TransUnion - Quarter Report: 2015 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended March 31, 2015

- 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:

TransUnion 333-182948

TransUnion

(Exact name of registrant as specified in its charter)



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



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

312-985-2000

(Registrants’ telephone number, including area code)

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 ¨	No x

(Note: As of January 1, 2015, TransUnion was no longer subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. However, TransUnion 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 either pursuant to its obligation under Section 15(d) of the Securities Exchange Act of 1934 or as a “voluntary filer” in compliance with the indentures governing its senior indebtedness.)

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



	Yes x No ¨

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



Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	x	Smaller reporting company	¨

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



	Yes ¨ No x

The number of shares of registrants’ common stock outstanding as of April 30, 2015, was 111,168,095.

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TRANSUNION

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED MARCH 31, 2015

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	Page
PART I. FINANCIAL INFORMATION	3
ITEM 1. UNAUDITED FINANCIAL STATEMENTS	3
Consolidated Balance Sheets	3
Consolidated Statements of Income (Loss)	4
Consolidated Statements of Comprehensive Income (Loss)	5
Consolidated Statements of Cash Flows	6
Consolidated Statement of Stockholders’ Equity	7
Notes to Unaudited Consolidated Financial Statements	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29
ITEM 4. CONTROLS AND PROCEDURES	29
PART II. OTHER INFORMATION	29
ITEM 1. LEGAL PROCEEDINGS	29
ITEM 1A. RISK FACTORS	30
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	31
ITEM 4. MINE SAFETY DISCLOSURES	31
ITEM 5. OTHER INFORMATION	31
ITEM 6. EXHIBITS	32
SIGNATURES	33
INDEX TO EXHIBITS	34

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TRANSUNION AND SUBSIDIARIES

Consolidated Balance Sheets

(in millions, except per share data)



	March 31, 2015			December 31, 2014
	Unaudited
Assets
Current assets:
Cash and cash equivalents	$	87.0		$	77.9
Trade accounts receivable, net of allowance of $3.0 and $2.4	211.7			200.4
Other current assets	129.6			122.7
Total current assets	428.3			401.0
Property, plant and equipment, net of accumulated depreciation and amortization of $132.9 and $123.4	176.1			181.4
Goodwill, net	2,009.0			2,023.9
Other intangibles, net of accumulated amortization of $459.5 and $407.8	1,891.9			1,939.6
Other assets	109.0			119.9
Total assets	$	4,614.3		$	4,665.8
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	102.8		$	106.5
Short-term debt and current portion of long-term debt	112.8			74.0
Other current liabilities	115.4			149.4
Total current liabilities	331.0			329.9
Long-term debt	2,863.6			2,865.9
Deferred taxes	663.4			676.8
Other liabilities	24.0			22.1
Total liabilities	3,882.0			3,894.7
Redeemable noncontrolling interests	13.0			23.4
Stockholders’ equity:
Common stock, $0.01 par value; 200.0 million shares authorized at March 31, 2015 and December 31, 2014, 111.5 million and 111.4 shares issued at March 31, 2015 and December 31, 2014, respectively, and 111.0 million shares and 110.9 million shares outstanding as of March 31, 2015 and December 31, 2014, respectively	1.1			1.1
Additional paid-in capital	1,141.2			1,138.0
Treasury stock at cost; 0.5 million shares at March 31, 2015 and December 31, 2014	(4.3		)	(4.3		)
Accumulated deficit	(436.8		)	(430.2		)
Accumulated other comprehensive loss	(145.0		)	(117.5		)
Total TransUnion stockholders’ equity	556.2			587.1
Noncontrolling interests	163.1			160.6
Total stockholders’ equity	719.3			747.7
Total liabilities and stockholders’ equity	$	4,614.3		$	4,665.8

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Income (Loss) (Unaudited)

(in millions, except per share data)



	Three Months Ended March 31,
	2015			2014
Revenue	$	353.1		$	303.4
Operating expenses
Cost of services (exclusive of depreciation and amortization below)	125.6			120.9
Selling, general and administrative	121.9			96.2
Depreciation and amortization	69.1			51.5
Total operating expenses	316.6			268.6
Operating income	36.5			34.8
Non-operating income and expense
Interest expense	(44.8		)	(50.8		)
Interest income	0.9			0.5
Earnings from equity method investments	2.3			3.6
Other income and (expense), net	(2.3		)	(1.7		)
Total non-operating income and expense	(43.9		)	(48.4		)
Loss before income taxes	(7.4		)	(13.6		)
Benefit for income taxes	3.0			0.1
Net loss	(4.4		)	(13.5		)
Less: net income attributable to the noncontrolling interests	(2.2		)	(1.2		)
Net loss attributable to TransUnion	$	(6.6	)	$	(14.7	)

Earnings per share:
Basic	$	(0.06	)	$	(0.13	)
Diluted	$	(0.06	)	$	(0.13	)

Weighted average shares outstanding:
Basic	111.0			110.3
Diluted	111.0			110.3

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 March 31,
	2015			2014
Net loss	$	(4.4	)	$	(13.5	)
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustment	(26.9		)	(11.2		)
(Expense) Benefit for income taxes	(0.1		)	3.5
Foreign currency translation, net	(27.0		)	(7.7		)
Interest rate swaps:
Net unrealized loss	—			(0.2		)
Amortization of accumulated loss	(0.1		)	—
Benefit for income taxes	—			0.1
Interest rate swaps, net	(0.1		)	(0.1		)
Total other comprehensive loss, net of tax	(27.1		)	(7.8		)
Comprehensive loss	(31.5		)	(21.3		)
Less: comprehensive income attributable to noncontrolling interests	(2.5		)	(1.4		)
Comprehensive loss attributable to TransUnion	$	(34.0	)	$	(22.7	)

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(in millions)



	Three Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net income (loss)	$	(4.4	)	$	(13.5	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	69.1			51.5
Amortization and loss on fair value of interest rate swaps	1.1			—
Amortization of deferred financing fees	2.0			1.7
Stock-based compensation	2.4			2.0
Provision for losses on trade accounts receivable	0.6			0.6
Equity in net income of affiliates, net of dividends	(0.9		)	(3.3		)
Deferred taxes	(9.5		)	(4.0		)
Amortization of senior notes purchase accounting fair value adjustment and note discount	0.2			(4.4		)
Other	0.2			(0.4		)
Changes in assets and liabilities:
Trade accounts receivable	(14.5		)	(18.4		)
Other current and long-term assets	6.4			1.5
Trade accounts payable	0.5			0.8
Other current and long-term liabilities	(36.7		)	(20.2		)
Cash provided by (used in) operating activities	16.5			(6.1		)
Cash flows from investing activities:
Capital expenditures	(30.1		)	(38.8		)
Proceeds from sale of trading securities	0.3			0.9
Purchases of trading securities	(1.0		)	(1.7		)
Proceeds from sale of other investments	3.9			—
Purchases of other investments	(7.2		)	—
Acquisitions and purchases of noncontrolling interests, net of cash acquired	(9.9		)	(39.1		)
Acquisition-related deposits	9.1			8.8
Cash used in investing activities	(34.9		)	(69.9		)
Cash flows from financing activities:
Proceeds from senior secured revolving line of credit	35.0			28.5
Repayments of debt	(6.6		)	(3.8		)
Proceeds from issuance of common stock and exercise of stock options	0.8			0.7
Debt financing fees	—			(0.2		)
Distributions to noncontrolling interests	(0.1		)	(0.5		)
Other	—			0.1
Cash provided by financing activities	29.1			24.8
Effect of exchange rate changes on cash and cash equivalents	(1.6		)	(0.6		)
Net change in cash and cash equivalents	9.1			(51.8		)
Cash and cash equivalents, beginning of period	77.9			111.2
Cash and cash equivalents, end of period	$	87.0		$	59.4

See accompanying notes to unaudited consolidated financial statements.

