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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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61-1678417
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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555 West Adams, Chicago, Illinois
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60661
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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x
YES
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o
NO
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o
YES
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x
NO
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x
YES
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o
NO
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x
YES
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o
NO
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x
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x
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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o
YES
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x
NO
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ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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ITEM 16. FORM 10-K SUMMARY
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•
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macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets;
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our ability to provide competitive services and prices;
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our ability to retain or renew existing agreements with large or long-term customers;
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our ability to maintain the security and integrity of our data;
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our ability to deliver services timely without interruption;
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our ability to maintain our access to data sources;
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government regulation and changes in the regulatory environment;
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litigation or regulatory proceedings;
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regulatory oversight of certain “critical activities”;
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our ability to effectively manage our costs;
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economic and political stability in the United Sates and international markets where we operate;
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our ability to effectively develop and maintain strategic alliances and joint ventures;
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our ability to timely develop new services and the market’s willingness to adopt our new services;
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our ability to manage and expand our operations and keep up with rapidly changing technologies;
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our ability to make acquisitions and integrate the operations of acquired businesses;
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our ability to protect and enforce our intellectual property, trade secrets and other forms of unpatented intellectual property;
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our ability to defend our intellectual property from infringement claims by third parties;
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the ability of our outside service providers and key vendors to fulfill their obligations to us;
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further consolidation in our end-customer markets;
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the increased availability of free or inexpensive consumer information;
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losses against which we do not insure;
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our ability to make timely payments of principal and interest on our indebtedness;
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our ability to satisfy covenants in the agreements governing our indebtedness;
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our ability to maintain our liquidity;
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share repurchase plans;
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our reliance on key management personnel; and
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our controlling stockholders.
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Investing in our Technology:
Technology is at the core of the solutions we provide to our customers. We have made significant investments since 2012 to modernize our infrastructure and to transition to the latest big data and analytics technologies which enable us to be quicker, more efficient and more cost-effective. Our next-generation technology enhances our ability to organize and handle high volumes of disparate data, improves delivery speeds, provides better availability and strengthens product development capabilities, while lowering our overall cost structure and allowing us to maintain our focus on information security. Our investment strategy has been to build capabilities and leverage them across multiple geographies and industry verticals.
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Expanding our Data:
We have continued to invest in the breadth and depth of our data. We introduced the concept of trended data to provide the trajectory of a consumer’s risk profile, used public records data to enhance the scope of business issues we can address and incorporated alternative data into our databases to better assess risk for banked and unbanked consumers. We believe we are the only provider of scale in the United States to possess both nationwide consumer credit data and comprehensive, diverse public records data. All of these initiatives improve the quality of our data, provide deeper insights into risk and allow us to create differentiated solutions for our customers.
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Strengthening our Analytics Capabilities:
We have strengthened our analytics capabilities by leveraging our next-generation technology and expanded data, utilizing more advanced tools and growing our analytics team. This has allowed us to create solutions that produce greater insights and more predictive results, which help our customers make better decisions. In addition, our strengthened analytics capabilities have shortened our time-to-market to create and deliver these solutions to our customers.
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Broadening our Target Markets:
We have grown our target markets by establishing a presence in attractive high-growth international markets such as India, Colombia and the Philippines, entering new verticals such as government and investigative services in the United States and expanding the reach of our consumer offerings by partnering with
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Enhancing our Business Processes and Capabilities:
We have enhanced our business processes and capabilities to support our growth. We have hired additional industry experts, which has allowed us to create and sell new vertical-specific solutions that address our customers’ needs. Our global sales force effectiveness program reallocates our sales resources more effectively and increases our sales team’s coverage of customers across our target markets. In conjunction with our other initiatives, we have also recently refreshed our company brand to reinforce our global position as a trusted, consumer-friendly company.
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Rapid Growth in Data Creation and Application:
Larger and more diversified datasets are now assembled faster while the breadth of analytical applications and solutions has expanded. Companies are increasingly relying on business analytics and big data technologies to help process this data in a cost-efficient manner. In addition, non-traditional sources of structured and unstructured data have become important in deriving alternative metrics. The proliferation of smartphones and other mobile devices also generates enormous amounts of data tied to consumers, activities and locations. We believe that the demand for targeted data and sophisticated analytical solutions will continue to grow meaningfully as businesses seek real-time access to more granular views of consumer populations and more holistic views on individual consumers.
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Advances in Technology and Analytics Unlocking the Value of Data:
Ongoing advances in data collection, storage and analytics technology have contributed to the greater use and value of data and analytics in decision making. As businesses have gained the ability to rapidly aggregate and analyze data, they increasingly expect access to real-time data and analytics from their information providers as well as solutions that fully integrate into their workflows. We believe this has made sophisticated technology critical for gaining and retaining business in the risk and information services industry.
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Greater Adoption of Big Data Solutions across New and Existing Industry Verticals:
With the proliferation of data, we believe companies across new and existing industry verticals recognize the value of risk information and analytical tools, particularly when tailored to their specific needs.
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Financial Services Industry:
The combination of increased regulatory capital, additional compliance costs and the overhang of legacy assets is pushing large segments of small-to-medium-sized business and consumer lending out of the banking sector, and resulting in the creation of new specialty finance companies, such as peer-to-peer lending platforms and online balance sheet lenders, which are actively filling the void. These technology-enabled lending platforms provide access to credit in a fast and efficient manner by utilizing sophisticated risk assessment tools that leverage data, such as behavioral data, transactional data and employment and credit information. At the same time, traditional financial services companies are also increasing the use of applications and data in order to address regulatory requirements, lower operating costs and better serve their customers.
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Insurance Industry:
As consumers increasingly obtain quotes from multiple insurers in an effort to lower their costs, insurers are trying to improve the accuracy of their risk assessments and initial quotes. For example, insurance carriers are using driver violation data to uncover offenses that will impact pricing earlier in the quoting process so consumers have a more accurate view of the premiums they will be charged.
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Healthcare Industry:
Greater patient financial responsibility, focus on cost management and regulatory supervision are driving healthcare providers to use data and related analytics tools to better manage their revenue cycle. For example, to reduce collection risks, healthcare providers seek information about their patients’ insurance coverage and ability to pay at the time of registration. In addition, insurance discovery tools are being utilized to optimize accounts receivable management, maximize collections and minimize uncompensated care.
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Increasing Lending Activity in Emerging International Markets:
As economies in emerging markets continue to develop and mature, we believe there will continue to be favorable socio-economic trends, such as an increase in the size of the middle class and a significant increase in the use of financial services by under-served and under-banked consumers. In addition, credit penetration is relatively low in emerging markets when compared to developed markets. For example, using our database of information compiled from financial institutions as a benchmark of credit activity, we estimate that less than 20% of the adult population in India is currently credit active. Furthermore, the widespread adoption and use of mobile phones in emerging markets have enabled greater levels of financial inclusion and access to banking and credit. We expect the populations in emerging markets to continue to become more credit active, resulting in increased demand for our services.
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Increased Management and Monitoring of Personal Financial Information and Identity Protection by Consumers:
Demand for consumer solutions is rising with greater consumer awareness of the importance and usage of their credit information, increased risk of identity theft due to data breaches and more readily available free credit information. The number of consumers subscribing to a credit monitoring or identity protection service has more than doubled from 2014 to 2016. In addition, the proliferation of mobile devices has made data much more accessible, enabling consumers to manage their finances and monitor their information in real-time. We believe these trends will continue to drive growth for our consumer business.
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Powerful Big Data Capabilities:
Our technology gives us the ability to process, organize and analyze high volumes of data across multiple operating systems, databases and file types as well as to deal with both structured and unstructured data that changes frequently. We process billions of transactions and trillions of data transformations on a daily basis.
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Enhanced Linking and Matching:
Because our data matching technology is able to interrelate data across disparate sources, industries and time periods, we believe that we are able to create differentiated datasets and provide our customers with comprehensive insights that allow them to better evaluate risk. For example, our
TLOxp
solution leverages these data matching capabilities across various datasets to identify and investigate relationships among people, assets, locations and businesses, allowing us to offer enhanced due diligence, threat assessment, identity authentication and fraud prevention and detection solutions.
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Greater Efficiency:
From ingestion of data to distribution of analytics and insights, our next-generation technology enables a faster time to market. For example, a portion of our platform now allows for data profiling, cleansing and ingestion of data significantly faster and can be done in a self-service approach by non-IT power users, allowing us to significantly reduce overall production times for new products.
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Advanced Platform Flexibility:
Our technology offers a high degree of flexibility, speed and customization of our solutions, via capabilities like graphical development and business rules environments, and allows easy integration with
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Lower Operating Costs:
Our technology investments have lowered our overall cost to maintain and develop our systems, allowing us to redeploy significantly more resources to support revenue generating initiatives, such as vertical expansion and new product development.
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AdFuel
:
AdFuel
powers digital media campaigns with highly targeted audiences for the financial services and insurance industries. TransUnion
AdFuel
audiences are found across the online advertising ecosystem on the industry’s leading publishers and platforms. Our audiences leverage TransUnion data, delivering actionable data and insights to financial services and insurance companies and helping organizations identify new opportunities and assess risk.
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CreditView
:
CreditView
is a first-to-market interactive dashboard that provides consumers with credit education and information in a comprehensive, user-friendly format. Consumers are able to easily see how their credit profiles have changed over time, receive alerts on key credit changes, and simulate the impact of financial decisions on their credit score.
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CreditVision
: We continue to enhance our credit data by including new data fields, enriching values in existing data fields and expanding account history. Our enhanced credit data has been combined with hundreds of algorithms to produce
CreditVision
and
CreditVision Link
, market-leading solutions that provide greater granularity and evaluate consumer behavior patterns over time. This results in a more predictive view of the consumer, increases the total population of consumers who can effectively be scored and helps consumers gain improved pricing.
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DecisionEdge
:
DecisionEdge
is a software-as-a-service decisioning offering which allows businesses to identify and authenticate customers, interpret data and predictive model results, and apply customer-specific criteria to facilitate real-time, automated decisions at the point of consumer interaction.
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DriverRisk:
Leveraging our driver violation database, we developed
DriverRisk
, a data and analytic solution that helps auto insurance carriers cost effectively validate driving records and assess risk during the underwriting and renewal process to improve returns.
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Insurance Coverage Discovery and Other Health Insurance
: For our healthcare customers, we offer insurance coverage discovery, coordination of benefits, and third party liability solutions, which enables the discovery of previously unidentified health insurance coverage to help both our provider and payer customers receive appropriate payment for uncompensated care and coordination of benefits payments. Our proprietary technology identifies patient accounts covered by Disproportionate Share Hospitals (DSH), Medicare, TRICARE and commercial insurance benefits at the time of service and monitors an account for up to three years for retroactive eligibility that providers may have missed.
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Prama:
Prama Insights
provides customers with on-demand, 24/7 customer access to massive, depersonalized data sets and key analytics for portfolio understandings, benchmarking and peer analysis.
Prama Studio
offers an environment
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SmartMove
:
SmartMove
allows independent landlords to screen applicants on a real-time basis by pushing the screening information of the individual renter to the landlord, based on the consent of the renter. The solution is delivered through our mobile channel and through our partners and provides independent landlords with convenient access to the same quality information provided to large property management firms.
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TLOxp
:
TLOxp
leverages our data matching capabilities across thousands of data sources to identify and investigate relationships among specific people, assets, locations and businesses. This allows us to offer enhanced due diligence, threat assessment, identity authentication and fraud prevention and detection solutions and to expand our solutions into new verticals such as government and law enforcement.
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Comprehensive Data Assets:
Our credit database contains the name and address of substantially all of the U.S. credit-active population, a listing of their existing credit relationships and their timeliness in repaying debt obligations. The information in our database is voluntarily provided by thousands of credit-granting institutions and other data furnishers. We enhance our data assets with alternative credit sources such as rental payments and utility payments. We also actively source information from courts, government agencies and other public records including suits, liens, judgments, bankruptcies, professional licenses, real property, vehicle ownership, other assets, driver violations, criminal records and contact information. Our databases are updated, reviewed and monitored on a regular basis.
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Predictive Analytics:
Our predictive analytics capabilities allow us to analyze our proprietary datasets and provide insights to our customers to allow them to drive better business decisions. Our tools allow customers to investigate past behavior, reasonably predict the likelihood of future events and strategize actions based on those predictions. We have numerous tools such as predictive modeling and scoring, customer segmentation, benchmarking, forecasting, fraud modeling and campaign optimization, all of which caters to specific customer requirements. Our predictive analytics capabilities are developed by an analytics team with deep industry experience and a broad array of specialized qualifications.
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Twelve months ended December 31,
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||||||||||||
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2016
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2015
|
|
|
2014
|
|
||||||
Domestic
|
|
|
82
|
|
%
|
|
|
82
|
|
%
|
|
|
80
|
|
%
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International
|
|
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18
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%
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|
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18
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|
%
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20
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%
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|
December 31,
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||||||||||||
(in millions)
|
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2016
|
|
|
2015
|
|
|
2014
|
|
||||||
U.S. Information Services
|
|
$
|
2,762.8
|
|
|
|
$
|
2,762.9
|
|
|
|
$
|
2,817.4
|
|
|
International
|
|
|
1,460.1
|
|
|
|
|
1,169.0
|
|
|
|
|
1,268.1
|
|
|
Consumer Interactive
|
|
|
417.7
|
|
|
|
|
404.0
|
|
|
|
|
385.4
|
|
|
Corporate
|
|
|
140.6
|
|
|
|
|
106.9
|
|
|
|
|
162.9
|
|
|
Total
|
|
$
|
4,781.2
|
|
|
|
$
|
4,442.8
|
|
|
|
$
|
4,633.8
|
|
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•
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Fair Credit Reporting Act (the
“
FCRA
”
)
: FCRA applies to consumer credit reporting agencies, including us, as well as data furnishers and users of consumer reports. FCRA promotes the accuracy, fairness and privacy of information in the files of consumer reporting agencies that engage in the practice of assembling or evaluating information relating to consumers for certain specified purposes. FCRA limits what information may be reported by consumer reporting agencies, limits the distribution and use of consumer reports, establishes consumer rights to access and dispute their own credit files, requires consumer reporting agencies to make available to consumers a free annual credit report and imposes many other requirements on consumer reporting agencies, data furnishers and users of consumer report information. Violation of FCRA can result in civil and criminal penalties. The law contains an attorney fee shifting provision to provide an incentive to consumers to bring individual or class action lawsuits against a consumer reporting agency for violations of FCRA. Regulatory enforcement of FCRA is under the purview of the FTC, the Consumer Financial Protection Bureau (the “CFPB”) and state attorneys general, acting alone or in concert with one another.
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State Fair Credit Reporting Acts
: Many states have enacted laws with requirements similar to FCRA. Some of these state laws impose additional, or more stringent, requirements than FCRA. FCRA preempts some of these state laws but the scope of preemption continues to be defined by the courts.
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The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”)
: A central purpose of the Dodd-Frank Act is to "protect consumers from abusive financial services practices, and for other purposes.” An important new regulatory body created by Title X of the Dodd-Frank Act is the CFPB. The CFPB, through rulemaking, confirmed that the Company is subject to the examination and supervision of the CFPB, and such examinations began in 2012. In addition to transferring authority under certain existing laws to the CFPB and providing it with examination and supervisory authority, the Dodd-Frank Act also prohibits unfair, deceptive or abusive acts or practices (“UDAAP”) with respect to consumer financial products and provides the CFPB with authority to enforce those provisions. The CFPB has stated that its UDAAP authority may allow it to find statutory violations even where a specific regulation does not prohibit the relevant conduct, or prior published regulatory guidance or judicial interpretation has found the activity to be in accordance with law.
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State unfair practices acts
: Many state have enacted statutes that prohibit unfair and deceptive marketing acts and practices within the state. The Company and others in the industry may be subject to these acts with respect to the marketing of consumer credit information products.
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Gramm-Leach Bliley Act (the “GLBA”
) The GLBA regulates the receipt, use and disclosure of non-public personal information of consumers that is held by financial institutions, including us. Several of our datasets are subject to GLBA provisions, including limitations on the use or disclosure of the underlying data and rules relating to the technological, physical and administrative safeguarding of non-public personal information. Violation of the GLBA can result in civil and criminal liability. Regulatory enforcement of the GLBA is under the purview of the FTC, the federal prudential banking regulators, the SEC and state attorneys general, acting alone or in concert with each other.
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Drivers' Privacy Protection Act (the “DPPA”)
: The DPPA requires all states to safeguard certain personal information included in licensed drivers’ motor vehicle records from improper use or disclosure. Protected information includes the driver’s name, address, phone number, Social Security Number, driver identification number, photograph, height, weight, gender, age, certain medical or disability information and, in some states, fingerprints, but does not include information on vehicular accidents, driving violations and driver’s status. The DPPA limits the use of this information sourced from State departments of motor vehicles to certain specified purposes, and does not apply if a driver has consented to the release of their data. The DPPA imposes criminal fines for non-compliance and grants individuals a private right of action, including actual and punitive damages and attorneys’ fees. The DPPA provides a federal baseline of protections for individuals, and is only partially preemptive, meaning that except in a few narrow circumstances, state legislatures may pass laws to supplement the protections made by the DPPA. Many States are more restrictive than the federal law.
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Data security breach laws
: Most states have adopted data security breach laws that require notice be given to affected consumers in the event of a breach of personal information, and in some cases the provision of additional benefits such as free credit monitoring to affected individuals. Some of these laws require additional data protection measures over
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Identity theft laws
: In order to help reduce the incidence of identity theft, most states and the District of Columbia have passed laws that give consumers the right to place a security freeze on their credit reports to prevent others from opening new accounts or obtaining new credit in their name. Generally, these state laws require us to respond to requests for a freeze within a certain period of time, to send certain notices or confirmations to consumers in connection with a security freeze and to unfreeze files upon request within a specified time period.
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Federal Trade Commission Act (the “FTC Act”)
: The FTC Act prohibits unfair methods of competition and unfair or deceptive acts or practices. We must comply with the FTC Act when we market our services, such as consumer credit monitoring services through our Consumer Interactive segment. The security measures we employ to safeguard the personal data of consumers could also be subject to the FTC Act, and failure to safeguard data adequately may subject us to regulatory scrutiny or enforcement action. There is no private right of action under the FTC Act.
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The Credit Repair Organizations Act (“CROA”)
: CROA regulates companies that claim to be able to assist consumers in improving their credit standing. Some courts have applied CROA to credit monitoring services offered by consumer reporting agencies and others. CROA allows for a private right of action and permits consumers to recover all money paid for alleged “credit repair” services in the event of violation. We, and others in our industry, have settled purported consumer class actions alleging violations of CROA without admitting or denying liability.
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The Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”)
: HIPAA and HITECH require companies to implement reasonable safeguards to prevent intentional or unintentional misuse or wrongful disclosure of protected health information. In connection with receiving data from and providing services to healthcare providers, we may handle data subject to HIPAA and HITECH requirements. We obtain protected health information from healthcare providers and payers of healthcare claims that are subject to the privacy, security and transactional requirements imposed by HIPAA. We are frequently required to secure HIPAA-compliant “business associate” agreements with the providers and payers who supply data to us. As a business associate, we are obligated to limit our use and disclosure of health-related data to certain statutorily permitted purposes, HIPAA regulations, as outlined in our business associate agreements, and to preserve the confidentiality, integrity and availability of this data. HIPAA and HITECH also require, in certain circumstances, the reporting of breaches of protected health information to affected individuals and to the United States Department of Health and Human Services. A violation of any of the terms of a business associate agreement or noncompliance with HIPAA or HITECH data privacy or security requirements could result in administrative enforcement action and/or imposition of statutory penalties by the United States Department of Health and Human Services or a state Attorney General. HIPAA and HITECH requirements supplement but do not preempt state laws regulating the use and disclosure of health-related information; state law remedies, which can include a private right of action, remain available to individuals affected by an impermissible use or disclosure of health-related data.
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South Africa
: National Credit Act of 2005 (the “NCA”) - The NCA and its implementing regulations govern credit bureaus and consumer credit information. The NCA sets standards for filing, retaining and reporting consumer credit information. The Act also defines consumers’ rights with respect to accessing their own information and addresses the process for disputing information in a credit file. The NCA is enforced by The National Credit Regulator who has authority to supervise and examine credit bureaus.
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Canada:
Personal Information Protection and Electronic Documents Act of 2000 (“PIPEDA”) - The PIPEDA and substantially similar provincial laws govern how private sector organizations collect, use and disclose personal information in the course of commercial activities. The PIPEDA gives individuals the right to access and request correction of their personal information collected by such organizations. The PIPEDA requires compliance with the Canadian Standard Association Model Code for the Protection of Personal Information. Most Canadian provinces also have laws dealing with consumer reporting. These laws typically impose an obligation on credit reporting agencies to have reasonable processes in place to maintain the accuracy of the information, place limits on the disclosure of the information and give consumers the right to have access to, and challenge the accuracy of, the information.
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India:
Credit Information Companies Regulation Act of 2005 (“CICRA”) - The CICRA requires entities that collect and maintain personal credit information to ensure that it is complete, accurate and protected. Entities must adopt certain privacy principles in relation to collecting, processing, preserving, sharing and using credit information. In addition, India has privacy legislation that would allow individuals to sue for damages in the case of a data breach, if the entity negligently failed to implement “reasonable security practices and procedures” to protect personal data.
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Hong Kong:
Personal Data (Privacy) Ordinance (“PDPO”) and The Code of Practice on Consumer Credit Data (“COPCCD”) - The PDPO and the COPCCD regulate the operation of consumer credit reference agencies. They prescribe the methods and security controls under which credit providers and credit reference agencies may collect, access and manage credit data. In April 2011, the COPCCD was amended to permit credit providers to share limited positive mortgage payment data. In June 2012, the PDPO was amended to increase penalties and create criminal liabilities for repeat contravention of PDPO under which enforcement notices have been served.
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Colombia:
The Colombian Financial Data Protection Regime (Law 1266 of 2008) regulates the collection, use and transfer of personal data pertaining to financial services, including credit reporting. The Colombian General Data Protection Regime (Law 1581 of 2012 and Decree 1377 of 2013) covers regulation of all other personal data. Both of these regimes have applicability to credit reporting services in Colombia and together address obligations of information furnishers, database owners, consumer right of access, consumer consent and permitted information disclosures. Regulatory enforcement primarily rests with the Financial Superintendence of Colombia and the Colombia Data Protection Authority (Superintendence of Industry and Commerce).
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make it difficult for us to satisfy our financial obligations, including with respect to our indebtedness;
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limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes;
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•
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limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes;
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•
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require us to use a substantial portion of our cash flow from operations to make debt service payments;
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expose us to the risk of increased interest rates as certain of our borrowings, including Trans Union LLC’s senior secured credit facility, are at variable rates of interest;
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•
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limit our flexibility to plan for, or react to, changes in our business and industry;
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•
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place us at a competitive disadvantage compared with our less-leveraged competitors; and
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increase our vulnerability to the impact of adverse economic and industry conditions.
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•
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amendment, enactment or interpretation of laws and regulations that restrict the access and use of personal information and reduce the availability or effectiveness of our solutions or the supply of data available to customers;
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changes in cultural and consumer attitudes in favor of further restrictions on information collection and sharing, which may lead to regulations that prevent full utilization of our solutions;
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•
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failure of data suppliers or customers to comply with laws or regulations, where mutual compliance is required;
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failure of our solutions to comply with current laws and regulations; and
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failure of our solutions to adapt to changes in the regulatory environment in an efficient, cost-effective manner.
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currency exchange rate fluctuations;
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•
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foreign exchange controls that might prevent us from repatriating cash to the United States;
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•
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difficulties in managing and staffing international offices;
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•
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increased travel, infrastructure, legal and compliance costs of multiple international locations;
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•
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foreign laws and regulatory requirements;
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•
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terrorist activity, natural disasters and other catastrophic events;
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•
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restrictions on the import and export of technologies;
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•
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difficulties in enforcing contracts and collecting accounts receivable;
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•
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longer payment cycles;
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•
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failure to meet quality standards for outsourced work;
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•
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unfavorable tax rules;
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•
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political and economic conditions in foreign countries, particularly in emerging markets;
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•
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the presence and acceptance of varying level of business corruption in international markets;
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•
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varying business practices in foreign countries; and
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•
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reduced protection for intellectual property rights.
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|
internally develop and implement new and competitive technologies;
|
•
|
use leading third-party technologies effectively;
|
•
|
respond to changing customer needs and regulatory requirements, including being able to bring our new products to the market quickly; and
|
•
|
transition customers and data sources successfully to new interfaces or other technologies.
|
•
|
failing to achieve the financial and strategic goals for the acquired business;
|
•
|
paying more than fair market value for an acquired company or assets;
|
•
|
failing to integrate the operations and personnel of the acquired businesses in an efficient and timely manner;
|
•
|
disrupting our ongoing businesses;
|
•
|
distracting management focus from our existing businesses;
|
•
|
acquiring unanticipated liabilities;
|
•
|
failing to retain key personnel;
|
•
|
incurring the expense of an impairment of assets due to the failure to realize expected benefits;
|
•
|
damaging relationships with employees, customers or strategic partners;
|
•
|
diluting the share value of existing stockholders; and
|
•
|
incurring additional debt or reducing available cash to service our existing debt.
|
•
|
disrupting our ongoing businesses;
|
•
|
reducing our revenues;
|
•
|
losing key personnel;
|
•
|
distracting management focus from our existing businesses;
|
•
|
indemnification claims for breaches of representations and warranties in sale agreements;
|
•
|
damaging relationships with employees and customers as a result of transferring a business to new owners; and
|
•
|
failure to close a transaction due to conditions such as financing or regulatory approvals not being satisfied.
|
•
|
Reduction of the maximum business tax rate from 35 percent to 15-20 percent;
|
•
|
Elimination of the deductibility of corporate interest expense, if a cost recovery system is elected;
|
•
|
Implementation of a one-time deemed repatriation tax rate of 10 percent on corporate profits held offshore;
|
•
|
Elective replacement of current depreciation deductions with a cost recovery system for capital asset investments (excluding land investments);
|
•
|
Elimination of the corporate alternative minimum tax; and
|
•
|
Elimination of most corporate tax expenditures except for the research and development credit.
|
•
|
a classified Board of Directors with staggered three year terms;
|
•
|
the ability of our Board of Directors to issue one or more series of preferred stock;
|
•
|
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
|
•
|
certain limitations on convening special stockholder meetings;
|
•
|
the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66
2
⁄
3
% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if the Sponsors and their affiliates beneficially own, in the aggregate, less than 50% in voting power of the stock of the Company entitled to vote generally in the election of directors; and
|
•
|
that certain provisions may be amended only by the affirmative vote of at least 66
2
⁄
3
% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if the Sponsors and their affiliates beneficially own, in the aggregate, less than 50% in voting power of the stock of the Company entitled to vote generally in the election of directors.
|
•
|
the requirement that a majority of the Board of Directors consist of “independent directors” as defined under the rules of the NYSE;
|
•
|
the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
|
•
|
the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
•
|
the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.
|
•
|
the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.
|
•
|
compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel and other committee advisers; and
|
•
|
compensation committees be required to consider, when engaging compensation consultants, legal counsel or other advisers, certain independence factors, including factors that examine the relationship between the consultant or adviser’s employer and us.
|
•
|
implement certain agreed practice changes in the way we advertise, market and sell products and services offered directly to consumers, including more robust disclosures regarding the nature of the credit score being provided as well as confirming consumer consent if the product or service is being sold through the use of a negative option feature (i.e., a trial period becomes a recurring paid subscription unless the consumer affirmatively cancels their registration); and
|
•
|
develop and submit to the CFPB for approval a comprehensive compliance plan detailing the steps for addressing each action required by the terms of the Consent Order and specific time frames and deadlines for implementation.
|
Name
|
Age
|
Position
|
James M. Peck
|
53
|
Director, President & Chief Executive Officer
|
Samuel A. Hamood
|
48
|
Executive Vice President & Chief Financial Officer
|
John W. Blenke
|
61
|
Executive Vice President & Corporate General Counsel
|
Christopher A. Cartwright
|
51
|
Executive Vice President-U.S. Information Services
|
John T. Danaher
|
52
|
Executive Vice President-Consumer Interactive
|
Gerald M. McCarthy, Jr.
|
47
|
Executive Vice President-Healthcare
|
David M. Neenan
|
51
|
Executive Vice President-International
|
Period
|
|
Low
|
|
High
|
Second quarter 2015 (from June 25, 2015)
|
|
$23.42
|
|
$25.89
|
Third quarter 2015
|
|
$23.30
|
|
$27.02
|
Fourth quarter 2015
|
|
$23.12
|
|
$28.08
|
First quarter 2016
|
|
$20.43
|
|
$27.98
|
Second quarter 2016
|
|
$26.48
|
|
$33.70
|
Third quarter 2016
|
|
$31.57
|
|
$35.79
|
Fourth quarter 2016
|
|
$28.92
|
|
$34.50
|
Period
|
|
Total Number of
Shares Purchased
(1)
|
|
Average Price
Paid Per Share
|
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
(2)
|
|
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under
the Plans or Programs
(2)
|
||||||
October 1 to October 31
|
|
791
|
|
|
$
|
33.20
|
|
|
—
|
|
|
$
|
—
|
|
November 1 to November 30
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
December 1 to December 31
|
|
20,242
|
|
|
30.93
|
|
|
—
|
|
|
$
|
—
|
|
|
Total
|
|
21,033
|
|
|
31.02
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents shares that were repurchased from employees for withholding taxes on options exercised and restricted stock vesting pursuant to the terms of the Company's equity compensation plans.
|
|
|
TransUnion
|
|
|
TransUnion Intermediate Predecessor
|
||||||||||||||||||||
(dollars in millions)
|
|
Twelve Months Ended December 31, 2016
|
|
Twelve Months Ended December 31, 2015
|
|
Twelve Months Ended December 31, 2014
|
|
Twelve Months Ended December 31, 2013
|
|
From Inception Through December 31, 2012
|
|
|
Four Months Ended April 30, 2012
|
||||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
1,704.9
|
|
|
$
|
1,506.8
|
|
|
$
|
1,304.7
|
|
|
$
|
1,183.2
|
|
|
$
|
767.0
|
|
|
|
$
|
373.0
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
|
579.1
|
|
|
531.6
|
|
|
500.2
|
|
|
473.9
|
|
|
298.2
|
|
|
|
172.0
|
|
||||||
Selling, general and administrative
|
|
560.1
|
|
|
499.7
|
|
|
434.9
|
|
|
353.3
|
|
|
212.6
|
|
|
|
172.0
|
|
||||||
Depreciation and amortization
|
|
265.2
|
|
|
278.4
|
|
|
241.2
|
|
|
186.8
|
|
|
115.0
|
|
|
|
29.2
|
|
||||||
Total operating expense
|
|
1,404.4
|
|
|
1,309.7
|
|
|
1,176.3
|
|
|
1,014.0
|
|
|
625.8
|
|
|
|
373.2
|
|
||||||
Operating income (loss)
|
|
300.5
|
|
|
197.1
|
|
|
128.4
|
|
|
169.2
|
|
|
141.2
|
|
|
|
(0.2
|
)
|
||||||
Non-operating income and expense
|
|
(95.1
|
)
|
|
(170.5
|
)
|
|
(130.2
|
)
|
|
(195.1
|
)
|
|
(138.5
|
)
|
|
|
(63.7
|
)
|
||||||
Income (loss) from continuing operations before income taxes
|
|
205.4
|
|
|
26.6
|
|
|
(1.8
|
)
|
|
(25.9
|
)
|
|
2.7
|
|
|
|
(63.9
|
)
|
||||||
(Provision) benefit for income taxes
|
|
(74.0
|
)
|
|
(11.3
|
)
|
|
(2.6
|
)
|
|
(2.3
|
)
|
|
(6.6
|
)
|
|
|
11.5
|
|
||||||
Net income (loss)
|
|
131.4
|
|
|
15.3
|
|
|
(4.4
|
)
|
|
(28.2
|
)
|
|
(3.9
|
)
|
|
|
(52.4
|
)
|
||||||
Less: net income attributable to noncontrolling interests
|
|
(10.8
|
)
|
|
(9.4
|
)
|
|
(8.1
|
)
|
|
(6.9
|
)
|
|
(4.9
|
)
|
|
|
(2.5
|
)
|
||||||
Net income (loss) attributable to the Company
|
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
|
$
|
(35.1
|
)
|
|
$
|
(8.8
|
)
|
|
|
$
|
(54.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
0.66
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.06
|
)
|
|
|
$
|
(1.84
|
)
|
Diluted
|
|
$
|
0.65
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.06
|
)
|
|
|
$
|
(1.84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
182.6
|
|
|
165.3
|
|
|
147.3
|
|
|
146.4
|
|
|
146.2
|
|
|
|
29.8
|
|
||||||
Diluted
|
|
184.6
|
|
|
166.8
|
|
|
147.3
|
|
|
146.4
|
|
|
146.2
|
|
|
|
29.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividends per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.56
|
|
|
|
$
|
—
|
|
Diluted
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.56
|
|
|
|
$
|
—
|
|
|
|
As of
|
||||||||||||||||||
(dollars in millions)
|
|
December 31,
2016 |
|
December 31,
2015 |
|
December 31,
2014 |
|
December 31,
2013
|
|
December 31,
2012
|
||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
4,781.2
|
|
|
$
|
4,442.8
|
|
|
$
|
4,633.8
|
|
|
$
|
4,456.2
|
|
|
$
|
4,339.1
|
|
Total debt
(1)
|
|
$
|
2,375.6
|
|
|
$
|
2,204.6
|
|
|
$
|
2,907.9
|
|
|
$
|
2,830.8
|
|
|
$
|
2,641.2
|
|
Total stockholders’ equity
(1)
|
|
$
|
1,473.0
|
|
|
$
|
1,367.0
|
|
|
$
|
747.7
|
|
|
$
|
714.5
|
|
|
$
|
796.1
|
|
(1)
|
The change in total debt and total stockholders' equity at December 31, 2015, reflects the impact of our initial public offering and the use of those proceeds to retire our public debt.
|
•
|
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.
|
•
|
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
|
•
|
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.
|
•
|
On November 10, 2016, we entered into an agreement with Synthetic P2P Holdings Corporation (“PeerIQ") whereby we licensed data to PeerIQ and, in return, received warrants to purchase a noncontrolling interest in their common stock. PeerIQ is a credit risk analytics firm that helps institutions analyze, access and manage risk in the peer-to-peer lending sector. Once the warrants are exercised, we will account for PeerIQ on the cost method of accounting. Any future dividends will be recorded in other income and expense when received.
|
•
|
On November 4, 2016, we increased our ownership interest in CIFIN from 95.17% to 100%. On August 3, 2016, we increased our equity interest in CIFIN from 94.67% to 95.17% with an additional purchase of 0.5%. On May 31, 2016, we increased our interest from 71.0% to 94.67% with an additional purchase of 23.67%. On February 8, 2016, we acquired a 71.0% equity interest in CIFIN. 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 September 30, 2016, we increased our equity interest in CIBIL from 77.1% to 82.1% with an additional purchase of 5%. In June 2016, we increased our equity interest in 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. In 2014, we increased our equity interest in CIBIL from 27.5% to 55.0%. This additional purchase gave us control and resulted in our consolidation of CIBIL. CIBIL's results of operations, which are not material, are included as part of our International segment in our consolidated statements of income since May 21, 2014, the date we obtained control.
|
•
|
On September 21, 2016, we acquired 100% of the equity of RTech. RTech uses innovative proprietary technology to help healthcare providers protect revenue and cash. The results of operations of RTech, 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 acquisition.
|
•
|
On August 30, 2016, we made a noncontrolling interest investment in SavvyMoney, Inc. (“SavvyMoney”). SavvyMoney is a provider of credit information services for bank and credit union users. We account for SavvyMoney on the cost method of accounting. Any future dividends will be recorded in other income and expense when received.
|
•
|
On June 15, 2016, we acquired 100% of the equity of Auditz. Auditz is a 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") and 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 November 12, 2014, we acquired an 87.5% ownership interest in DHI. DHI collects traffic violation and criminal court data. The results of operations of DHI, which are not material, have been included as part of our USIS segment in our consolidated statements of income since the date of acquisition.
|
•
|
On April 15, 2016, we made a noncontrolling 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 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, 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 sheets from the date we acquired the remaining interests.
|
•
|
On October 17, 2014, we increased our equity interest in L2C, Inc. ("L2C") from 11.6% to 100%. L2C provides predictive analytics generally focused on the unbanked market using alternative data. The results of operations of L2C, which are not material, have been included as part of our USIS segment in our consolidated statements of income since the date we obtained control.
|
•
|
Effective January 1, 2014, we acquired the remaining 30% equity interest in our Guatemala subsidiary, Trans Union Guatemala, S.A. (TransUnion Guatemala) from the minority shareholders. 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 sheets from the date we acquired the remaining interests.
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
Twelve months ended December 31,
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Revenue
|
$
|
1,704.9
|
|
|
$
|
1,506.8
|
|
|
$
|
1,304.7
|
|
|
$
|
198.1
|
|
|
13.1
|
%
|
|
$
|
202.1
|
|
|
15.5
|
%
|
Reconciliation of net income (loss) attributable to TransUnion to Adjusted EBITDA
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) attributable to TransUnion
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
|
$
|
114.7
|
|
|
nm
|
|
$
|
18.4
|
|
|
147.2
|
%
|
|
Net interest expense
|
80.9
|
|
|
130.4
|
|
|
186.7
|
|
|
(49.6
|
)
|
|
(38.0
|
)%
|
|
(56.3
|
)
|
|
(30.2
|
)%
|
|||||
Provision for income taxes
|
74.0
|
|
|
11.3
|
|
|
2.6
|
|
|
62.7
|
|
|
nm
|
|
8.7
|
|
|
334.6
|
%
|
||||||
Depreciation and amortization
|
265.2
|
|
|
278.4
|
|
|
241.2
|
|
|
(13.2
|
)
|
|
(4.8
|
)%
|
|
37.2
|
|
|
15.4
|
%
|
|||||
EBITDA
|
540.7
|
|
|
426.0
|
|
|
418.0
|
|
|
114.6
|
|
|
26.9
|
%
|
|
8.0
|
|
|
1.9
|
%
|
|||||
Adjustments to EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock-based compensation
(2)
|
31.2
|
|
|
22.3
|
|
|
10.6
|
|
|
8.9
|
|
|
39.8
|
%
|
|
11.7
|
|
|
110.4
|
%
|
|||||
Mergers and acquisitions, divestitures and business optimization
(3)
|
18.5
|
|
|
8.0
|
|
|
19.7
|
|
|
10.4
|
|
|
129.9
|
%
|
|
(11.7
|
)
|
|
(59.4
|
)%
|
|||||
Technology transformation
(4)
|
23.3
|
|
|
26.9
|
|
|
18.7
|
|
|
(3.5
|
)
|
|
(13.2
|
)%
|
|
8.2
|
|
|
43.9
|
%
|
|||||
Other
(5)
|
23.1
|
|
|
43.5
|
|
|
(12.7
|
)
|
|
(20.3
|
)
|
|
(46.8
|
)%
|
|
56.2
|
|
|
nm
|
||||||
Total adjustments to EBITDA
|
96.1
|
|
|
100.7
|
|
|
36.3
|
|
|
(4.5
|
)
|
|
(4.5
|
)%
|
|
64.4
|
|
|
177.4
|
%
|
|||||
Adjusted EBITDA
|
$
|
636.8
|
|
|
$
|
526.7
|
|
|
$
|
454.3
|
|
|
$
|
110.1
|
|
|
20.9
|
%
|
|
$
|
72.4
|
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash provided by operating activities
|
$
|
389.9
|
|
|
$
|
309.1
|
|
|
$
|
154.3
|
|
|
$
|
80.8
|
|
|
26.1
|
%
|
|
$
|
154.8
|
|
|
100.3
|
%
|
Capital expenditures
|
$
|
124.0
|
|
|
$
|
132.2
|
|
|
$
|
155.2
|
|
|
$
|
(8.2
|
)
|
|
(6.2
|
)%
|
|
$
|
(23.0
|
)
|
|
(14.8
|
)%
|
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, 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
|
2.
|
Consisted of stock-based compensation and cash-settled stock-based compensation.
|
3.
|
For the
twelve months ended
December 31, 2016
, consisted of the following adjustments to operating income: a $(0.7) million net gain from exiting a business relationship and the closure and divestiture of certain business operations; a $(0.5) million adjustment to business optimization expenses; and a $(0.1) million reduction in contingent consideration expense from previous acquisitions. For the
twelve months ended
December 31, 2016
, consisted of the following adjustments to non-operating income and expense: $17.6 million of acquisition expenses; a $2.0 million loss on the impairment of a cost method investment; and a $0.2 million loss on the closure and divestiture of certain business operations.
|
4.
|
Represented costs associated with a project to transform our technology infrastructure.
|
5.
|
For the
twelve months ended
December 31, 2016
, consisted of the following adjustments to operating income: $19.4 million for the settlement with the CFPB and related costs; $0.3 million for certain legal and regulatory matters; and $(0.7) million of miscellaneous. For the
twelve months ended
December 31, 2016
, consisted of the following adjustments to non-operating income and expense: $2.7 million of fees connected to the filing of secondary registration statements filed on behalf of certain stockholders; $1.4 million of loan fees; a $0.5 million mark-to-market loss related to ineffectiveness of our interest rate hedge; $(0.3) million of currency remeasurement of our foreign operations; and $(0.2) million of miscellaneous.
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
Twelve months ended December 31,
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Cost of services
|
$
|
579.1
|
|
|
$
|
531.6
|
|
|
$
|
500.2
|
|
|
$
|
47.5
|
|
|
8.9
|
%
|
|
$
|
31.4
|
|
|
6.3
|
%
|
Selling, general and administrative
|
560.1
|
|
|
499.7
|
|
|
434.9
|
|
|
60.4
|
|
|
12.1
|
%
|
|
64.8
|
|
|
14.9
|
%
|
|||||
Depreciation and amortization
|
265.2
|
|
|
278.4
|
|
|
241.2
|
|
|
(13.2
|
)
|
|
(4.8
|
)%
|
|
37.2
|
|
|
15.4
|
%
|
|||||
Total operating expenses
|
$
|
1,404.4
|
|
|
$
|
1,309.7
|
|
|
$
|
1,176.3
|
|
|
$
|
94.7
|
|
|
7.2
|
%
|
|
$
|
133.4
|
|
|
11.3
|
%
|
•
|
an increase in labor costs in all of our segments, as we continue to invest in key strategic growth initiatives;
|
•
|
an increase in product costs resulting from the increase in revenue, primarily in our USIS segment; and
|
•
|
operating costs related to our recent acquisitions in our USIS and International segments,
|
•
|
a decrease in product costs in our Consumer Interactive segment associated with one of our indirect channel partners being acquired by a competitor;
|
•
|
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.
|
•
|
an increase in product costs resulting from the increase in revenue;
|
•
|
operating and integration costs of our DHI, L2C and Trustev acquisitions in our USIS segment and the CIBIL acquisition in our International segment; and
|
•
|
an increase in labor costs as we continue to invest in key strategic growth initiatives,
|
•
|
an expense in 2014 of $10.2 million for the acceleration of fees for a data matching service contract that we terminated and in-sourced in our USIS segment;
|
•
|
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.
|
•
|
an increase in litigation expense in Corporate due primarily to $19.4 million for the settlement with the CFPB and related costs;
|
•
|
an increase in advertising costs primarily in our Consumer Interactive segment;
|
•
|
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; and
|
•
|
operating costs relating to our recent acquisitions in our USIS and International segments,
|
•
|
the impact of weakening foreign currencies on the expenses of our International segment.
|
•
|
an increase in labor costs due to an increase in incentive-based compensation resulting from improved operating results in all segments, an increase in stock-based compensation in our USIS and International segments, including the increase in the value of cash-settled stock-based compensation in our International segment, and an increase in headcount primarily in our USIS and International segments as we continue to invest in key strategic growth initiatives;
|
•
|
operating and integration costs of our DHI, L2C and Trustev acquisitions in our USIS segment and the CIBIL acquisition in our International segments; and
|
•
|
an increase in advertising costs primarily in our Consumer Interactive segment,
|
•
|
a decrease in litigation expense in Corporate; and
|
•
|
the impact of weakening foreign currencies on the expenses of our International segment.
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
|
Twelve months ended December 31,
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||||||||||||
(dollars in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Gross operating income by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
USIS operating income
|
|
$
|
203.5
|
|
|
$
|
130.5
|
|
|
$
|
102.4
|
|
|
$
|
73.0
|
|
|
55.9
|
%
|
|
$
|
28.2
|
|
|
27.5
|
%
|
International operating income
|
|
49.8
|
|
|
21.2
|
|
|
22.8
|
|
|
28.6
|
|
|
135.0
|
%
|
|
(1.6
|
)
|
|
(7.1
|
)%
|
|||||
Consumer Interactive operating income
|
|
168.9
|
|
|
137.2
|
|
|
93.4
|
|
|
31.6
|
|
|
23.1
|
%
|
|
43.8
|
|
|
46.9
|
%
|
|||||
Corporate operating loss
|
|
(121.6
|
)
|
|
(91.8
|
)
|
|
(90.1
|
)
|
|
(29.8
|
)
|
|
(32.4
|
)%
|
|
(1.7
|
)
|
|
(1.9
|
)%
|
|||||
Total operating income
|
|
$
|
300.5
|
|
|
$
|
197.1
|
|
|
$
|
128.4
|
|
|
$
|
103.5
|
|
|
52.5
|
%
|
|
$
|
68.7
|
|
|
53.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intersegment operating income eliminations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
USIS
|
|
$
|
(55.5
|
)
|
|
$
|
(52.4
|
)
|
|
$
|
(54.9
|
)
|
|
$
|
(3.1
|
)
|
|
(6.0
|
)%
|
|
$
|
2.5
|
|
|
4.6
|
%
|
International
|
|
(3.0
|
)
|
|
(1.9
|
)
|
|
(0.6
|
)
|
|
(1.0
|
)
|
|
(53.6
|
)%
|
|
(1.3
|
)
|
|
(232.1
|
)%
|
|||||
Consumer Interactive
|
|
58.5
|
|
|
54.4
|
|
|
55.5
|
|
|
4.2
|
|
|
7.6
|
%
|
|
(1.2
|
)
|
|
(2.2
|
)%
|
|||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||||
Total eliminations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
USIS
|
|
19.5
|
%
|
|
14.1
|
%
|
|
12.6
|
%
|
|
|
|
5.4
|
%
|
|
|
|
1.5
|
%
|
|||||||
International
|
|
15.9
|
%
|
|
7.9
|
%
|
|
8.8
|
%
|
|
|
|
8.0
|
%
|
|
|
|
(0.9
|
)%
|
|||||||
Consumer Interactive
|
|
41.5
|
%
|
|
37.1
|
%
|
|
31.8
|
%
|
|
|
|
4.4
|
%
|
|
|
|
5.3
|
%
|
|||||||
Total operating margin
|
|
17.6
|
%
|
|
13.1
|
%
|
|
9.8
|
%
|
|
|
|
4.5
|
%
|
|
|
|
3.3
|
%
|
•
|
the increase in revenue in all segments, including revenue from the recent acquisitions; and
|
•
|
The decrease in depreciation and amortization, primarily in our USIS segment,
|
•
|
an increase in labor costs, primarily in our USIS and International segments and in Corporate, attributed to higher incentive and stock-based and other compensation costs and an increase in headcount as we continue to invest in key strategic initiatives growth initiatives;
|
•
|
an increase in litigation expense in Corporate due to $19.4 million for the settlement with CFPB and related costs;
|
•
|
operating costs related to our recent acquisitions in our USIS and International segments;
|
•
|
an increase in advertising costs primarily in our Consumer Interactive segment;
|
•
|
an increase in product costs, primarily in our USIS segment, resulting from the increase in revenue; and
|
•
|
the impact of weakening foreign currencies on the 2016 results of our International segment.
|
•
|
the increase in revenue in all segments, including revenue from the recent acquisitions; and
|
•
|
an expense in 2014 of $10.2 million for the acceleration of fees for a data matching service contract that we terminated and in-sourced in our USIS segment,
|
•
|
The increase in depreciation and amortization, primarily in our USIS and International segments;
|
•
|
an increase in incentive-based, stock-based and other compensation costs;
|
•
|
operating and integration costs from the DHI, L2C and Trustev acquisitions in our USIS segment and the CIBIL acquisition in our International segment;
|
•
|
incremental costs incurred as part of the transformation of our technology infrastructure;
|
•
|
an increase in advertising costs primarily in our Consumer Interactive segment; and
|
•
|
the impact of weakening foreign currencies on the 2015 results of our International segment.
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
Twelve months ended December 31,
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Interest expense
|
$
|
(85.5
|
)
|
|
$
|
(134.2
|
)
|
|
$
|
(190.0
|
)
|
|
$
|
48.7
|
|
|
36.3
|
%
|
|
$
|
55.8
|
|
|
29.4
|
%
|
Interest income
|
4.6
|
|
|
3.8
|
|
|
3.3
|
|
|
0.8
|
|
|
22.2
|
%
|
|
0.5
|
|
|
14.0
|
%
|
|||||
Earnings from equity method investments
|
8.6
|
|
|
8.8
|
|
|
12.5
|
|
|
(0.2
|
)
|
|
(2.7
|
)%
|
|
(3.7
|
)
|
|
(29.5
|
)%
|
|||||
Other income and expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition fees
|
(17.6
|
)
|
|
(5.8
|
)
|
|
(2.9
|
)
|
|
(11.7
|
)
|
|
nm
|
|
|
(2.9
|
)
|
|
(98.7
|
)%
|
|||||
Loan Fees
|
(1.4
|
)
|
|
(39.0
|
)
|
|
(14.6
|
)
|
|
37.6
|
|
|
96.4
|
%
|
|
(24.4
|
)
|
|
nm
|
|
|||||
Dividends from cost method investments
|
0.9
|
|
|
0.8
|
|
|
0.8
|
|
|
0.1
|
|
|
6.9
|
%
|
|
—
|
|
|
—
|
%
|
|||||
Other income (expense), net
|
(4.7
|
)
|
|
(4.9
|
)
|
|
60.7
|
|
|
0.2
|
|
|
3.7
|
%
|
|
(65.6
|
)
|
|
(108.1
|
)%
|
|||||
Total other income and expense, net
|
(22.8
|
)
|
|
(48.9
|
)
|
|
44.0
|
|
|
26.1
|
|
|
53.4
|
%
|
|
(92.9
|
)
|
|
(211.1
|
)%
|
|||||
Non-operating income and expense
|
$
|
(95.1
|
)
|
|
$
|
(170.5
|
)
|
|
$
|
(130.2
|
)
|
|
$
|
75.4
|
|
|
44.2
|
%
|
|
$
|
(40.3
|
)
|
|
(31.0
|
)%
|
|
Twelve months ended December 31,
|
|
Change
|
||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Cash provided by operating activities
|
$
|
389.9
|
|
|
$
|
309.1
|
|
|
$
|
154.3
|
|
|
$
|
80.8
|
|
|
$
|
154.8
|
|
Cash used in investing activities
|
(495.8
|
)
|
|
(197.1
|
)
|
|
(276.0
|
)
|
|
(298.7
|
)
|
|
78.9
|
|
|||||
Cash (used in) provided by financing activities
|
153.8
|
|
|
(51.3
|
)
|
|
91.9
|
|
|
205.1
|
|
|
(143.2
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
1.1
|
|
|
(5.4
|
)
|
|
(3.5
|
)
|
|
6.5
|
|
|
(1.9
|
)
|
|||||
Net change in cash and cash equivalents
|
$
|
49.0
|
|
|
$
|
55.3
|
|
|
$
|
(33.3
|
)
|
|
$
|
(6.3
|
)
|
|
$
|
88.6
|
|
(in millions)
|
Operating
leases
|
|
Purchase
obligations
|
|
Debt
repayments
|
|
Loan fees
and interest
payments
|
|
Total
|
||||||||||
2017
|
$
|
12.6
|
|
|
$
|
182.9
|
|
|
$
|
50.7
|
|
|
$
|
86.6
|
|
|
$
|
332.8
|
|
2018
|
11.0
|
|
|
40.2
|
|
|
54.5
|
|
|
84.4
|
|
|
190.1
|
|
|||||
2019
|
10.3
|
|
|
21.9
|
|
|
54.3
|
|
|
85.7
|
|
|
172.2
|
|
|||||
2020
|
9.9
|
|
|
18.0
|
|
|
314.4
|
|
|
84.0
|
|
|
426.3
|
|
|||||
2021
|
8.9
|
|
|
8.0
|
|
|
1,914.6
|
|
|
21.4
|
|
|
1,952.9
|
|
|||||
Thereafter
|
17.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
|||||
Totals
|
$
|
70.0
|
|
|
$
|
271.3
|
|
|
$
|
2,388.5
|
|
|
$
|
362.1
|
|
|
$
|
3,091.9
|
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
Consolidated Statements of Income
|
|
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
Consolidated Statements of Stockholders’ Equity
|
|
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
182.2
|
|
|
$
|
133.2
|
|
Trade accounts receivable, net of allowance of $6.2 and $4.2
|
277.9
|
|
|
228.3
|
|
||
Other current assets
|
89.9
|
|
|
65.3
|
|
||
Total current assets
|
550.0
|
|
|
426.8
|
|
||
Property, plant and equipment, net of accumulated depreciation and amortization of $235.6 and $174.3
|
197.5
|
|
|
183.0
|
|
||
Goodwill
|
2,173.9
|
|
|
1,983.4
|
|
||
Other intangibles, net of accumulated amortization of $815.8 and $615.3
|
1,762.3
|
|
|
1,770.1
|
|
||
Other assets
|
97.5
|
|
|
79.5
|
|
||
Total assets
|
$
|
4,781.2
|
|
|
$
|
4,442.8
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Trade accounts payable
|
$
|
114.2
|
|
|
$
|
105.4
|
|
Short-term debt and current portion of long-term debt
|
50.4
|
|
|
43.9
|
|
||
Other current liabilities
|
208.7
|
|
|
146.7
|
|
||
Total current liabilities
|
373.3
|
|
|
296.0
|
|
||
Long-term debt
|
2,325.2
|
|
|
2,160.7
|
|
||
Deferred taxes
|
579.0
|
|
|
588.4
|
|
||
Other liabilities
|
30.7
|
|
|
27.8
|
|
||
Total liabilities
|
3,308.2
|
|
|
3,072.9
|
|
||
Redeemable noncontrolling interests
|
—
|
|
|
2.9
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value; 1.0 billion shares authorized at December 31, 2016 and December 31, 2015; 183.9 million and 183.0 million shares issued as of December 31, 2016 and December 31, 2015, respectively; and 183.2 million and 182.3 million shares outstanding as of December 31, 2016 and December 31, 2015, respectively
|
1.8
|
|
|
1.8
|
|
||
Additional paid-in capital
|
1,844.9
|
|
|
1,850.3
|
|
||
Treasury stock at cost; 0.7 million shares at December 31, 2016 and December 31, 2015
|
(5.3
|
)
|
|
(4.6
|
)
|
||
Accumulated deficit
|
(303.8
|
)
|
|
(424.3
|
)
|
||
Accumulated other comprehensive loss
|
(174.8
|
)
|
|
(191.8
|
)
|
||
Total TransUnion stockholders’ equity
|
1,362.8
|
|
|
1,231.4
|
|
||
Noncontrolling interest
|
110.2
|
|
|
135.6
|
|
||
Total stockholders’ equity
|
1,473.0
|
|
|
1,367.0
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,781.2
|
|
|
$
|
4,442.8
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
1,704.9
|
|
|
$
|
1,506.8
|
|
|
$
|
1,304.7
|
|
Operating expenses
|
|
|
|
|
|
||||||
Cost of services (exclusive of depreciation and amortization below)
|
579.1
|
|
|
531.6
|
|
|
500.2
|
|
|||
Selling, general and administrative
|
560.1
|
|
|
499.7
|
|
|
434.9
|
|
|||
Depreciation and amortization
|
265.2
|
|
|
278.4
|
|
|
241.2
|
|
|||
Total operating expenses
|
1,404.4
|
|
|
1,309.7
|
|
|
1,176.3
|
|
|||
Operating income
|
300.5
|
|
|
197.1
|
|
|
128.4
|
|
|||
Non-operating income and (expense)
|
|
|
|
|
|
||||||
Interest expense
|
(85.5
|
)
|
|
(134.2
|
)
|
|
(190.0
|
)
|
|||
Interest income
|
4.6
|
|
|
3.8
|
|
|
3.3
|
|
|||
Earnings from equity method investments
|
8.6
|
|
|
8.8
|
|
|
12.5
|
|
|||
Other income and (expense), net
|
(22.8
|
)
|
|
(48.9
|
)
|
|
44.0
|
|
|||
Total non-operating income and (expense)
|
(95.1
|
)
|
|
(170.5
|
)
|
