XML 30 R20.htm IDEA: XBRL DOCUMENT
v3.20.2

Reportable Segments | 9 Months Ended
--- | ---
Sep. 30, 2020
Segment Reporting [Abstract] |
Segment Reporting Disclosure | Reportable Segments We have three reportable segments, U.S. Markets, International, and Consumer Interactive, and the Corporate unit, which provides support services to each of the segments. Our chief operating decision maker (“CODM”) uses the profit measure of Adjusted EBITDA, on both a consolidated and segment basis, to allocate resources and assess performance of our businesses. We use Adjusted EBITDA as our profit measure because it eliminates the impact of certain items that we do not consider indicative of operating performance, which is useful to compare operating results between periods. Our board of directors and executive management team also use Adjusted EBITDA as a compensation measure for both segment and corporate management under our incentive compensation plans. Adjusted EBITDA is also a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours. We define Adjusted EBITDA as net income (loss) attributable to each segment plus (less) loss (income) from discontinued operations, plus net interest expense, plus (less) provision (benefit) for income taxes, plus depreciation and amortization, plus (less) certain acquisition-related deferred revenue adju stments, plus stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-related expenses including Callcredit integration-related expenses, plus certain expenses associated with our accelerated technology investment, plus (less) certain other expenses (income). The segment financial information below aligns with how we report information to our CODM to assess operating performance and how we manage the business. The accounting policies of the segments are the same as described in Note 1, “Significant Accounting and Reporting Policies” and Note 10, “Revenue.” The following is a more detailed description of our three reportable segments and the Corporate unit, which provides support services to each segment: U.S. Markets The U.S. Markets segment provides consumer reports, actionable insights and analytics such as credit and other scores, and decisioning capabilities to businesses. These businesses use our services to acquire new customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. The core capabilities and delivery methods in our U.S. Markets segment allow us to serve a broad set of customers across industries. We report disaggregated revenue of our U.S. Markets segment for Financial Services and Emerging Verticals: •Financial Services: The Financial Services vertical consists of our consumer lending, mortgage, auto, and cards and payments lines of business. Our Financial Services clients consist of most banks, credit unions, finance companies, auto lenders, mortgage lenders, online-only lenders (FinTech), and other consumer lenders in the United States. We also distribute our solutions through most major resellers, secondary market players and sales agents. Beyond traditional lenders, we work with a variety of credit arrangers, such as auto dealers and peer-to-peer lenders. We provide solutions across every aspect of the lending lifecycle; customer acquisition and engagement, fraud and ID management, retention and recovery. Our products are focused on mitigating risk and include credit reporting, credit marketing, analytics and consulting, identity verification and authentication and debt recovery solutions. •Emerging Verticals: Emerging Verticals include Healthcare, Insurance, Tenant and Employment, Collections, Public Sector, Media, Diversified Markets and other verticals. Our solutions in these verticals are also data-driven and address the entire customer lifecycle. We offer onboarding and transaction processing products, scoring and analytic products, marketing solutions, fraud and identity management solutions, and customer retention solutions. International The International segment provides services similar to our U.S. Markets segment to businesses in select regions outside the United States. Depending on the maturity of the credit economy in each country, services may include credit reports, analytics and decisioning services and other value-added risk management services. In addition, we have insurance, business and automotive databases in select geographies. These services are offered to customers in a number of industries including financial services, insurance, automotive, collections, and communications, and are delivered through both direct and indirect channels. The International segment also provides consumer services similar to those offered by our Consumer Interactive segment that help consumers proactively manage their personal finances and take precautions against identity theft. We report disaggregated revenue of our International segment for the following regions: Canada, Latin America, the United Kingdom, Africa, India and Asia Pacific. Consumer Interactive The Consumer Interactive segment provides solutions that help consumers manage their personal finances and take precautions against identity theft. Services in this segment include credit reports and scores, credit monitoring, fraud protection and resolution, and financial management for consumers. The segment also provides solutions that help businesses respond to data breach events. Our products are provided through user-friendly online and mobile interfaces and are supported by educational content and customer support. Our Consumer Interactive segment serves consumers through both direct and indirect channels. Corporate Corporate provides support services for each of the segments, holds investments, and conducts enterprise functions. Certain costs incurred in Corporate that are not directly attributable to one or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature. Selected segment financial information and disaggregated revenue consisted of the following:
|  | Three Months Ended September 30, |  |  |  | Nine Months Ended September 30, |  |
(in millions) |  | 2020 |  | 2019 |  | 2020 |  | 2019
Gross Revenue: |  |  |  |  |  |  |  |
U.S. Markets: |  |  |  |  |  |  |  |
Financial Services |  | $ | 249.1 |  |  | $ | 225.3 |  |  | $ | 701.7 |  |  | $ | 627.4 |
Emerging Verticals |  | 189.4 |  |  | 194.9 |  |  | 564.1 |  |  | 567.5 |
Total U.S. Markets |  | 438.5 |  |  | 420.2 |  |  | 1,265.8 |  |  | 1,194.9 |
International: |  |  |  |  |  |  |  |
Canada |  | 27.9 |  |  | 27.3 |  |  | 78.5 |  |  | 75.7 |
Latin America |  | 21.7 |  |  | 26.4 |  |  | 63.2 |  |  | 77.9 |
United Kingdom |  | 44.2 |  |  | 47.6 |  |  | 132.1 |  |  | 136.4 |
Africa |  | 12.3 |  |  | 15.7 |  |  | 35.6 |  |  | 44.7 |
India |  | 23.9 |  |  | 27.4 |  |  | 72.4 |  |  | 80.0 |
Asia Pacific |  | 14.9 |  |  | 15.6 |  |  | 40.5 |  |  | 42.4 |
Total International |  | 144.8 |  |  | 160.0 |  |  | 422.2 |  |  | 457.1 |
Total Consumer Interactive |  | 131.6 |  |  | 127.8 |  |  | 386.7 |  |  | 374.7 |
Total revenue, gross |  | $ | 714.9 |  |  | $ | 708.0 |  |  | $ | 2,074.8 |  |  | $ | 2,026.7 |
Intersegment revenue eliminations: |  |  |  |  |  |  |  |
U.S. Markets |  | $ | (17.2) |  |  | $ | (17.1) |  |  | $ | (51.7) |  |  | $ | (51.8) |
International |  | (1.4) |  |  | (1.3) |  |  | (3.9) |  |  | (3.8) |
Consumer Interactive |  | (0.5) |  |  | (0.2) |  |  | (1.3) |  |  | (0.6) |
Total intersegment eliminations |  | (19.0) |  |  | (18.7) |  |  | (56.8) |  |  | (56.2) |
Total revenue as reported |  | $ | 695.9 |  |  | $ | 689.3 |  |  | $ | 2,017.9 |  |  | $ | 1,970.5 |
As a result of displaying amounts in millions, rounding differences may exist in the table above. A reconciliation of Segment Adjusted EBITDA to income from continuing operations before taxes for the periods presented is as follows:
|  | Three Months Ended September 30, |  |  |  | Nine Months Ended September 30, |  |
(in millions) |  | 2020 |  | 2019 |  | 2020 |  | 2019
U.S. Markets Adjusted EBITDA |  | $ | 177.3 |  |  | $ | 181.0 |  |  | $ | 520.0 |  |  | $ | 498.5 |
International Adjusted EBITDA |  | 56.7 |  |  | 64.0 |  |  | 154.4 |  |  | 188.6 |
Consumer Interactive Adjusted EBITDA |  | 67.1 |  |  | 66.5 |  |  | 186.2 |  |  | 185.8 |
Total |  | 301.1 |  |  | 311.6 |  |  | 860.6 |  |  | 872.9 |
Adjustments to reconcile to income from continuing operations before income taxes: |  |  |  |  |  |  |  |
Corporate expenses(1) |  | (31.2) |  |  | (30.7) |  |  | (84.7) |  |  | (89.4) |
Net interest expense |  | (26.5) |  |  | (41.3) |  |  | (94.6) |  |  | (128.2) |
Depreciation and amortization |  | (92.2) |  |  | (88.7) |  |  | (273.4) |  |  | (271.4) |
Acquisition-related revenue adjustments(2) |  | — |  |  | — |  |  | — |  |  | (5.9) |
Stock-based compensation(3) |  | (7.8) |  |  | (14.7) |  |  | (29.5) |  |  | (35.6) |
Mergers and acquisitions, divestitures and business optimization(4) |  | (1.5) |  |  | (4.8) |  |  | (12.9) |  |  | 7.8 |
Accelerated technology investment(5) |  | (4.5) |  |  | — |  |  | (10.3) |  |  | — |
Other(6) |  | (2.6) |  |  | (15.4) |  |  | (36.4) |  |  | (17.3) |
Net loss (income) attributable to non-controlling interests |  | 3.9 |  |  | (3.4) |  |  | 9.5 |  |  | 1.5 |
Total adjustments |  | (162.4) |  |  | (199.1) |  |  | (532.3) |  |  | (538.5) |
Income from continuing operations before income taxes |  | $ | 138.7 |  |  | $ | 112.5 |  |  | $ | 328.3 |  |  | $ | 334.3 |
As a result of displaying amounts in millions, rounding differences may exist in the table above. (1)Certain costs that are not directly attributable to one or more of the segments remain in Corporate. These costs are typically enterprise-level costs and are primarily administrative in nature. (2)This adjustment represents certain non-cash adjustments related to acquired entities, predominantly adjustments to increase revenue resulting from purchase accounting reductions to deferred revenue we record on the opening balance sheets of acquired entities. Deferred revenue results when a company receives payment in advance of fulfilling their performance obligations under contracts. Business combination accounting rules require us to record deferred revenue of acquired entities at fair value if we are obligated to perform any future services under these contracts. The fair value of this deferred revenue is determined based on the direct and indirect incremental costs of fulfilling our performance obligations under these contracts, plus a normal profit margin. Generally, this fair value calculation results in a reduction to the purchased deferred revenue balance. The above adjustment includes an estimate for the increase in revenue equal to the difference between what the acquired entities would have recorded as revenue and the lower revenue we record as a result of the reduced deferred revenue balance. This increase is partially offset by an estimated decrease to revenue for certain acquired non-core customer contracts that are not classified as discontinued operations that will expire within approximately one year from the date of acquisition. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue. (3)Consisted of stock-based compensation and cash-settled stock-based compensation. (4)For the three months ended September 30, 2020, consisted of the following adjustments: $1.5 million of acquisition expenses. For the nine months ended September 30, 2020, consisted of the following adjustments: $7.5 million of Callcredit integration costs; a $4.8 million loss on the impairment of a Cost Method investment; $4.8 million of acquisition expenses; $0.3 million of adjustments to contingent consideration expense from previous acquisitions; a $(2.5) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer; a $(1.8) million gain on the disposal of assets of a small business in our United Kingdom region that are classified as held-for-sale; and a $(0.1) million reimbursement for transition services provided to the buyers of certain of our discontinued operations. For the three months ended September 30, 2019, consisted of the following adjustments: a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; $2.0 million of Callcredit integration costs; a $0.6 million adjustment to contingent consideration expense from previous acquisitions; $0.5 million of acquisition expenses; and a $(0.2) million reimbursement for transition services provided to the buyers of certain of our discontinued operations. For the nine months ended September 30, 2019, consisted of the following adjustments: a $(31.2) million gain on a Cost Method investment resulting from an observable price change for a similar investment of the same issuer; $(0.4) million reimbursement for transition services provided to the buyers of our discontinued operations; $10.5 million of Callcredit integration costs; a $8.6 million loss on the impairment of certain Cost Method investments; $2.1 million of acquisition expenses; a $2.0 million loss on assets of a small business in our United Kingdom region that are classified as held-for-sale; and a $0.6 million adjustment to contingent consideration expense from previous acquisitions. (5)Represents expenses associated with our accelerated technology investment to migrate to the cloud. (6)For the three months ended September 30, 2020, consisted of the following adjustments: $4.2 million for certain legal expenses; $0.4 million of loan fees; a $(0.8) million gain from currency remeasurement of our foreign operations; a $(0.9) million recovery from the Fraud Incident (as defined in our Annual Report on Form 10-K for the year ended December 31, 2019), net of additional administration expenses; and $(0.3) million other. For the nine months ended September 30, 2020, consisted of the following adjustments: $34.7 million for certain legal expenses; a $2.1 million loss from currency remeasurement of our foreign operations; $1.2 million of loan fees; $0.2 million of fees related to our new swap agreements; a $(1.1) million recovery from the Fraud Incident, net of additional administration expense; $(0.5) million reimbursement of fees associated with the refinancing of our Senior Secured Credit Facility; and $(0.3) million of other. For the three months ended September 30, 2019, consisted of the following adjustments: $19.7 million of expenses (including $1.8 million of administrative expenses) associated with the Fraud Incident offset by the $(7.1) million portion that is attributable to the non-controlling interest; $1.6 million from currency remeasurement; $0.7 million of deferred loan fees written off as a result of the prepayments on our debt; and $0.5 million of loan fees. For the nine months ended September 30, 2019, consisted of the following adjustments: $19.7 million of expenses (including $1.8 million of administrative expenses) associated with the Fraud Incident offset by the $(7.1) million portion that is attributable to the non-controlling interest; $1.9 million from currency remeasurement; $1.5 million of loan fees; $1.5 million of deferred loan fees written off as a result of the prepayments on our debt; and $(0.1) million of miscellaneous. Earnings from equity method investments included in non-operating income and expense was as follows:
|  | Three Months Ended September 30, |  |  |  | Nine Months Ended September 30, |  |
(in millions) |  | 2020 |  | 2019 |  | 2020 |  | 2019
U.S. Markets |  | $ | 0.8 |  |  | $ | 0.8 |  |  | $ | 2.0 |  |  | $ | 2.0 |
International |  | 1.4 |  |  | 2.4 |  |  | 4.7 |  |  | 8.2 |
Total |  | $ | 2.1 |  |  | $ | 3.1 |  |  | $ | 6.7 |  |  | $ | 10.2 |

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration