| Significant accounting and reporting policies | Significant Accounting Policies Description of Business TransUnion is a leading global information and insights company that makes trust possible between businesses and consumers, helping people around the world access opportunities that can lead to a higher quality of life. We have built robust data and analytics assets for a large portion of the adult population in the markets we serve. We use our platform to connect these disparate data assets and concentrate them on a single, layered and unified environment, enabling more persistent identity resolution with sharper, more contextualized insights. We use these insights, combined with our industry expertise, to develop impactful solutions to solve customers’ needs, including credit risk, marketing, and fraud mitigation. Our solutions enable businesses to manage and measure credit risk, market to new and existing customers, verify consumer identities, and mitigate fraud. Businesses embed our solutions into their workflows to deliver critical insights and enable effective actions. Consumers use our solutions to view their credit profiles, access analytical tools that help them understand and manage their personal financial information and take precautions against identity theft. We have a global presence across North America, Latin America, Europe, Africa, and Asia Pacific. Basis of Presentation The accompanying consolidated financial statements of TransUnion and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Our consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the periods presented. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s consolidated balance sheets, statements of operations or statements of stockholders’ equity. As a result of displaying amounts in millions, rounding differences may exist in the financial statements and footnote tables. During the first quarter of 2024, we reorganized our operations to merge our Consumer Interactive operating segment with our U.S. Markets operating segment. This change aligns with our transformation plan for an integrated U.S. business with common enabling functions to achieve greater cost efficiencies. In addition, we changed the responsibility for certain international operations previously managed within the U.S. Markets segment to certain regions within the International segment. As a result, we have two operating segments, U.S. Markets and International, which are consistent with our reportable segments, and reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner in which the chief operating decision maker assesses the Company’s performance. The reporting of certain revenue from the acquisition of Argus Information and Advisory Services, Inc. and Commerce Signals, Inc. (collectively, “Argus”), which was previously reported within our Financial Services vertical, is now reported in Emerging Verticals in the U.S. Markets operating segment. While this change does not impact our operating segments, it does impact our disaggregated revenue disclosures. We have recast our historical financial information presented in this Annual Report on Form 10-K to reflect these changes and conform to our current operating structure. 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. 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. All intercompany transactions and balances have been eliminated. Investments in Affiliated Companies Investments in affiliated companies represent our investments in non-consolidated domestic and foreign entities. These entities operate in businesses similar to ours. Investments in nonmarketable unconsolidated entities in which the Company is able to exercise significant influence are accounted for using the equity method. For equity method 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. 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. 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 in the Consolidated Statements of Operations. See Note 9, “Investments in Affiliated Companies,” for a further discussion. Variable Interest Entities At inception, we determine whether an entity in which we have made an investment in or have other variable interest arrangements with is considered a variable interest entity (“VIE”). We are required to consolidate any VIE if we are the primary beneficiary of the VIE. We are the primary beneficiary of a VIE if we have the power to direct activities that most significantly affect the economic performance of the VIE and have the obligation to absorb a portion of the losses or benefits that are significant to the VIE. If we are not the primary beneficiary of the VIE, we account for the investment or other variable interests in the VIE in accordance with other applicable GAAP. When events or circumstances change our variable interests or relationships with any of these entities, we reassess our determination of whether they are a VIE and, if so, whether we are the primary beneficiary. As of December 31, 2024, we have a variable interest in one unconsolidated variable interest entity with a current exposure of loss of approximately $35.3 million, consisting of the current carrying value of our investment in and receivables from this entity. 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 a ccompanying 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. Segments Operating segments are businesses for which separate financial information is available and evaluated regularly by our chief operating decision maker (“CODM”) deciding how to allocate resources and assess performance. As discussed above, during the first quarter of 2024, we reorganized our operations to merge our Consumer Interactive operating segment with our U.S. Markets operating segment. As a result, we have two operating and reportable segments; U.S. Markets and International. We also report expenses for Corporate, which provides support services to each segment. Details of our segment results are discussed in Note 19, “Reportable Segments.” Foreign Currency Translation The functional currency for each of our foreign subsidiaries is generally that subsidiary’s local currency. We translate the assets and liabilities of foreign subsidiaries at the period-end exchange rate, and translate revenues and expenses at the monthly average rates during the year. We record the resulting translation adjustment as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of an entity are included in the results of operations as incurred. The exchange rate gains and losses for the years ended December 31, 2024, 2023 and 2022 were not material. Revenue Recognition All of our revenue is derived from contracts with our customers and is reported as revenue in the Consolidated Statements of Operations generally as or at the point in time our performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. We have contracts with two 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, 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 of units delivered or a guaranteed minimum, if higher. Occasionally we have contracts where the amount we will be entitled to for the transactions processed is uncertain, in which case we estimate the revenue based on what we consider to be the most likely amount of consideration we will be entitled to and adjust any estimates as facts and circumstances evolve. 