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TRANSUNION AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity (Unaudited)

(in millions)



	Common Stock			Paid-In Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total			Redeemable Non- controlling Interests
	Shares	Amount		Paid-In Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total			Redeemable Non- controlling Interests
Balance December 31, 2014	110.9	$	1.1	$	1,138.0		$	(4.3	)	$	(430.2	)	$	(117.5	)	$	160.6		$	747.7		$	23.4
Net income (loss)	—	—		—			—			(6.6		)	—			2.0			(4.6		)	0.2
Other comprehensive income (loss)	—	—		—			—			—			(27.5		)	0.4			(27.1		)	—
Distributions to noncontrolling interests	—	—		—			—			—			—			(0.1		)	(0.1		)	—
Reclassification of redeemable noncontrolling interest	—	—		—			—			—			—			0.2			0.2			(0.2		)
Purchase of noncontrolling interests	—	—		(0.1		)	—			—			—			—			(0.1		)	(10.4		)
Excess tax benefit	—	—		0.1			—			—			—			—			0.1			—
Stock-based compensation	—	—		2.4			—			—			—			—			2.4			—
Issuance of stock	—	—		0.4			—			—			—			—			0.4			—
Exercise of stock options	0.1	—		0.4			—			—			—			—			0.4			—
Balance March 31, 2015	111.0	$	1.1	$	1,141.2		$	(4.3	)	$	(436.8	)	$	(145.0	)	$	163.1		$	719.3		$	13.0

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

Any reference in this report to "the Company", “we", “us”, and “our” refers to TransUnion (formerly known as TransUnion Holding Company, Inc.) and its direct and indirect subsidiaries.

The accompanying unaudited consolidated financial statements of TransUnion have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany transactions and balances have been eliminated. The operating results of TransUnion for the periods presented are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015. 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, 2014, filed with the Securities and Exchange Commission (“SEC”) on March 30, 2015.

Principles of Consolidation

The consolidated financial statements of TransUnion include the accounts of TransUnion and all of its majority-owned or controlled subsidiaries. Investments in unconsolidated entities in which the Company has at least a 20% ownership interest, or where it is able to exercise significant influence, are accounted for using the equity method. Nonmarketable investments in unconsolidated entities in which the Company has less than a 20% ownership interest, or where it is not able to exercise significant influence, are accounted for using the cost method and are periodically reviewed for impairment.

Change in Accounting Estimate

Effective July 1, 2014, we revised the remaining useful lives of certain internal use software, equipment, leasehold improvement and corporate headquarters facility assets to align with the expected completion dates of our strategic initiatives to transform our technology infrastructure and corporate headquarters facility. As a result, depreciation and amortization expense increased by $8.0 million in the three months ended March 31, 2015. The net-of-tax impact of this change decreased net income attributable to TransUnion by $5.2 million, or $0.05 per share for the period.

Subsequent Events

Events and transactions occurring through the date of issuance of the financial statements have been evaluated by management and, when appropriate, recognized or disclosed in the financial statements or notes to the consolidated financial statements.

Recently Adopted Accounting Pronouncements

There are no recent accounting pronouncements that have been adopted.

Recent Accounting Pronouncement Not Yet Adopted

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This comprehensive guidance will replace all existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2016, and interim periods therein. We are currently assessing the impact this guidance will have on our consolidated financial statements.

On June 19, 2014, the FASB issued ASU No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This update clarifies the accounting for share-based awards with performance targets and is effective for years beginning after December 15, 2015. We are currently assessing the impact this guidance will have on our consolidated financial statements.

On April 7, 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30). Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs to be presented in the balance sheet as a direct reduction of the carrying amount of the corresponding debt. This guidance is effective for fiscal years beginning after December

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15, 2015, and interim periods therein. Early adoption is permitted. The impact of this guidance will reduce the net carrying value of debt disclosed in our consolidated balance sheet.

2. Fair Value

The following table summarizes financial instruments measured at fair value, on a recurring basis, as of March 31, 2015:



(in millions)	Total			Level 1		Level 2			Level 3
Assets
Trading securities	$	11.7		$	7.3	$	4.4		$	—
Available for sale securities	3.0			—		3.0			—
Total	$	14.7		$	7.3	$	7.4		$	—

Liabilities
Contingent obligation	$	(5.4	)	$	—	$	—		$	(5.4	)
Interest rate swaps	(2.9		)	—		(2.9		)	—
Total	$	(8.3	)	$	—	$	(2.9	)	$	(5.4	)

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

Level 2 instruments consist of pooled separate accounts, foreign exchange-traded corporate bonds and interest rate swaps. Pooled separate accounts are designated as trading securities valued at net asset values. These securities relate to the nonqualified deferred compensation plan held in trust for the benefit of plan participants. Foreign exchange-traded corporate bonds are available-for-sale securities valued at their current quoted prices. These securities mature between 2027 and 2033. Interest rate swaps fair values are determined using standard valuation models with market-based observable inputs including forward and spot exchange rates and interest rate curves. See Note 8, “Debt” for additional information regarding interest rate swaps.

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

Level 3 instruments consist of contingent obligations related to acquisitions with maximum payouts totaling $19.5 million. These obligations are contingent upon meeting certain performance requirements in 2015 and 2016. The fair values of these obligations were determined based on an income approach, using our current expectations of the future earnings of the acquired entities. We assess the fair value of these obligations each reporting period with any changes reflected as gains or losses in selling, general and administrative expenses in the consolidated statements of income. During the first quarter of 2015, we recorded an expense of $0.4 million as a result of changes to the fair value of these obligations.

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3. Other Current Assets

Other current assets consisted of the following:



(in millions)	March 31, 2015		December 31, 2014
Deferred income tax assets	$	48.3	$	51.2
Prepaid expenses	48.0		43.4
Other investments	12.3		8.8
Deferred financing fees	8.3		8.2
Income taxes receivable	5.0		2.8
Marketable securities	3.0		3.0
Other	4.7		5.3
Total other current assets	$	129.6	$	122.7

Other investments are non-negotiable certificates of deposit of which the majority are in denominations of greater than $0.1 million. As of March 31, 2015, these investments were recorded at their carrying value.

4. Other Assets

Other assets consisted of the following:



(in millions)	March 31, 2015		December 31, 2014
Investments in affiliated companies	$	52.0	$	52.8
Deferred financing fees	23.7		25.8
Other investments	18.9		18.8
Marketable securities	11.7		10.9
Deposits	2.4		11.5
Other	0.3		0.1
Total other assets	$	109.0	$	119.9

Other investments include non-negotiable certificates of deposit of which the majority are in denominations of greater than $0.1 million. As of March 31, 2015, these investments were recorded at their carrying value.

