares shall vest and become non-forfeitable, and the Vesting Period shall lapse, as provided in the Grant Notice.
3. Settlement of Awards . The provisions of Section 9(d) of the Plan are incorporated herein by reference and made a part hereof..
4. Treatment of Restricted Shares Upon Termination . Except as provided in the Grant Notice, the provisions of Section 9(c)(ii) of the Plan are incorporated herein by reference and made a part hereof.
5. Confidentiality . Participant acknowledges and agrees that: the Company Group and its Affiliates are engaged in highly competitive businesses; the Company Group and its Affiliates are have developed and acquired Confidential Information (as defined below) at great effort and significant expense; the Company Group and its Affiliates are have made reasonable and substantial efforts to maintain the confidentiality of their respective Confidential Information; the Confidential Information that Participant will help develop and/or have access to is critical to the success and survival of the Company Group and its Affiliates, and their respective ability to compete, and it could be used by a competitor in a manner that would irreparably harm the competitive position of the Company and/or one or more of its Affiliates in the marketplace. To protect the goodwill of the Company Group and its Affiliates, to protect the investment made by the Company Group and its Affiliates in its Service Providers, to protect the Confidential Information of the Company Group and its Affiliates, and as a material consideration and inducement to the Company to retain Participant as a director of the Company, in addition to any other confidentiality obligation under any other agreement with any member of the Company Group, pursuant to any applicable policy of the Company Group, or under applicable law, the Company and the Participant hereby agree as follows:
(a) During Participant’s tenure as a director of the Company and at all times thereafter, Participant will hold all Confidential Information in the strictest confidence, and Participant will not use, disclose, reveal, publish or make available to any person or any firm, company or other entity any Confidential Information, except (i) to the extent required to perform Participant’s duties as a director of the Company and (ii) following delivery of prior written notice to the Company (to the extent permitted under applicable law), if the release of such Confidential Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, in each case in a manner consistent with Participant’s fiduciary and statutory duties as a director. The Participant shall cooperate with any attempt by the Company to obtain a protective order or similar treatment with respect to any such subpoena or other court order.




(b) Following the Participant’s Termination, the Participant shall (i) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by any member of the Company Group, (ii) immediately destroy, delete or return to the Company, at the Company’s option, all originals and copies in any form or medium in the Participant’s possession or control that contains Confidential Information or otherwise relates to the business of the Company Group, except that the Participant may retain those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information, and (iii) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which the Participant is or becomes aware.
(c) All Confidential Information shall remain the sole and exclusive property of the Company. Nothing in this Award Agreement shall be construed as granting Participant or any other Person any right, title or interest in or to the Confidential Information.
(d) “ Confidential Information ” means any trade secret or confidential or proprietary business information of the Company Group or any of their respective Affiliates (whether or not such Confidential Information has been conceived, originated, discovered or developed in whole or in part by Participant). Confidential Information includes, but is not limited to: information concerning the Company’s, any member of the Company Group’s, or any of their respective Affiliates’ business plans, operations, products, strategies, marketing, sales, pricing, inventions, designs, costs, legal strategies, finances, employees, customers, prospective customers, licensees, licensors, or authors or other contributors; information received from third parties under confidential conditions; or other financial, commercial, business, technical or marketing information concerning the Company, the Company Group, or any of their respective Affiliates, or any of the products or services made, developed, offered or sold by the Company, the Company Group, or any of their respective Affiliates. Confidential Information does not include knowledge or information that was known to Participant prior to Participant’s appointment as a director of the Company, or knowledge or information that is in the public domain or generally available to the public (except if the knowledge or information is in the public domain or generally available to the public because of Participant’s willful or negligence conduct).
6. Company; Participant .
(a) The term “Company” as used in this Award Agreement shall include the Company and its subsidiaries.
(b) Whenever the word “Participant” is used in any provision of this Award Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Restricted Shares may be transferred in accordance with the Plan, the word “Participant” shall be deemed to include such person or persons.
7. Non-Transferability . The Restricted Shares are not transferable by the Participant except to Permitted Transferees in accordance with Section 14(b) of the Plan. Except as otherwise provided herein, no assignment or transfer of the Restricted Shares, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Restricted Shares shall terminate and become of no further effect.
8. Rights as Stockholder; Additional Agreements . Upon the execution and delivery of this Award Agreement, the Restricted Shares shall be transferred to the Participant and the Restricted Shares shall be registered to the name of the Participant in the books and records of the Company, subject to the terms of the Plan and this Award Agreement. The Participant shall have all rights of a shareholder, including the right to vote the Restricted Shares and to receive ordinary dividends payable with respect to the Restricted Shares from the date of this Award Agreement. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, the Award or the settlement of the Award to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and




