Equifax Reports Record Fourth Quarter and Full Year 2012 Results; Board Approves a 22% Increase in Quarterly Dividend to $0.22 per share

06 Feb, 2013, 16:08 ET from Equifax Inc.

ATLANTA, Feb. 6, 2013 /PRNewswire/ -- Equifax Inc. (NYSE: EFX) today announced financial results for the quarter and full year ended December 31, 2012.  The company reported revenue of $558.1 million in the fourth quarter of 2012, a 9.5 percent increase from the fourth quarter of 2011. 

(Logo:  http://photos.prnewswire.com/prnh/20060224/CLF037LOGO )

Fourth quarter diluted EPS from continuing operations attributable to Equifax was $0.38 as compared to $0.60 in 2011.  The company recorded a $24.1 million, after tax, non-cash pension settlement charge related to lump sum buyouts of certain pension plan participants during the fourth quarter. On a non-GAAP basis, adjusted EPS from continuing operations attributable to Equifax, excluding the impact of CSC Credit Services acquisition fees, the pension settlement, certain income tax items and acquisition-related amortization expense, net of tax, was $0.78, up 14 percent from the fourth quarter of 2011. 

For the full year 2012, revenue was $2.2 billion, a 10.2 percent increase from 2011.  Excluding Brazilian operating results in 2011, a non-GAAP measure, full year revenue was up 12 percent.  Diluted EPS from continuing operations attributable to Equifax was $2.22 compared to $1.87 for the full year 2011.  On a non-GAAP basis, full year adjusted EPS from continuing operations, which excludes the impact of CSC Credit Services acquisition fees, the pension settlement, certain income tax items, and acquisition-related amortization expense, was $2.97, up 18 percent from the prior year period. 

"Our team's rigorous focus on executing key strategic initiatives enabled us to deliver another quarter and full year of strong performance.  We also completed the acquisition of our largest affiliate, CSC Credit Services, significantly enhancing our opportunities for both operating leverage and profitability," said Richard F. Smith, Equifax's Chairman and Chief Executive Officer. "We enter 2013 as a strong company with a broader base of opportunities for growth in both revenue and earnings. As a result, we remain confident in our long term business model, expecting to deliver topline growth of 7% to 10%, attractive and expanding operating margins, and adjusted EPS growth of 10% to 13%."

Quarterly Dividend Announcement

The Equifax Board of Directors has approved a 22% increase in the quarterly cash dividend, increasing it to $0.22 per share from the previous quarterly dividend of $0.18 per share. The cash dividend is payable on March 15, 2013, to shareholders of record as of the close of business on February 22, 2013. Equifax has paid cash dividends for 100 consecutive years.

Fourth Quarter 2012 Highlights     

  • On December 28, 2012, we completed the acquisition of certain business assets and the operations of CSC Credit Services, Inc., a subsidiary of Computer Sciences Corporation, for $1.0 billion.  The results of this acquisition have been included in our U.S. Consumer Information Solutions segment subsequent to the December 28th date of acquisition and are not material for the fourth quarter of 2012. This acquisition was funded by the proceeds of a $500 million in 10-year bonds issued in 2012, commercial paper and cash on hand.
  • Operating margin was 17.0 percent for the fourth quarter of 2012, compared to 24.7 percent in the fourth quarter of 2011. On a non-GAAP basis, adjusted operating margin, which excludes transaction-related expenses associated with the acquisition of CSC Credit Services and the pension settlement, was 24.9 percent for the fourth quarter of 2012, up 20 basis points from 2011.
  • Subsequent to year end, we disposed of two small, non-strategic business units, Equifax Settlement Services and Talent Management Services.  These businesses will be reported as discontinued operations beginning in the first quarter of 2013. 

U.S. Consumer Information Solutions (USCIS)

Total revenue was $235.7 million in the fourth quarter of 2012 compared to $215.6 million in the fourth quarter of 2011, an increase of 9 percent. 