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. These investments are included in other assets in the consolidated balance sheets.

We use the equity method to account for investments in affiliates where we have at least a 20% ownership interest or 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 use the cost method to account for nonmarketable investments in affiliates where we have less than a 20% ownership interest or where we are not able to exercise significant influence. For these investments, we adjust the carrying value for purchases and sales of our ownership interests.

For all investments, we adjust the carrying value if we determine that an other-than-temporary impairment has occurred. There were no impairments of investments in affiliated companies during the three months ended March 31, 2015 or March 31, 2014.

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Investments in affiliated companies consisted of the following:



(in millions)	March 31, 2015		December 31, 2014
Total equity method investments	$	51.1	$	51.9
Total cost method investments	0.9		0.9
Total investments in affiliated companies	$	52.0	$	52.8

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



(in millions)	Three Months Ended March 31, 2015		Three Months Ended March 31, 2014
Earnings from equity method investments	$	2.3	$	3.6
Dividends received from equity method investments	$	1.4	$	0.3

There were no dividends received from cost method investments for the three months ended March 31, 2015 and March 31, 2014.

6. Other Current Liabilities

Other current liabilities consisted of the following:



(in millions)	March 31, 2015		December 31, 2014
Accrued payroll	$	42.6	$	71.5
Accrued legal and regulatory	17.8		17.8
Accrued interest	14.3		20.5
Accrued employee benefits	9.4		13.0
Deferred revenue	8.3		8.6
Other	23.0		18.0
Total other current liabilities	$	115.4	$	149.4

The decrease in accrued payroll was due primarily to the payment of accrued bonuses during the first quarter of 2015.

7. Other Liabilities

Other liabilities consisted of the following:



(in millions)	March 31, 2015		December 31, 2014
Retirement benefits	$	11.8	$	10.8
Unrecognized tax benefits	0.2		0.3
Other	12.0		11.0
Total other liabilities	$	24.0	$	22.1

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8. Debt

Debt outstanding consisted of the following:



(in millions)	March 31, 2015			December 31, 2014
Senior secured term loan, payable in quarterly installments through April 9, 2021, including variable interest (4.00% at March 31, 2015) at LIBOR or alternate base rate, plus applicable margin, including original discount of $4.1 million and $4.3 million at March 31, 2015, and December 31, 2014, respectively	$	1,876.9		$	1,881.5
Senior secured revolving line of credit, due on April 9, 2019, variable interest (3.75% at March 31, 2015) at LIBOR or alternate base rate, plus applicable margin	85.0			50.0
9.625% Senior Notes - Senior unsecured PIK toggle notes, principal due June 15, 2018, semi-annual interest payments, 9.625% fixed interest per annum	600.0			600.0
8.125% Senior Notes - Senior unsecured PIK toggle notes, principal due June 15, 2018, semi-annual interest payments, 8.125% fixed interest per annum, including original issuance discount of $1.3 million at March 31, 2015, and December 31, 2014	398.7			398.7
Other notes payable	13.8			7.4
Capital lease obligations	2.0			2.3
Total debt	$	2,976.4		$	2,939.9
Less short-term debt and current portion of long-term debt	(112.8		)	(74.0		)
Total long-term debt	$	2,863.6		$	2,865.9

Senior Secured Credit Facility

On June 15, 2010, the Company entered into a senior secured credit facility with various lenders. The senior secured credit facility consists of a senior secured term loan and a senior secured revolving line of credit. On April 9, 2014, we refinanced and amended the senior secured credit facility. The refinancing resulted in an increase in the outstanding senior secured term loan from $1,120.5 million to $1,900.0 million. The amendment, among other things, reduced the interest rate floor and margins, reduced the amount available under the senior secured revolving line of credit from $210.0 million to $190.0 million, extended the maturity dates, and changed certain covenant requirements. The additional borrowings were used in part to repay all amounts outstanding under the existing senior secured revolving line of credit and pay fees and expenses associated with the refinancing transaction. On May 9, 2014, the remaining borrowings were used to redeem the entire $645.0 million outstanding balance of the 11.375% notes issued by Trans Union LLC and its wholly-owned subsidiary, TransUnion Financing Corporation, including a prepayment premium and unpaid accrued interest through June 15, 2014. We refer to these transactions collectively as the "2014 Refinancing Transaction."

Interest rates on the refinanced senior secured term loan are based on the London Interbank Offered Rate ("LIBOR") unless otherwise elected, and subject to a floor of 1.00%, plus a margin of 2.75% or 3.00% depending on our senior secured net leverage ratio. Under the refinanced senior secured term loan, the Company is required to make principal payments of 0.25% of the refinanced original principal balance at the end of each quarter, with the remaining balance due April 9, 2021. The Company is also required to make additional payments based on excess cash flows, as defined in the agreement, of the prior year. There were no excess cash flows for 2014 and therefore no payment was required in 2015. 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.

During the fourth quarter of 2014, the Company borrowed $50.0 million against the senior secured revolving line of credit to partially fund acquisitions made in 2014. In March of 2015, the Company borrowed an additional $35.0 million to complete these funding requirements and replenish cash on hand.

Interest rates on the refinanced senior secured revolving line of credit are based on LIBOR unless otherwise elected, and subject to a floor of 1.00%, plus a margin of 2.50% or 2.75% depending on our senior secured net leverage ratio. There is a 0.375% or 0.50% annual commitment fee, depending on our senior secured net leverage ratio, payable quarterly based on the undrawn portion of the senior secured revolving line of credit. The commitment under the senior secured revolving line of credit expires on April 9, 2019.

With certain exceptions, the 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. We are in compliance with all of the loan covenants.

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On April 30, 2012, we entered into swap agreements that effectively fixed the interest payments on a portion of the then existing senior secured term loan at 2.033%, plus the applicable margin, beginning March 28, 2013. Under the swap agreements, which we had designated as cash flow hedges, we pay a fixed rate of interest of 2.033% and receive a variable rate of interest equal to the greater of 1.50% or the three month LIBOR. The net amount paid or received was recorded as an adjustment to interest expense. As a result of the April 9, 2014, senior secured credit facility amendment, the swaps were no longer expected to be highly effective and no longer qualify for hedge accounting. The total fair value of the swap instruments as of April 9, 2014, of $1.6 million was recorded in other liabilities in the consolidated balance sheet. The corresponding net of tax loss of $1.0 million was recorded in accumulated other comprehensive income and is being amortized to interest expense on a straight-line basis through December 29, 2017, the remaining life of the swaps. Changes in the fair value of the swaps after April 9, 2014, are being recorded in other income and expense. The change in the fair value of the swaps resulted in a loss of $0.9 million for the three-months ended March 31, 2015.

9.625% Senior Notes

On March 21, 2012, the Company issued $600.0 million principal amount of 9.625%/10.375% senior unsecured PIK toggle notes (“9.625% Senior Notes”) due June 15, 2018, in a private placement to certain investors. Pursuant to an exchange offer completed in October 2012, these notes were subsequently registered with the SEC. The Company is required to pay interest on the 9.625% Senior Notes in cash unless certain conditions described in the indenture governing the notes are satisfied, in which case the Company will be entitled to pay interest for such period by increasing the principal amount of the notes or by issuing new notes (such increase being referred to as “PIK,” or paid-in-kind interest) to the extent described in the indenture.