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. Other Performance Obligations 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. Deferred revenue generally consists of amounts billed in excess of revenue recognized for the sale of data services, subscriptions and set up fees. The current and long-term portions of deferred revenue are included in other current liabilities and other liabilities. See Note 15, “Revenue,” for further details. Costs of Services Costs of services includes 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 data center costs. Selling, General and Administrative Expenses Selling, general and administrative expenses includes personnel-related costs for sales, administrative and management employees, costs for professional and consulting services, advertising and facilities expenses. Advertising costs are expensed as incurred. Advertising costs, which include fees we pay to our partners to promote our products online, for the years ended December 31, 2024, 2023 and 2022 were $61.4 million, $64.2 million and $87.7 million, respectively. Stock-Based Compensation Compensation expense for all stock-based compensation awards is determined using the grant date fair value. For all equity-based plans, we record the impact of forfeitures when they occur. Expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equal to the vesting period. We generally issue service-based restricted stock units that vest based on the passage of time and performance-based restricted stock units that vest based on the achievement of 3-year cumulative revenue and Adjusted Diluted Earnings per Share (“Adjusted EPS”) targets, and market-based relative total stockholder return (“TSR”) based on how our stock price performs relative to a benchmark of similar companies over a three-year period. Vesting of both restricted stock units and performance-based restricted stock units is contingent on continued employment. Prior to the year ended December 31, 2024, we issued performance-based restricted stock units that vest based on the achievement of Adjusted EBITDA targets instead of Adjusted EPS targets. Service-based awards generally vest over 3.5 years. Performance-based awards generally vest over 3-years and the number of shares which could potentially be issued ranges from zero to 250% of the target award. We occasionally issue off-cycle or special grants that could have different performance measurements and vesting terms. The closing market price of our stock on the date of grant is used to determine the grant date fair value for our restricted stock units except those that are subject to market performance. A risk-neutral Monte-Carlo simulation model based on input assumptions that exist as of the date of each grant is used to determine the fair value of awards based on TSR. The primary input assumptions utilized in determining the grant date fair value of the restricted stock units based on TSR are the expected stock volatility for the Company and the benchmark group of companies, the risk-free interest rate, expected dividend yields, and correlations between our stock price and the stock prices of the peer group of companies. The details of our stock-based compensation program are discussed in Note 17, “Stock-Based Compensation.” Benefit Plans We maintain a defined-contribution savings plan for eligible employees. We provide a partial matching contribution based on a participant’s eligible contributions and may provide an annual discretionary contribution. Contributions to this plan for the years ended December 31, 2024, 2023 and 2022 were $36.9 million, $34.7 million and $32.9 million, respectively. Restructuring Restructuring expenses consist of employee-separation costs, including severance and other benefits calculated based on long-standing benefit practices and local statutory requirements. In some jurisdictions, the Company has ongoing benefit arrangements under which the Company records estimated severance and other termination benefits when such costs are deemed probable and estimable, approved by the appropriate corporate management, and if actions required to complete the termination plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Severance and other termination bene fits for which there is not an ongoing benefit arrangement are recorded when appropriate corporate management has committed to the plan and the benefit arrangement is communicated to the affected employees. In addition, restructuring expenses include a loss on early termination of leased facility assets which are abandoned in connection with such terminations. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates. The effect of a tax rate change on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date of the change. 