Equifax Reports Second Quarter 2009 Results
- Second quarter revenue was $455.4 million, up 1 percent over the first quarter of 2009.
- Second quarter EPS was $0.47 and second quarter adjusted EPS was $0.57.
ATLANTA, July 22 /PRNewswire-FirstCall/ -- Equifax Inc. (NYSE: EFX) today announced financial results for the quarter ended June 30, 2009. The company reported revenue of $455.4 million in the second quarter of 2009, a 9 percent decrease from the second quarter of 2008, of which 4 percent was due to the unfavorable effect of foreign exchange rates. Second quarter 2009 net income was $59.6 million, down from $70.8 million in the prior year. Diluted earnings per share ("EPS") for the second quarter of 2009 was $0.47 compared to $0.54 in the same period of the prior year. On a non-GAAP basis, EPS, excluding the impact of acquisition-related amortization expense ("adjusted EPS"), was $0.57 compared to $0.64 in the second quarter of 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060224/CLF037LOGO )
"We continued to make good progress on our key strategic initiatives during the second quarter, including leveraging The Work Number and Tax Management Services businesses, innovating new products and expanding mortgage settlement services. For the quarter, TALX delivered strong year-over-year growth, while USCIS was generally consistent with our previous outlook aided by strong mortgage activity during much of the quarter," said Richard F. Smith, Equifax's Chairman and Chief Executive Officer. "However, our International results were adversely affected by weakening economic conditions, while Personal Solutions and North America Commercial Solutions were adversely impacted by the continuing recessionary environment and consumer caution in the U.S. In the face of ongoing softness in the global economy and in demand for credit-related services, we continue to aggressively manage our expenses, diversify our revenue base and invest in our long-term growth strategy. We believe these efforts will position us well for revenue growth when the economy begins to recover."
Second Quarter 2009 Highlights
-- Revenue grew 1 percent on a reported basis versus the first quarter of
2009.
-- Operating margin was 23.5 percent compared to an adjusted operating
margin of 24.5 percent in the first quarter of 2009, which excludes the
impact of a restructuring charge recorded during the first quarter.
-- Total debt at June 30, 2009, decreased $76.0 million from March 31,
2009.
U.S. Consumer Information Solutions (USCIS)
Total revenue was $211.0 million in the second quarter of 2009, flat when compared to the first quarter of 2009, but an 8 percent decrease from the second quarter of 2008.
-- Online Consumer Information Solutions revenue was $134.8 million, down
11 percent from a year ago.
-- Mortgage Solutions revenue was $28.6 million, up 60 percent from a year
ago.
-- Credit Marketing Services revenue was $27.4 million, down 23 percent
from a year ago.
-- Direct Marketing Services revenue was $20.2 million, down 15 percent
from a year ago.
Operating margin for USCIS was 35.2 percent in the second quarter of 2009, down from 36.0 percent in the first quarter of 2009. Second quarter 2008 operating margin was 38.0 percent.
International
Total revenue was $105.2 million in the second quarter of 2009, a 4 percent increase over the first quarter of 2009, but a 24 percent decrease from the second quarter of 2008. In local currency, revenue was down 2 percent when compared to the first quarter of 2009 and down 8 percent when compared to the same period in the prior year.
-- Latin America revenue was $47.0 million, down 8 percent in local
currency and down 23 percent in U.S. dollars from a year ago.
-- Europe revenue was $33.0 million, down 12 percent in local currency and
down 29 percent in U.S. dollars from a year ago.
-- Canada Consumer revenue was $25.2 million, down 3 percent in local
currency and down 16 percent in U.S. dollars from a year ago.
Operating margin for International was 25.3 percent in the second quarter of 2009, down from 28.7 percent in the first quarter of 2009 and down from 30.6 percent in the second quarter of 2008.
TALX
Total revenue was $86.0 million in the second quarter of 2009, a 12 percent increase from the second quarter of 2008.
-- The Work Number revenue was $39.0 million, up 23 percent from a year
ago.
-- Tax and Talent Management Services revenue was $47.0 million, up 4
percent from a year ago. Tax Management Services revenue growth over
the prior year more than offset a revenue decline in Talent Management
Services.
Operating margin was 23.2 percent, up from 17.7 percent in the second quarter of 2008.