to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
9. Tax Withholding . The provisions of Section 14(d) of the Plan are incorporated herein by reference and made a prt hereof; provided, that the Committee may allow a withholding of shares in excess of the minimum required statutory liability if the Committee determines that such excess withholding would not result on adverse accounting consequences.
10. Clawback/Repayment . The Award shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (1) any clawback, forfeiture or other similar policy adopted by the Board or the Committee and as in effect from time to time, and (2) applicable law. In addition, if the Participant receives any amount in excess of the amount that the Participant should have otherwise received under the terms of or with respect to the Award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the Committee may provide that the Participant shall be required to repay any such excess amount to the Company.
11. Detrimental Activity . Notwithstanding anything to the contrary contained in the Plan, the Grant Notice or this Award Agreement, if at any time prior to the time that the Restricted Shares have vested or within one (1) year thereafter, the Participant has engaged or engages in any Detrimental Activity, the Committee may, in its sole discretion, (1) cancel any or all of the Restricted Shares, and (2) the Participant will forfeit any after-tax gain realized on the vesting or sale of such Restricted Shares, and repay the gain to the Company.
12. Notice . Every notice or other communication relating to this Award Agreement between the Company and the Participant shall be in writing, and shall be mailed, transmitted or delivered to the party for whom it is intended at such physical or electronic (e-mail) address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed, transmitted or delivered to the Company at its principal executive office, to the attention of the Company Secretary, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed or transmitted to the Participant at the Participant’s last known address or e-mail address, as reflected in the Company’s records. Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.
13. No Right to Continued Service . This Award Agreement does not confer upon the Participant any right to continue as a service provider to the Company.
14. Binding Effect . This Award Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto, and each member of the Company Group, and each of their respective Affiliates, shall have the right to enforce Section 4 hereof.
15. Waiver and Amendments . Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Award Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however , that any such waiver, alteration, amendment or modification may be consented to on the Company’s behalf by the Committee. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
16. Governing Law; Forum; Jury Trial .
(a) Governing Law; Forum . This Award Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Notwithstanding anything contained in this Award Agreement, the Grant Notice or the Plan to the




contrary, if any suit or claim is instituted by the Participant or the Company relating to this Award Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware.
(b) WAIVER OF JURY TRIAL . AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AWARD AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL), THE COMPANY AND PARTICIPANT EACH EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AWARD AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.
17. Plan . The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Award Agreement, the Plan shall govern and control.
18. Section 409A. It is intended that the Award granted hereunder shall be exempt from Section 409A of the Code pursuant to the “short-term deferral” rule applicable to such section, as set forth in the regulations or other guidance published by the Internal Revenue Service thereunder. The Company does not guarantee any particular tax effect with respect to the Award.

*      *      *





Exhibit 10.4


FIRST AMENDMENT TO THE REGISTRATION RIGHTS AGREEMENT
This First Amendment (this “ Amendment ”) to the Registration Rights Agreement is entered into as of March 2, 2016, by and among TransUnion (successor to TransUnion Holding Company, Inc.), a Delaware corporation (“ Issuer ”), the Advent Investor, the GS Investors (collectively, the “ Investors ”) and certain Key Individuals, and constitutes an amendment to the Registration Rights Agreement (the “ Agreement ”), dated as of April 30, 2012, among (i) the Issuer, (ii) the Investors and (iii) the Key Individuals. All capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.
WHEREAS, Section 3.7 of the Agreement permits the Issuer, the Investors and the holders of at least two-thirds (66 2/3%) of the Registrable Securities held by all Key Individuals to amend the Agreement if such amendment does not (a) have a disproportionate material adverse effect on a Holder relative to the other Holders and (b) have a disproportionate adverse effect on the rights of any Key Individual under the Agreement as compared to other Key Individuals; and
WHEREAS, the Issuer, the Investors and certain of the Key Individuals holding at least two-thirds (66 2/3%) of the Registrable Securities currently held by all Key Individuals desire to amend the Agreement as set forth in this Amendment to (i) delete the Demand Notice and Shelf Notice requirements contained in Sections 2.01 and 2.02, respectively; (ii) remove the ability of Key Individuals to participate in Demand Registrations pursuant to Section 2.01 of the Agreement; and (iii) shorten the notice periods for Piggyback Registrations pursuant to Section 2.03 of the Agreement.
NOW, THEREFORE, in consideration of the mutual promises set forth herein and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree and hereby amend the Agreement as follows:
1.
Section 2.01 .
a.
Section 2.01(e) is hereby deleted in its entirety and replaced with “[Reserved]”.
b.
Section 2.01(h) is hereby amended and restated to read in its entirety as follows:
(h) Priority of Securities Registered Pursuant to Demand Registrations . If the managing underwriter or underwriters of a proposed Underwritten Offering of the Registrable Securities included in a Demand Registration (or, in the case of a Demand Registration not being underwritten, the Demanding Investors), advise the Board in writing that, in its or their reasonable opinion, the number of securities requested to be included in such Demand Registration exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the securities to be included in such Demand Registration shall be allocated, (i) first, pro rata among the GS Holders and the Advent Holders (in each case, including any Demanding Investor) based on the relative number of Registrable Securities then held by each such GS Holder and Advent Holder and (ii) second, and only if all the securities referred to in clause (i) have been included, the number of securities that the Issuer proposes to include in such Registration that, in the opinion of the managing underwriter or underwriters (or the Investors, as the case may be) can be sold without having such adverse effect.




2. Section 2.02(c) is hereby deleted in its entirety and replaced with “[Reserved]”.
3. Section 2.03(a) .
a.
The reference in Section 2.03(a) to “forty-five (45) days” is hereby deleted in its entirety and replaced with “five (5) Business Days”.
b.
The reference in Section 2.03(a) to “fifteen (15) days” is hereby deleted in its entirety and replaced with “five (5) Business Days”.
4. No Further Effect . Except as expressly set forth in this Amendment, this Amendment does not, by implication or otherwise, alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Agreement.
5. Governing Law . This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts entered into and performed entirely within such State.
6. Miscellaneous . This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other parties hereto, this Amendment shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
[ Signature pages follow ]


















IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written.
                            
TRANSUNION
By:
/s/ JOHN W. BLENKE
 
Name: John W. Blenke
 
Title: Executive Vice President






































[Signature Page to Amendment to Registration Rights Agreement]





                        
GS CAPITAL PARTNERS VI FUND, L.P.
By:
GSCP VI Advisors, L.L.C.
its General Partner
By:
/s/ SUMIT RAJPAL
 
Name:
Sumit Rajpal
 
Title:
Vice President


                        
GS CAPITAL PARTNERS VI PARALLEL, L.P.
By:
GS Advisors VI, L.L.C.
its General Partner
By:
/s/ SUMIT RAJPAL
 
Name:
Sumit Rajpal
 
Title:
Vice President


                        
SPARTANSHIELD HOLDINGS
By:
GS Capital Partners VI Offshore Fund, L.P., its General Partner
By: GSCP VI Offshore Advisors, L.L.C., its General Partner
By:
/s/ SUMIT RAJPAL
 
Name:
Sumit Rajpal
 
Title:
Vice President


                        
ADVENT-TRANSUNION ACQUISITION LIMITED PARTNERSHIP
By:
Advent-TransUnion GP LLC, its general partner
By:
/s/ MICHAEL RISTAINO
 
Name: Michael Ristaino
 
Title: President







[Signature Page to Amendment to Registration Rights Agreement]





Key Individuals:


_/s/ JAMES M. PECK ___
James M. Peck


_/s/ SAMUEL A. HAMOOD __
Samuel A. Hamood


_/s/ JOHN W. BLENKE ____
John W. Blenke


_/s/ CHRISTOPHER CARTWRIGHT _
Christopher Cartwright


_/s/ MOHIT KAPOOR_ ___
Mohit Kapoor


_ /s/ SIDDHARTH N. (BOBBY) MEHTA
Siddharth N. (Bobby) Mehta


_/s/ DAVID M. NEENAN_ __ _
David M. Neenan


_/s/ GEORGE M. AWAD_ __
George M. Awad


_/s/ LEO F. MULLIN ___________
Leo F. Mullin


_/s/ ANDREW PROZES_ ____
Andrew Prozes









[Signature Page to Amendment to Registration Rights Agreement]




Exhibit 31.1
CERTIFICATION
I, James M. Peck, certify that:
1. I have reviewed this report on Form 10-Q of TransUnion;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 27, 2016

/s/ James M. Peck
Name: James M. Peck
Title: Chief Executive Officer
 




Exhibit 31.2
CERTIFICATION
I, Samuel A. Hamood, certify that:
1. I have reviewed this report on Form 10-Q of TransUnion;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 27, 2016
 

/s/ Samuel A. Hamood
Name: Samuel A. Hamood
Title: Chief Financial Officer




Exhibit 32
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of TransUnion for the period ended June 30, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), James M. Peck, as Chief Executive Officer of the Company, and Samuel A. Hamood, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of TransUnion.
 
July 27, 2016


/s/ James M. Peck
Name: James M. Peck
Title: Chief Executive Officer


/s/ Samuel A. Hamood
Name: Samuel A. Hamood
Title: Chief Financial Officer

This certification accompanies this Form 10-Q and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section.