UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended ~~September~~June 30, ~~2018~~2019

- OR -



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

For the transition period from to

Commission file number:

001-37470

TransUnion

(Exact name of registrant as specified in its charter)



Delaware		61-1678417
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)



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

~~312-985-2000~~312-985-2000

(Registrants’ telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Common Stock,	$0.01 par value	TRU	New York Stock Exchange

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



☒	x ~~YES~~ Yes	☐	o NO No

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



☒	x ~~YES~~ Yes	☐	o NO No

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



☒	xLarge ~~accelerated filer~~ Accelerated Filer	☐	¨Accelerated ~~filer~~ Filer
☐	¨ ~~Non-accelerated filer~~ Non-Accelerated Filer	☐	¨Smaller ~~reporting company~~ Reporting Company
		☐	¨Emerging ~~growth company~~ Growth Company



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

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



☐	o ~~YES~~ Yes	☒	x NO No

As of ~~September~~June 30, ~~2018,~~2019, there were ~~185.3~~187.8 million shares of TransUnion common stock outstanding.

TRANSUNION

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED ~~SEPTEMBER~~JUNE 30,~~2018~~2019

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TRANSUNION AND SUBSIDIARIES

Consolidated Balance Sheets

(in millions, except per share data)


	September 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
	Unaudited						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	226.6		$	115.8		$	194.7		$	187.4
Trade accounts receivable, net of allowance of $13.7 and $9.9	426.1			326.7
Trade accounts receivable, net of allowance of $16.3 and $13.5							489.2			456.8
Other current assets	160.6			146.2			185.7			136.5
Current assets of discontinued operations	72.7			—			—			60.8
Total current assets	886.0			588.7			869.6			841.5
Property, plant and equipment, net of accumulated depreciation and amortization of $351.6 and $299.3	198.2			198.6
Goodwill, net	3,339.0			2,368.8
Other intangibles, net of accumulated amortization of $1,141.4 and $993.6	2,570.1			1,825.8
Property, plant and equipment, net of accumulated depreciation and amortization of $410.6 and $366.2							215.1			220.3
Goodwill							3,352.5			3,293.6
Other intangibles, net of accumulated amortization of $1,347.0 and $1,206.7							2,449.4			2,548.1
Other assets	148.0			136.6			240.7			136.3
Total assets	$	7,141.3		$	5,118.5		$	7,127.3		$	7,039.8
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	159.1		$	131.3		$	178.7		$	169.9
Short-term debt and current portion of long-term debt	64.2			119.3			86.4			71.7
Other current liabilities	301.1			207.8			310.6			284.1
Current liabilities of discontinued operations	21.3			—			—			22.8
Total current liabilities	545.7			458.4			575.7			548.5
Long-term debt	4,057.6			2,345.3			3,831.5			3,976.4
Deferred taxes	529.6			419.4			461.3			478.0
Other liabilities	44.3			70.8			150.3			54.7
Total liabilities	5,177.2			3,293.9			5,018.8			5,057.6
Stockholders’ equity:
Common stock, $0.01 par value; 1.0 billion shares authorized at September 30, 2018 and December 31, 2017, 189.5 million and 187.4 million shares issued at September 30, 2018 and December 31, 2017, respectively, and 185.3 million shares and 183.2 million shares outstanding as of September 30, 2018 and December 31, 2017, respectively	1.9			1.9
Common stock, $0.01 par value; 1.0 billion shares authorized at June 30, 2019 and December 31, 2018, 192.6 million and 190.0 million shares issued at June 30, 2019 and December 31, 2018, respectively, and 187.8 million shares and 185.7 million shares outstanding as of June 30, 2019 and December 31, 2018, respectively							1.9			1.9
Additional paid-in capital	1,923.9			1,863.5			1,976.4			1,947.3
Treasury stock at cost; 4.2 million shares at September 30, 2018 and December 31, 2017, respectively	(139.5		)	(138.8		)
Treasury stock at cost; 4.8 million and 4.2 million shares at June 30, 2019 and December 31, 2018, respectively							(177.1		)	(139.9		)
Retained earnings	275.2			137.4			506.1			363.1
Accumulated other comprehensive loss	(193.9		)	(135.3		)	(296.2		)	(282.7		)
Total TransUnion stockholders’ equity	1,867.6			1,728.7			2,011.1			1,889.7
Noncontrolling interests	96.5			95.9			97.4			92.5
Total stockholders’ equity	1,964.1			1,824.6			2,108.5			1,982.2
Total liabilities and stockholders’ equity	$	7,141.3		$	5,118.5		$	7,127.3		$	7,039.8

See accompanying notes to unaudited consolidated financial statements.

TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(in millions, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenue	$	661.9		$	563.1		$	1,281.2		$	1,100.5
Operating expenses
Cost of services (exclusive of depreciation and amortization below)	216.2			189.1			424.3			371.4
Selling, general and administrative	196.7			171.6			392.4			334.9
Depreciation and amortization	89.2			68.0			182.7			134.6
Total operating expenses	502.2			428.7			999.4			840.9
Operating income	159.7			134.4			281.8			259.6
Non-operating income and (expense)
Interest expense	(45.2		)	(25.9		)	(90.2		)	(48.5		)
Interest income	1.8			1.4			3.3			2.1
Earnings from equity method investments	3.3			2.9			7.1			5.2
Other income and (expense), net	26.7			(39.7		)	19.9			(42.3		)
Total non-operating income and (expense)	(13.4		)	(61.3		)	(59.9		)	(83.5		)
Income from continuing operations before income taxes	146.3			73.1			221.8			176.1
Provision for income taxes	(39.4		)	(15.8		)	(39.9		)	(43.5		)
Income from continuing operations	107.0			57.3			181.9			132.6
Discontinued operations, net of tax	(3.0		)	—			(4.6		)	—
Net income	104.0			57.3			177.3			132.6
Less: net income attributable to the noncontrolling interests	(2.5		)	(2.3		)	(4.9		)	(4.5		)
Net income attributable to TransUnion	$	101.5		$	55.0		$	172.4		$	128.1

Income from continuing operations	$	107.0		$	57.3		$	181.9		$	132.6
Less: income from continuing operations attributable to noncontrolling interests	(2.5		)	(2.3		)	(4.9		)	(4.5		)
Income from continuing operations attributable to TransUnion	104.5			55.0			177.0			128.2
Discontinued operations, net of tax	(3.0		)	—			(4.6		)	—
Net income attributable to TransUnion	$	101.5		$	55.0		$	172.4		$	128.1

Basic earnings per common share from:
Income from continuing operations attributable to TransUnion	$	0.56		$	0.30		$	0.95		$	0.70
Discontinued operations, net of tax	(0.02		)	—			(0.02		)	—
Net Income attributable to TransUnion	$	0.54		$	0.30		$	0.92		$	0.70
Diluted earnings per common share from:
Income from continuing operations attributable to TransUnion	$	0.55		$	0.29		$	0.93		$	0.67
Discontinued operations, net of tax	(0.02		)	—			(0.02		)	—
Net Income attributable to TransUnion	$	0.53		$	0.29		$	0.90		$	0.67
Weighted-average shares outstanding:
Basic	187.5			184.3			187.1			184.0
Diluted	191.3			190.8			191.2			190.5

Three Months Ended
September 30, Nine Months Ended
September 30,

2018
2017 2018 2017
Revenue
$ 603.6

$ 498.0
$ 1,704.1
$ 1,427.7
Operating expenses

Cost of services (exclusive of depreciation and amortization below)
207.5

169.3
579.0
472.3
Selling, general and administrative
189.8

142.2
524.6
436.0
Depreciation and amortization
84.2

59.9
218.8
176.2
Total operating expenses
481.5

371.4
1,322.3
1,084.5
Operating income
122.1

126.6
381.7
343.2
Non-operating income and (expense)

Interest expense
(44.0 )
(21.7 ) (92.5 ) (65.8 )
Interest income
1.3

1.5
3.5
4.2
Earnings from equity method investments
3.2

2.6
8.4
6.3
Other income and (expense), net
(3.2 )
(4.8 ) (45.6 ) (15.6 )
Total non-operating income and (expense)
(42.7 )
(22.4 ) (126.1 ) (70.9 )
Income from continuing operations before income taxes
79.4

104.2
255.6
272.3
Provision for income taxes
(28.6 )
(32.3 ) (72.1 ) (68.7 )
Income from continuing operations 50.8
71.9
183.5
203.6
Discontinued operations, net of tax (1.4 ) —
(1.4 ) —
Net income
49.4

71.9
182.0
203.6
Less: net income attributable to the noncontrolling interests
(3.1 )
(3.1 ) (7.6 ) (7.6 )
Net income attributable to TransUnion
$ 46.3

$ 68.8
$ 174.4
$ 196.0

Income from continuing operations $ 50.8
$ 71.9
$ 183.5
$ 203.6
Less: income from continuing operations attributable to noncontrolling interests (3.1 ) (3.1 ) (7.6 ) (7.6 )
Income from continuing operations attributable to TransUnion 47.7
68.8
175.9
196.0
Discontinued operations, net of tax (1.4 ) —
(1.4 ) —
Net income attributable to TransUnion $ 46.3
$ 68.8
$ 174.4
$ 196.0

Basic earnings per common share from:

Income from continuing operations attributable to TransUnion $ 0.26
$ 0.38
$ 0.95
$ 1.08
Discontinued operations, net of tax (0.01 ) —
(0.01 ) —
Net Income attributable to TransUnion $ 0.25
$ 0.38
$ 0.95
$ 1.08
Diluted earnings per common share from:
Income from continuing operations attributable to TransUnion $ 0.25
$ 0.36
$ 0.92
$ 1.03
Discontinued operations, net of tax (0.01 ) —
(0.01 ) —
Net Income attributable to TransUnion $ 0.24
$ 0.36
$ 0.91
$ 1.03
Weighted-average shares outstanding:

Basic
185.1
182.2
184.4
182.3
Diluted
191.2
189.2
190.8
189.8

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

See accompanying notes to unaudited consolidated financial statements.

TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

(in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net income	$	49.4		$	71.9		$	182.0		$	203.6		$	104.0		$	57.3		$	177.3		$	132.6
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustment	(7.7		)	1.8			(73.6		)	28.2			(42.5		)	(80.9		)	23.9			(65.9		)
Expense for income taxes	(0.5		)	(0.2		)	(0.4		)	(0.6		)
(Expense) benefit for income taxes													(0.1		)	0.7			(0.3		)	0.1
Foreign currency translation, net	(8.2		)	1.6			(74.0		)	27.6			(42.6		)	(80.2		)	23.6			(65.8		)
Hedge instruments:
Net change on interest rate cap	1.5			0.8			15.6			0.7			(7.1		)	4.2			(11.7		)	14.1
Amortization of accumulated loss	—			0.1			—			0.3
Expense for income taxes	(0.4		)	(0.4		)	(3.9		)	(0.4		)
Net change on interest rate swap													(24.3		)	—			(38.1		)	—
Cumulative effect of adopting ASU 2017-12													—			—			1.0			—
Benefit (expense) for income taxes													7.9			(1.0		)	12.4			(3.5		)
Hedge instruments, net	1.1			0.5			11.7			0.6			(23.5		)	3.2			(36.4		)	10.6
Available-for-sale debt securities:
Net unrealized loss	—			—			(0.1		)	(0.2		)	—			(0.1		)	—			(0.1		)
Benefit for income taxes	0.1			—			0.1			0.1			—			—			—			—
Available-for-sale debt securities, net	0.1			—			—			(0.1		)	—			(0.1		)	—			(0.1		)
Total other comprehensive income (loss), net of tax	(7.0		)	2.1			(62.3		)	28.1			(66.1		)	(77.1		)	(12.8		)	(55.3		)
Comprehensive income	42.4			74.0			119.7			231.7			37.9			(19.8		)	164.5			77.3
Less: comprehensive income attributable to noncontrolling interests	(2.5		)	(2.0		)	(3.9		)	(8.8		)
Comprehensive income attributable to TransUnion	$	39.9		$	72.0		$	115.8		$	222.9
Less: comprehensive income (loss) attributable to noncontrolling interests													(3.2		)	0.9			(5.7		)	(1.4		)
Comprehensive income (loss) attributable to TransUnion													$	34.7		$	(18.9	)	$	158.8		$	75.9

See accompanying notes to unaudited consolidated financial statements.

TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(in millions)



	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income	$	177.3		$	132.6
Add: loss from discontinued operations, net of tax	4.6			—
Income from continuing operations	181.9			132.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	182.7			134.6
Loss on debt financing transactions	0.8			11.9
Amortization and (gain) loss on fair value of hedge instrument	—			(0.7		)
Net (gain) impairment from adjustments to the carrying value of investments in nonconsolidated affiliates	(22.6		)	1.4
Equity in net income of affiliates, net of dividends	1.4			(0.2		)
Deferred taxes	0.1			(8.9		)
Amortization of discount and deferred financing fees	3.2			1.6
Stock-based compensation	16.6			21.3
Payment of contingent obligation	(0.4		)	—
Provision for losses on trade accounts receivable	5.6			3.4
Other	1.2			1.8
Changes in assets and liabilities:
Trade accounts receivable	(32.6		)	(46.6		)
Other current and long-term assets	(34.8		)	(17.4		)
Trade accounts payable	6.1			25.9
Other current and long-term liabilities	(0.9		)	(30.2		)
Cash provided by operating activities of continuing operations	308.3			230.5
Cash used in operating activities of discontinued operations	(7.3		)	—
Cash provided by operating activities	301.0			230.5
Cash flows from investing activities:
Capital expenditures	(88.0		)	(70.4		)
Proceeds from sale of trading securities	3.3			1.8
Purchases of trading securities	(1.7		)	(1.8		)
Proceeds from sale of other investments	10.5			4.5
Purchases of other investments	(19.8		)	(14.1		)
Acquisitions and purchases of noncontrolling interests, net of cash acquired	(45.9		)	(1,801.2		)
Proceeds from disposals of discontinued operations, net of cash on hand	40.3			(0.5		)
Other	(6.5		)	—
Cash used in investing activities	(107.8		)	(1,881.7		)
Cash flows from financing activities:
Proceeds from Senior Secured Term Loan B-4	—			1,000.0
Proceeds from Senior Secured Term Loan A-2	—			800.0
Proceeds from senior secured revolving line of credit	—			125.0
Payments of senior secured revolving line of credit	—			(135.0		)
Repayments of debt	(133.9		)	(24.2		)
Debt financing fees	—			(33.6		)
Proceeds from issuance of common stock and exercise of stock options	12.8			14.1
Dividends to shareholders	(28.5		)	(13.8		)
Distributions to noncontrolling interests	(0.8		)	(0.1		)
Employee taxes paid on restricted stock units recorded as treasury stock	(36.9		)	(0.5		)
Cash (used in) provided by financing activities	(187.3		)	1,731.9
Effect of exchange rate changes on cash and cash equivalents	1.4			(4.2		)
Net change in cash and cash equivalents	7.3			76.5
Cash and cash equivalents, beginning of period	187.4			115.8
Cash and cash equivalents, end of period	$	194.7		$	192.3

Nine Months Ended September 30,
2018
2017
Cash flows from operating activities:

Net income $ 182.0

$ 203.6
Add: loss from discontinued operations, net of tax 1.4

—
Income from continuing operations 183.5

203.6
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 218.8

176.2
Loss on debt financing transactions 12.0

10.5
Amortization and (gain) loss on fair value of hedge instrument (0.7 )
0.5
Impairment of Cost Method Investment, net 1.5
—
Equity in net income of affiliates, net of dividends (3.1 )
(5.5 )
Deferred taxes (17.9 )
(14.1 )
Amortization of discount and deferred financing fees 3.2

2.0
Stock-based compensation 36.9

23.1
Payment of contingent obligation (0.2 ) (2.2 )
Provision for losses on trade accounts receivable 6.3

3.3
Other 3.0

(2.1 )
Changes in assets and liabilities:

Trade accounts receivable (79.4 )
(40.1 )
Other current and long-term assets (5.5 )
(37.8 )
Trade accounts payable 8.3

10.2
Other current and long-term liabilities 43.6

19.1
Cash provided by operating activities of continuing operations 410.3

346.7
Cash used in operating activities of discontinued operations (0.9 )
—
Cash provided by operating activities 409.4

346.7
Cash flows from investing activities:

Capital expenditures (118.3 )
(91.0 )
Proceeds from sale of trading securities 1.8

2.5
Purchases of trading securities (2.0 )
(1.6 )
Proceeds from sale of other investments 15.9

54.4
Purchases of other investments (22.7 )
(42.1 )
Acquisitions and purchases of noncontrolling interests, net of cash acquired (1,800.4 )
(70.7 )
Acquisition-related deposits —
(1.0 )
Other (1.4 )
0.3
Cash used in investing activities of continuing operations (1,927.1 )
(149.2 )
Cash used in investing activities of discontinued operations (0.1 ) —
Cash used in investing activities (1,927.2 ) (149.2 )
Cash flows from financing activities:

Proceeds from Senior Secured Term Loan B-4 1,000.0

—
Proceeds from Senior Secured Term Loan A-2 800.0

33.4
Proceeds from senior secured revolving line of credit 125.0

105.0
Payments of senior secured revolving line of credit (210.0 )
(105.0 )
Repayments of debt (39.3 )
(25.0 )
Debt financing fees (33.8 )
(12.6 )
Proceeds from issuance of common stock and exercise of stock options 23.3

22.1
Dividends to shareholders (27.7 )
—
Treasury stock purchased —

(133.5 )
Distributions to noncontrolling interests (2.8 )
(3.1 )
Payment of contingent obligation —
(8.2 )
Other (0.8 )
—
Cash provided by (used in) financing activities 1,633.9

(126.9 )
Effect of exchange rate changes on cash and cash equivalents (5.3 )
0.5
Net change in cash and cash equivalents 110.8

71.1
Cash and cash equivalents, beginning of period 115.8

182.2
Cash and cash equivalents, end of period $ 226.6

$ 253.3
As a result of displaying amounts in millions, rounding differences may exist in the table above.

See accompanying notes to unaudited consolidated financial statements.

TRANSUNION AND SUBSIDIARIES

Consolidated ~~Statement~~Statements of Stockholders’ Equity (Unaudited)

(in millions)


	Common Stock			Paid-In Capital			Treasury Stock			Retained Earnings				Accumulated Other Comprehensive Loss			Noncontrolling Interests				Total				Common Stock			Paid-In Capital			Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Noncontrolling Interests				Total
	Shares	Amount								Retained Earnings			Shares				Noncontrolling Interests			Amount								Paid-In Capital			Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Noncontrolling Interests				Total
Balance, December 31, 2017	183.2	$	1.9	Paid-In Capital		$	Treasury Stock	1,863.5		$	(138.8	)		Accumulated Other Comprehensive Loss	$	137.4		$	(135.3	)	Total			$	95.9	$	1,824.6	183.2		$	1.9			$	1,863.5			$	(138.8	)		$	137.4			$	(135.3	)		$	95.9	$	1,824.6
Net income	—	—		—			—			174.4				—			7.6				182.0				—	—		—			—				73.1				—				2.3				75.4
Other comprehensive income	—	—		—			—			—				(58.6		)	(3.7		)		(62.3		)		—	—		—			—				—				21.7				0.1				21.8
Distributions to noncontrolling interests	—	—		—			—			—				—			(3.5		)		(3.5		)
Noncontrolling interests of acquired businesses	—	—		—			—			—				—			0.3				0.3
Stock-based compensation	—	—		35.3			—			—				—			—				35.3				—	—		8.9			—				—				—				—				8.9
Employee share purchase plan	0.2	—		11.3			—			—				—			—				11.3				0.1	—		4.8			—				—				—				—				4.8
Exercise of stock options	1.9	—		13.7			—			—				—			—				13.7				0.7	—		5.3			—				—				—				—				5.3
Treasury stock purchased	—	—		—			(0.8		)	—				—			—				(0.8		)		—	—		—			(0.4		)		—				—				—				(0.4		)
Dividends to shareholders	—	—		—			—			(28.4		)		—			—				(28.4		)
Cumulative effect of adopting Topic 606, net of tax	—	—		—			—			(6.0		)		—			(0.1		)		(6.1		)		—	—		—			—				(6.0		)		—				(0.1		)		(6.1		)
Cumulative effect of adopting ASC 2016-16	—	—		—			—			(2.2		)		—			—				(2.2		)		—	—		—			—				(2.2		)		—				—				(2.2		)
Other	—	—		0.1			0.1			—				—			—				0.2
Balance, September 30, 2018	185.3	$	1.9	$	1,923.9		$	(139.5	)	$	275.2			$	(193.9	)	$	96.5			$	1,964.1
Balance, March 31, 2018																									184.0	1.9		1,882.5			(139.2		)		202.3				(113.6		)		98.2				1,932.1
Net income																									—	—		—			—				55.0				—				2.3				57.3
Other comprehensive income																									—	—		—			—				—				(73.9		)		(3.2		)		(77.1		)
Distributions to noncontrolling interests																									—	—		—			—				—				—				(0.1		)		(0.1		)
Noncontrolling interests of acquired businesses																									—	—		—			—				—				—				0.1				0.1
Stock-based compensation																									—	—		11.5			—				—				—				—				11.5
Exercise of stock options																									0.7	—		4.7			—				—				—				—				4.7
Treasury stock purchased																									—	—		—			(0.1		)		—				—				—				(0.1		)
Dividends to shareholders																									—	—		—			—				(14.1		)		—				—				(14.1		)
Balance, June 30, 2018																									184.7	$	1.9	$	1,898.7		$	(139.3	)		$	243.2			$	(187.5	)		$	97.3			$	1,914.3



	Common Stock				Paid-In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
	Shares		Amount		Paid-In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance, December 31, 2018	185.7		$	1.9	$	1,947.3	$	(139.9	)	$	363.1		$	(282.7	)	$	92.5		$	1,982.2
Net income	—		—		—		—			70.9			—			2.4			73.4
Other comprehensive income	—		—		—		—			—			53.2			0.1			53.3
Stock-based compensation	—		—		9.2		—			—			—			—			9.2
Employee share purchase plan	0.1		—		6.9		—			—			—			—			6.9
Exercise of stock options	0.5		—		4.2		—			—			—			—			4.2
Vesting of restricted stock units	1.6		—		—		—			—			—			—			—
Treasury stock purchased	(0.6	)	—		—		(37.1		)	—			—			—			(37.1		)
Dividends to shareholders	—		—		—		—			(14.2		)	—			—			(14.2		)
Cumulative effect of adopting ASU 2017-12	—		—		—		—			(1.0		)	—			—			(1.0		)
Balance, March 31, 2019	187.3		1.9		1,967.6		(177.0		)	418.8			(229.4		)	95.0			2,076.9
Net income	—		—		—		—			101.5			—			2.5			104.0
Other comprehensive income	—		—		—		—			—			(66.8		)	0.7			(66.1		)
Distributions to noncontrolling interests	—		—		—		—			—			—			(0.8		)	(0.8		)
Stock-based compensation	—		—		6.1		—			—			—			—			6.1
Exercise of stock options	0.5		—		2.7		—			—			—			—			2.7
Treasury stock purchased	—		—		—		(0.1		)	—			—			—			(0.1		)
Dividends to shareholders	—		—		—		—			(14.2		)	—			—			(14.2		)
Balance, June 30, 2019	187.8		$	1.9	$	1,976.4	$	(177.1	)	$	506.1		$	(296.2	)	$	97.4		$	2,108.5

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

See accompanying notes to unaudited consolidated financial statements.