  • Online Consumer Information Solutions revenue was $147.7 million, up 8 percent from a year ago.
  • Mortgage Solutions revenue was $42.7 million, up 28 percent from a year ago.
  • Consumer Financial Marketing Services revenue was $45.3 million, down 1 percent when compared to a year ago.

Operating margin for USCIS was 37.4 percent in the fourth quarter of 2012 compared to 37.5 percent in the fourth quarter of 2011.

International

Total revenue was $124.7 million in the fourth quarter of 2012, a 7 percent increase in both U.S. dollars and local currency from the fourth quarter of 2011.

  • Latin America revenue was $47.9 million, up 9 percent in local currency and 8 percent in U.S. dollars from a year ago. 
  • Europe revenue was $43.6 million, up 3 percent in local currency and 4 percent in U.S. dollars from a year ago. 
  • Canada Consumer revenue was $33.2 million, up 7 percent in local currency and 10 percent in U.S. dollars from a year ago.

Operating margin for International was 29.8 percent in the fourth quarter of 2012 compared to 28.7 percent in the fourth quarter of 2011. 

Workforce Solutions

Total revenue was $117.2 million in the fourth quarter of 2012, an 11 percent increase over the fourth quarter of 2011. 

  • Verification Services revenue was $69.6 million, up 27 percent when compared to a year ago.
  • Employer Services revenue was $47.6 million, down 6 percent when compared to a year ago.

Operating margin for Workforce Solutions was 22.4 percent in the fourth quarter of 2012 compared to 23.2 percent in the fourth quarter of 2011. 

North America Personal Solutions

Revenue was $52.9 million, a 16 percent increase from the fourth quarter of 2011. Operating margin was 30.1 percent compared to 30.5 percent in the fourth quarter of 2011.   

North America Commercial Solutions

Revenue was $27.6 million, up 4 percent in U.S. dollars and local currency compared to the fourth quarter of 2011.  Operating margin was 34.4 percent which was flat compared to the fourth quarter of 2011.

First Quarter and Full Year 2013 Outlook

Based on the current level of domestic and international business activity and current foreign exchange rates as well as the continuing level of mortgage activity, consolidated revenue for the first quarter of 2013 is expected to be up 10 to 12 percent from the year-ago quarter.  First quarter 2013 adjusted EPS attributable to Equifax, which excludes the impact of acquisition-related amortization expense, is expected to be between $0.84 and $0.87, up 20 to 24 percent from the first quarter of 2012. The outlook for adjusted EPS includes a negative impact of approximately $0.01 resulting from the disposition of two business units in the first quarter of 2013.

For the full year, revenue from continuing operations is expected to be up 10 to 12 percent and adjusted EPS from continuing operations attributable to Equifax is expected to be between $3.56 and $3.64.

About Equifax

Equifax is a global leader in consumer, commercial and workforce information solutions, that provides businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 500 million consumers and 81 million businesses worldwide, and uses advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index.  Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.

Earnings Conference Call and Audio Webcast

In conjunction with this release, Equifax will host a conference call tomorrow, February 7, 2013, at 8:30 a.m. (EST) via a live audio webcast.  To access the webcast, go to the Investor Center of our website at www.equifax.com. The discussion will be available via replay at the same site shortly after the conclusion of the webcast.  This press release is also available at that website.

Non-GAAP Financial Measures

This news release contains certain non-GAAP financial measures which should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of operating revenue, operating income, operating margin, or EPS as determined in accordance with GAAP.  Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes are presented in the Q&A section of this release.  This information can also be found under "Investor Center/GAAP/Non-GAAP Measures" on our website at www.equifax.com.

Forward-Looking Statements

This press release contains certain estimates and other forward-looking statements regarding Equifax's performance, including future revenues and earnings per share.  These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact.  These statements are based on certain factors and assumptions including with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities and effective tax rates.  While Equifax believes these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect.

