UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~September~~June 30, ~~2020~~2021

- OR -


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

For the transition period from to

Commission file number:

001-37470

TransUnion

(Exact name of registrant as specified in its charter)


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

555 West Adams,

Chicago,

Illinois

60661

(Address of principal executive offices)

(Zip code)

312-985-2000

(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.

☒

Yes

☐

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

☒

Yes

☐

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:

Table of Contents

☒

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company


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

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

☐

Yes

☒

As of ~~September~~June 30, ~~2020,~~2021, there were ~~190.3~~191.5 million shares of TransUnion common stock outstanding.

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TRANSUNION

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~2021

TABLE OF CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

TRANSUNION AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)

(in millions, except per share data)


		September 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	554.0	$	274.1	Cash and cash equivalents	$	526.2	$	493.0
Trade accounts receivable, net of allowance of $25.3 and $19.0		468.0		443.9
Trade accounts receivable, net of allowance of $24.8 and $26.6						Trade accounts receivable, net of allowance of $24.8 and $26.6	511.8		453.7
Other current assets	Other current assets	194.6		170.2		Other current assets	215.0		159.5
Total current assets	Total current assets	1,216.6		888.2		Total current assets	1,253.0		1,106.2
Property, plant and equipment, net of accumulated depreciation and amortization of $520.5 and $454.4		202.8		219.0
Property, plant and equipment, net of accumulated depreciation and amortization of $601.4 and $548.9						Property, plant and equipment, net of accumulated depreciation and amortization of $601.4 and $548.9	209.3		223.2
Goodwill	Goodwill	3,313.4		3,377.8		Goodwill	3,455.3		3,461.5
Other intangibles, net of accumulated amortization of $1,660.8 and $1,482.1		2,235.7		2,391.9
Other intangibles, net of accumulated amortization of $1,885.4 and $1,752.2						Other intangibles, net of accumulated amortization of $1,885.4 and $1,752.2	2,211.3		2,284.6
Other assets	Other assets	229.3		236.3		Other assets	266.2		236.1
Total assets	Total assets	$	7,197.8	$	7,113.2	Total assets	$	7,395.1	$	7,311.6
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity					Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:					Current liabilities:
Trade accounts payable	Trade accounts payable	$	186.7	$	176.2	Trade accounts payable	$	212.2	$	193.2
Short-term debt and current portion of long-term debt	Short-term debt and current portion of long-term debt	55.4		58.7		Short-term debt and current portion of long-term debt	69.3		55.5
Other current liabilities	Other current liabilities	376.3		336.5		Other current liabilities	320.3		415.8
Total current liabilities	Total current liabilities	618.4		571.4		Total current liabilities	601.8		664.5
Long-term debt	Long-term debt	3,560.6		3,598.3		Long-term debt	3,273.2		3,398.7
Deferred taxes	Deferred taxes	391.6		439.1		Deferred taxes	430.7		396.8
Other liabilities	Other liabilities	225.0		165.0		Other liabilities	181.8		215.5
Total liabilities	Total liabilities	4,795.6		4,773.8		Total liabilities	4,487.5		4,675.5
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, $0.01 par value; 1.0 billion shares authorized at September 30, 2020 and December 31, 2019, 195.5 million and 193.5 million shares issued at September 30, 2020 and December 31, 2019, respectively, and 190.3 million shares and 188.7 million shares outstanding as of September 30, 2020 and December 31, 2019, respectively		2.0		1.9
Common stock, $0.01 par value; 1.0 billion shares authorized at June 30, 2021 and December 31, 2020, 197.1 million and 195.7 million shares issued at June 30, 2021 and December 31, 2020, respectively, and 191.5 million shares and 190.5 million shares outstanding as of June 30, 2021 and December 31, 2020, respectively						Common stock, $0.01 par value; 1.0 billion shares authorized at June 30, 2021 and December 31, 2020, 197.1 million and 195.7 million shares issued at June 30, 2021 and December 31, 2020, respectively, and 191.5 million shares and 190.5 million shares outstanding as of June 30, 2021 and December 31, 2020, respectively	2.0		2.0
Additional paid-in capital	Additional paid-in capital	2,074.0		2,022.3		Additional paid-in capital	2,133.7		2,088.1
Treasury stock at cost; 5.2 million and 4.8 million shares at September 30, 2020 and December 31, 2019, respectively		(214.7)		(179.2)
Treasury stock at cost; 5.6 million and 5.2 million shares at June 30, 2021 and December 31, 2020, respectively						Treasury stock at cost; 5.6 million and 5.2 million shares at June 30, 2021 and December 31, 2020, respectively	(249.2)		(215.2)
Retained earnings	Retained earnings	850.3		652.0		Retained earnings	1,160.1		937.4
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(409.7)		(251.6)		Accumulated other comprehensive loss	(241.9)		(272.1)
Total TransUnion stockholders’ equity	Total TransUnion stockholders’ equity	2,301.9		2,245.4		Total TransUnion stockholders’ equity	2,804.7		2,540.2
Noncontrolling interests	Noncontrolling interests	100.3		94.0		Noncontrolling interests	102.9		95.9
Total stockholders’ equity	Total stockholders’ equity	2,402.2		2,339.4		Total stockholders’ equity	2,907.6		2,636.1
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	7,197.8	$	7,113.2	Total liabilities and stockholders’ equity	$	7,395.1	$	7,311.6

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(in millions, except per share data)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Revenue	Revenue	$	695.9	$	689.3	$	2,017.9	$	1,970.5	Revenue	$	774.2	$	634.4	$	1,519.5	$	1,322.0
Operating expenses	Operating expenses									Operating expenses
Cost of services (exclusive of depreciation and amortization below)	Cost of services (exclusive of depreciation and amortization below)	222.4		220.8		666.1		645.2		Cost of services (exclusive of depreciation and amortization below)	250.3		218.6		493.5		443.7
Selling, general and administrative	Selling, general and administrative	219.0		208.4		655.4		600.8		Selling, general and administrative	208.0		201.1		435.1		436.4
Depreciation and amortization	Depreciation and amortization	92.2		88.7		273.4		271.4		Depreciation and amortization	98.4		90.8		192.7		181.2
Total operating expenses	Total operating expenses	533.6		518.0		1,594.9		1,517.4		Total operating expenses	556.7		510.5		1,121.3		1,061.3
Operating income	Operating income	162.3		171.3		423.0		453.1		Operating income	217.5		123.9		398.2		260.7
Non-operating income and (expense)	Non-operating income and (expense)									Non-operating income and (expense)
Interest expense	Interest expense	(27.6)		(43.5)		(98.7)		(133.7)		Interest expense	(25.6)		(33.5)		(51.4)		(71.1)
Interest income	Interest income	1.2		2.2		4.2		5.4		Interest income	0.9		1.1		1.5		3.0
Earnings from equity method investments	Earnings from equity method investments	2.1		3.1		6.7		10.2		Earnings from equity method investments	2.7		2.1		5.7		4.6
Other income and (expense), net	Other income and (expense), net	0.8		(20.6)		(6.9)		(0.7)		Other income and (expense), net	(0.1)		(0.7)		(0.5)		(7.7)
Total non-operating income and (expense)	Total non-operating income and (expense)	(23.6)		(58.8)		(94.7)		(118.7)		Total non-operating income and (expense)	(22.1)		(30.9)		(44.6)		(71.2)
Income from continuing operations before income taxes		138.7		112.5		328.3		334.3
Income before income taxes										Income before income taxes	195.4		93.0		353.5		189.6
Provision for income taxes	Provision for income taxes	(32.1)		(24.2)		(77.3)		(64.2)		Provision for income taxes	(62.5)		(23.0)		(90.0)		(45.2)
Income from continuing operations		106.7		88.3		251.0		270.2
Discontinued operations, net of tax		0		0		0		(4.6)
Net income	Net income	106.7		88.3		251.0		265.6		Net income	132.9		70.0		263.5		144.3
Less: net (income) loss attributable to the noncontrolling interests	Less: net (income) loss attributable to the noncontrolling interests	(3.9)		3.4		(9.5)		(1.5)		Less: net (income) loss attributable to the noncontrolling interests	(5.2)		(1.5)		(8.0)		(5.6)
Net income attributable to TransUnion	Net income attributable to TransUnion	$	102.8	$	91.7	$	241.5	$	264.1	Net income attributable to TransUnion	$	127.6	$	68.5	$	255.6	$	138.7

Income from continuing operations		$	106.7	$	88.3	$	251.0	$	270.2
Less: net (income) loss from continuing operations attributable to noncontrolling interests		(3.9)		3.4		(9.5)		(1.5)
Income from continuing operations attributable to TransUnion		102.8		91.7		241.5		268.7
Discontinued operations, net of tax		0		0		0		(4.6)
Net income attributable to TransUnion		$	102.8	$	91.7	$	241.5	$	264.1

Basic earnings per common share from:
Income from continuing operations attributable to TransUnion		$	0.54	$	0.49	$	1.27	$	1.43
Discontinued operations, net of tax		0		0		0		(0.02)
Net Income attributable to TransUnion		$	0.54	$	0.49	$	1.27	$	1.41
Diluted earnings per common share from:
Income from continuing operations attributable to TransUnion		$	0.53	$	0.48	$	1.26	$	1.40
Discontinued operations, net of tax		0		0		0		(0.02)
Net Income attributable to TransUnion		$	0.53	$	0.48	$	1.26	$	1.38
Weighted-average shares outstanding:	Weighted-average shares outstanding:									Weighted-average shares outstanding:
Basic	Basic	190.2		188.2		189.8		187.5		Basic	191.4		189.9		191.2		189.6
Diluted	Diluted	192.3		192.0		192.1		191.6		Diluted	192.8		192.0		192.8		192.0
Earnings Per Share:										Earnings Per Share:
Basic										Basic	$	0.67	$	0.36	$	1.34	$	0.73
Diluted										Diluted	$	0.66	$	0.36	$	1.33	$	0.72

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(in millions)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net income	Net income	$	106.7	$	88.3	$	251.0	$	265.6	Net income	$	132.9	$	70.0	$	263.5	$	144.3
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Foreign currency translation:	Foreign currency translation:									Foreign currency translation:
Foreign currency translation adjustment	Foreign currency translation adjustment	54.5		(70.7)		(124.6)		(46.8)		Foreign currency translation adjustment	15.2		3.9		4.3		(179.1)
Benefit (expense) for income taxes	Benefit (expense) for income taxes	0		0.5		1.9		0.2		Benefit (expense) for income taxes	(0.3)		1.6		0		2.0
Foreign currency translation, net	Foreign currency translation, net	54.5		(70.2)		(122.7)		(46.6)		Foreign currency translation, net	14.9		5.5		4.3		(177.1)
Hedge instruments:	Hedge instruments:									Hedge instruments:
Net change on interest rate cap	Net change on interest rate cap	0		(0.4)		4.1		(12.2)		Net change on interest rate cap	0		4.5		0		4.1
Net change on interest rate swap	Net change on interest rate swap	6.4		(5.6)		(53.3)		(43.7)		Net change on interest rate swap	4.8		(12.8)		33.1		(59.7)
Cumulative effect of adopting ASU 2017-12		0		0		0		1.0
Benefit for income taxes		(1.4)		1.2		12.4		13.7
Benefit (expense) for income taxes										Benefit (expense) for income taxes	(1.2)		2.1		(8.2)		13.8
Hedge instruments, net	Hedge instruments, net	5.0		(4.8)		(36.8)		(41.2)		Hedge instruments, net	3.6		(6.2)		24.9		(41.8)
Available-for-sale debt securities:
Available-for-sale securities:										Available-for-sale securities:
Net unrealized gain	Net unrealized gain	0		0.1		0		0.1		Net unrealized gain	0.1		0		0.1		0
Benefit for income taxes		0		0		0		0
Available-for-sale debt securities, net		0		0.1		0		0.1
Total other comprehensive (loss) income, net of tax		59.5		(74.9)		(159.5)		(87.7)
Provision for income taxes										Provision for income taxes	0		0		0		0
Available-for-sale securities, net										Available-for-sale securities, net	0.1		0		0.1		0
Total other comprehensive income (loss), net of tax										Total other comprehensive income (loss), net of tax	18.6		(0.7)		29.3		(218.9)
Comprehensive income	Comprehensive income	166.2		13.4		91.5		177.9		Comprehensive income	151.5		69.3		292.8		(74.6)
Less: comprehensive loss (income) attributable to noncontrolling interests		(4.5)		4.8		(8.2)		(0.9)
Comprehensive income attributable to TransUnion		$	161.7	$	18.2	$	83.3	$	177.0
Less: comprehensive income attributable to noncontrolling interests										Less: comprehensive income attributable to noncontrolling interests	(5.4)		(1.4)		(7.1)		(3.8)
Comprehensive income (loss) attributable to TransUnion										Comprehensive income (loss) attributable to TransUnion	$	146.1	$	67.9	$	285.7	$	(78.4)

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(in millions)


		Nine Months Ended September 30,							Six Months Ended June 30,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	251.0	$	265.6	Net income	$	263.5	$	144.3
Add: loss from discontinued operations, net of tax		0		4.6
Income from continuing operations		251.0		270.2
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	273.4		271.4		Depreciation and amortization	192.7		181.2
Net loss/(gain) on investments in affiliated companies and assets-held-for sale		0.5		(20.6)
Net (earnings)/dividends, from equity method investments		0.9		(1.2)
Net loss on investments in affiliated companies						Net loss on investments in affiliated companies	0.6		0.5
Deferred taxes	Deferred taxes	(25.2)		(9.7)		Deferred taxes	23.8		(11.2)
Amortization of discount and deferred financing fees		2.9		4.7��
Stock-based compensation	Stock-based compensation	29.6		29.7		Stock-based compensation	34.6		21.5
Provision for losses on trade accounts receivable	Provision for losses on trade accounts receivable	11.4		7.9		Provision for losses on trade accounts receivable	0.6		10.3
Other	Other	2.3		3.9		Other	3.1		7.5
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Trade accounts receivable	Trade accounts receivable	(43.4)		(13.2)		Trade accounts receivable	(58.3)		(12.5)
Other current and long-term assets	Other current and long-term assets	(9.6)		(35.4)		Other current and long-term assets	(33.8)		(7.5)
Trade accounts payable	Trade accounts payable	7.3		10.8		Trade accounts payable	12.8		28.8
Other current and long-term liabilities	Other current and long-term liabilities	57.1		69.2		Other current and long-term liabilities	(59.1)		16.5
Cash provided by operating activities of continuing operations		558.2		587.7
Cash used in operating activities of discontinued operations		0		(7.3)
Cash provided by operating activities	Cash provided by operating activities	558.2		580.4		Cash provided by operating activities	380.5		379.4
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(131.7)		(132.1)		Capital expenditures	(97.1)		(87.6)
Proceeds from sale/maturity of other investments		52.3		18.2
Proceeds from sale/maturities of other investments						Proceeds from sale/maturities of other investments	4.1		24.7
Purchases of other investments	Purchases of other investments	(65.0)		(31.4)		Purchases of other investments	(21.1)		(50.7)
Acquisitions and purchases of noncontrolling interests, net of cash acquired		(12.3)		(46.2)
Proceeds from disposals of assets held for sale		1.6		40.3
Investments in nonconsolidated affiliates and purchases of convertible notes						Investments in nonconsolidated affiliates and purchases of convertible notes	(31.4)		(5.2)
Other	Other	1.6		(3.9)		Other	(0.6)		2.3
Cash used in investing activities of continuing operations		(153.5)		(155.1)
Cash used in investing activities of discontinued operations		0		0
Cash used in investing activities	Cash used in investing activities	(153.5)		(155.1)		Cash used in investing activities	(146.1)		(116.5)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Repayments of debt	Repayments of debt	(45.0)		(313.9)		Repayments of debt	(113.3)		(31.2)
Proceeds from issuance of common stock and exercise of stock options	Proceeds from issuance of common stock and exercise of stock options	21.7		22.4		Proceeds from issuance of common stock and exercise of stock options	11.1		12.9
Dividends to shareholders	Dividends to shareholders	(43.3)		(42.6)		Dividends to shareholders	(33.3)		(29.0)
Distributions to noncontrolling interests		(1.4)		(1.2)
Employee taxes paid on restricted stock units recorded as treasury stock	Employee taxes paid on restricted stock units recorded as treasury stock	(35.5)		(37.7)		Employee taxes paid on restricted stock units recorded as treasury stock	(34.0)		(33.1)
Payment of contingent consideration	Payment of contingent consideration	(6.4)		0		Payment of contingent consideration	(32.4)		(6.4)
Distributions to noncontrolling interests						Distributions to noncontrolling interests	(0.6)		0
Cash used in financing activities	Cash used in financing activities	(109.9)		(373.0)		Cash used in financing activities	(202.5)		(86.8)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(14.9)		(3.8)		Effect of exchange rate changes on cash and cash equivalents	1.3		(18.0)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	279.9		48.5		Net change in cash and cash equivalents	33.2		158.1
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	274.1		187.4		Cash and cash equivalents, beginning of period	493.0		274.1
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	554.0	$	235.9	Cash and cash equivalents, end of period	$	526.2	$	432.2

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated 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																																	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
Balance, December 31, 2019																	Balance, December 31, 2019		188.7	$	1.9	$	2,022.3	$	(179.2)	$	652.0			$	(251.6)			$	94.0		$	2,339.4
Net income	Net income	—	—		—		—		70.9		—		2.4		73.4		Net income		—	—		—		—		70.2		—				4.1		74.3
Other comprehensive income	Other comprehensive income	—	—		—		—		—		53.2		0.1		53.3		Other comprehensive income		—	—		—		—		—		(216.6)				(1.7)		(218.3)
Stock-based compensation	Stock-based compensation	—	—		9.2		—		—		—		—		9.2		Stock-based compensation		—	—		4.1		—		—		—				—		4.1
Employee share purchase plan	Employee share purchase plan	0.1	0		6.9		—		—		—		—		6.9		Employee share purchase plan		0.1	0		8.9		—		—		—				—		8.9
Exercise of stock options	Exercise of stock options	0.5	0		4.2		—		—		—		—		4.2		Exercise of stock options		0.4	0		2.8		—		—		—				—		2.8
Vesting of restricted stock units	Vesting of restricted stock units	1.6	0		—		—		—		—		—		—		Vesting of restricted stock units		0.9	0		—		—		—		—				—		0
Treasury stock purchased	Treasury stock purchased	(0.6)	—		—		(37.1)		—		—		—		(37.1)		Treasury stock purchased		(0.3)	—		—		(32.6)		—		—				—		(32.6)
Dividends to shareholders	Dividends to shareholders	—	—		—		—		(14.2)		—		—		(14.2)		Dividends to shareholders		—	—		—		—		(14.4)		—				—		(14.4)
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
Other																	Other		—	—		—		—		(0.1)		—				0.1		0
Balance, March 31, 2020																	Balance, March 31, 2020		189.8	$	1.9	$	2,038.1	$	(211.8)	$	707.7	$	(468.2)			$	96.5	$	2,164.2
Net income	Net income	—	—		—		—		101.5		—		2.5		104.0		Net income		—	—		—		—		68.5		—				1.5		70.0
Other comprehensive income	Other comprehensive income	—	—		—		—		—		(66.8)		0.7		(66.1)		Other comprehensive income		—	—		—		—		—		(0.4)				(0.2)		(0.6)
Distributions to noncontrolling interests		—	—		—		—		—		—		(0.8)		(0.8)
Stock-based compensation	Stock-based compensation	—	—		6.1		—		—		—		—		6.1		Stock-based compensation		—	—		15.9		—		—		—				—		15.9
Exercise of stock options	Exercise of stock options	0.5	0		2.7		—		—		—		—		2.7		Exercise of stock options		0.3	0.1		2.5		—		—		—				—		2.6
Treasury stock purchased	Treasury stock purchased	0	—		—		(0.1)		—		—		—		(0.1)		Treasury stock purchased		0	—		—		(0.4)		—		—				—		(0.4)
Dividends to shareholders	Dividends to shareholders	—	—		—		—		(14.2)		—		—		(14.2)		Dividends to shareholders		—	—		—		—		(14.5)		—				—		(14.5)
Balance, June 30, 2019		187.8	1.9		1,976.4		(177.1)		506.1		(296.2)		97.4		2,108.5
Net income		—	—		—		—		91.7		—		(3.4)		88.3
Other comprehensive income		—	—		—		—		—		(73.5)		(1.4)		(74.9)
Distributions to noncontrolling interests		—	—		—		—		—		—		(0.5)		(0.5)
Stock-based compensation		—	—		12.4		—		—		—		—		12.4
Employee share purchase plan		0.1	0		8.3		—		—		—		—		8.3
Exercise of stock options		0.4	0		2.6		—		—		—		—		2.6
Treasury stock purchased		0	—		—		(0.8)		—		—		—		(0.8)
Dividends to shareholders		—	—		—		—		(14.3)		—		—		(14.3)
Other	Other	—	—		—		—		(0.1)		—		—		(0.1)		Other		—	—		(0.1)		—		—		—				(0.5)		(0.6)
Balance, September 30, 2019		188.3	$	1.9	$	1,999.7	$	(177.9)	$	583.4	$	(369.7)	$	92.1	$	2,129.5
Balance, June 30, 2020																	Balance, June 30, 2020		190.1	$	2.0	$	2,056.4	$	(212.2)	$	761.7	$	(468.6)			$	97.3	$	2,236.6