TRANSUNION AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

1. Significant Accounting and Reporting Policies

Basis of Presentation

~~Any~~Unless the context indicates otherwise, any reference in this report to ~~“the Company,~~the “Company,” “we,” “our,” “us,” and ~~“its’” are~~“its” refers to TransUnion and its consolidated subsidiaries, collectively.

The accompanying unaudited consolidated financial statements of TransUnion and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany transactions and balances have been eliminated. The operating results of TransUnion for the periods presented are not necessarily indicative of the results that may be expected for the full year ending December 31, ~~2018.~~2019. These unaudited consolidated financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, filed with the Securities and Exchange Commission (“SEC”) on February ~~13, 2018.~~14, 2019.

Subsequent Events

Events and transactions occurring through the date of issuance of the financial statements have been evaluated by management and, when appropriate, recognized or disclosed in the financial statements or notes to the consolidated financial statements. See Note 16, "Subsequent Event," for additional information.

Principles of Consolidation

The consolidated financial statements of TransUnion include the accounts of TransUnion and all of its controlled subsidiaries. Investments in nonmarketable unconsolidated entities in which the Company is able to exercise significant influence are accounted for using the equity method. Investments in nonmarketable unconsolidated entities in which the Company is not able to exercise significant influence, our “Cost Method Investments,” are accounted for at our initial cost, minus any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

~~Subsequent Events~~

Recently Adopted Accounting Pronouncements

~~On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (ASC Topic 606),~~ with several subsequent updates. This series of comprehensive guidance has replaced all existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. Under the new guidance, there is a five-step model to apply to revenue recognition. The five-steps consist of: (1) determination of whether a contract, an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied.

We adopted this standard as of January 1, 2018, and used the modified retrospective approach applied to reflect the aggregate effect of all modifications of those contracts that were not completed as of that date. Under the modified retrospective approach, we recognized the cumulative effect of adopting ASC Topic 606 in the opening balance of retained earnings to reflect deferred revenue related to certain contracts where we satisfy performance obligations over time. There was no material impact on our consolidated financial statements or on how we recognize revenue upon adoption. Prior period amounts were not adjusted and the prior period amounts continue to be reported in accordance with previous accounting guidance. These financial statements include enhanced disclosures, particularly around contract assets and liabilities and the disaggregation of revenue. See Note 11, “Revenue,” and Note 14, “Reportable Segments,” for these enhanced disclosures.

~~On January 5, 2016, the FASB issued ASU No. 2016-01,Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.~~ The FASB issued technical corrections to this guidance in February 2018. This ASU is intended to improve the recognition and measurement of financial instruments. Among other things, the ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value, if fair value is readily determinable, with changes in fair value recognized in net income. If fair value is not readily determinable, an entity may elect to measure equity investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. On January 1, 2018, we adopted this guidance and have availed ourselves of this measurement election for all currently held equity investments that do not have readily determinable fair values. See Note 6, “Investments in Affiliated Companies,” for the impact on our current financial statements, which was not material.

~~On August 26, 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.~~ This ASU addresses the diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted this guidance on January 1, 2018, and are required to apply it on a retrospective basis. Accordingly, we have reclassified certain payments made in 2017 in satisfaction of contingent obligations from financing activities to operating activities on our statement of cash flows. The reclassification was not material for the nine months ended September 30, 2018, and will not be material for the full year.

~~On October 16, 2016, the FASB issued ASU No. 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory~~. This ASU requires companies to recognize the income tax effects of intercompany sales and transfers of assets other than inventory in the income statement in the period in which the transfer occurs. Intercompany transactions are generally eliminated in consolidation, however there may be income tax consequences of such transactions that do not eliminate. Prior to adoption, any income tax resulting from these transactions were deferred on the balance sheet as a prepaid asset until the asset leaves the consolidated group. The new guidance requires the income tax resulting from these transactions to be recognized in the income statement in the period in which the sale or transfer of the asset occurs. Further, the new guidance requires a modified retrospective approach upon adoption, with any previously established prepaid assets resulting from past intercompany sales or transfers to be reversed with an offset to retained earnings. On January 1, 2018, we adopted this guidance and reclassified our previously established prepaid assets, which were not material, to retained earnings.

~~Recent Accounting Pronouncements Not Yet Adopted~~

On February 25, 2016, the FASB issued ASU ~~No.~~ 2016-02, Leases (Topic 842). During 2018 and 2019, the FASB issued additional ~~update improvements~~guidance related to ~~lease accounting.~~the new standard. This series of comprehensive guidance, among other things, ~~will require~~requires us to record the ~~future~~ discounted present value of all future lease payments as a liability on our balance sheet, as well as a corresponding ~~“right-to-use”~~“right-of-use” (“ROU”) asset, which is an asset that represents the right to use or control the use of a specified asset for the lease term, for all long-term leases. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We have adopted this guidance effective January 1, 2019, on a modified retrospective basis, as of the beginning of the period adopted, including the package of practical expedients available per paragraph 842-10-65-1(f). On March 31, 2019, and on each reporting date thereafter, we recognize an operating lease liability and offsetting ROU asset on our Consolidated Balance Sheet, with no other impact to our Consolidated Financial Statements. See Note 5, “Other Assets,” Note 7 “Other Current Liabilities,” Note 8, “Other Liabilities” and Note 10, “Leases” for additional information and the new required disclosures.

On August 28, 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The new standard is intended to improve and simplify accounting rules around hedge accounting. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods therein. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness. For our cash flow hedges, this means that the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is now recorded in other comprehensive income, and reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. We have adopted this ASU and related amendments effective January 1, 2019, and have applied the modified retrospective transition method that allows for a cumulative-effect adjustment to reclassify cumulative ineffectiveness previously recorded in other comprehensive income to retained earnings in the period of adoption. The adjustment was not material to our consolidated financial statements.

On February 14, 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. These amendments provide an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (the “Act”) is recorded. This guidance is effective for fiscal years beginning after December 15, 2018, ~~including~~and interim periods therein. We have elected to not reclassify the

stranded tax effects within ~~those fiscal years. We are in the final stages of assessing the~~accumulated other comprehensive income to retained earnings and therefore there is no impact ~~this guidance will have~~ on our consolidated financial ~~statements, including quantitative~~statements.

On August 27, 2018, the FASB issued ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. These amendments modify the disclosure requirements in Topic 820 by removing, adding or modifying certain fair value measurement disclosures. This guidance is effective for fiscal years beginning after December 15, 2018, and ~~qualitative~~interim periods therein. This new guidance only impacts our future disclosures, ~~that will be required. We are also in the processes of implementing enhancements that will be utilized~~with no impact to ~~support~~ our calculations and disclosures going forward. We are on track to adopts this guidance on January 1, 2019, on a prospective basis, and plan to adopt the package of transition practical expedients available per paragraph 842-10-65-1(f).current disclosures.

Recent Accounting Pronouncements Not Yet Adopted

On June 16, 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In addition, these amendments require the measurement of all expected credit losses for financial assets, including trade accounts receivable, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods therein. We are currently assessing the impact this guidance will have on our consolidated financial statements.

~~On August 28, 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.~~ The new standard is intended to improve and simplify accounting rules around hedge accounting. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods therein. We are currently assessing the impact this guidance will have on our consolidated financial statements.

~~On February 14, 2018, the FASB issued ASU 2018-02,~~ ~~Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.~~ These amendments provide an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recorded. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. We are currently assessing the impact this guidance will have on our consolidated financial statements.

~~On August 27, 2018, the FASB issued ASU 2018-13~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.~~ These amendments modify the disclosure requirements in Topic 820 by removing, adding or modifying certain fair value measurement disclosures. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. While we are currently assessing the guidance, we do not expect it to impact our financial statements other than our fair value disclosures.

2. Business Acquisitions

Callcredit Acquisition

On June 19, 2018, we acquired 100% of the equity of Callcredit Information Group, Ltd. (“Callcredit”) for $1,408.2 million in cash, funded primarily by additional borrowings against our Senior Secured Credit Facility. See Note 9, “Debt,” for additional information about our Senior Secured Credit Facility. There was no contingent consideration resulting from this transaction. Callcredit, founded in 2000, is ~~an U.K.-based~~a United Kingdom-based information solutions company that, like TransUnion, provides data, analytics and technology solutions to help businesses and consumers make informed decisions. International expansion is a key growth strategy for TransUnion, and we expect to leverage strong synergies across TransUnion’s and Callcredit’s business models and solutions.

~~We have included Callcredit~~Callcredit’s 2018 revenue ~~of $35.9 million~~ and an operating ~~loss of $18.9 million~~income since the date of acquisition for the three and six months ended June 30, 2018, are included as part of the International segment in the accompanying consolidated statements of ~~income.~~income and are not material.

For the ~~nine~~six months ended ~~September~~June 30, 2018, ~~and 2017,~~ on a pro-forma basis assuming the transaction occurred on January 1, 2017, combined pro-forma revenue of TransUnion and Callcredit was ~~$1,791.8~~$1,188.2 million ~~and $1,516.5 million, respectively,~~ and combined pro-forma net income from continuing operations was ~~$165.8 million and $50.7 million, respectively.~~$118.8 million. For ~~nine~~the six months ended ~~September~~June 30, 2018, combined pro-forma net income from continuing operations was adjusted to exclude ~~$19.1~~$18.2 million of acquisition-related costs and $9.4 million of financing costs expensed in 2018. For the nine months ended September 30, 2017, combined pro-forma net income from continuing operations was adjusted to include these charges, as well as $0.5 million of acquisition-related costs incurred in the fourth quarter of 2017.

We ~~have~~ identified and categorized certain operations of Callcredit that we do not consider core to our business as discontinued operations of our International segment as of the date of acquisition. These discontinued operations consist of businesses that do not align with our stated strategic objectives. ~~We expect to sell~~As of June 30, 2019, we have disposed of all of these businesses ~~within a year,~~ and we do not expect to have a significant continuing involvement with any of these ~~operations after the date of disposal. We have~~operations. At December 31, 2018, we categorized the assets and liabilities of these discontinued operations on separate lines on the face of our balance sheet and reflect them as of the date of acquisition as discontinued operations in the table below. ~~These amounts are based on estimates that will be refined as we complete the fair-value~~

Purchase Price Allocation

The final allocation of the purchase price, ~~of Callcredit.~~

~~Purchase Price Allocation~~

~~The allocation~~including our estimate of the ~~purchase price to~~fair values of the identifiable assets ~~acquired~~ and ~~liabilities assumed is preliminary pending finalizing our fair value assessment, which we expect~~goodwill, to ~~complete within one year. The preliminary fair value of~~ the assets acquired and liabilities assumed ason the date of ~~September 30, 2018,~~acquisition, consisted of the following:


(in millions)	Fair Value			Fair Value
Trade accounts receivable	$	19.7		$	20.8
Property and equipment	3.2			3.2
Goodwill⁽¹⁾	761.2			757.1
Identifiable intangible assets	684.8			720.1
All other assets	53.7			55.0
Assets of discontinued operations⁽²⁾	71.1			57.1
Total assets acquired	1,593.7			1,613.3

Existing debt	—
All other liabilities	(167.6		)	(185.5		)
Liabilities of discontinued operations⁽²⁾	(17.9		)	(19.6		)
Net assets of the acquired company	$	1,408.2		$	1,408.2


(1)	For tax purposes, ~~we estimate that~~ none of the goodwill is tax deductible.

(2)

We have categorized certain businesses of Callcredit as discontinued operations in our consolidated financial statements. ~~The preliminary fair value~~As of ~~assets and liabilities~~June 30, 2019, we have disposed of all of these discontinued operations include an estimate of the fair value of the identifiable intangible assets and goodwill acquired. We will revise these estimates as we finalize our analysis of these discontinued operations and purchase price allocation.businesses.

We recorded the excess of the purchase price over the ~~preliminary~~ fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed as goodwill in a new reportable unit in our International segment. The purchase price of Callcredit exceeded the preliminary fair value of the net assets acquired primarily due to growth opportunities, the assembled workforce, synergies associated with internal use software and other technological and operational efficiencies.

Identifiable Amortizable Intangible Assets

The ~~preliminary~~ fair values of the amortizable intangible assets acquired consisted of the ~~following as of September 30, 2018:~~following:


(in millions)	Estimated Useful Life	Fair Value		Estimated Useful Life	Fair Value
Database and credit files	15 years	$	463.0	15 years	$	502.0
Customer relationships	15 years	155.0		15 years	155.0
Technology and software	5 years	66.1		5 years	62.4
Trademarks	2 years	0.7		2 years	0.7
Total identifiable assets		$	684.8		$	720.1

We estimate the ~~preliminary~~ weighted-average useful life of the identifiable intangible assets to be approximately 1414.1 years, resulting in ~~an approximate amortization~~approximately $51.0 million of ~~$48.9 million per year.~~annual amortization.

Acquisition Costs

As of ~~September~~June 30, ~~2018,~~2019, we have incurred approximately ~~$19.6~~$20.4 million of ~~related-acquisition~~acquisition-related costs, including ~~$0.5~~$19.9 million incurred in ~~2017.~~prior years. These costs include investment banker fees, legal fees, due diligence and other external costs that we have recorded in other income and expense. ~~The Company will~~We may incur additional acquisition-related costs, including legal fees, valuation fees and other professional fees in the next several quarters that we will record in other income and expense.

~~iovation and Healthcare Payment Specialists, LLC~~Other Acquisitions

During the second quarter of 2018, we acquired 100% of the equity of iovation, Inc. (“iovation”) and Healthcare Payment Specialists, LLC (“HPS”). During the fourth quarter of 2018, we acquired 100% of the equity of Rubixis, Inc (“Rubixis”). During the second quarter of 2019, we acquired 100% of the equity of TruSignal, Inc. (“TruSignal”).

iovation is a provider of advanced device identity and consumer authentication services that helps businesses and consumers safely transact in a digital world. HPS provides expertise and technology solutions to help medical care providers maximize Medicare reimbursements. Rubixis is an innovative healthcare revenue cycle solutions company that helps providers maximize reimbursement from insurance payers. TruSignal is an innovative leader in people-based marketing technology for Fortune 500 brands, agencies, platforms, publishers and data owners.

The results of operations of iovation, HPS, Rubixis, and TruSignal, which are not material to our consolidated financial statements, have been included as part of our ~~USIS~~U.S. Markets segment (formerly U.S. Information Services) in our consolidated statements of income since the date of the acquisition.

We finalized the purchase accounting for iovation and HPS ~~provides expertise and technology solutions to help medical care providers maximize Medicare reimbursements.~~during the second quarter of 2019. The results of operations of HPS, which are not material to our consolidated financial statements, have been included as part of our USIS segment in our consolidated statements of income since the date of the acquisition. Thefinal allocation of the purchase price ~~to the identifiable assets acquired and liabilities assumed~~ for these ~~acquisitions is preliminary pending full fair value assessments, which we expect to complete within one year.~~

~~Based on the preliminary purchase price allocations for these acquisitions, we recorded approximately $215.5~~two entities resulted in $230.2 million of goodwill and ~~$228.5~~$208.5 million of amortizable intangible assets recorded in addition to what we recorded for Callcredit as discussed above. ~~We estimate the~~The weighted-average useful lives of the ~~iovation and HPS~~ amortizable intangible assets ~~to be~~are approximately ~~15 years.~~10.6 years, resulting in approximately $19.7 million of annual amortization.

3. Fair Value

The following table summarizes financial instruments measured at fair value, on a recurring basis, as of ~~September~~June 30, ~~2018~~2019:



(in millions)	Total			Level 1		Level 2			Level 3
Assets
Trading securities	$	12.0		$	9.7	$	2.3		$	—
Available-for-sale debt securities	3.0			—		3.0			—
Interest rate caps	2.2			—		2.2			—
Total	$	17.2		$	9.7	$	7.5		$	—

Liabilities
Interest rate swaps	$	(48.9	)	$	—	$	(48.9	)	$	—
Contingent consideration	(7.6		)	—		—			(7.6		)
Total	$	(56.5	)	$	—	$	(48.9	)	$	(7.6	)

(in millions) Total Level 1 Level 2 Level 3
Assets
Interest rate caps $ 25.3
$ —
$ 25.3
$ —
Trading securities 13.4
8.9
4.5
—
Available-for-sale debt securities 2.8
—
2.8
—
Total $ 41.5
$ 8.9
$ 32.6
$ —

Liabilities
Contingent consideration $ (0.4 ) $ —
$ —
$ (0.4 )
Total $ (0.4 ) $ —
$ —
$ (0.4 )

Level 1 instruments consist of exchange-traded mutual funds. Exchange-traded mutual funds are trading securities valued at their current market prices. These securities relate to the nonqualified deferred compensation plan held in trust for the benefit of plan participants.

Level 2 instruments consist of pooled separate accounts, foreign exchange-traded corporate bonds and interest rate ~~caps.~~caps and swaps. Pooled separate accounts are designated as trading securities valued at net asset values. These securities relate to the nonqualified deferred compensation plan held in trust for the benefit of plan participants. Foreign exchange-traded corporate bonds are available-for-sale debt securities valued at their current quoted prices. These securities mature between 2027 and 2033. The interest rate caps and swaps fair values are determined using the market standard methodology of discounting the future expected net cash ~~receipts~~flows that would occur if variable interest rates rise above the strike rate of the caps ~~in conjunction with~~and swaps, taking into consideration the cash payments related to financing the premium of the interest rate caps. The variable interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. See Note 9, “Debt,” for additional information regarding interest rate ~~caps.~~caps and swaps.

All unrealized gains and losses on trading securities are included in net income, while unrealized gains and losses on available-for-sale debt securities are included in other comprehensive income. There were no other-than-temporary gains or losses on available-for-sale debt securities and there were no significant realized or unrealized gains or losses on any of our securities for any of the periods presented.

Level 3 instruments consist of contingent obligations related to companies we have acquired with remaining maximum payouts totaling ~~$14.7~~$11.3 million. These obligations are contingent upon meeting certain quantitative or qualitative performance metrics through ~~2018,~~2019, and are included in other current liabilities on our balance sheet. The fair values of the obligations are determined based on an income approach, using our expectations of the future expected earnings of the acquired entities. We assess the fair value of these obligations each reporting period with any changes reflected as gains or losses in selling, general and administrative expenses in the consolidated statements of income. During the three months ended ~~September~~June 30, ~~2018,~~2019, we recorded a gain of $0.9 million as a result of changes to the fair value of these obligations. During the six months ended June 30, 2019, there were no significant gains or losses as a result of changes to the fair value of these obligations. ~~During the nine months ended September 30, 2018, we recorded expenses of $0.1 million as a result of changes to the fair value of these obligations.~~

4. Other Current Assets

Other current assets consisted of the following:


(in millions)	September 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018
Prepaid expenses	$	78.5	$	59.0	$	89.5	$	77.1
Other receivables	27.1		16.5
Other investments	21.7		18.3		43.9		23.6
Income taxes receivable	16.8		23.7		17.9		5.5
Available-for-sale debt securities	2.8		3.3
Other receivable					14.8		14.3
Marketable securities					3.0		2.9
Contract assets					2.0		1.0
Deferred financing fees	0.6		0.6		0.6		0.6
CFPB escrow deposit	—		13.9
Other	13.1		10.9		14.0		11.5
Total other current assets	$	160.6	$	146.2	$	185.7	$	136.5

The increase in prepaid expenses is due primarily to prepaid assets of the businesses we acquired in 2018. Other receivables include amounts recoverable under insurance policies for certain litigation costs. Other investments include non-negotiable certificates of deposit that are recorded at their carrying value. ~~Upon adoption of ASC Topic 606, we have recorded contract assets, which are not significant and are included in the “other” line above.~~Other receivables include amounts recoverable under insurance policies for certain litigation costs. See Note ~~11,~~12, “Revenue,” for a further discussion about our contract assets.

5. Other Assets

Other assets consisted of the following:


(in millions)	September 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018
Investments in affiliated companies	$	83.8	$	79.2
Interest rate caps	25.3		9.4
Trading securities	13.4		12.7
Investments in nonconsolidated affiliates					$	128.9	$	81.9
Right-of-use lease assets					76.6		—
Marketable securities					12.0		12.4
Other investments	12.6		13.5		4.7		12.4
Deposits	3.4		14.6		4.2		3.8
Notes receivable from affiliated companies					4.0		1.0
Interest rate caps					2.2		16.5
Deferred financing fees	1.8		2.0		1.3		1.6
Other	7.7		5.2		6.8		6.7
Total other assets	$	148.0	$	136.6	$	240.7	$	136.3

See Note 6, “Investments in Nonconsolidated Affiliates,” for additional information about our investments in nonconsolidated affiliates. On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842). As a result, we have recorded an ROU lease assets, which represent the fair value of the right to use our long-term leased assets over their lease terms. See Note 10, “Leases,” for additional information about our right-of-use lease assets. See Note 9, “Debt,” for additional information about our interest rate caps. Other investments include non-negotiable certificates of deposit that are recorded at their carrying value. See Note 6, “Investments in Affiliated Companies,” for additional information about investment in affiliated companies. See Note 9, “Debt,” for additional information about the interest rate caps.

6. Investments in ~~Affiliated Companies~~Nonconsolidated Affiliates

Investments in ~~affiliated companies~~nonconsolidated affiliates represent our investment in ~~non-consolidated~~nonconsolidated domestic and foreign entities. These entities are in businesses similar to ours, such as credit reporting, credit-scoring, decisioning services and credit-monitoring services.

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

We account for nonmarketable investments in equity securities in which we are not able to exercise significant influence, our Cost Method Investments, at our initial cost, minus any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. For these investments, we adjust the carrying value

for any purchases or sales of our ownership interests. We record any dividends received from these investments as other income in non-operating income and expense.

During 2019, we recorded a $31.2 million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer, partially offset by $8.6 million of impairments of other Cost Method investments. The net gain was included in other income and expense in the consolidated statements of income. There were no material gain or loss adjustments to our investments in ~~affiliated companies~~nonconsolidated affiliates during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018 or 2017.~~2018.

Investments in ~~affiliated companies~~nonconsolidated affiliates consisted of the following:



(in millions)	June 30, 2019		December 31, 2018
Equity method investments	$	43.7	$	44.0
Cost Method Investments	85.2		37.9
Total investments in nonconsolidated affiliates	$	128.9	$	81.9

(in millions) September 30,
2018
December 31,
2017
Equity method investments $ 45.9
$ 42.8
Cost Method Investments 37.9
36.4
Total investments in affiliated companies $ 83.8
$ 79.2

These balances are included in other assets in the consolidated balance sheets. The increase in cost method investments is due to the net gains on certain previous Consumer Interactive and U.S. Markets Cost Method investments discussed above that we recorded in other income and expense, a new investment made by our U.S. Markets segment, and an incremental investment in one of our current Consumer Interactive segment investments.

Earnings from equity method investments, which are included in non-operating income and expense, and dividends received from equity method investments consisted of the following:



	Three Months Ended June 30,		Six Months Ended June 30,
(in millions)	2019	2018	2019	2018
Earnings from equity method investments	3.3	2.9	7.1	5.2
Dividends received from equity method investments	8.0	4.3	8.5	5.0

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2018 2017 2018 2017
Earnings from equity method investments $ 3.2
$ 2.6
$ 8.4
$ 6.3
Dividends received from equity method investments $ 0.3
$ 0.3
$ 5.3
$ 0.8

Dividends received from Cost Method Investments for the three and six months ended ~~September~~June 30, 2019, was $0.7 million in each period, and for the three and six months ended June 30, 2018, was $0.1 million. There were no dividends received from cost method investments for the three months ended September 30, 2017. Dividends received from cost method investments for the nine months ended September 30, 2018 and 2017, were $0.8 million and $0.7 million ~~respectively.~~in each period.