A number of factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to actions taken by us, including restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions), as well as from developments beyond our control, including, but not limited to, changes in worldwide and U.S. economic conditions that materially impact consumer spending, consumer debt and employment and the demand for Equifax's products and services. Other risk factors include our ability to successfully develop and market new products and services, respond to pricing and other competitive pressures, complete and integrate acquisitions and other investments and achieve targeted cost efficiencies; attempted cyber and other security breaches and other disruptions to our information technology  infrastructure;  changes in, and the effects of, laws and regulations and government policies governing our business, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, in particular the establishment of the Consumer Financial Protection Bureau with expansive authority to write rules impacting our business, conduct examinations of our credit reporting and other consumer –facing businesses  and enforce consumer financial protection laws and regulations; federal or state responses to identity theft concerns; adverse or uncertain economic conditions and changes in credit and financial markets; the European sovereign debt crisis and issues in the U.S. with respect to its credit ratings and political concerns over related budgetary matters; exchange rates; timing and amount of capital expenditures; changes in capital markets and corresponding effects on Equifax's capital resources, level of indebtedness and benefit plan obligations; earnings exchange rates and the decisions of taxing authorities, all of which could affect our effective tax rates; and potential adverse developments in new and pending legal proceedings or government investigations.  Additional risks and uncertainties can be found in our Annual Report on Form 10-K for the year ended December 31, 2011 under captions "Forward-Looking Statements" and "Item 1A, "Risk Factors", and in our other filings with the U.S. Securities and Exchange Commission.  Forward-looking statements are given only as at the date of this release and Equifax disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

EQUIFAX

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

December 31,

2012

2011

 (In millions, except per share amounts) 

 (Unaudited) 

Operating revenue

$            558.1

$            509.7

Operating expenses:

   Cost of services (exclusive of depreciation and amortization below)

215.8

191.5

   Selling, general and administrative expenses

206.5

151.3

   Depreciation and amortization

40.6

41.2

          Total operating expenses

462.9

384.0

Operating income

95.2

125.7

   Interest expense

(14.3)

(13.9)

   Other (expense) income, net

1.1

1.0

Consolidated income before income taxes

82.0

112.8

   Provision for income taxes

(33.8)

(38.3)

Consolidated income from continuing operations 

48.2

74.5

   Discontinued operations, net of tax 

-

1.5

Consolidated net income

48.2

76.0

   Less:  Net income attributable to noncontrolling interests

(1.9)

(1.6)

Net income attributable to Equifax 

$              46.3

$              74.4

Amounts attributable to Equifax:

   Income from continuing operations attributable to Equifax

$              46.3

$              72.9

   Discontinued operations, net of tax

-

1.5

   Net income 

$              46.3

$              74.4

Basic earnings per common share:

   Income from continuing operations attributable to Equifax

$              0.39

$              0.61

   Discontinued operations attributable to Equifax

-

0.01

   Net income attributable to Equifax

$              0.39

$              0.62

Weighted-average shares used in computing basic earnings per share

119.8

120.3

Diluted earnings per common share: 

   Income from continuing operations attributable to Equifax

$              0.38

$              0.60

   Discontinued operations attributable to Equifax

-

0.01

   Net income attributable to Equifax

$              0.38

$              0.61

Weighted-average shares used in computing diluted earnings per share

122.4

122.2

Dividends per common share

$              0.18

$              0.16

 

 

EQUIFAX

CONSOLIDATED STATEMENTS OF INCOME

Twelve Months Ended

December 31,

2012

2011

 (In millions, except per share amounts) 

 (Unaudited) 

Operating revenue

$         2,160.5

$         1,959.8

Operating expenses:

   Cost of services (exclusive of depreciation and amortization below)

829.1

758.8

   Selling, general and administrative expenses

678.7

564.5

   Depreciation and amortization

163.7

165.5

          Total operating expenses

1,671.5

1,488.8

Operating income

489.0

471.0

   Interest expense

(55.4)

(55.1)

   Other income (expense), net

6.6

(7.7)

Consolidated income from continuing operations before income taxes

440.2

408.2

   Provision for income taxes

(159.4)

(168.0)

Consolidated income from continuing operations 

280.8

240.2

   Discontinued operations, net of tax 

-

1.5

Consolidated net income

280.8

241.7

   Less:  Net income attributable to noncontrolling interests

(8.7)

(8.8)

Net income attributable to Equifax 

$            272.1

$            232.9

Amounts attributable to Equifax:

   Income from continuing operations attributable to Equifax

$            272.1

$            231.4

   Discontinued operations, net of tax

-

1.5

   Net income 

$            272.1

$            232.9

Basic earnings per common share:

   Income from continuing operations attributable to Equifax

$              2.27

$              1.90

   Discontinued operations attributable to Equifax

-

0.01

   Net income attributable to Equifax

$              2.27

$              1.91

Weighted-average shares used in computing basic earnings per share

119.9

121.9

Diluted earnings per common share: 

   Income from continuing operations attributable to Equifax

$              2.22

$              1.87

   Discontinued operations attributable to Equifax

-

0.01

   Net income attributable to Equifax

$              2.22

$              1.88

Weighted-average shares used in computing diluted earnings per share

122.5

123.7

Dividends per common share

$              0.72

$              0.64

 

 

EQUIFAX

CONSOLIDATED BALANCE SHEETS 

December 31,

December 31,

2012

2011

(In millions, except par values)

(Unaudited)

ASSETS

Current assets:

   Cash and cash equivalents

$             146.8

$             127.7

   Trade accounts receivable, net of allowance for doubtful accounts of $6.3 and $5.9 at 

     December 31, 2012 and 2011, respectively

317.0

284.4

   Prepaid expenses

26.2

24.6

   Other current assets 

39.7

20.2

     Total current assets

529.7

456.9

Property and equipment:

   Capitalized internal-use software and system costs

369.9

332.2

   Data processing equipment and furniture

198.4

183.1

   Land, buildings and improvements

177.0

178.4

     Total property and equipment

745.3

693.7

   Less accumulated depreciation and amortization

(461.6)

(400.8)

    Total property and equipment, net

283.7

292.9

Goodwill  

2,290.4

1,961.2

Indefinite-lived intangible assets

254.5

95.6

Purchased intangible assets, net

987.7

550.2

Other assets, net

165.1

161.9

       Total assets

$          4,511.1

$          3,518.7

LIABILITIES AND EQUITY

Current liabilities:

    Short-term debt and current maturities of long-term debt

$             283.3

$               47.2

    Accounts payable

25.1

27.5

    Accrued expenses

84.9

56.3

    Accrued salaries and bonuses

104.7

79.2

    Deferred revenue 

57.9

55.8

    Other current liabilities

90.6

98.9

       Total current liabilities

646.5

364.9

Long-term debt

1,447.4

966.0

Deferred income tax liabilities, net

227.7

235.9

Long-term pension and other postretirement benefit liabilities

176.3

176.4

Other long-term liabilities

54.0

53.4

   Total liabilities

2,551.9

1,796.6

Equifax shareholders' equity:

   Preferred stock, $0.01 par value: Authorized shares - 10.0; Issued shares - none

-

-

   Common stock, $1.25 par value: Authorized shares - 300.0;

      Issued shares - 189.3 at December 31, 2012 and 2011;

      Outstanding shares - 120.4 and 119.6 at December 31, 2012 and 2011, respectively

236.6

236.6

   Paid-in capital

1,139.6

1,118.0

   Retained earnings

3,064.6

2,879.2

   Accumulated other comprehensive loss

(362.0)

(391.8)

   Treasury stock, at cost, 68.3 shares and 69.1 shares at December 31, 2012 and 2011, respectively 

(2,139.7)

(2,133.7)

   Stock held by employee benefits trusts, at cost, 0.6 shares at December 31, 2012 and 2011