|
(130.2
|
)
|
|||
Income (loss) before income taxes
|
205.4
|
|
|
26.6
|
|
|
(1.8
|
)
|
|||
Provision for income taxes
|
(74.0
|
)
|
|
(11.3
|
)
|
|
(2.6
|
)
|
|||
Net income (loss)
|
131.4
|
|
|
15.3
|
|
|
(4.4
|
)
|
|||
Less: net income attributable to noncontrolling interests
|
(10.8
|
)
|
|
(9.4
|
)
|
|
(8.1
|
)
|
|||
Net income (loss) attributable to TransUnion
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
|
|
|
|
|
|
||||||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.66
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
Diluted
|
$
|
0.65
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
182.6
|
|
|
165.3
|
|
|
147.3
|
|
|||
Diluted
|
184.6
|
|
|
166.8
|
|
|
147.3
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
$
|
131.4
|
|
|
$
|
15.3
|
|
|
$
|
(4.4
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
26.7
|
|
|
(86.3
|
)
|
|
(58.9
|
)
|
|||
Benefit for income taxes
|
2.7
|
|
|
4.9
|
|
|
5.2
|
|
|||
Foreign currency translation, net
|
29.4
|
|
|
(81.4
|
)
|
|
(53.7
|
)
|
|||
Hedge instruments:
|
|
|
|
|
|
||||||
Net unrealized (loss) gain
|
(12.0
|
)
|
|
0.3
|
|
|
(0.6
|
)
|
|||
Amortization of accumulated loss
|
0.4
|
|
|
0.4
|
|
|
0.3
|
|
|||
Benefit (provision) for income taxes
|
4.4
|
|
|
(0.2
|
)
|
|
0.1
|
|
|||
Hedge instruments, net
|
(7.2
|
)
|
|
0.5
|
|
|
(0.2
|
)
|
|||
Available-for-sale securities:
|
|
|
|
|
|
||||||
Net unrealized gain
|
0.4
|
|
|
—
|
|
|
0.2
|
|
|||
Provision for income taxes
|
(0.2
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Available-for-sale securities, net
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|||
Total other comprehensive income (loss), net of tax
|
22.4
|
|
|
(80.9
|
)
|
|
(53.8
|
)
|
|||
Comprehensive income (loss)
|
153.8
|
|
|
(65.6
|
)
|
|
(58.2
|
)
|
|||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
(16.2
|
)
|
|
(2.8
|
)
|
|
1.5
|
|
|||
Comprehensive income (loss) attributable to TransUnion
|
$
|
137.6
|
|
|
$
|
(68.4
|
)
|
|
$
|
(56.7
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
131.4
|
|
|
$
|
15.3
|
|
|
$
|
(4.4
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
265.2
|
|
|
278.4
|
|
|
241.2
|
|
|||
Net loss (gain) on refinancing transactions
|
—
|
|
|
37.6
|
|
|
(33.1
|
)
|
|||
Gain on fair value adjustment of cost and equity method investment
|
—
|
|
|
—
|
|
|
(22.2
|
)
|
|||
Impairment of cost method investment
|
2.0
|
|
|
—
|
|
|
4.1
|
|
|||
Amortization and loss on fair value of hedge instruments
|
0.9
|
|
|
1.2
|
|
|
0.6
|
|
|||
Equity in net income of affiliates, net of dividends
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(3.3
|
)
|
|||
Deferred taxes
|
(22.2
|
)
|
|
(17.3
|
)
|
|
(20.8
|
)
|
|||
Amortization of discount and deferred financing fees
|
3.2
|
|
|
6.1
|
|
|
1.5
|
|
|||
Stock-based compensation
|
24.4
|
|
|
9.0
|
|
|
8.0
|
|
|||
Provision for losses on trade accounts receivable
|
4.3
|
|
|
3.2
|
|
|
3.2
|
|
|||
Other
|
(5.1
|
)
|
|
1.4
|
|
|
1.3
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Trade accounts receivable
|
(42.5
|
)
|
|
(39.2
|
)
|
|
(36.3
|
)
|
|||
Other current and long-term assets
|
(5.9
|
)
|
|
13.8
|
|
|
2.0
|
|
|||
Trade accounts payable
|
2.9
|
|
|
1.3
|
|
|
6.1
|
|
|||
Other current and long-term liabilities
|
31.9
|
|
|
(1.6
|
)
|
|
6.4
|
|
|||
Cash provided by operating activities
|
389.9
|
|
|
309.1
|
|
|
154.3
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(124.0
|
)
|
|
(132.2
|
)
|
|
(155.2
|
)
|
|||
Proceeds from sale of trading securities
|
0.9
|
|
|
1.0
|
|
|
1.5
|
|
|||
Purchases of trading securities
|
(1.5
|
)
|
|
(1.5
|
)
|
|
(2.1
|
)
|
|||
Proceeds from sale of other investments
|
58.2
|
|
|
12.4
|
|
|
9.7
|
|
|||
Purchases of other investments
|
(64.6
|
)
|
|
(15.5
|
)
|
|
(15.1
|
)
|
|||
Acquisitions and purchases of noncontrolling interests, net of cash acquired
|
(356.6
|
)
|
|
(70.4
|
)
|
|
(119.9
|
)
|
|||
Acquisition-related deposits, net
|
(6.2
|
)
|
|
9.1
|
|
|
4.1
|
|
|||
Other
|
(2.0
|
)
|
|
—
|
|
|
1.0
|
|
|||
Cash used in investing activities
|
(495.8
|
)
|
|
(197.1
|
)
|
|
(276.0
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from senior secured term loan B
|
150.0
|
|
|
1,881.0
|
|
|
1,895.3
|
|
|||
Extinguishment of senior secured term loan B
|
—
|
|
|
(1,881.0
|
)
|
|
(1,120.5
|
)
|
|||
Proceeds from senior secured term loan A
|
55.0
|
|
|
350.0
|
|
|
—
|
|
|||
Extinguishment of 9.625% and 8.125% Senior Notes
|
—
|
|
|
(1,000.0
|
)
|
|
—
|
|
|||
Extinguishment of 11.375% senior unsecured notes
|
—
|
|
|
—
|
|
|
(645.0
|
)
|
|||
Proceeds from senior secured revolving line of credit
|
145.0
|
|
|
35.0
|
|
|
78.5
|
|
|||
Payment on senior secured revolving line of credit
|
(145.0
|
)
|
|
(85.0
|
)
|
|
(28.5
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from financing activities (continued):
|
|
|
|
|
|
||||||
Repayments of debt
|
(49.3
|
)
|
|
(38.2
|
)
|
|
(25.6
|
)
|
|||
Termination of interest rate swaps
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|||
Proceeds from initial public offering
|
—
|
|
|
764.5
|
|
|
—
|
|
|||
Underwriter fees and other costs on initial public offering
|
—
|
|
|
(49.8
|
)
|
|
—
|
|
|||
Debt financing fees (2015 and 2014 fees include prepayment premiums on early terminations)
|
(3.7
|
)
|
|
(18.2
|
)
|
|
(61.5
|
)
|
|||
Proceeds from issuance of common stock and exercise of stock options
|
6.0
|
|
|
2.8
|
|
|
9.6
|
|
|||
Treasury stock purchases
|
(0.7
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|||
Distributions to noncontrolling interests
|
(9.3
|
)
|
|
(10.8
|
)
|
|
(10.4
|
)
|
|||
Excess tax benefit
|
6.3
|
|
|
1.4
|
|
|
—
|
|
|||
Payment of contingent obligation
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Cash provided by (used in) financing activities
|
153.8
|
|
|
(51.3
|
)
|
|
91.9
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1.1
|
|
|
(5.4
|
)
|
|
(3.5
|
)
|
|||
Net change in cash and cash equivalents
|
49.0
|
|
|
55.3
|
|
|
(33.3
|
)
|
|||
Cash and cash equivalents, beginning of period
|
133.2
|
|
|
77.9
|
|
|
111.2
|
|
|||
Cash and cash equivalents, end of period
|
$
|
182.2
|
|
|
$
|
133.2
|
|
|
$
|
77.9
|
|
|
|
|
|
|
|
||||||
Noncash investing activities:
|
|
|
|
|
|
||||||
Property and equipment acquired through capital lease obligations
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
Noncash financing activities:
|
|
|
|
|
|
||||||
Finance arrangements
|
$
|
16.3
|
|
|
$
|
7.8
|
|
|
$
|
12.9
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
87.9
|
|
|
$
|
147.6
|
|
|
$
|
191.0
|
|
Income taxes, net of refunds
|
93.6
|
|
|
25.9
|
|
|
25.2
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Paid-In
Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Non-controlling
Interests |
|
Total
|
|
Redeemable
Non- controlling Interests |
|||||||||||||||||
Balance, December 31, 2013
|
147.0
|
|
|
$
|
1.5
|
|
|
$
|
1,121.4
|
|
|
$
|
(4.1
|
)
|
|
$
|
(417.7
|
)
|
|
$
|
(73.2
|
)
|
|
$
|
86.6
|
|
|
$
|
714.5
|
|
|
$
|
17.6
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.5
|
)
|
|
—
|
|
|
8.4
|
|
|
(4.1
|
)
|
|
(0.3
|
)
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44.3
|
)
|
|
(7.5
|
)
|
|
(51.8
|
)
|
|
(2.0
|
)
|
||||||||
Establishment of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85.1
|
|
|
85.1
|
|
|
8.4
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
|
(10.1
|
)
|
|
(0.3
|
)
|
||||||||
Purchase of noncontrolling interests
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
(3.4
|
)
|
|
—
|
|
||||||||
Stockholder contribution from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.0
|
|
|
—
|
|
||||||||
Issuance of stock
|
0.7
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
||||||||
Exercise of stock options
|
0.2
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||||||
Treasury stock purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||||||
December 31, 2014
|
147.9
|
|
|
$
|
1.5
|
|
|
$
|
1,137.6
|
|
|
$
|
(4.3
|
)
|
|
$
|
(430.2
|
)
|
|
$
|
(117.5
|
)
|
|
$
|
160.6
|
|
|
$
|
747.7
|
|
|
$
|
23.4
|
|
TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity—Continued (in millions) |
||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Paid-In
Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Non-controlling
Interests |
|
Total
|
|
Redeemable
Non- controlling Interests |
|||||||||||||||||
Net income (loss)
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
9.8
|
|
|
$
|
15.7
|
|
|
$
|
(0.4
|
)
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74.3
|
)
|
|
(6.2
|
)
|
|
(80.5
|
)
|
|
(0.4
|
)
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
(10.4
|
)
|
|
(0.4
|
)
|
||||||||
Reclassification of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
(0.2
|
)
|
||||||||
Adjustment of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(4.7
|
)
|
||||||||
Purchase of noncontrolling interests
|
—
|
|
|
—
|
|
|
(13.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.4
|
)
|
|
(32.3
|
)
|
|
(14.4
|
)
|
||||||||
Excess tax benefit
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
||||||||
Initial public offering
|
34.0
|
|
|
0.3
|
|
|
714.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
714.7
|
|
|
—
|
|
||||||||
Issuance of stock
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||||||
Exercise of stock options
|
0.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||||||
Treasury stock purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
||||||||
Balance, December 31, 2015
|
182.3
|
|
|
$
|
1.8
|
|
|
$
|
1,850.3
|
|
|
$
|
(4.6
|
)
|
|
$
|
(424.3
|
)
|
|
$
|
(191.8
|
)
|
|
$
|
135.6
|
|
|
$
|
1,367.0
|
|
|
$
|
2.9
|
|
TRANSUNION AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity—Continued (in millions) |
||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Paid-In
Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Non-controlling
Interests |
|
Total
|
|
Redeemable
Non- controlling Interests |
|||||||||||||||||
Net income
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120.6
|
|
|
$
|
—
|
|
|
$
|
10.8
|
|
|
$
|
131.4
|
|
|
$
|
—
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.0
|
|
|
0.8
|
|
|
17.8
|
|
|
4.6
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|
(9.3
|
)
|
|
—
|
|
||||||||
Adjustment of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
15.8
|
|
||||||||
Establishment of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.2
|
|
|
10.2
|
|
|
43.7
|
|
||||||||
Excess tax benefit
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
23.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
|
—
|
|
||||||||
Employee share purchase plan
|
0.1
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
||||||||
Exercise of stock options
|
0.8
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
||||||||
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
(31.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37.9
|
)
|
|
(69.3
|
)
|
|
(67.0
|
)
|
||||||||
Treasury stock purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||||||
Balance, December 31, 2016
|
183.2
|
|
|
$
|
1.8
|
|
|
$
|
1,844.9
|
|
|
$
|
(5.3
|
)
|
|
$
|
(303.8
|
)
|
|
$
|
(174.8
|
)
|
|
$
|
110.2
|
|
|
$
|
1,473.0
|
|
|
$
|
—
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Prepaid expenses
|
$
|
43.9
|
|
|
$
|
41.9
|
|
Other investments
|
29.5
|
|
|
12.5
|
|
||
Income taxes receivable
|
5.4
|
|
|
0.1
|
|
||
Marketable securities
|
3.3
|
|
|
2.9
|
|
||
Deferred financing fees
|
0.5
|
|
|
0.5
|
|
||
Other
|
7.3
|
|
|
7.4
|
|
||
Total other current assets
|
$
|
89.9
|
|
|
$
|
65.3
|
|
(in millions)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Computer equipment and furniture
|
$
|
226.9
|
|
|
$
|
187.3
|
|
Purchased software
|
105.5
|
|
|
75.4
|
|
||
Building and building improvements
|
97.5
|
|
|
91.4
|
|
||
Land
|
3.2
|
|
|
3.2
|
|
||
Total cost of property, plant and equipment
|
433.1
|
|
|
357.3
|
|
||
Less: accumulated depreciation
|
(235.6
|
)
|
|
(174.3
|
)
|
||
Total property, plant and equipment, net of accumulated depreciation
|
$
|
197.5
|
|
|
$
|
183.0
|
|
(in millions)
|
USIS
|
|
International
|
|
Consumer Interactive
|
|
Total
|
||||||||
Balance, December 31, 2014
|
$
|
1,202.6
|
|
|
$
|
580.1
|
|
|
$
|
241.2
|
|
|
$
|
2,023.9
|
|
Purchase accounting adjustments
|
(5.7
|
)
|
|
1.8
|
|
|
—
|
|
|
(3.9
|
)
|
||||
Acquisitions
|
13.2
|
|
|
—
|
|
|
—
|
|
|
13.2
|
|
||||
Foreign exchange rate adjustment
|
—
|
|
|
(49.8
|
)
|
|
—
|
|
|
(49.8
|
)
|
||||
Balance, December 31, 2015
|
$
|
1,210.1
|
|
|
$
|
532.1
|
|
|
$
|
241.2
|
|
|
$
|
1,983.4
|
|
Purchase accounting adjustments
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
||||
Acquisitions
|
31.6
|
|
|
131.6
|
|
|
—
|
|
|
163.2
|
|
||||
Foreign exchange rate adjustment
|
—
|
|
|
23.3
|
|
|
—
|
|
|
23.3
|
|
||||
Balance, December 31, 2016
|
$
|
1,245.7
|
|
|
$
|
687.0
|
|
|
$
|
241.2
|
|
|
$
|
2,173.9
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(in millions)
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Database and credit files
|
$
|
844.4
|
|
|
$
|
(242.7
|
)
|
|
$
|
601.7
|
|
|
$
|
791.3
|
|
|
$
|
(185.8
|
)
|
|
$
|
605.5
|
|
Internal use software
|
739.0
|
|
|
(412.7
|
)
|
|
326.3
|
|
|
628.5
|
|
|
(308.3
|
)
|
|
320.2
|
|
||||||
Customer relationships
|
415.7
|
|
|
(89.3
|
)
|
|
326.4
|
|
|
392.0
|
|
|
(66.4
|
)
|
|
325.6
|
|
||||||
Trademarks, copyrights and patents
|
573.3
|
|
|
(69.2
|
)
|
|
504.1
|
|
|
571.6
|
|
|
(53.9
|
)
|
|
517.7
|
|
||||||
Noncompete and other agreements
|
5.7
|
|
|
(1.9
|
)
|
|
3.8
|
|
|
2.0
|
|
|
(0.9
|
)
|
|
1.1
|
|
||||||
Total intangible assets
|
$
|
2,578.1
|
|
|
$
|
(815.8
|
)
|
|
$
|
1,762.3
|
|
|
$
|
2,385.4
|
|
|
$
|
(615.3
|
)
|
|
$
|
1,770.1
|
|
(in millions)
|
Annual
Amortization
Expense
|
||
2017
|
$
|
167.4
|
|
2018
|
166.0
|
|
|
2019
|
148.3
|
|
|
2020
|
131.8
|
|
|
2021
|
118.6
|
|
|
Thereafter
|
1,030.2
|
|
|
Total future amortization expense
|
$
|
1,762.3
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Investments in affiliated companies
|
$
|
62.6
|
|
|
$
|
50.5
|
|
Marketable securities
|
12.4
|
|
|
11.2
|
|
||
Other Investments
|
9.5
|
|
|
13.0
|
|
||
Deposits
|
9.3
|
|
|
1.8
|
|
||
Deferred financing fees
|
1.2
|
|
|
1.7
|
|
||
Other
|
2.5
|
|
|
1.3
|
|
||
Total other assets
|
$
|
97.5
|
|
|
$
|
79.5
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Total equity method investments
|
$
|
39.4
|
|
|
$
|
45.5
|
|
Total cost method investments
|
23.2
|
|
|
5.0
|
|
||
Total investments in affiliated companies
|
$
|
62.6
|
|
|
$
|
50.5
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Earnings from equity method investments
|
|
$
|
8.6
|
|
|
$
|
8.8
|
|
|
$
|
12.5
|
|
Dividends received from equity method investments
|
|
$
|
8.0
|
|
|
$
|
8.7
|
|
|
$
|
9.2
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Accrued payroll
|
$
|
79.3
|
|
|
$
|
74.5
|
|
Accrued legal and regulatory
|
35.9
|
|
|
16.3
|
|
||
Accrued employee benefits
|
31.8
|
|
|
24.2
|
|
||
Contingent consideration
|
16.1
|
|
|
2.0
|
|
||
Deferred revenue
|
12.0
|
|
|
10.6
|
|
||
Income taxes payable
|
11.5
|
|
|
2.6
|
|
||
Accrued interest
|
1.3
|
|
|
1.0
|
|
||
Other
|
20.8
|
|
|
15.5
|
|
||
Total other current liabilities
|
$
|
208.7
|
|
|
$
|
146.7
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Retirement benefits
|
$
|
10.9
|
|
|
$
|
11.2
|
|
Interest rate caps
|
6.1
|
|
|
—
|
|
||
Unrecognized tax benefits
|
4.8
|
|
|
0.3
|
|
||
Contingent consideration
|
1.5
|
|
|
5.1
|
|
||
Other
|
7.4
|
|
|
11.2
|
|
||
Total other liabilities
|
$
|
30.7
|
|
|
$
|
27.8
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Senior Secured Term Loan B, payable in quarterly installments through April 9, 2021, and periodic variable interest at LIBOR or alternate base rate, plus applicable margin (3.52% at December 31, 2016), including original issue discount and deferred financing fees of $7.6 million and $4.4 million, respectively, at December 31, 2016, and original issue discount and deferred financing fees of $7.3 million and $3.8 million, respectively, at December 31, 2015
|
$
|
1,984.6
|
|
|
$
|
1,855.6
|
|
Senior Secured Term Loan A, payable in quarterly installments through June 30, 2020, and periodic variable interest at LIBOR or alternate base rate, plus applicable margin (2.77% at December 31, 2016), including original issue discount and deferred financing fees of $0.7 million and $0.2 million, respectively, at December 31, 2016, and original issue discount and deferred financing fees of $0.7 million and $0.1 million, respectively, at December 31, 2015
|
375.7
|
|
|
340.4
|
|
||
Other notes payable
|
14.2
|
|
|
6.2
|
|
||