7. Other Current Liabilities

Other current liabilities consisted of the following:



(in millions)	June 30, 2019		December 31, 2018
Deferred revenue	$	93.5	$	73.1
Accrued payroll	75.3		102.5
Accrued legal and regulatory	36.5		33.2
Income taxes payable	24.9		17.0
Accrued employee benefits	23.9		35.1
Operating lease liabilities	19.2		—
Accrued interest	4.0		2.5
Contingent consideration	7.6		1.2
Other	25.7		19.5
Total other current liabilities	$	310.6	$	284.1

(in millions) September 30,
2018
December 31,
2017
Accrued payroll $ 105.8
$ 84.6
Deferred revenue 70.1
13.2
Accrued legal and regulatory 50.0
46.3
Accrued employee benefits 34.4
34.1
Income taxes payable 20.6
8.5
Accrued interest 2.9
1.5
Contingent consideration 0.4
1.1
Other 16.9
18.5
Total other current liabilities $ 301.1
$ 207.8

~~The increase~~Deferred revenue increased primarily due to annual minimum billings, primarily in ~~deferred revenue includes the deferred revenue of businesses acquired in 2018 and the impact of adopting ASC Topic 606.~~our United Kingdom business, that we have a contractual right to invoice. See Note ~~11,~~12, “Revenue,” for additional information about our deferred revenue. The decrease in accrued payroll was due primarily to the payment of accrued annual bonuses during the first quarter of 2019 that were earned in 2018. On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842). As a result, we have recorded the discounted present value of all future lease payments over the terms of the corresponding leases as a liability for our long-term leases. See Note 8,

“Other Liabilities” for the long-term portion of this liability and Note 10, “Leases” for additional information about our leases. See Note 3, “Fair Value,” for additional information related to our contingent consideration obligations.

8. Other Liabilities

Other liabilities consisted of the following:



(in millions)	June 30, 2019		December 31, 2018
Operating lease liabilities	$	63.4	$	—
Interest rate swap	48.9		10.7
Unrecognized tax benefits	19.8		19.6
Retirement benefits	12.7		10.2
Income tax payable	1.9		5.0
Deferred revenue	2.9		0.9
Contingent consideration	—		0.1
Other	0.7		8.2
Total other liabilities	$	150.3	$	54.7

(in millions) September 30,
2018
December 31,
2017
Unrecognized tax benefits $ 19.3
$ 12.3
Retirement benefits 10.9
12.2
Deferred revenue 0.7
—
Income tax payable 5.0
25.6
Purchase consideration payable —
12.2
Other 8.4
8.5
Total other liabilities $ 44.3
$ 70.8
On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842). As a result, we have recorded the discounted present value of all future lease payments over the terms of the corresponding leases as a liability for our long-term leases. See Note 7, “Other Current Liabilities” for the current portion of this liability and Note 10, “Leases” for additional information about our leases. See Note 9, “Debt,” for additional information about our interest rate swap.

9. Debt

Debt outstanding consisted of the following:



(in millions)	June 30, 2019			December 31, 2018
Senior Secured Term Loan B-3, payable in quarterly installments through April 9, 2023, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (4.40% at June 30, 2019, and 4.52% at December 31, 2018), net of original issue discount and deferred financing fees of $4.0 million and $3.7 million, respectively, at June 30, 2019, and original issue discount and deferred financing fees of $5.0 million and $4.6 million, respectively, at December 31, 2018	$	1,783.9		$	1,892.0
Senior Secured Term Loan A-2, payable in quarterly installments through August 9, 2022, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (4.15% at June 30, 2019, and 4.27% at December 31, 2018), net of original issue discount and deferred financing fees of $2.4 million and $3.1 million, respectively, at June 30, 2019, and original issue discount and deferred financing fees of $2.8 million and $3.6 million, respectively, at December 31, 2018	1,151.9			1,166.0
Senior Secured Term Loan B-4, payable in quarterly installments through June 19, 2025, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (4.40% at June 30, 2019, and 4.52% at December 31, 2018), net of original issue discount and deferred financing fees of $2.2 million and $9.9 million, respectively, at June 30, 2019, and original issue discount and deferred financing fees of $2.3 million and $10.7 million, respectively, at December 31, 2018	977.9			982.0
Senior Secured Revolving Line of Credit	—			—
Other notes payable	3.6			7.3
Finance leases	0.6			0.8
Total debt	3,917.9			4,048.1
Less short-term debt and current portion of long-term debt	(86.4		)	(71.7		)
Total long-term debt	$	3,831.5		$	3,976.4

(in millions) September 30,
2018
December 31,
2017
Senior Secured Term Loan B-3, payable in quarterly installments through April 9, 2023, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (4.24% at September 30, 2018, and 3.57% at December 31, 2017), net of original issue discount and deferred financing fees of $5.2 million and $4.9 million, respectively, at September 30, 2018, and original issue discount and deferred financing fees of $6.2 million and $3.7 million, respectively, at December 31, 2017 $ 1,956.4
$ 1,971.5
Senior Secured Term Loan A-2, payable in quarterly installments through August 9, 2022, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (3.99% at September 30, 2018, and 3.07% at December 31, 2017), net of original issue discount and deferred financing fees of $3.0 million and $3.9 million, respectively, at September 30, 2018, and original issue discount and deferred financing fees of $1.4 million and $0.3 million, respectively, at December 31, 2017 1,173.1
395.8
Senior Secured Term Loan B-4, payable in quarterly installments through June 19, 2025, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (4.24% at September 30, 2018), net of original issue discount and deferred financing fees of $2.4 million and $11.1 million, respectively, at September 30, 2018 984.0
—
Senior Secured Revolving Line of Credit —
85.0
Other notes payable 7.3
11.0
Capital lease obligations 1.0
1.3
Total debt 4,121.8
2,464.6
Less short-term debt and current portion of long-term debt (64.2 ) (119.3 )
Total long-term debt $ 4,057.6
$ 2,345.3

Excluding any potential additional principal payments which may become due on the senior secured credit facility based on excess cash flows of the prior year, scheduled future maturities of total debt at ~~September~~June 30, ~~2018,~~2019, were as follows:



(in millions)	June 30, 2019
2019	$	37.7
2020	93.7
2021	89.9
2022	1,044.9
2023	1,732.1
Thereafter	945.0
Unamortized original issue discounts and deferred financing fees	(25.4		)
Total debt	$	3,917.9

(in millions) September 30,
2018
2018 $ 15.2
2019 71.7
2020 93.5
2021 89.9
2022 1,044.9
Thereafter 2,837.1
Unamortized original issue discounts and deferred financing fees (30.5 )
Total debt $ 4,121.8

Senior Secured Credit Facility

On June 15, 2010, we entered into a senior secured credit facility with various lenders. This facility has been amended several times and currently consists of the Senior Secured Term Loan A-2, the Senior Secured Term Loan B-3, the Senior Secured Term Loan B-4 and the Senior Secured Revolving Line of Credit.

On May 2, 2018, we amended certain provisions of our senior secured credit facility. This amendment among other things, allowed us the option to elect between two testing dates for the calculation of ratio requirements to enter into certain transactions. This amendment resulted in $0.1 million of fees expensed and recorded in other income and expense in the consolidated statements of income for the nine months ended September 30, 2018, and $2.6 million of refinancing fees deferred on the balance sheet to be amortized into interest expense over the life of the loans.

During the first quarter of 2018, we repaid $30.0 million of the outstanding borrowings under the Senior Secured Revolving Line of Credit. During the second quarter of 2018, we borrowed a total of $125.0 million under the Senior Secured Revolving Line of Credit to fund an acquisition and for general corporate purposes. On June 19, 2018, we borrowed an additional $800.0 million against our Senior Secured Term Loan A-2 and $600.0 million against a new tranche 4 of our Senior Secured Term Loan B (“Senior Secured Term Loan B-4”) to fund the acquisition of Callcredit. On June 29, 2018, we borrowed an additional $400.0 million of our Senior Secured Term Loan B-4 to fund another acquisition and to repay a portion of our Senior Secured Revolving Line of Credit.

~~The new financing resulted in $0.1 million and $12.0~~During the second quarter of 2019, we prepaid $100.0 million of ~~fees~~our outstanding Senior Secured Term Loan B-3. As a result of these prepayments, we expensed ~~and recorded in other income and expense in the consolidated statements of income for the three and nine months ended September 30, 2018, respectively, and $19.7~~$0.9 million of our unamortized original issue discount and deferred financing ~~fees deferred on the balance sheet to be amortized into interest expense over the life~~fees.

As of ~~the loans.~~

~~During the third quarter,~~June 30, 2019, we ~~repaid the $75.0 million~~had no outstanding balance onunder the Senior Secured Revolving Line of ~~Credit. As~~Credit and $0.1 million of ~~September 30, 2018, we~~outstanding letters of credit, and could have borrowed up to the ~~entire $300.0~~remaining $299.9 million available.

The terms of the additional borrowings in the second quarter of 2018 on our Senior Secured Term Loan A-2 are the same as the terms of the other outstanding borrowings under the Senior Secured Term Loan A-2. Interest rates on the new Senior Secured Term Loan B-4 are based on LIBOR, unless otherwise elected, plus a margin of 2.00%. We are required to make principal payments on the Senior Secured Term Loan B-4 at the end of each quarter of 0.25% starting in the third quarter of 2018, with the remaining balance due June 19, 2025.

On January 31, 2017, we refinanced and amended certain provisions of our Senior Secured Term Loan B-3. On August 9, 2017, we refinanced and amended certain provisions of our senior secured credit facility. These refinancings resulted in $5.6 million and $10.5 million of refinancing fees and other net costs expensed and recorded in other income and expense in the consolidated statements of income for the three and nine months ended September 30, 2017, respectively.

TransUnion also has the ability to request incremental loans on the same terms under the existing senior secured credit facility up to the greater of an additional $675.0 million and 100% of Consolidated EBITDA. Consolidated EBITDA is reduced to the extent that the senior secured net leverage ratio is above 4.25-to-1. In addition, so long as the senior secured net leverage ratio does not exceed 4.25-to-1.0, we may incur additional incremental loans, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings.

restrictions and nonfinancial covenants, along with a senior secured net leverage ratio test. The nonfinancial covenants include restrictions on dividends, investments, dispositions, future borrowings and other specified payments, as well as additional reporting and disclosure requirements. The senior secured net leverage test must be met as a condition to incur additional indebtedness, make certain investments, and may be required to make certain restricted payments. The senior secured net leverage ratio must not exceed 5.5-to-1 at any such test date. TransUnion may make dividend payments up to an unlimited amount under the terms of the senior secured credit facility provided that no default or event of default exists and so long as the total net leverage ratio does not exceed 4.75-to-1. As of ~~September~~June 30, ~~2018,~~2019, we were in compliance with all debt covenants.

On December 17, 2018, we entered into interest rate swap agreements with various counterparties that effectively fixed our LIBOR exposure on a portion of our existing senior secured term loans or similar replacement debt between a range of 2.647% to 2.706% . We have designated these swap agreements as cash flow hedges. The current aggregate notional amount under these agreements is $1,440.0 million, decreasing each quarter until the second agreement terminates on December 30, 2022.

On December 18, 2015, we entered into interest rate cap agreements with various ~~counter-parties~~counterparties that effectively cap our LIBOR exposure on a portion of our existing senior secured term loans or similar replacement debt at 0.75% beginning June 30, 2016. We have designated these cap agreements as cash flow hedges. The current aggregate notional amount under these agreements is ~~$1,459.8~~$1,436.0 million and will decrease each quarter until the agreement terminates on June 30, 2020. In July 2016, we began to pay the various ~~counter-parties~~counterparties a fixed rate on the outstanding notional amounts of between 0.98% and 0.994% and receive payments to the extent LIBOR exceeds 0.75%.

The interest rate caps are recorded on the balance sheet at fair value. The effective portion of changes in the fair value of the interest rate cap agreements is recorded in other comprehensive income (loss). The ineffective portion of changes in the fair value of the caps, which is due to, and will continue to result from, the cost of financing the cap premium, is recorded in other income and expense. The effective portion of the change in the fair value of the caps resulted in an unrealized gain of $1.1 million and $11.7 million, net of tax, recorded in other comprehensive income for the three and nine months ended September 30, 2018, respectively. The effective portion of the change in the fair value of the caps resulted in an unrealized gain of $0.5 million and $0.4 million, net of tax, recorded in other comprehensive income for three and nine months ended September 30, 2017, respectively. The ineffective portion of the change in the fair value of the caps resulted in no gain or loss recorded in other income and expense for the three months ended September 30, 2018. The ineffective portion of the change in the fair value of the caps resulted in a gain of $0.7 million recorded in other income and expense for the nine months ended September 30, 2018. The ineffective portion of the change in the fair value of the caps resulted in a loss of $0.1 million and $0.2 million recorded in other income and expense for three and nine months ended September 30, 2017, respectively.

In accordance with ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, the new guidance eliminates the requirement to separately measure and report hedge ineffectiveness. For our cash flow hedges, this means that the entire change in the fair value of the hedging instrument included in our assessment of hedge effectiveness is now recorded in other comprehensive income, and reclassified to interest expense when the corresponding hedged debt affects earnings.

The change in the fair value of the swaps resulted in an unrealized loss of $24.3 million ($18.2 million, net of tax) and $38.1 million ($28.6 million, net of tax) for the three and six months ended June 30, 2019, respectively, recorded in other comprehensive income. Interest ~~income~~expense on the swaps in the three and six months ended June 30, 2019 was expense of $0.6 million ($0.5 million, net of tax) and $1.2 million ($0.9 million, net of tax), respectively. We expect to recognize a loss of approximately $11.7 million as interest expense due to our expectation that LIBOR will exceed the fixed rates of interest over the next twelve months.

The change in the fair value of the caps resulted in an unrealized loss of $7.1 million ($5.3 million, net of tax) and $11.7 million ($8.8 million, net of tax) for the three and six months ended June 30, 2019, respectively, recorded in other comprehensive income. The change in the fair value of the caps resulted in an unrealized gain of $4.3 million ($3.2 million, net of tax) and $14.2 million ($10.6 million, net of tax) for the three and six months ended June 30, 2018, respectively, recorded in other comprehensive income. Interest expense reclassified from other comprehensive income to interest expense related to the fair value of the portion of the caps expiring in the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, was ~~$0.8~~income of $1.3 million ($1.0 million, net of tax) and ~~$1.1~~$3.0 million ($2.2 million, net of tax), respectively. Interest expense reclassified from other comprehensive income to interest expense related to the fair value of the portion of the caps expiring in the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, was ~~$0.8~~income of $0.5 million ($0.4 million, net of tax) and ~~$3.3~~$0.3 million ($0.2 million, net of tax), respectively. We expect to reclassify a gain of approximately ~~$8.3~~$4.9 million from other comprehensive income to interest expense related to the fair value of the portion of the caps expiring and payments received to the extent LIBOR exceeds 0.75% in the next twelve months.

Fair Value of Debt

As of ~~September~~June 30, ~~2018,~~2019, the fair value of our variable-rate Senior Secured Term Loan A-2, ~~and Senior Secured Revolving Line of Credit,~~ excluding original issue discounts and deferred fees, approximates the carrying value. As of ~~September~~June 30, ~~2018,~~2019, the fair value of our Senior Secured Term Loan B-3 and B-4, excluding original issue discounts and deferred fees, was ~~$1,973.9~~$1,791.6 million and ~~$1,000.0~~$990.0 million, respectively. The fair values of our variable-rate term loans are determined using Level 2 inputs, ~~and~~based on quoted market prices for the publicly traded instruments.

10. Leases

Upon adoption of Topic 842 on January 1, 2019, our lease obligations consisted of operating leases for office space and data centers and a small number of finance leases for equipment. Our operating leases have remaining lease terms of up to 13.3 years, with a weighted-average remaining lease term of 5.6 years. We have options to extend many of our operating leases for an additional period of time and options to terminate early several of our operating leases. The lease term consists of the non-cancelable period of the lease, periods covered by options to extend the lease if we are reasonably certain to exercise the option, periods covered by an option to terminate the lease if we are reasonably certain not to exercise the option, and periods covered by an option to extend or not to terminate the lease in which the exercise of the option is controlled by the lessor.

On the commencement date of an operating lease, we record an ROU asset, which represents our right to use or control the use of a specified asset for the lease term, and an offsetting lease liability, which represents our obligation to make lease payments arising from the lease, based on the present value of the net fixed future lease payments due over the initial lease term. We use an estimate of our incremental borrowing rate as the discount rate to determine the present value of the net fixed future lease payments, except for leases where the interest rate implicit in the lease is readily determinable. Upon adoption and as of June 30, 2019, the weighted-average discount rate used to calculate the present value of the fixed future lease payments was 5.7%.

Both Topic 842 and the predecessor lease accounting guidance under ASU 840 require us to expense the net fixed payments of operating leases on a straight-line basis over the lease term. Topic 842 requires us to include any built up deferred or prepaid rent balance resulting from the difference between the straight-line expense and the cash payments as a component of our ROU asset. Also included in our ROU asset is any monthly prepayment of rent. Our rent expense is typically due on the first day of each month, and we typically pay rent several weeks before it is due, so at any given month end, we will have a prepaid rent balance that is included as a component of our ROU asset.

~~10.~~Most of our operating leases contain variable non-lease components consisting of maintenance, insurance, taxes and similar costs of the office space we occupy. We have adopted the practical expedient to not separate these non-lease components from the lease components and instead account for them as a single lease component for all of our leases. We straight-line the net fixed payments of operating leases over the lease term and expense the variable lease payments in the period in which we incur the obligation to pay such variable amounts. These variable lease payments are not included in our calculation of our ROU assets or lease liabilities.

We have no significant short-term leases, finance leases, or subleases.

ROU assets are included in Other Assets, and operating lease liabilities are included in Other Current Liabilities and Other Liabilities in our Consolidated Balance Sheet. Finance lease assets are included in Property, Plant and Equipment, and finance lease liabilities are included in the Current Portion of Long-term Debt and Long-term Debt in our Consolidated Balance Sheet. See Note 7, “Other Current Liabilities,” Note 8,” Other Liabilities,” and note 9, “Debt,” for additional information about these items.

Our operating lease costs, including fixed, variable and short-term lease costs, were $6.9 million and $6.1 million for the three months ended June 30, 2019 and 2018, respectively and $14.2 million and $11.6 million for the six months ended June 30, 2019 and 2018. Cash paid for operating leases are included in operating cash flows, and were $7.2 million and $6.5 million for the three months ended June 30, 2019 and 2018, respectively and $15.0 million and $11.5 million for the six months ended June 30, 2019 and 2018. Our finance lease amortization expense, interest expense, and cash paid were not significant for the reported periods.

We have adopted the package of transition practical expedients which allows us to not reassess our existing lease classifications, initial direct costs, and whether or not an existing contract contains a lease.

We have elected to use the portfolio approach to assess the discount rate we use to calculate the present value of our future lease payments. Using this approach does not result in a materially different outcome compared with applying separate discount rates to each lease in our portfolio.

We have adopted an accounting policy to recognize rent expense for short-term leases, those leases with initial lease terms of twelve months or less, on a straight-line basis in our income statement.

Future fixed payments for non-cancelable operating leases and finance leases in effect as of June 30, 2019, are payable as follows:



(in millions)	Operating Leases			Finance Leases			Total
2019	$	10.8		$	0.3		$	11.1
2020	22.6			0.3			22.9
2021	18.8			0.1			18.9
2022	11.8			—			11.8
2023	9.7			—			9.7
Thereafter	23.5			—			23.5
Less imputed interest	(14.6		)	(0.1		)	(14.7		)
Totals	$	82.6		$	0.6		$	83.2

11. Stockholders’ Equity

Common Stock

On February 13, 2018, we announced that our board of directors has approved a dividend policy pursuant to which we intend to pay quarterly cash dividends on our common stock. On ~~May 9, 2018,~~February 21, 2019, the board of directors declared a dividend ~~for the first quarter of 2018~~ of $0.075 per share to holders of record as of the close of business on ~~May 23, 2018.~~March 7, 2019. The total dividend declared was ~~$14.1~~$14.3 million, of which ~~$13.8~~$14.0 million was paid on ~~June 7, 2018,~~March 22, 2019, with the remainder due as dividend equivalents to employees who hold restricted stock units when and if those units vest. On ~~August 7, 2018,~~May 9, 2019, the board of directors declared a dividend ~~for the second quarter of 2018~~ of $0.075 per share to holders of record as of the close of business on ~~August 22, 2018.~~May 23, 2019. The total dividend declared was ~~$14.2~~$14.3 million, of which ~~$13.9~~$14.1 million was paid on ~~September 6, 2018,~~June 7, 2019, with the remainder due as dividend equivalents to employees who hold restricted stock units when and if those units vest. In the first quarter of 2019, we also paid $0.4 million of dividend equivalents that were declared in 2018 to employees whose restricted stock units vested in 2019 and reversed $0.1 million of dividend equivalents previously declared but forfeited in the first quarter of 2019.

Treasury Stock

During the first quarter of 2019, 1.6 million outstanding employee restricted stock units vested and became taxable to the employees. The employees used 0.6 million shares of the vested stock to satisfy their payroll tax withholding obligations in a net share settlement arrangement whereby the employees received 1.0 million of the shares and gave TransUnion the remaining 0.6 million shares that we have recorded as treasury stock. We remitted cash equivalent to the $36.8 million vest date value of the treasury stock to the respective governmental agencies in settlement of the employee withholding tax obligations. On occasion, as other stock units vest or stock options are exercised, employees use shares of stock to satisfy their payroll tax withholding obligations in a net settlement arrangement and we remit the equivalent value of those shares to the respective governmental agencies.

Preferred Stock

We have 100.0 million shares of preferred stock authorized. No preferred stock had been issued or was outstanding as of ~~September~~June 30, ~~2018.~~2019.

~~11.~~12. Revenue

All of our revenue is derived from contracts with customers and is reported as revenue in the Consolidated Statement of Income. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under ASC Topic 606. We have contracts with two general groups of performance ~~obligations;~~obligations: those that require us to stand ready to provide goods and services to a customer to use as and when requested (“Stand Ready Performance Obligations”) and those that do not require us to stand ready (“Other Performance Obligations”). Our Stand Ready Performance Obligations include obligations to stand ready to provide data, process transactions, access our databases, software-as-a-service and direct-to-consumer products, rights to use our intellectual property and other services. Our Other Performance Obligations include the sale of certain batch data sets and various professional and other services.

Most of our Stand Ready Performance Obligations consist of a series of distinct goods and services that are substantially the same and have the same monthly pattern of transfer to our customers. We consider each month of service in this time series to be a distinct performance obligation and, accordingly, recognize revenue over time. For a majority of these Stand Ready Performance Obligations the total contractual price is variable because our obligation is to process an unknown quantity of transactions, as and when requested by our customers, over the contract period. We allocate the variable price to each month of service using the time-series concept and recognize revenue based on the most likely amount of consideration to which we will be entitled to, which is generally the amount we have the right to invoice. This monthly amount can be based on the actual volume of units delivered or any guaranteed minimum, if higher. Occasionally we have contracts where the amount we will be entitled to for the transactions processed is uncertain, in which case we estimate the revenue based on what we consider to be the most likely amount of consideration we will be entitled to, and true-up any estimates as facts and circumstances evolve.