The indenture governing the 9.625% Senior Notes contains nonfinancial covenants that include restrictions on our ability to pay dividends or distributions, repurchase equity, prepay junior debt, make certain investments, incur additional debt, issue certain stock, incur liens on property, merge, consolidate or sell certain assets, enter into transactions with affiliates, and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments to TransUnion. We are in compliance with all covenants under the indenture.

8.125% Senior Notes

On November 1, 2012, the Company issued $400.0 million principal amount of 8.125%/8.875% senior unsecured PIK toggle notes (“8.125% Senior Notes” and together with the 9.625% Senior Notes, the "senior unsecured PIK toggle notes") due June 15, 2018, at an offering price of 99.5% in a private placement to certain investors. Pursuant to an exchange offer completed in August 2013, these notes were subsequently registered with the SEC. The Company is required to pay interest on the 8.125% Senior Notes in cash unless certain conditions described in the indenture governing the notes are satisfied, in which case the Company will be entitled to pay interest for such period by increasing the principal amount of the notes or by issuing new notes to the extent described in the indenture.

The indenture governing the 8.125% Senior Notes and the nonfinancial covenants are substantially identical to those governing the 9.625% Senior Notes. We are in compliance with all covenants under the indenture.

Fair Value of Debt

The estimated fair values of our 9.625% and 8.125% Senior Notes as of March 31, 2015, were $607.5 million and $412.4 million, respectively, compared with book values of $600.0 million and $398.7 million, respectively. The fair values of these fixed-rate notes, as determined under Level 2 of the fair-value hierarchy, are measured using quoted market prices of these publicly traded securities. The book value of our variable-rate debt approximates its fair value. The estimated fair value of our debt may not represent the actual settlement value due to redemption premiums and prepayment penalties that we may incur in connection with extinguishing our debt before its stated maturity.

9. 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 long-term incentive stock plans. There were 7.8 million and 7.5 million anti-dilutive stock-based awards outstanding at March 31, 2015 and March 31, 2014, respectively, including contingently issuable market-based stock options. These awards were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive since we reported a net loss in both periods. Basic and diluted weighted average shares outstanding and earnings per share for the years ended March 31, 2015 and March 31, 2014, were as follows:

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(in millions, except per share data)	Three Months Ended March 31, 2015			Three Months Ended March 31, 2014

Earnings per share - basic
Earnings available to common shareholders	$	(6.6	)	$	(14.7	)
Weighted average shares outstanding	111.0			110.3
Earnings per share - basic	$	(0.06	)	$	(0.13	)

Earnings per share - diluted
Earnings available to common shareholders	$	(6.6	)	$	(14.7	)

Weighted average shares outstanding	111.0			110.3
Dilutive impact of stock based awards	—			—
Weighted average dilutive shares outstanding	111.0			110.3
Earnings per share - diluted	$	(0.06	)	$	(0.13	)

10. Income Taxes

Effective January 1, 2015, the look-through provision under subpart F of the U.S. Internal Revenue Code expired. Consequently, in both periods presented, we recorded tax expense for the U.S. income tax we would incur in the absence of the look-through rule. This rule requires U.S. corporate shareholders to recognize current U.S. taxable income from passive income, including dividends, earned by certain foreign subsidiaries, regardless of whether that income is remitted to the United States. The look-through rule grants an exception to this recognition for subsidiary passive income attributable to an active business. When it is not in effect, we are required to accrue a tax liability for certain foreign earnings as if those earnings were distributed to the United States.

For the three months ended March 31, 2015, we reported a loss before income taxes and an effective tax rate benefit of 40.1%, which was higher than the 35% U.S. federal statutory rate due primarily to the benefit of state income taxes and the tax rate differential on foreign earnings, partially offset by the expiration of the look-through rule.

For the three months ended March 31, 2014, we reported a loss before income taxes and an effective tax rate benefit of 0.6%, which was lower than the 35% U.S. federal statutory rate due primarily to the additional tax expense associated with the expiration of the look-through rule, tax expense on unremitted foreign earnings not considered permanently reinvested, increased tax due to foreign dividends and a detrimental change in state tax rates which primarily affected deferred tax expense.

The total amount of unrecognized tax benefits was $1.9 million as of both March 31, 2015 and December 31, 2014, and these same amounts would affect the effective tax rate, if recognized. The accrued interest payable for taxes as of March 31, 2015, and December 31, 2014, was $1.0 million and $0.9 million, respectively. There was no significant liability for tax penalties as of March 31, 2015 or December 31, 2014. 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. As of March 31, 2015, tax years 2006 and forward remained open for examination in some state and foreign jurisdictions and tax years 2009 and forward remained open for federal purposes. The Internal Revenue Service issued its final Revenue Agent’s Report to the Company during December 2014 for its audit of 2009 through 2011 tax years. We evaluated the issues raised and, where appropriate, made adjustments where we determined that we did not have a more likely than not probability of prevailing upon appeal.

11. Operating Segments

Operating segments are businesses for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources. This segment financial information is reported on the basis that is used for the internal evaluation of operating performance. The accounting policies of the segments are the same as described in Note 1, “Significant Accounting and Reporting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2014.

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We evaluate the performance of segments based on revenue and operating income. Intersegment sales and transfers have been eliminated and were not material.

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

U.S. Information Services

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

International

The International segment provides services similar to our USIS segment to businesses in select regions outside the United States. Depending on the maturity of the credit economy in each country, these 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.

Consumer Interactive

Consumer Interactive offers solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution and financial management. Our products are provided through user friendly online and mobile interfaces and supported by educational content and customer support. Our Consumer Interactive segment serves over 35 million consumers through both direct and indirect channels.

Corporate

Corporate provides shared services for the Company and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the operating segments remain in Corporate. These costs are typically for enterprise-level functions and are primarily administrative in nature.

Selected financial information consisted of the following:



	Three Months Ended March 31, 2015					Three Months Ended March 31, 2014
(in millions)	Revenue		Operating income (loss)			Revenue		Operating income (loss)
USIS	$	222.2	$	31.3		$	194.2	$	32.4
International	62.9		2.4			54.1		2.2
Consumer Interactive	68.0		23.6			55.1		19.0
Corporate	—		(20.8		)	—		(18.8		)
Total	$	353.1	$	36.5		$	303.4	$	34.8

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A reconciliation of operating income to income (loss) before income taxes for the periods ended as presented was as follows:



(in millions)	Three Months Ended March 31, 2015			Three Months Ended March 31, 2014
Operating income from segments	$	36.5		$	34.8
Non-operating income and expense	(43.9		)	(48.4		)
Income (loss) before income taxes	$	(7.4	)	$	(13.6	)

Earnings from equity method investments included in other income and expense, net, for the periods presented were as follows:



(in millions)	Three Months Ended March 31, 2015		Three Months Ended March 31, 2014
USIS	$	0.4	$	0.3
International	1.9		3.3
Consumer Interactive	—		—
Total	$	2.3	$	3.6

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

References in this discussion and analysis to "the Company”, “we”, “our”, “us”, and “its'” are to TransUnion and its consolidated subsidiaries, collectively.