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		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																																	Noncontrolling Interests			Total
Balance, December 31, 2019		188.7	$	1.9	$	2,022.3	$	(179.2)	$	652.0	$	(251.6)	$	94.0	$	2,339.4
Balance, December 31, 2020																	Balance, December 31, 2020		190.5	$	2.0	$	2,088.1	$	(215.2)	$	937.4			$	(272.1)			$	95.9		$	2,636.1
Net income	Net income	—	—		—		—		70.2		—		4.1		74.3		Net income		—	—		—		—		127.9		—				2.7		130.6
Other comprehensive income	Other comprehensive income	—	—		—		—		—		(216.6)		(1.7)		(218.3)		Other comprehensive income		—	—		—		—		—		11.7				(1.0)		10.7
Stock-based compensation	Stock-based compensation	—	—		4.1		—		—		—		—		4.1		Stock-based compensation		—	—		17.0		—		—		—				—		17.0
Employee share purchase plan	Employee share purchase plan	0.1	0		8.9		—		—		—		—		8.9		Employee share purchase plan		0.1	0		10.7		—		—		—				—		10.7
Exercise of stock options	Exercise of stock options	0.4	0		2.8		—		—		—		—		2.8		Exercise of stock options		0.1	0		1.0		—		—		—				—		1.0
Vesting of restricted stock units	Vesting of restricted stock units	0.9	0		—		—		—		—		—		—		Vesting of restricted stock units		0.9	0		—		—		—		—				—		0
Treasury stock purchased	Treasury stock purchased	(0.3)	—		—		(32.6)		—		—		—		(32.6)		Treasury stock purchased		(0.3)	—		—		(28.5)		—		—				—		(28.5)
Dividends to shareholders	Dividends to shareholders	—	—		—		—		(14.4)		—		—		(14.4)		Dividends to shareholders		—	—		—		—		(14.5)		—				—		(14.5)
Other		—	—		—		—		(0.1)		—		0.1		0
Balance, March 31, 2020		189.8	1.9		2,038.1		(211.8)		707.7		(468.2)		96.5		2,164.2
Balance, March 31, 2021																	Balance, March 31, 2021		191.3	$	2.0	$	2,116.8	$	(243.8)	$	1,050.8	$	(260.3)			$	97.6	$	2,763.1
Net income	Net income	—	—		—		—		68.5		—		1.5		70.0		Net income		—	—		—		—		127.6		—				5.2		132.9
Other comprehensive income	Other comprehensive income	—	—		—		—		—		(0.4)		(0.2)		(0.6)		Other comprehensive income		—	—		—		—		—		18.5				0.1		18.6
Distributions to noncontrolling interests																	Distributions to noncontrolling interests		—	—		—		—		—		—				(0.6)		(0.6)
Stock-based compensation	Stock-based compensation	—	—		15.9		—		—		—		—		15.9		Stock-based compensation		—	—		15.9		—		—		—				—		15.9
Exercise of stock options	Exercise of stock options	0.3	0.1		2.5		—		—		—		—		2.6		Exercise of stock options		0.2	0		1.0		—		—		—				—		1.0
Vesting of restricted stock units																	Vesting of restricted stock units		0.1	0		—		—		—		—				—		0
Treasury stock purchased	Treasury stock purchased	0	—		—		(0.4)		—		—		—		(0.4)		Treasury stock purchased		(0.1)	—		—		(5.4)		—		—				—		(5.4)
Dividends to shareholders	Dividends to shareholders	—	—		—		—		(14.5)		—		—		(14.5)		Dividends to shareholders		—	—		—		—		(18.4)		—				—		(18.4)
Other	Other	—	—		(0.1)		—		—		—		(0.5)		(0.6)		Other		—	—		—		—		—		—				0.5		0.5
Balance, June 30, 2020		190.1	2.0		2,056.4		(212.2)		761.7		(468.6)		97.3		2,236.6
Net income (loss)		—	—		—		—		102.8		—		3.9		106.7
Other comprehensive income		—	—		—		—		—		58.9		0.6		59.5
Distributions to noncontrolling interests		—	—		—		—		—		—		(1.4)		(1.4)
Stock-based compensation		—	—		7.2		—		—		—		—		7.2
Employee share purchase plan		0.1	0		10.2		—		—		—		—		10.2
Vesting of restricted stock units		0.1	0		—		—		—		—		—		—
Exercise of stock options		0	0		0.2		—		—		—		—		0.2
Treasury stock purchased		0	—		—		(2.5)		—		—		—		(2.5)
Dividends to shareholders		—	—		—		—		(14.3)		—		—		(14.3)
Other		—	—		—		—		0.1		—		(0.1)		0
Balance, September 30, 2020		190.3	$	2.0	$	2,074.0	$	(214.7)	$	850.3	$	(409.7)	$	100.3	$	2,402.2
Balance, June 30, 2021																	Balance, June 30, 2021		191.5	$	2.0	$	2,133.7	$	(249.2)	$	1,160.1	$	(241.9)			$	102.9	$	2,907.6

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

1. Significant Accounting and Reporting Policies

Basis of Presentation

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

The accompanying unaudited Condensed Consolidated Financial Statements of TransUnion have been prepared in accordance with instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all the information required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement have been included. All significant intercompany transactions and balances have been eliminated. As a result of displaying amounts in millions, rounding differences may exist in the financial statements and footnote tables. 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, ~~2020.~~2021. The Company’s ~~year end~~year-end Consolidated Balance Sheet data was derived from audited financial statements. Therefore, 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, ~~2019,~~2020, filed with the Securities and Exchange Commission (“SEC”) on February ~~18, 2020.~~16, 2021.

For the periods presented, TransUnion does not have any material assets, liabilities, revenues, expenses or operations of any kind other than its ownership investment in TransUnion Intermediate Holdings, Inc.

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.

Use of Estimates

The preparation of consolidated financial statements and related disclosures in accordance with GAAP requires management to make estimates and judgments that affect the amounts reported. We believe that the estimates used in preparation of the accompanying consolidated financial statements are reasonable, based upon information available to management at this time. These estimates and judgments affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the balance sheet date, as well as the amounts of revenue and expense during the reporting period. Estimates are inherently uncertain and actual results could differ materially from the estimated amounts.

Impact of ~~coronavirus (“COVID-19”)~~COVID-19 On Our Financial Statements

~~The global spread and unprecedented impact~~Beginning in the middle of ~~COVID-19 is complex and continues to evolve rapidly. On~~ March ~~11,~~ 2020, the ~~World Health Organization declared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak has reached all~~economic effect of the regions in which we do business, and governmental authorities around the world have implemented numerous measures attempting to contain and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, shutdowns, limitations or closures of non-essential businesses, school closures, social distancing requirements and various economic stimulus initiatives. While certain of these measures have been relaxed or reversed to varying degrees throughout the world, many have subsequently been reinstated and even tightened, adding an additional layer of uncertainty. The global spread of COVID-19 and actions taken in response to the virus have negatively affected workforces, customers, consumer confidence, financial markets, employment rates, consumer spending, credit markets and housing demand, caused significant economic and business disruption, volatility and financial uncertainty, and led to a significant economic downturn, including in the markets where we operate. Businesses and consumers continue to react and adapt to the uncertainty with varying degrees of success in the markets where we operate. Since mid-March 2020, the COVID-19 pandemic ~~widespread measures implemented to contain its effects, and business and consumer responses to such measures, have~~ had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in all of our segments. While we ~~have seen some signs of increased~~continue to see improvements in demand for our services to varying degrees in the markets where we operate since the low point in April 2020, including ~~ongoing improvements in~~encouraging first and second quarter of 2021 results, given the ~~third quarter,~~continuously evolving and unpredictable nature of the ~~impact~~pandemic including the rise of variants of the virus, COVID-19 ~~including government measures and business and consumer responses to such measures,~~ may ~~continue to~~ have a material and adverse impact on various aspects of our business, ~~for an uncertain period of time.~~

We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, our allowance for doubtful accounts, stock-based compensation, goodwill and other long-lived assets, financial assets, valuation allowances for tax assets and revenue recognition. While our current assessment of these estimates did not have a material impact on our consolidated financial statements as of and for nine months ended September 30, 2020, as additional information becomes available to us, our future assessment of these estimates, including our ~~expectations at~~results of operations and financial condition, in the ~~time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods.~~

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future.

Trade Accounts Receivable

We base our allowance for doubtful accounts estimate on our historical write-off experience, current conditions, an analysis of the aging of outstanding receivables and customer payment patterns, and specific reserves for customers in adverse financial condition or for existing contractual disputes. Beginning January 1, 2020, we also considered our current expectations of future economic conditions, including the impact of COVID-19, when estimating our allowance for doubtful accounts. ~~We made an immaterial increase to our allowance for doubtful accounts as a result of our current estimate of the impact COVID-19 will have on the collectability of our accounts receivable.~~ As additional information becomes available to us, our future assessment of our allowance for doubtful accounts could materially and adversely impact our consolidated financial statements in future reporting periods.

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The following is a rollforward of the allowance for doubtful accounts for the periods presented:

Nine Months Ended September 30,
2020 2019
Beginning Balance $ 19.0 $ 13.5
Provision for losses on trade accounts receivable 11.4 7.9
Write-offs, net of recovered accounts (5.1) (2.6)
Ending balance $ 25.3 $ 18.8

~~Long-Lived Assets and Goodwill~~

We review long-lived asset groups that are subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. We test goodwill for impairment on an annual basis, in the fourth quarter, or on an interim basis if there is an indicator of impairment. As additional information becomes available to us, our future assessment of impairments to long-lived assets and goodwill could materially and adversely impact our consolidated financial statements in future reporting periods.

The decrease in other intangibles, net of accumulated amortization, as of September 30, 2020, compared with December 31, 2019, includes a decrease of $39.8 million due to the translation adjustment of our foreign entities long-lived assets, net of accumulated amortization, resulting from changes to foreign exchange rates between periods. The decrease in goodwill as of September 30, 2020, compared with December 31, 2019, is due primarily to a $68.1 million translation adjustment of our foreign entities goodwill resulting from changes to foreign exchange rates between periods. The offset to these translation adjustments are included in accumulated other comprehensive loss on our balance sheet.


	Six Months Ended June 30,
	2021		2020
Beginning Balance	$	26.6	$	19.0
Provision for losses on trade accounts receivable	0.6		10.3
Write-offs, net of recovered accounts	(2.4)		(3.4)
Ending balance	$	24.8	$	26.0

Recently Adopted Accounting Pronouncements

~~On June 16, 2016, the FASB issued Accounting Standards Update (“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 current expectations of future economic conditions based on reasonable and supportable forecasts. We adopted this guidance on January 1, 2020. Upon adoption and at September 30, 2020, this new guidance did not have a material impact on our consolidated financial statements.

~~In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848),~~ ~~Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~. In response to concerns about structural risks of interbank offered rates including the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable and less susceptible to manipulation. The provisions of this ASU are elective and apply to all entities, subject to meeting certain criteria, that have debt or hedging contracts and other contracts that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU, among other things, provides optional expedients and exceptions to applying certain U.S. GAAP requirements to these contracts if certain criteria are met for a limited period of time in order to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

We have adopted this guidance and have applied certain optional expedients and exceptions and expect to apply other optional expedients and exceptions to our existing debt and hedge contracts that reference LIBOR, and to any other new contract that references LIBOR or another reference rate when these reference rates are discontinued and as our contracts are updated up

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through the transition period that ends December 31, 2022. The adoption of these expedients and exceptions did not and is not expected to have a material impact on our Consolidated Financial Statements.

~~Recent Accounting Pronouncements Not Yet Adopted~~

On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU removes specific exceptions to the general principles in Topic 740. Among other things it eliminates the need for organizations to analyze whether the following apply in a given period: an exception to the incremental approach for intra-period tax allocation; exceptions to accounting for basis differences when there are ownership changes in foreign investments; and an exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. This amendment also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax; and enacted changes in tax laws in interim periods. This guidance is effective for annual reporting periods beginning after December 15, 2020, including interim periods therein. ~~We are assessing the impact~~Upon adoption, this guidance ~~will~~did not have a material impact on our consolidated financial statements.

On January 16, 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This amendment, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. This amendment also clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. This guidance is effective for annual reporting periods beginning after December 15, 2020, including interim periods therein. ~~We are assessing the impact~~Upon adoption, this guidance ~~will have on~~had no impact our consolidated financial ~~statements. We do~~statements as we had not ~~believe~~such transactions at the ~~impact will be material.~~time of adoption.

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2. Fair Value

The following table summarizes financial instruments measured at fair value, on a recurring basis, as of ~~September~~June 30, 2021:


(in millions)	Total		Level 1		Level 2		Level 3
Assets
Available-for-sale debt securities (Note 3)	$	3.2	$	0	$	3.2	$	0
Interest rate swaps (Notes 4 and 8)	0.1		0		0.1		0
Total	$	3.3	$	0	$	3.3	$	0

Liabilities
Interest rate swaps (Notes 7 and 8)	$	56.7	$	0	$	56.7	$	0
Total	$	56.7	$	0	$	56.7	$	0

The following table summarizes financial instruments measured at fair value, on a recurring basis, as of December 31, 2020:


(in millions)	(in millions)	Total		Level 1		Level 2		Level 3		(in millions)	Total		Level 1		Level 2		Level 3
Assets	Assets									Assets
Available-for-sale debt securities (Note 3)	Available-for-sale debt securities (Note 3)	$	3.0	$	0	$	3.0	$	0	Available-for-sale debt securities (Note 3)	$	3.2	$	0	$	3.2	$	0
Total	Total	$	3.0	$	0	$	3.0	$	0	Total	$	3.2	$	0	$	3.2	$	0

Liabilities	Liabilities									Liabilities
Interest rate swaps (Notes 7 and 8)	Interest rate swaps (Notes 7 and 8)	$	99.5	$	0	$	99.5	$	0	Interest rate swaps (Notes 7 and 8)	$	89.7	$	0	$	89.7	$	0
Contingent consideration (Note 6)		5.0		0		0		5.0
Contingent consideration (Note 6 and 7)										Contingent consideration (Note 6 and 7)	41.4		0		0		41.4
Total	Total	$	104.5	$	0	$	99.5	$	5.0	Total	$	131.1	$	0	$	89.7	$	41.4

Level 2 instruments consist of foreign exchange-traded corporate bonds and interest rate swaps. Foreign exchange-traded corporate bonds are available-for-sale debt securities valued at their current quoted prices. These securities mature between 2027 and 2033. Unrealized gains and losses on available-for-sale debt securities, which are not material, are included in other comprehensive income. The interest rate swaps fair values are determined using the market standard methodology of discounting the future expected net cash receipts or payments that would occur if variable interest rates rise above or fall below the fixed rates of the swaps. The variable interest rates used in the calculations of projected receipts on the swaps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

~~Unrealized gains~~ As discussed in Note 8, “Debt,” there are two tranches of interest rate swaps that we entered into in 2020. As of June 30, 2021, one of those tranches is in an asset position, and ~~losses on available-for-sale debt securities are included~~the other is in ~~other comprehensive income. There were no significant realized or unrealized gains or losses on any of our securities for any of the periods presented.~~a liability position.

Level 3 ~~instrument are~~instruments were contingent consideration obligations related to companies we ~~acquire with remaining maximum payouts totaling $5.1 million.~~acquired. These ~~obligation are~~obligations were contingent upon meeting certain ~~quantitative~~revenue performance metrics through ~~2020,~~March 31, 2021. The fair values of these obligations were determined based on an income approach, using our expectations of the future expected revenue of the acquired entities. During the six months ended June 30, 2021 we paid $41.2 million of this contingent consideration, and ~~are included~~recorded other offsetting adjustments to our estimates of the acquisition date fair values of these obligations recorded to goodwill, and changes to the fair value of these obligations subsequent to the dates of acquisition recorded to selling, general and administrative expenses in ~~other current liabilities on~~ our consolidated statements of income. As of June 30, 2021, the balance ~~sheet.~~of these contingent obligations is zero.

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3. Other Current Assets

Other current assets consisted of the following:


(in millions)	(in millions)	September 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Prepaid expenses	Prepaid expenses	$	92.3	$	84.1	Prepaid expenses	$	120.6	$	84.7
Other investments		44.0		30.7
Income taxes receivable		22.5		19.0
Other receivables		19.1		15.2
Marketable securities (Note 2)	Marketable securities (Note 2)	3.0		2.9		Marketable securities (Note 2)	3.2		3.2
Contract assets		1.9		1.4
Deferred financing fees (Note 8)		0.5		0.5
Contract assets (Note 10)						Contract assets (Note 10)	1.6		1.8
Other	Other	11.3		16.4		Other	89.6		69.8
Total other current assets	Total other current assets	$	194.6	$	170.2	Total other current assets	$	215.0	$	159.5

Other includes other investments ~~include~~in non-negotiable certificates of deposit that are recorded at their carrying value which approximates fair value. ~~Other receivables primarily include amounts recoverable under insurance policies for certain litigation costs.~~

4. Other Assets

Other assets consisted of the following:


(in millions)	(in millions)	September 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Investments in affiliated companies (Note 5)	Investments in affiliated companies (Note 5)	$	130.0	$	133.7	Investments in affiliated companies (Note 5)	$	168.3	$	138.8
Right-of-use lease assets	Right-of-use lease assets	66.4		71.2		Right-of-use lease assets	61.6		65.6
Non-qualified employee benefit plan assets		9.9		12.7
Deposits		4.8		4.1
Notes receivable from affiliated companies		4.0		4.0
Deferred financing fees		1.6		1.9
Interest rate swaps (Notes 2 and 8)						Interest rate swaps (Notes 2 and 8)	0.1		0
Other	Other	12.6		8.7		Other	36.2		31.7
Total other assets	Total other assets	$	229.3	$	236.3	Total other assets	$	266.2	$	236.1

5. Investments in Affiliated Companies

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

We use the equity method to account for 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, 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.

For nine months ended September 30, 2020, we recorded a $4.8 million impairment loss of a Cost Method investment, partially offset by a $2.5 million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer. For the nine months ended September 30, 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 a $8.6 million impairment loss of other Cost Method investments. These gains and losses are included in other income and expense in the consolidated statements of income.

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Investments in affiliated companies consisted of the following:


(in millions)	(in millions)	September 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Equity Method investments	Equity Method investments	$	40.3	$	49.0	Equity Method investments	$	44.0	$	46.1
Cost Method investments	Cost Method investments	89.7		84.7		Cost Method investments	124.3		92.7
Total investments in affiliated companies (Note 4)	Total investments in affiliated companies (Note 4)	$	130.0	$	133.7	Total investments in affiliated companies (Note 4)	$	168.3	$	138.8

These balances are included in other assets in the consolidated balance sheets. The increase in Cost Method investments is due primarily to ~~two new Cost Method~~ investments we made during ~~2020, partially offset by the net loss on Cost Method investments discussed above,~~2021 recorded in our Consumer Interactive and U.S. Markets ~~segment.~~segments.