Certain Stand Ready Performance Obligation fees result from contingent fee based contracts that require us to provide services before we have an enforceable right to payment. For these performance obligations, we recognize revenue at the point in time the contingency is met and we have an enforceable contract and right to payment.

Certain of our Stand Ready Performance Obligation contracts include non-recurring, non-refundable up-front fees to cover our costs of setting up files or configuring systems to enable our customers to access our services. These fees are not fees for distinct performance obligations. When these fees are insignificant in relation to the total contract value we recognize such fees as revenue when invoiced. If such fees are significant we recognize them as revenue over the duration of the contract, the period of time for which we have contractually enforceable rights and obligations. For contracts where such fees are for a distinct performance obligation, we recognize revenue as or when the performance obligation is satisfied.

Certain of our Other Performance Obligations, including certain batch data sets and certain professional and other services, are delivered at a point in time. Accordingly, we recognize revenue upon delivery, once we have satisfied that obligation. For certain Other Performance Obligations, including certain professional and other services, we recognize revenue over time,~~based on an estimate of progress towards completion of that obligation.~~

For all contracts that include a Stand Ready Performance Obligation with variable pricing, we are unable to estimate the variable price attributable to future performance obligations because the number of units to be purchased is not known. As a result, we use the exception available to forgo disclosures about revenue attributable to the future performance obligations where we recognize revenue using the time-series concept as discussed above, including those qualifying for the right to invoice practical expedient. We also use the exception available to forgo disclosures about revenue attributable to contracts withexpected durations of one year or less.

~~During the nine-month period ending September 30, 2018, we recognized $18.7 million of revenue that was included in the balance~~Certain of our ~~deferred~~Other Performance Obligations, including certain batch data sets and certain professional and other services, are delivered at a point in time. Accordingly, we recognize revenue ~~at the beginning~~upon delivery, once we have satisfied that obligation. For certain Other Performance Obligations, including certain professional and other services, we recognize revenue over time,based on an estimate of ~~the year as adjusted for the cumulative effect~~progress towards completion of ~~adopting ASC Topic 606.~~that obligation.

In certain circumstances we apply the guidance in ASC Topic 606 to a portfolio of contracts with similar characteristics. We use estimates and assumptions when accounting for a portfolio that reflect the size and composition of the portfolio of contracts.

Our contracts generally include standard commercial payment terms generally acceptable in each region, and do not include financing with extended payment terms. We have no significant obligations for refunds, warranties, or similar obligations. Our revenue does not include taxes collected from our customers.

Accounts receivable are shown separately on our balance sheet. Contract assets and liabilities result due to the timing of revenue recognition, billings and cash collections. Contract assets include our right to payment for goods and services already transferred to a customer when the right to payment is conditional on something other than the passage of time, for example contracts where we recognize revenue over time but do not have a contractual right to payment until we complete the contract. Contract assets are included in our other current assets and are not material as of ~~September~~June 30, ~~2018.~~2019. Contract liabilities include current and long-term deferred revenue which are included in other current liabilities and other liabilities. We expect to recognize the December 31, 2018 current deferred revenue as revenue during 2019. The long-term ~~portion~~deferred revenue is not significant.

For additional disclosures about the disaggregation of our revenue see Note ~~14,~~15, “Reportable Segments”.

~~12.~~13. Earnings Per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the reported period. Diluted earnings per share reflects the effect of the increase in shares outstanding determined by using the treasury stock method for awards issued under our incentive stock plans.

~~For the three and nine months ended September~~As of June 30, ~~2018, there were zero and less than 0.1 million anti-dilutive stock-based awards outstanding for each respective period. In addition,~~2019, there were 1.1 million contingently-issuable stock-based awards outstanding that were excluded from the diluted earnings per share calculation because the contingencies had not been met. ~~For the three and nine months ended September~~

As of June 30, ~~2017,~~2018, there were less than 0.1 million ~~anti-dilutive stock-based awards outstanding for each respective period. In addition, there were no~~ contingently-issuable stock-based awards outstanding that were excluded from the diluted earnings per share calculation because the contingencies had not been met.

Basic and diluted weighted average shares outstanding and earnings per share were as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except per share data)	2019			2018			2019			2018
Income from continuing operations	$	107.0		$	57.3		$	181.9		$	132.6
Less: income from continuing operations attributable to noncontrolling interests	(2.5		)	(2.3		)	(4.9		)	(4.5		)
Income from continuing operations attributable to TransUnion	104.5			55.0			177.0			128.2
Discontinued operations, net of tax⁽¹⁾	(3.0		)	—			(4.6		)	—
Net income attributable to TransUnion	$	101.5		$	55.0		$	172.4		$	128.1

Basic earnings per common share from:
Income from continuing operations attributable to TransUnion	$	0.56		$	0.30		$	0.95		$	0.70
Discontinued operations, net of tax	(0.02		)	—			(0.02		)	—
Net Income attributable to TransUnion	$	0.54		$	0.30		$	0.92		$	0.70
Diluted earnings per common share from:
Income from continuing operations attributable to TransUnion	$	0.55		$	0.29		$	0.93		$	0.67
Discontinued operations, net of tax	(0.02		)	—			(0.02		)	—
Net Income attributable to TransUnion	$	0.53		$	0.29		$	0.90		$	0.67
Weighted-average shares outstanding:
Basic	187.5			184.3			187.1			184.0
Diluted	191.3			190.8			191.2			190.5

Anti-dilutive stock-based awards outstanding	—			—			0.1			—

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions, except per share data) 2018 2017 2018 2017
Income from continuing operations $ 50.8
$ 71.9
$ 183.5
$ 203.6
Less: income from continuing operations attributable to noncontrolling interests (3.1 ) (3.1 ) (7.6 ) (7.6 )
Income from continuing operations attributable to TransUnion 47.7
68.8
175.9
196.0
Discontinued operations, net of tax⁽¹⁾
(1.4 ) —
(1.4 ) —
Net income attributable to TransUnion $ 46.3
$ 68.8
$ 174.4
$ 196.0

Basic earnings per common share from:
Income from continuing operations attributable to TransUnion $ 0.26
$ 0.38
$ 0.95
$ 1.08
Discontinued operations, net of tax (0.01 ) —
(0.01 ) —
Net Income attributable to TransUnion $ 0.25
$ 0.38
$ 0.95
$ 1.08
Diluted earnings per common share from:
Income from continuing operations attributable to TransUnion $ 0.25
$ 0.36
$ 0.92
$ 1.03
Discontinued operations, net of tax (0.01 ) —
(0.01 ) —
Net Income attributable to TransUnion $ 0.24
$ 0.36
$ 0.91
$ 1.03
Weighted-average shares outstanding:
Basic 185.1
182.2
184.4
182.3
Diluted 191.2
189.2
190.8
189.8


(1)	Discontinued operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 rounds to zero. As a result of displaying amounts in millions, there is ~~zero.~~a rounding difference in the six months ended June 30, 2018.

~~13.~~14. Income Taxes

We are continuing to gather information and are waiting on further guidance from the IRS, the SEC and the FASB on the Tax Cuts and Jobs Act of 2017 (the “Act”). Effective January 1, 2018, the U.S. federal statutory rate was reduced from 35% to 21% as a result of the Act.

For the three months ended ~~September~~June 30, ~~2018,~~2019, we reported an effective tax rate of ~~36.0%~~26.9%, which was higher than the 21% U.S. federal statutory rate due primarily to ~~$19.5~~$4.9 million in state taxes, $7.8 million in foreign taxes resulting from jurisdictions which have effective tax rates higher than the U.S. federal statutory rate, and $2.2 million in other discrete tax items, partially offset by $6.3 million of excess tax benefits on stock-based compensation.

For the six months ended June 30, 2019, we reported an effective tax rate of 18.0%, which was lower than the 21% U.S. federal statutory rate due primarily to $27.3 million of excess tax benefits on stock-based compensation, partially offset by $12.1 million in foreign taxes for the same reasons as stated above, $7.0 million in state taxes and $1.5 million in other discrete items.

For the three months ended June 30, 2018, we reported an effective tax rate of 21.7%, which was higher than the 21% U.S. federal statutory rate due primarily to $10.3 million of tax expense related to the impact of the Tax Cuts and Jobs Act of 2017 (the “Act”), foreign rate differential, unrecognized tax benefits, and non-deductible acquisition and other costs, partially offset by $9.8 million of excess tax benefits on stock-based compensation.

For the six months ended June 30, 2018, we reported an effective tax rate of 24.7%, which was higher than the 21% U.S. federal statutory rate due primarily to $24.6 million of tax expense related to the impact of the Act, foreign rate differential, unrecognized tax benefits and non-deductible acquisition and other costs, partially offset by $7.6 million of excess tax benefits on stock-based compensation. Also during the quarter, we made revisions to our 2017 provisional estimates under SAB No. 118 and ASU No 2018-05. The revisions included adjustments to tax expense on the U.S. federal corporate rate reduction from 35% to 21%, the one-time mandatory repatriation tax and executive compensation. The impact of these changes to our effective rate was $5.6 million. We plan to finalize our 2017 provisional estimates during the fourth quarter 2018. For the nine months ended September 30, 2018, we reported an effective tax rate of 28.2%, which was higher than the 21% U.S. federal statutory rate due primarily to $44.1 million of tax expense related to the impact of the Act, foreign rate differential, unrecognized tax benefits and non-deductible acquisition and other costs, partially offset by $25.7$18.1 million of excess tax benefits on stock-based compensation.

For the three months ended September 30, 2017, we reported an effective tax rate of 31.0%, which was lower than the 35% U.S. federal statutory rate due primarily to $5.0 million of excess tax benefits on stock-based compensation, partially offset by an increase in state tax expense, including changes in state tax rates of $2.2 million. For the nine months ended September 30, 2017, we reported an effective tax rate of 25.2%, which was lower than the 35% U.S. federal statutory rate due primarily to the excess tax benefits on stock option exercises of $28.1 million, and the first quarter 2017 ownership structure change for certain international subsidiaries, which resulted in a decrease in income tax expense of $5.2 million, partially offset by an increase of $3.2 million in state tax expense, including changes in state tax rates.

The total amount of unrecognized tax benefits was ~~$19.3~~$19.8 million as of ~~September~~June 30, ~~2018,~~2019, and ~~$12.3~~$19.6 million as of December 31, ~~2017.~~2018. The amounts that would affect the effective tax rate if recognized are ~~$12.6~~$13.1 million and ~~$8.2~~$12.3 million, respectively. There were no significant liabilities for accrued interest ~~for~~or penalties on income taxes ~~or accrued tax penalties~~ as of ~~September~~June 30, ~~2018,~~2019 or December 31, ~~2017.~~2018. We are regularly audited by federal, state and foreign taxing authorities. Given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits. An estimate of the range of the increase or decrease in unrecognized tax benefits due to audit results cannot be made at this time. Generally, tax years 2010 and forward remain open for examination in some ~~state~~foreign jurisdictions, 2011 and ~~foreign~~forward in some state jurisdictions, and tax years 2012 and forward remain open for examination for U.S. federal income tax purposes.

~~14.~~15. Reportable Segments

~~This~~Over the past few years, we have completed a significant number of acquisitions that have transformed our business. We have also developed a significant number of new product offerings that have further diversified our portfolio of businesses. As a result of the evolution of our business, we have changed the disaggregated revenue and our measure of segment profit (Adjusted EBITDA) information that we provide to our chief operating decision makers (our “CODM”) to better align with how we manage the business. Accordingly, our disclosures around the disaggregation of our revenue and the measure of segment profit have been recast for all periods presented in this Quarterly Report on Form 10-Q to conform to the information used by our CODM. We have not changed our reportable segments and these changes do not impact our consolidated results.

We have three reportable segments, U. S. Markets (formerly U.S. Information Services), International, and Consumer Interactive, and the Corporate unit, which provides support services to each of the segments. Our CODM uses the profit measure of Adjusted EBITDA, on both a consolidated and segment basis, to allocate resources and assess performance of our businesses. We use Adjusted EBITDA as our profit measure because it eliminates the impact of certain items that we do not consider indicative of operating performance, which is useful to compare operating results between periods. Our board of directors and executive management team also use Adjusted EBITDA as a compensation measure for both segment and corporate management under our incentive compensation plans. Adjusted EBITDA is also a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours.

We define Adjusted EBITDA as net income (loss) attributable to each segment plus (less) loss (income) from discontinued operations, plus net interest expense, plus (less) provision (benefit) for income taxes, plus depreciation and amortization, plus (less) certain deferred revenue acquisition revenue-related adjustments, plus stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-related expenses including Callcredit integration-related expenses, plus (less) certain other expenses (income).

The segment financial information ~~is reported on~~below aligns with how we report information to our CODM to assess operating performance and how we manage the ~~basis that is used for the internal evaluation of operating performance.~~business. The accounting policies of the segments are the same as described in Note 1, “Significant Accounting and Reporting Policies,” included in our audited financial statements for the year ended December 31, 2017, of our Annual Report on Form 10-K filed with the SEC on February 13, 2018, as updated in Note 1, “Significant Accounting and Reporting Polices,”Policies” and Note ~~11, “Revenue,~~12, “Revenue.” ~~above.~~

~~We evaluate the performance of segments based on revenue and operating income.~~ The following is a more detailed description of ~~the~~ our three reportable segments and the Corporate unit, which provides support services to each segment:

U.S. ~~Information Services~~Markets

U.S. ~~Information Services (“USIS”)~~Markets provides consumer reports, risk scores, analytical services and decisioning ~~services~~capabilities to businesses. These businesses use our services to acquire new customers, assess ~~consumer~~consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery ~~platforms~~methods in our ~~USIS~~U.S. Markets segment allow us to serve a broad set of customers ~~and business issues.~~across industries. We ~~offer our services to customers in financial services, insurance, healthcare and other industries.~~

~~We derive our USIS segment~~report disaggregated revenue from three operating platforms: Online Data Services, Marketing Services and Decision Services. Online Data Services encompass services delivered in real-time using both credit and public record datasets. We also provide online reports that link public record datasets for qualified businesses seeking to locate consumers, specific assets or investigate relationships among consumers, businesses and locations. Collectively, the reports, characteristics and scores, with variations tailored for specific industries, form the basis of Online Data Services. We also provide online services to help businesses manage fraud and authenticate a consumer’s identity when they initiate a new business relationship. Additionally, we provide data to businesses to help them satisfy “know your customer” compliance requirements and to confirm an individual’s identity. Marketing Services help our customers develop marketing lists of prospects via direct mail, web and mobile. Our databases are used by our customers to contact individuals to extend firm offers of credit or insurance. We provide portfolio review services, which are

~~periodic reviews~~ of our customers’ existing accounts, to help our customers develop cross-selling offers to their existing customers and monitor and manage risk in their existing consumer portfolios. We also provide trigger services, which are daily notifications of changes to a consumer profile. Decision Services, our software-as-a-service offerings, includes a number of platforms that help businesses interpret data and predictive model results and apply their customer-specific criteria to facilitate real-time automated decisions atU.S. Markets segment for the time of customer interaction. Decision Services also includes advanced device identity and consumer authentication services that help businesses and consumers safely transact in a digital world. Our customers use Decision Services to evaluate business risks and opportunities, including those associated with new consumer credit and checking accounts, insurance applications, optimizing accounts receivable management and collections, patient registrations and insurance coverages, and apartment rental requests.following verticals:

•

Financial Services: The financial services vertical consists of our consumer lending, mortgage, auto and cards and payments lines of business. Our financial services clients consist of most banks, credit unions, finance companies, auto lenders, mortgage lenders, online-only lenders (FinTech), and other consumer lenders in the United States. We also distribute our solutions through most major resellers, secondary market players and sales agents. Beyond traditional lenders, we work with a variety of credit arrangers, such as auto dealers and peer-to-peer lenders. We provide solutions across every aspect of the lending lifecycle; customer acquisition and engagement, fraud and ID management, retention and recovery. Our products are focused on mitigating risk and include credit reporting, credit marketing, analytics and consulting, identity verification and authentication and debt recovery solutions.

•

Emerging Verticals: Emerging verticals include healthcare, insurance, collections, property management, public sector and other diversified markets. Our solutions in these verticals are similar to the solutions in our financial services vertical and also address the entire customer lifecycle. We offer onboarding and retention solutions, transaction processing products, scoring products, marketing solutions, analytics and consulting, identity management and fraud solutions, and revenue optimization and collections solutions.

International

The International segment provides services similar to our ~~USIS~~U.S. Markets 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~~services, decisioning ~~services~~capabilities, and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. These services are offered to customers in a number of industries including financial services, insurance, automotive, collections, and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer services similar to those offered by our Consumer Interactive segment that help consumers proactively manage their personal finances.

We report disaggregated revenue of our International segment ~~revenue in two categories, developed markets and emerging markets. Our developed markets are~~for the following regions: Canada, Latin America, the United Kingdom, ~~Canada,~~Africa, India and ~~Hong Kong. Our emerging markets are Africa, Latin America,~~ Asia ~~Pacific, and India.~~Pacific.

Consumer Interactive

Consumer Interactive offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution, and financial management. Our products are provided through user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.

Corporate

In addition, Corporate provides support services for each of the segments, holds investments, and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature.

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

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2018 2017 2018 2017
Gross revenue:
U.S. Information Services:
  Online Data Services $ 235.2
$ 200.2
$ 698.4
$ 573.2
  Marketing Services 59.6
48.5
167.4
137.0
  Decision Services 80.1
63.3
209.5
182.0
Total U.S. Information Services 374.8
312.0
1,075.3
892.1

International:
  Developed Markets 63.9
33.8
138.4
92.8
  Emerging Markets 64.8
61.2
192.5
172.8
Total International 128.7
94.9
330.9
265.6

Total Consumer Interactive 119.1
107.0
354.6
317.3

Total revenue, gross 622.6
513.9
1,760.8
1,475.1

Intersegment revenue eliminations:
   U.S. Information Services (17.5 ) (14.6 ) (52.4 ) (43.8 )
   International Developed Markets (1.3 ) (1.3 ) (3.7 ) (3.4 )
   International Emerging Markets —
—
(0.2 ) (0.1 )
   Consumer Interactive (0.2 ) (0.1 ) (0.5 ) (0.1 )
Total intersegment eliminations (19.0 ) (16.0 ) (56.8 ) (47.4 )
Total revenue, net $ 603.6
$ 498.0
$ 1,704.1
$ 1,427.7

Gross operating income:
U.S. Information Services $ 92.6
$ 82.4
$ 271.2
$ 238.4
International 3.9
19.9
33.9
41.5
Consumer Interactive 56.6
46.5
164.4
144.2
Corporate (31.1 ) (22.3 ) (87.8 ) (80.9 )
Total operating income $ 122.1
$ 126.6
$ 381.7
$ 343.2

Intersegment operating income eliminations:
U.S. Information Services $ (17.2 ) $ (14.1 ) $ (51.3 ) $ (42.5 )
International (0.7 ) (1.0 ) (2.3 ) (2.6 )
Consumer Interactive 17.9
15.1
53.7
45.1
Corporate —
—
—
—
Total intersegment eliminations $ —
$ —
$ —
$ —



	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2019			2018			2019			2018
Revenue:
U.S. Markets:
Financial Services	$	213.0		$	192.6		$	402.1		$	375.2
Emerging Verticals	192.9			165.6			372.6			325.3
Total U.S. Markets	405.9			358.2			774.7			700.5

International:
Canada	25.4			24.2			48.4			45.9
Latin America	26.2			25.8			51.5			51.0
United Kingdom	46.6			7.7			88.8			7.7
Africa	14.0			15.6			29.0			32.6
India	24.9			18.9			52.6			39.1
Asia Pacific	14.0			14.1			26.8			26.0
Total International	151.1			106.3			297.1			202.3

Total Consumer Interactive	123.6			117.6			246.9			235.5

Total revenue, gross	$	680.5		$	582.1		$	1,318.7		$	1,138.2

Intersegment revenue eliminations:
U.S. Markets	$	(17.2	)	$	(17.5	)	$	(34.7	)	$	(34.9	)
International	(1.3		)	(1.4		)	(2.5		)	(2.6		)
Consumer Interactive	(0.2		)	(0.2		)	(0.4		)	(0.3		)
Total intersegment eliminations	(18.6		)	(19.0		)	(37.5		)	(37.8		)
Total revenue as reported	$	661.9		$	563.1		$	1,281.2		$	1,100.5

Adjusted EBITDA
U.S. Markets	$	175.4		$	147.9		$	317.5		$	281.2
International	59.6			41.2			124.5			74.3
Consumer Interactive	59.1			58.0			119.3			114.9
Corporate	(30.4		)	(26.4		)	(58.7		)	(47.1		)
Consolidated Adjusted EBITDA	$	263.7		$	220.6		$	502.6		$	423.3

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

A reconciliation of ~~operating~~net income attributable to ~~income before income taxes~~TransUnion to Adjusted EBITDA for the periods presented is as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2018 2017 2018 2017
Operating income from segments $ 122.1
$ 126.6
$ 381.7
$ 343.2
Non-operating income and expense (42.7 ) (22.4 ) (126.1 ) (70.9 )
Income from continuing operations before income taxes $ 79.4
$ 104.2
$ 255.6
$ 272.3



	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2019			2018		2019			2018
Reconciliation of net income attributable to TransUnion to Adjusted EBITDA:
Net income attributable to TransUnion	$	101.5		$	55.0	$	172.4		$	128.1
Discontinued operations	3.0			—		4.6			—
Net income from continuing operations attributable to TransUnion	104.5			55.0		177.0			128.2
Net interest expense	43.4			24.5		86.9			46.4
Provision (benefit) for income taxes	39.4			15.8		39.9			43.5
Depreciation and amortization	89.2			68.0		182.7			134.6
EBITDA	276.4			163.4		486.5			352.6
Adjustments to EBITDA:
Acquisition revenue-related adjustments	1.7			—		5.9			—
Stock-based compensation	8.2			16.0		20.9			26.9
Mergers and acquisitions, divestitures and business optimization	(23.9		)	25.9		(12.6		)	29.2
Other	1.3			15.3		1.9			14.7
Total adjustments to EBITDA	(12.7		)	57.2		16.2			70.7
Consolidated Adjusted EBITDA	$	263.7		$	220.6	$	502.6		$	423.3

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

Earnings from equity method investments included in non-operating income and expense for the periods presented were as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2019		2018		2019		2018
U.S. Markets	$	0.6	$	0.6	$	1.3	$	1.3
International	2.7		2.3		5.8		3.9
Total	$	3.3	$	2.9	$	7.1	$	5.2

Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions) 2018 2017 2018 2017
U.S. Information Services $ 0.7
$ 0.7
$ 2.1
$ 1.5
International 2.5
1.9
6.3
4.8
Total $ 3.2
$ 2.6
$ 8.4
$ 6.3

16. Subsequent Event

~~15. Contingencies~~On July 12, 2019, the Company determined that TransUnion Limited, a Hong Kong entity in which the Company holds a 56.25 percent interest, has been the victim of criminal fraud. The incident involved employee impersonation and fraudulent requests targeting TransUnion Limited, which resulted in a series of fraudulently-induced wire transfers in early July 2019 totaling $17.8 million.

~~Litigation~~

~~In view~~The Company has launched an internal investigation to determine the full extent of the ~~inherent unpredictability~~fraud scheme and related potential exposure, and expects to record a one-time pre-tax charge of ~~litigation and regulatory matters, particularly where the damages sought are substantial or indeterminate or when the proceedings or investigations are~~up to $17.8 million in the ~~early stages, we cannot determine~~third quarter of 2019 as the result of this event. The Company self-discovered this fraudulent activity and promptly initiated contact with any degree of certainty the timing or ultimate resolution of litigation and regulatory matters or the eventual loss, fines, penalties or business impact, if any, that may result. We establish reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. its bank as well as appropriate law enforcement authorities.