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, 2014, 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 in “Cautionary Notice Regarding Forward-Looking Statements”, and Part II, Item 1A, “Risk Factors.”

Overview

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

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

Recent Developments

On March 26, 2015, TransUnion Holding Company, Inc. was renamed TransUnion and TransUnion Corp. was renamed TransUnion Intermediate Holdings, Inc., as reflected in this report.

Segments

We manage our business and report our financial results in three operating segments: USIS, International and Consumer Interactive.

•

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

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•

The International segment provides services similar to our USIS segment to businesses in select regions outside the United States. Depending on the maturity of the credit economy in each country, services may include credit reports, analytics and decisioning services and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. These services are offered to customers in a number of industries including 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.

•

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

Factors Affecting Our Results of Operations

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

Macroeconomic and Industry Trends

Our revenues are significantly influenced by general macroeconomic conditions, including the availability of affordable credit and capital, interest rates, inflation, employment levels, consumer confidence and housing demand. Since the beginning of 2014, general economic conditions have slowly improved with a decrease in unemployment, an improvement in consumer confidence, favorable trends in the auto and other consumer lending market, and a housing market that shows an increase in home sales and a decrease in mortgage interest rates compared. Also, during the first quarter of 2014, North America had several weeks of extreme cold weather conditions, which negatively impacted revenue for that quarter. Our results from these improved market conditions were partially offset by the impact of a strengthening U.S. dollar, which has diminished the operating results of our International segment compared with the prior year.

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

Effects of Inflation

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

Recent Acquisitions and Partnerships

We selectively evaluate acquisitions and partnerships as a means to expand our business, increase our international footprint and enter into new markets.

•

During January 2015, we acquired the remaining equity interests in our two Brazilian subsidiaries, Data Solutions Serviços de Informática Ltda. (“ZipCode”) and Crivo Sistemas em Informática S.A. (“Crivo”). We will no longer record net income attributable to the noncontrolling interests in our consolidated statements of income or redeemable noncontrolling interests in our consolidated balance sheet from the date we acquired the remaining interests.


•	On November 12, 2014, we acquired an 87.5% ownership interest in Drivers History Information Sales, LLC ("DHI"). DHI collects traffic violation and criminal court data. The results of operations of DHI, which are not material, have been included as part of our USIS segment in our consolidated statements of income since the date of acquisition.

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•	On October 17, 2014, we increased our equity interest in L2C, Inc. ("L2C") from 11.6% to 100%. L2C provides predictive analytics generally focused on the unbanked market using alternative data. The results of operations of L2C, which are not material, have been included as part of our USIS segment in our consolidated statements of income since the date we obtained control.

•

In 2014, we increased our equity interest in Credit Information Bureau (India) Limited (“CIBIL”) from 27.5% to 55.0%. This additional purchase gave us control and resulted in our consolidation of CIBIL. CIBIL's results of operations, which are not material, are included as part of our International segment in our consolidated statements of income since May 21, 2014, the date we obtained control.


•	Effective January 1, 2014, we acquired the remaining 30% equity interest in our Guatemala subsidiary, Trans Union Guatemala, S.A. (TransUnion Guatemala) from the minority shareholders. As a result of this acquisition, the Company no longer records net income attributable to noncontrolling interests for this subsidiary.

Key Components of Our Results of Operations

Revenue

We derive our USIS segment revenue from three operating platforms: Online Data Services, Marketing Services and Decision Services. Online Data Services encompass services delivered in real-time using both credit and public record datasets. We also provide online reports that link public record datasets for qualified businesses seeking to locate consumers, specific assets or investigate relationships among consumers, businesses and locations. Collectively, the reports, characteristics and scores, with variations tailored for specific industries, form the basis of Online Data Services. We also provide online services to help businesses manage fraud and authenticate a consumer’s identity when they initiate a new business relationship. Additionally, we provide data to businesses to help them satisfy “know your customer” compliance requirements and to confirm an individual’s identity. Marketing Services help our customers develop marketing lists of prospects via direct mail, web and mobile. Our databases are used by our customers to contact individuals to extend firm offers of credit or insurance. We provide portfolio review services, which are periodic reviews of our customers’ existing accounts, to help our customers develop cross-selling offers to their existing customers and monitor and manage risk in their existing consumer portfolios. We also provide trigger services which are daily notifications of changes to a consumer profile. Decision Services, our software-as-a-service offerings, includes a number of platforms that help businesses interpret data and predictive model results and apply their customer-specific criteria to facilitate real-time automated decisions at the time of customer interaction. Our customers use Decision Services to evaluate business risks and opportunities, including those associated with new consumer credit and checking accounts, insurance applications, account collection, patient registrations and apartment rental requests.

We report our International segment revenue in two categories: developed markets and emerging markets. Our developed markets are Canada and Hong Kong. Our emerging markets include Africa, Latin America, Asia Pacific and India. In 2014, we reclassified Puerto Rico to emerging markets to align it with the rest of the Latin America region. Prior years’ revenue has been reclassified accordingly.

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

Cost of Services

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

Selling, General and Administrative

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

Non-Operating Income and Expense

Non-operating income and expense includes interest expense, interest income, earnings from equity-method investments, dividends from cost-method investments, 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, evaluates the financial performance of our businesses based on a variety of key indicators. These indicators include the non-GAAP measure Adjusted EBITDA and the GAAP measures revenue, cash provided by operating activities and cash paid for capital expenditures. In order to more closely align the definition of Adjusted EBITDA to the definition we use as a supplemental measure of our operating performance as well as the compensation measure under our incentive plan, we have included additional adjustments to our previously defined Adjusted EBITDA. Such additional adjustments consist of expenses for mergers and acquisitions integration, business optimization, our technology transformation project, operating expense tax matters, consulting study fees related to our strategic initiatives and other expenses. All periods have been presented in the table below under our new definition of Adjusted EBITDA. For the three months ended March 31, 2015 and 2014, these indicators were as follows:



	Three Months Ended March 31,
(in millions)	2015			2014			$ Change			% Change
Revenue	$	353.1		$	303.4		$	49.7		16.4	%

Reconciliation of net income (loss) attributable to the Company to Adjusted EBITDA⁽¹⁾:
Net loss attributable to the Company	$	(6.6	)	$	(14.7	)	$	8.1		55.0	%
Net interest expense	43.9			50.3			(6.4		)	(12.8	)%
Benefit for income taxes	(3.0		)	(0.1		)	(2.9		)	nm
Depreciation and amortization	69.1			51.5			17.6			34.0	%
EBITDA	103.4			87.0			16.4			18.7	%
Stock-based compensation	2.4			2.0			0.4			21.4	%
Mergers, acquisitions, divestitures and business optimization⁽²⁾	0.5			4.0			(3.5		)	(88.7	)%
Technology transformation project⁽³⁾	5.8			1.0			4.8			nm
Other⁽⁴⁾	2.1			1.3			0.8			78.4	%
Total adjustments	10.8			8.3			2.5			31.5	%
Adjusted EBITDA⁽¹⁾	$	114.2		$	95.3		$	18.9		19.8	%
Other metrics:
Cash provided by (used in) operating activities	$	16.5		$	(6.1	)	$	22.6		nm
Cash paid for capital expenditures	30.1			38.8			(8.7		)	(22.4	)%

nm: not meaningful

(1)

Adjusted EBITDA is defined as net income (loss) attributable to the Company before net interest expense, income tax provision (benefit), depreciation and amortization and other adjustments noted in the table above. We present Adjusted EBITDA as a supplemental measure of our operating performance because it eliminates the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. Also, Adjusted EBITDA is a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours. In addition, our board of directors and executive management team use Adjusted EBITDA as a compensation measure under our incentive plan. Furthermore, under the credit agreement governing our senior secured credit facility and the indentures governing our senior unsecured PIK toggle notes, 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 the Company. The table above provides a

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reconciliation from our net income (loss) attributable to the Company to Adjusted EBITDA for the three months ended March 31, 2015 and 2014.