(5.9)

(5.9)

   Total Equifax shareholders' equity

1,933.2

1,702.4

Noncontrolling interests

26.0

19.7

   Total equity

1,959.2

1,722.1

       Total liabilities and equity

$          4,511.1

$          3,518.7

 

 

EQUIFAX

CONSOLIDATED STATEMENTS OF CASH FLOWS 

Twelve Months Ended

December 31,

2012

2011

(In millions)

(Unaudited)

Operating activities:

  Consolidated net income

$       280.8

$       241.7

  Adjustments to reconcile consolidated net income to net cash provided

    by operating activities:

      Loss on divestitures

-

26.3

      Depreciation and amortization

163.4

164.9

      Stock-based compensation expense

28.0

24.4

      Excess tax benefits from stock-based compensation plans

(1.7)

(1.2)

      Deferred income taxes

(26.5)

3.6

      Pension settlement charge

38.7

-

      Changes in assets and liabilities, excluding effects of acquisitions:

        Accounts receivable, net

(17.2)

(26.6)

        Prepaid expenses and other current assets

(22.5)

2.4

        Other assets

(4.0)

15.0

        Current liabilities, excluding debt

53.3

1.3

        Other long-term liabilities, excluding debt

4.0

(43.1)

Cash provided by operating activities

496.3

408.7

Investing activities:

    Capital expenditures

(66.0)

(75.0)

    Acquisitions, net of cash acquired

(1,016.4)

(127.4)

    Proceeds received from divestitures

2.5

2.5

    Investment in unconsolidated affiliates, net

(3.7)

(4.2)

Cash used in investing activities

(1,083.6)

(204.1)

Financing activities:

    Net short-term borrowings

234.1

24.4

    Payments on long-term debt

(15.2)

(16.7)

    Proceeds from issuance of long-term debt

499.2

-

    Treasury stock purchases

(85.1)

(142.3)

    Dividends paid to Equifax shareholders

(86.0)

(78.1)

Dividends paid to noncontrolling interests

(4.8)

(5.6)

    Proceeds from exercise of stock options

68.3

23.7

    Excess tax benefits from stock-based compensation plans

1.7

1.2

Other 

(5.9)

(2.5)

Cash provided by (used in) financing activities

606.3

(195.9)

Effect of foreign currency exchange rates on cash and cash equivalents

0.1

(0.4)

Increase in cash and cash equivalents

19.1

8.3

Cash and cash equivalents, beginning of period

127.7

119.4

Cash and cash equivalents, end of period

$       146.8

$       127.7

 

 

Common Questions & Answers (Unaudited)

(Dollars in millions)

1.

Can you provide a further analysis of operating revenue and operating income by operating segment?

Operating revenue and operating income consist of the following components:  

(in millions)

Three Months Ended December 31,

Operating revenue:

2012

2011

$ Change

% Change

Local Currency % Change*

Online Consumer Information Solutions

$            147.7

$        136.5

$                11.2

8%

Mortgage Solutions 

42.7

33.3

9.4

28%

Consumer Financial Marketing Services

45.3

45.8

(0.5)

-1%

    Total U.S. Consumer Information Solutions

235.7

215.6

20.1

9%

Latin America

47.9

44.5

3.4

8%

9%

Europe

43.6

41.7

1.9

4%

3%

Canada Consumer

33.2

30.1

3.1

10%

7%

   Total International

124.7

116.3

8.4

7%

7%

Verification Services

69.6

54.9

14.7

27%

Employer Services

47.6

50.9

(3.3)

-6%

   Total Workforce Solutions

117.2

105.8

11.4

11%

North America Personal Solutions

52.9

45.6

7.3

16%

North America Commercial Solutions

27.6

26.4

1.2

4%

4%

   Total operating revenue

$            558.1

$        509.7

$                48.4

9%

9%

(in millions)

Twelve Months Ended December 31,

Operating revenue:

2012

2011

$ Change

% Change

Local Currency % Change*

Online Consumer Information Solutions

$            607.0

$        519.8

$                87.2

17%

Mortgage Solutions 

161.0

119.5

41.5

35%

Consumer Financial Marketing Services

148.8

153.3

(4.5)

-3%

    Total U.S. Consumer Information Solutions

916.8

792.6

124.2

16%

Latin America

187.4

208.8

(21.4)

-10%

-7%

Europe

169.7

158.7

11.0

7%

10%

Canada Consumer

129.1

125.4

3.7

3%

4%

   Total International

486.2

492.9

(6.7)

-1%

1%

Verification Services

258.5

192.5

66.0

34%

Employer Services

204.6

211.8

(7.2)

-3%

   Total Workforce Solutions

463.1

404.3

58.8

15%

North America Personal Solutions

204.5

180.7

23.8

13%

North America Commercial Solutions

89.9

89.3

0.6

1%

1%

   Total operating revenue

$         2,160.5

$     1,959.8

$              200.7

10%

11%

(in millions)

Three Months Ended December 31,

Operating

Operating

Operating income:

2012

Margin

2011

Margin

$ Change

% Change

U.S. Consumer Information Solutions

$              88.1

37.4%

$                80.8

37.5%

$            7.3

9%

International

37.2

29.8%

33.5

28.7%

3.7

11%

Workforce Solutions

26.2

22.4%

24.6

23.2%

1.6

7%

North America Personal Solutions

16.0

30.1%

13.9

30.5%

2.1

15%

North America Commercial Solutions

9.5

34.4%

9.1

34.4%

0.4

4%

General Corporate Expense

(81.8)

nm

(36.2)

nm

(45.6)

-126%

   Total operating income

$              95.2

17.0%

$              125.7

24.7%

$        (30.5)

-24%

(in millions)

Twelve Months Ended December 31,

Operating

Operating

Operating income:

2012

Margin

2011

Margin

$ Change

% Change

U.S. Consumer Information Solutions

$            341.7

37.3%

$              287.3

36.2%

$          54.4

19%

International

143.8

29.6%

132.2

26.8%

11.6

9%

Workforce Solutions

107.9

23.3%

90.7

22.4%

17.2

19%

North America Personal Solutions

61.6

30.1%

54.1

29.9%

7.5

14%

North America Commercial Solutions

19.8

22.0%

23.6

26.5%

(3.8)

-16%

General Corporate Expense

(185.8)

nm

(116.9)

nm

(68.9)

-59%

   Total operating income

$            489.0

22.6%

$              471.0

24.0%

$          18.0

4%

nm - not meaningful

* Reflects percentage change in revenue conforming 2012 results using 2011 exchange rates.

 

Common Questions & Answers (Unaudited)

(Dollars in millions)

2.

What drove the fluctuation in the effective tax rate?

Our effective tax rate from continuing operations was 41.2% for the three months ended December 31, 2012, up from 33.9% for the same period in 2011.  During the fourth quarter of 2011, we recognized a $4.2 million cumulative income tax benefit resulting from the recognition of an income tax deduction related to several prior years.  Also, in the fourth quarter of  2012, we incurred a $20.5 million tax charge resulting from the completion of an international tax restructuring completed during the current quarter. Additionally, we recognized a $15.3 million benefit as a result of the approval of a tax method change during the quarter.

3.

Can you provide depreciation and amortization by segment?

Depreciation and amortization are as follows:

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2012

2011

2012

2011

U.S. Consumer Information Solutions

$                    9.8

$           11.0

$                  41.7

$               44.1

International

6.1

6.4

24.8

26.9

Workforce Solutions 

17.5

16.8

68.8

66.6

North America Personal Solutions

1.7

1.6

7.0

6.0

North America Commercial Solutions

1.2

1.2

4.7

5.1

General Corporate Expense

4.3

4.2

16.7

16.8

  Total depreciation and amortization

$                  40.6

$           41.2

$                163.7

$             165.5

4.

