Debt | Debt Debt outstanding consisted of the following: (in millions) December 31, December 31, Senior Secured Term Loan B-6, payable in quarterly installments through December 1, 2028, with periodic variable interest at LIBOR or alternate base rate, plus applicable margin (6.63% at December 31, 2022, and 2.75% at December 31, 2021), net of original issue discount and deferred financing fees of $5.3 million and $29.9 million, respectively, at December 31, 2022, and original issue discount and deferred financing fees of $7.7 million and $43.1 million, respectively, at December 31, 2021 $ 2,433.7 $ 3,049.2 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 (6.13% at December 31, 2022, and 1.85% at December 31, 2021), net of original issue discount and deferred financing fees of $2.5 million and $6.2 million, respectively, at December 31, 2022, and original issue discount and deferred financing fees of $3.2 million and $7.7 million, respectively, at December 31, 2021 2,203.3 2,227.1 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 (6.13% at December 31, 2022 and 1.35% at December 31, 2021), net of original issue discount and deferred financing fees of $1.3 million and $0.8 million, respectively, at December 31, 2022, and original issue discount and deferred financing fees of $1.9 million and $1.2 million, respectively, at December 31,2021 1,033.0 1,089.4 Finance leases 0.1 0.2 Senior Secured Revolving Credit Facility — — Total debt 5,670.1 6,365.9 Less short-term debt and current portion of long-term debt (114.6) (114.6) Total long-term debt $ 5,555.5 $ 6,251.3 Excluding any potential additional principal payments which may become due on the Senior Secured Credit Facility based on excess cash flows of the prior year, scheduled future maturities of total debt at December 31, 2022, were as follows: (in millions) December 31, 2023 $ 114.6 2024 1,034.5 2025 57.0 2026 2,165.0 2027 31.0 Thereafter 2,314.0 Unamortized original issue discounts and deferred financing fees (46.0) Total debt $ 5,670.1 Senior Secured Credit Facility On June 15, 2010, we entered into a Senior Secured Credit Facility with various lenders. This facility has been amended several times and currently consists of the Senior Secured Term Loan B-6, Senior Secured Term Loan B-5, Senior Secured Term Loan A-3 (collectively, the “Senior Secured Term Loans”), and the Senior Secured Revolving Credit Facility. On December 1, 2021, we entered into an agreement to amend certain provisions of the Senior Secured Credit Facility and exercise our right to draw additional debt in an amount of $3,100.0 million, less original issue discount and deferred financing fees of $7.8 million and $43.6 million, respectively. Proceeds from the incremental loan on the Senior Secured Credit Facility were used to fund the acquisition of Neustar. In addition, on December 1, 2021, we entered into a Second Lien Credit Agreement to obtain term loans (the “Second Lien Term Loan”) in an aggregate amount of $640.0 million, less original issue discount and deferred financing fees of $3.2 million and $14.3 million, respectively, used to fund the acquisition of Sontiq. On December 23, 2021, we fully repaid the Second Lien Term Loan using a portion of the proceeds from our sale of the Healthcare business. As a result of the prepayment, we expensed $3.2 million and $14.2 million, respectively, of the unamortized original issue discount and deferred fees to other income and expense in the consolidated statement of income. During 2022 and 2021, we prepaid $600.0 million and $85.0 million, respectively, of our Senior Secured Term Loans, funded from our cash on hand. As a result of these prepayments, we expensed $9.3 million and $0.5 million, respectively, of the unamortized original issue discount and deferred fees to other income and expense in the consolidated statement of income. Interest rates on the Senior Secured Term Loan B-6 are based on the London Interbank Offered Rate (“LIBOR”) with a floor of 0.50%, unless otherwise elected, plus a margin of 2.25% or 2.00% depending on our total net leverage ratio. The Company is required to make principal payments at the end of each quarter of 0.25% of the 2021 incremental principal balance plus additional borrowings with the remaining balance due December 1, 2028. Interest rates on the Senior Secured Ter m Loan B-5 are based on LIBOR, unless otherwise elected, plus a margin of 1.75%. The Company is required to make principal payments at the end of each quarter of 0.25% of the 2019 refinanced principal balance plus additional borrowings with the remaining balance due November 15, 2026. Interest rates on Senior Secured Term Loan A-3 are based on LIBOR, unless otherwise elected, plus a margin of 1.25%, 1.50% or 1.75% depending on our total net leverage ratio. The Company is required to make principal payments of 0.625%, of the 2019 refinanced principal balance plus additional borrowings, at the end of each quarter through December 2021, increasing to 1.25% each quarter thereafter, with the remaining balance due December 10, 2024. Interest rates on the Senior Secured Revolving Credit Facility are based on LIBOR, unless otherwise elected, plus a margin of 1.25%, 1.50% or 1.75% depending on our total net leverage ratio. There is a 0.20%, 0.25% or 0.30% annual commitment fee, depending on our total net leverage ratio, payable quarterly based on the undrawn portion of the Senior Secured Revolving Credit Facility. The commitment under the Senior Secured Revolving Line of Credit expires on December 10, 2024. Interest rates on the Second Lien Term Loan were based on LIBOR, unless otherwise elected, plus a margin of 5.00%. The Company was required to repay the principal balance plus interest due December 1, 2029, however, the loan was repaid in full on December 23, 2021. The Company may be required to make additional payments based on excess cash flows of the prior year, as defined in the agreement. Depending on the senior secured net leverage ratio for the year, a principal payment of between zero and fifty percent of the excess cash flows will be due the following year. There is no required excess cash flow payment due for 2022. Additional payments based on excess cash flows could be due in future years. As of December 31, 2022, 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 sum of the greater of $1,000.0 million and 100% of Consolidated EBITDA, minus the amount of secured indebtedness and the amount incurred prior to the incremental loan, 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 $100 million or 10.0% 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 December 31, 2022, we were in compliance with all debt covenants. Interest Rate Hedging On November 16, 2022, we entered into interest rate swap agreements with various counterparties that effectively fix our LIBOR exposure on a portion of our Senior Secured Term Loan or similar replacement debt. The new swaps commenced on December 30, 2022, and expire on December 31, 2024, with a current aggregate notional amount of $1,320.0 million that amortizes each quarter. The new swaps require us to pay fixed rates varying between 4.4105% and 4.4465% 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. On December 23, 2021, we entered into interest rate swap agreements with various counterparties that effectively fix our LIBOR exposure on a portion of our Senior Secured Term Loan or similar replacement debt. The new swaps commenced on December 31, 2021, and expire on December 31, 2026, with a current aggregate notional amount of $1,584.0 million that amortizes each quarter. The tranche requires us to pay fixed rates varying between 1.4280% and 1.4360% 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. On March 10, 2020, we entered into two interest rate swap agreements with various counterparties that effectively fix our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt. The first swap commenced on June 30, 2020, and expired on June 30, 2022. The second swap commences on June 30, 2022, and expires on June 30, 2025, with a current aggregate notional amount of $1,100.0 million that amortizes each quarter after it commences. The second swap requires us 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. On December 17, 2018, we entered into interest rate swap agreements with various counterparties that effectively fixed our LIBOR exposure on a portion of our Senior Secured Term Loans or similar replacement debt at 2.702% and 2.706%. These swap agreements expired on December 30, 2022. On December 18, 2015, we entered into interest rate cap agreements with various counterparties 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 $260.1 million ($195.2 million, net of tax), an unrealized gain of $67.3 million ($50.5 million, net of tax), and an unrealized loss of $43.5 million ($32.7 million, net of tax) for the years ended December 31, 2022, 2021 and 2020, respectively, recorded in other comprehensive income. Interest income on the swaps in the twelve months ended December 31, 2022 was $8.3 million ($6.2 million, net of tax). Interest expense on the swaps in the twelve months ended December 31, 2021 and 2020 was $41.8 million ($31.4 million, net of tax) and $32.3 million ($23.3 million, net of tax), respectively. We expect to recognize a loss of approximately $102.4 million as interest expense due to our expectation that LIBOR will exceed the fixed rates of interest over the next twelve months. Fair Value of Debt As of December 31, 2022 and 2021, the fair value of our Senior Secured Term Loan B-6, excluding original issue discounts and deferred fees, was approximately $2,450.5 million and $3,096.1 million, respectively. As of December 31, 2022 and 2021, the fair value of our Senior Secured Term Loan B-5, excluding original issue discounts and deferred fees, was approximately $2,184.4 million and $2,217.0 million, respectively. As of December 31, 2022 and 2021, the fair value of our variable-rate Senior Secured Term Loan A-3, excluding original issue discounts and deferred fees was approximately $1,026.6 million and $1,076.1 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. |