Capital lease obligations
|
1.1
|
|
|
2.4
|
|
||
Total debt
|
$
|
2,375.6
|
|
|
$
|
2,204.6
|
|
Less short-term debt and current portion of long-term debt
|
(50.4
|
)
|
|
(43.9
|
)
|
||
Total long-term debt
|
$
|
2,325.2
|
|
|
$
|
2,160.7
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
||||||
Earnings per share - basic
|
|
|
|
|
|
|
||||||
Earnings (loss) available to common shareholders
|
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
Weighted average shares outstanding
|
|
182.6
|
|
|
165.3
|
|
|
147.3
|
|
|||
Earnings (loss) per share - basic
|
|
$
|
0.66
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
||||||
Earnings per share - diluted
|
|
|
|
|
|
|
||||||
Earnings (loss) available to common shareholders
|
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
|
182.6
|
|
|
165.3
|
|
|
147.3
|
|
|||
Dilutive impact of stock based awards
|
|
2.0
|
|
|
1.5
|
|
|
—
|
|
|||
Weighted average dilutive shares outstanding
|
|
184.6
|
|
|
166.8
|
|
|
147.3
|
|
|||
Earnings (loss) per share - diluted
|
|
$
|
0.65
|
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
|||||||||||
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Federal
|
|
|
|
|
|
||||||
Current
|
$
|
53.9
|
|
|
$
|
3.8
|
|
|
$
|
(0.1
|
)
|
Deferred
|
(21.3
|
)
|
|
(8.2
|
)
|
|
(15.9
|
)
|
|||
State
|
|
|
|
|
|
||||||
Current
|
6.9
|
|
|
(0.3
|
)
|
|
0.4
|
|
|||
Deferred
|
10.6
|
|
|
(5.5
|
)
|
|
0.1
|
|
|||
Foreign
|
|
|
|
|
|
||||||
Current
|
35.4
|
|
|
25.1
|
|
|
23.1
|
|
|||
Deferred
|
(11.5
|
)
|
|
(3.6
|
)
|
|
(5.0
|
)
|
|||
Total provision for income taxes
|
$
|
74.0
|
|
|
$
|
11.3
|
|
|
$
|
2.6
|
|
|
|||||||||||
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
$
|
128.0
|
|
|
$
|
(30.5
|
)
|
|
$
|
(54.1
|
)
|
Foreign
|
77.4
|
|
|
57.1
|
|
|
52.3
|
|
|||
Income (loss) before income taxes
|
$
|
205.4
|
|
|
$
|
26.6
|
|
|
$
|
(1.8
|
)
|
|
|
Twelve Months Ended December 31,
|
|||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Income taxes at 35% statutory rate
|
|
$
|
71.9
|
|
|
35.0
|
%
|
|
$
|
9.3
|
|
|
35.0
|
%
|
|
$
|
(0.6
|
)
|
|
35.0
|
%
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
State taxes, net of federal benefit
|
|
15.4
|
|
|
7.5
|
%
|
|
(5.8
|
)
|
|
(21.8
|
)%
|
|
0.4
|
|
|
(23.9
|
)%
|
|||
Foreign rate differential
|
|
(1.8
|
)
|
|
(0.9
|
)%
|
|
(2.6
|
)
|
|
(9.9
|
)%
|
|
(1.8
|
)
|
|
98.7
|
%
|
|||
Current year tax impact of unremitted foreign earnings
|
|
7.7
|
|
|
3.7
|
%
|
|
11.1
|
|
|
41.8
|
%
|
|
5.6
|
|
|
(308.4
|
)%
|
|||
Impact of foreign dividends
|
|
0.1
|
|
|
—
|
%
|
|
0.1
|
|
|
0.2
|
%
|
|
—
|
|
|
(1.6
|
)%
|
|||
DPAD & R&D tax credit
|
|
(5.0
|
)
|
|
(2.4
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
International restructuring
|
|
(13.6
|
)
|
|
(6.6
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other
|
|
(0.7
|
)
|
|
(0.3
|
)%
|
|
(0.8
|
)
|
|
(2.9
|
)%
|
|
(1.0
|
)
|
|
56.0
|
%
|
|||
Total
|
|
$
|
74.0
|
|
|
36.0
|
%
|
|
$
|
11.3
|
|
|
42.4
|
%
|
|
$
|
2.6
|
|
|
(144.2
|
)%
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Deferred income tax assets:
|
|
|
|
||||
Compensation
|
$
|
20.1
|
|
|
$
|
13.7
|
|
Employee benefits
|
4.9
|
|
|
5.8
|
|
||
Legal reserves and settlements
|
7.4
|
|
|
5.1
|
|
||
Hedge investments
|
4.8
|
|
|
0.2
|
|
||
Financing related costs
|
4.2
|
|
|
4.1
|
|
||
Loss and credit carryforwards
|
84.9
|
|
|
96.2
|
|
||
Other
|
10.0
|
|
|
7.8
|
|
||
Gross deferred income tax assets
|
136.3
|
|
|
132.9
|
|
||
Valuation allowance
|
(59.2
|
)
|
|
(46.7
|
)
|
||
Total deferred income tax assets, net
|
$
|
77.1
|
|
|
$
|
86.2
|
|
Deferred income tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
$
|
(604.5
|
)
|
|
$
|
(606.2
|
)
|
Investments in affiliated companies
|
—
|
|
|
(14.9
|
)
|
||
Taxes on undistributed foreign earnings
|
(49.7
|
)
|
|
(49.8
|
)
|
||
Other
|
(1.9
|
)
|
|
(3.7
|
)
|
||
Total deferred income tax liability
|
(656.1
|
)
|
|
(674.6
|
)
|
||
Net deferred income tax liability
|
$
|
(579.0
|
)
|
|
$
|
(588.4
|
)
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Balance as of beginning of period
|
$
|
1.9
|
|
|
$
|
1.9
|
|
Increase in tax positions of prior years
|
0.7
|
|
|
0.1
|
|
||
Increase for tax positions of current year
|
2.5
|
|
|
—
|
|
||
Decrease in tax positions due to settlement and lapse of statute
|
(0.3
|
)
|
|
(0.1
|
)
|
||
Balance as of end of period
|
$
|
4.8
|
|
|
$
|
1.9
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Service condition options:
|
|
|
|
||||
Dividend yield
|
—
|
|
|
—
|
|
||
Expected volatility
|
40%-55%
|
|
|
55%-60%
|
|
||
Risk-free interest rate
|
1.7%-2.3%
|
|
|
0.9%-2.3%
|
|
||
Expected life, in years
|
6.4
|
|
|
5.9-6.4
|
|
||
Weighted-average grant date fair value
|
$
|
7.40
|
|
|
$
|
6.12
|
|
|
|
|
|
||||
Market condition options:
|
|
|
|
||||
Weighted-average grant date fair value
|
$
|
7.15
|
|
|
$
|
5.59
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic Value (in millions) |
|||||
Outstanding as of December 31, 2015
|
9,814,760
|
|
|
$
|
7.02
|
|
|
7.3
|
|
$
|
201.7
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(783,550
|
)
|
|
5.84
|
|
|
|
|
|
|||
Forfeited
|
(251,888
|
)
|
|
9.40
|
|
|
|
|
|
|||
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding as of December 31, 2016
|
8,779,322
|
|
|
$
|
7.05
|
|
|
6.3
|
|
$
|
209.6
|
|
|
|
|
|
|
|
|
|
|||||
Expected to vest as of December 31, 2016
|
6,787,907
|
|
|
$
|
7.11
|
|
|
6.3
|
|
$
|
161.7
|
|
Exercisable as of December 31, 2016
|
1,842,076
|
|
|
$
|
6.73
|
|
|
6.1
|
|
$
|
44.6
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Intrinsic value of options exercised
|
|
$
|
19.4
|
|
|
$
|
5.2
|
|
|
$
|
1.1
|
|
Total fair value of options vested
|
|
$
|
3.9
|
|
|
$
|
3.8
|
|
|
$
|
3.0
|
|
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Trading securities
|
$
|
12.4
|
|
|
$
|
8.2
|
|
|
$
|
4.2
|
|
|
$
|
—
|
|
Available-for-sale securities
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
||||
Total
|
$
|
15.7
|
|
|
$
|
8.2
|
|
|
$
|
7.5
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate caps
|
$
|
(6.1
|
)
|
|
$
|
—
|
|
|
$
|
(6.1
|
)
|
|
$
|
—
|
|
Contingent consideration
|
(17.6
|
)
|
|
—
|
|
|
—
|
|
|
(17.6
|
)
|
||||
Total
|
$
|
(23.7
|
)
|
|
$
|
—
|
|
|
$
|
(6.1
|
)
|
|
$
|
(17.6
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Gross revenues
|
|
|
|
|
|
||||||
U.S. Information Services
|
$
|
1,045.1
|
|
|
$
|
924.5
|
|
|
$
|
811.5
|
|
International
|
313.9
|
|
|
269.6
|
|
|
257.7
|
|
|||
Consumer Interactive
|
407.1
|
|
|
369.8
|
|
|
294.0
|
|
|||
Total revenues, gross
|
$
|
1,766.0
|
|
|
$
|
1,563.9
|
|
|
$
|
1,363.3
|
|
|
|
|
|
|
|
||||||
Intersegment revenue eliminations:
|
|
|
|
|
|
||||||
U.S. Information Services
|
$
|
(57.0
|
)
|
|
$
|
(53.9
|
)
|
|
$
|
(56.3
|
)
|
International
|
(4.0
|
)
|
|
(3.2
|
)
|
|
(2.2
|
)
|
|||
Consumer Interactive
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total intersegment eliminations
|
(61.1
|
)
|
|
(57.1
|
)
|
|
(58.5
|
)
|
|||
Total revenues, net
|
$
|
1,704.9
|
|
|
$
|
1,506.8
|
|
|
$
|
1,304.7
|
|
|
|
|
|
|
|
||||||
Operating income:
|
|
|
|
|
|
||||||
U.S. Information Services
|
$
|
203.5
|
|
|
$
|
130.5
|
|
|
$
|
102.4
|
|
International
|
49.8
|
|
|
21.2
|
|
|
22.8
|
|
|||
Consumer Interactive
|
168.9
|
|
|
137.2
|
|
|
93.4
|
|
|||
Corporate
|
(121.6
|
)
|
|
(91.8
|
)
|
|
(90.1
|
)
|
|||
Total operating income
|
$
|
300.5
|
|
|
$
|
197.1
|
|
|
$
|
128.4
|
|
|
|
|
|
|
|
||||||
Intersegment operating income eliminations:
|
|
|
|
|
|
||||||
U.S. Information Services
|
$
|
(55.5
|
)
|
|
$
|
(52.4
|
)
|
|
$
|
(54.9
|
)
|
International
|
(3.0
|
)
|
|
(1.9
|
)
|
|
(0.6
|
)
|
|||
Consumer Interactive
|
58.5
|
|
|
54.4
|
|
|
55.5
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total intersegment eliminations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Operating income from segments
|
$
|
300.5
|
|
|
$
|
197.1
|
|
|
$
|
128.4
|
|
Non-operating income and expense
|
(95.1
|
)
|
|
(170.5
|
)
|
|
(130.2
|
)
|
|||
Income (loss) before income tax
|
$
|
205.4
|
|
|
$
|
26.6
|
|
|
$
|
(1.8
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
U.S. Information Services
|
$
|
1.9
|
|
|
$
|
1.8
|
|
|
$
|
1.2
|
|
International
|
6.7
|
|
|
7.0
|
|
|
11.3
|
|
|||
Total
|
$
|
8.6
|
|
|
$
|
8.8
|
|
|
$
|
12.5
|
|
(in millions)
|
December 31,
2016 |
|
December 31,
2015 |
||||
U.S. Information Services
|
$
|
2,762.8
|
|
|
$
|
2,762.9
|
|
International
|
1,460.1
|
|
|
1,169.0
|
|
||
Consumer Interactive
|
417.7
|
|
|
404.0
|
|
||
Corporate
|
140.6
|
|
|
106.9
|
|
||
Total
|
$
|
4,781.2
|
|
|
$
|
4,442.8
|
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
U.S. Information Services
|
$
|
82.5
|
|
|
$
|
86.5
|
|
|
$
|
99.6
|
|
International
|
30.2
|
|
|
29.8
|
|
|
30.1
|
|
|||
Consumer Interactive
|
9.1
|
|
|
7.9
|
|
|
5.3
|
|
|||
Corporate
|
2.2
|
|
|
8.0
|
|
|
20.2
|
|
|||
Total
|
$
|
124.0
|
|
|
$
|
132.2
|
|
|
$
|
155.2
|
|
|
Twelve Months Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
U.S. Information Services
|
$
|
191.0
|
|
|
$
|
206.2
|
|
|
$
|
174.7
|
|
International
|
57.2
|
|
|
55.1
|
|
|
51.0
|
|
|||
Consumer Interactive
|
11.7
|
|
|
11.8
|
|
|
10.3
|
|
|||
Corporate
|
5.3
|
|
|
5.3
|
|
|
5.2
|
|
|||
Total
|
$
|
265.2
|
|
|
$
|
278.4
|
|
|
$
|
241.2
|
|
(in millions)
|
Operating
Leases
|
|
Purchase
Obligations
|
|
Total
|
||||||
2017
|
$
|
12.6
|
|
|
$
|
182.9
|
|
|
$
|
195.5
|
|
2018
|
11.0
|
|
|
40.2
|
|
|
51.2
|
|
|||
2019
|
10.3
|
|
|
21.9
|
|
|
32.2
|
|
|||
2020
|
9.9
|
|
|
18.0
|
|
|
27.9
|
|
|||
2021
|
8.9
|
|
|
8.0
|
|
|
16.9
|
|
|||
Thereafter
|
17.3
|
|
|
0.3
|
|
|
17.6
|
|
|||
Totals
|
$
|
70.0
|
|
|
$
|
271.3
|
|
|
$
|
341.3
|
|
•
|
implement certain agreed practice changes in the way we advertise, market and sell products and services offered directly to consumers, including more robust disclosures regarding the nature of the credit score being provided as well as confirming consumer consent if the product or service is being sold through the use of a negative option feature (i.e., a trial period becomes a recurring paid subscription unless the consumer affirmatively cancels their registration); and
|
•
|
develop and submit to the CFPB for approval a comprehensive compliance plan detailing the steps for addressing each action required by the terms of the Consent Order and specific time frames and deadlines for implementation.
|
|
Three Months Ended
|
||||||||||||||
(in millions)
|
December 31,
2016 |
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
||||||||
Revenue
|
$
|
435.9
|
|
|
$
|
437.6
|
|
|
$
|
425.7
|
|
|
$
|
405.7
|
|
Operating income
|
89.3
|
|
|
95.8
|
|
|
63.5
|
|
|
51.9
|
|
||||
Net income
|
52.6
|
|
|
44.5
|
|
|
19.7
|
|
|
14.6
|
|
||||
Net income attributable to TransUnion
|
49.5
|
|
|
41.2
|
|
|
17.3
|
|
|
12.6
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.27
|
|
|
$
|
0.23
|
|
|
$
|
0.09
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
Three Months Ended
|
||||||||||||||
(in millions)
|
December 31,
2015 |
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
||||||||
Revenue
|
$
|
386.1
|
|
|
$
|
389.1
|
|
|
$
|
378.5
|
|
|
$
|
353.1
|
|
Operating income
|
48.9
|
|
|
60.3
|
|
|
51.4
|
|
|
36.5
|
|
||||
Net income (loss)
|
21.1
|
|
|
(1.0
|
)
|
|
(0.4
|
)
|
|
(4.4
|
)
|
||||
Net income (loss) attributable to TransUnion
|
19.2
|
|
|
(4.0
|
)
|
|
(2.6
|
)
|
|
(6.6
|
)
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
$
|
0.10
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
(in millions)
|
Foreign
Currency
Translation
Adjustment
|
|
Net
Unrealized
Gain/(Loss)
On Hedges
|
|
Net
Unrealized
Gain/(Loss)
On Available-for-sale Securities
|
|
Accumulated
Other
Comprehensive
Income /
(Loss)
|
||||||||
Balance, December 31, 2013
|
$
|
(72.6
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(73.2
|
)
|
Change
|
(44.2
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|
(44.3
|
)
|
||||
Balance, December 31, 2014
|
$
|
(116.8
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
0.1
|
|
|
$
|
(117.5
|
)
|
Change
|
(74.8
|
)
|
|
0.5
|
|
|
—
|
|
|
(74.3
|
)
|
||||
Balance, December 31, 2015
|
$
|
(191.6
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
0.1
|
|
|
$
|
(191.8
|
)
|
Change
|
24.0
|
|
|
(7.2
|
)
|
|
0.2
|
|
|
17.0
|
|
||||
Balance, December 31, 2016
|
$
|
(167.6
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
0.3
|
|
|
$
|
(174.8
|
)
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of TransUnion;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles;
|
•
|
provide reasonable assurance that receipts and expenditures of TransUnion are being made only in accordance with the authorizations of management and directors of TransUnion; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
|
(a)
|
List of Documents Filed as a Part of This Report:
|
(1)
|
Financial Statements
. The following financial statements are included in Item 8 of Part II:
|
•
|
Consolidated Balance Sheets—December 31, 2016 and 2015;
|
•
|
Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014;
|
•
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014;
|
•
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014;
|
•
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014;
|
•
|
Notes to Consolidated Financial Statements.
|
(2)
|
Financial Statement Schedules.
|
•
|
Schedule I - Condensed Financial Information of TransUnion;
|
•
|
Schedule I - Notes to Financial Information of TransUnion; and
|
•
|
Schedule II—Valuation and Qualifying Accounts.
|
(3)
|
Exhibits
. A list of the exhibits required to be filed as part of this Report by Item 601 of Regulation S-K is set forth in the Exhibit Index on page 106 of this Form 10-K, which immediately precedes such exhibits, and is incorporated herein by reference.
|
(4)
|
Valuation and qualifying accounts.
|
(b)
|
Exhibits.
See Item 15(a)(3).
|
(c)
|
Financial Statement Schedules
. See Item 15(a)(2)
|
TransUnion
|
||
|
|
|
By:
|
|
/s/ Samuel A. Hamood
|
|
|
Samuel A. Hamood
Executive Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
|
|
/s/ James M. Peck
|
|
Director, President and Chief Executive Officer
|
James M. Peck
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Samuel A. Hamood
|
|
Executive Vice President and Chief Financial Officer
|
Samuel A. Hamood
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Timothy Elberfeld
|
|
Vice President and Chief Accounting Officer
|
Timothy Elberfeld
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ George M. Awad
|
|
Director
|
George M. Awad
|
|
|
|
|
|
/s/ Christopher Egan
|
|
Director
|
Christopher Egan
|
|
|
|
|
|
/s/Pamela A. Joseph
|
|
Director
|
Pamela A. Joseph
|
|
|
|
|
|
/s/ Siddharth N. (Bobby) Mehta
|
|
Director
|
Siddharth N. (Bobby) Mehta
|
|
|
|
|
|
/s/ Leo F. Mullin
|
|
Director
|
Leo F. Mullin
|
|
|
|
|
|
/s/ Andrew Prozes
|
|
Director
|
Andrew Prozes
|
|
|
|
|
|
/s/ Sumit Rajpal
|
|
Director
|
Sumit Rajpal
|
|
|
|
|
|
/s/ Steven M. Tadler
|
|
Director
|
Steven M. Tadler
|
|
|
Exhibit
No.
|
|
Exhibit Name
|
|
|
|
2.1*†
|
|
Purchase Agreement Made as a Deed, dated December 9, 2015, by and among TransUnion Netherlands I B.V., Trustev Limited, the Non-Management Sellers Identified therein, the Management Sellers identified therein and the Management Seller Representative named therein (Incorporated by reference to Exhibit 2.1 to TransUnion’s Current Report on Form 8-K filed December 15, 2015).
|
|
|
|
2.2*††
|
|
Agreement with respect to certain Shares and Options of Trustev Limited Made as a Deed, dated as of December 9, 2015, by and among Trustev Limited, TransUnion Netherlands I B.V., the Management Holders identified therein and the Management Holder Representative named therein (Incorporated by reference to Exhibit 2.2 to TransUnion’s Current Report on Form 8-K filed December 15, 2015).
|
|
|
|
2.3*†
|
|
Share Purchase Sale Agreement, dated February 8, 2016, among TransUnion Netherlands II B.V., Bancolombia S.A., Banco Bilbao Vizcaya Argentaria Colombia S.A., Banco Davivienda S.A., Banco Corpbanca Colombia S.A., Banco de Bogota S.A., Banco de Occidente S.A., Banco GNB Sudameris S.A., Banco Colpatria Multibanca S.A., Banco Popular S.A., Banco Caja Social S.A., Corporacion Financiera Colombiana S.A., Banco Comercial AV Villas S.A., Citibank - Colombia S.A., Banco Compartir S.A., JP Morgan Corporacion Financiera S.A., Titularizadora Colombiana S.A., and Banco de las Microfinanzas-Banamia S.A., as Sellers, TransUnion, as guarantor, and Central de Informacion Financiera S.A. (Incorporated by reference to Exhibit 2.1 to TransUnion’s Current Report on Form 8-K filed on February 12, 2016).