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


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
Earnings from equity method investments (Note 13)	Earnings from equity method investments (Note 13)	$	2.1	$	3.1	$	6.7	$	10.2	Earnings from equity method investments (Note 13)	$	2.7	$	2.1	$	5.7	$	4.6
Dividends received from equity method investments	Dividends received from equity method investments	$	1.3	$	0.5	$	7.6	$	9.0	Dividends received from equity method investments	$	7.4	$	5.7	$	8.0	$	6.4

6. Other Current Liabilities

Other current liabilities consisted of the following:


(in millions)	(in millions)	September 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Accrued payroll		$	102.3	$	110.6
Accrued payroll and employee benefits						Accrued payroll and employee benefits	$	130.2	$	149.3
Deferred revenue (Note 10)	Deferred revenue (Note 10)	90.1		82.8		Deferred revenue (Note 10)	83.6		85.5
Accrued legal and regulatory (Note 14)	Accrued legal and regulatory (Note 14)	76.4		30.4		Accrued legal and regulatory (Note 14)	46.7		76.0
Income taxes payable		27.4		14.9
Accrued employee benefits		23.4		35.4
Operating lease liabilities	Operating lease liabilities	18.0		19.9		Operating lease liabilities	15.3		17.9
Accrued interest		5.7		4.0
Contingent consideration (Note 2)	Contingent consideration (Note 2)	5.0		7.2		Contingent consideration (Note 2)	0		37.8
Other	Other	28.1		31.3		Other	44.5		49.3
Total other current liabilities	Total other current liabilities	$	376.3	$	336.5	Total other current liabilities	$	320.3	$	415.8

The ~~increase~~decrease in accrued payroll was due primarily to the payment of accrued bonuses during the first quarter of 2021 that were earned in 2020.The decrease in accrued legal and regulatory was due primarily to ~~accruals related to~~a reduction of our estimated liability for the Ramirez ~~litigation and~~Litigation as discussed below, partially offset by an increase for certain other legal and regulatory matters. Contingent consideration that was accrued as of December 31, 2020 was paid out in the second quarter of 2021.

7. Other Liabilities

Other liabilities consisted of the following:


(in millions)	(in millions)	September 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Interest rate swaps and caps (Notes 2 and 8)		$	99.5	$	46.6
Interest rate swaps (Notes 2 and 8)						Interest rate swaps (Notes 2 and 8)	$	56.7	$	89.7
Operating lease liabilities	Operating lease liabilities	54.8		57.2		Operating lease liabilities	54.7		54.0
Unrecognized tax benefits, net of indirect tax effects (Note 12)	Unrecognized tax benefits, net of indirect tax effects (Note 12)	36.6		32.8		Unrecognized tax benefits, net of indirect tax effects (Note 12)	35.5		34.4
Non-qualified and other employee benefit plan liabilities		10.9		11.6
Deferred revenue (Note 10)	Deferred revenue (Note 10)	5.6		15.7		Deferred revenue (Note 10)	2.0		3.0
Other	Other	17.6		1.1		Other	32.9		34.4
Total other liabilities	Total other liabilities	$	225.0	$	165.0	Total other liabilities	$	181.8	$	215.5

The ~~increase~~decrease in the interest rate swaps liability was due primarily to changes in the forward LIBOR curve during the period.

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8. Debt

Debt outstanding consisted of the following:


(in millions)	(in millions)	September 30, 2020		December 31, 2019		(in millions)	June 30, 2021		December 31, 2020
Senior Secured Term Loan B-5, payable in quarterly installments through November 15, 2026, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (1.90% at September 30, 2020, and 3.55% at December 31, 2019), net of original issue discount and deferred financing fees of $4.3 million and $10.5 million, respectively, at September 30, 2020, and original issue discount and deferred financing fees of $4.8 million and $11.7 million, respectively, at December 31, 2019		$	2,490.6	$	2,508.5
Senior Secured Term Loan A-3, payable in quarterly installments through December 10, 2024, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (1.40% at September 30, 2020, and 3.30% at December 31, 2019), net of original issue discount and deferred financing fees of $2.8 million and $1.7 million, respectively, at September 30, 2020, and original issue discount and deferred financing fees of $3.3 million and $2.2 million, respectively, at December 31, 2019		1,124.0		1,144.5
Senior Secured Term Loan B-5, payable in quarterly installments through November 15, 2026, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (1.85% at June 30, 2021, and 1.90% at December 31, 2020), net of original issue discount and deferred financing fees of $3.5 million and $8.4 million, respectively, at June 30, 2021, and original issue discount and deferred financing fees of $3.9 million and $9.5 million, respectively, at December 31, 2020						Senior Secured Term Loan B-5, payable in quarterly installments through November 15, 2026, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (1.85% at June 30, 2021, and 1.90% at December 31, 2020), net of original issue discount and deferred financing fees of $3.5 million and $8.4 million, respectively, at June 30, 2021, and original issue discount and deferred financing fees of $3.9 million and $9.5 million, respectively, at December 31, 2020	$	2,239.1	$	2,335.6
Senior Secured Term Loan A-3, payable in quarterly installments through December 10, 2024, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (1.35% at June 30, 2021, and 1.40% at December 31, 2020), net of original issue discount and deferred financing fees of $2.3 million and $1.4 million, respectively, at June 30, 2021, and original issue discount and deferred financing fees of $2.6 million and $1.6 million, respectively, at December 31, 2020						Senior Secured Term Loan A-3, payable in quarterly installments through December 10, 2024, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (1.35% at June 30, 2021, and 1.40% at December 31, 2020), net of original issue discount and deferred financing fees of $2.3 million and $1.4 million, respectively, at June 30, 2021, and original issue discount and deferred financing fees of $2.6 million and $1.6 million, respectively, at December 31, 2020	1,103.2		1,117.0
Senior Secured Revolving Credit Facility	Senior Secured Revolving Credit Facility	0		0		Senior Secured Revolving Credit Facility	0		0
Other notes payable	Other notes payable	1.3		3.7		Other notes payable	0		1.4
Finance leases	Finance leases	0.1		0.3		Finance leases	0.2		0.2
Total debt	Total debt	3,616.0		3,657.0		Total debt	3,342.5		3,454.2
Less short-term debt and current portion of long-term debt	Less short-term debt and current portion of long-term debt	(55.4)		(58.7)		Less short-term debt and current portion of long-term debt	(69.3)		(55.5)
Total long-term debt	Total long-term debt	$	3,560.6	$	3,598.3	Total long-term debt	$	3,273.2	$	3,398.7

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 B-5, ~~and the~~ Senior Secured Term Loan A-3 (collectively, the “Senior Secured Term Loans”), and the Senior Secured Revolving Credit Facility.

For the six months ended June 30, 2021, we prepaid $85.0 million of our Senior Secured Term Loans, funded from our cash on hand. As a result of this prepayment, we expensed $0.5 million of our unamortized original issue discount and deferred financing fees to other income and expense in the consolidated statement of income.

As of ~~September~~June 30, ~~2020,~~2021, we had 0 outstanding balance under the Senior Secured Revolving Credit Facility and $0.1 million of outstanding letters of credit, and could have borrowed up to the remaining $299.9 million available.

TransUnion also has the ability to request incremental loans on the same terms under the Senior Secured Credit Facility up to the greater of $1,000.0 million and 100% of ~~consolidated~~Consolidated EBITDA for the four quarters preceding such request date, and may incur additional incremental loans so long as the senior secured net leverage ratio does not exceed 4.25-to-1, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings.

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 measurement date. Under the terms of the Senior Secured Credit Facility, TransUnion may make dividend payments up to the greater of $75 million or 7.5% of Consolidated EBITDA per year, or an unlimited amount 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, ~~2020,~~2021, we were in compliance with all debt covenants.

Interest Rate Hedging

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exchange for receiving a variable rate that matches the variable rate on our loans. The second tranche commences on June 30, 2022, and expires on June 30, 2025, with an initial aggregate notional amount of $1,110.0 million that amortizes each quarter after it commences. The second tranche requires TransUnion to pay fixed rates varying between 0.9125% and 0.9280% in exchange for receiving a variable rate that matches the variable rate on our loans. We have designated these swap agreements as cash flow hedges.

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On December 17, 2018, we entered into interest rate swap agreements with various ~~counter-parties~~counter parties that effectively fix our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt, which is currently fixed at 2.702% and 2.706%. We have designated these swap agreements as cash flow hedges. The current aggregate notional amount under these agreements is ~~$1,415.0~~$1,400.0 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~~counter parties that effectively capped our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt at 0.75% beginning June 30, 2016. These cap agreements expired on June 30, 2020, and were previously designated as cash flow hedges.

The change in the fair value of our hedging instruments, included in our assessment of hedge effectiveness, is recorded in other comprehensive income, and reclassified to interest expense when the corresponding hedged debt affects earnings.

The net change in the fair value of the swaps resulted in an unrealized gain of ~~$6.4~~$4.8 million ($~~5.0~~3.6 million, net ofof tax) and ~~loss of $53.3~~$33.1 million ($~~39.9~~24.9 million, net of tax) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, recorded in other comprehensive income. The net change in the fair value of the swaps resulted in an unrealized loss of ~~$5.6~~$12.8 million ($~~4.5~~9.6 million, net of tax) and ~~$43.7~~$59.7 million ($~~33.0~~44.9 million, net of tax) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, respectively, recorded in other comprehensive income. Interest expense on the swaps in the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021 was ~~$10.3~~$10.4 million ($~~8.0~~7.8 million, net of tax) and ~~$21.9~~$20.7 million ($~~16.5~~15.5 million, net of tax), respectively. Interest expense on the swaps in the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 was ~~$1.5~~expense of $7.9 million ($~~1.3~~6.6 million, net of tax) and ~~$2.6~~$11.6 million ($~~2.0~~8.8 million, net of tax), respectively. We currently expect to recognize a loss of approximately ~~$40.4~~$40.3 million as interest expense due to our expectation that LIBOR will exceed the fixed rates of interest over the next twelve months.

The net change in the fair value of the caps resulted in a recognition into interest expense previously unrealized loss of $4.5 million ($3.4 million, net of tax) and $4.1 million ($3.1 million, net of tax) for the ~~nine~~three and six months ended ~~September~~June 30, 2020, previously recorded in other comprehensive income. The net change in the fair value of the caps resulted in an unrealized loss of $0.4 million ($0.4 million, net of tax) and $12.2 million ($9.2 million, net of tax) for the three and nine months ended September 30, 2019, 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 ~~nine~~three and six months ended ~~September~~June 30, 2020, was expense of $4.6 million ($3.9 million, net of tax) and $6.7 million ($5.1 million, net of tax). 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, 2019, was income of $0.3 million ($0.2 million, net of tax) and $3.2 million ($2.5 million, net of tax), respectively.

Fair Value of Debt

As of ~~September~~June 30, 2021 and December 31, 2020 the fair value of our variable-rate Senior Secured Term Loan B-5, excluding original issue discounts and deferred fees was approximately $2,236.9 million and $2,351.9 million, respectively. As of June 30, 2021 and December 31, 2020, the fair value of our Senior Secured Term Loan A-3, excluding original issue discounts and deferred fees, was approximately ~~$1,112.9 million. As of September 30, 2020, the fair value of our Senior Secured Term Loan B-5, excluding original issue discounts~~$1,104.1 million and ~~deferred fees, was approximately $2,442.9 million.~~$1,112.8 million, respectively. The fair values of our variable-rate term loans are determined using Level 2 inputs, based on quoted market prices for the publicly traded instruments.

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9. Stockholders’ Equity

Common Stock Dividends

During the second quarter of 2021, we increased our quarterly dividend from $0.075 per share to $0.095 per share. Our board of directors declared a dividend of $0.075 and $0.095 per share on February ~~27, 2020,~~24, 2021 and May ~~13, 2020 and August 5, 2020,~~11, 2021, respectively, to holders of record on March ~~13, 2020,~~11, 2021 and May ~~28, 2020 and August 20, 2020,~~26, 2021, respectively. We paid dividends of ~~$14.2 million,~~ $14.3 million and ~~$14.3~~$18.2 million on March ~~30, 2020,~~26, 2021 and June ~~12, 2020~~10, 2021, respectively. Dividends declared accrue to outstanding restricted stock units and ~~September 4, 2020, respectively. Portions of the dividends declared~~ are ~~payable~~paid to employees as dividend equivalents ~~to employees who hold~~when the restricted stock ~~units when those~~ units vest.

Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend ~~upon~~on a number of factors, including our liquidity, results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems ~~relevant.~~appropriate. We currently have capacity and intend to continue to pay a quarterly dividend, subject to approval by our board. ~~While we expect to continue to pay dividends at this time, if circumstances deteriorate, we would consider recommending that our board temporarily reduce or suspend our dividend.~~

Treasury Stock

On February 13, 2017, our board of directors authorized the repurchase of up to $300.0 million of our common stock over the next 3 years. Our board of directors removed the three-year time limitation on February 8, 2018. To date, we have repurchased $133.5 million of our common stock and have the ability to repurchase the remaining $166.5 million.

We have no obligation to repurchase additional shares. Any determination 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 our liquidity, results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law, market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities ~~liquidity,~~ and other factors ~~deemed~~management deems 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. While the existing share repurchase program remains authorized by the board of directors, given the uncertainties arising from the COVID-19 pandemic, we do not intend to repurchase additional shares in the short term. We may resume share repurchases in the future at any time, depending upon market conditions, our capital needs and other factors.

During the first quarter of 2021 and 2020, 0.9 million outstanding employee restricted stock units vested and became taxable to the employees. ~~The~~During the first quarter of 2021 and 2020, the employees used 0.3 million shares of the vested stock to satisfy their payroll tax withholding obligations in a net share settlement arrangement whereby the employees received 0.6 million of the shares and gave TransUnion the remaining 0.3 million shares that we have recorded as treasury stock. WeDuring the first quarter of 2021 and 2020, we remitted cash equivalent ~~to the~~$27.7 million and $32.1 million, respectively, of the 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 throughout the year, 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

As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, we had 100.0 million shares of preferred stock authorized, and 0 preferred stock issued or outstanding.

10. Revenue

All of our revenue is derived from contracts with customers and is reported as revenue in the consolidated statements of income generally as, or at the point in time, the performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. We have contracts with 2 general groups of performance 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, provide 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, which is generally the amount we have the right to invoice. This monthly amount can be based on the actual volume

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of units delivered or a guaranteed minimum, if higher. Occasionally we have contracts ~~pursuant to which~~where the amount we will be entitled to

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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 ~~to which~~ we will be entitled to, and adjust any estimates as facts and circumstances evolve.

Certain ~~Stand Ready~~of our Performance ~~Obligation fees result from~~Obligations are related to 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.

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 with expected durations of one year or less.

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. These contracts are not material.

In certain circumstances we apply the revenue recognition guidance 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 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 pursuant to which 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, ~~2020.~~2021.

As our other contracts with customers generally have a duration of one year or less, our contract liabilities consist of deferred revenue that is primarily short-term in nature. Contract liabilities include current and long-term deferred revenue that is included in other current liabilities and other liabilities. We expect to recognize the December 31, ~~2019,~~2020, current deferred revenue balance as revenue during ~~2020.~~2021. The majority of our long-term deferred revenue, which is not material, is expected to be recognized in less than two years.

For additional disclosures about the disaggregation of our revenue see Note 13, “Reportable Segments.”

11. 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.

As of ~~September~~June 30, 2021 and June 30, 2020, ~~and September 30, 2019,~~ there were ~~1.3~~0.1 million and ~~1.1~~1.3 million contingently-issuable performance-based stock awards outstanding that were excluded from the diluted earnings per share calculation, respectively, because the contingencies had not been met.

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

Three Months Ended
September 30, Nine Months Ended September 30,
(in millions, except per share data) 2020 2019 2020 2019
Income from continuing operations $ 106.7 $ 88.3 $ 251.0 $ 270.2
Less: net (income) loss from continuing operations attributable to noncontrolling interests (3.9) 3.4 (9.5) (1.5)
Income from continuing operations attributable to TransUnion 102.8 91.7 241.5 268.7
Discontinued operations, net of tax 0 0 0 (4.6)
Net income attributable to TransUnion $ 102.8 $ 91.7 $ 241.5 $ 264.1
Basic earnings per common share from:
Income from continuing operations attributable to TransUnion $ 0.54 $ 0.49 $ 1.27 $ 1.43
Discontinued operations, net of tax 0 0 0 (0.02)
Net Income attributable to TransUnion $ 0.54 $ 0.49 $ 1.27 $ 1.41
Diluted earnings per common share from:
Income from continuing operations attributable to TransUnion $ 0.53 $ 0.48 $ 1.26 $ 1.40
Discontinued operations, net of tax 0 0 0 (0.02)
Net Income attributable to TransUnion $ 0.53 $ 0.48 $ 1.26 $ 1.38
Weighted-average shares outstanding:
Basic 190.2 188.2 189.8 187.5
Dilutive impact of stock based awards 2.1 3.8 2.3 4.1
Diluted 192.3 192.0 192.1 191.6
Anti-dilutive weighted stock-based awards outstanding 0.1 0.1 0.3 0.2


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	2021		2020		2021		2020
Net income	$	132.9	$	70.0	$	263.5	$	144.3
Less: net (income) loss attributable to the noncontrolling interests	(5.2)		(1.5)		(8.0)		(5.6)
Net income (loss) attributable to TransUnion	$	127.6	$	68.5	$	255.6	$	138.7

Weighted-average shares outstanding:
Basic	191.4		189.9		191.2		189.6
Dilutive impact of stock based awards	1.4		2.1		1.6		2.5
Diluted	192.8		192.0		192.8		192.0

Earnings Per Share:
Basic	$	0.67	$	0.36	$	1.34	$	0.73
Diluted	$	0.66	$	0.36	$	1.33	$	0.72

Anti-dilutive weighted stock-based awards outstanding	0.1		0.3		0.1		0.3

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12. Income Taxes

For the three months ended June 30, 2021, we reported an effective tax rate of 32.0%, which was higher than the 21.0% U.S. federal statutory rate due primarily to recording tax expense of $20.3 million related to the remeasurement of our U.K. deferred taxes to reflect an increase in the U.K. corporate income tax rate enacted in the second quarter of 2021, partially offset by $5.5 million of discrete tax benefit related to electing the Global Intangible Low Tax Income (“GILTI”) high-tax exclusion retroactively for the 2019 tax year and $2.1 million of excess tax benefits on stock-based compensation.On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to GILTI that allow certain U.S. taxpayers to elect to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. The GILTI high-tax exclusion is an annual election and is retroactively available.

For the six months ended ~~September~~June 30, 2021, we reported an effective tax rate of 25.5%, which was higher than the 21.0% U.S. federal statutory rate due primarily to recording tax expense of $20.3 million related to the remeasurement of our U.K. deferred taxes to reflect an increase in the U.K. corporate income tax rate enacted in the second quarter 2021, partially offset by $11.2 million of discrete tax benefit related to electing the GILTI high-tax exclusion retroactively for the 2018 and 2019 tax years and $7.9 million of excess tax benefits on stock-based compensation.

For the three months ended June 30, 2020, we reported an effective tax rate of ~~23.1%~~24.7%, which was higher than the 21.0% U.S. federal statutory rate due primarily to state taxes, foreign tax rate differences and accrued withholding taxes on unrepatriated foreign earnings, partially offset by $4.7 million of excess tax benefits on stock-based compensation.

For the ~~nine~~six months ended ~~September~~June 30, 2020, we reported an effective tax rate of ~~23.5%~~23.9%, which was higher than the 21.0% U.S. federal statutory rate due primarily to state taxes, foreign tax rate differences, accrued withholding taxes on unrepatriated foreign earnings and changes in valuation allowances for foreign tax credits, partially offset b~~y $22.4~~by $21.0 million of excess tax benefits on stock-based ~~compensation~~.

We periodically assess the recoverability of our deferred tax assets, and a valuation allowance is recorded against deferred tax assets if it is more likely than not that some portion of the deferred tax assets will not be realized. COVID-19 had no material impact on our assessment of the recoverability of our deferred tax assets at September 30, 2020. As additional information becomes available to us, our future assessment of the recoverability of our deferred tax assets could materially and adversely impact our consolidated financial statements in future reporting periods.