North America Personal Solutions
Total revenue was $37.5 million, a 3 percent decrease from the first quarter of 2009 and a 10 percent decrease from the second quarter of 2008. Operating margin was 21.5 percent, up from 15.5 percent in the first quarter of 2009, but down from 25.1 percent in the second quarter of 2008.
North America Commercial Solutions
Total revenue was $15.7 million, down 3 percent in local currency and down 1 percent in U.S. dollars from the first quarter of 2009. Revenue was down 5 percent in local currency and down 11 percent in U.S. dollars compared to the second quarter of 2008. Operating margin was 15.4 percent, up from 14.4 percent in the first quarter of 2009, but down from 16.0 percent in the second quarter of 2008.
Third Quarter 2009 Outlook
Based on the current level of domestic and international business activity and current foreign exchange rates, adjusted EPS for the third quarter of 2009 is expected to be between $0.52 and $0.57.
About Equifax Inc. (www.equifax.com)
Equifax empowers businesses and consumers with information they can trust. A global leader in information solutions, employment and income verification and human resources business process outsourcing services, we leverage one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.
Customers have trusted Equifax for over 100 years to deliver innovative solutions with the highest integrity and reliability. Businesses -- large and small -- rely on us for consumer and business credit intelligence, portfolio management, fraud detection, decisioning technology, marketing tools, HR/payroll services, and much more. We empower individual consumers to manage their personal credit information, protect their identity and maximize their financial well-being.
Headquartered in Atlanta, Georgia, Equifax Inc. operates in the U.S. and 14 other countries throughout North America, Latin America and Europe. Equifax is a member of Standard & Poor's (S&P) 500((R)) Index. Our common stock is traded on the New York Stock Exchange under the symbol EFX.
Earnings Conference Call and Audio Webcast
In conjunction with this release, Equifax will host a conference call tomorrow, July 23, 2009, at 8:30 a.m. (EDT) 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 earnings release presents operating income and operating margin excluding a 2009 first quarter restructuring charge and diluted EPS excluding acquisition-related amortization expense and restructuring charge, both net of tax. These are important financial measures for Equifax but are not financial measures as defined by GAAP.
These non-GAAP financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures of 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. This information can also be found under "Investors/GAAP/Non-GAAP Measures" on our website at www.equifax.com.
Forward-Looking Statements
Management believes certain statements in this earnings release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements are made. Management does not undertake any obligation to update any forward-looking statements.
Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by Equifax, including restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions), as well as from developments beyond Equifax's control, including but not limited to changes in worldwide and U.S. economic conditions that materially impact consumer spending, consumer debt and employment, changes in demand for Equifax's products and services, our ability to develop new products and services, pricing and other competitive pressures, our ability to achieve targeted cost efficiencies, risks relating to illegal third party efforts to access data, risks associated with our ability to complete and integrate acquisitions and other investments, changes in laws and regulations governing our business, including federal or state responses to identity theft concerns, and the outcome of our pending litigation. Certain additional factors are set forth in Equifax's Annual Report on Form 10-K for the year ended December 31, 2008 under Item 1A, "Risk Factors", and our other filings with the Securities and Exchange Commission.
EQUIFAX
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
Three Months Ended
June 30,
--------
2009 2008
---- ----
(In millions, except per share amounts) (Unaudited)
-------------
Operating revenue $455.4 $501.9
------ ------
Operating expenses:
Cost of services (exclusive of depreciation and
amortization below) 192.4 204.4
Selling, general and administrative expenses 116.7 131.8
Depreciation and amortization 39.1 38.0
---- ----
Total operating expenses 348.2 374.2
----- -----
Operating income 107.2 127.7
Interest expense (14.5) (17.3)
Other income, net 3.1 0.9
--- ---
Consolidated income before income taxes 95.8 111.3