What was the currency impact on the foreign operations?

The U.S. dollar impact on operating revenue and operating income is as follows:

Three Months Ended December 31, 2012

Operating Revenue

Operating Income

Amount

%

Amount

%

Canada Consumer

$                    1.0

3%

$                    0.4

4%

Canada Commercial

0.2

0%

0.1

1%

Europe

0.4

1%

0.1

1%

Latin America

(0.7)

-1%

(0.6)

-4%

Twelve Months Ended December 31, 2012

Operating Revenue

Operating Income

Amount

%

Amount

%

Canada Consumer

$                  (1.4)

-1%

$                  (0.6)

-1%

Canada Commercial

(0.3)

-1%

(0.1)

-1%

Europe

(4.4)

-3%

(1.0)

-3%

Latin America

(6.5)

-3%

(3.5)

-5%

 

 

 

Common Questions & Answers (Unaudited)

(Dollars in millions)

5.

Subsequent to year end, Equifax disposed of two, non-strategic business units which will be reported as discontinued operations beginning with the first quarter of 2013.  Also beginning in 2013, a realignment of our account management responsibilities resulted in transferring the responsibility for selected wholesale accounts from North America Personal Solutions to USCIS, for which we will make conforming adjustments to historic segment results for comparability.

a) What will be the annual 2012 and 2011 as well as the quarterly 2012 revenue, operating income and net income from continuing operations attributable to Equifax when historical results are adjusted to reflect the treatment of Equifax Settlement Services and Talent Management Services as discontinued operations?

YTD 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

YTD 2012

Proforma revenue

$             1,893.2

$                505.9

$                513.2

$                520.0

$                533.9

$             2,073.0

Proforma operating income

$                469.3

$                128.3

$                128.9

$                130.7

$                  92.2

$                480.1

YTD 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

YTD 2012

Net income from continuing operations

  attributable to Equifax (as reported)

$                231.4

$                  71.5

$                  76.4

$                  77.9

$                  46.3

$                272.1

Operating income from disposals

(1.7)

(0.7)

(3.8)

(1.4)

(3.0)

(8.9)

Other expense from disposals

0.1

0.0

0.0

0.0

0.1

0.1

Income tax effect of disposals

0.6

0.3

1.4

0.5

1.1

3.3

Proforma net income from continuing operations

  attributable to Equifax  

$                230.4

$                  71.1

$                  74.0

$                  77.0

$                  44.5

$                266.6

b) What will be the annual 2012 and 2011 as well as the quarterly 2012 adjusted EPS of Equifax when historical results are adjusted to reflect the 

treatment of Equifax Settlement Services and Talent Management Services as discontinued operations?

YTD 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

YTD 2012

Adjusted EPS (see non-GAAP reconciliations)

$                  2.52

$                  0.70

$                  0.74

$                  0.75

$                  0.78

$                  2.97

Impact of disposals

(0.02)

(0.01)

(0.02)

(0.01)

(0.02)

(0.06)

Proforma adjusted EPS

$                  2.50

$                  0.69

$                  0.72

$                  0.74

$                  0.76

$                  2.91

Weighted-average shares used in computing

  diluted EPS

123.7

122.4

122.8

122.2

122.4

122.5

c) What will be the annual 2012 and 2011 as well as the quarterly 2012 revenue and operating income for USCIS, Workforce Solutions and  North America  Personal Solutions segments when historical results are adjusted to reflect the treatment of Equifax Settlement Services and Talent Management Services as discontinued operations as well as change in reporting of certain wholesale revenue?