For the three months ended September 30, 2019, we reported an effective tax rate of 21.6%, which was higher than the 21.0% U.S. federal statutory rate due primarily to $17.0 million of various foreign, federal and state tax impacts, partially offset by $11.7 million in state tax benefits and $4.6 million of excess tax benefits on stock-based compensation.

For the nine months ended September 30, 2019, we reported an effective tax rate of 19.2%, which was lower than the 21.0% U.S. federal statutory rate due primarily to $31.9 million of excess tax benefits on stock-based compensation and $11.2 million in state tax benefits, partially offset by $37.1 million of additional foreign, federal and state tax expenses.

The gross amount of unrecognized tax benefits, which excludes indirect tax effects, was ~~$39.2~~$39.3 million as of ~~September~~June 30, ~~2020,~~2021, and ~~$32.8~~$36.9 million as of December 31, ~~2019.~~2020. The amounts that would affect the effective tax rate if recognized are ~~$17.3~~$19.6 million and ~~$13.6~~$18.5 million, respectively. We classify interest and penalties as income tax expense in the consolidated statements of income and their associated liabilities as other liabilities in the consolidated balance sheets. Interest and penalties on unrecognized tax benefits were $5.7 million as of June 30, 2021, $4.8 million as of December 31, 2020. 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~~Tax years 2009 and forward remain open for examination in some foreign jurisdictions, ~~2011~~2015 and forward in some state jurisdictions, and ~~tax years~~ 2012 and forward ~~remain open for examination~~ for U.S. federal income tax purposes.

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13. Reportable Segments

We have three reportable segments, U.S. Markets, International, and Consumer Interactive, and the Corporate unit, which provides support services to each of the segments. Our chief operating decision maker (“CODM”) uses the profit measure of Adjusted EBITDA, on both a consolidated and a 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 acquisition-related~~ ~~deferred revenue adjustments, plus~~ stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-related expenses, ~~including Callcredit integration-related expenses,~~ plus certain ~~expenses associated with our~~ accelerated technology investment expenses to migrate to the cloud, plus (less) certain other expenses (income).

The segment financial information below aligns with how we report information to our CODM to assess operating performance and how we manage the business. The accounting policies of the segments are the same as described in Note 1, “Significant Accounting and Reporting Policies” and Note 10, “Revenue.”

The following is a more detailed description of our 3 reportable segments and the Corporate unit, which provides support services to each segment:

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U.S. Markets

The U.S. Markets segment provides consumer reports, actionable insights and analytics such as credit and other scores, and ~~decisioning~~solutions capabilities to businesses. These businesses use our services to acquire new customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery methods in our U.S. Markets segment allow us to serve a broad set of customers across industries. We report disaggregated revenue of our U.S. Markets segment for Financial Services and Emerging 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, Tenant and Employment, Services and Collections, Public Sector, Media, Diversified Markets and other verticals. Our solutions in these verticals are also data-driven and address the entire customer lifecycle. We offer onboarding and transaction processing products, scoring and analytic products, marketing solutions, fraud and identity management solutions, and customer retention solutions.

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

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

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Consumer Interactive

The Consumer Interactive segment provides 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 for consumers. The segment also provides solutions that help businesses respond to data breach events. 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

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 1 or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature.

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


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
Gross Revenue:	Gross Revenue:									Gross Revenue:
U.S. Markets:	U.S. Markets:									U.S. Markets:
Financial Services	Financial Services	$	249.1	$	225.3	$	701.7	$	627.4	Financial Services	$	270.7	$	222.2	$	533.7	$	452.6
Emerging Verticals	Emerging Verticals	189.4		194.9		564.1		567.5		Emerging Verticals	214.1		183.2		419.1		374.7
Total U.S. Markets	Total U.S. Markets	438.5		420.2		1,265.8		1,194.9		Total U.S. Markets	$	484.7	$	405.5	$	952.8	$	827.3

International:	International:									International:
Canada	Canada	27.9		27.3		78.5		75.7		Canada	$	34.0	$	24.1	$	64.4	$	50.6
Latin America	Latin America	21.7		26.4		63.2		77.9		Latin America	26.0		17.2		50.1		41.5
United Kingdom	United Kingdom	44.2		47.6		132.1		136.4		United Kingdom	53.4		39.2		103.7		88.0
Africa	Africa	12.3		15.7		35.6		44.7		Africa	15.2		9.0		28.9		23.3
India	India	23.9		27.4		72.4		80.0		India	27.9		17.6		61.9		48.4
Asia Pacific	Asia Pacific	14.9		15.6		40.5		42.4		Asia Pacific	16.0		12.5		29.7		25.6
Total International	Total International	144.8		160.0		422.2		457.1		Total International	$	172.5	$	119.7	$	338.7	$	277.4

Total Consumer Interactive	Total Consumer Interactive	131.6		127.8		386.7		374.7		Total Consumer Interactive	$	136.6	$	128.4	$	266.9	$	255.1

Total revenue, gross	Total revenue, gross	$	714.9	$	708.0	$	2,074.8	$	2,026.7	Total revenue, gross	$	793.8	$	653.5	$	1,558.5	$	1,359.9

Intersegment revenue eliminations:	Intersegment revenue eliminations:									Intersegment revenue eliminations:
U.S. Markets	U.S. Markets	$	(17.2)	$	(17.1)	$	(51.7)	$	(51.8)	U.S. Markets	$	(17.6)	$	(17.4)	$	(35.0)	$	(34.5)
International	International	(1.4)		(1.3)		(3.9)		(3.8)		International	(1.5)		(1.2)		(2.9)		(2.5)
Consumer Interactive	Consumer Interactive	(0.5)		(0.2)		(1.3)		(0.6)		Consumer Interactive	(0.5)		(0.4)		(1.0)		(0.8)
Total intersegment eliminations	Total intersegment eliminations	(19.0)		(18.7)		(56.8)		(56.2)		Total intersegment eliminations	$	(19.6)	$	(19.1)	$	(39.0)	$	(37.8)
Total revenue as reported	Total revenue as reported	$	695.9	$	689.3	$	2,017.9	$	1,970.5	Total revenue as reported	$	774.2	$	634.4	$	1,519.5	$	1,322.0

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

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


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
U.S. Markets Adjusted EBITDA	U.S. Markets Adjusted EBITDA	$	177.3	$	181.0	$	520.0	$	498.5	U.S. Markets Adjusted EBITDA	$	209.4	$	171.2	$	408.3	$	342.7
International Adjusted EBITDA	International Adjusted EBITDA	56.7		64.0		154.4		188.6		International Adjusted EBITDA	72.2		37.5		143.6		97.7
Consumer Interactive Adjusted EBITDA	Consumer Interactive Adjusted EBITDA	67.1		66.5		186.2		185.8		Consumer Interactive Adjusted EBITDA	64.8		61.7		123.3		119.1
Total	Total	301.1		311.6		860.6		872.9		Total	346.4		270.4		675.2		559.5
Adjustments to reconcile to income from continuing operations before income taxes:
Adjustments to reconcile to income before income taxes:										Adjustments to reconcile to income before income taxes:
Corporate expenses⁽¹⁾	Corporate expenses⁽¹⁾	(31.2)		(30.7)		(84.7)		(89.4)		Corporate expenses(1)	$	(27.9)	$	(27.7)	$	(56.2)	$	(53.5)
Net interest expense	Net interest expense	(26.5)		(41.3)		(94.6)		(128.2)		Net interest expense	(24.7)		(32.3)		(49.8)		(68.1)
Depreciation and amortization	Depreciation and amortization	(92.2)		(88.7)		(273.4)		(271.4)		Depreciation and amortization	(98.4)		(90.8)		(192.7)		(181.2)
Acquisition-related revenue adjustments⁽²⁾		0		0		0		(5.9)
Stock-based compensation⁽³⁾		(7.8)		(14.7)		(29.5)		(35.6)
Mergers and acquisitions, divestitures and business optimization⁽⁴⁾		(1.5)		(4.8)		(12.9)		7.8
Accelerated technology investment⁽⁵⁾		(4.5)		0		(10.3)		0
Other⁽⁶⁾		(2.6)		(15.4)		(36.4)		(17.3)
Stock-based compensation(2)										Stock-based compensation(2)	(18.1)		(19.4)		(34.4)		(21.7)
Mergers and acquisitions, divestitures and business optimization(3)										Mergers and acquisitions, divestitures and business optimization(3)	(11.3)		(7.1)		(13.1)		(11.5)
Accelerated technology investment(4)										Accelerated technology investment(4)	(9.8)		(3.3)		(17.1)		(5.8)
Net other(5)										Net other(5)	33.9		1.8		33.8		(33.8)
Net loss (income) attributable to non-controlling interests	Net loss (income) attributable to non-controlling interests	3.9		(3.4)		9.5		1.5		Net loss (income) attributable to non-controlling interests	5.2		1.5		8.0		5.6
Total adjustments	Total adjustments	(162.4)		(199.1)		(532.3)		(538.5)		Total adjustments	(151.1)		(177.4)		(321.7)		(369.9)
Income from continuing operations before income taxes		$	138.7	$	112.5	$	328.3	$	334.3
Income before income taxes										Income before income taxes	$	195.4	$	93.0	$	353.5	$	189.6

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

(1)Certain costs that are not directly attributable to one or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature.

(2)This adjustment represents certain non-cash adjustments related to acquired entities, predominantly adjustments to increase revenue resulting from purchase accounting reductions to deferred revenue we record on the opening balance sheets of acquired entities. Deferred revenue results when a company receives payment in advance of fulfilling their performance obligations under contracts. Business combination accounting rules require us to record deferred revenue of acquired entities at fair value if we are obligated to perform any future services under these contracts. The fair value of this deferred revenue is determined based on the direct and indirect incremental costs of fulfilling our performance obligations under these contracts, plus a normal profit margin. Generally, this fair value calculation results in a reduction to the purchased deferred revenue balance. The above adjustment includes an estimate for the increase in revenue equal to the difference between what the acquired entities would have recorded as revenue and the lower revenue we record as a result of the reduced deferred revenue balance. This increase is partially offset by an estimated decrease to revenue for certain acquired non-core customer contracts that are not classified as discontinued operations that will expire within approximately one year from the date of acquisition. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue.

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

~~(4)~~(3)For the three months ended ~~September~~June 30, 2021, consisted of the following adjustments: $(6.7) million of adjustments to contingent consideration expense from previous acquisitions; $(3.5) million of acquisition expenses; and a $(1.1) million gain reduction to notes receivable that were converted into equity upon acquisition and consolidation of an entity.

For the six months ended June 30, 2021, consisted of the following adjustments: $(7.9) million of adjustments to contingent consideration expense from previous acquisitions; $(4.6) million of acquisition expenses; a $(1.1) million gain reduction to notes receivable that were converted into equity upon acquisition and consolidation of an entity; and a $0.5 million gain on the sale of a cost method investment.

For the three months ended June 30, 2020, consisted of the following adjustments: ~~$1.5 million of acquisition expenses.~~

~~For the nine months ended September 30, 2020, consisted of the following adjustments: $7.5 million of Callcredit integration costs;~~ a ~~$4.8~~$(4.8) million loss on the impairment of a Cost Method investment; ~~$4.8~~$(3.6) million of Callcredit integration costs; $(1.2) million of acquisition expenses; ~~$0.3~~and a $2.5 million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer.

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

For the three months ended September 30, 2019, consisted of the following adjustments: a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; $2.0 million of Callcredit integration costs; a $0.6 million adjustment to contingent consideration expense from previous acquisitions; $0.5 million of

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~~acquisition expenses; and a $(0.2) million reimbursement for transition services provided to the buyers of certain of our discontinued operations.~~

For the nine months ended September 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; $(0.4) million reimbursement for transition services provided to the buyers of our discontinued operations; $10.5 million of Callcredit integration costs; a $8.6 million loss on the impairment of certain Cost Method investments; $2.1 million of acquisition expenses; a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; and a $0.6 million adjustment to contingent consideration expense from previous acquisitions.

~~(5)~~(4)Represents expenses associated with our accelerated technology investment to migrate to the cloud.

~~(6)~~(5)For the three months ended ~~September~~June 30, ~~2020~~, ~~consisted of the following adjustments~~: $4.2 million for certain legal expenses; $0.4 million of loan fees; a $(0.8) million gain from currency remeasurement of our foreign operations; a $(0.9) million recovery from the Fraud Incident (as defined in our Annual Report on Form 10-K for the year ended December 31, 2019), net of additional administration expenses; and $(0.3) million other.

~~For the nine months ended September 30, 2020,~~2021, consisted of the following adjustments: ~~$34.7~~a $32.4 million ~~for~~net reduction in certain legal expenses; a ~~$2.1 million loss from currency remeasurement of~~ ~~our foreign operations; $1.2 million of loan fees; $0.2 million of fees related to our new swap agreements; a $(1.1)~~$3.4 million recovery from the Fraud Incident, net of additional ~~administration expense; $(0.5)~~administrative expenses; and $(1.9) million ~~reimbursement~~ of ~~fees associated with the refinancing~~net other consisting of net losses from currency remeasurement of our ~~Senior Secured Credit Facility;~~foreign operations, loan fees and ~~$(0.3) million of~~ other.

For the ~~three~~six months ended ~~September~~June 30, ~~2019~~, 2021, consisted of the following adjustments: ~~$19.7~~a $32.4 million ~~of expenses (including $1.8~~net reduction in certain legal expenses; a $3.4 million ~~of administrative expenses) associated with~~recovery from the Fraud Incident, ~~offset by the $(7.1)~~net of additional administrative expense; and $(2.0) million ~~portion that is attributable to the non-controlling interest; $1.6 million~~of net other consisting of net losses from currency ~~remeasurement; $0.7 million~~remeasurement of ~~deferred loan fees written off as a result~~our foreign operations and other.

Table of ~~the prepayments on our debt; and $0.5 million of loan fees.~~Contents

For the ~~nine~~three months ended ~~September~~June 30, ~~2019,~~2020, consisted of the following adjustments: ~~$19.7 million of expenses (including~~ $1.8 million of ~~administrative expenses) associated with the Fraud Incident offset by the $(7.1) million portion that is attributable to the non-controlling interest; $1.9 million~~net other consisting of net gains from currency ~~remeasurement; $1.5~~remeasurement of our foreign operations, loan fees and other.

For the six months ended June 30, 2020, consisted of the following adjustments: $(30.5) million for certain legal expenses; and $(3.3) million of ~~loan fees; $1.5 million~~net other consisting of ~~deferred~~net losses from currency remeasurement of our foreign operations, loan fees, ~~written off as a result of the prepayments on our debt;~~ and ~~$(0.1) million of miscellaneous.~~

other.

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


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
U.S. Markets	U.S. Markets	$	0.8	$	0.8	$	2.0	$	2.0	U.S. Markets	$	0.7	$	0.6	$	1.3	$	1.3
International	International	1.4		2.4		4.7		8.2		International	2.0		1.4		4.4		3.3
Total	Total	$	2.1	$	3.1	$	6.7	$	10.2	Total	$	2.7	$	2.1	$	5.7	$	4.6

14. Contingencies

Legal and Regulatory Matters

We are routinely named as defendants in, or parties to, various legal actions and proceedings relating to our current or past business operations. These actions generally assert claims for violations of federal or state credit reporting, consumer protection or privacy laws, or common law claims related to the unfair treatment of consumers, and may include claims for substantial or indeterminate compensatory or punitive damages, or injunctive relief, and may seek business practice changes. We believe that most of these claims are either without merit or we have valid defenses to the claims, and we vigorously defend these matters or seek non-monetary or small monetary settlements, if possible. However, due to the uncertainties inherent in litigation, we cannot predict the outcome of each claim in each instance.

In the ordinary course of business, we also are subject to governmental and regulatory examinations, information-gathering requests, investigations and proceedings (both formal and informal), certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. In connection with formal and informal inquiries by these regulators, we routinely receive requests, subpoenas and orders seeking documents, testimony, and other information in connection with various aspects of our activities.

In view of the inherent unpredictability of legal and regulatory matters, particularly where the damages sought are substantial or indeterminate or when the proceedings or investigations are in the early stages, we cannot determine with any degree of certainty the timing or ultimate resolution of legal and regulatory matters or the eventual loss, fines ~~penalties~~ or ~~business impact,~~penalties, if any, that may ~~result.~~result from such matters. We establish reserves for legal and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. However, for certain of the matters described below, we are not able to reasonably estimate our exposure because damages have not been specified and (i) the proceedings are in early stages, (ii) there is uncertainty as to the likelihood of a class being certified or the ultimate size of the class, (iii) there is uncertainty as to the outcome of similar matters pending against our competitors, (iv) there are significant factual issues to be resolved, and/or (v) there are legal issues of a first impression being presented. The actual costs of resolving legal and regulatory matters, however, may be substantially higher than the amounts reserved for those matters, and an adverse outcome in certain of these matters could have a material adverse effect on our consolidated financial statements in particular quarterly or annual ~~periods. During the third quarter of 2020 we accrued~~periods. We accrue amounts for certain legal and regulatory matters for which losses ~~were~~are considered to be probable of occurring based on our best estimate of the most likely outcome. It is reasonably possible actual losses could be significantly different from our current estimates. In addition, there are some matters for which it is reasonably possible that a loss will occur, however we cannot estimate a range of the potential losses for these matters.

To reduce our exposure to an unexpected significant monetary award resulting from an adverse judicial decision, we maintain insurance that we believe is appropriate and adequate based on our historical experience. We regularly advise our insurance carriers of the claims (threatened or pending) against us in the course of litigation and generally receive a reservation of rights letter from the carriers when such claims exceed applicable deductibles. We are not aware of any significant monetary claim that has been asserted against us in the course of pending litigation that would not have some level of coverage by insurance after the relevant deductible, if any, is met.

As of June 30, 2021 and December 31, 2020, we have accrued liabilities of $46.7 million and $76.0 million, respectively, for anticipated claims. These amounts are included in other accrued liabilities in the consolidated balance sheets. Litigation expense is included in selling, general and administrative expenses in the consolidated statements of income. Legal fees incurred in connection with ongoing litigation and enforcement matters are considered period costs and are expensed as incurred.

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The following discussion describes material developments in previously disclosed material legal and regulatory matters that occurred in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~.2021. Refer to Part II, Item 8, Footnote ~~21,~~20, “Contingencies” of our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, for a full description of our material pending legal and regulatory matters at that time.

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Ramirez v. Trans Union LLC

As a result of a decision by the United States Third Circuit Court of Appeals (Cortez v. Trans Union LLC) in 2010, we modified one of our add-on services we offer to our business customers that was designed to alert our customer that the consumer, who was seeking to establish a business relationship with the customer, may potentially be on the Office of Foreign Assets Control, Specifically Designated National and Blocked Persons alert list (the “OFAC Alert”).

In Ramirez v. Trans Union LLC (“Ramirez” or the “Ramirez Litigation”) filed in 2012, the plaintiff alleged that the OFAC Alert service did not comply with the Cortez ruling and that we willfully violated the Fair Credit Reporting Act (“FCRA”) by continuing to offer the OFAC Alert service. The plaintiff also alleged that there are one or more classes of individuals who should be entitled to statutory damages based on the allegedly willful violations. In July 2014, the trial Court in Ramirez certified a class of 8,185 individuals solely for purposes of statutory damages if TransUnion was ultimately found to have willfully violated the FCRA.

On ~~February 27, 2020,~~June 21, 2017, the jury in Ramirez returned a verdict in favor of a class of 8,185 individuals and awarded punitive and statutory damages totaling approximately $60 million. In November 2017, the trial court denied our post-trial motions for judgment as a matter of law, a new trial and a reduction on the jury verdict.We appealed the Ramirez ruling to the United States Court of Appeals for the Ninth Circuit ~~issued its opinion in~~ ~~Ramirez v. Trans Union LLC, (No. 3:12-cv-00632-JSC, United States District Court for~~and on February 27, 2020, the ~~Northern District of California), which~~Ninth Circuit affirmed in part and reversed and vacated in part the trial court’s judgment, holding that the punitive damages award was excessive in violation of constitutional due process. The appeals court remanded the case to the trial court with instructions to reduce the punitive damages award from approximately $52.0 million ($6,353.08 per class member) to approximately $32.0 million ($3,936.88 per class member). On April 8, 2020, the Ninth Circuit denied our petition for ~~rehearing~~ rehearing en ~~banc. We determined that punitive damages were probable~~ banc, and ~~reasonably estimable and recorded an estimated liability at March 31,~~on September 2, 2020, ~~in an amount equal~~we filed a Petition for Certiorari with the United States Supreme Court. On December 16, 2020, the United States Supreme Court granted the Petition for Certiorari with respect to ~~the portion~~whether Article III of the ~~punitive~~United States Constitution or Rule 23 of the Federal Rules of Civil Procedure permit a damages ~~award affirmed by~~class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered.

On June 25, 2021, the United States Supreme Court’s decision reversed the Ninth Circuit opinion, and remanded the matter back to the lower courts for further proceedings consistent with its opinion. The United States Supreme Court’s opinion held that only plaintiffs who have suffered a concrete harm by a defendant’s statutory violation have Article III standing to seek damages against defendants in Federal court. Based on the ruling, only approximately 23% of the class was determined to have suffered concrete harm. Accordingly, as of June 30, 2021, we revised the amount of the probable loss that we previously estimated, resulting in a reduction of our estimated liability and partially offsetting insurance receivable, with ~~expense of $30.5~~a $32.4 million net reduction recorded in selling, general and administrative expense. We also recorded a related income tax ~~benefit~~expense of ~~$7.6~~$8.1 million in our provision for income taxes.

CFPB Matter

~~taxes.~~In June 2021, we received a Notice and Opportunity to Respond and Advise (“NORA”) letter from the Consumer Financial Protection Bureau (“CFPB”), informing us that the CFPB’s Enforcement Division is considering whether to recommend that the CFPB take legal action against us and certain of our executive officers. The NORA letter alleges that we failed to comply with and timely implement a Consent Order issued by the CFPB in January 2017, and further alleges additional violations related to Consumer Interactive’s marketing practices. We ~~recorded~~continue to believe that our marketing practices are lawful and appropriate. Should the CFPB commence an ~~additional reserve for~~action against us, it may seek restitution, civil monetary penalties, injunctive relief or other corrective action. We cannot provide assurance that the CFPB will not ultimately commence a legal action against us in this matter, innor are we able to predict the ~~third quarter~~likely outcome of ~~2020.~~this matter. As of June 30, 2021, the amount of the probable loss is not reasonably estimable.

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

The following discussion and analysis of TransUnion’s financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, TransUnion’s audited consolidated financial statements, the accompanying notes, “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, 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, collectively.

Overview

TransUnion is a leading global information and insights company that strives to make trust possible between businesses and consumers, working to ensure that each person is reliably and safely represented in the marketplace. At TransUnion, we find innovative ways to leverage data and information to help businesses and consumers transact with confidence and achieve great things. We call this Information for Good.

Grounded in our legacy as a credit reporting agency, we have built a robust and accurate database of information for a large portion of the adult population in the markets we serve. We use our data fusion methodology to link and match an increasing set of other disparate data to further enrich our database. We use this enriched data, combined with our expertise, to continuously develop more powerful and useful solutions for our customers, all in accordance with global laws and regulations. Because of our work, organizations can better understand consumers in order to make more informed decisions, and earn consumer trust through effective, personalized experiences, and the proactive extension of the right opportunities, tools and offers.

We provide consumer reports, actionable insights and analytics such as credit and other scores, 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 have deep domain expertise across a number of attractive industries, which we also refer to as verticals, including Financial Services, Healthcare, Insurance and the other markets we serve. We have a global presence in over 30 countries and territories across North America, Latin America, Europe, Africa, India, and Asia Pacific.

Our solutions are based on a foundation of financial, credit, alternative credit, identity, bankruptcy, lien, judgment, healthcare, insurance claims, automotive and other relevant information obtained from thousands of sources including financial institutions, private databases, public records repositories, and other data sources. We refine, standardize and enhance this data using sophisticated algorithms to create proprietary databases. Our technology infrastructure allows us to efficiently integrate our data with our analytics and decisioning capabilities to create and deliver innovative solutions to our customers and to quickly adapt to changing customer needs. Our deep analytics resources, including our people and tools driving predictive modeling and scoring, customer segmentation, benchmarking and forecasting, enable us to provide businesses and consumers with better insights into their data. Our decisioning capabilities, which are generally delivered on a software-as-a-service platform, allow businesses to interpret data and apply their specific qualifying criteria to make decisions and take actions. Collectively, our data, analytics and decisioning capabilities allow businesses to authenticate the identity of consumers, effectively determine the most relevant products for consumers, retain and cross-sell to existing consumers, identify and acquire new consumers and reduce loss from fraud and data breaches. Similarly, our capabilities allow consumers to see how their credit profiles have changed over time, understand the impact of financial decisions on their credit scores, manage their personal information and take precautions against identity theft.

Segments

We manage our business and report disaggregated revenue and financial results in three reportable segments: U.S. Markets, International and Consumer Interactive.

•The U.S. Markets segment provides consumer reports, actionable insights and analytics such as credit and other scores, and decisioning capabilities to businesses. These businesses use our services to acquire new customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk,

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collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery methods in our U.S. Markets segment allow us to serve a broad set of customers across industries. We report disaggregated revenue of our U.S. Markets segment for Financial Services and Emerging Verticals.

•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 and decisioning services, and other value-added risk management services. We also have insurance, business and automotive databases in select geographies. These services are offered to customers in a number of industries including financial services, retail credit, insurance, automotive, collections, public sector, and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer services similar to those offered by our Consumer Interactive segment that help consumers proactively manage their personal finances and take precautions against identity theft.

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 provides 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 for consumers. The segment also provides solutions that help businesses respond to data breach events. 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 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.

Factors Affecting Our Results of Operations

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

Macroeconomic and Industry Trends; Effects of ~~Coronavirus (“COVID-19”)~~the COVID-19 pandemic on our Business and Results of Operations

Our revenues can be significantly influenced by general macroeconomic conditions, including the impact of the global COVID-19 pandemic, the availability of credit and capital, interest rates, inflation, employment levels, consumer confidence and housing demand. ~~The global spread and unprecedented impact of COVID-19 is complex and continues to evolve rapidly.~~

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak has reached all of the regions in which we do business, and governmental authorities around the world have implemented numerous measures attempting to contain and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, shutdowns, limitations or closures of non-essential businesses, school closures, social distancing requirements and various economic stimulus initiatives. While certain of these measures have been relaxed or reversed to varying degrees throughout the world, many have subsequently been reinstated and even tightened, adding an additional layer of uncertainty. The global spread of COVID-19 and actions taken in response to the pandemic have negatively affected workforces, customers, consumer confidence, financial markets, employment rates, consumer spending, credit markets and housing demand, caused significant economic and business disruption, volatility and financial uncertainty, and led to a significant economic downturn, including in the markets where we operate. Businesses and consumers continue to react and adapt to the uncertainty with varying degrees of success in the markets where we operate. Since mid-MarchIn 2020, the COVID-19 pandemic ~~widespread measures implemented to contain its effects, and business and consumer responses to such measures, have~~ had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in all of our ~~segments. While~~segments beginning in the middle of March 2020. However, after reaching a low point in April 2020, we ~~continue to see~~have seen ongoing and accelerating improvements in demand for our services inand solutions. This dynamic impacts the comparability of our results of operations between the periods presented below.

In the markets where we ~~operate~~compete, we have generally seen improving macroeconomic conditions over the past few quarters. In the United States, we have seen strong and improving macroeconomic conditions, including GDP growth, falling unemployment rates, rising consumer confidence levels, and mortgage interest rates near historical lows. In our international regions, we have seen similar macroeconomic trends, although there are lingering economic concerns related to the COVID-19 pandemic in certain markets. These ongoing macroeconomic improvements are reflected in our first half of 2021 results, with all of our segments showing ongoing and accelerating signs of improvements, particularly in both verticals within our U.S. Markets segment and all of the regions within our International segment.

While our results continue to reflect ongoing improvements since the low point in April of 2020, in light of the ~~impact of~~continuing uncertainty around COVID-19, including ~~government measures and business and consumer responses to such measures, may continue to have a material adverse impact on~~the rise in variants of the virus, our ~~business for an uncertain period of time. In addition, if the pandemic~~primary focus continues to ~~create significant disruptions in the credit or financial markets, or impacts our credit ratings, it could adversely impact our ability to access capital on favorable terms or at all.~~

~~From the earliest days of the COVID-19 pandemic, the Company’s primary focus has been~~be the health and safety of our associates, our customers and the wider communities in which we operate. ~~In each of the markets~~We continue to encourage our associates to get vaccinated, when possible, and have implemented flexible policies that enable them to do so. While we continue to largely operate in a work-from-home model in every market we serve, we have ~~quickly and effectively moved~~begun to ~~a work-from-home model, allowing us to protect~~slowly reenter our associates and the broader population while continuing to operate our businesses and provide services and solutions to customers and consumers. In addition, the Company has taken several actions to support those who are financially impacted by the COVID-19 pandemic in the jurisdictions where we operate. We remain focused on ensuring impacted consumers are aware of resources and relief available to them, and we are working directly with our partners across the broader consumer credit ecosystem in an effort to prevent adverse impacts to

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consumers’ credit reports as a result of the pandemic. We are also working with trade associations and industry peers to develop additional proactive solutions to help impacted consumers and to facilitate access to resources and educational materials aimed at consumers.

~~The decline in demand for our services and solutions resulted~~office space in a ~~reduction in certain costs that vary with revenue. In addition, we are actively monitoring our cost base~~safe and thoughtful manner, and have ~~taken~~begun to conduct small in-person meetings in some of our offices.

Notwithstanding our encouraging first and ~~will continue to take actions with~~second quarter 2021 results, given the ~~goal~~continuously evolving and unpredictable nature of maintaining financial liquidity and flexibility, such as temporarily halting our travel-related expenses, slowing new hiring as we develop our understanding of the shape and the speed of the expected recovery and canceling in-person meetings. We continue to monitor and plan for other cost levers that we can pull and will evaluate whether additional cost control measures are necessary or desirable to enhance our liquidity and financial profile as the effects of the COVID-19 pandemic continue to evolve. However, there is no certainty that such measures, or measures that we have already taken, will be successful in mitigating the numerous operational, health and financial risks posed by COVID-19 and it may be necessary to further modify our business practices in the future, which could further materially and adversely impact our consolidated financial statements in future periods.

The extent to which COVID-19 impacts our business, operations and our consolidated financial statements is inherently uncertain and will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration, scope and severity of the pandemic; the impact on worldwide macroeconomic conditions during and after the pandemic, including ~~interest rates, employment rates, consumer confidence, and foreign exchange rates in each~~variants of the ~~markets in which we operate; governmental, business~~virus, COVID-19 may have a material and ~~individuals’ actions that have been taken and continue to evolve in response to the pandemic, which could include limitations~~adverse impact on and changes to our operations or mandates to provide services; the effect on our customers; changes in customer and consumer demand for our services; the effect on consumer confidence and spending; our ability to sell and provide our services, including the impact of travel restrictions and people working from home; the abilityvarious aspects of our customers to pay for our services on a timely basis or at all; the health of, and the effect on, our workforce; our ability to maintain sufficient liquidity; and the potential effects on our internal controls, including those over financial reporting, as a result of changes in working environments for our employees, business, partners and suppliers. Each of these factors could cause or contribute to the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2019, and in this Quarterly Report on Form 10-Q, and could further materially and adversely impact our business, consolidated financial statements and our stock price.

We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, our allowance for doubtful accounts, stock-based compensation, goodwill and other long-lived assets, financial assets, valuation allowances for tax assets and revenue recognition. While based on our current assessment of these estimates there was not a material impact to our consolidated financial statements as of and for the quarter ended September 30, 2020, as additional information becomes available to us, our future assessment of these estimates, including our ~~expectations at~~results of operations and financial condition, in the ~~time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods.~~future.

Our revenues are also significantly influenced by industry trends, including the demand for information services in financial services, healthcare, insurance and other industries we serve. Companies are increasingly relying on business analytics and big-data technologies to help process data in a cost-efficient manner. As customers have gained the ability to rapidly aggregate and analyze data generated by their own activities, they are increasingly expecting access to real-time data and analytics from their information service providers as well as solutions that fully integrate into their ~~workflows. In the long term, and once the impact of COVID-19 subsides, we believe demand~~workflows. Demand for consumer solutions ~~will increase,~~is

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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 and the emergence of new regulations across ~~the globe, including new~~both emerging and ~~future COVID-19 related regulations on consumer and business activities and interactions and stimulus packages, will~~developed economies globally continue to make operations for businesses more ~~complex.~~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

The following developments impact the comparability of our balance sheets, results of operations and cash flows between years:

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~~Since mid-March~~In 2020, the economic effect of the COVID-19 pandemic ~~and widespread measures implemented to contain its effects, and business and consumer responses to such measures have~~ had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in all of our ~~segments. While~~segments beginning in the middle of March 2020. However, after reaching a low point in April 2020, we ~~continue to see~~have seen ongoing improvements in demand for our services to varying degrees in all the markets where we operate, ~~since~~with some lingering economic concerns from COVID-19 in certain of our international markets. These ongoing improvements are reflected in our first half of 2021 results and impact the ~~low point in April,~~comparability of our results of operations between periods. Notwithstanding our encouraging first and second quarter 2021 results, given the ~~impact~~continuously evolving and unpredictable nature of the pandemic and rise of variants of the virus, COVID-19 ~~including government measures and business and consumer responses to such measures,~~ may ~~continue to~~ have a material and adverse impact on various aspects of our business, ~~for an uncertain period~~including our results of ~~time.~~

On March 10, 2020, we entered into two tranches of interest rate swap agreements with various counter-parties that effectively fixes our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt. The first tranche commenced on June 30, 2020operations and ~~expires on June 30, 2022 with an initial notional amount of $1,145.0 million which amortizes each quarter. The first tranche requires TransUnion to pay fixed rates varying between 0.5200% and 0.5295%~~financial condition, in ~~exchange for receiving a variable rate which matches~~ the variable rate on our loans. The second tranche commences on June 30, 2022 and expires on June 30, 2025 with an initial notional amount of $1,110.0 million which amortizes each quarter. The second tranche requires TransUnion to pay fixed rates varying between 0.9125% and 0.9280% in exchange for receiving a variable rate which matches the variable rate on our loans. We have designated these swap agreements as cash flow hedges.future.

On February 27, 2020, the United States Court of Appeals for the Ninth Circuit affirmed in part and reversed and vacated in part the trial court’s judgment in Ramirez v. Trans Union LLC (“Ramirez” or the “Ramirez Litigation”), reducing the trial court’s punitive damages award from approximately $52 million to approximately $32 million. As a result, ~~at that time~~in the first quarter of 2020 we recorded $30.5 million ($22.9 million net of tax) of legal expense in selling, general and administrative ~~expenses in 2020.~~expenses. We recorded an additional reserve for this matter in the third quarter of 2020. On December 16, 2020, the United States Supreme Court granted the Petition for

Certiorari with respect to whether Article III of the United States Constitution or Rule 23 of the Federal Rules of Civil Procedure permit a damages class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered. On June 25, 2021, the United States Supreme Court’s decision reversed the Ninth Circuit opinion in Ramirez v. TransUnion, LLC, and remanded the matter back to the lower courts for further proceedings consistent with its opinion. The United States Supreme Court’s opinion held that only plaintiffs who have suffered a concrete harm by a defendant’s statutory violation have Article III standing to seek damages against defendants in Federal court. Based on the ruling, only approximately 23% of the class was determined to have suffered concrete harm. Accordingly, as of June 30, 2021, we revised the amount of the probable loss that we previously estimated, resulting in a reduction of our estimated liability and partially offsetting insurance receivable, with a $32.4 million net reduction recorded in selling, general and administrative expense. We also ~~refinanced~~recorded a related tax expense of $8.1 million in our ~~senior secured credit facility in the fourth quarter of 2019. Since the middle of the second quarter of 2019,~~provision for income taxes.

In March 2021, we ~~have~~ prepaid ~~$340~~$85.0 million of our Senior Secured Term ~~Loans. These actions resulted in lower~~Loans, funded from our cash on hand. In December 2020, we prepaid $150.0 million of our Senior Secured Term Loans, funded from our cash on hand.

On March 10, 2020, we entered into two tranches of interest ~~expense~~rate swap agreements with various counter parties that effectively fixes our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt. See Part I, Item I, Note 8, “Debt,” for ~~the thee- and nine-month periods of 2020, compared with the same periods in 2019.~~additional information about these swap agreements.

Recent Acquisitions

We selectively evaluate acquisitions as a means to expand our business and international footprint and to enter new markets. Since January 1, ~~2019,~~2020, we have completed the following acquisitions, ~~as of September 30, 2020,~~ including those that impact the comparability of our results between periods:

•On October 14, 2020, we acquired 100% of the equity of Tru Optik Data Corp (“Tru Optik”). Tru Optik uses its custom audience-building platform to deliver predictive scoring to improve the performance of custom digital marketing campaigns. The results of operations of Tru Optik, 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 August 14, 2020, we acquired 100% of the equity of Signal Digital, Inc. (“Signal”). Signal is a digital marketing company that provides tag management, data collection, and onboarding capabilities to customers for activation in the marketing ~~ecosystem or for consumer personalization.~~ecosystem. The results of operations of Signal, which are not material to our consolidated financial

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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 May 22, 2019, we acquired 100% of the equity of TruSignal, Inc. (“TruSignal”). TruSignal is an innovative leader in people-based marketing technology for Fortune 500 brands, agencies, platforms, publishers and 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 TruSignal, 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.

Key Components of Our Results of Operations

Revenue

The following is a more detailed description of how we derive and report revenue for our three reportable segments:

U.S. Markets

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

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

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

Consumer Interactive

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.

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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 and cost-method investments, if any, expenses related to successful and unsuccessful business acquisitions, loan fees, debt refinancing expenses, certain acquisition-related gains and losses and other non-operating income and expenses.

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Results of Operations

Key Performance Measures

Management, including our chief operating decision maker (“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~~measure consolidated Adjusted EBITDA. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, these key indicators were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 $
Change %
Change 2020 2019 $
Change %
Change
Revenue and Adjusted Revenue:
Consolidated revenue as reported $ 695.9 $ 689.3 $ 6.6 1.0 % $ 2,017.9 $ 1,970.5 $ 47.5 2.4 %
Acquisition revenue-related adjustments⁽¹⁾
— — — nm — 5.9 (5.9) nm
Consolidated Adjusted Revenue⁽²⁾
$ 695.9 $ 689.3 $ 6.6 1.0 % $ 2,017.9 $ 1,976.4 $ 41.5 2.1 %
U.S. Markets gross revenue $ 438.5 $ 420.2 $ 18.2 4.3 % $ 1,265.8 $ 1,194.9 $ 70.9 5.9 %
Acquisition revenue-related adjustments⁽¹⁾
— — — nm — 0.4 (0.4) nm
U.S. Markets gross Adjusted Revenue⁽²⁾
$ 438.5 $ 420.2 $ 18.2 4.3 % $ 1,265.8 $ 1,195.2 $ 70.6 5.9 %
International gross revenue $ 144.8 $ 160.0 $ (15.1) (9.5) % $ 422.2 $ 457.1 $ (34.9) (7.6) %
Acquisition revenue-related adjustments⁽¹⁾
— — — nm — 5.6 (5.6) nm
International gross Adjusted Revenue⁽²⁾
$ 144.8 $ 160.0 $ (15.1) (9.5) % $ 422.2 $ 462.7 $ (40.4) (8.7) %
Consumer Interactive gross revenue $ 131.6 $ 127.8 $ 3.9 3.0 % $ 386.7 $ 374.7 $ 12.0 3.2 %
Adjusted EBITDA⁽²⁾:
Reconciliation of net income attributable to TransUnion to Adjusted EBITDA⁽²⁾:
Net income attributable to TransUnion $ 102.8 $ 91.7 $ 11.1 12.1 % $ 241.5 $ 264.1 $ (22.6) (8.6) %
Discontinued operations — — — nm — 4.6 (4.6) nm
Net income from continuing operations attributable to TransUnion 102.8 91.7 11.1 12.1 % 241.5 268.7 (27.2) (10.1) %
Net interest expense 26.5 41.3 (14.9) (36.0) % 94.6 128.2 (33.7) (26.3) %
Provision for income taxes 32.1 24.2 7.8 32.2 % 77.3 64.2 13.1 20.4 %
Depreciation and amortization 92.2 88.7 3.5 3.9 % 273.4 271.4 2.0 0.7 %
EBITDA 253.5 246.0 7.5 3.1 % 686.7 732.5 (45.8) (6.2) %
Adjustments to EBITDA:
Acquisition revenue-related adjustments⁽¹⁾
— — — nm — 5.9 (5.9) nm
Stock-based compensation⁽³⁾
7.8 14.7 (6.9) (46.8) % 29.5 35.6 (6.0) (16.9) %
Mergers and acquisitions, divestitures and business optimization⁽⁴⁾
1.5 4.8 (3.4) (69.3) % 12.9 (7.8) 20.7 nm
Accelerated technology investment⁽⁵⁾
4.5 — 4.5 nm 10.3 — 10.3 nm
Other⁽⁶⁾
2.6 15.4 (12.8) (83.3) % 36.4 17.3 19.1 110.4 %
Total adjustments to EBITDA 16.4 34.9 (18.5) (53.0) % 89.2 51.0 38.2 74.9 %
Consolidated Adjusted EBITDA⁽²⁾
$ 269.9 $ 280.9 $ (11.0) (3.9) % $ 775.9 $ 783.5 $ (7.6) (1.0) %

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Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 $
Change %
Change 2020 2019 $
Change %
Change
U.S. Markets Adjusted EBITDA $ 177.3 $ 181.0 $ (3.7) (2.1) % $ 520.0 $ 498.5 $ 21.5 4.3 %
International Adjusted EBITDA 56.7 64.0 (7.3) (11.4) % 154.4 188.6 (34.1) (18.1) %
Consumer Interactive Adjusted EBITDA 67.1 66.5 0.5 0.8 % 186.2 185.8 0.3 0.2 %
Corporate (31.2) (30.7) (0.5) 1.5 % (84.7) (89.4) 4.7 (5.3) %
Consolidated Adjusted EBITDA⁽²⁾
$ 269.9 $ 280.9 $ (11.0) (3.9) % $ 775.9 $ 783.5 $ (7.6) (1.0) %
Other metrics:
Cash provided by operating activities of continuing operations $ 178.8 $ 279.4 $ (100.6) (36.0) % $ 558.2 $ 587.7 $ (29.5) (5.0) %
Capital expenditures $ (44.1) $ (44.1) $ — — % $ (131.7) $ (132.1) $ 0.4 (0.3) %


	Three Months Ended June 30,								Six Months Ended June 30,
(in millions)	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Revenue:
Consolidated revenue as reported	$	774.2	$	634.4	$	139.7	22.0	%	$	1,519.5	$	1,322.0	$	197.5	14.9	%
U.S. Markets gross revenue	484.7		405.5		79.3		19.5	%	952.8		827.3		125.5		15.2	%
International gross revenue	172.5		119.7		52.8		44.1	%	338.7		277.4		61.3		22.1	%
Consumer Interactive gross revenue	136.6		128.4		8.2		6.4	%	266.9		255.1		11.8		4.6	%

Adjusted EBITDA(1):
Reconciliation of net income attributable to TransUnion to Adjusted EBITDA(1):
Net income attributable to TransUnion	$	127.6	$	68.5	$	59.1	86.3	%	$	255.6	$	138.7	$	116.8	84.2	%
Net interest expense	24.7		32.3		(7.6)		(23.6)	%	49.8		68.1		(18.3)		(26.8)	%
Provision for income taxes	62.5		23.0		39.5		nm		90.0		45.2		44.8		99.1	%
Depreciation and amortization	98.4		90.8		7.6		8.4	%	192.7		181.2		11.5		6.4	%
EBITDA	313.3		214.7		98.6		45.9	%	588.1		433.2		154.9		35.8	%
Adjustments to EBITDA:
Stock-based compensation(2)	18.1		19.4		(1.3)		(6.7)	%	34.4		21.7		12.7		58.4	%
Mergers and acquisitions, divestitures and business optimization(3)	11.3		7.1		4.2		58.1	%	13.1		11.5		1.7		14.5	%
Accelerated technology investment(4)	9.8		3.3		6.5		nm		17.1		5.8		11.3		nm
Net other(5)	(33.9)		(1.8)		(32.1)		nm		(33.8)		33.8		(67.6)		nm
Total adjustments to EBITDA	5.3		28.0		(22.7)		(81.2)	%	30.9		72.8		(42.0)		(57.6)	%
Consolidated Adjusted EBITDA(1)	$	318.6	$	242.7	$	75.9	31.3	%	$	619.0	$	506.0	$	112.9	22.3	%

Adjusted EBITDA(1):
U.S. Markets	$	209.4	$	171.2	$	38.3	22.4	%	$	408.3	$	342.7	$	65.6	19.1	%
International	72.2		37.5		34.7		92.7	%	143.6		97.7		45.9		47.0	%
Consumer Interactive	64.8		61.7		3.1		5.0	%	123.3		119.1		4.2		3.6	%
Corporate	(27.9)		(27.7)		(0.2)		(0.6)	%	(56.2)		(53.5)		(2.8)		(5.2)	%
Consolidated Adjusted EBITDA(1)	$	318.6	$	242.7	$	75.9	31.3	%	$	619.0	$	506.0	$	112.9	22.3	%

Other metrics:
Cash provided by operating activities	$	235.7	$	253.9	$	(18.2)	(7.2)	%	$	380.5	$	379.4	$	1.1	0.3	%
Capital expenditures	(53.9)		(45.6)		(8.3)		18.2	%	(97.1)		(87.6)		(9.5)		10.8	%

nm: not meaningful

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

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

~~(2)~~We define Adjusted Revenue as GAAP revenue adjusted for certain acquisition-related deferred revenue and non-core contract-related revenue. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue. We define Adjusted EBITDA as net income (loss) attributable to TransUnion, ~~plus (less) loss (income) from discontinued operations,~~ plus net interest expense, plus (less) provision (benefit) for income taxes, plus depreciation and amortization, plus ~~(less) the revenue adjustments included in Adjusted Revenue, plus~~ stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-related ~~expenses including Callcredit integration-related~~ expenses, plus certain accelerated technology investment expenses to migrate to the cloud, plus (less) certain other expenses (income). 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

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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. 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. Our board of directors and executive management team use Adjusted EBITDA as a compensation measure under our incentive compensation plan. 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, ~~2020~~2021 and ~~2019.~~

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2020.

~~(3)~~(2)Consisted of stock-based compensation and cash-settled stock-based compensation.

~~(4)~~(3)For the three months ended ~~September~~June 30, 2021, consisted of the following adjustments: $6.7 million of adjustments to contingent consideration expense from previous acquisitions; $3.5 million of acquisition expenses; and a $1.1 million gain reduction to notes receivable that were converted into equity upon acquisition and consolidation of an entity.

For the six months ended June 30, 2021, consisted of the following adjustments: $7.9 million of adjustments to contingent consideration expense from previous acquisitions; $4.6 million of acquisition expenses; a $1.1 million gain reduction to notes receivable that were converted into equity upon acquisition and consolidation of an entity; and a ($0.5) million gain on the sale of a cost method investment.

For the three months ended June 30, 2020, consisted of the following adjustments: ~~$1.5~~a $4.8 million loss on the impairment of a Cost Method investment; $3.6 million of Callcredit integration costs; $1.2 million of acquisition ~~expenses.~~expenses; and a ($2.5) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer.

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

~~(5)~~(4)Represents expenses associated with our accelerated technology investment.

~~(6)~~(5)For the three months ended ~~September~~June 30, ~~2020~~,2021, consisted of the following adjustments: ~~$4.2~~a ($32.4) million ~~for certain legal expenses; $0.4 million of loan fees; a $(0.8) million gain from currency remeasurement of our foreign operations; a $(0.9) million recovery from the Fraud Incident (as defined~~net reduction in ~~our Annual Report on Form 10-K for the year ended December 31, 2019), net of additional administration expenses; and $(0.3) million other.~~

~~For the nine months ended September 30, 2020,~~ ~~consisted of the following adjustments: $34.7 million for~~ certain legal expenses; a ~~$2.1 million loss from currency remeasurement of our foreign operations; $1.2 million of loan fees; $0.2 million of fees related to our new swap agreements; a $(1.1)~~($3.4) million recovery from the Fraud Incident, net of additional ~~administration expense; $(0.5)~~administrative expenses; and $1.9 million ~~reimbursement~~ of ~~fees associated with the refinancing~~net other consisting of net losses from currency remeasurement of our ~~Senior Secured Credit Facility;~~foreign operations, loan fees and ~~$(0.3) million of~~ other.

For the ~~three~~six months ended ~~September~~June 30, ~~2019~~, 2021, consisted of the following adjustments: ~~$19.7~~a ($32.4) million ~~of expenses (including $1.8~~net reduction in certain legal expenses; a ($3.4) million ~~of administrative expenses) associated with~~recovery from the Fraud Incident, ~~offset by the $(7.1)~~net of additional administrative expense; and $2.0 million ~~portion that is attributable to the non-controlling interest; $1.6 million~~of net other consisting of net losses from currency ~~remeasurement; $0.7 million~~remeasurement of ~~deferred~~our foreign operations, loan fees ~~written off as a result of the prepayments on our debt;~~ and ~~$0.5 million of loan fees.~~other.

For the ~~nine~~three months ended ~~September~~June 30, ~~2019,~~2020, consisted of the following adjustments: ~~$19.7~~($1.8) million of ~~expenses (including $1.8~~net other consisting of net gains from currency remeasurement of our foreign operations, loan fees and other.

For the six months ended June 30, 2020, consisted of the following adjustments: $30.5 million for certain legal expenses; and $3.3 million of ~~administrative expenses) associated with the Fraud Incident offset by the $(7.1) million portion that is attributable to the non-controlling interest; $1.9 million~~net other consisting of net losses from currency ~~remeasurement; $1.5 million~~remeasurement of ~~loan fees; $1.5 million of deferred~~our foreign operations, loan fees, ~~written off as a result of the prepayments on our debt;~~ and ~~$(0.1) million of miscellaneous.~~

other.

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Revenue

Since mid-March 2020, the COVID-19 pandemic and widespread measures implemented to contain its effects and business and consumer responses to such measures have had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in all of our segments. While we continue to see improvements in demand for our services in the markets where we operate since the low point in April, the impact of COVID-19, including government measures and business and consumer responses to such measures, may continue to have a material adverse impact on our business for an uncertain period of time.

~~Revenue increased $6.6 million, or 1.0%, for~~For the three months ended ~~September~~June 30, ~~2020,~~2021, revenue increased $139.7 million, or 22.0%, compared with the same period in ~~2019,~~2020, due primarily to ~~organic growth~~improving macroeconomic conditions in ~~the Financial Services vertical~~all of our markets, revenue from new product initiatives, revenue from our recent acquisitions in the U.S. Markets segment, ~~the Consumer Interactive segment,~~ and the Canada region in the International segment, revenue from our recent acquisition in U.S. Markets Emerging Verticals and revenue from new product initiatives, partially offset by a decrease in revenue in the U.S. Markets Emerging Verticals and the other regionsan increase of ~~our International segment, and a 0.6% decrease~~2.3% from the impact of ~~weakening~~strengthening foreign currencies.

~~Revenue~~For the six months ended June 30, 2021, revenue increased ~~$47.5~~$197.5 million or ~~2.4%, for the nine months ended September 30, 2020,~~14.9% compared with the same period in ~~2019,~~2020, due primarily to ~~organic growth~~improving macroeconomic conditions in ~~the Financial Services vertical~~all of our markets, revenue from new product initiatives, revenue from our recent acquisitions in the U.S. Markets segment, ~~the Consumer Interactive segment,~~ and the Canada region in the International segment, revenue from recent acquisitions in U.S. Markets Emerging Verticals and revenue from new product initiatives, partially offset by a decrease in revenue in the U.S. Markets Emerging Verticals and the other regionsan increase of ~~our International segment, and a 1.0% decrease~~1.4% increase from the impact of ~~weakening~~strengthening foreign currencies.

Revenue by segment and a more detailed explanation of revenue within each segment are as follows:


		Three Months Ended September 30,														Nine Months Ended September 30,															Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		$ Change		% Change		2020		2019		$ Change		% Change		(in millions)	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
U.S. Markets:	U.S. Markets:																	U.S. Markets:
Financial Services	Financial Services	$	249.1	$	225.3	$	23.8	10.6	%	$	701.7	$	627.4	$	74.3	11.8	%	Financial Services	$	270.7	$	222.2	$	48.4	21.8	%	$	533.7	$	452.6	$	81.1	17.9	%
Emerging Verticals	Emerging Verticals	189.4		194.9		(5.5)		(2.8)	%	564.1		567.5		(3.3)		(0.6)	%	Emerging Verticals	214.1		183.2		30.8		16.8	%	419.1		374.7		44.4		11.8	%
U.S. Markets gross revenue	U.S. Markets gross revenue	438.5		420.2		18.2		4.3	%	1,265.8		1,194.9		70.9		5.9	%	U.S. Markets gross revenue	$	484.7	$	405.5	$	79.3	19.5	%	$	952.8	$	827.3	$	125.5	15.2	%

International:	International:																	International:
Canada	Canada	27.9		27.3		0.6		2.1	%	78.5		75.7		2.8		3.7	%	Canada	$	34.0	$	24.1	$	9.9	40.9	%	$	64.4	$	50.6	$	13.8	27.2	%
Latin America	Latin America	21.7		26.4		(4.7)		(17.8)	%	63.2		77.9		(14.7)		(18.9)	%	Latin America	26.0		17.2		8.8		51.4	%	50.1		41.5		8.6		20.8	%
United Kingdom	United Kingdom	44.2		47.6		(3.4)		(7.2)	%	132.1		136.4		(4.3)		(3.1)	%	United Kingdom	53.4		39.2		14.2		36.2	%	103.7		88.0		15.7		17.9	%
Africa	Africa	12.3		15.7		(3.4)		(21.7)	%	35.6		44.7		(9.1)		(20.4)	%	Africa	15.2		9.0		6.2		68.8	%	28.9		23.3		5.6		24.0	%
India	India	23.9		27.4		(3.5)		(12.8)	%	72.4		80.0		(7.7)		(9.6)	%	India	27.9		17.6		10.3		58.2	%	61.9		48.4		13.4		27.7	%
Asia Pacific	Asia Pacific	14.9		15.6		(0.7)		(4.2)	%	40.5		42.4		(1.9)		(4.6)	%	Asia Pacific	16.0		12.5		3.4		27.4	%	29.7		25.6		4.2		16.4	%
International gross revenue	International gross revenue	144.8		160.0		(15.1)		(9.5)	%	422.2		457.1		(34.9)		(7.6)	%	International gross revenue	$	172.5	$	119.7	$	52.8	44.1	%	$	338.7	$	277.4	$	61.3	22.1	%

Consumer Interactive gross revenue	Consumer Interactive gross revenue	131.6		127.8		3.9		3.0	%	386.7		374.7		12.0		3.2	%	Consumer Interactive gross revenue	$	136.6	$	128.4	$	8.2	6.4	%	$	266.9	$	255.1	$	11.8	4.6	%

Total gross revenue	Total gross revenue	$	714.9	$	708.0	$	7.0	1.0	%	$	2,074.8	$	2,026.7	$	48.1	2.4	%	Total gross revenue	$	793.8	$	653.5	$	140.2	21.5	%	$	1,558.5	$	1,359.9	$	198.6	14.6	%

Intersegment revenue eliminations:	Intersegment revenue eliminations:																	Intersegment revenue eliminations:
U.S. Markets	U.S. Markets	$	(17.2)	$	(17.1)	$	(0.1)	(0.7)	%	$	(51.7)	$	(51.8)	—		0.1	%	U.S. Markets	$	(17.6)	$	(17.4)	$	(0.1)	(0.7)	%	$	(35.0)	$	(34.5)	$	(0.5)	(1.5)	%
International	International	(1.4)		(1.3)		—		(3.3)	%	(3.9)		(3.8)		(0.1)		(1.8)	%	International	(1.5)		(1.2)		(0.3)		(20.8)	%	(2.9)		(2.5)		(0.4)		(17.1)	%
Consumer Interactive	Consumer Interactive	(0.5)		(0.2)		(0.2)		(83.4)	%	(1.3)		(0.6)		(0.6)		(95.9)	%	Consumer Interactive	(0.5)		(0.4)		(0.1)		(28.4)	%	(1.0)		(0.8)		(0.2)		(28.6)	%
Total intersegment revenue eliminations	Total intersegment revenue eliminations	(19.0)		(18.7)		(0.4)		(2.0)	%	(56.8)		(56.2)		(0.6)		(1.1)	%	Total intersegment revenue eliminations	$	(19.6)	$	(19.1)	$	(0.5)	(2.6)	%	$	(39.0)	$	(37.8)	$	(1.2)	(3.1)	%
Total revenue as reported	Total revenue as reported	$	695.9	$	689.3	$	6.6	1.0	%	$	2,017.9	$	1,970.5	$	47.5	2.4	%	Total revenue as reported	$	774.2	$	634.4	$	139.7	22.0	%	$	1,519.5	$	1,322.0	$	197.5	14.9	%

nm: not meaningful

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

U.S. Markets Segment

U.S. Markets revenue increased $79.3 million, or 19.5%, and $125.5 million, or 15.2%, for the three and six months ended June 30, 2021, compared with the same periods in 2020, due to an increase in revenue in both verticals, including revenue from our recent acquisitions in our Emerging Markets vertical.

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~~U.S. Markets Segment~~

~~U.S. Markets revenue~~Financial Services: Revenue increased ~~$18.2~~$48.4 million, or ~~4.3%~~21.8%, and ~~$70.9~~$81.1 million, or ~~5.9%~~17.9%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019.~~2020. The increase in revenue ~~for the three and nine-month periods~~ is due primarily to ~~an increase~~improving macroeconomic conditions and revenue from new product initiatives in ~~revenue~~all of our lines of business in both periods. In the second quarter, the Consumer Lending, Auto, and Cards and Payments lines of business led with broad-based growth across customers, while the exceptionally strong growth of the previous several quarters in the ~~Financial Services vertical, partially offset by a decrease in revenue in Emerging Verticals.~~

~~Since mid-March 2020, the COVID-19 pandemic, widespread measures implemented to contain its effects and~~Mortgage line of business and consumer responses to such measures have had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in our U.S Markets segment. While we continue to see improvements in demand for our servicesslowed significantly in the markets where we operate since the low point in April, the impact of COVID-19, including government measures and business and consumer responses to such measures, may continue to have a material adverse impact on our U.S Markets segment for an uncertain period of time.second quarter.

~~Financial Services:~~Emerging Verticals: Revenue increased ~~$23.8~~$30.8 million, or ~~10.6%~~16.8%, and ~~$74.3~~$44.4 million, or 11.8%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019.~~2020. The increase in revenue ~~for both periods~~ is due primarily to ~~improvements in market~~improving macroeconomic conditions in all of our ~~mortgage line~~verticals, revenue from new product initiatives, and an increase of ~~business, as historically low interest rates drove refinance activity~~3.8% and ~~the home purchase market~~3.3% from our recent acquisitions. Every vertical except Healthcare had ~~modest growth. The growth~~an increase in ~~the mortgage line of business, which may not persist, was partially offset by decreases in our other lines of business~~revenue in both ~~periods, which have shown some signs of improvement since~~ the ~~lows in April.~~three-month and six-month periods.

International Segment

~~Emerging Verticals:~~ ~~Revenue decreased $5.5~~International revenue increased $52.8 million, or ~~2.8%~~44.1%, and ~~$3.3~~$61.3 million, or ~~0.6%~~22.1%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in 2019. The decrease in revenue for the three-month period is due primarily to a decrease in the Healthcare, Diversified Markets, and Collections verticals, partially offset by an increase in the Media, Tenant & Employment and Public Sector verticals. The decrease in revenue for the nine-month period is due primarily to a decrease in the Collections, Diversified Markets, and Healthcare verticals, partially offset by an increase in the Insurance, Media, and Public Sector verticals.