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. See Note 16, “Income Taxes,” for additional information. Cash and Cash Equivalents We consider investments in highly liquid debt instruments with original maturities of three months or less to be cash equivalents. The carrying value of our cash and cash equivalents approximate their fair value. Concentration of Risk Financial instruments that potentially subject us to a concentration of risk consist primarily of cash and cash equivalents. Our cash balances are primarily on deposit at high credit quality institutions or invested in money market funds. These deposits are typically in excess of insured limits. We have established guidelines relative to diversification and maturities for maintaining safety and liquidity. Trade Accounts Receivable We base our allowance for doubtful accounts estimate on our historical loss experience, our current expectations of future losses, current economic 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. The following is a roll-forward of the allowance for doubtful accounts for the periods presented: Years Ended December 31, 2024 2023 2022 Beginning Balance $ 16.4 $ 11.0 $ 10.7 Provision for losses on trade accounts receivable 18.7 8.8 5.9 Write-offs, net of recovered accounts (15.2) (3.4) (5.6) Ending balance $ 19.9 $ 16.4 $ 11.0 Marketable Securities We classify our investments in debt and equity securities in accordance with our intent and ability to hold the investments. Held-to-maturity securities are carried at amortized cost, which approximates fair value, and are classified as either short-term or long-term investments based on the contractual maturity date. Earnings from these securities are reported as a component of interest income. Available-for-sale securities, if any, are carried at fair market value, with the unrealized gains and losses, net of tax, included in accumulated other comprehensive income. At December 31, 2024 and 2023, the Company’s marketable securities consisted of available-for-sale securities. The available-for-sale securities relate to foreign exchange-traded corporate bonds. There were no significant realized or unrealized gains or losses for these securities for any of the periods presented. We follow fair value guidance to measure the fair value of our financial assets as further described in Note 18, “Fair Value”. We periodically review our marketable securities to determine if there is an other-than-temporary impairment on any security. If it is determined that an other-than-temporary decline in value exists, we write down the investment to its market value and record the related impairment loss in other income. There were no other-than-temporary impairments of marketable securities in 2024, 2023 or 2022. Contract Acquisition Costs We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. We use a portfolio approach to amortize capitalized contract acquisition costs on a straight-line basis over five years, which reflects the estimated average period of benefit and is consistent with the transfer of our services to our customer to which the contract relates. We classify capitalized contract acquisition costs as current or noncurrent based on the timing of expense recognition. The current and noncurrent portions are included in other current assets and other assets, respectively, in our Consolidated Balance Sheets. Amortization expense is included in selling, general and administrative within our accompanying Consolidated Statements of Operations. As of December 31, 2024 and 2023, we had capitalized contract acquisition costs of $60.4 million and $39.9 million, respectively, which have been included in other current assets and other assets in our accompanying Consolidated Balance Sheets. For the years ended December 31, 2024, 2023 and 2022, we amortized $12.8 million, $7.2 million and $4.4 million of capitalized contract acquisition costs to selling, general and administrative expenses on our Consolidated Statements of Operations. Business Combinations We account for business combinations under the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination generally be recognized at their fair values as of the acquisition date. The determination of fair value requires management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets has been recorded as goodwill. The results of operations of these acquisitions are included in our consolidated financial statements from the respective dates of acquisition. See Note 2, “Business Acquisitions,” for further details. Long-Lived Assets Property, Plant, Equipment Property, plant and equipment is depreciated primarily using the straight-line method, over the estimated useful lives of the assets. Buildings and building improvements are generally depreciated over 20 years. Computer equipment and furniture and purchased software are depreciated over 3 to 7 years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the lease term. Assets to be disposed of, if any, are separately presented in the Consolidated Balance Sheet and reported at the lower of the carrying amount or fair value, less costs to sell, and are no longer depreciated. We write off the gross cost and accumulated depreciation of assets that are disposed of or no longer in use. See Note 5, “Property, Plant and Equipment” for additional information about these assets. Definite-Lived Intangible Assets Intangible assets are initially recorded at their acquisition cost, at relative fair value if acquired as part of an asset acquisition, or fair value if acquired as part of a business combination, and amortized over their estimated useful lives. All intangible assets are amortized on a straight-line basis, which approximates the pattern of benefit. Database and credit files are generally amortized over a 12 to 15 year period. Internal use software is generally amortized over 3 to 10 year period. Customer relationships are amortized over a 10 to 20 year period. Trademarks primarily consist of the TransUnion trade name, which is being amortized over a 40 year useful life, and the remaining trademark assets are generally amortized over a shorter period based on their estimated useful life, which ranges between 1 and 20 years. Copyrights, patents, noncompete and other agreements are amortized over varying periods based on their estimated useful lives. Intangible assets are subsequently removed from the presentation of gross cost and accumulated amortization once they are no longer in use or become fully amortized. See Note 7, “Intangible Assets” for additional information. For internal use software, we monitor the activities of each of our system development projects and analyze the associated costs, making an appropriate distinction between costs to be expensed and costs to be capitalized. Costs incurred during the preliminary project stage are expensed as incurred. Many of the costs incurred during the application development stage are capitalized, including costs of software design and configuration, development of interfaces, coding, testing and installation of the software. We begin to amortize the software once it is ready for its intended use. Impairment of Long-Lived Assets 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. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to the estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized equal to the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. There were no significant impairment charges recorded during 2024, 2023 and 2022. Goodwill Other than goodwill, we have no other indefinite-lived intangible assets. Goodwill is allocated to our reporting units, which are an operating segment or one level below an operating segment. We conduct an impairment test annually in the fourth quarter of each year, or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired. We have the option to first perform a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the qualitative analysis indicates that an impairment is more likely than not for any reporting unit, we perform a quantitative impairment test for that reporting unit. We have the option to bypass the qualitative analysis for any reporting unit and proceed directly to performing a quantitative impairment test. When we perform a quantitative impairment test, we use a combination of an income approach, using the discounted cash flow method, and a market approach, using the guideline public company method, to determine the fair value of each reporting unit. For each reporting unit, we compare the fair value to its carrying value including goodwill. If the fair value of the reporting unit is less than its carrying value, we record an impairment charge based on that difference, up to the amount of goodwill recorded in that reporting unit. The quantitative impairment test requires the application of a number of significant assumptions, including estimates of future revenue growth rates, EBITDA margins, discount rates, and market multiples. The projected future revenue growth rates and EBITDA margins, and the resulting projected cash flows of each reporting unit are based on historical experience and internal operating plans reviewed by management, extrapolated over the forecast period. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to each reporting unit. Market multiples are based on the guideline public company method using comparable publicly traded company multiples of EBITDA for a group of benchmark companies. Leases We determine if an arrangement is a lease at the inception of a contract. Our operating leases principally involve office space with fixed monthly lease payments that may also contain variable non-lease components consisting of common area maintenance, operating expenses, insurance and similar costs of the space that we occupy. We have adopted the practical expedient to not separate these non-lease components from the lease components and instead account for them as a single lease component for all of our leases. This practical expedient allows us to allocate the fixed lease components and the non-lease components based on the contractually stated amounts, with the fixed lease components included in our Right-of-Use (“ROU”) lease assets and lease liability values. Variable payments are not included within the ROU lease assets or lease liabilities and are expensed in the period in which they are incurred. We have options to extend many of our operating leases for an additional period of time and options to terminate several of our operating leases early. The lease term consists of the non-cancelable period of the lease, periods covered by options to extend the lease if we are reasonably certain to exercise the option, periods covered by an option to terminate the lease if we are reasonably certain not to exercise the option, and periods covered by an option to extend or not to terminate the lease in which the exercise of the option is controlled by the lessor. On the commencement date of an operating lease, we record a ROU lease asset, which represents our right to use or control the use of the specified asset for the lease term, and an offsetting lease liability, which represents our obligation to make lease payments arising from the lease, based on the present value of the net fixed future lease payments due over the initial lease term. We have elected to use the portfolio approach to assess the discount rate we use to calculate the present value of our future lease payments. We use an estimate of the incremental borrowing rate for similarly rated debt issuers, at the inception of the lease or when the lease is assumed, as the discount rate to determine the present value of the net fixed future lease payments, except for leases where the interest rate implicit in the lease is readily determinable. Lease accounting guidance requires us to expense the net fixed payments of operating leases on a straight-line basis over the lease term. We include any built up deferred or prepaid rent balance resulting from the difference between the straight-line expense and the cash payments as a component of our ROU lease asset. Also included in our ROU lease asset is any monthly prepayment of rent. Our rent expense is typically due on the first day of each month, and we typically pay rent several weeks before it is due, so at any given month end, we will have a prepaid rent balance that is included as a component of our ROU lease asset. We have adopted an accounting policy to recognize rent expense for short-term leases, those leases with initial lease terms of twelve months or less, on a straight-line basis in our income statement. We have no significant short-term operating leases, finance leases, or subleases. ROU lease assets are included in other assets, and operating lease liabilities are included in other current liabilities and other liabilities in our Consolidated Balance Sheet. Finance lease assets are included in property, plant and equipment, and finance lease liabilities, if any, are included in the current portion of long-term debt and long-term debt in our Consolidated Balance Sheet. For leases where we will derive no economic benefit from leased space that we have vacated, we recognize an impairment of right-of-use assets at the time we vacate. See Note 8, “Other Assets,” Note 10, “Other Current Liabilities,” Note 12, “Other Liabilities,” and Note 13, “Debt,” for additional information about these items. Recently Adopted Accounting Pronouncements On November 27, 2023, the Financial Ac |