(2)	In 2015, consisted of a $0.4 million adjustment for contingent consideration expense and $0.1 million of acquisition expenses. In 2014, consisted of $2.7 million of merger and acquisition integration expenses, $0.5 million of contingent consideration expense, $0.5 million of acquisition expenses and $0.3 million of business optimization expenses.


(3)	In 2015 and 2014, represented costs associated with a project to transform our technology infrastructure.


(4)	In 2015, consisted of $0.9 million mark-to-market loss related to ineffectiveness on our interest rate hedge, $0.7 million of currency remeasurement, $0.4 million of loan fees and $0.1 million of miscellaneous. In 2014, consisted of $0.6 million of loan fees and $0.7 million of miscellaneous.

Revenue

Total revenue increased $49.7 million for the three months ended March 31, 2015, compared with the same period in 2014, due to strong organic growth in all of our segments and revenue from our recent acquisitions of CIBIL, L2C and DHI in our USIS and International segments, partially offset by the impact of weakening foreign currencies on the 2014 revenue of our International segment. Acquisitions accounted for an increase in revenue of 4.7%. The impact of weakening foreign currencies accounted for a decrease in revenue of 1.4%. Excluding revenue from the recent acquisitions and the impact of weakening foreign currencies, consolidated revenues grew 13.1%. Revenue by segment in the three-month periods was as follows:



	Three Months Ended March 31,
(in millions)	2015		2014		$ Change		% Change
USIS
Online Data Services	$	149.7	$	131.2	$	18.5	14.2	%
Marketing Services	33.2		30.9		2.3		7.3	%
Decision Services	39.3		32.1		7.2		22.3	%
Total USIS	222.2		194.2		28.0		14.4	%

International
Developed Markets	20.5		19.7		0.8		3.6	%
Emerging Markets	42.4		34.4		8.0		23.3	%
Total International	62.9		54.1		8.8		16.1	%

Consumer Interactive	68.0		55.1		12.9		23.5	%
Total revenue	$	353.1	$	303.4	$	49.7	16.4	%

USIS Segment

USIS revenue increased $28.0 million for the three months ended March 31, 2015, compared with the same period in 2014, due to increases in revenue for all platforms and the revenue from our recent acquisitions of DHI and L2C.

Online Data Services

Online Data Services revenue increased $18.5 million for the three-month period, compared with the same period in 2014, due to a 9.0% increase in credit report unit volume. Increases in credit report unit volume in the financial services, resellers, insurance and healthcare markets were partially offset by a small decrease in volume in other markets. Credit report unit volume was weakened in the first quarter of 2014 due to the extreme cold weather conditions experienced across large portions of the United States in early 2014. Also, a change in the mix of products sold resulted in an increase in average pricing for online credit reports in 2015.

Marketing Services

Marketing Services revenue increased $2.3 million for the three-month period, compared with the same period in 2014, due primarily to an organic increase in custom data sets and archive information and revenue from our recent acquisitions.

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Decision Services

Decision Services revenue increased $7.2 million for the three-month period, compared with the same period in 2014, due primarily to an organic increase in revenue in healthcare, financial services and insurances markets and revenue from our recent acquisitions.

International Segment

International revenue increased $8.8 million, or 16.1%, for the three months ended March 31, 2015, compared with the same period in 2014. Higher local currency revenue from increased volumes in all regions and the inclusion of revenue from our acquisition of CIBIL was partially offset by a 8.1% decrease in revenue from the impact of weakening foreign currencies. Incremental revenue from our acquisition of CIBIL accounted for an 18.0% increase in International revenue. Excluding the impact of foreign currencies and acquisitions, International revenue increased 6.2%.

Developed Markets

Developed markets revenue increased $0.8 million, or 3.6%, for the three-month period, compared with the same period in 2014, due to higher local currency revenue in both regions partially offset by a 7.8% decrease in revenue from the impact of a weakening Canadian dollar. Excluding the impact of foreign currencies, developed markets revenue increased 11.4%.

Emerging Markets

Emerging markets revenue increased $8.0 million, or 23.3%, for the three-month period, compared with the same period in 2014. Higher local currency revenue in all regions and the inclusion of revenue from our acquisition of CIBIL was partially offset by a 8.2% decrease in revenue from the impact of weakening foreign currencies, primarily the South African rand and Brazilian real. Incremental revenue from our acquisition of CIBIL accounted for a 28.3% increase in emerging markets revenue. Excluding the impact of foreign currencies and acquisitions, emerging markets revenue increased 3.2%.

Consumer Interactive Segment

Consumer Interactive revenue increased $12.9 million for the three months ended March 31, 2015, compared with the same period in 2014. This increase was due to an increase in revenue from our indirect channel and an increase in the average number of subscribers in our direct channel.

Operating Expenses

Operating expenses for the three-month periods were as follows:



	Three Months Ended March 31,
(in millions)	2015		2014		$ Change		% Change
Cost of services	$	125.6	$	120.9	$	4.7	3.9	%
Selling, general and administrative	121.9		96.2		25.7		26.7	%
Depreciation and amortization	69.1		51.5		17.6		34.2	%
Total operating expenses	$	316.6	$	268.6	$	48.0	17.9	%

Cost of Services

Cost of services increased $4.7 million for the three-month period, compared with the same period in 2014. The increase was due primarily to:


•	operating and integration costs of our DHI, L2C and CIBIL acquisitions in our USIS and International segments;


•	incremental costs incurred as part of the transformation of our technology infrastructure; and


•	an increase in product costs resulting from the increase in revenue,

partially offset by:


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

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Selling, General and Administrative

Selling, general and administrative expenses increased $25.7 million for the three-month period, compared with the same period in 2014. The increase was due primarily to:


•	operating and integration costs from our DHI, L2C and CIBIL acquisitions in our USIS and International segments; and


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

partially offset by:


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

Depreciation and Amortization

Depreciation and amortization increased $17.6 million for the three-month period, compared with the same period in 2014, primarily in our USIS and International segments. In July 2014, we revised the remaining useful lives of certain internal-use software, equipment, leasehold improvements and the corporate headquarters facility to align with the expected completion dates of our strategic initiatives to transform our technology platform and corporate headquarters facility. As a result, depreciation and amortization increased $8.0 million during the three months ended March 31, 2015. Depreciation and amortization also increased an additional $9.6 million for the three months ended March 31, 2015, due to the recent business acquisitions and increased capital expenditures related to our strategic initiatives made in 2014 and the first quarter of 2015.