The ~~actual costs of resolving litigation and regulatory matters, however,~~Company may be ~~substantially higher than the amounts reserved for those matters, and an adverse outcome~~limited in certain of these matters could have a material adverse effect on our consolidated financial statements in particular quarterly or annual periods. The following discussion describes material developments in previously disclosed material legal proceedings that occurred in the three months ended September 30, 2018. Refer to Part I, Item 3, of our Annual Report on Form 10-K for the year ended December 31, 2017, for a full description of our material pending legal proceedings.

~~Public Records~~

~~On September 20, 2018, the Court granted final approval~~what information it can disclose because of the ~~settlement~~ongoing investigation. To date, the Company has not found any evidence of ~~all~~additional fraudulent activity. This incident did not result in any unauthorized access to any of the ~~pending public records matters,~~confidential consumer information or other ~~than~~data that we maintain. While this matter will result in some additional near-term expenses, the ~~Walsh~~ ~~matter, on terms that will~~Company does not expect this incident to otherwise have a material impact on its business.

See our ~~financial condition or results of operations. We are in active discussions regarding a settlement of the individual claims asserted in the~~ ~~Walsh~~ ~~matter, which was stayed pending final approval of the broader settlement, and expect it will also be resolved~~Current Report on terms that will not have a material impact on our financial condition or results of operations. If a settlement is not ultimately reached, TransUnion believes it has valid defenses to this action and will continue to defend it vigorously.Form 8-K dated July 18, 2019.

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

The following discussion and analysis of TransUnion’s financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, TransUnion’s audited consolidated financial statements, the accompanying notes, “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, as well as the unaudited consolidated financial statements and the related notes presented in Part I, Item 1, of this Quarterly Report on Form 10-Q.

In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed below in “Cautionary Notice Regarding Forward-Looking Statements,” and Part II, Item 1A, “Risk Factors.”

References in this discussion and analysis to “the Company,” “we,” “us” and “our” refer to TransUnion and its direct and indirect subsidiaries, ~~including TransUnion Intermediate Holdings, Inc.,~~ collectively.

Overview

TransUnion is a leading global risk and information solutions provider to businesses and consumers. We provide consumer reports, risk scores, analytical services and decisioning capabilities to businesses. Businesses embed our solutions into their process workflows to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. Consumers use our solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft. We are differentiated by our comprehensive and unique datasets, our next-generation technology and our analytics and decisioning capabilities, which enable us to deliver insights across the entire consumer lifecycle. We believe we are the largest provider of risk and information solutions in the United States to possess both nationwide consumer credit data and comprehensive, diverse public records data, which allows us to better predict behaviors, assess risk and address a broader set of business issues for our customers. We have deep domain expertise across a number of attractive industries, which we also refer to as verticals, including financial services, ~~specialized risk,~~healthcare, insurance and ~~healthcare.~~specialized risk. We have a global presence in over 30 countries and territories across North America, Latin America, the United Kingdom, Africa, ~~Latin America,~~India and ~~Asia.~~Asia Pacific.

Our solutions are based on a foundation of financial, credit, alternative credit, identity, bankruptcy, lien, judgment, insurance claims, automotive and other relevant information from approximately 90,000 data sources, including financial institutions, private databases and public records repositories. We refine, standardize and enhance this data using sophisticated algorithms to create proprietary databases. Our deep analytics expertise, which includes our people as well as tools such as predictive modeling and scoring, customer segmentation, benchmarking and forecasting, enables businesses and consumers to gain better insights into their risk and financial data. Our decisioning capabilities, which are generally delivered on a software-as-a-service platform, allow businesses to interpret data and apply their specific qualifying criteria to make decisions and take action with respect to their customers. Collectively, our data, analytics and decisioning capabilities allow businesses to authenticate the identity of consumers, effectively determine the most relevant products for consumers, retain and cross-sell to existing consumers, identify and acquire new consumers and reduce loss from fraud. Similarly, our capabilities allow consumers to see how their credit profiles have changed over time, understand the impact of financial decisions on their credit scores and manage their personal information as well as to take precautions against identity theft.

Segments

Over the past few years, we have completed a significant number of acquisitions that have transformed our business. We have also developed a significant number of new product offerings that have further diversified our portfolio of businesses. As a result of the evolution of our business, we have changed the disaggregated revenue and our measure of segment profit (Adjusted EBITDA) information that we provide to our chief operating decision makers (our “CODM”) to better align with how we manage the business. Accordingly, our disclosures around the disaggregation of our revenue and the measure of segment profit have been recast for all periods presented in this Quarterly Report on Form 10-Q to conform to the information used by our CODM. We have not changed our reportable segments and these changes do not impact our consolidated results. See Part 1, Item 1, Note 15, “Reportable Segments,” for further information about this change.

We manage our business and report ~~our~~disaggregated revenue and financial results in three reportable segments: ~~USIS,~~U.S. Markets (formerly U.S. Information Services), International and Consumer Interactive.

~~USIS~~The U.S. Markets segment provides consumer reports, risk scores, ~~analytics~~analytical services and decisioning ~~services~~capabilities to businesses. These businesses use our services to acquire new customers, assess ~~consumer~~consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery ~~platforms~~methods in our ~~USIS~~U.S. Markets segment allow us to serve a

broad set of customers ~~and business issues.~~across industries. We ~~offer~~report disaggregated revenue of our ~~services to customers in~~U.S. Markets segment for the financial services ~~insurance, healthcare~~ and ~~other industries.~~emerging verticals.

The International segment provides services similar to our ~~USIS~~U.S. Markets 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~~services, decisioning ~~services~~capabilities, and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. These services are offered to customers in a number of industries including financial services, insurance, automotive, collections and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer services similar to those offered by our Consumer Interactive segment that help consumers proactively manage their personal finances.

We report disaggregated revenue of our International segment for the following regions: Canada, Latin America, the United Kingdom, Africa, India and Asia Pacific.

The Consumer Interactive segment offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution, and financial management. Our products are provided through user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.

In addition, Corporate provides shared services for each of the segments, holds investments, raises capital, and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature.

Factors Affecting Our Results of Operations

The following are certain key factors that affect, or have recently affected, our results of operations:

Macroeconomic and Industry Trends

Our revenues can be significantly influenced by general macroeconomic conditions, including the availability of ~~affordable~~ credit and capital, interest rates, inflation, employment levels, consumer confidence and housing demand. In the markets where we compete, we have generally seen good economic conditions and increased market stabilization over the past few years. In the United States, June set a record for the longest period of economic expansion in U.S. history at 121 months. One result of this record expansion is that we continue to see a healthy, well-functioning consumer lending market driven by the exceptionally strong labor market and continuing strong consumer ~~confidence~~confidence. During the second quarter of 2019, we saw continuing improvements that ~~is near an all-time high. Rising interest rates continue to impact~~began late in the ~~housing refinance~~first quarter in the mortgage market ~~and the overall housing market has softened primarily~~ due to ~~a lack~~the recent declines in mortgage rates and improvements in new and existing home sales, and some early indications of inventory, especially at the entry level. We anticipate these headwinds will be partially offset by the increased availability of home equity and subsequent borrowing. We have also seen solid demand for our marketing services, andimprovements in our ~~Consumer Interactive segment,~~customer’s marketing activity. Demand for consumer solutions continues to be strong ~~demand for our credit and~~due to consumer awareness of the risk of identity theft ~~solutions. We~~due to data breaches and increasingly available free credit information. These positive signs have been tempered by continuing uncertainty around trade policies and global economic growth. Internationally, we continue to see strong growth in key ~~international~~ markets, tempered by uncertainty in our Africa region and ongoing ~~headwinds in Africa. Also, weakening~~concern over Brexit. Weakening foreign currencies, ~~resulted~~primarily in ~~a slight decline in~~Latin America and Africa, lowered our reported results ~~in both the three- and nine-month periods of 2018~~for 2019 compared with ~~the prior year periods.~~2018.

Our revenues are also significantly influenced by industry trends, including the demand for information services in financial services, healthcare, insurance ~~healthcare~~ and other industries we serve. Companies are increasingly relying on business analytics and big-data technologies to help process ~~this~~ data in a cost-efficient manner. As customers have gained the ability to rapidly aggregate and analyze data generated by their own activities, they are increasingly expecting access to real-time data and analytics from their information providers as well as solutions that fully integrate into their workflows. As economies in emerging markets continue to develop and mature, we believe there will continue to be favorable socio-economic trends, such as an increase in the size of the middle class and a significant increase in the use of financial services by currently under-served and under-banked customers. Demand for consumer solutions is rising, with higher consumer awareness of the importance and usage of their credit information, increased risk of identity theft due to data breaches, and more readily available free credit information. The complexity of existing regulations ~~including from the Consumer Financial Protection Bureau (“CFPB”)~~ and the ~~Dodd-Frank Wall Street Reform~~emergence of new regulations across both emerging and ~~Consumer Protection Act and new capital requirements,~~developed economies globally continue to make operations for businesses more challenging.

Effects of Inflation

We do not believe that inflation has had a material effect on our business, results of operations or financial condition.

Recent Developments

During the ~~third~~second quarter of ~~2018,~~2019, we ~~repaid the remaining~~prepaid $100.0 million of our outstanding Senior Secured ~~Revolving Line of Credit balance of $75.0 million.~~

On February 13, 2018, we announced that our board of directors approved a dividend policy pursuant to which we intend to pay quarterly cash dividends on our common stock. On May 9, 2018, the board of directors declared a dividend for the first quarter of 2018 of $0.075 per share to holders of record as of the close of business on May 23, 2018. The total dividend declared was $14.1 million, of which $13.8 million was paid on June 7, 2018, with the remainder due to employees who hold restricted stock units when and if those units vest. On August 7, 2018, the board of directors declared a dividend for the second quarter of 2018 of $0.075 per share to holder of record as of the close of business on August 22, 2018. The total dividend declared was $14.2 million, of which $13.9 million was paid on September 6, 2018, with the remainder due to employees who hold restricted stock units when and if those units vest.

TransUnion may make dividend payments up to an unlimited amount under the terms of the senior secured credit facility provided than no default or event of default exists and so long as the total net leverage ratio does not exceed 4.75-to-1. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.Term Loan B-3.

~~Our board~~On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842).This guidance, among other things, requires us to record the future discounted present value of ~~directors also removed~~all future lease payments as a liability on our balance sheet, as well as a corresponding “right-to-use” asset, which is an asset that represents the ~~three-year time limitation~~right to use or control the use of a specified asset for the lease term, for all long-term leases. This new guidance affects the comparability of our ~~previously announced $300.0 million stock repurchase program. The remaining authorized $166.6 million~~balance sheets as of ~~repurchases may be made from time~~June 30, 2019 compared with December 31, 2018. See Part 1, Item 1, Note 10, “Leases,” for additional information about our leases.

On December 17, 2018, we entered into interest rate swap agreements with various counterparties that fixes our LIBOR exposure on an additional portion of our existing senior secured term loans or similar replacement debt at approximately 2.647% to ~~time at management’s discretion at prices management considers to be attractive through open market purchase or through privately negotiated transactions.~~2.706%.

During the second quarter of 2018, we borrowed a significant amount of additional debt against our senior secured credit facility to fund the purchase of three acquisitions as discussed in “Recent Acquisitions and Partnerships” below. During the second quarter of 2018, we borrowed a total of $125.0 million under the Senior Secured Revolving Line of Credit to fund an acquisition and for general corporate purposes. On June 19, 2018, we borrowed an additional $800.0 million against our Senior Secured Term Loan A-2 and $600.0 million against a new tranche 4 of our Senior Secured Term Loan B (“Senior Secured Term Loan B-4”) to fund the acquisition of Callcredit. On June 29, 2018, we borrowed an additional $400.0 million of our Senior Secured Term Loan B-4 to fund another acquisition and to repay a portion of our Senior Secured Revolving Line of Credit. ~~Our net incremental borrowings during~~These transactions affect the ~~second quarter~~comparability of interest expense between 2019 and 2018 ~~was $20.0 million under the Senior Secured Revolving Line~~as further discussed in “Results of ~~Credit.~~

~~On March 12, 2018, we repaid $30.0 million of our outstanding Senior Secured Revolving Line of Credit.~~

~~On January 1, 2018, we adopted ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (ASC Topic 606),~~ using the modified retrospective approach. Under the modified retrospective approach, we recognized the cumulative effect of adopting ASC Topic 606 in the opening balance of retained earnings. There was no material impact on our consolidated financial statements or on how we recognize revenue upon adoption. See Part I, Item 1, Note 1, “Significant AccountingOperations - Non-Operating Income and ~~Reporting Policies,” and Note 11, “Revenue,” for additional information about the adoption of Topic 606.~~Expense” below.

Recent Acquisitions and Partnerships

We selectively evaluate acquisitions and partnerships as a means to expand our business and international footprint and to enter new markets. Since January 1, ~~2017,~~2018, we have completed the following ~~acquisitions:~~acquisitions, including those that impact the comparability of our 2019 results with our 2018 results:

On ~~June 29, 2018,~~May 22, 2019, we acquired 100% of the equity of ~~iovation,~~TruSignal, Inc. (“~~iovation”~~TruSignal”). ~~iovation~~TruSignal is ~~a provider of advanced device identity~~an innovative leader in people-based marketing technology for Fortune 500 brands, agencies, platforms, publishers and ~~consumer authentication services that help businesses and consumers safely transact in a digital world.~~data owners. TruSignal uses predictive scoring, powered by artificial intelligence, to make big data actionable for one-to-one addressable marketing. The results of operations of ~~iovation,~~TruSignal, which are not material to our consolidated financial statements, have been included as part of our ~~USIS~~U.S. Markets segment in our consolidated statements of income since the date of the acquisition.

On ~~June 22, 2018,~~April 16, 2019, we acquired a noncontrolling interest in the outstanding equity of Payfone, Inc. (“Payfone”). Payfone leverages mobile network data from a comprehensive set of providers and applies proprietary technology and solutions to determine if the device is being used by its rightful owner. We will record any future dividends in other income and expense when received. We measure our investment in Payfone at our initial cost, minus any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments in Payfone, with any adjustments recorded in other income and expense.

On April 15, 2019, we increased our noncontrolling interest investment in SavvyMoney, Inc. (“SavvyMoney”). We had previously increased our noncontrolling interest investment in SavvyMoney on June 22, 2018. Our initial investment in SavvyMoney was made on August 30, 2016. SavvyMoney is a provider of credit information services for bank and credit union users. We will record any future dividends in other income and expense when received. We measure our investment in SavvyMoney at our initial cost, minus any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments in SavvyMoney, with any adjustments recorded in other income and expense. ~~We will record any future dividends~~

On October 15, 2018, we acquired 100% of the equity of Rubixis, Inc. (“Rubixis”). Rubixis is an innovative healthcare revenue cycle solutions company that helps providers maximize reimbursement from insurance payers. Rubixis brings specialized expertise in ~~other~~the management of denials and underpayments, two significant pain points for healthcare providers. The results of operations of Rubixis, which are not material to our consolidated financial statements, have been included as part of our U.S. Markets segment in our consolidated statements of income since the date of the acquisition.

On June 29, 2018, we acquired 100% of the equity of iovation, Inc. (“iovation”). iovation is a provider of advanced device identity and ~~expense when received.~~consumer authentication services that helps businesses and consumers safely transact in a digital world. The results of operations of iovation, which are not material to our consolidated financial statements, have been included as part of our U.S. Markets segment in our consolidated statements of income since the date of the acquisition.

On June 19, 2018, we acquired 100% of the equity of Callcredit Information Group, Ltd. (“Callcredit”). Callcredit is a ~~U.K. based~~United Kingdom-based information solutions company founded in 2000 that provides data, analytics and technology solutions to help businesses and consumers make informed decisions. The results of operations of Callcredit ~~which are not material to our consolidated financial statements for the quarter,~~ have been included as part of our International segment in our consolidated statements of income since the date of the acquisition. See Part I, Item I, “Notes to Unaudited Consolidated Financial Statements,” Note 2, “Business Acquisitions,” for further information about this acquisition.

On June 1, 2018, we acquired 100% of the equity of Healthcare Payment Specialists, LLC (“HPS”). HPS provides expertise and technology solutions to help medical care providers maximize Medicare reimbursements. The results of operations of HPS, which are not material to our consolidated financial statements, have been included as part of our ~~USIS~~U.S. Markets segment in our consolidated statements of income since the date of the acquisition.

On November 30, 2017, we acquired a non-controlling, non-voting preferred stock equity interest in Throtle, Inc. (“Throtle”). Throtle is a second generation data onboarding company focused on deterministic matching, identity resolution and closed-loop enablement. We measure our investment in Throtle at our initial cost, minus any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments in Throtle, with any adjustments recorded in other income and expense. We will record any future dividends in other income and expense when received.

On November 14, 2017, we acquired 100% of the equity of FT Holdings, Inc. (“FactorTrust”). FactorTrust is a provider of alternative credit data, analytics and risk scoring information that empowers lenders to make more informed decisions, and increases financial inclusion to a wider population of consumers. The results of operations of FactorTrust, which are not material to our consolidated financial statements, have been included as part of our USIS segment in our consolidated statements of income since the date of the acquisition.

On October 2, 2017, we acquired 100% of the equity of xTech Holdings, Inc. (“eBureau”). eBureau is a leading provider of custom-analytic solutions with both credit-risk and anti-fraud applications. The results of operations of eBureau, 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 August 18, 2017, we acquired 100% of the equity of Datalink Services, Inc. (“Datalink”). Datalink’s solutions provide enhanced data that identifies risks associated with an applicant’s driving behavior and provides insurers with a cost-competitive, timely and more detailed offering. The results of operations of Datalink, 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 July 19, 2017, we acquired a non-controlling, non-voting preferred stock equity interest in Synthetic P2P Holdings Corporation (“PeerIQ”). Also, on November 10, 2016, we entered into an agreement with 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 provider. We measure our investment in PeerIQ at our initial cost, minus any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments in PeerIQ, with any adjustments recorded in other income and expense. We will record any future dividends in other income and expense when received.

During March 2017, we increased our equity interest in Credit Information Bureau (India) Limited (“CIBIL”) from 82.1% to 92.1% with additional purchases totaling 10%. CIBIL’s results of operations are included as part of our International segment in our consolidated statements of income.

Key Components of Our Results of Operations

Revenue

WeThe following is a more detailed description of how we derive and report revenue for our ~~USIS segment revenue from~~ three ~~operating platforms: Online Data Services, Marketing Services~~reportable segments:

U.S. Markets

U.S. Markets provides consumer reports, risk scores, analytical services and Decision Services. Online Data Services encompass services delivered in real-time using both credit and public record datasets. We also provide online reports that link public record datasets for qualifieddecisioning capabilities to businesses. These businesses seeking to locate consumers, specific assets or investigate relationships among consumers, businesses and locations. Collectively, the reports, characteristics and scores, with variations tailored for specific industries, form the basis of Online Data Services. We also provide onlineuse our services to ~~help businesses~~acquire new customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage ~~fraud~~debt portfolio risk, collect debt, verify consumer identities and ~~authenticate~~investigate potential fraud. The core capabilities and delivery methods in our U.S. Markets segment allow us to serve a ~~consumer’s identity when they initiate a new business relationship. Additionally, we provide data~~broad set of customers across industries. We report disaggregated revenue of our U.S. Markets segment for the following verticals:

•

Financial Services: The financial services vertical consists of our consumer lending, mortgage, auto and cards and payments lines of business. Our financial services clients consist of most banks, credit unions, finance companies, auto lenders, mortgage lenders, online-only lenders (FinTech), and other consumer lenders in the United States. We also distribute our solutions through most major resellers, secondary market players and sales agents. Beyond traditional lenders, we work with a variety of credit arrangers, such as auto dealers and peer-to-peer lenders. We provide solutions across every aspect of the lending lifecycle: customer acquisition and engagement, fraud and ID management, retention and recovery. Our products are focused on mitigating risk and include credit reporting, credit marketing, analytics and consulting, identity verification, and authentication and debt recovery solutions.

•

International

The International segment provides services similar to our U.S. Markets 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 services, decisioning capabilities, and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. These services are offered to ~~help them satisfy “know your customer” compliance requirements and to confirm an individual’s identity. Marketing Services help our~~ customers develop marketing lists of prospects via direct mail, web and mobile. Our databases are used by our customers to contact individuals to extend firm offers of credit or insurance. We provide portfolio review services, which are periodic reviews of our customers’ existing accounts, to help our customers develop cross-selling offers to their existing customers and monitor and manage risk in ~~their existing consumer portfolios. We also provide trigger services, which are daily notifications of changes to a consumer profile. Decision Services, our software-as-a-service offerings, includes~~ a number of ~~platforms~~industries including financial services, insurance, automotive, collections, and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer services similar to those offered by our Consumer Interactive segment that help ~~businesses interpret data and predictive model results and apply~~consumers proactively manage their customer-specific criteria to facilitate real-time automated decisions at the time of customer interaction. Decision Services also includes advanced device identity and consumer authentication services that help businesses and consumers safely transact in a digital world. Our customers use Decision Services to evaluate business risks and opportunities, including those associated with new consumer credit and checking accounts, insurance applications, optimizing accounts receivable management and collections, patient registrations and insurance coverages, and apartment rental requests.personal finances.

We report disaggregated revenue of our International segment ~~revenue in two categories, developed markets and emerging markets. Our developed markets are~~for the following regions: Canada, Latin America, the United Kingdom, ~~Canada~~Africa, India and ~~Hong Kong. Our emerging markets are Africa, Latin America,~~ Asia ~~Pacific and India.~~Pacific.

Consumer Interactive

Consumer Interactive offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution, and financial management. Our products are provided through ~~user friendly~~user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels.

Cost of Services

Costs of services include data acquisition and royalty fees, personnel costs related to our databases and software applications, consumer and call center support costs, hardware and software maintenance costs, telecommunication expenses and occupancy costs associated with the facilities where these functions are performed.

Selling, General and Administrative

Selling, general and administrative expenses include personnel-related costs for sales, administrative and management employees, costs for professional and consulting services, advertising and occupancy and facilities expense of these functions.

Non-Operating Income and Expense

Non-operating income and expense includes interest expense, interest income, earnings from equity-method investments, dividends from cost-method investments, impairments of equity-method ~~investments~~ and ~~impairments and any other adjustments of~~ cost-method investments, if any, expenses related to successful and unsuccessful business acquisitions, loan fees, debt refinancing expenses, certain acquisition-related gains and losses and other non-operating income and expenses.

Results of Operations

Key Performance Measures

~~Management, including~~Over the past few years, we have completed a significant number of acquisitions that have transformed our business. We have also developed a significant number of new product offerings that have further diversified our portfolio of businesses. As a result of the evolution of our business, we have changed the disaggregated revenue and our measure of segment profit (Adjusted EBITDA) information that we provide to our chief operating decision ~~maker,~~makers (our “CODM”) to better align with how we manage the business. Accordingly, our disclosures around the disaggregation of our revenue and the measure of segment profit have been recast for all periods presented in this Quarterly Report on Form 10-Q to conform to the information used by our CODM. We have not changed our reportable segments and these changes do not impact our consolidated results. See Part 1, Item 1, Note 15, “Reportable Segments,” for further information about this change.