~~International Segment~~

~~International revenue decreased $15.1 million, or 9.5%, and $34.9 million, or 7.6%, for the three and nine months ended September 30,~~ 2020, compared with the same period in 2019. The decrease in revenue for the three month period is due primarily to the impact of COVID-19, and a decrease of 2.9% from the impact of weakening foreign currencies. The decrease in revenue for the nine month period is due primarily to the impact of COVID-19, and a decrease of 4.2% from the impact of weakening foreign currencies.

Since mid-March 2020, the COVID-19 pandemic, widespread measures implemented to contain its effects, and business and consumer responses to such measures have had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in all regions of our International segment. In certain countries in our less developed regions, many of our customers are unable to operate as effectively or at all in a remote work-from-home environment, consumers are less able to transact online, and government stimulus efforts have generally been less than in the United States, all of which adversely impacted revenue in these regions. Our Canada, United Kingdom and Asia-Pacific regions were more in line, although weaker than the United States. While we continue to see improvements in demand for our services in the markets where we operate since the low point in April, the impact of COVID-19, including government measures and business and consumer responses to such measures, may continue to have a material adverse impact on our International segment for an uncertain period of time.

~~Canada:~~ Revenue increased $0.6 million, or 2.1%, and $2.8 million, or 3.7%, for the three and nine months ended September 30, 2020, compared with the same periods in 2019. The increase in revenue for the three and nine-month periods is due primarily to higher local currency revenue from increased volumes ~~including~~resulting from improving economic conditions and from new product initiatives, ~~partially offset by a decrease from the impact~~and an increase in revenue of ~~COVID-19 primarily in the second~~12.3% and ~~third quarters, and a decrease of 1.0% and 1.8%~~6.7% in each respective period from the impact of ~~weakening~~strengthening foreign currencies.

Canada: Revenue increased $9.9 million, or 40.9%, and $13.8 million, or 27.2%, for the three and six months ended June 30, 2021, compared with the same periods in 2020, due primarily to higher local currency revenue from increased volumes resulting from improving economic conditions and new product initiatives, and an increase of 16.0% and 10.9% in each respective period from the impact of strengthening foreign currencies.

Latin America: Revenue ~~decreased $4.7~~increased $8.8 million, or ~~17.8%~~51.4%, and ~~$14.7~~$8.6 million, or ~~18.9%~~20.8%, for the three and ~~nine~~six months ended ~~September~~June 30, 2021, compared with the same periods in 2020, due primarily to higher local currency revenue from increased volume resulting from improving economic conditions and from new product initiatives, and an increase of 5.0% for the three-month period and a decrease of 1.3% in the six-month period from the impact of foreign currencies.

United Kingdom: Revenue increased $14.2 million, or 36.2%, and $15.7 million, or 17.9%, for the three and six months ended June 30, 2021, compared with the same periods in ~~2019,~~2020, due primarily to ~~a decrease in~~higher local currency revenue ~~as a result~~from increased volume resulting from improving economic conditions and from new product initiatives, and an increase of ~~COVID-19 primarily in the second~~15.9% and ~~third quarters, and a decrease of 12.6% and 11.8%~~11.4% in each respective period from the impact of ~~weakening~~strengthening foreign currencies.

~~United Kingdom:~~Africa: Revenue ~~decreased $3.4~~increased $6.2 million, or ~~7.2%~~68.8%, and ~~$4.3~~$5.6 million, or ~~3.1%~~24.0%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019. The decrease in revenue for the three-month period is~~ 2020, due primarily to ~~a decrease in~~higher local currency revenue ~~as a result of COVID-19, partially offset by~~from increased volume resulting from improving economic conditions and from new product initiatives, and an increase of ~~4.2%~~31.7% and 12.6% in each respective period from the impact of strengthening foreign currencies. ~~The decrease in revenue~~

India: Revenue increased $10.3 million, or 58.2%, and $13.4 million, or 27.7%, for the ~~nine-month period is~~three and six months ended June 30, 2021, compared with the same periods in 2020, due primarily to ~~a decrease in local currency revenue as a result of COVID-19 primarily in the second and third quarters, partially offset by~~ higher local currency revenue from increased ~~volumes including~~volume resulting from improving economic conditions and from new product initiatives, and an increase of 4.6% and 1.2% in each respective period from the ~~first quarter. The~~ impact ~~from~~of strengthening foreign ~~currencies was negligible in the nine-month period.~~currencies.

~~Table of Contents~~

~~Africa:~~Asia Pacific: Revenue ~~decreased~~increased $3.4 million, or ~~21.7%~~27.4%, and ~~$9.1~~$4.2 million, or ~~20.4%~~16.4%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019,~~2020, due primarily to ~~a decrease in local currency revenue as a result of COVID-19 primarily in the second and third quarters, and a decrease of 11.7% in both periods from the impact of weakening foreign currencies.~~

~~India:~~ Revenue decreased $3.5 million, or 12.8%, and $7.7 million, or 9.6%, for the three and nine months ended September 30, 2020, compared with the same periods in 2019. The decrease in revenue for the three-month period is due primarily to a decrease in local currency revenue as a result of COVID-19 and a decrease of 5.1% from the impact of weakening foreign currencies. The decrease in revenue during the nine-month period is due primarily to a decrease in local currency revenue due to COVID-19 primarily in the second and third quarters, and a decrease of 4.8% from the impact of weakening foreign currencies, partially offset by higher local currency revenue from increased ~~volumes including~~volume resulting from improving economic conditions and from new product initiatives, ~~during the first quarter of 2020.~~

~~Asia Pacific:~~ ~~Revenue decreased $0.7 million, or 4.2%,~~ and $1.9 million, or 4.6%, for the three and nine months ended September 30, 2020, compared with the same periods in 2019. The decrease in revenue for the three-month period is due primarily to a decrease in local currency revenue as a result of COVID-19, partially offset by an increase of ~~1.8% from the impact of strengthening foreign currencies. The decrease~~0.4% and 0.6% in ~~revenue during the nine-month~~each respective period ~~is due primarily to a decrease in local currency revenue as a result of COVID-19 primarily in the second and third quarters, partially offset by an increase of 1.4%~~ from the impact of strengthening foreign currencies.

Consumer Interactive Segment

Consumer Interactive revenue increased ~~$3.9~~$8.2 million, or ~~3.0%~~6.4%, and ~~$12.0~~$11.8 million, or ~~3.2%~~4.6%, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019,~~2020, due primarily to an increase in revenue in our direct ~~channel. The impact~~channel in both periods. Our indirect channel had an increase in revenue in the three-month period and a decrease in revenue in the six-month period as this channel has begun to moderate.

Table of COVID-19, including government measures and business and consumer responses to such measures, may have a material and adverse impact on our Consumer Interactive segment for an uncertain period of time, particularly in our indirect channel.Contents

Operating Expenses

Operating expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, 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)	(in millions)	2020		2019		$ Change		% Change		2020		2019		$ Change		% Change		(in millions)	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Cost of services	Cost of services	$	222.4	$	220.8	$	1.6	0.7	%	$	666.1	$	645.2	$	21.0	3.2	%	Cost of services	$	250.3	$	218.6	$	31.7	14.5	%	$	493.5	$	443.7	$	49.8	11.2	%
Selling, general and administrative	Selling, general and administrative	219.0		208.4		10.5		5.1	%	655.4		600.8		54.6		9.1	%	Selling, general and administrative	208.0		201.1		6.9		3.4	%	435.1		436.4		(1.3)		(0.3)	%
Depreciation and amortization	Depreciation and amortization	92.2		88.7		3.5		3.9	%	273.4		271.4		2.0		0.7	%	Depreciation and amortization	98.4		90.8		7.6		8.4	%	192.7		181.2		11.5		6.4	%
Total operating expenses	Total operating expenses	$	533.6	$	518.0	$	15.6	3.0	%	$	1,594.9	$	1,517.4	$	77.5	5.1	%	Total operating expenses	$	556.7	$	510.5	$	46.2	9.0	%	$	1,121.3	$	1,061.3	$	60.0	5.7	%

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

~~Certain of our cost of services costs are variable in nature and fluctuate directly with revenu~~e. Certain other costs of services and selling, general and administrative costs are discretionary in nature and management has identified several cost savings measures that have been implemented to a varying extent, and can be adjusted depending on the severity of any decline in revenue.

Cost of Services

Cost of services increased ~~$1.6~~$31.7 million and ~~$21.0~~$49.8 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019.~~2020.

The increase was due primarily to:

•an increase in ~~labor~~product costs resulting from the increase in revenue in all of our segments;

•operating costs from our recent acquisitions in our U.S. Markets ~~segment, as we invested in key strategic growth initiatives;~~

•~~an increase in costs from our accelerated technology investment; and~~

•~~an increase in product costs in our U.S. Markets and Consumer Interactive segments, primarily in the nine-month period,~~

~~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 $10.5 million and $54.6 million for the three and nine months ended September 30, 2020, compared with the same periods in 2019.~~

~~Table of Contents~~

~~The increase was due primarily to:~~

•~~an increase of $18.3 million and $51.5 million in each respective period for legal and regulatory matters primarily related to the Ramirez litigation in the nine-month period;~~segment;

•an increase in costs from our accelerated technology investment;

•~~an increase in bad debt expense due to an increase in our estimated reserves including our current expected~~the impact of ~~COVID-19, primarily in~~strengthening foreign currencies on the ~~first quarter~~;expenses of our International segment; and

•an increase in ~~advertising~~labor costs, including an increase in incentive compensation due to improvements in performance, primarily in our ~~Consumer Interactive segment in the first quarter,~~U.S. Markets and International segments,

partially offset by:

•a decrease in travel and entertainment expenses due to travel restrictions ~~and shelter in place orders~~ related to ~~COVID-19;~~COVID-19 in the six-month period.

Selling, General and Administrative

Selling, general and administrative expenses increased $6.9 million and decreased $1.3 million for the three and six months ended June 30, 2021, compared with the same periods in 2020.

The changes were due primarily to:

•an increase in labor costs, including an increase in incentive and stock-based compensation due to improvements in performance, primarily in our U.S. Markets and International segments and in corporate, in both periods;

•~~a decrease~~operating costs and contingent consideration expense recorded from our recent acquisitions in ~~stock-based compensation from lower expected achievement on certain performance-based awards due to COVID-19; and~~our U.S. Markets segment in both periods;

•the impact of ~~overall weakening~~strengthening foreign currencies on the expenses of our International ~~segment.~~segment in both periods; and

•an increase in advertising expense, primarily in our Consumer Interactive segment, in both periods,

partially offset by:

•a decrease of $27.7 million and $57.1 million in each respective period for legal and regulatory matters, primarily related to the Ramirez Litigation, which resulted in a significant expense in the first quarter of 2020 and a significant reversal of expense in the second quarter of 2021 as discussed in Recent Developments above.

•a decrease in bad debt expense in both periods, as we have reversed reserves that were recorded at the beginning of the COVID-19 pandemic;

•a decrease in travel and entertainment expenses due to travel restrictions related to COVID-19 in the six-month period.

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Depreciation and Amortization

Depreciation and amortization increased ~~$3.5~~$7.6 million and ~~$2.0~~$11.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the same periods in ~~2019.~~2020. These ~~change are~~increases were due primarily to an increase in depreciation and amortization from recent acquisitions of tangible and intangible assets, partially offset by a decrease in amortization related to certain intangible assets from our 2012 change in control transaction that have become fully amortized.

Adjusted EBITDA and Adjusted EBITDA margin


		Three Months Ended September 30,																		Nine Months Ended September 30,																			Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2020			2019			$ Change		% Change		2020			2019			$ Change		% Change		(in millions)	2021			2020			$ Change		% Change		2021			2020			$ Change		% Change
Adjusted Revenue:
U.S. Markets gross Adjusted Revenue		$	438.5		$	420.2		$	18.2	4.3	%	$	1,265.8		$	1,195.2		$	70.6	5.9	%
International gross Adjusted Revenue		144.8			160.0			(15.1)		(9.5)	%	422.2			462.7			(40.4)		(8.7)	%
Consumer Interactive gross Adjusted Revenue		131.6			127.8			3.9		3.0	%	386.7			374.7			12.0		3.2	%
Total gross Adjusted Revenue		714.9			708.0			7.0		1.0	%	2,074.8			2,032.6			42.2		2.1	%
Revenue:																						Revenue:
U.S. Markets gross revenue																						U.S. Markets gross revenue	$	484.7		$	405.5		$	79.3	19.5	%	$	952.8		$	827.3		$	125.5	15.2	%
International gross revenue																						International gross revenue	172.5			119.7			52.8		44.1	%	338.7			277.4			61.3		22.1	%
Consumer Interactive gross revenue																						Consumer Interactive gross revenue	136.6			128.4			8.2		6.4	%	266.9			255.1			11.8		4.6	%
Total gross revenue																						Total gross revenue	793.8			653.5			140.2		21.5	%	1,558.5			1,359.9			198.6		14.6	%
Less: intersegment revenue eliminations	Less: intersegment revenue eliminations	(19.0)			(18.7)			(0.4)		(2.0)	%	(56.8)			(56.2)			(0.6)		1.1	%	Less: intersegment revenue eliminations	(19.6)			(19.1)			(0.5)		(2.6)	%	(39.0)			(37.8)			(1.2)		(3.1)	%
Consolidated Adjusted Revenue		$	695.9		$	689.3		$	6.6	1.0	%	$	2,017.9		$	1,976.4		$	41.5	2.1	%
Total revenue as reported																						Total revenue as reported	$	774.2		$	634.4		$	139.7	22.0	%	$	1,519.5		$	1,322.0		$	197.5	14.9	%

Adjusted EBITDA⁽¹⁾:	Adjusted EBITDA⁽¹⁾:																					Adjusted EBITDA(1):
U.S. Markets	U.S. Markets	$	177.3		$	181.0		$	(3.7)	(2.1)	%	$	520.0		$	498.5		$	21.5	4.3	%	U.S. Markets	$	209.4		$	171.2		$	38.3	22.4	%	$	408.3		$	342.7		$	65.6	19.1	%
International	International	56.7			64.0			(7.3)		(11.4)	%	154.4			188.6			(34.1)		(18.1)	%	International	72.2			37.5			34.7		92.7	%	143.6			97.7			45.9		47.0	%
Consumer Interactive	Consumer Interactive	67.1			66.5			0.5		0.8	%	186.2			185.8			0.3		0.2	%	Consumer Interactive	64.8			61.7			3.1		5.0	%	123.3			119.1			4.2		3.6	%
Corporate	Corporate	(31.2)			(30.7)			(0.5)		(1.5)	%	(84.7)			(89.4)			4.7		5.3	%	Corporate	(27.9)			(27.7)			(0.2)		(0.6)	%	(56.2)			(53.5)			(2.8)		(5.2)	%
Consolidated Adjusted EBITDA⁽¹⁾	Consolidated Adjusted EBITDA⁽¹⁾	$	269.9		$	280.9		$	(11.0)	(3.9)	%	$	775.9		$	783.5		$	(7.6)	(1.0)	%	Consolidated Adjusted EBITDA(1)	$	318.6		$	242.7		$	75.9	31.3	%	$	619.0		$	506.0		$	112.9	22.3	%

Adjusted EBITDA margin⁽¹⁾:	Adjusted EBITDA margin⁽¹⁾:																					Adjusted EBITDA margin(1):
U.S. Markets	U.S. Markets	40.4		%	43.1		%			(2.6)	%	41.1		%	41.7		%			(0.6)	%	U.S. Markets	43.2		%	42.2		%			1.0	%	42.8		%	41.4		%			1.4	%
International	International	39.2		%	40.0		%			(0.9)	%	36.6		%	40.8		%			(4.2)	%	International	41.8		%	31.3		%			10.5	%	42.4		%	35.2		%			7.2	%
Consumer Interactive	Consumer Interactive	51.0		%	52.1		%			(1.1)	%	48.1		%	49.6		%			(1.5)	%	Consumer Interactive	47.5		%	48.1		%			(0.6)	%	46.2		%	46.7		%			(0.5)	%
Consolidated Adjusted EBITDA margin⁽¹⁾	Consolidated Adjusted EBITDA margin⁽¹⁾	38.8		%	40.7		%			(2.0)	%	38.5		%	39.6		%			(1.2)	%	Consolidated Adjusted EBITDA margin(1)	41.1		%	38.2		%			2.9	%	40.7		%	38.3		%			2.5	%
Net income attributable to TransUnion as a percentage of revenue	Net income attributable to TransUnion as a percentage of revenue	14.8		%	13.3		%			1.5	%	12.0		%	13.4		%			(1.4)	%	Net income attributable to TransUnion as a percentage of revenue	16.5		%	10.8		%			5.7	%	16.8		%	10.5		%			6.3	%

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

~~Table of Contents~~

1.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~~revenue and segment Adjusted EBITDA. Consolidated Adjusted EBITDA margin is calculated using consolidated ~~Adjusted Revenue~~revenue and consolidated Adjusted EBITDA.

Consolidated Adjusted EBITDA ~~decreased $11.0~~increased $75.9 million and ~~$7.6~~$112.9 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared to the same periods in ~~2019.~~2020.

The ~~decrease~~increase was due primarily to:

•an increase in ~~expense for certain legal~~revenue from improving macroeconomic conditions in all of our markets; and ~~regulatory matters;~~

•~~a decrease in revenue in our International segment;~~

•~~an increase in labor costs in our U.S. Markets segment, as we invested in key strategic growth initiatives; and~~

•~~an increase in product costs in our U.S. Markets and Consumer Interactive segment,~~

~~partially offset by:~~

•~~an increase in revenue in our U.S. Markets and Consumer Interactive segment;~~

•a decrease in travel and entertainment expenses due to travel restrictions ~~and shelter in place orders~~ related to ~~COVID-19;~~COVID-19,

partially offset by:

•an increase in product costs resulting from the increase in revenue in all of our segments;

Table of Contents

•an increase in labor costs, including incentive compensation, primarily in our U.S. Markets and International segments and in Corporate;

•an increase in operating costs from our recent acquisitions;

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

•the impact of ~~weakening~~strengthening foreign currencies on the expenses of our International ~~segment.~~segment; and

•a decrease in bad debt expense in both periods as we have reversed reserves that were recorded at the beginning of the COVID-19 pandemic.

Adjusted EBITDA margin for the U.S. Markets segment ~~decreased for the three and nine-month periods~~increased due primarily to ~~the impact of COVID-19 on revenue in the Emerging Verticals and~~ an increase in ~~expense for certain legal~~revenue and ~~regulatory matters, partially offset by~~ improving market conditions in ~~the mortgage line~~both of ~~business~~our verticals, a decrease in ~~the Financial Services Vertical~~bad debt expense, and a decrease in travel and entertainment ~~expenses.~~expenses due to travel restrictions related to COVID-19 in the six-month period, partially offset by an increase in product costs resulting from the increase in revenue and an increase in incentive compensation costs due to improved performance.

Adjusted EBITDA margins for the International segment ~~decreased for both the three- and nine-month periods~~increased due primarily to ~~the impact~~an increase in revenue and improving market conditions in all of ~~COVID-19 on revenue, partially offset by~~our regions, a decrease in bad debt expense, and a decrease in travel and entertainment ~~expenses.~~expenses due to travel restrictions related to COVID-19 in the six-month period, partially offset by an increase in incentive compensation costs due to improved performance.

Adjusted EBITDA margin for the Consumer Interactive segment decreased due ~~primarily~~ to an increase in product costs in our indirect channel and an increase in advertising costs, ~~in the nine-month period and an increase in variable product costs in both periods,~~ partially offset by an increase in revenue in ~~both periods.~~our direct channel.

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)	(in millions)	2020		2019		$ Change		% Change		2020		2019		$ Change		% Change		(in millions)	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Interest expense	Interest expense	$	(27.6)	$	(43.5)	$	15.9	36.5	%	$	(98.7)	$	(133.7)	$	34.9	26.1	%	Interest expense	$	(25.6)	$	(33.5)	$	7.9	23.5	%	$	(51.4)	$	(71.1)	$	19.7	27.8	%
Interest income	Interest income	1.2		2.2		(1.0)		(46.2)	%	4.2		5.4		(1.2)		(23.0)	%	Interest income	0.9		1.1		(0.2)		(21.8)	%	1.5		3.0		(1.5)		(49.0)	%
Earnings from equity method investments	Earnings from equity method investments	2.1		3.1		(1.0)		(32.2)	%	6.7		10.2		(3.5)		(34.0)	%	Earnings from equity method investments	2.7		2.1		0.7		33.7	%	5.7		4.6		1.1		24.4	%
Other income and expense, net:	Other income and expense, net:																	Other income and expense, net:
Acquisition fees	Acquisition fees	(1.5)		(0.5)		(1.0)		(195.0)	%	(4.8)		(2.1)		(2.7)		(123.8)	%	Acquisition fees	(3.5)		(1.2)		(2.3)		nm		(4.6)		(3.3)		(1.3)		(40.5)	%
Loan fees	Loan fees	(0.4)		(0.5)		0.1		18.5	%	(0.7)		(1.5)		0.8		54.2	%	Loan fees	(0.4)		(0.4)		—		8.8	%	(1.2)		(0.3)		(0.9)		nm
Other income (expense), net	Other income (expense), net	2.6		(19.6)		22.2		nm		(1.4)		3.0		(4.4)		nm		Other income (expense), net	3.8		1.0		2.8		nm		5.4		(4.1)		9.4		nm
Total other income and expense, net	Total other income and expense, net	0.8		(20.6)		21.4		nm		(6.9)		(0.7)		(6.2)		nm		Total other income and expense, net	(0.1)		(0.7)		0.6		86.3	%	(0.5)		(7.7)		7.2		93.6	%
Non-operating income and expense	Non-operating income and expense	$	(23.6)	$	(58.8)	$	35.2	59.9	%	$	(94.7)	$	(118.7)	$	24.0	20.2	%	Non-operating income and expense	$	(22.1)	$	(30.9)	$	8.9	28.7	%	$	(44.6)	$	(71.2)	$	26.6	37.4	%

nm: not meaningful

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

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, interest expense decreased ~~$15.9~~$7.9 million and ~~$34.9~~$19.7 million compared with the same periods in ~~2019,~~2020, due primarily to the impact of the decrease in the average interest rate and a decrease in our average outstanding principal balance. ~~We refinanced our Senior Secured Credit Facility in late 2019 resulting in a lower interest rate. Also, since~~In the ~~middle of the second~~fourth quarter of ~~2019,~~2020, we ~~have~~ prepaid ~~$340~~$150.0 million of our Senior Secured Term ~~Loans which impacts~~Loans. In the

~~Table~~ first quarter of ~~Contents~~

2021, we prepaid an additional $85.0 million of our Senior Secured Term Loans. These prepayments impact the comparability of interest expense between periods. Our future interest expense could be materially impacted by changes in our variable interest rates caused by COVID-19 or other macro-economic factors, to the extent our variable rate debt is not hedged with fixed rate debt.

Acquisition fees represent costs we have incurred for various acquisition-related efforts.

Other income (expense), net includes currency remeasurement gains and losses, dividends received from cost method investments and other miscellaneous non-operating income and expense ~~items. For the three months ended September 30, 2020, other income (expense), net included a $1.5 recovery of cash related to~~items, including recoveries from the Fraud Incident in ~~2019. For~~ the ~~nine months ended September 30, 2020, other income (expense), net included a $4.8 million loss on the impairment~~three- and six-month periods of ~~an investment in a Cost Method investment, offset by a $2.5 million gain on another Cost Method investments resulting from observable price changes for similar investments~~2021.

Table of the same issue and a $2.1 million recovery of cash related to the Fraud Incident in 2019. For the three and nine months ended September 30, 2019, other income (expense), net included a $17.8 million charge for the fraudulent wire transfers from the Fraud Incident. For the nine-month period, other income (expense), net also included 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.Contents

Provision for Income Taxes

For the six months ended June 30, 2021, we reported an effective tax rate of 25.5%, which was higher than the 21.0% U.S. federal statutory rate due primarily to recording tax expense of $20.3 million related to the remeasurement of our U.K. deferred taxes to reflect an increase in the U.K. corporate income tax rate enacted in the second quarter of 2021, partially offset by $11.2 million of discrete tax benefit related to electing the GILTI high-tax exclusion retroactively for the 2018 and 2019 tax years and $7.9 million of excess tax benefits on stock-based compensation.

For the three months ended ~~September~~June 30, 2020, we reported an effective tax rate of ~~23.1%~~24.7%, which was higher than the 21.0% U.S. federal statutory rate due primarily to state taxes, foreign tax rate differences and accrued withholding taxes on unrepatriated foreign earnings, partially offset by $4.7 million of excess tax benefits on stock-based compensation.

For the ~~nine~~six months ended ~~September~~June 30, 2020, we reported an effective tax rate of ~~23.5%~~23.9%, which was higher than the 21.0% U.S. federal statutory rate due primarily to state taxes, foreign tax rate differences, accrued withholding taxes on unrepatriated foreign earnings and changes in valuation allowances for foreign tax credits, partially offset by ~~$22.4~~$21.0 million of excess tax benefits on stock-based compensation.

Significant Changes in Assets and Liabilities

~~Total goodwill~~Our long-term debt decreased by $125.5 million at ~~September~~June 30, ~~2020,~~2021, compared with December 31, ~~2019,~~2020, due primarily to the ~~impact~~$85.0 prepayment of ~~changes~~debt made in March 2021, and the scheduled payments made in the ~~foreign exchange rates~~first and second quarter of our international operations relative to the U.S. dollar on the translated balances of our foreign goodwill. Total other intangible assets decreased at September 30, 2020, compared with December 31, 2019, due primarily to additional amortization during 2020 and the impact of changes in the foreign exchange rates of our international operations relative to the U.S. dollar on the translated balances of our foreign intangible assets, offset by additional investments in internally developed software during 2020.2021.

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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 Credit Facility.~~senior secured revolving line of credit. Our principal uses of liquidity are working capital, capital expenditures, debt service and other capital structure ~~payments,~~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~~senior secured revolving line of credit will be sufficient to fund our ~~operating needs,~~ planned capital expenditures, debt service and other capital structure ~~payments, and~~obligations, business acquisitions ~~for the foreseeable future. Since mid-March 2020, the COVID-19 pandemic, widespread measures implemented to contain its effects~~ and business and consumer responses to such measures have had a material and adverse impact on numerous aspects of our business, including customer demand for our services and solutions in all of our segments, and our consolidated financial statements. At this time, however, we do not expect the impact of COVID-19 to impact our ability to fund our operating needs for the foreseeable future. Our ability to maintain adequate liquidity for our operations in the future is dependent upon a number of factors, including our revenue, macroeconomic conditions, ~~the length and severity of business disruptions caused by COVID-19,~~ our ability to contain costs, including capital expenditures, and to collect accounts receivable, and various other factors, many of which are beyond our control. We will continue to monitor our liquidity position and may elect to raise funds through debt or equity financing in the future to fund operations, significant investments or acquisitions that are consistent with our growth strategy. In addition, if the pandemic continues to create significant disruptions in the credit or financial markets, or impacts our credit ratings, it could adversely affect our ability to access capital on favorable terms or at all.

Cash and cash equivalents totaled ~~$554.0~~$526.2 million and ~~$274.1~~$493.0 million at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, respectively, of which ~~$255.1~~$293.6 million and ~~$176.5~~$232.0 million was held outside the United States in each respective period. As of ~~September~~June 30, ~~2020,~~2021, we had no outstanding balance under the Senior Secured Revolving Credit Facility and $0.1 million of outstanding letters of credit, and could have borrowed up to the remaining $299.9 million available.

TransUnion also has the ability to request incremental loans on the same terms under the Senior Secured Credit Facility up to the greater of $1,000.0 million and 100% of consolidated EBITDA for the four quarters preceding the measurement date, and may incur additional incremental loans so long as the senior secured net leverage ratio does not exceed 4.25-to-1, subject to certain additional conditions and commitments by existing or new lenders to fund any additional borrowings.

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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 measurement date.

The balance retained in cash and cash equivalents is consistent with our short-term cash needs and investment objectives. We may be required to make additional principal payments on the Senior Secured Term Loans B-5 and A-3 based on excess cash flows of the prior year, as defined in the credit agreement. ~~There were~~The senior secured net leverage ratio for 2020 resulted in no required excess cash ~~flows~~flow payment for ~~2019 and therefore no additional payment was required in 2020.~~2021. Additional payments based on excess cash flows could be due in future years. See Part I, Item 1, Note 8 “Debt,” for additional information about our debt.

~~Table~~For the six months ended June 30, 2021, we prepaid $85.0 million of ~~Contents~~

our Senior Secured Term Loan B-5, funded from our cash on hand.

Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend ~~upon~~on a number of factors, including our liquidity, results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems ~~relevant.~~appropriate. We currently have capacity and intend to continue to pay a quarterly dividend, subject to approval by our board. ~~While we are comfortable paying the dividend at this time, if circumstances further deteriorate, we would consider recommending that our board temporarily reduce or suspend our dividend.~~

Sources and Uses of Cash


		Nine Months Ended September 30,											Six Months Ended June 30,
(in millions)	(in millions)	2020		2019		Change		(in millions)	2021		2020		Change
Cash provided by operating activities of continuing operations		$	558.2	$	587.7	$	(29.5)
Cash used in investing activities of continuing operations		(153.5)		(155.1)		1.6
Cash provided by operating activities								Cash provided by operating activities	$	380.5	$	379.4	$	1.1
Cash used in investing activities								Cash used in investing activities	(146.1)		(116.5)		(29.6)
Cash used in financing activities	Cash used in financing activities	(109.9)		(373.0)		263.1		Cash used in financing activities	(202.5)		(86.8)		(115.7)
Cash used in discontinued operations		—		(7.3)		7.3
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(14.9)		(3.8)		(11.1)		Effect of exchange rate changes on cash and cash equivalents	1.3		(18.0)		19.3
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	279.9	$	48.5	$	231.4	Net change in cash and cash equivalents	$	33.2	$	158.1	$	(124.9)

Operating Activities

The ~~decrease~~increase in cash provided by ~~continuing~~ operations was due primarily to ~~a decrease~~an increase in operating performance and a ~~smaller~~decrease in interest expense, mostly offset by an increase in working ~~capital compared to 2019 as a result~~capital.

Table of ~~COVID-19, partially offset by lower interest expense.~~Contents

Investing Activities

The ~~decrease~~increase in cash used in investing activities was due primarily to ~~a decrease~~an increase in ~~proceeds from the disposal of discontinued operations, partially offset by a decrease in cash used for acquisitions and~~ purchases of ~~noncontrolling interests.~~convertible notes and investments in nonconsolidated affiliates and an increase in capital expenditures.

Financing Activities

The ~~decrease~~increase in cash used in financing activities was due primarily to $85.0 million debt prepayments made in ~~2019.~~2021 and an increase in the payments for contingent consideration in 2021.

Capital Expenditures

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

Cash paid for capital expenditures ~~decreased $0.4~~increased $9.5 million, from ~~$132.1~~$87.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, to ~~$131.7~~$97.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~

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2021.

Debt

Hedges

On March 10, 2020, we entered into two tranches of interest rate swap agreements with various ~~counter-parties~~counter parties that effectively fix our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt. The first tranche commenced on June 30, 2020, and expires on June 30, 2022, with ~~an initial~~a current aggregate notional amount of ~~$1,145.0~~$1,130.0 million that amortizes each quarter. The first tranche requires TransUnion to pay fixed rates varying between 0.5200% and 0.5295% in exchange for receiving a variable rate that matches the variable rate on our loans. The second tranche commences on June 30, 2022, and expires on June 30, 2025, with an initial notional amount of $1,110.0 million that amortizes each quarter. The second tranche requires TransUnion to pay fixed rates varying between 0.9125% and 0.9280% in exchange for receiving a variable rate that matches the variable rate on our loans. We have designated these swap agreements as cash flow hedges.

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 Credit Facility 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.

For additional information about our debt and hedge, see Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements,” Note 8, “Debt.”

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Recent Accounting Pronouncements

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

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Application of Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”). The notes to our consolidated financial statements include disclosures about our significant accounting policies. These accounting policies require us to make certain judgments and estimates in reporting our operating results and our assets and liabilities. ~~The following paragraphs describe the accounting policies that require significant judgment~~See Part II, Item 7, “Application of Critical Accounting Estimate” and ~~estimates due to inherent uncertainty or complexity.~~

~~See~~Part II, Item 8, Note 1, “Significant Accounting and Reporting Policies,” to the financial statements included in this Quarterly Report on Form 10-Q, which includes certain updates to our accounting policies, including our critical accounting estimates, based on our current expectationsPolicies” of the impact of COVID-19. Although we believe that our estimates and judgments are reasonable, they are based on information reasonably available at this time, and actual results may differ from these estimates under different conditions. See also 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, ~~2019,~~2020, filed with the ~~SEC~~Securities and Exchange Commission on February ~~18, 2020,~~16, 2021, for additional ~~information.~~information about our critical accounting estimates.

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 risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negatives of these words and other similar expressions.

Factors that could cause actual results to differ materially from those described in the forward-looking ~~statements. Factors~~statements, or that could materially affect our financial results or such forward-looking statements include:

•the effects of the COVID-19 ~~pandemic on the economy;~~pandemic;

•the duration of the COVID-19 pandemic and the timing of the economic recovery following the COVID-19 pandemic;

•the prevalence and severity of variants of the COVID-19 virus;

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

•our ability to provide competitive services and prices;

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

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

•our ability to deliver services timely without interruption;

•our ability to maintain our access to data sources;

•government regulation and changes in the regulatory environment;

•litigation or regulatory proceedings;

•regulatory oversight of “critical activities”;

•our ability to effectively manage our costs;

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

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

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

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

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

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

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

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

•further consolidation in our end-customer markets;

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•the increased availability of free or inexpensive consumer information;

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•losses against which we do not insure;

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

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

•our ability to maintain our liquidity;

•share repurchase plans; and

•our reliance on key management personnel.

There may be other factors, many of which are beyond our control, that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, 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” 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

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, ~~2019.~~2020.

In the normal course of business we are exposed to market risk, primarily from changes in variable interest rates and foreign currency exchange rates, which could impact our results of operations and financial position. We manage the exposure to this market risk through our regular operating and financing activities. We may use derivative financial instruments, such as foreign currency and interest rate hedges, but only as a risk management tool and not for speculative or trading purposes.

Interest Rate Risk

Our Senior Secured Credit Facility consists of Senior Secured Term Loans and a $300.0 million Senior Secured Revolving Credit Facility. Interest rates on these borrowings are based, at our election, on LIBOR or an alternate base rate, subject to floors, plus applicable margins based on applicable net leverage ratios. We currently have several interest rate hedge instruments that effectively fixes our LIBOR exposure on approximately ~~70%~~75% of our outstanding debt. Based on the amount of unhedged outstanding variable-rate debt, we have a material exposure to interest rate risk. In the future our exposure to interest rate risk may change due to changes in the amount borrowed, changes in interest rates, or changes in the amount we have hedged. Since the onset of the COVID-19 pandemic, LIBOR has dropped significantly, and may be more volatile in the future, which could materially impact our total interest expense due to the unhedged portion of our debt. The amount of our outstanding debt, and the ratio of fixed-rate debt to variable-rate debt, can be expected to vary as a result of future business requirements, market conditions or other factors.

See Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements,” Note 8, “Debt,” for additional information about interest rates on our debt.

Foreign Currency Exchange Rate Risk

A substantial majority of our revenue, expense and capital expenditure activities are transacted in U.S. dollars. However, we transact business in a number of foreign currencies, including British pounds sterling, the South African rand, the Canadian dollar, the Indian rupee, the Colombian peso and the Brazilian real. In reporting the results of our foreign operations, we benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar relative to the foreign currencies.

We are required to translate the assets and liabilities of our foreign subsidiaries that are measured in foreign currencies at the applicable period-end exchange rate in our consolidated balance sheets. We are required to translate revenue and expenses at the average exchange rates prevailing during the year in our consolidated statements of income. The resulting translation adjustment is included in other comprehensive income, as a component of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income and expense as incurred.

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Since the onset of the COVID-19 pandemic, the U.S. dollar has strengthened against many of the currencies in the countries in which we operate, which has adversely impacted our results of operations. COVID-19 may continue to create volatile exchange rates that could materially and adversely impact our consolidated financial statements in the future.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

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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 evaluation of our disclosure controls and procedures as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Controls over Financial Reporting

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

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

General

Refer to Part I, Item 3, “Legal Proceedings,” of our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, and Part II, Item 1, “Legal ~~Proceedings,”~~Proceedings” of ~~our~~all subsequently filed Quarterly Reports on Form 10-Q, including this Quarterly Report, and Part I, Item 1, Note 14 “Contingencies,” of this Quarterly Report for a full description of our material pending legal and regulatory matters.

ITEM 1A. RISK FACTORS

In addition to the other information included in this report, you should carefully consider the ~~discussion of risk~~ factors ~~affecting the Company as set forth~~discussed in ~~Part I, Item 1A "Risk~~“Risk Factors”

included in our Annual Report on Form 10-K for the year ended December 31, ~~2019, as amended~~2020, and ~~supplemented by the risk factor set forth in Part II, Item 1A “Risk Factors” of our~~any subsequently filed Quarterly ~~Report~~Reports on ~~Form 10-Q for the quarter ended June 30, 2020, which are incorporated by reference into this Part II, Item 1A of this~~ Form 10-Q, as well as the factors identified under “Cautionary Statement Regarding Forward-Looking Statements” at the end of Part I, Item 2 of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. The risks described in ~~these reports~~our Annual Report on Form 10-K for the year ended December 31, 2020, Subsequent Quarterly Reports on Form 10-Q, 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, and~~condition, or operating results.

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 21,673 $ 89.39 — $ 166.6
August 1 to August 31 905 88.84 — $ 166.6
September 1 to September 30 5,250 87.14 — $ 166.6
Total 27,828 —


	(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 30	1,324	$	92.99	—	$	166.5
May 1 to May 31	2,872	108.30		—	$	166.5
June 1 to June 30	47,096	106.40		—	$	166.5
Total	51,292			—

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~~$133.5 million of common stock under the program and may purchase up to an additional ~~$166.6~~$166.5 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.

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ITEM 6. EXHIBITS



3.1						Third Amended and Restated Certificate of Incorporation of TransUnion (Incorporated by reference to Exhibit 3.1.2 to TransUnion’s Current Report on Form 8-K filed May 18, 2020).

3.2						Third Amended and Restated Bylaws of TransUnion ~~Amended~~amended as of May 12, 2020 (Incorporated by reference to Exhibit 3.2 to TransUnion’s Current Report on Form 8-K filed May 18, 2020).

10.1						Retirement and Transition Agreement, dated as of April 1, 2021 by and between TransUnion and John Danaher (Incorporated by reference to Exhibit 10.1 to TransUnion’s Current Report on 8-K filed on April 7, 2021).

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.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.

104						The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2020,~~2021, formatted in Inline XBRL (included with Exhibit 101 attachments).

** Filed or furnished herewith.

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SIGNATURES

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

TransUnion

~~October~~July 27, ~~2020~~2021

/s/ Todd M. Cello

Todd M. Cello

Executive Vice President, Chief Financial Officer

~~October~~July 27, ~~2020~~2021

/s/ Timothy Elberfeld

Timothy Elberfeld

Senior Vice President, Chief Accounting Officer

(Principal Accounting Officer)

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			Page
PART I. FINANCIAL INFORMATION			4
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS			4
Consolidated Balance Sheets			4
Consolidated Statements of Income			5
Consolidated Statements of Comprehensive Income (Loss)			6
Consolidated Statements of Cash Flows			7
Consolidated Statements of Stockholders’ Equity			8
Notes to Unaudited Consolidated Financial Statements			109
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			2625
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			4441
ITEM 4. CONTROLS AND PROCEDURES			4541
PART II. OTHER INFORMATION			4643
ITEM 1. LEGAL PROCEEDINGS			4643
ITEM 1A. RISK FACTORS			4643
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			4643
ITEM 6. EXHIBITS			4744
SIGNATURES			4845