Operating Income and Operating Margins



	Three Months Ended March 31,
(dollars in millions)	2015			2014			$ Change			% Change
USIS operating income	$	31.3		$	32.4		$	(1.1	)	(3.4	)%
International operating income	2.4			2.2			0.2			4.3	%
Consumer Interactive operating income	23.6			19.0			4.6			24.4	%
Corporate operating loss	(20.8		)	(18.8		)	(2.0		)	(10.2	)%
Total operating income	$	36.5		$	34.8		$	1.7		4.9	%

Operating Margin:
USIS	14.1		%	16.7		%				(2.6	)%
International	3.8		%	4.2		%				(0.4	)%
Consumer Interactive	34.7		%	34.5		%				0.2	%
Total operating margin	10.3		%	11.5		%				(1.2	)%

Total operating income increased $1.7 million for the three months ended March 31, 2015, compared with the same period in 2014. The increase was due primarily to:


•	the increase in revenue in all segments, including revenue from the recent acquisitions,

partially offset by:


•	operating and integration costs from our DHI, L2C and CIBIL acquisitions in our USIS and International segments;


•	The increase in depreciation and amortization, primarily in our USIS and International segments;


•	the impact of weakening foreign currencies on the 2014 results of our International segment;


•	an increase in advertising costs in our Consumer Interactive segment; and


•	incremental costs incurred as part of the transformation of our technology infrastructure.

Margins for the USIS segment decreased due primarily to incremental costs incurred as part of the strategic initiative to transform our technology platform, including additional depreciation and amortization resulting from shortening the remaining useful lives

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of certain existing technology assets to align with the expected completion of this initiative, and operating and integration expenses from the recent acquisitions, partially offset by the increase in revenue. Margins for the International segment decreased due primarily to additional depreciation and amortization resulting from reassessing the remaining useful lives of certain assets, as well as integration and depreciation and amortization expenses of our CIBIL acquisition, partially offset by the increase in revenue. Margins for the Consumer Interactive segment increased slightly, as the increase in revenue was mostly offset by the increase in advertising costs.

Non-Operating Income and Expense



	Three Months Ended March 31,
(in millions)	2015			2014			$ Change			% Change
Interest expense	$	(44.8	)	$	(50.8	)	$	6.0		11.8	%
Interest income	0.9			0.5			0.4			80.0	%
Earnings from equity method investments	2.3			3.6			(1.3		)	(36.1	)%
Other income and expense, net:
Acquisition fees	(0.1		)	(0.5		)	0.4			80.0	%
Loan fees	(0.4		)	(0.6		)	0.2			33.3	%
Dividends from cost method investments	—			—			—			-
Other income, net	(1.8		)	(0.6		)	(1.2		)	(200.0	)%
Total other income and expense, net	(2.3		)	(1.7		)	(0.6		)	(35.3	)%
Non-operating income and expense	$	(43.9	)	$	(48.4	)	$	4.5		9.3	%

Interest expense decreased $6.0 million for the three-month period, compared with the same period in 2014. A decrease in interest expense due to the early redemption of the 11.375% notes in the second quarter of 2014 was partially offset by additional interest expense resulting from the increase in the average principal balance of the senior secured credit facility in 2015 compared with 2014. See Part I, Item 1, Note 8, "Debt" for additional information about the early redemption of the 11.375% Senior Notes and the senior secured credit facility refinancing.

Earnings from equity method investments decreased $1.3 million because in the first quarter of 2015, we included CIBIL in our consolidated results, whereas in the first quarter of 2014, CIBIL was an equity method investment.

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

For the three months ended March 31, 2015, other income, net, included a loss of $0.9 million on the swap that no longer qualifies for hedge accounting.

Provision for Income Taxes

Significant Changes in Assets and Liabilities

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There were no significant changes in our assets or liabilities between December 31, 2014, and March 31, 2015.

Liquidity and Capital Resources

Overview

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

Cash and cash equivalents totaled $87.0 million and $77.9 million at March 31, 2015, and December 31, 2014, respectively, of which $57.5 million and $50.6 million was held outside the United States. As of March 31, 2015, we had $85.0 million outstanding borrowings against the senior secured revolving line of credit and could have borrowed up to the remaining $105.0 million available. The Company is required to make additional principal payments on the senior secured term loan based on excess cash flows, as defined in the agreement, of the prior year. There were no excess cash flows for 2014 and therefore no additional payment was required in 2015. See Part I, Item 1, Note 8 “Debt,” for additional information about our debt.

Sources and Uses of Cash



	Three Months Ended March 31,
(in millions)	2015			2014			Change
Cash provided by (used in) operating activities	$	16.5		$	(6.1	)	$	22.6
Cash used in investing activities	(34.9		)	(69.9		)	35.0
Cash provided by financing activities	29.1			24.8			4.3
Effect of exchange rate changes on cash and cash equivalents	(1.6		)	(0.6		)	(1.0		)
Net change in cash and cash equivalents	$	9.1		$	(51.8	)	$	60.9

Operating Activities

The increase in cash provided by operating activities was due primarily to the increase in cash operating margin and decrease in interest expense.

Investing Activities

The decrease in cash used in investing activities was due primarily to a decrease in cash used for acquisitions and capital expenditures.

Financing Activities

The increase in cash provided by financing activities was due primarily to the increase in net borrowings.

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. During the third quarter of 2013, we began a strategic initiative to transform our technology infrastructure to enable growth, promote innovation and provide a competitive advantage. We are also in the process of making improvements to our corporate headquarters facility.

Cash paid for capital expenditures decreased $8.7 million, from $38.8 million for the three months ended March 31, 2014, to $30.1 million for the three months ended March 31, 2015, due to a decrease in spending to upgrade our corporate headquarters facility. We expect total capital expenditures to be lower in 2015 than 2014 as a percentage of revenue as we complete the improvements to our corporate headquarters in the first half of 2015.

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Debt

Senior Secured Credit Facility

On April 9, 2014, we refinanced and amended our senior secured credit facility. The refinancing resulted in an increase of the outstanding senior secured term loan from $1,120.5 million to $1,900.0 million. The amendment, among other things, reduced the interest rate floor and margins, reduced the amount available under the senior secured revolving line of credit from $210.0 million to $190.0 million, extended the maturity dates, and changed certain covenant requirements. The additional borrowings were used in part to repay all amounts outstanding under the existing senior secured revolving line of credit and pay fees and expenses associated with the refinancing transaction. On May 9, 2014, the remaining borrowings were used to redeem the entire $645.0 million outstanding balance of the 11.375% Senior Notes issued by TransUnion Financing Corp and Trans Union LLC including unpaid accrued interest and a prepayment premium. We refer to these transactions collectively as the "2014 Refinancing Transaction." The 2014 Refinancing Transaction resulted in a net gain of $33.1 million that was recorded in the consolidated statement of income primarily in the second quarter of 2014 and $5.0 million of additional deferred financing fees that were recorded in the consolidated balance sheet in the second quarter of 2014.