USCIS

YTD 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

YTD 2012

Revenue (as reported)

$                792.6

$                217.7

$                230.1

$                233.3

$                235.7

$                916.8

Equifax Settlement Services revenue

(44.4)

(12.0)

(17.1)

(18.7)

(18.7)

(66.5)

Revenue reclassification from PSOL

16.9

4.6

4.5

5.3

4.6

19.0

Proforma revenue

$                765.1

$                210.3

$                217.5

$                219.9

$                221.6

$                869.3

Operating income (as reported)

$                287.3

$                  79.4

$                  88.1

$                  86.1

$                  88.1

$                341.7

Equifax Settlement Services operating income

(0.5)

(0.7)

(3.5)

(1.3)

(2.2)

(7.7)

Operating income reclassification from PSOL

12.8

2.7

2.7

3.4

2.4

11.2

Proforma operating income

$                299.6

$                  81.4

$                  87.3

$                  88.2

$                  88.3

$                345.2

Workforce Solutions

YTD 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

YTD 2012

Revenue (as reported)

$                404.3

$                113.7

$                115.2

$                117.0

$                117.2

$                463.1

Talent Management Services revenue

(22.1)

(4.8)

(5.5)

(5.2)

(5.5)

(21.0)

Proforma revenue

$                382.2

$                108.9

$                109.7

$                111.8

$                111.7

$                442.1

Operating income (as reported)

$                  90.7

$                  26.2

$                  26.9

$                  28.6

$                  26.2

$                107.9

Talent Management Services operating income

(1.2)

0.0

(0.3)

(0.1)

(0.8)

(1.2)

Proforma operating income

$                  89.5

$                  26.2

$                  26.6

$                  28.5

$                  25.4

$                106.7

North America Personal Solutions

YTD 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

YTD 2012

Revenue (as reported)

$                180.7

$                  49.5

$                  50.7

$                  51.4

$                  52.9

$                204.5

Revenue reclassification to USCIS

(16.9)

(4.6)

(4.5)

(5.3)

(4.6)

(19.0)

Proforma revenue

$                163.8

$                  44.9

$                  46.2

$                  46.1

$                  48.3

$                185.5

Operating income (as reported)

$                  54.1

$                  14.0

$                  15.1

$                  16.5

$                  16.0

$                  61.6

Operating income reclassification to USCIS

(12.8)

(2.7)

(2.7)

(3.4)

(2.4)

(11.2)

Proforma operating income

$                  41.3

$                  11.3

$                  12.4

$                  13.1

$                  13.6

$                  50.4

 

 

Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited)

(Dollars in millions, except per share amounts)

A.

Reconciliation of net income from continuing operations attributable to Equifax to diluted EPS attributable to Equifax, adjusted for 

CSC acquisition fees, a pension settlement, certain income tax items, the loss on the deconsolidation of our Brazilian

business and acquisition-related amortization expense:

Three Months Ended

December 31,

2012

2011

$ Change

% Change

Net income from continuing operations attributable to Equifax

$                  46.3

$                 72.9

$                 (26.6)

-36%

  Fees associated with the acquisition of CSC Credit Services, 

    net of tax (1)

3.2

-

3.2

nm

  Pension settlement, net of tax (2)

24.1

-

24.1

nm

  Income tax impact of international tax restructuring (3)

20.5

-

20.5

nm

  Income tax benefits (4)

(15.3)

(4.2)

(11.1)

nm

Net income from continuing operations attributable to Equifax, 

  adjusted for acquisition fees, pension settlement

  and income tax items above

78.8

68.7

10.1

15%

  Acquisition-related amortization expense, net of tax, and

        cash income tax benefit of acquisition-related amortization

        expense of certain acquired intangibles

16.1

14.3

1.8

12%

Net income from continuing operations attributable to Equifax, 

  adjusted for CSC acquisition fees, pension settlement,

  certain income tax items and acquisition-related

  amortization expense

$                  94.9

$                 83.0

$                   11.9

14%

Diluted EPS from continuing operations attributable to Equifax, 

  adjusted for CSC acquisition fees, pension settlement,

  certain income tax items and acquisition-related

  amortization expense

$                  0.78

$                 0.68

$                   0.10

14%

Weighted-average shares used in computing diluted EPS

122.4

122.2

Twelve Months Ended

December 31,