Management, including our CODM, evaluates the financial performance of our businesses based on a variety of key indicators. These indicators include the GAAP measures of revenue, segment Adjusted EBITDA, cash provided by operating activities and cash paid for capital expenditures and the non-GAAP measures Adjusted Revenue and consolidated Adjusted ~~EBITDA and the GAAP measures cash provided by operating activities of continuing operations and cash paid for capital expenditures.~~EBITDA. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, these key indicators were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2018 2017
$
Change

%
Change
2018 2017
$
Change

%
Change
Revenue as reported $ 603.6
$ 498.0
$ 105.6
21.2 % $ 1,704.1
$ 1,427.7
$ 276.3
19.4 %
Acquisitions revenue-related adjustment⁽¹⁾
17.7
—
17.7
nm
17.7
—
17.7
nm
Adjusted Revenue $ 621.3
$ 498.0
$ 123.3
24.8 % $ 1,721.8
$ 1,427.7
$ 294.1
20.6 %

Reconciliation of net income (loss)
    attributable to TransUnion to Adjusted
    EBITDA⁽²⁾:

Net income attributable to TransUnion $ 46.3
$ 68.8
$ (22.5 ) (32.7 )% $ 174.4
$ 196.0
$ (21.6 ) (11.0 )%
Discontinued operations 1.4
—
1.4
— % 1.4
—
1.4
— %
Net income from continuing operations
    attributable to TransUnion
47.7
68.8
(21.1 ) (30.6 )% 175.9
196.0
(20.2 ) (10.3 )%
Net interest expense 42.6
20.2
22.5
111.4 % 89.0
61.6
27.4
44.4 %
Provision (benefit) for income taxes 28.6
32.3
(3.7 ) (11.5 )% 72.1
68.7
3.4
5.0 %
Depreciation and amortization 84.2
59.9
24.3
40.5 % 218.8
176.2
42.6
24.2 %
EBITDA 203.2
181.3
21.9
12.1 % 555.8
502.6
53.2
10.6 %
Adjustments to EBITDA:
Acquisitions revenue-related adjustment⁽¹⁾
17.7
—
17.7
nm
17.7
—
17.7
nm
Stock-based compensation⁽³⁾
16.3
9.5
6.9
72.2 % 43.2
34.3
9.0
26.2 %
Mergers and acquisition, divestitures
    and business optimization⁽⁴⁾
6.2
(1.7 ) 7.8
nm
35.3
5.2
30.1
nm
Other⁽⁵⁾
1.5
5.0
(3.6 ) (70.7 )% 16.1
9.8
6.3
64.0 %
Total adjustments to EBITDA 41.7
12.9
28.8
nm
112.4
49.3
63.1
127.9 %
Adjusted EBITDA⁽²⁾
$ 244.9
$ 194.1
$ 50.7
26.1 % $ 668.1
$ 551.9
$ 116.3
21.1 %

Other metrics:
Cash provided by operating activities of
continuing operations
$ 179.8
$ 174.5
$ 5.3
3.0 % $ 410.3
$ 346.7
$ 63.6
18.3 %
Capital expenditures $ 47.9
$ 33.0
$ 14.9
45.2 % $ 118.3
$ 91.0
$ 27.3
30.0 %



	Three Months Ended June 30,										Six Months Ended June 30,
(in millions)	2019			2018		$ Change			% Change		2019			2018		$ Change			% Change
Revenue:
Consolidated revenue as reported	$	661.9		$	563.1	$	98.8		17.5	%	$	1,281.2		$	1,100.5	$	180.7		16.4	%
Acquisition revenue-related adjustments⁽¹⁾	1.7			—		1.7			nm		5.9			—		5.9			nm
Consolidated Adjusted Revenue⁽²⁾	$	663.6		$	563.1	$	100.5		17.9	%	$	1,287.1		$	1,100.5	$	186.6		17.0	%
																—
U.S. Markets gross revenue	$	405.9		$	358.2	$	47.7		13.3	%	$	774.7		$	700.5	$	74.1		10.6	%
Acquisition revenue-related adjustments⁽¹⁾	0.2			—		0.2			nm		0.4			—		0.4			nm
U.S. Markets gross Adjusted Revenue⁽²⁾	$	406.0		$	358.2	$	47.8		13.3	%	$	775.0		$	700.5	$	74.5		10.6	%

International gross revenue	$	151.1		$	106.3	$	44.8		42.1	%	$	297.1		$	202.3	$	94.9		46.9	%
Acquisition revenue-related adjustments⁽¹⁾	1.6			—		1.6			nm		5.6			—		5.6			nm
International gross Adjusted Revenue⁽²⁾	$	152.7		$	106.3	$	46.4		43.6	%	$	302.7		$	202.3	$	100.4		49.7	%

Consumer Interactive gross revenue	$	123.6		$	117.6	$	6.0		5.1	%	$	246.9		$	235.5	$	11.5		4.9	%

Adjusted EBITDA⁽²⁾:
Reconciliation of net income attributable to TransUnion to Adjusted EBITDA⁽²⁾:
Net income attributable to TransUnion	$	101.5		$	55.0	$	46.4		84.4	%	$	172.4		$	128.1	$	44.2		34.5	%
Discontinued operations	3.0			—		3.0			nm		4.6			—		4.6			nm
Net income from continuing operations attributable to TransUnion	104.5			55.0		49.4			89.8	%	177.0			128.2		48.8			38.1	%
Net interest expense	43.4			24.5		18.9			77.1	%	86.9			46.4		40.5			87.5	%
Provision for income taxes	39.4			15.8		23.5			nm		39.9			43.5		(3.6		)	(8.2	)%
Depreciation and amortization	89.2			68.0		21.2			31.2	%	182.7			134.6		48.1			35.8	%
EBITDA	276.4			163.4		113.0			69.2	%	486.5			352.6		133.9			38.0	%
Adjustments to EBITDA:
Acquisition revenue-related adjustments⁽¹⁾	1.7			—		1.7			nm		5.9			—		5.9			n/m
Stock-based compensation⁽³⁾	8.2			16.0		(7.9		)	(49.1	)%	20.9			26.9		(6.0		)	(22.2	)%
Mergers and acquisitions, divestitures and business optimization⁽⁴⁾	(23.9		)	25.9		(49.8		)	nm		(12.6		)	29.2		(41.8		)	n/m
Other⁽⁵⁾	1.3			15.3		(14.0		)	(91.8	)%	1.9			14.7		(12.7		)	(86.7	)%
Total adjustments to EBITDA	(12.7		)	57.2		(69.9		)	(122.2	)%	16.2			70.7		(54.6		)	(77.2	)%
Consolidated Adjusted EBITDA⁽²⁾	$	263.7		$	220.6	$	43.1		19.5	%	$	502.6		$	423.3	$	79.4		18.7	%



	Three Months Ended June 30,											Six Months Ended June 30,
(in millions)	2019			2018			$ Change			% Change		2019			2018			$ Change			% Change
U.S. Markets Adjusted EBITDA	$	175.4		$	147.9		$	27.6		18.6	%	$	317.5		$	281.2		$	36.2		12.9	%
International Adjusted EBITDA	59.6			41.2			18.4			44.5	%	124.5			74.3			50.3			67.7	%
Consumer Interactive Adjusted EBITDA	59.1			58.0			1.1			1.9	%	119.3			114.9			4.4			3.9	%
Corporate	(30.4		)	(26.4		)	(4.0		)	(14.9	)%	(58.7		)	(47.1		)	(11.6		)	(24.6	)%
Consolidated Adjusted EBITDA⁽²⁾	$	263.7		$	220.6		$	43.1		19.5	%	$	502.6		$	423.3		$	79.4		18.7	%

Other metrics:
Cash provided by operating activities of continuing operations	$	182.1		$	129.5		$	52.6		40.6	%	$	308.3		$	230.5		$	77.8		33.8	%
Capital expenditures	$	46.1		$	43.5		$	2.6		6.0	%	$	88.0		$	70.4		$	17.6		25.0	%

nm: not meaningful

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

~~(1)~~1.

This adjustment represents certain non-cash adjustments related to acquired entities, predominantly adjustments to increase revenue resulting from purchase accounting reductions to deferred revenue we record on the opening balance sheets of acquired entities. Deferred revenue results when a company receives payment in advance of fulfilling their performance obligations under contracts. Business combination accounting rules require us to record deferred revenue of acquired entities at fair value if we are obligated to perform any future services under these contracts. The fair value of this deferred revenue is determined based on the direct and indirect incremental costs of fulfilling our performance obligations under these contracts, plus a normal profit margin. Generally, this fair value calculation results in a reduction to the purchased deferred revenue balance. The above adjustment includes an estimate for the increase in revenue equal to the difference between what the acquired entities would have recorded as revenue and the lower revenue we record as a result of the reduced deferred revenue balance. This increase is partially offset by an estimated decrease to revenue for certain acquired non-core customer contracts that are not classified as discontinued operations that will expire within approximately one year from the date of acquisition. We present Adjusted Revenue as a supplemental measure of our revenue because we believe it provides meaningful information regarding our revenue and provides a basis to compare revenue between periods. In addition, our board of directors and executive management team use Adjusted Revenue as a compensation measure under our incentive compensation plans. The table above provides a reconciliation for revenue to Adjusted Revenue.

under contracts. Business combination accounting rules require us to record deferred revenue of acquired entities at fair value if we are obligated to perform any future services under these contracts. The fair value of this deferred revenue is determined based on the direct and indirect incremental costs of fulfilling our performance obligations under these contracts, plus a normal profit margin. Generally, this fair value calculation results in a reduction to the purchased deferred revenue balance. The above adjustment includes an estimate for the increase in revenue equal to the difference between what the acquired entities would have recorded as revenue and the lower revenue we record as a result of the reduced deferred revenue balance. This increase is partially offset by an estimated decrease to revenue for certain acquired non-core customer contracts that are not classified as discontinued operations that will expire within approximately one year. We present Adjusted Revenue as a supplemental measure of our revenue because we believe it provides meaningful information regarding our revenue and provides a basis to compare revenue between periods. In addition, our board of directors and executive management team use Adjusted Revenue as a compensation measure under our incentive compensation plan. The table above provides a reconciliation for revenue to Adjusted Revenue. The estimated adjustments to revenue are subject to change as we finalize the fair value assessments of the deferred revenue acquired with recent acquisitions and as we complete our assessment of the non-core customer contracts.

~~(2)~~2.

We define Adjusted Revenue as GAAP revenue adjusted for certain acquisition-related deferred revenue and non-core contract-related revenue. We define 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 Revenue as a supplemental measure of revenue because we believe it provides a basis to compare revenue between periods. We present Adjusted EBITDA as a supplemental measure of our operating performance because it eliminates the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. Also, Adjusted EBITDA is a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours. In addition, our board of directors and executive management team use Adjusted EBITDA as a compensation measure under our incentive compensation plan. Furthermore, under the credit agreement governing our senior secured credit facility, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is tied to a ratio based on Adjusted EBITDA. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Debt.” Adjusted EBITDA does not reflect our capital expenditures, interest, income tax, depreciation, amortization, stock-based compensation and certain other income and expense. Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. Adjusted EBITDA is not a measure of financial condition or profitability under GAAP and should not be considered as an alternative to cash flows from operating activities, as a measure of liquidity or as an alternative to operating income or net income as indicators of operating performance. We believe that the most directly comparable GAAP measure to Adjusted EBITDA is net income attributable to TransUnion. The table above provides a reconciliation from our net income (loss) attributable to TransUnion to consolidated Adjusted EBITDA for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017.~~2018.


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

~~(4)~~4.

For the three months ended ~~September~~June 30, ~~2018,~~2019, consisted of the following ~~adjustments to operating income: $4.2~~adjustments: a $(31.2) million gain on a Cost Method investment resulting from an observable price change for a similar investment of ~~Callcredit integration costs;~~the same issuer; a ~~$0.2 million loss on the divestiture of a small business operation; and a $0.1~~$(0.9) million adjustment to contingent consideration expense from previous ~~acquisitions. For the three months ended September 30, 2018, consisted of the following adjustments to non-operating income and expense: $1.7~~acquisitions; a $(0.2) million ~~of acquisition expenses; a $0.2 million loss from a fair value remeasurement of an investment in a nonconsolidated affiliate; a $(0.1) million offset~~reimbursement for transition services provided to the ~~loss included in operating income adjustments on the divestiture~~buyers of ~~a small business operation for the portion that is attributable to the non-controlling interest; and $(0.1) million~~certain of ~~miscellaneous. For the nine months ended September 30, 2018, consisted of the following adjustments to operating income: $4.2~~our discontinued operations; $4.4 million of Callcredit integration ~~costs and~~costs; a ~~$1.2~~$3.3 million loss on the ~~divestiture~~impairment of a ~~small business operation;~~Cost Method investment; and a $0.1 million adjustment to contingent consideration expense from previous acquisitions. For the nine months ended September 30, 2018, consisted of the following adjustments to non-operating income and expense: $28.7$0.8 million of acquisition expenses; a $1.5 million net loss from the fair value remeasurements of investments in nonconsolidated affiliates; and a $(0.4) million offset to the loss included in operating income adjustments on the divestiture of a small business operation for the portion that is attributable to the non-controlling interest.expenses.

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

For the three months ended ~~September~~June 30, ~~2017,~~2018, consisted of the following adjustments to operating income: a $0.4 million adjustment to contingent consideration expense from previous acquisitions. For the three months ended September 30, 2017, consisted of the following adjustments to non-operating income and expense: a $(2.0) million net reduction in acquisition expenses resulting from a reimbursement of certain acquisition costs recorded in prior periods partially offset by other acquisition costs; and $(0.1)adjustments: $25.4 million of ~~miscellaneous. For the nine months ended September 30, 2017, consisted of the following adjustments to operating income:~~acquisition expenses; a ~~$0.5~~$1.1 million loss on the divestiture of a small business operation; a $(0.3) million gain on a Cost Method investment resulting for an observable price change for a similar investment of the same issuer; and a ~~$0.2~~$(0.3) million ~~adjustment~~offset to ~~contingent consideration expense from previous acquisitions.~~ the loss included in operating income adjustments on the divestiture of a small business operation for the portion that is attributable to the non-controlling interest.

For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, consisted of the following ~~adjustments to non-operating income and expense: $4.5~~adjustments: $27.1 million of acquisition ~~expenses.~~expenses; a $1.6 million loss on the impairment of a Cost Method investment; a $1.1 million loss on the divestiture of a small business operation; a $(0.3) gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer; and a $(0.3) million offset to the loss included in operating income adjustments on the divestiture of a small business operation for the portion that is attributable to the non-controlling interest.

~~(5)~~5.

For the three months ended ~~September~~June 30, ~~2018,~~2019, consisted of the following ~~adjustments to non-operating income and expense:~~adjustments: $0.8 million of deferred loan fees written off as a ~~$1.0 million loss from currency remeasurement~~result of the prepayments on our ~~foreign operations; $0.5~~debt; $0.6 million of loan fees; ~~$0.1 million of fees related to new financing under our senior secured credit facility;~~ and $(0.1) ~~million of miscellaneous. For the nine months~~from currency remeasurement.

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

For the three months ended ~~September~~June 30, 2018, consisted of the following adjustments to non-operating income and expense: ~~$12.0~~$11.9 million of fees related to new financing under our senior secured credit facility; a ~~$3.3~~$3.0 million loss from currency remeasurement of our foreign operations; ~~$1.1~~$0.3 million of loan fees; and $0.1 million of miscellaneous.

For the six months ended June 30, 2018, consisted of the following adjustments to non-operating income and expense: $11.9 million of fees related to new financing under our senior secured credit facility; a $2.3 million loss from currency remeasurement of our foreign operations; $0.7 million of loan fees; $0.5 million of fees incurred in connection with a secondary offering of shares of TransUnion common stock by certain of our stockholders; and a $(0.7) million mark-to-market gain related to ineffectiveness of our interest rate ~~hedge; and $(0.1) million of miscellaneous.~~hedge.

For the three months ended September 30, 2017, consisted of the following adjustments to operating income and expense: a $(1.3) million reduction to expense for certain legal and regulatory matters; and a $(0.6) million reduction to expense for sales and use tax matters. For the three months ended September 30, 2017, consisted of the following adjustments to non-operating income and expense: $5.6 million of fees related to the refinancing of our senior secured credit facility; $0.5 million of currency remeasurement of our foreign operations; $0.4 million of fees incurred in connection with a secondary offering of shares of TransUnion common stock by certain of our stockholders; $0.3 million of loan fees; and $0.1 million mark-to-market loss related to ineffectiveness of our interest rate hedge. For the nine months ended September 30, 2017, consisted of the following adjustments to operating income and expense: a $(1.3) million reduction to expense for certain legal and regulatory matters; and a $(0.6) million reduction to expense for sales and use tax matters. For the nine months ended September 30, 2017, consisted of the following adjustments to non-operating income and expense: $10.5 million of fees related to the refinancing of our senior secured credit facility; $1.4 million of fees incurred in connection with secondary offerings of shares of TransUnion common stock by certain of our stockholders; $1.1 million of loan fees; a $0.2 million mark-to-market loss related to ineffectiveness of our interest rate hedge; $(1.1) million of currency remeasurement of our foreign operations; and $(0.4) million of miscellaneous.

Revenue

~~Total revenue~~Revenue increased ~~$105.6~~$98.8 million for the three months ended ~~September~~June 30, ~~2018,~~2019 compared with the same period in ~~2017,~~2018, due to ~~strong~~ organic growth in all of our segments, ~~across all platforms~~including both the U.S. Markets financial services and ~~nearly all markets,~~emerging verticals and most of the International regions, revenue from our recent acquisitions in our ~~USIS~~U.S. Markets and International segments, and revenue from new ~~products,~~product initiatives, partially offset by the impact of weakening foreign currencies on ~~the 2018~~ revenue offrom our International segment. ~~Revenue for our recent acquisitions~~Acquisitions accounted for an increase in revenue of ~~11.2% while the~~8.9%. The impact of weakening foreign currencies accounted for a decrease in revenue of 1.2%.

~~Total revenue~~Revenue increased ~~$276.3~~$180.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019 compared with the same period in ~~2017,~~2018, due to ~~strong~~ organic growth in ~~our~~ all of our segments, ~~across~~including both the U.S. Markets financial services and emerging verticals and all ~~platforms and nearly all markets,~~of the International regions, revenue from our recent acquisitions in our ~~USIS~~U.S. Markets and International segments, and revenue from new ~~products,~~product initiatives, partially offset by the impact of weakening foreign currencies on ~~the 2018~~ revenue offrom our International segment. ~~Revenue for our recent acquisitions~~Acquisitions accounted for an increase in revenue of ~~6.8% and the~~10.0%. The impact of weakening foreign currencies accounted for a decrease in revenue of ~~0.2%~~1.4%.

Revenue by segment ~~for the three-~~ and ~~nine-month periods were~~a more detailed explanation of revenue within each segment are as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2018 2017
$
Change

%
Change
2018 2017
$
Change

%
Change
Gross revenue:
U.S. Information Services:
  Online Data Services $ 235.2
$ 200.2
$ 35.0
17.5 % $ 698.4
$ 573.2
$ 125.2
21.8 %
  Marketing Services 59.6
48.5
11.1
22.8 % 167.4
137.0
30.4
22.2 %
  Decision Services 80.1
63.3
16.7
26.4 % 209.5
182.0
27.5
15.1 %
Total U.S. Information Services 374.8
312.0
62.8
20.1 % 1,075.3
892.1
183.1
20.5 %

International:
  Developed Markets 63.9
33.8
30.1
89.1 % 138.4
92.8
45.6
49.2 %
  Emerging Markets 64.8
61.2
3.7
6.0 % 192.5
172.8
19.7
11.4 %
Total International 128.7
94.9
33.8
35.6 % 330.9
265.6
65.4
24.6 %

Total Consumer Interactive 119.1
107.0
12.1
11.3 % 354.6
317.3
37.2
11.7 %

Total revenue, gross 622.6
513.9
108.6
21.1 % 1,760.8
1,475.1
285.7
19.4 %

Intersegment eliminations:
   U.S. Information Services (17.5 ) (14.6 ) (2.9 ) (52.4 ) (43.8 ) (8.6 )
   International Developed Markets (1.3 ) (1.3 ) 0.1
(3.7 ) (3.4 ) (0.3 )
   International Emerging Markets —
—
—
(0.2 ) (0.1 ) —

   Consumer Interactive (0.2 ) (0.1 ) (0.1 ) (0.5 ) (0.1 ) (0.4 )
Total intersegment eliminations (19.0 ) (16.0 ) (3.0 ) (56.8 ) (47.4 ) (9.4 )
Total revenue, net $ 603.6
$ 498.0
$ 105.6
21.2 % $ 1,704.1
$ 1,427.7
$ 276.3
19.4 %



	Three Months Ended June 30,											Six Months Ended June 30,
(in millions)	2019			2018			$ Change			% Change		2019			2018			$ Change			% Change
U.S. Markets:
Financial Services	$	213.0		$	192.6		$	20.4		10.6	%	$	402.1		$	375.2		$	26.9		7.2	%
Emerging Verticals	192.9			165.6			27.3			16.5	%	372.6			325.3			47.2			14.5	%
U.S. Markets gross revenue	405.9			358.2			47.7			13.3	%	774.7			700.5			74.1			10.6	%

International:
Canada	25.4			24.2			1.1			4.7	%	48.4			45.9			2.4			5.3	%
Latin America	26.2			25.8			0.5			1.8	%	51.5			51.0			0.6			1.1	%
United Kingdom⁽¹⁾	46.6			7.7			38.9			nm		88.8			7.7			81.1			nm
Africa	14.0			15.6			(1.6		)	(10.2	)%	29.0			32.6			(3.6		)	(11.0	)%
India	24.9			18.9			6.0			31.7	%	52.6			39.1			13.5			34.6	%
Asia Pacific	14.0			14.1			(0.1		)	(1.0	)%	26.8			26.0			0.9			3.3	%
International gross revenue⁽¹⁾	151.1			106.3			44.8			42.1	%	297.1			202.3			94.9			46.9	%

Consumer Interactive gross revenue	123.6			117.6			6.0			5.1	%	246.9			235.5			11.5			4.9	%

Total gross revenue	$	680.5		$	582.1		$	98.4		16.9	%	$	1,318.7		$	1,138.2		$	180.5		15.9	%

Intersegment revenue eliminations:
U.S. Markets	$	(17.2	)	$	(17.5	)	$	0.3		(1.7	)%	$	(34.7	)	$	(34.9	)	0.2			(0.6	)%
International	(1.3		)	(1.4		)	0.1			(5.9	)%	(2.5		)	(2.6		)	0.1			(3.9	)%
Consumer Interactive	(0.2		)	(0.2		)	—			19.0	%	(0.4		)	(0.3		)	(0.1		)	31.1	%
Total intersegment revenue eliminations	(18.6		)	(19.0		)	0.3			(1.8	)%	(37.5		)	(37.8		)	0.2			(0.6	)%
Total revenue as reported	$	661.9		$	563.1		$	98.8		17.5	%	$	1,281.2		$	1,100.5		$	180.7		16.4	%

nm: not meaningful

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

~~USIS~~(1) We acquired Callcredit, which is our United Kingdom region in our International segment, on June 19, 2018. Our 2018 consolidated, International segment and United Kingdom region revenue, includes the activity of Callcredit from the date of acquisition, which obscures comparability of our results between periods.

U.S. Markets Segment

~~USIS~~U.S. Markets revenue increased ~~$62.8~~$47.7 million and ~~$183.1~~$74.1 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared with the same periods in ~~2017,~~2018, due primarily to increases in revenue from ~~all platforms,~~both verticals, including ~~revenue from our recent acquisitions. Revenue~~increases from recent acquisitions ~~accounted for an increase in revenue~~ of ~~8.8%~~5.4% and ~~6.8% in each respective period.~~5.3%, respectively.

~~Online Data Services~~

~~Online Data Services revenue~~Financial Services: Revenue increased ~~$35.0~~$20.4 million and ~~$125.2~~$26.9 million for the three and ~~nine~~six months ended ~~September~~June 30, 2019, compared with the same period in 2018, due primarily to improvements in market conditions, new product initiatives, revenue from our recent acquisitions, and improvements in our credit marketing services revenue.

Emerging Verticals: Revenue increased $27.3 million and $47.2 million for the three and six months ended June 30, 2019, compared with the same period in 2018, due primarily to an increase of 8.7% and 8.6% from recent acquisitions in each respective period and increased volumes including new product initiatives and organic growth, particularly in the Insurance, Healthcare and Diversified Markets verticals.

International Segment

International revenue increased $44.8 million, or 42.1%, and $94.9 million, or 46.9%, for the three and six months ended June 30, 2019, compared with the same periods in ~~2017,~~2018, due primarily to ~~an 11.7%~~a 30.1% increase from our acquisition of Callcredit and ~~10.5% increase~~higher revenue in ~~credit report unit volume~~most regions, partially offset by a decrease of 6.5% and 7.8% in each respective period ~~an increase~~from weakening foreign currencies, primarily in our Latin America and Africa regions. We acquired Callcredit, which is our United Kingdom region in our International segment, on June 19, 2018. Our International segment revenue includes the activity of ~~6.5%~~Callcredit from the date of acquisition, which obscures comparability of our results between periods.

Canada: Revenue increased $1.1 million, or 4.7%, and ~~7.9% from our recent acquisitions in each respective period, a change in the mix of customer volumes and an increase from new product initiatives.~~

~~Marketing Services~~

~~Marketing Services revenue increased $11.1~~$2.4 million, ~~and $30.4 million~~or 5.3%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared with the same periods in ~~2017,~~2018, due primarily to ~~an organic increase in custom data sets and archive information driven by an increase in demand for our new solutions and other batch jobs.~~

~~Decision Services~~

Decision Services revenue increased $16.7 million and $27.5 million for the three and nine months ended September 30, 2018, compared with the same periods in 2017, due primarily to an increase in revenue of 23.0% and 8.6% from our recent acquisitions in each respective period.

~~International Segment~~

International revenue increased $33.8 million, or 35.6%, and $65.4 million, or 24.6%, for the three and nine months ended September 30, 2018, compared with the same periods in 2017. The increase was due tohigher revenue from ~~our acquisition of Callcredit, which accounted for 29.7% and 13.5% of the increase in each respective period, and higher local currency revenue in most regions due primarily to~~ increased volumes ~~for most products,~~including new product initiatives, partially offset by a decrease of ~~6.2%~~3.8% and ~~0.9%~~4.6% in each respective period from the impact of weakening foreign currencies.

~~Developed Markets~~

~~Developed markets revenue~~Latin America: Revenue increased ~~$30.1~~$0.5 million, or ~~89.1%~~1.8%, and ~~$45.6~~$0.6 million, or ~~49.2%~~1.1%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared with the same periods in ~~2017, due to revenue from our acquisition of Callcredit, which accounted for 83.6% and 38.7% of the increase in each respective period, and higher local currency revenue in all regions~~2018, due primarily to higher revenue from increased volumes ~~for most products, partially~~including new product initiatives, offset by a decrease of ~~3.1%~~8.9% and ~~an increase of 0.7%~~9.2% in each respective period from the impact of weakening foreign ~~currencies, primarily~~currencies.

United Kingdom: Revenue from continuing operations was $46.6 million and $88.8 million for the ~~Canadian dollar.~~three and six months ended June 30, 2019, compared to $7.7 million in both periods in 2018, all attributable to our Callcredit acquisition. We acquired Callcredit on June 19, 2018, which obscures comparability of our results between periods.

~~Emerging Markets~~

~~Emerging markets revenue increased $3.7~~Africa: Revenue decreased $1.6 million, or ~~6.0%~~10.2%, and ~~$19.7~~$3.6 million, or ~~11.4%~~11.0%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared with the same periods in ~~2017, due to higher local currency revenue in most regions~~2018, due primarily to ~~increased volumes for most products. Revenue decreased 7.8%~~a decrease of 12.6% and ~~1.8%~~13.5% in each respective period from the impact of weakening foreign currencies, partially offset by higher revenue from increased volumes including new product initiatives.

India: Revenue increased $6.0 million, or 31.7%, and $13.5 million, or 34.6%, for the three and six months ended June 30, 2019, compared with the same periods in 2018, due primarily to higher revenue from increased volumes including new product initiatives, partially offset by a decrease of 5.5% and 9.5% in each respective period from the ~~African rand, Brazilian real~~impact of weakening foreign currencies.

Asia Pacific: Revenue decreased $0.1 million, or 1.0%, and ~~Indian rupee.~~increased $0.9 million, or 3.3%, for the three and six months ended June 30, 2019, compared with the same periods in 2018, due primarily to lower direct-to-consumer revenue in Hong Kong that was only partially offset by increased volumes including new product initiatives. The impact of foreign currencies did not have a significant impact in either period.

Consumer Interactive Segment

Consumer Interactive revenue increased ~~$12.1~~$6.0 million and ~~$37.2~~$11.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared with the same periods in ~~2017. The increase was~~2018, due primarily to an increase in revenue from both our direct ~~channel~~ and ~~from our~~ indirect ~~channel, which includes~~channels, partially offset by a decrease in incremental credit monitoring revenue due to a breach at a competitor.

Operating Expenses

Operating expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, were as follows:


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended June 30,								Six Months Ended June 30,
(in millions)	2018		2017		$ Change		% Change		2018		2017		$ Change		% Change		2019		2018		$ Change		% Change		2019		2018		$ Change		% Change
Cost of services	$	207.5	$	169.3	$	38.2	22.6	%	$	579.0	$	472.3	$	106.6	22.6	%	$	216.2	$	189.1	$	27.1	14.3	%	$	424.3	$	371.4	$	52.9	14.2	%
Selling, general and administrative	189.8		142.2		47.6		33.5	%	524.6		436.0		88.6		20.3	%	196.7		171.6		25.2		14.7	%	392.4		334.9		57.5		17.2	%
Depreciation and amortization	84.2		59.9		24.3		40.5	%	218.8		176.2		42.6		24.2	%	89.2		68.0		21.2		31.2	%	182.7		134.6		48.1		35.8	%
Total operating expenses	$	481.5	$	371.4	$	110.1	29.7	%	$	1,322.3	$	1,084.5	$	237.8	21.9	%	$	502.2	$	428.7	$	73.5	17.1	%	$	999.4	$	840.9	$	158.6	18.9	%

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

Cost of Services

Cost of services increased ~~$38.2~~$27.1 million and ~~$106.6~~$52.9 million for the ~~three-~~three and ~~nine-month periods,~~six months ended June 30, 2019, compared with the same periods in ~~2017.~~2018.

The increase was due primarily to:

operating and integration-related costs relating to the business acquisitions in our ~~USIS and International segments;~~

~~an increase in labor costs, primarily in our USIS~~U.S. Markets and International segments, as we continue to invest in key strategic growth initiatives; and

an increase in product costs resulting from the increase in revenue, primarily in our ~~USIS and Consumer Interactive segments.~~U.S. Markets segment,

partially offset by:

the impact of weakening foreign currencies on the expenses of our International segment.

Selling, General and Administrative

Selling, general and administrative expenses increased ~~$47.6~~$25.2 million and ~~$88.6~~$57.5 million for the ~~three-~~three and ~~nine-month periods,~~six months ended June 30, 2019, compared with the same periods in ~~2017.~~2018.

The increase was due primarily to:

operating and integration-related costs relating to the business acquisitions in our ~~USIS~~U.S. Markets and International ~~segments; and~~

~~an increase in labor costs, primarily in our USIS segment and in Corporate,~~segments, as we continue to invest in key strategic growth ~~initiatives.~~initiatives; and

an increase in labor costs, as we continue to invest in key strategic growth initiatives,

an increase in advertising costs, primarily in our Consumer Interactive segment;

partially offset by:

the impact of weakening foreign currencies on the expenses of our International segment.

Depreciation and Amortization

Depreciation and amortization increased ~~$24.3~~$21.2 million and ~~$42.6~~$48.1 million for the ~~three-~~three and ~~nine-month periods,~~six months ended June 30, 2019, compared with the same periods in ~~2017,~~2018, primarily in our International and U.S. Markets segment, due primarily to recent ~~fixed assets~~intangible and ~~intangible~~tangible fixed assets acquired with our recent ~~USIS~~International and ~~International~~U.S. Markets segment business acquisitions.

~~Operating Income~~

Adjusted EBITDA and ~~Operating Margins~~Adjusted EBITDA margin

~~Operating income and operating margins by segment for the three- and nine-month periods were as follows:~~


	Three Months Ended September 30,											Nine Months Ended September 30,											Three Months Ended June 30,											Six Months Ended June 30,
(in millions)	2018			2017			$ Change			% Change		2018			2017			$ Change			% Change		2019			2018			$ Change			% Change		2019			2018			$ Change			% Change
Gross operating income:
U.S. Information Services	$	92.6		$	82.4		$	10.2		12.4	%	$	271.2		$	238.4		$	32.8		13.8	%
Adjusted Revenue:
U.S. Markets gross Adjusted Revenue																							$	406.0		$	358.2		$	47.8		13.3	%	$	775.0		$	700.5		$	74.5		10.6	%
International gross Adjusted Revenue																							152.7			106.3			46.4			43.6	%	302.7			202.3			100.4			49.7	%
Consumer Interactive gross Revenue																							123.6			117.6			6.0			5.1	%	246.9			235.5			11.5			4.9	%
Total gross Adjusted Revenue																							682.3			582.1			100.2			17.2	%	1,324.6			1,138.2			186.4			16.4	%
Less: intersegment revenue eliminations																							(18.6		)	(19.0		)	0.3			(1.8	)%	(37.5		)	(37.8		)	0.2			(0.6	)%
Consolidated Adjusted Revenue																							$	663.6		$	563.1		$	100.5		17.9	%	$	1,287.1		$	1,100.5		$	186.6		17.0	%

Adjusted EBITDA⁽¹⁾:
U.S. Markets																							$	175.4		$	147.9		$	27.6		18.6	%	$	317.5		$	281.2		$	36.2		12.9	%
International	3.9			19.9			(16.0		)	(80.4	)%	33.9			41.5			(7.5		)	(18.2	)%	59.6			41.2			18.4			44.5	%	124.5			74.3			50.3			67.7	%
Consumer Interactive	56.6			46.5			10.1			21.7	%	164.4			144.2			20.2			14.0	%	59.1			58.0			1.1			1.9	%	119.3			114.9			4.4			3.9	%
Corporate	(31.1		)	(22.3		)	(8.8		)	(39.5	)%	(87.8		)	(80.9		)	(6.9		)	(8.5	)%	(30.4		)	(26.4		)	(4.0		)	(14.9	)%	(58.7		)	(47.1		)	(11.6		)	(24.6	)%
Total operating income	$	122.1		$	126.6		$	(4.5	)	(3.6	)%	$	381.7		$	343.2		$	38.5		11.2	%
Consolidated Adjusted EBITDA⁽¹⁾																							$	263.7		$	220.6		$	43.1		19.5	%	$	502.6		$	423.3		$	79.4		18.7	%

Intersegment eliminations:
U.S. Information Services	$	(17.2	)	$	(14.1	)	$	(3.0	)			$	(51.3	)	$	(42.5	)	$	(8.8	)
Adjusted EBITDA margin⁽¹⁾:
U.S. Markets																							43.2		%	41.3		%				1.9	%	41.0		%	40.1		%				0.8	%
International	(0.7		)	(1.0		)	0.2					(2.3		)	(2.6		)	0.3					39.0		%	38.8		%				0.3	%	41.1		%	36.7		%				4.4	%
Consumer Interactive	17.9			15.1			2.8					53.7			45.1			8.5					47.8		%	49.3		%				(1.5	)%	48.3		%	48.8		%				(0.5	)%
Corporate	—			—			—					—			—			—
Total intersegment eliminations	$	—		$	—		$	—				$	—		$	—		$	—

Operating margin:
U.S. Information Services	24.7		%	26.4		%				(1.7	)%	25.2		%	26.7		%				(1.5	)%
International	3.0		%	21.0		%				(18.0	)%	10.2		%	15.6		%				(5.4	)%
Consumer Interactive	47.5		%	43.5		%				4.1	%	46.4		%	45.4		%				0.9	%
Total operating margin	20.2		%	25.4		%				(5.2	)%	22.4		%	24.0		%				(1.6	)%
Consolidated Adjusted EBITDA margin⁽¹⁾																							39.7		%	39.2		%				0.6	%	39.1		%	38.5		%				0.6	%

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

See the reconciliation of net income attributable to TransUnion to Consolidated Adjusted EBITDA in the “Key Performance Measures” section at the beginning of our discussion about our Results of Operations. Segment Adjusted EBITDA margins are calculated using segment gross Adjusted Revenue and segment Adjusted EBITDA. Consolidated Adjusted EBITDA margin is calculated using consolidated Adjusted Revenue and consolidated Adjusted EBITDA.

~~Segment operating margins are calculated using segment gross revenue and gross operating income.~~ Consolidated ~~operating margin is calculated using net revenue and operating income.~~

~~Total operating income decreased $4.5~~Adjusted EBITDA increased $43.1 million and ~~increased $38.5~~$79.4 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared ~~with~~to the same periods in ~~2017. These changes were~~2018. The increase was due primarily to:

an increase in revenue in all of our segments, including revenue from ~~our~~ recent business ~~acquisitions,~~acquisitions;

partially offset by:

an increase in operating costs ~~relating~~related to recent business acquisitions;

an increase in product costs, due to the ~~recent business acquisitions~~increase in ~~our USIS~~revenue; and ~~International segments, including depreciation and amortization costs and integration-related costs for these entities;~~

an increase in labor costs ~~primarily in our USIS and International segments and in Corporate, including an increase in headcount~~ as we continue to invest in ~~key~~ strategic growth ~~initiatives; and~~initiatives.

~~an increase in product costs,~~Adjusted EBITDA margins for the U.S. Markets segment increased due primarily ~~in our USIS and Consumer Interactive segments, due~~ to the increase in ~~revenue.~~

~~Margins for the USIS segment decreased due to the depreciation and amortization and integration-related costs of our recent business acquisitions,~~revenue, partially offset by the ~~increase in revenue. Margins~~integration-related costs of the recent business acquisitions.

Adjusted EBITDA margins for the International segment ~~decreased~~increased slightly due to the ~~depreciation~~strong increases in revenue in India and ~~amortization and integration-related costs of~~higher margins in our ~~recent business acquisitions. Margins~~United Kingdom region in 2019 compared with 2018.

Adjusted EBITDA margins for the Consumer Interactive segment ~~increased~~decreased due to ~~the increase in revenue.~~increased advertising costs.

Non-Operating Income and Expense


	Three Months Ended September 30,											Nine Months Ended September 30,											Three Months Ended June 30,											Six Months Ended June 30,
(in millions)	2018			2017			$ Change			% Change		2018			2017			$ Change			% Change		2019			2018			$ Change			% Change		2019			2018			$ Change			% Change
Interest expense	$	(44.0	)	$	(21.7	)	$	(22.3	)	(102.8	)%	$	(92.5	)	$	(65.8	)	$	(26.7	)	(40.5	)%	$	(45.2	)	$	(25.9	)	$	(19.3	)	(74.7	)%	$	(90.2	)	$	(48.5	)	$	(41.7	)	(85.9	)%
Interest income	1.3			1.5			(0.2		)	(10.9	)%	3.5			4.2			(0.7		)	(16.1	)%	1.8			1.4			0.4			32.6	%	3.3			2.1			1.1			52.0	%
Earnings from equity method investments	3.2			2.6			0.6			21.6	%	8.4			6.3			2.1			33.7	%	3.3			2.9			0.3			11.5	%	7.1			5.2			1.8			35.1	%
Other income and expense, net:
Acquisition fees	(1.7		)	2.0			(3.7		)	nm		(28.7		)	(4.5		)	(24.2		)	nm		(0.8		)	(25.4		)	24.6			97.0	%	(1.6		)	(27.1		)	25.5			94.1	%
Loan fees	(0.5		)	(5.9		)	5.3			89.8	%	(13.1		)	(11.6		)	(1.5		)	(12.8	)%	(0.6		)	(12.2		)	11.6			94.9	%	(1.0		)	(12.6		)	11.6			92.1	%
Dividends from Cost Method Investments	0.1			—			0.1			nm		0.8			0.7			0.1			18.3	%
Dividends from Cost Method investments																							0.7			0.7			—			(4.3	)%	0.7			0.7			—			(4.3	)%
Other income (expense), net	(1.1		)	(1.0		)	(0.1		)	(10.0	)%	(4.5		)	(0.1		)	(4.5		)	nm		27.4			(2.9		)	30.3			nm		21.9			(3.5		)	25.4			nm
Total other income and expense, net	(3.2		)	(4.8		)	1.5			31.3	%	(45.6		)	(15.6		)	(30.0		)	nm		26.7			(39.7		)	66.5			nm		19.9			(42.3		)	62.3			nm
Non-operating income and expense	$	(42.7	)	$	(22.4	)	$	(20.3	)	(90.6	)%	$	(126.1	)	$	(70.9	)	$	(55.2	)	(77.8	)%	$	(13.4	)	$	(61.3	)	$	47.9		78.1	%	$	(59.9	)	$	(83.5	)	$	23.5		28.2	%

nm: not meaningful

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

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, interest expense increased ~~$22.3~~$19.3 million and ~~$26.7~~$41.7 million compared with the same periods in ~~2017,~~2018, due primarily to the impact of the increase in our average outstanding principal balance as a result of funding our business acquisitions in the middle of 2018, and an increase in the average interest rate. ~~Our~~Future interest expense ~~will continue to be higher going forward due to the additional debt we incurred to fund our recent business acquisitions, and~~ could be impacted by changes in our variable interest rates.

Acquisition fees represent costs we have incurred for acquisition-related efforts. ~~Costs increased for~~For the ~~nine~~three and six months ended ~~September~~June 30, 2018, ~~compared with~~acquisition fees included fees related to the ~~same period in 2017, due primarily to our acquisitions~~acquisition of Callcredit, Healthcare Payment Specialists, and ~~iovation during the second quarter of 2018.~~iovation.

~~For the nine months ended September 30, 2018, loan~~Loan fees ~~included $12.0 million of fees related to the additional debt we incurred to fund our recent business acquisitions. For~~for the three and ~~nine~~six month periods of 2018 included $11.9 million related to additional borrowings to finance these acquisitions.

During 2019, we recorded a $31.2 million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer, offset by $8.6 million of impairments of other Cost Method investments. There were no material gain or loss adjustments to our investments in nonconsolidated affiliates during the three and six months ended ~~September~~June 30, ~~2017, loan fees included $5.6 million~~2018. See Part I, Item I, “Notes to Unaudited Consolidated Financial Statements,” Note 6, “Investments in Nonconsolidated Affiliates,” for additional information. Other income (expense), net also includes currency remeasurement gains and ~~$10.5 million, respectively, of refinancing fees~~losses, and other ~~net costs expensed as a result of refinancing our Senior Secured Term Loan B on January 31, 2017.~~

miscellaneous non-operating income and expense items.

Provision for Income Taxes

Significant Changes in Assets and Liabilities

~~Goodwill~~We adopted ASU 2016-02, Leases (Topic 842) on January 1, 2019. As a result, we are required to record the discounted present value of all future lease payments as a liability on our balance sheet, as well as a corresponding “right-of-use” (“ROU”) asset, which is an asset that represents the right to use or control the use of a specified asset for the lease term, for all long-term leases. See Item I, Part 1, Note 5, “Other Assets,” Note 7, “Other Current Liabilities,” Note 8, “Other Liabilities,” and ~~other intangible assets at September 30, 2018, increased compared with December 31, 2017, due primarily to~~Note 10, “Leases” for more information about the ~~business acquisitions we completed in~~impact on our balance sheet.

We prepaid $100.0 million of our outstanding debt during the second quarter of ~~2018. Debt at September 30, 2018, increased compared with December 31, 2017, because we funded the business acquisitions with additional debt.~~2019.

Liquidity and Capital Resources

Overview

Our principal sources of liquidity are cash flows provided by operating activities, cash and cash equivalents on hand, and our Senior Secured Revolving Line of Credit. Our principal uses of liquidity are working capital, capital expenditures, debt service and other capital structure obligations, business acquisitions and other general corporate purposes. We believe our cash on hand, cash generated from operations, and funds available under the senior secured credit facility will be sufficient to fund our planned capital expenditures, debt service and other capital structure obligations, business acquisitions and operating needs for the foreseeable future. We may, however, elect to raise funds through debt or equity financing in the future to fund significant investments or acquisitions that are consistent with our growth strategy.

Cash and cash equivalents totaled ~~$226.6~~$194.7 million and ~~$115.8~~$187.4 million at ~~September~~June 30, ~~2018,~~2019, and December 31, ~~2017,~~2018, respectively, of which ~~$141.5~~$150.5 million and ~~$84.9~~$130.8 million was held outside the United States in each respective period. As of ~~September~~June 30, ~~2018,~~2019, we had no outstanding balance under the Senior Secured Revolving Line of Credit and $0.1 million of outstanding letters of credit, and could have borrowed up to the ~~$300.0~~remaining $299.9 million available. TransUnion also has the ability to request incremental loans on the same terms under the existing senior secured credit facility up to the greater of an additional $675.0 million and 100% of Consolidated EBITDA. Consolidated EBITDA is reduced to the extent that the senior secured net leverage ratio is above 4.25-to-1. In addition, so long as the senior secured net leverage ratio does not exceed 4.25-to-1.0, we may incur additional incremental loans, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings.

The balance retained in cash and cash equivalents is consistent with our short-term cash ~~needs.~~needs and investment objectives. We may be required to make additional principal payments on the Senior Secured Term Loans B-3 and B-4 based on excess cash flows of the prior year, as defined in the credit agreement. There were no excess cash flows for ~~2017~~2018 and therefore no additional payment was required in ~~2018.~~2019. Additional payments based on excess cash flows could be due in future years. See Part I, Item 1, Note 9 “Debt,” for additional information about our debt.

On October 15, 2018, we acquired 100% of the equity of Rubixis, Inc. (“Rubixis”). Rubixis helps healthcare providers maximize reimbursement from insurance payers, with specialized expertise in the management of claim denials and underpayments, two significant pain points for healthcare providers. The purchase price, which is not material, was funded with cash on hand.

~~During the third quarter of 2018, we repaid the remaining $75.0 million balance outstanding under the Senior Secured Revolving Line of Credit.~~ During the second quarter of ~~2018,~~2019, we ~~borrowed a total of $125.0~~prepaid $100.0 million ~~under the Senior Secured Revolving Line of Credit to fund an acquisition and for general corporate purposes. On May 2, 2018, we amended certain provisions~~ of our ~~senior secured credit facility. On June 19, 2018, we borrowed an additional $800.0 million against our~~outstanding Senior Secured Term Loan A-2 and $600.0 million against a new tranche 4 of our Senior Secured Term Loan B (“Senior Secured Term Loan B-4”) to fund the acquisition of Callcredit. On June 29, 2018, we borrowed an additional $400.0 million of our Senior Secured Term Loan B-4 to fund another acquisition and to repay a portion of our Senior Secured Revolving Line of Credit. Our net incremental borrowings during the second quarter of 2018 was $20.0 million under the Senior Secured Revolving Line of Credit. B-3.