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 Trans Union LLC senior secured revolving line of credit and could result in a default under the Trans Union LLC senior secured credit facility or the indentures governing the TransUnion senior unsecured PIK toggle notes. Upon the occurrence of an event of default under the Trans Union LLC senior secured credit facility or the indentures governing the TransUnion senior unsecured PIK toggle notes, the Trans Union LLC lenders, or the holders of the TransUnion senior unsecured PIK toggle notes, as the case may be, could elect to declare all amounts outstanding under the applicable indebtedness to be immediately due and payable, and the lenders could terminate all commitments to extend further credit under our senior secured credit facility. If we were unable to repay the amounts declared due, the lenders could proceed against any collateral granted to them to secure that indebtedness. We have pledged substantially all of the Trans Union LLC assets as collateral under the senior secured credit facility. If the lenders under the senior secured credit facility accelerate the repayment of borrowings, or the holders of the TransUnion senior unsecured PIK toggle notes accelerate repayment of the notes, we may not have sufficient assets to repay the debt due.

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

Our senior secured credit facility includes a senior secured net leverage ratio covenant which must be tested as a condition to incur additional indebtedness. The ratio must also be tested at the end of any fiscal quarter for which we have a line of credit borrowing outstanding in excess of 30% of the revolving credit commitment. As of March 31, 2015, this covenant required us to maintain a senior secured net leverage ratio on a pro forma basis equal to, or less than, 6.00-to-1. As of March 31, 2015, we were in compliance with all debt covenants.

Under the covenants of the instruments governing our senior debt, TransUnion Intermediate is restricted from making certain distribution payments to TransUnion. For additional information about our debt, see Part I, Item 1, “Notes to Unaudited Consolidated Financial Statements, Note 8, “Debt.”

Recent Accounting Pronouncements

See Note 1, “Significant Accounting And Reporting Policies,” for information about recent accounting pronouncements and the potential impact on our consolidated financial statements.

Application of Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. These accounting principles require us to make certain judgments and estimates in reporting our operating results and our assets and liabilities. Although we believe that our estimates and judgments are reasonable, they are based on information available at the

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time, and actual results may differ significantly from these estimates under different conditions. See the “Application of Critical Accounting Estimates” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 1, “Significant Accounting and Reporting Policies” to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 30, 2015, for a description of the significant accounting estimates used in the preparation of our consolidated financial statements.

During the third quarter of 2014 we revised the remaining useful lives of certain internal use software, equipment, leasehold improvement and corporate headquarters facility assets to align with the expected completion dates of our strategic initiatives to transform our technology platform and corporate headquarters facility. As a result, depreciation and amortization increased by $8.0 million in the three-month period ended March 31, 2015, compared with the prior year.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Any statements made in this quarterly 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,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast” and other similar expressions.

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that factors affecting our actual financial results or results of operations could cause actual results to differ materially from those expressed in the forward-looking statements. Factors that could materially affect our financial results or such forward-looking statements include:


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


•	our ability to provide competitive services and prices;


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


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


•	our ability to deliver services timely without interruption;


•	our ability to maintain our access to data sources;


•	government regulation and changes in the regulatory environment;


•	litigation or regulatory proceedings;


•	regulatory oversight of certain “critical activities”


•	our ability to effectively manage our costs;


•	economic and political stability in 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 timely complete our multi-year technology transformation;


•	our ability to make acquisitions and integrate the operations of acquired businesses;


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

property;


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


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


•	further consolidation in our end-customer markets;


•	the increased availability of free or inexpensive consumer information;


•	losses against which we do not insure;


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


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


•	our ability to maintain our liquidity;


•	our reliance on key management personnel; and


•	our majority shareholders controlling us.

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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 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 events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We operate internationally and are subject to various market risks, including those caused by potentially adverse movements in foreign currency exchange rates. We also have a significant amount of variable rate debt and funds invested in interest bearing accounts.

There have been no 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, 2014.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

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

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the 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 the 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 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

General

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 privacy, libel, slander or 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 litigation 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 litigation and regulatory matters or the eventual loss, fines, penalties or business impact, if any, that may result. We establish reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The actual costs of resolving litigation and regulatory matters, however, may

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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.

On a regular basis, we accrue reserves for litigation and regulatory matters based on our historical experience and our ability to reasonably estimate and ascertain the probability of any liability. See our Annual Report on Form 10-K for the year ended December 31, 2014, Part II, Item 8, “Combined Notes to Consolidated Financial Statements,” Note 19, “Contingencies,” for additional information about these reserves. However, for certain matters, 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. However, for these matters we do not believe based on currently available information that the outcomes will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period.

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 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 that would not have some level of coverage by insurance after the relevant deductible, if any, is met.

The following discussion describes material developments in previously disclosed material legal proceedings that occurred in the three months ended March 31, 2015. Refer to our Annual Report on Form 10-K for the year ended December 31, 2014, for a full description of our material pending legal proceedings.

AG Investigations

On April 20, 2015, the Attorney General for the State of Mississippi filed an action in the Chancery Court of Jackson County Mississippi with respect to the certain of the matters reviewed in its investigation. The complaint State of Mississippi ex rel. Jim Hood, Attorney General of the State of Mississippi v. TransUnion Corp., Trans Union LLC and TransUnion Interactive, Inc. (No. 2015-0716-MLF) alleges that certain marketing practices with respect to credit monitoring services sold to Mississippi residents, and certain procedures used to ensure the accuracy of the information in the credit reports of Mississippi residents, constitute unfair and deceptive practices in violation of Mississippi law. We do not believe we have violated any law and intend to vigorously defend this matter.

ITEM 1A. RISK FACTORS

In addition to the other information included in this report, you should carefully consider the factors discussed in “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2014, 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 our Annual Report on Form 10-K 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 operating results.

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

(a) Recent Sales of Unregistered Securities

During the three months ended March 31, 2015, TransUnion sold a total of 59,316 shares of common stock at $6.65 per share and 834 shares of common stock at $11.42 per share to employees exercising stock options, and 24,214 shares of common stock at $17.40 to an executive officer and a director of the Company. During the three months ended March 31, 2015, TransUnion also granted options to purchase 209,700 shares of its common stock at an exercise price of $17.40 per share to certain employees under the Company’s 2012 Management Equity Plan. The sales of shares and grants of options were effected without registration in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act and Rules 505, 506 and 701 promulgated thereunder. None of the transactions set forth above involved underwriters, underwriting discounts or commissions or public offerings of our securities.

(b) Use of Proceeds

Not applicable.



Period	(a) Total Number of Shares Purchased⁽¹⁾	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 to January 31	958	$	17.40	—	$	—
February 1 to February 28	—	—		—	$	—
March 1 to March 31	—	—		—	$	—
Total	958	17.40		—	$	—


⁽¹⁾	Represents shares of TransUnion’s common stock that were repurchased from ex-employees who sold shares back to the Company upon termination.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) None

(b) Not applicable.

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ITEM 6. EXHIBITS



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

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

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

101.INS		XBRL Instance Document

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



*	This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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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

May 7, 2015	By	/s/ SAMUEL A. HAMOOD
		Samuel A. Hamood
		Executive Vice President, Chief Financial Officer

May 7, 2015	By	/s/ JAMES V. PIEPER
		James V. Pieper
		Vice President, Chief Accounting Officer
		(Principal Accounting Officer)

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INDEX TO EXHIBITS



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

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

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

101.INS		XBRL Instance Document

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



*	This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.