|
|
|
|
2.4*††
|
|
Purchase Agreement, dated September 21, 2016, by and among TransUnion Healthcare, Inc., RTech Healthcare Revenue Technologies, Inc., the Sellers identified therein, and the Seller Representative named therein (Incorporated by reference to Exhibit 2.1 to TransUnion’s Current Report on Form 8-K filed on September 22, 2016).
|
|
|
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation of TransUnion (Incorporated by reference to Exhibit 4.1 to TransUnion’s Registration Statement on Form S-8 filed June 26, 2015).
|
|
|
|
3.2
|
|
Second Amended and Restated Bylaws of TransUnion (Incorporated by reference to Exhibit 4.2 to TransUnion’s Registration Statement on Form S-8 filed June 26, 2015).
|
|
|
|
4.1
|
|
Form of Stock Certificate for Common Stock (Incorporated by reference to Exhibit 4.6 to TransUnion’s Amendment No. 3 to Registration Statement on Form S-1 filed on June 15, 2015).
|
|
|
|
10.1
|
|
Amendment No. 7 to Credit Agreement, dated as of April 9, 2014, by and among TransUnion Intermediate Holdings, Inc., Trans Union LLC, the guarantors party thereto, Deutsche Bank Trust Company Americas, as Existing Administrative Agent, Existing Collateral Agent, Existing Swing Line Lender and Existing L/C Issuer, Deutsche Bank AG New York Branch, as Successor Administrative Agent, Successor Collateral Agent, Successor Swing Line Lender, Successor L/C Issuer and as 2014 Replacement Term Lender, and each other Lender party thereto (Incorporated by reference to Exhibit 10.1 to TransUnion's Current Report on Form 8-K filed April 9, 2014).
|
|
|
|
10.2
|
|
Second Amended and Restated Credit Agreement, dated as of April 9, 2014, by and among TransUnion Intermediate Holdings, Inc., Trans Union LLC, the guarantors party thereto, Deutsche Bank AG New York Branch, as Administrative Agent and as Collateral Agent, Deutsche Bank AG New York Branch, as L/C Issuer and Swing Line Lender, the other lenders from time to time party thereto, Goldman Sachs Lending Partners LLC, as Syndication Agent, and Bank of America, N.A., Royal Bank of Canada and Credit Suisse AG, as Documentation Agents (Incorporated by reference to Exhibit 10.2 to TransUnion's Current Report on Form 8-K filed April 9, 2014).
|
|
|
|
10.3
|
|
Amendment No. 8 to Credit Agreement, dated as of June 2, 2015, among TransUnion Corp., Trans Union LLC, the guarantors from time to time party thereto, Deutsche Bank AG New York Branch, as administrative agent and as collateral agent,, the other lenders party thereto, Credit Suisse Securities (USA) LLC, Goldman Sachs Lending Partners LLC, J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner and Smith Incorporated, as syndication agents, Royal Bank of Canada and Wells Fargo Bank, N.A., as documentation agents, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Lending Partners LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner and Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners (Incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed June 8, 2015).
|
10.4
|
|
Amendment No. 9 to Credit Agreement, dated as of June 30, 2015, among TransUnion Intermediate Holdings, Inc. (f/k/a TransUnion Corp.), Trans Union LLC, the guarantors from time to time party thereto, Deutsche Bank AG New York Branch, as administrative agent and as collateral agent, Deutsche Bank AG New York Branch, as L/C issuer and swing line lender, the other lenders party thereto, Goldman Sachs Lending Partners LLC, as syndication agent, Bank of America, N.A., Royal Bank of Canada and Credit Suisse AG, as documentation agents, Deutsche Bank Securities Inc., Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner and Smith Incorporated, RBC Capital Markets and Credit Suisse Securities (USA) LLC, as joint lead arrangers and joint bookrunners (Incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed July 2, 2015).
|
|
|
|
10.5
|
|
Amendment No. 10 to Credit Agreement, dated as of March 31, 2016, by and among TransUnion Intermediate Holdings, Inc., Trans Union LLC, the Guarantors, Deutsche Bank Securities Inc., as lead arranger, Deutsche Bank AG New York Branch, as administrative agent, as collateral agent (in such capacity, the “
Collateral Agent
”) and each of the lenders party thereto (Incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed on April 6, 2016).
|
|
|
|
10.6
|
|
Amendment No. 11 to Credit Agreement,
dated as of May 31, 2016, by and among TransUnion Intermediate Holdings, Inc., Trans Union LLC, the Guarantors, Deutsche Bank Securities Inc., as lead arranger, Deutsche Bank AG New York Branch, as administrative agent, as collateral agent and each of the lenders party thereto (Incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed on June 1, 2016).
|
|
|
|
10.7
|
|
Amendment No. 12 to Credit Agreement,
dated as of January 31, 2017, by and among TransUnion Intermediate Holdings, Inc., Trans Union LLC, the Guarantors, Deutsche Bank Securities Inc., Capital One, N.A., Goldman Sachs Lending Partners LLC, JPMorgan Chase Bank, N.A. Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers, Deutsche Bank AG New York Branch, as administrative agent and collateral agent and each of the lenders party thereto (Incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on Form 8-K filed on February 3, 2017).
|
|
|
|
10.8†††
|
|
TransUnion Holding Company, Inc. 2012 Management Equity Plan (Effective April 30, 2012) (Incorporated by reference to Exhibit 10.1 to TransUnion's Registration Statement on Form S-4 filed July 31, 2012).
|
|
|
|
10.9†††
|
|
TransUnion Holding Company, Inc. 2012 Management Equity Plan Stock Option Agreement (Effective April 30, 2012) (Incorporated by reference to Exhibit 10.2 to TransUnion's Registration Statement on Form S-4 filed July 31, 2012).
|
|
|
|
10.10†††
|
|
Amendment No. 1 to TransUnion Holding Company, Inc. 2012 Management Equity Plan Stock Option Agreement, dated as of January 1, 2016 (Incorporated by reference to Exhibit 10.7 to TransUnion's Annual Report on Form 10-K for the year ended December 31, 2015).
|
|
|
|
10.11
|
|
Stockholders’ Agreement made as of April 30, 2012, among TransUnion, the members of the management or other key persons of TransUnion or of TransUnion Intermediate Holdings, Inc., that are signatories thereto, any other person who becomes a party thereto, and the GS Investors (as defined therein) and the Advent Investor (as defined therein) (for specific purposes) (Incorporated by reference to Exhibit 10.4 to TransUnion's Registration Statement on Form S-4 filed July 31, 2012).
|
|
|
|
10.12
|
|
First Amendment to the Stockholders' Agreement, dated as of February 12, 2016, among TransUnion, The Advent Investor (as defined therein) and the GS Investor (as defined therein) (Incorporated by reference to Exhibit 10.9 to TransUnion's Annual Report on Form 10-K for the year ended December 31, 2015).
|
|
|
|
10.13**
|
|
Second Amendment to the Stockholders’ Agreement, dated as of December 16, 2016, among TransUnion, The Advent Investor (as defined therein) and the GS Investor (as defined therein).
|
|
|
|
10.14
|
|
Amended and Restated Major Stockholders’ Agreement, dated as of June 23, 2015, among TransUnion, the Advent Investor (as defined therein) and the GS Investors (as defined therein) (Incorporated by reference to Exhibit 10.7 to TransUnion's Amendment No. 2 to Registration Statement on Form S-1/A filed May 29, 2015).
|
|
|
|
10.15
|
|
Registration Rights Agreement dated as of April 30, 2012, by and among TransUnion, the Advent Investors (as defined therein), the GS Investors (as defined therein), certain Key Individuals (as defined therein) and any other person who becomes a party thereto (Incorporated by reference to Exhibit 10.5 to TransUnion's Registration Statement on Form S-4 filed July 31, 2012).
|
|
|
|
10.16
|
|
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) (Incorporated by reference to Exhibit 10.4 to TransUnion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
|
|
|
10.17
|
|
Form of Director Indemnification Agreement for directors of TransUnion (Incorporated by reference to Exhibit 10.6 to TransUnion's Registration Statement on Form S-4 filed July 31, 2012).
|
|
|
|
10.18†††
|
|
Employment Agreement with James M. Peck, President and Chief Executive Officer of TransUnion and TransUnion Intermediate Holdings, Inc., dated December 6, 2012 (Incorporated by reference to Exhibit 10.15 to TransUnion's and TransUnion Intermediate Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2012).
|
|
|
|
10.19†††
|
|
Letter Agreement between TransUnion and Reed Elsevier with respect to the employment of James M. Peck as the President and Chief Executive Officer of TransUnion and TransUnion Intermediate Holdings, Inc., dated December 6, 2012 (Incorporated by reference to Exhibit 10.16 to TransUnion's and TransUnion Intermediate Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2012).
|
|
|
|
10.20†††
|
|
TransUnion 2015 Omnibus Incentive Plan. (Incorporated by reference to Exhibit 4.4 to TransUnion’s Registration Statement on Form S-8 filed June 26, 2015).
|
|
|
|
10.21†††
|
|
TransUnion 2015 Omnibus Incentive Plan Award Agreement with respect to Restricted Stock Units and Performance Share Units (U.S. Employees) (Incorporated by reference to Exhibit 10.2 to TransUnion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
|
|
|
10.22†††
|
|
TransUnion 2015 Omnibus Incentive Plan Award Agreement with respect to Restricted Stock (Outside Directors) (Incorporated by reference to Exhibit 10.3 to TransUnion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
|
|
|
10.23†††
|
|
TransUnion 2015 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 4.5 to TransUnion’s Registration Statement on Form S-8 filed June 26, 2015).
|
|
|
|
10.24†††**
|
|
TransUnion 2015 Employee Stock Purchase Plan, as Amended and Restated, Effective November 18, 2016.
|
|
|
|
10.25**
|
|
Consent Order Issued by the United States Consumer Financial Protection Bureau on January 3, 2017, Administrative Proceeding - File No. 2017-CFPB-0002, In the Matter of: TransUnion Interactive, Inc., Trans Union LLC and TransUnion.
|
|
|
|
21**
|
|
Subsidiaries of TransUnion.
|
|
|
|
23.1**
|
|
Consent of Ernst & Young LLP
|
|
|
|
24**
|
|
Power of Attorney - TransUnion (included on the signature page of this Form 10-K).
|
|
|
|
31.1**
|
|
Certification of Principal Executive Officer for TransUnion pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2**
|
|
Certification of Principal Financial Officer for TransUnion pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32**
|
|
Certification of Chief Executive Officer and Chief Financial Officer for TransUnion 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.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Due from TransUnion Intermediate
|
$
|
129.3
|
|
|
$
|
114.4
|
|
Other current assets
|
0.6
|
|
|
—
|
|
||
Total current assets
|
129.9
|
|
|
114.4
|
|
||
Investment in TransUnion Intermediate
|
1,255.3
|
|
|
1,131.2
|
|
||
Total assets
|
$
|
1,385.2
|
|
|
$
|
1,245.6
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Trade accounts payable
|
$
|
0.1
|
|
|
$
|
—
|
|
Other current liabilities
|
0.1
|
|
|
0.1
|
|
||
Total current liabilities
|
0.2
|
|
|
0.1
|
|
||
Other liabilities
|
22.2
|
|
|
14.1
|
|
||
Total liabilities
|
22.4
|
|
|
14.2
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value; 1.0 billion shares authorized at December 31, 2016 and December 31, 2015; 183.9 million and 183.0 million shares issued as of December 31, 2016 and December 31, 2015, respectively; and 183.2 million and 182.3 million shares outstanding as of December 31, 2016 and December 31, 2015, respectively
|
1.8
|
|
|
1.8
|
|
||
Additional paid-in capital
|
1,844.9
|
|
|
1,850.3
|
|
||
Treasury stock at cost; 0.7 million shares at December 31, 2016 and December 31, 2015
|
(5.3
|
)
|
|
(4.6
|
)
|
||
Accumulated deficit
|
(303.8
|
)
|
|
(424.3
|
)
|
||
Accumulated other comprehensive loss
|
(174.8
|
)
|
|
(191.8
|
)
|
||
Total stockholders’ equity
|
1,362.8
|
|
|
1,231.4
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,385.2
|
|
|
$
|
1,245.6
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating expenses
|
|
|
|
|
|
||||||
Selling, general and administrative
|
1.8
|
|
|
1.6
|
|
|
1.4
|
|
|||
Total operating expenses
|
1.8
|
|
|
1.6
|
|
|
1.4
|
|
|||
Operating loss
|
(1.8
|
)
|
|
(1.6
|
)
|
|
(1.4
|
)
|
|||
Non-operating income and expense
|
|
|
|
|
|
||||||
Interest expense
|
—
|
|
|
(52.8
|
)
|
|
(97.0
|
)
|
|||
Equity Income from TransUnion Intermediate
|
124.3
|
|
|
61.6
|
|
|
49.1
|
|
|||
Other income and (expense), net
|
(2.7
|
)
|
|
(33.7
|
)
|
|
(0.2
|
)
|
|||
Total non-operating income and expense
|
121.6
|
|
|
(24.9
|
)
|
|
(48.1
|
)
|
|||
Income (loss) before income taxes
|
119.8
|
|
|
(26.5
|
)
|
|
(49.5
|
)
|
|||
Benefit for income taxes
|
0.8
|
|
|
32.4
|
|
|
37.0
|
|
|||
Net income (loss)
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
|
|||||||||||
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
$
|
120.6
|
|
|
$
|
5.9
|
|
|
$
|
(12.5
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
21.3
|
|
|
(79.7
|
)
|
|
(47.9
|
)
|
|||
Benefit for income taxes
|
2.7
|
|
|
4.9
|
|
|
3.8
|
|
|||
Foreign currency translation, net
|
24.0
|
|
|
(74.8
|
)
|
|
(44.1
|
)
|
|||
Hedge instruments:
|
|
|
|
|
|
||||||
Net unrealized (loss) gain
|
(12.0
|
)
|
|
0.3
|
|
|
(0.6
|
)
|
|||
Amortization of accumulated loss
|
0.4
|
|
|
0.4
|
|
|
0.3
|
|
|||
Benefit (provision) for income taxes
|
4.4
|
|
|
(0.2
|
)
|
|
0.1
|
|
|||
Hedge instruments, net
|
(7.2
|
)
|
|
0.5
|
|
|
(0.2
|
)
|
|||
Available-for-sale securities:
|
|
|
|
|
|
||||||
Net unrealized gain
|
0.4
|
|
|
—
|
|
|
0.2
|
|
|||
Provision for income taxes
|
(0.2
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Available-for-sale securities, net
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|||
Total other comprehensive income (loss), net of tax
|
17.0
|
|
|
(74.3
|
)
|
|
(44.2
|
)
|
|||
Comprehensive income (loss) attributable to TransUnion
|
$
|
137.6
|
|
|
$
|
(68.4
|
)
|
|
$
|
(56.7
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash (used in) provided by operating activities
|
$
|
(11.6
|
)
|
|
$
|
289.5
|
|
|
$
|
(9.4
|
)
|
Cash used in investing activities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Extinguishment of 9.625% and 8.125% Senior Notes
|
—
|
|
|
(1,000.0
|
)
|
|
—
|
|
|||
Proceeds from initial public offering
|
—
|
|
|
764.5
|
|
|
—
|
|
|||
Underwriter fees and other costs on initial public offering
|
—
|
|
|
(49.8
|
)
|
|
—
|
|
|||
Debt financing fees
|
—
|
|
|
(8.1
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock and exercise of stock options
|
6.0
|
|
|
2.8
|
|
|
9.6
|
|
|||
Treasury stock purchases
|
(0.7
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|||
Excess tax benefit
|
6.3
|
|
|
1.4
|
|
|
—
|
|
|||
Cash provided by (used in) financing activities
|
11.6
|
|
|
(289.5
|
)
|
|
9.4
|
|
|||
Net change in cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(in millions)
|
Balance at
Beginning of Year
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
(1)
|
|
Balance at
End of
Year
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
4.2
|
|
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
(2.3
|
)
|
|
$
|
6.2
|
|
2015
|
$
|
2.4
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
4.2
|
|
2014
|
$
|
0.7
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
(1.5
|
)
|
|
$
|
2.4
|
|
Allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
46.7
|
|
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
(1.1
|
)
|
|
$
|
59.2
|
|
2015
|
$
|
42.1
|
|
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
$
|
46.7
|
|
2014
|
$
|
25.9
|
|
|
$
|
19.5
|
|
|
$
|
—
|
|
|
$
|
(3.3
|
)
|
|
$
|
42.1
|
|
(1)
|
For the allowance for doubtful accounts, includes write-offs of uncollectable accounts.
|
TRANSUNION
|
|
By:
|
/s/ MICHAEL J. FORDE
|
|
Name:Michael J. Forde
|
|
Title:Senior Vice President - Legal & Regulatory and Corporate Secretary
|
ADVENT-TRANSUNION ACQUISITION LIMITED PARTNERSHIP
|
||||
By:
|
Advent-TransUnion GP LLC, its general partner
|
|||
|
|
|||
By:
|
/s/ MICHAEL J. RISTAINO
|
|||
|
Name: Michael J. Ristaino
|
|||
|
Title: President
|
|||
|
|
|||
|
|
|||
GS CAPITAL PARTNERS VI FUND, L.P.
|
|
|||
By:
|
GSCP VI Advisors, L.L.C. its General Partner
|
|
||
|
|
|
||
By:
|
/s/ GIL KLEMANN
|
|
||
|
Name:
|
Gil Klemann
|
|
|
|
Title:
|
Vice President
|
|
GS CAPITAL PARTNERS VI PARALLEL, L.P.
|
||
By:
|
GS Advisors VI, L.L.C. its General Partner
|
|
|
|
|
By:
|
/s/ GIL KLEMANN
|
|
|
Name:
|
Gil Klemann
|
|
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/ GIL KLEMANN
|
|
|
Name:
|
Gil Klemann
|
|
Title:
|
Vice President
|
|
|
In the Matter of:
|
CONSENT ORDER
|
|
|
TransUnion Interactive, Inc., Trans Union, LLC, and TransUnion
|
|
|
|
1.
|
The Bureau has jurisdiction over this matter under sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563 and 5565.
|
2.
|
Respondents have executed a “Stipulation and Consent to the Issuance of a Consent Order,” dated December 22, 2016 (Stipulation), which is incorporated by reference and is accepted by the Bureau. By this Stipulation, Respondents have consented to the issuance of this Consent Order by the Bureau under sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563 and 5565, without admitting or denying the findings of fact or conclusions of law, except that Respondents admit the facts necessary to establish the Bureau’s jurisdiction over Respondents and the subject matter of this action.
|
3.
|
The following definitions apply to this Consent Order:
|
a.
|
“Affected Consumers” are the approximately 700,000 consumers identified by the Bureau and Respondents who were enrolled in the TUCM Product through a Negative Option offer during the Relevant Period, and then cancelled their subscriptions within two billing cycles of enrollment without receiving a refund of fees paid.
|
b.
|
“Board” means TU’s duly-elected and acting Board of Directors.
|
c.
|
“Clearly and prominently” means “clearly and conspicuously” such that the required disclosure is difficult to miss (
i.e
., easily noticeable) and easily understandable by ordinary consumers, including in all the following ways:
|
i.
|
In textual communications (
e.g.
, printed publications or words displayed on the screen of an electronic device for which the communication was designed), the disclosure must be of a type
|
ii.
|
In communications disseminated orally or through audible means (
e.g
., radio or streaming audio), the disclosure must be delivered in a volume, speed, and cadence sufficient for an ordinary consumer to hear and comprehend it;
|
iii.
|
In communications disseminated through video means (
e.g
., television or streaming video), the disclosure must be in writing in a form consistent with subsection (i), and must appear on the screen for a duration sufficient for an ordinary consumer to read and comprehend it;
|
iv.
|
In communications made through interactive media such as the internet, online services, and software, the disclosure must be unavoidable and presented in a form consistent with subsection (i); a disclosure is not Clear and Conspicuous if a consumer must take any action, such as clicking on a hyperlink or hovering over an icon, to see it;
|
v.
|
In communications that contain both audio and visual portions, the disclosure must be presented simultaneously in both the audio and visual portions of the communication;
|
vi.
|
In all instances, the disclosure must be presented before the consumer incurs any financial obligation, and use diction and syntax that is understandable to a reasonable consumer
in each
language in which the representation that requires the disclosure appears; and
|
vii.
|
The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication with the consumer.
|
d.
|
“Consumer Reporting Agency” or “CRA” means a “consumer reporting agency,” as that term is defined in section 603(f) of the FCRA, 15 U.S.C. § 1681a(f).
|
e.
|
“Consumer Reports” means a “consumer report,” as that term is defined in section 603(d) of the FCRA, 15 U.S.C. § 1681a(d).
|
f.
|
“Credit-Related Products” means any product or service Respondents offer for sale directly to consumers, including but not limited to the TUCM Product, credit scores, credit reports, credit monitoring, or identity theft insurance or protection.
|
g.
|
“Consumer Complaint” means any expression of dissatisfaction by a consumer regarding Credit-Related Products.
|
h.
|
“Effective Date” means the date on which the Consent Order is issued.
|
i.
|
“Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegate.
|
j.
|
“Negative Option” means a category of commercial transactions in which a seller markets an offer for a trial period and the seller then interprets a customer’s failure to take an affirmative action, either to reject an offer or cancel an agreement, as assent or continuing assent to be charged for goods or services.
|
k.
|
“Assistant Deputy for Consumer Reporting” means the Assistant Deputy for Consumer Reporting for the Office of Supervision for the Consumer Financial Protection Bureau, or his/her delegate.
|
l.
|
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Respondents based on substantially the same facts as described in Section IV of this Consent Order.
|
m.
|
“Relevant Period” includes the period from July 21, 2011 until the Effective Date.
|
n.
|
“Respondents”
means TransUnion Interactive, Inc., TransUnion, LLC, TransUnion, and their successors and assigns.
|
o.
|
“TransUnion Credit Monitoring Product” or “TUCM Product” means the TransUnion Credit Monitoring bundled product that includes, among other things, a VantageScore credit score, credit report, and monthly subscription-based credit monitoring product, which was offered by TUI during the Relevant Period on a “free” or “$1” trial basis.
|
4.
|
TransUnion Interactive, Inc. (TUI), headquartered in Chicago, Illinois, is a wholly-owned subsidiary of TransUnion, LLC (TULLC), a limited liability company and Delaware corporation. TransUnion (TU) is a non-operating holding company that is the ultimate parent company of TUI and TULLC.
|
5.
|
TUI, TULLC, and TU are each a “covered person” as that term is defined by the CFPA, 12 U.S.C. § 5481(6).
|
6.
|
TULLC is a Consumer Reporting Agency and compiles and maintains financial, consumer, and commercial data across the nation and worldwide.
|
7.
|
TULLC uses credit information it has collected in consumer credit files to generate Consumer Reports. TULLC markets, sells, and provides Consumer Reports to commercial users, such as lenders, insurance companies, and potential employers.
|
8.
|
TUI generates, markets, and sells Credit-Related Products, such as credit scores, credit reports, and credit monitoring, directly to consumers using credit information from Consumer Reporting Agencies.
|
9.
|
During the Relevant Period, TUI has marketed and sold Credit-Related Products -including the TUCM Product - to consumers in various combinations. Consumers can purchase these products from TUI through a one-time transaction or through a subscription where the consumer pays a monthly fee to have continuous access to the product for as long as the consumer is enrolled in the subscription.
|
10.
|
During the Relevant Period, TUI has marketed and sold Credit-Related Products to consumers through a variety of online channels. This includes banner and display advertisements that appear on TU’s main website (TransUnion.com) and on popular websites such as auto.com, bankrate.com, Google, and Amazon; direct emails to certain consumers; and advertisements on TUI’s marketing affiliate websites.
|
11.
|
Credit scores are, among other things, numerical summaries designed to predict consumer payment behavior on a wide range of credit products. Many lenders and other commercial users rely, in part, on consumers’ credit scores when deciding whether to extend credit to a consumer.
|
12.
|
No single credit score or credit score model serves as the primary credit score for the marketplace. Lenders use a variety of credit scores, which vary by score provider, scoring model, and target industry.
|
13.
|
CRAs like TULLC, and other companies, apply various analytical scoring models to the information in consumer credit files to produce the credit scores that lenders and commercial users rely upon.
|
14.
|
Respondents generate a credit score
based on a scoring model that is different from the credit score models most often used by lenders. It is based on a model from VantageScore Solutions, LLC, which has offered three versions of its score since 2011. Respondents refer to this score as the TransUnion VantageScore.
|
15.
|
TULLC has marketed the TransUnion VantageScore to lenders and other commercial users. The vast majority of credit decisions made by lenders, however, are not based on VantageScore credit scores.
|
16.
|
In addition to selling credit scores to lenders and other commercial users, the TransUnion VantageScore credit scores are marketed and sold to consumers as a part of its TUCM Product bundle.
|
17.
|
Some of the online advertisements for the TUCM Product represent to consumers that the VantageScore consumers are purchasing is the same score used by lenders or other commercial users to determine creditworthiness. In reality, the credit score model used by any individual lender or other commercial user is highly unlikely to be the TransUnion VantageScore.
|
18.
|
For example, one such advertisement stated, “Make sure you know your Credit Score when looking for a car. Lenders typically will check your credit before buying and financing a car.” Another advertisement stated, “Make sure you know your Credit Score when looking for an apartment. Landlords may check your credit.”
|
19.
|
These advertisements implicitly represent that the VantageScore credit score that Respondents offer is the same score that “lenders” or “landlords” typically use to determine creditworthiness.
|
20.
|
Consumers who click on these advertisements are directed to landing pages, which usually contain additional claims, such as “With a good credit score, you may pay less with lower interest rates on mortgages, auto loans and credit cards.”
|
21.
|
Consumers are then directed through a series of enrollment pages where they enter personal information, including their credit card numbers, to obtain the TUCM Product, which includes the VantageScore credit score bundled with a subscription -based credit monitoring service and a credit report.
|
22.
|
There is no way for Respondents or a consumer to know which credit score model or particular credit score a lender may rely upon when making a credit decision related to that consumer.
|
23.
|
In many cases, there are significant and meaningful differences between the VantageScore credit scores marketed and sold to consumers and the variety of credit scores used by lenders.
|
24.
|
As a result, the scores marketed and sold to consumers often present an inaccurate picture of how lenders, the vast majority of which use other scores and data providers, assess consumer creditworthiness.
|
25.
|
In some instances, the advertisements contain disclosures, but they fail to adequately disclose that the VantageScore credit scores they are selling to consumers are not the scores lenders typically use.
|
26.
|
A significant number of the advertisements fail to include on the first web page viewed by consumers any disclosures about the nature of the credit scores it offers. Rather, the first time any disclosure appears is on the landing page, which the consumer accesses by clicking on a link in the initial advertisement.
|
27.
|
The disclosure, however, is not clear and conspicuous or easy to understand. Rather, the disclosure, which states “Lenders use many different credit scoring models. The score you get from us may not be the one your lender uses[,]” is typically buried at the bottom of the advertisement in fine print, far
|
28.
|
Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” acts or practices. 12 U.S.C. § 5536(a)(1)(B).
|
29.
|
As described in Paragraphs 4 through 27, in connection with the advertising, marketing, promoting, offering for sale, or sale of the TUCM Product, Respondents have represented, directly or indirectly, expressly or impliedly, that the credit scores they market and sell to consumers are the same scores typically used by lenders or other commercial users for credit decisions.
|
30.
|
In fact, the credit scores Respondents market and sell to consumers are not the same scores typically used by lenders or other commercial users for credit decisions.
|
31.
|
Thus, Respondents’ representations, as described in Paragraphs 4 through 27, are false or misleading and constitute deceptive acts or practices in violation of sections 1031(a) and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).
|
32.
|
During the Relevant Period the vast majority of the online advertisements also misrepresented to consumers that they could have access to “free” credit scores and “$1” credit reports.
|
33.
|
The advertisements routinely stated: “You’re Seconds Away From Your FREE Credit Score”; “See your FREE credit score”; and “Free Credit Score and $1 Report.”
|
34.
|
In fact, these promotions included a Negative Option billing structure: Consumers who signed up for the TUCM Product to obtain their “free” scores and “free” or “$1” reports received a bundled product that included a seven-day free trial of a credit monitoring service. After that seven-day period, consumers who did not cancel their subscription were automatically enrolled in the monthly
|
35.
|
TUI’s advertisements offering “free” or “$1” TUCM Products failed to adequately disclose the Negative Option feature of the product.
|
36.
|
The disclosure in the advertisements was neither clear nor conspicuous. In contrast to the bold, colorful headlines that touted the free scores and products, the disclosure was often displayed in fine print, in low contrast, and was generally placed in a less prominent location, such as the bottom of the webpage, grouped with other disclosures
.
|
37.
|
In some instances, consumers did not know they had been automatically enrolled in a Negative Option subscription plan for the TUCM Product until they discovered a charge - usually of $16.99 per month - on their bank or credit card statement.
|
38.
|
Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” acts or practices. 12 U.S.C. § 5536(a)(1)(B). As described in Paragraphs 32 through 37, in connection with the advertising, marketing, promotion, offering for sale, or sale of the TUCM Product, Respondents have represented, directly or indirectly, expressly or impliedly, that consumers could obtain their credit score or credit report for free or for a $1 fee.
|
39.
|
In fact, many consumers do not receive their credit score or credit report for free or for a $1 fee. Instead, Respondents’ offer, which is described in a disclosure that is neither clear nor conspicuous, is a Negative Option whereby consumers enroll in a subscription plan that involves a monthly fee unless they cancel during the trial period. Therefore, Respondents engaged in deceptive acts or practices in violation of sections 1031(a) and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).
|
40.
|
Respondents, their officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order
,
whether acting directly or indirectly, may not violate sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536 as follows, and must take the following affirmative actions
:
|
a.
|
Respondents, their officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of Credit-Related Products, may not misrepresent, or assist others in misrepresenting, expressly or impliedly:
|
i.
|
Any material fact about the cost or price of a Credit-Related Product, including that the product or service is free, discounted, a gift, a sample, a trial, a bonus, without cost or obligation, or words of similar import, denoting or implying the absence of an obligation on the part of the consumer to affirmatively act in order to avoid charges;
|
ii.
|
Any material fact about the timing or manner of any charge or bill, including the frequency or recurrence of any charge or bill, the purpose for which a consumer’s credit card or payment information will be used, the length of subscription, if applicable, the date(s) upon which the consumer will be charged or billed, and the deadline (by date or frequency) by which the consumer must act in order to stop any charges; or
|
iii.
|
Any other fact material to consumers, such as any material restrictions, limitations, or conditions of the product or service, or any material aspect of its performance, efficacy, nature, or central characteristics.
|
b.
|
Respondents, their officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of any Credit-Related Product:
|
i.
|
Before enrolling any consumer in a Credit-Related Product with a Negative Option feature, Respondents must obtain the express informed consent from the consumer, which consists of:
|
1.
|
For all Internet offers: a check box on the final order page that consumers must affirmatively check to select the Negative Option feature (
i.e
., it cannot be pre-checked), and which clearly and conspicuously states that the consumer agrees to be billed for the product unless the consumer cancels before the trial period expires;
|
2.
|
Immediately adjacent to the affirmative selection checkbox, Respondents must clearly and conspicuously disclose: (i) if applicable, the amount the consumer will be charged on a recurring (
e.g.
, monthly) basis if the product or service is not cancelled before the expiration of the trial period; and (ii) the date when the trial period expires and the amount the consumer will be billed; and
|
3.
|
The disclosure must not contain any information related to the benefits of the product.
|
ii.
|
Within a reasonable time period after the Effective Date as set forth in the Compliance Plan, must provide a simple mechanism for a consumer to immediately cancel the purchase of any Credit-Related Product, and stop billing and collecting payments for any recurring charge for any good or service. The mechanism must not be difficult, costly, confusing, or time consuming, and must, at a minimum, be substantially similar to the mechanism(s) the consumer used to initiate the purchase of any Credit-Related Product;
|
iii.
|
For all oral offers for a Credit-Related Product, in addition to disclosing the information identified in Subsections (a)(i)-(iii), and prior to obtaining any billing information from a consumer, obtain affirmative and unambiguous oral confirmation that the consumer:
|
1.
|
Consents to authorizing payment for such goods or services; and
|
2.
|
Understands the specific steps the consumer must take to prevent further charges.
|
c.
|
Respondents, their officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of Credit-Related Products, including
|
i.
|
Clearly and prominently disclose the nature of the credit score offered in each communication containing the offer and, for internet offers, on at least one page of the order process.
|
ii.
|
Ensure that the disclosure clearly and prominently discloses or substantially states the following:
|
1.
|
Like other credit scores offered to consumers, the credit score Respondent is selling is not likely to be the same score used by lenders or other commercial users for credit decisions; and
|
2.
|
There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions;
|
iii.
|
For written communications, including for internet offers, ensure that the disclosure contains a label in font size double that of the disclosure that says: “What You Need to Know.”
|
d.
|
Respondents, their officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, must take the following actions:
|
i.
|
Further develop and implement comprehensive policies and procedures for improving communication with consumers regarding Credit-Related Products, including, but not limited to, communications about the nature of the credit score, pricing structure, , and any other material terms, including:
|
1.
|
Regularly collecting, reviewing, and assessing key performance metrics, such as Consumer Complaints (both those it receives directly as well as those it receives through other channels such as the CFPB and State Attorneys General Offices, among
|
2.
|
Regularly collecting, reviewing, and assessing empirical data regarding consumer perceptions of Respondents’ advertising with regard to the nature of the credit score, the pricing structure, the effective cost of the product or service, and any other material terms; and
|
3.
|
Regularly reviewing and assessing advertisements to determine what modifications, if any, need to be made to the advertisements to improve consumer understanding of Credit-Related Products in light of empirical evidence.
|
41.
|
Within 90 days of the Effective Date, Respondents must submit to the Assistant Deputy for Consumer Reporting for review and determination of non-objection a comprehensive compliance plan designed to ensure that Respondents’ advertising practices comply with all applicable Federal consumer financial laws and the terms of this Consent Order (Compliance Plan). The Compliance Plan must include, at a minimum:
|
a.
|
Detailed steps for addressing each action required by Section V of this Consent Order; and
|
b.
|
Specific timeframes and deadlines for implementation of the steps described above.
|
42.
|
The Assistant Deputy for Consumer Reporting will have the discretion to make a determination of non-objection to the Compliance Plan or direct Respondents to revise it. If the Assistant Deputy for Consumer Reporting directs Respondents to revise the Compliance Plan, the Respondents must make the revisions and resubmit the Compliance Plan to the Assistant Deputy for Consumer Reporting within 30 days.
|
43.
|
After receiving notification that the Assistant Deputy for Consumer Reporting has made a determination of non-objection to the Compliance Plan, Respondents must implement and adhere to the steps, recommendations, deadlines, and timeframes outlined in the Compliance Plan.
|
44.
|
The Board, or a duly authorized committee thereof, must review all submissions (including plans, reports, programs, policies, and procedures) required by this Consent Order prior to submission to the Bureau.
|
45.
|
Although this Consent Order requires Respondents to submit certain documents for the review or non-objection by the Assistant Deputy for Consumer Reporting, the Board will have the ultimate responsibility for proper and sound management of Respondents and for ensuring that Respondents comply with Federal consumer financial law and this Consent Order.
|
46.
|
In each instance that this Consent Order requires the Board to ensure adherence to, or perform certain obligations of Respondents, the Board, or a duly authorized committee thereof, must:
|
a.
|
Authorize whatever actions are necessary for Respondents to fully comply with the Consent Order;
|
b.
|
Require timely reporting by management to the Board, or a duly authorized committee thereof, on the status of compliance obligations; and
|
c.
|
Require timely and appropriate corrective action to remedy any material non-compliance with any failures to comply with Board directives related to this Section.
|
47.
|
Within 10 days of the Effective Date, Respondents must reserve or deposit into a segregated deposit account $13,930,000 for the purpose of providing redress to Affected Consumers.
|
48.
|
Within 90 days of the Effective Date, Respondents must submit to the Assistant Deputy for Consumer Reporting for review and non-objection a comprehensive written plan for providing redress consistent with this Consent Order (Redress Plan). The Assistant Deputy for Consumer Reporting will have the discretion to make a determination of non-objection to the Redress Plan or direct Respondents to revise it. If the Assistant Deputy for Consumer Reporting directs Respondents to revise the Redress Plan, Respondents must make the revisions and resubmit the Redress Plan to the Assistant Deputy for Consumer Reporting within 30 days. After receiving notification that the Assistant Deputy for Consumer Reporting has made a determination of non-objection to the Redress Plan, Respondents must implement and adhere to the steps, recommendations, deadlines, and timeframes outlined in the Redress Plan.
|
49.
|
The Redress Plan must:
|
a.
|
Include a detailed description of the methodology used to determine the population of Affected Consumers and the appropriate redress for each Affected Consumer, the manner and form in which redress payments will be distributed to Affected Consumers, and procedures to issue and track redress payments;
Provide that Respondent shall pay all costs associated with administering redress and remediation as required by this section;
|
b.
|
Include the form of the letters (“Notification Letters”) and envelopes to be sent notifying consumers of the redress payments and a description of the process for sending the Notification Letters to consumers. Respondent must not include in any envelope containing a Notification Letter any materials other than the approved letter and redress checks.
|
c.
|
R
e
quire Respondent to make
reasonable attempts
to
obtain a current
address for
any
consumer
whose
Notification Lett
er
is
returned for any reason,
using
at
least the National Change of
Address
System
,
and
to promptl
y
re-mail all
returned l
e
tters to
current addresses.
If
a
r
e
dr
ess
check
for
any consumer
is return
ed
to Respondent
after such second
mailing, or if
a current
mailing
address cannot
be id
e
ntified using the National
Change
of Address
System,
Respond
e
nts must retain the
redress amount of such
consumer for
a
period of
one
hundr
e
d and
eighty (180)
da
ys
from th
e
dat
e
the
check was originally
mailed, during
which
p
er
iod
such amount
may b
e
claimed by such
consumer
upon
appropriate
proof
of identity.
|
d.
|
Require Respondents to submit a Redress Plan Report to the Assistant Deputy for Consumer Reporting with 90 days of completion of the Redress Plan. The Redress Plan Report must include an audit and assessment of Respondents’ compliance with the terms of the Redress Plan.
|
50.
|
After completing the Redress Plan, if the amount of the redress provided to Affected Consumers is less than $13,930,000 within 30 days of the completion of the Redress Plan, Respondents must pay the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions, the difference between the amount of redress provided to Affected Consumers and $13,930,000, so that such funds may be distributed to the U.S. Treasury as disgorgement.
|
51.
|
Respondents may not condition the provision of any redress to any Affected Consumer under this Order on that Affected Consumer waiving any right.
|
52.
|
Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law described in Section IV of this Consent Order, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Respondents must pay a civil money penalty of $3,000,000 to the Bureau.
|
53.
|
Within 10 days of the Effective Date, Respondents must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
|
54.
|
The civil money penalty paid under this Consent Order will be deposited in the Civil Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
|
55.
|
Respondents must treat the civil money penalty paid under this Consent Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Respondents may not:
|
a.
|
Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Consent Order; or
|
b.
|
Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Consent Order.
|
56.
|
To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Respondents may not argue that Respondents are entitled to, nor may Respondents benefit by, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action (Penalty Offset). If the court in any Related Consumer Action grants such a Penalty Offset, Respondents must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.
|
57.
|
In the event of any default on Respondents obligations to make payment under this Consent Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable.
|
58.
|
Respondents must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds may be returned to Respondents.
|
59.
|
Under 31 U.S.C. § 7701, Respondents, unless they already have done so, must furnish to the Bureau its taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Consent Order.
|
60.
|
Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Respondents must notify the Assistant Deputy for Consumer Reporting of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that Respondents paid or are required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid.
|
61.
|
Respondents must notify the Bureau of any development that may affect compliance obligations arising under this Consent Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Consent Order; the filing of any bankruptcy or insolvency proceeding by or against Respondents; or a change in
|
62.
|
Within 7 days of the Effective Date, Respondents must designate at least one telephone number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with Respondents.
|
63.
|
Respondents must report any change in the information required to be submitted under Paragraph 61 at least 30 days before the change or as soon as practicable after the learning about the change, whichever is sooner.
|
64.
|
Within 120 days of the Effective Date, and again one year after the Effective Date, Respondents must submit to the Assistant Deputy for Consumer Reporting an accurate written compliance progress report (Compliance Report) that has been approved by the Board or duly authorized committee thereof, which, at a minimum:
|
a.
|
Describes in detail the manner and form in which Respondents have complied with this Order; and
|
b.
|
Attaches a copy of each Order Acknowledgment obtained under Section XII, unless previously submitted to the Bureau.
|
65.
|
Within 30 days of the Effective Date, Respondents must deliver a copy of this Consent Order to each of their board members and executive officers, as well as to any managers, employees, affiliates, service providers, or other agents and representatives who have responsibilities related to the subject matter of the Consent Order.
|
66.
|
For five
years from the Effective Date, Respondents must deliver a copy of this Consent Order to any business entity resulting from any change in structure referred to in Section XI, any future board members and executive officers, as well as to any managers, employees, affiliates, service providers,
|
67.
|
Respondents must secure a signed and dated statement acknowledging receipt of a copy of this Consent Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001
et seq.
, within 30 days of delivery, from all persons receiving a copy of this Consent Order under this Section.
|
68.
|
Respondents must create, or if already created, must retain for at least five years from the Effective Date, the following business records:
|
a.
|
All documents and records necessary to demonstrate full compliance with each provision of this Consent Order, including all submissions to the Bureau
.
|
b.
|
All documents and records pertaining to the Redress Plan
,
described in Section VIII above.
|
c.
|
Copies of all internet (website), direct email, and print advertisements, sufficient to demonstrate the experience of consumers on each materially different version of each advertisement, including all order flow pages on which Respondents, whether acting directly or indirectly, advertise, promote, market, offer for sale, sell, or provide Credit Related Products, and any other marketing material, including, but not limited to, sales scripts and training materials relating to the Credit-Related Products, including any such materials used by a third party or affiliate on behalf of Respondents;
|
d.
|
For each internet (website), direct email, print advertisement, or other marketing material relating to Credit-Related Products: A record of the date(s) and locations or placements where the advertisement is publicly accessible to the extent that information is available; the number, type, and cost of all Credit-Related Products purchased through the advertisement; and any and all
|
e.
|
A record of all consumer perception assessments or testing and all documents created pursuant to the requirements of Section VI; and
|
f.
|
For each internet (website) advertisement, the number of visits to, unique visitors, impressions of, and clicks on the advertisement and any associated landing and flow page(s), to the extent that information is available; and the number of conversions, purchases of a Credit-Related Product, and consumers acquired through the advertisement.
|
g.
|
For each individual Affected Consumer: the consumer’s name, address, phone number, email address, amount paid, description of the Credit-Related Product purchased, the date on which the Credit-Related Product was purchased, and, if applicable, the date and reason consumer left the program.
|
h.
|
For each Credit-Related Product, accounting records showing the gross and net revenues generated by the Credit-Related Product.
|
i.
|
All Consumer Complaints and refund requests (whether received directly or indirectly, such as through a third party) relating to any Credit-Related Product, and any responses to those complaints or requests.
|
j.
|
Respondents must make the documents identified in Paragraph 68 available to the Bureau upon the Bureau’s request.
|
69.
|
Unless otherwise directed in writing by the Bureau, Respondents must provide all submissions, requests, communications, or other documents relating to this Consent Order in writing, with the
|
a.
|
By overnight courier (not the U.S. Postal Service), as follows:
|
b.
|
By first-class mail to the below address and contemporaneously by email to Enforcement_Compliance@cfpb.gov:
|
70.
|
Respondents must cooperate fully to help the Bureau determine the identity and location of each Affected Consumer. Respondents must provide such information in their or their agents’ possession or control within 30 days of receiving a written request from the Bureau.
|
71.
|
Within 30 days of receipt of a written request from the Bureau, Respondents must submit additional Compliance Reports or other requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents.
|
72.
|
Respondents must permit Bureau representatives to interview any employee or other person affiliated with Respondents who has agreed to such an interview. The person interviewed may have counsel present.
|
73.
|
Nothing in this Consent Order will limit the Bureau’s lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or other compulsory process.
|
74.
|
Respondents may seek a modification to non-material requirements of this Consent Order (
e.g
., reasonable extensions of time and changes to reporting requirements) by submitting a written request to the Assistant Deputy for Consumer Reporting.
|
75.
|
The Assistant Deputy for Consumer Reporting may, in his/her discretion, modify any non-material requirements of this Consent Order (
e.g
., reasonable extensions of time and changes to reporting requirements) if he/she determines good cause justifies the modification. Any such modification by the Assistant Deputy for Consumer Reporting must be in writing.
|
76.
|
The provisions of this Consent Order do not bar, estop, or otherwise prevent the Bureau, or any other governmental agency, from taking any other action against Respondents, except as described in Paragraph 77.
|
77.
|
The Bureau releases and discharges Respondents from all potential liability for law violations that the Bureau has or might have asserted based on the practices described in Section IV of this Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. The Bureau may use the practices described in this Consent Order in future enforcement actions against Respondents and their affiliates, including, without limitation, to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release does not preclude or affect any right of the Bureau
|
78.
|
This Consent Order is intended to be, and will be construed as, a final Consent Order issued under section 1053 of the CFPA, 12 U.S.C. § 5563, and expressly does not form, and may not be construed to form, a contract binding the Bureau or the United States.
|
79.
|
This Consent Order will terminate five years from the Effective Date or five years from the most recent date that the Bureau initiates an action alleging any violation of the Consent Order by Respondents. If such action is dismissed or the relevant adjudicative body rules that Respondents did not violate any provision of the Consent Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Consent Order will terminate as though the action had never been filed. The Consent Order will remain effective and enforceable until such time, except to the extent that any provisions of this Consent Order have been amended, suspended, waived, or terminated in writing by the Bureau or its designated agent.
|
80.
|
Calculation of time limitations will run from the Effective Date and be based on calendar days, unless otherwise noted.
|
81.
|
Should Respondents seek to transfer or assign all or part of its operations that are subject to this Consent Order, Respondents must, as a condition of sale, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Consent Order.
|
82.
|
The provisions of this Consent Order will be enforceable by the Bureau. For any violation of this Consent Order, the Bureau may impose the maximum amount of civil money penalties allowed under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c). In connection with any attempt by the Bureau to enforce this Consent Order in federal district court, the Bureau may serve Respondents wherever Respondents may be found and Respondents may not contest that court’s personal jurisdiction over Respondents.
|
83.
|
This Consent Order and the accompanying Stipulation contain the complete agreement between the parties. The parties have made no promises, representations, or warranties other than what is contained in this Consent Order and the accompanying Stipulation. This Consent Order and the accompanying Stipulation supersede any prior oral or written communications, discussions, or understandings.
|
84.
|
When a consumer is offered or provided a Credit-Related Product pursuant to the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681g or a state law regarding credit file security freezes, Respondents will follow any applicable requirements mandated by those laws in lieu of the requirements of Sections V and Section XIII of this Consent Order.
|
85.
|
Nothing in this Consent Order or the accompanying Stipulation may be construed as allowing Respondents, their Boards,
officers, or employees to violate any law, rule, or regulation.
|
|
STIPULATION AND CONSENT
TO THE ISSUANCE OF
A CONSENT ORDER
|
In the matter of:
|
|
|
|
TransUnion Interactive, Inc., TransUnion, LLC, and TransUnion
|
|
|
|
1.
|
The Bureau has jurisdiction over this matter under sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563, 5565.
|
2.
|
Respondents agree to the issuance of the Consent Order, without admitting or denying any of the findings of fact or conclusions of law, except that Respondents admit the facts necessary to establish the Bureau’s jurisdiction over Respondents and the subject matter of this action.
|
3.
|
Respondents agree that the Consent Order will be deemed an “order issued with the consent of the person concerned” under 12 U.S.C. § 5563(b)(4), and agrees that the Order will become a final order, effective upon issuance, and will be fully enforceable by the Bureau under 12 U.S.C. §§ 5563(d)(1) and 5565.
|
4.
|
Respondents voluntarily enter into this Stipulation and Consent to the Issuance of a Consent Order.
|
5.
|
The Consent Order resolves only Respondents’ potential liability for law violations that the Bureau asserted or might have asserted based on the practices described in Section IV of the Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. Respondents acknowledge that no promise or representation has been made by the Bureau or any employee, agent, or representative of the Bureau, about any liability outside of this action that may have arisen or may arise from the facts underlying this action or immunity from any such liability.
|
6.
|
Respondents agree that the facts described in Section IV of the Consent Order will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding before the Bureau to enforce the Consent Order, or in any subsequent civil litigation by the Bureau to enforce the Consent Order or its rights to any payment or monetary judgment under the Consent Order.
|
7.
|
The terms and provisions of this Stipulation and the Consent Order will be binding upon, and inure to the benefit of, the parties hereto and their successors in interest.
|
8.
|
Respondents agree that the Bureau may present the Consent Order to the Bureau Director for signature and entry without further notice.
|
9.
|
Respondents, by consenting to this Stipulation, waives:
|
a.
|
Any right to service of the Consent Order, and agree that issuance of the Consent Order will constitute notice to the Respondents of its terms and conditions;
|
b.
|
Any objection to the jurisdiction of the Bureau, including, without limitation, under section 1053 of the CFPA, 12 U.S.C. § 5563;
|
c.
|
The rights to all hearings under the statutory provisions under which the proceeding is to be or has been instituted; the filing of proposed findings of fact and conclusions of law; proceedings before, and a recommended decision by, a hearing officer; all post-hearing procedures; and any other procedural right available under section 1053 of the CFPA, 12 U.S.C. § 5563, or 12 CFR Part 1081;
|
d.
|
The right to seek any administrative or judicial review of the Consent Order;
|
e.
|
Any claim for fees, costs or expenses against the Bureau, or any of its agents or employees, and any other governmental entity, related in any way to this enforcement matter or the Consent Order, whether arising under common law or under the terms of any statute, including, but not limited to the Equal Access to Justice Act and the Small Business Regulatory Enforcement Fairness Act of 1996; for these purposes, Respondents agree that Respondents are not the prevailing parties in this action because the parties have reached a good faith settlement;
|
f.
|
Any other right to challenge or contest the validity of the Consent Order;
|
g.
|
Such provisions of the Bureau’s rules or other requirements of law as may be construed to prevent any Bureau employee from participating in the preparation of, or advising the Director as to, any order, opinion, finding of fact, or conclusion of law to be entered in connection with this Stipulation or the Consent Order; and
|
h.
|
Any right to claim bias or prejudgment by the Director based on the consideration of or discussions concerning settlement of all or any part of the proceeding.
|
Subsidiary
|
Jurisdiction of Organization
|
||
TransUnion Intermediate Holdings, Inc.
|
DE
|
||
TransUnion Risk and Alternative Data Solutions, Inc.
|
DE
|
||
TransUnion Digital LLC
|
DE
|
||
Trans Union LLC
|
DE
|
||
Trans Union International, Inc.
|
DE
|
||
Source USA Insurance Agency, Inc.
|
IL
|
||
TransUnion International Holdings LLC
|
DE
|
||
Diversified Data Development Corporation
|
CA
|
||
Financial Healthcare Systems, LLC
|
CO
|
||
TransUnion Teledata LLC
|
OR
|
||
Decision Systems, Inc.
|
GA
|
||
TransUnion Exchange Corporation
|
CA
|
||
TransUnion Reverse Exchange LLC
|
DE
|
||
TransUnion Intelligence LLC
|
NV
|
||
TransUnion Rental Screening Solutions, Inc.
|
DE
|
||
Credit Retriever LLC
|
DE
|
||
Verifacts LLC
|
DE
|
||
INSDEC LLC
|
DE
|
||
TransUnion Consumer Solutions LLC
|
DE
|
||
Trans Union Content Solutions LLC
|
DE
|
||
TransUnion Interactive, Inc.
|
DE
|
||
Title Insurance Services Corporation
|
SC
|
||
TransUnion Marketing Solutions, Inc.
|
IL
|
||
Trans Union Real Estate Services, Inc.
|
DE
|
||
Visionary Systems, Inc.
|
GA
|
||
Worthknowing, Inc.
|
GA
|
||
TransUnion Financing Corporation
|
DE
|
||
TransUnion Healthcare, Inc.
|
TX
|
||
TransUnion Risk Advisory, Inc.
|
DE
|
||
L2C, Inc.
|
DE
|
||
Link Marketing, Inc.
|
DE
|
||
Link2credit, Inc.
|
DE
|
||
DHI Investments LLC
|
NJ
|
||
TransUnion Data Solutions LLC
|
DE
|
||
Auditz, LLC
|
DE
|
||
RTech Healthcare Revenue Technologies, Inc.
|
NY
|
||
TransUnion ITC Ltd.
|
Botswana
|
||
Credit Reference Bureau Africa (Pty) Ltd.
|
Botswana
|
||
Collection Africa (Pty) Ltd.
|
Botswana
|
||
Crivo Sistemas em Informatica S.A.
|
Brazil
|
Moussoro Participacoes Ltda.
|
Brazil
|
||
Data Solutions Servicos de Informatica Ltda.
|
Brazil
|
||
Trans Union of Canada, Inc.
|
Canada
|
||
Trans Union Chile, S.A.
|
Chile
|
||
Databusiness S.A.
|
Chile
|
||
TransUnion Information Technology Ltd.
|
China
|
||
TransUnion Colombia Ltda.
|
Colombia
|
||
Central de Information Financiera, S.A.
|
Colombia
|
||
Trans Union Costa Rica, S.A.
|
Costa Rica
|
||
Centro de Informacion y Estudios Estrategicos Empresariales S.A.
|
Dominican Rep.
|
||
TransUnion S.A.
|
Dominican Rep.
|
||
Centro de Operaciones y Servicios de Informacion Estrategica, S.A.
|
Dominican Rep.
|
||
TransUnion El Salvador, S.A. de C.V.
|
El Salvador
|
||
Trans Union Guatemala, S.A.
|
Guatemala
|
||
Soluciones de Informatica de Centroamerica (SICE), S.A.
|
Guatemala
|
||
Trans Union Honduras Buro de Credito, S.A.
|
Honduras
|
||
TransUnion Limited
|
Hong Kong
|
||
TransUnion Asia Ltd.
|
Hong Kong
|
||
TransUnion Information Services Limited
|
Hong Kong
|
||
Credit Information Services Limited
|
Hong Kong
|
||
Trans Union Software Services Private Limited
|
India
|
||
TransUnion CIBIL Limited
|
India
|
||
TransUnion Global Technology Center LLP
|
India
|
||
Trustev Limited
|
Ireland
|
||
Trans Union (Israel) Ltd.
|
Israel
|
||
TransUnion Jamaica Limited
|
Jamaica
|
||
TransUnion Kenya Limited
|
Kenya
|
||
Credit Reference Bureau (Holdings) Limited
|
Kenya
|
||
Regional Data Systems Limited
|
Kenya
|
||
Credit Information Systems Company Limited
|
Kenya
|
||
Collection Africa Ltd.
|
Kenya
|
||
Credit Reference Bureau Africa Ltd.
|
Kenya
|
||
Credit Reference Bureau Africa Ltd.
|
Malawi
|
||
Credit Reference Bureau Africa Ltd.
|
Mauritius
|
||
STS Vail Beheeren Administracion S. DE. R.L. DE C.V.
|
Mexico
|
||
TransUnion Soluciones de Informacion, S de R.L de C.V.
|
Mexico
|
||
Credit Reference Bureau Africa Ltd.
|
Mozambique
|
||
TransUnion Credit Bureau Namibia (Pty) Ltd.
|
Namibia
|
||
Beheer en Beleggingsmaatchapij Stivaco B.V.
|
Netherlands
|
||
Vail Systemen Groep, B.V.
|
Netherlands
|
||
TransUnion Netherlands I, B.V.
|
Netherlands
|
||
TransUnion Netherlands II, B.V.
|
Netherlands
|
||
TransUnion Nicaragua, S.A.
|
Nicaragua
|
Trans Union Central America, S.A.
|
Panama
|
||
TransUnion Information Solutions, Inc.
|
Philippines
|
||
Trans Union de Puerto Rico, Inc.
|
Puerto Rico
|
||
TransUnion Rwanda Ltd.
|
Rwanda
|
||
TransUnion Africa Holdings (Pty) Ltd.
|
South Africa
|
||
TransUnion Credit Bureau (Pty) Ltd.
|
South Africa
|
||
TransUnion Africa (Pty) Ltd.
|
South Africa
|
||
TransUnion Analytic and Decision Services (Pty) Ltd.
|
South Africa
|
||
TransUnion CGS (Pty) Ltd.
|
South Africa
|
||
TransUnion Auto Information Solutions (Pty) Ltd.
|
South Africa
|
||
Autolocator (Pty) Ltd.
|
South Africa
|
||
TransUnion ITC (Pty) Ltd.
|
Swaziland
|
||
Credit Reference Bureau Africa Ltd.
|
Tanzania
|
||
Collection Africa Ltd.
|
Tanzania
|
||
Credit Reporting Services Limited
|
Trinidad & Tobago
|
||
Credit Reference Bureau Africa Ltd.
|
Uganda
|
||
TransUnion Company of Vietnam Ltd.
|
Vietnam
|
||
Credit Reference Bureau Africa Ltd.
|
Zambia
|
||
Trans Union (Private) Ltd.
|
Zimbabwe
|
1)
|
Registration Statement (Form S-3 No. 333-213542) of TransUnion,
|
2)
|
Registration Statement (Form S-8 No. 333-207090) pertaining to the TransUnion Holding Company, Inc. 2012 Management Equity Plan of TransUnion, and
|
3)
|
Registration Statement (Form S-8 No. 333-205239) pertaining to the TransUnion 2015 Omnibus Incentive Plan and the TransUnion 2015 Employee Stock Purchase Plan;
|
|
|
|
/s/James M. Peck
|
||
Name:
|
|
James M. Peck
|
Title:
|
|
Principal Executive Officer
|
|
|
|
/s/Samuel A. Hamood
|
||
Name:
|
|
Samuel A. Hamood
|
Title:
|
|
Principal Financial Officer
|
(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 the Company.
|
|
|
|
/s/James M. Peck
|
||
Name:
|
|
James M. Peck
|
Title:
|
|
Chief Executive Officer
|
|
||
Date: February 15, 2017
|
||
|
||
/s/Samuel A. Hamood
|
||
Name:
|
|
Samuel A. Hamood
|
Title:
|
|
Chief Financial Officer
|