During the first quarter of ~~2018, we repaid $30.0~~2019, 1.6 million outstanding employee restricted stock units vested and became taxable to the employees. The employees used 0.6 million shares of the vested stock to satisfy their payroll tax withholding obligations in a net share settlement arrangement whereby the employees received 1.0 million of the ~~outstanding borrowings under~~shares and gave TransUnion the ~~Senior Secured Revolving Line of Credit.~~

~~The new financing resulted in $0.1~~remaining 0.6 million ~~and $12.0~~shares that we have recorded as treasury stock. We remitted cash equivalent to the $36.8 million of fees expensed and recorded in other income and expense in the consolidated statements of income for the three and nine months ended September 30, 2018, and $22.3 million of financing fees deferred on the balance sheet to be amortized into interest expense over the lifevest date value of the ~~loans.~~

treasury stock to the respective governmental agencies in settlement of the employee withholding tax obligations. On ~~January 31, 2017,~~occasion, as other stock units vest or stock options are exercised, employees use shares of stock to satisfy their payroll tax withholding obligations in a net settlement arrangement and we ~~refinanced and amended certain provisions~~remit the equivalent value of our Senior Secured Term Loan B. On August 9, 2017, we refinanced and amended certain provisions of our senior secured credit facility. These refinancings resulted in $10.5 million of refinancing fees and other net costs expensed and recorded in other income and expense inthose shares to the ~~consolidated statements of income in 2017.~~respective governmental agencies.

On February 13, 2018, we announced that our board of directors has approved a dividend policy pursuant to which we intend to pay quarterly cash dividends on our common stock. On ~~May 9, 2018,~~February 21, 2019, the board of directors declared a dividend ~~for~~of $0.075 per share to holders of record as of the ~~first quarter~~close of ~~2018~~business on March 7, 2019. The total dividend declared was $14.3 million, of which $14.0 million was paid on March 22, 2019, with the remainder due as dividend equivalents to employees who hold restricted stock units when and if those units vest. On May 9, 2019, the board of directors declared a dividend of $0.075 per share to holders of record as of the close of business on May 23, ~~2018.~~2019. The total dividend declared was ~~$14.1~~$14.3 million, of which ~~$13.8~~$14.1 million was paid on June 7, ~~2018,~~2019, with the remainder due as dividend equivalents to employees who hold restricted stock units when and if those units vest. On August 7, 2018, the board of directors declared a dividend for the second quarter of 2018 of $0.075 per share to holder of record as of the close of business on August 22, 2018. The total dividend declared was $14.2 million, of which $13.9 million was paid on September 6, 2018, with the remainder due to employees who hold restricted stock units when and if those units vest.

TransUnion may make dividend payments up to an unlimited amount under the terms of the senior secured credit facility provided than no default or event of default exists and so long as the total net leverage ratio does not exceed 4.75-to-1. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

On February 13, 2017, our board of directors authorized the repurchase of up to $300.0 million of ~~our~~common stock over the ~~ensuing~~next three years. On February 8, 2018, our board of directors removed the three-year time limitation. ~~Repurchases~~Prior to the second quarter of 2018, we had purchased approximately $133.4 million of common stock under the program and may purchase up to an additional $166.6 million. Additional repurchases may be made from time to time at management’s discretion at prices management considers to be attractive through open market purchases or through privately negotiated transactions, subject to availability. Open market purchases will be conducted in accordance with the limitations set forth byin Rule 10b-18 of the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”),~~ and other applicable legal requirements. ~~During 2017, the Company purchased 3.5 million shares of common stock for $133.4 million from underwriters of secondary offerings of shares of our common stock by certain of our stockholders.~~

We have no obligation to repurchase additional shares, and the timing, actual number and value of the shares that are repurchased, if any, will be at the discretion of management and will depend on a number of factors, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. Repurchases may be suspended, terminated or modified at any time for any reason. Any repurchased shares will have the status of treasury shares and may be used, if and when needed, for general corporate purposes.

On June 19, 2018, we borrowed an additional $800.0 million against our Senior Secured Term Loan A-2 and $600.0 million against a new tranche 4 of our Senior Secured Term Loan B (“Senior Secured Term Loan B-4”) to fund the acquisition of Callcredit. On June 29, 2018, we borrowed an additional $400.0 million of our Senior Secured Term Loan B-4 to fund another acquisition and to repay a portion of our Senior Secured Revolving Line of Credit. These new borrowings have increased our future scheduled loan repayments and interest expense compared with the first quarter of 2018.

Sources and Uses of Cash


	Nine Months Ended September 30,									Six Months Ended June 30,
(in millions)	2018			2017			Change			2019			2018			Change
Cash provided by operating activities of continuing operations	$	410.3		$	346.7		$	63.6		$	308.3		$	230.5		$	77.8
Cash used in investing activities of continuing operations	(1,927.1		)	(149.2		)	(1,777.9		)	(107.8		)	(1,881.7		)	1,773.9
Cash provided by (used in) financing activities	1,633.9			(126.9		)	1,760.8
Cash (used in) provided by financing activities										(187.3		)	1,731.9			(1,919.2		)
Cash used in discontinued operations	(1.0		)	—			(1.0		)	(7.3		)	—			(7.3		)
Effect of exchange rate changes on cash and cash equivalents	(5.3		)	0.5			(5.8		)	1.4			(4.2		)	5.6
Net change in cash and cash equivalents	$	110.8		$	71.1		$	39.7		$	7.3		$	76.5		$	(69.2	)

Operating Activities

The increase in cash provided by operating activities of continuing operations was due primarily to the increase in operating income excluding depreciation and amortization, partially offset by ~~the~~an increase in interest expense resulting from the increase in outstanding ~~debt.~~debt due to our 2018 acquisitions.

Investing Activities

The ~~increase~~decrease in cash used in investing activities was due primarily to ~~the~~lower cash used for acquisitions, partially offset by an increase in ~~cash used to fund our acquisitions.~~capital expenditures and the proceeds from the sale of the Callcredit discontinued operations.

Financing Activities

The increase in cash ~~provided by~~used in financing activities ~~was~~is due primarily to ~~cash~~the loan proceeds borrowed in 2018 to fund our acquisitions, ~~and a decrease in treasury stock repurchased,~~ partially offset by ~~dividends paid~~$100.0 million of prepayments made on our outstanding debt in 2019, $36.8 million of cash used to pay employee withholding taxes on restricted stock that vested during the first quarter of 2019 that we have recorded as treasury stock, and one additional quarterly dividend payment made in 2019 compared with 2018.

Capital Expenditures

We make capital expenditures to grow our business by developing new and enhanced capabilities, to increase the effectiveness and efficiency of the organization and to reduce risks. We make capital expenditures for product development, disaster recovery, security enhancements, regulatory compliance, and the replacement and upgrade of existing equipment at the end of its useful life.

Cash paid for capital expenditures increased ~~$27.3~~$17.6 million, from ~~$91.0~~$70.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, to ~~$118.3~~$88.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019.

Debt

Senior Secured Credit Facility

On June 15, 2010, we entered into a senior secured credit facility with various lenders. This facility has been amended several times and currently consists of the Senior Secured Term Loan A-2, the Senior Secured Term Loan B-3, Senior Secured Term Loan B-4, and the Senior Secured RevolvingLine of Credit.

~~During~~Hedge

2.706% . We have designated these swap agreements as cash flow hedges. The current aggregate notional amount under these agreements is $1,440.0 million, decreasing each quarter until the second ~~quarter of 2018, we borrowed additional funds under our Senior Secured Term Loan A-2 and B-4 to fund the purchase of Callcredit, iovation and HPS.~~

~~The terms of the additional borrowings~~agreement terminates on our Senior Secured Term Loan A-2 are the same as the terms of the other outstanding borrowings under the Senior Secured Term Loan A-2. Interest rates on the new Senior Secured Term Loan B-4 are based on LIBOR, unless otherwise elected, plus a margin of 2.00%. The Company is required to make principal payments on the Senior Secured Term Loan B-4 at the end of each quarter of 0.25% starting the third quarter of 2018 with the remaining balance due June 19, 2025.

~~Hedge~~December 30, 2022.

In accordance with ASC 815, the fair value of the interest rate caps at inception is reclassified from other comprehensive income to interest expense in the same period the interest expense on the underlying hedged debt impacts earnings. Based on how the fair value of interest rate caps are determined, the earlier interest periods have lower fair values at inception than the later interest periods, resulting in less interest expense being recognized in the earlier periods compared with the later periods. Any payments we receive to the extent LIBOR exceeds 0.75% is also reclassified from other comprehensive income to interest expense in the period received. Interest income reclassified from other comprehensive income to interest expense related to the fair value of the portion of the caps expiring in the three and nine months ended September 30, 2018, was $0.8 million and $1.1 million, respectively. Interest expense reclassified from other comprehensive income to interest expense related to the fair value of the portion of the caps expiring in the three and nine months ended September 30, 2017, was $0.8 million and $3.3 million, respectively. We expect to reclassify approximately $8.3 million from other comprehensive income to interest expense related to the fair value of the portion of the caps expiring and payments received to the extent LIBOR exceeds 0.75% in the next twelve months.

Effect of Certain Debt Covenants

A breach of any of the covenants under the agreements governing our debt could limit our ability to borrow funds under the Senior Secured Revolving Line of Credit and could result in a default under the senior secured credit facility. Upon the occurrence of an event of default under the senior secured credit facility, the lenders could elect to declare all amounts then outstanding to be immediately due and payable, and the lenders could terminate all commitments to extend further credit. If we were unable to repay the amounts declared due, the lenders could proceed against any collateral granted to them to secure that indebtedness.

With certain exceptions, the senior secured credit facility obligations are secured by a first-priority security interest in substantially all of the assets of Trans Union LLC, including its investment in subsidiaries. The senior secured credit facility contains various restrictions and nonfinancial covenants, along with a senior secured net leverage ratio test. The nonfinancial covenants include restrictions on dividends, investments, dispositions, future borrowings and other specified payments, as well as additional reporting and disclosure requirements. The senior secured net leverage test must be met as a condition to incur additional indebtedness, make certain investments, and may be required to make certain restricted payments. The senior secured net leverage ratio must not exceed 5.5-to-1 at any such test date. TransUnion may make dividend payments up to an unlimited amount under the terms of the senior secured credit facility provided that no default or event of default exists and so long as the total net leverage ratio does not exceed 4.75-to-1. As of ~~September~~June 30, ~~2018,~~2019, we were in compliance with all debt covenants.

Our ability to meet our liquidity needs or to pay dividends on our common stock depends on our subsidiaries’ earnings, the terms of our indebtedness, and other contractual restrictions. Trans Union LLC, the borrower under the senior secured credit facility, is not permitted to declare any dividend or make any other distribution subject to certain exceptions, including compliance with a fixed charge coverage ratio and a basket that depends on TransUnion Intermediate Holdings, Inc.’s consolidated net income.

For additional information about our debt and hedge, see Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements,” Note 9, “Debt.”

Recent Accounting Pronouncements

See Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements,” Note 1, “Significant Accounting and Reporting Policies,” and Note ~~11, “Revenue,~~10, “Leases,” for information about recent accounting pronouncements and the ~~potential~~ impact on our consolidated financial statements.

Application of Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. These accounting principles require us to make certain judgments and estimates in reporting our operating results and our assets and liabilities. Although we believe that our estimates and judgments are reasonable, they are based on information available at the time, and actual results may differ significantly from these estimates under different conditions. See the “Application of Critical Accounting Estimates” section in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 1, “Significant Accounting and Reporting Policies,” to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, filed with the SEC on February ~~13, 2018,~~14, 2019, for a description of the significant accounting estimates used in the preparation of our consolidated financial statements.

Cautionary Notice Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant ~~risk~~risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negatives of these words and other similar expressions.

~~Although we believe~~Factors that ~~these forward-looking statements are based on reasonable assumptions, you should be aware that factors affecting our actual financial results~~ could cause actual results to differ materially from those ~~expressed~~described in the forward-looking statements. Factors that could materially affect our financial results or such forward-looking statements ~~include among others, the risks, uncertainties and factors set forth below under Item 1A, “Risk Factors,” and the following factors:~~include:

macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets;

our ability to provide competitive services and prices;

our ability to retain or renew existing agreements with large or long-term customers;

our ability to maintain the security and integrity of our data;

our ability to deliver services timely without interruption;

our ability to maintain our access to data sources;

government regulation and changes in the regulatory environment;

litigation or regulatory proceedings;

regulatory oversight of ~~certain~~ “critical ~~activities;”~~activities”;

our ability to effectively manage our costs;

economic and political stability in the United States and international markets where we operate;

our ability to effectively develop and maintain strategic alliances and joint ventures;

our ability to timely develop new services and the market’s willingness to adopt our new services;

our ability to manage and expand our operations and keep up with rapidly changing technologies;

our ability to make acquisitions and successfully integrate the operations of acquired businesses and realize the intended benefits of such acquisitions;

our ability to protect and enforce our intellectual property, trade secrets and other forms of unpatented intellectual property;

our ability to defend our intellectual property from infringement claims by third parties;

the ability of our outside service providers and key vendors to fulfill their obligations to us;

further consolidation in our end-customer markets;

the increased availability of free or inexpensive consumer information;

losses against which we do not insure;

our ability to make timely payments of principal and interest on our indebtedness;

our ability to satisfy covenants in the agreements governing our indebtedness;

our ability to maintain our liquidity;

share repurchase plans; and

our reliance on key management personnel.

In addition to factors previously disclosed in TransUnion’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the effects of pending and future legislation; risks related to disruption of management time from ongoing business operations due to our recent acquisitions; business disruption following the acquisition; macroeconomic factors beyond the TransUnion’s control; risks related to the TransUnion’s indebtedness and other consequences associated with mergers, acquisitions and divestitures and legislative and regulatory actions and reforms.

There may be other factors, many of which are beyond our control, that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed in our Annual Report on Form 10-K for the year ended December 31,

~~2017,~~ 2018, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K filed with the Securities and Exchange Commission, and in this report under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.”~~Operations” in this report. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

The forward-looking statements contained in this report speak only as of the date of this report. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements, to reflect the impact of events or circumstances that may arise after the date of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We operate internationally and are subject to various market risks, including those caused by potentially adverse movements in foreign currency exchange rates. Due to our acquisition of Callcredit during the second quarter 2018, we now have exposure to British pounds ~~sterling.~~sterling in addition to other foreign currencies. We also have a significant amount of variable rate debt and funds invested in interest bearing accounts. As of ~~September~~June 30, ~~2018,~~2019, our weighted-average interest rate on our variable rate ~~debt~~debt is ~~4.17%~~4.33%, compared with ~~3.47%~~4.45% at December 31, ~~2017.~~2018. This ~~increase~~decrease is primarily due to the ~~increase~~decrease in LIBOR during the past ~~nine months, and increase in the margin on our Senior Secured Term Loan A-2, and the borrowing under Senior Secured Term Loan B-4, which has a higher margin than our Senior Secured Term Loan A-2.~~three months.

There have been no other material changes from the quantitative and qualitative disclosures about market risk included in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on ~~the~~this evaluation, ofour Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to the material weakness in our ~~Chief Executive Officer and Chief Financial Officer~~internal control over financial reporting discussed below. Notwithstanding this material weakness, our management has concluded that the financial statements included elsewhere in this Quarterly Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

As previously disclosed on Form 8-K dated on July 18, 2019, we determined that TransUnion Limited, a Hong Kong entity in which we hold a 56.25 percent interest, has been the victim of criminal fraud. The incident involved employee impersonation and fraudulent requests targeting TransUnion Limited, which resulted in a series of fraudulently-induced unauthorized wire transfers in early July 2019 totaling $17.8 million. We determined that our internal controls did not operate effectively to prevent or timely detect unauthorized wire transfers by TransUnion Limited. Specifically, although we believe our internal controls were adequate to timely detect unauthorized wire transfers so as to prevent or detect a material misstatement of ~~such date,~~ our ~~disclosure~~financial statements, these controls did not operate effectively to safeguard the company’s cash assets in TransUnion Limited from unauthorized wire transfers. This material weakness in our controls resulted in the inability to prevent and ~~procedures were effective at~~timely detect this misappropriation of our cash assets in TransUnion Limited.

Immediately following this incident, we initiated a ~~reasonable assurance level.~~reassessment of our controls related to the wire transfer process and have begun formulating an action plan for the remediation of this matter, which will include the following control enhancements identified to date:

enhancing email controls;

enhancing approval requirements for wire transfers;

enhancing controls within online banking platforms;

increasing the centralization and review processes associated with cash management; and

increasing internal communication to heighten awareness and emphasize the importance of exercising professional skepticism and judgment.

We will continue to assess whether additional control enhancements are necessary and expect to complete our remediation efforts during the remainder of 2019.

Changes in Internal Controls over Financial Reporting

During the quarter covered by this report, other than the actions described above, there have been no changes in our internal ~~controls~~control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal ~~controls~~control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

General

~~The following discussion describes material developments in previously disclosed material legal proceedings that occurred in the three months ended September 30, 2018.~~ Refer to Part I, Item 3, “Legal Proceedings,” of our Annual Report on Form 10-K for the year ended December 31, 2017, Part II, Item 1, “Legal Proceedings,” of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018, and Part II, Item 1, “Legal Proceedings,” of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018, for a full description of our material pending legal proceedings.

~~Public Records~~

~~On September 20, 2018, the Court granted final approval of the settlement of all of the pending public records matters, other than the~~ ~~Walsh~~ ~~matter, on terms that will not have a material impact on our financial condition or results of operations. We are in active discussions regarding a settlement of the individual claims asserted in the~~ ~~Walsh~~ matter, which was stayed pending final approval of the broader settlement, and expect it will also be resolved on terms that will not have a material impact on our financial condition or results of operations. If a settlement is not ultimately reached, TransUnion believes it has valid defenses to this action and will continue to defend it vigorously.

ITEM 1A. RISK FACTORS

~~In addition to~~The following discussion supplements the ~~other information included~~discussion of risk factors affecting the Company as set forth in ~~this report, you should carefully consider the factors discussed in~~Part I, Item 1A, “Risk Factors” ~~included in~~of our Annual Report on Form 10-K for the year ended December 31, ~~2017, as well as the factors identified under~~2018, and “Cautionary Statement Regarding Forward-Looking Statements” ~~at the end of Part I, Item 2~~ of this ~~Quarterly Report on~~ Form ~~10-Q, which~~10-Q. The discussion of risk factors, as so supplemented, sets forth the material risk factors that could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, and this Quarterly Report on Form 10-Q are not the only risks facing TransUnion. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or operating results.

We may be unable to adequately anticipate, prevent or mitigate damage resulting from increasingly sophisticated methods of illegal or fraudulent activities committed against us, which could harm our business, financial condition and results of operations and could significantly harm our reputation.

The defensive measures that we take to manage threats, especially cyber-related threats, to our business may not adequately anticipate, prevent or mitigate harm we may suffer from such threats. Criminals use evolving and increasingly sophisticated methods of perpetrating illegal and fraudulent activities. For example, we determined in July 2019 that TransUnion Limited, a Hong-Kong entity in which the Company holds a 56.25 percent interest, was the victim of criminal fraud involving employee impersonation and fraudulent requests that successfully targeted TransUnion Limited, which resulted in a series of fraudulently-induced wire transfers totaling $17.8 million for which we expect to record a one-time pre-tax charge of up to $17.8 million in the third quarter of 2019. See Part I, Item 1, Note 16, “Subsequent Event,” for additional information about this incident. Fraudulent activities committed against us could disrupt our operations, have an adverse effect on our financial results, subject us to substantial legal proceedings and potential liability, result in a material loss of business and/or significantly harm our reputation.

Failure to implement and maintain effective internal control over financial reporting could result in material misstatements in our financial statements, which could cause investors to lose confidence in our reported financial information and have a negative effect on our stock price.

We have identified a material weakness in our internal control over financial reporting. See Part I, Item 1, Note 16, “Subsequent Event.” We cannot assure you that we will maintain effective internal control over financial reporting in the future. Any failure to maintain or implement new or improved controls could result in additional material weaknesses or result in the failure to detect or prevent material misstatements in our financial statements, which could cause investors to lose confidence in our reported financial information and harm our stock price.

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

(a) Recent Sales of Unregistered Securities

Not applicable.

(b) Use of Proceeds

Not applicable.

(a) Total Number of
Shares Purchased

(b) Average Price
Paid Per Share

(c) Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs

(d) Approximate Dollar
Value, in millions, of Shares that
May Yet Be Purchased
Under
the Plans or Programs⁽¹⁾
July 1 to July 31 903
$ 71.90
—
$ 166.6
August 1 to August 31 2,974
72.00
—
$ 166.6
September 1 to September 30 —
—
—
$ 166.6
Total 3,877
$ 71.98
—



	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value, in millions, of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾
April 1 to April 31	201	$	66.84	—	$	166.6
May 1 to May 31	2,021	64.55		—	$	166.6
June 1 to June 30	—	—		—	$	166.6
Total	2,222	$	64.76	—

Shares shown in column (a) above consist of shares that were repurchased from employees for withholding taxes on options exercised and restricted stock units vesting pursuant to the terms of the Company's equity compensation plans and net settled.

(1) On February 13, 2017, our board of directors authorized the repurchase of up to $300.0 million of common stock over the next three years. On February 8, 2018, our board of directors removed the three-year time limitation. Prior to the second quarter of 2018, we had purchased approximately $133.4 million of common stock under the program and may purchase up to an additional $166.6 million. Additional repurchases may be made from time to time at management’s discretion at prices management considers to be attractive through open market purchases or through privately negotiated transactions, subject to availability. Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Exchange Act and other applicable legal requirements.

ITEM 6. EXHIBITS




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).

31.1**		TransUnion Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**		TransUnion Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**		TransUnion Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**		XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH**		XBRL Taxonomy Extension Schema Document.

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB**		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document.

** Filed or furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	TransUnion

~~October~~July 23, ~~2018~~2019	By	/s/ Todd M. Cello
		Todd M. Cello
		Executive Vice President, Chief Financial Officer

~~October~~July 23, ~~2018~~2019	By	/s/ Timothy Elberfeld
		Timothy Elberfeld
		Vice President, Chief Accounting Officer
		(Principal Accounting Officer)

4547



	Page
PART I. FINANCIAL INFORMATION	3
ITEM 1. UNAUDITED FINANCIAL STATEMENTS	3
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Consolidated Statements of Comprehensive Income	5
Consolidated Statements of Cash Flows	6
Consolidated ~~Statement~~Statements of Stockholders’ Equity	7
Notes to Unaudited Consolidated Financial Statements	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42
~~ITEM 4. CONTROLS AND PROCEDURES~~	42
~~PART II. OTHER INFORMATION~~	43
ITEM ~~1. LEGAL PROCEEDINGS~~4. CONTROLS AND PROCEDURES	43
PART II. OTHER INFORMATION	45
ITEM 1. LEGAL PROCEEDINGS	45
ITEM 1A. RISK FACTORS	4345
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	4345
ITEM 6. EXHIBITS	4446
SIGNATURES	4547