Provision for income taxes (34.7) (38.7)
----- -----
Consolidated net income 61.1 72.6
Less: Net income attributable to noncontrolling
interest (1.5) (1.8)
---- ----
Net income attributable to Equifax $59.6 $70.8
===== =====
Basic earnings per common share $0.47 $0.55
===== =====
Weighted-average shares used in computing basic
earnings per share 126.3 129.0
===== =====
Diluted earnings per common share $0.47 $0.54
===== =====
Weighted-average shares used in computing diluted
earnings per share 127.8 131.5
===== =====
Dividends per common share $0.04 $0.04
===== =====
EQUIFAX
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
Six Months Ended
June 30,
--------
2009 2008
---- ----
(In millions, except per share amounts) (Unaudited)
-------------
Operating revenue $908.3 $1,005.0
------ --------
Operating expenses:
Cost of services (exclusive of depreciation and
amortization below) 381.4 410.6
Selling, general and administrative expenses 239.7 264.6
Depreciation and amortization 77.3 75.9
---- ----
Total operating expenses 698.4 751.1
----- -----
Operating income 209.9 253.9
Interest expense (28.8) (37.0)
Other income, net 5.5 1.2
--- ---
Consolidated income before income taxes 186.6 218.1
Provision for income taxes (69.4) (78.1)
----- -----
Consolidated net income 117.2 140.0
Less: Net income attributable to noncontrolling
interest (3.2) (3.5)
---- ----
Net income attributable to Equifax $114.0 $136.5
====== ======
Basic earnings per common share $0.90 $1.06
===== =====
Weighted-average shares used in computing basic
earnings per share 126.3 129.3
===== =====
Diluted earnings per common share $0.89 $1.04
===== =====
Weighted-average shares used in computing diluted
earnings per share 127.6 131.8
===== =====
Dividends per common share $0.08 $0.08
===== =====
EQUIFAX
CONSOLIDATED BALANCE SHEETS
----------------------------
June 30, December 31,
-------- ------------
2009 2008
---- ----
(In millions, except par values) (Unaudited)
-------------------------
ASSETS
Current assets:
Cash and cash equivalents $63.6 $58.2
Trade accounts receivable, net of
allowance for doubtful accounts of
$15.2 and $14.5 at June 30, 2009 and
December 31, 2008, respectively 254.4 253.4
Prepaid expenses 33.4 22.9
Other current assets 19.4 19.3
---- ----
Total current assets 370.8 353.8
----- -----
Property and equipment:
Capitalized internal-use
software and system costs 295.2 313.9
Data processing equipment and
furniture 173.9 176.6
Land, buildings and improvements 160.8 124.0
----- -----
Total property and equipment 629.9 614.5
Less accumulated depreciation and
amortization (313.9) (328.2)
------ ------
Total property and equipment, net 316.0 286.3
----- -----
Goodwill 1,803.6 1,760.0
Indefinite-lived intangible assets 95.2 95.1
Purchased intangible assets, net 643.3 682.2
Other assets, net 86.9 82.9
---- ----
Total assets $3,315.8 $3,260.3
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current
maturities $333.7 $31.9
Capital lease obligation 29.0 -
Accounts payable 31.0 29.9
Accrued expenses 50.1 57.6
Accrued salaries and bonuses 38.9 54.2
Deferred revenue 62.3 65.7
Other current liabilities 70.3 78.7
---- ----
Total current liabilities 615.3 318.0
Long-term debt 791.3 1,187.4
Deferred income tax liabilities, net 226.4 215.3
Long-term pension and other
postretirement benefit liabilities 143.0 166.0
Other long-term liabilities 52.3 50.1
------- -------
Total liabilities 1,828.3 1,936.8
------- -------
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 and
189.2 at June 30, 2009 and
December 31, 2008,
respectively;
Outstanding shares - 126.4
and 126.3 at June 30, 2009
and December 31, 2008,
respectively 236.6 236.5
Paid-in capital 1,084.0 1,075.2
Retained earnings 2,384.7 2,281.0
Accumulated other comprehensive loss (333.2) (390.6)
Treasury stock, at cost, 60.2
shares and 59.7 shares at
June 30, 2009 and December
31, 2008, respectively (1,848.8) (1,837.9)
Stock held by employee benefits
trusts, at cost, 2.7 shares and 3.2
shares at June 30, 2009 and
December 31, 2008, respectively (47.5) (51.8)
----- -----
Total Equifax shareholders' equity 1,475.8 1,312.4
Noncontrolling interest 11.7 11.1
---- ----
Total equity 1,487.5 1,323.5
------- -------
Total liabilities and equity $3,315.8 $3,260.3
======== ========
EQUIFAX
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------
Six Months Ended
June 30,
--------
2009 2008
---- ----
(In millions) (Unaudited)
Operating activities:
Consolidated net income $117.2 $140.0
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 77.3 75.9
Stock-based compensation expense 9.8 11.0
Tax effects of stock-based compensation plans 0.1 2.5
Excess tax benefits from stock-based compensation
plans (0.5) (1.6)
Deferred income taxes 6.7 (13.5)
Changes in assets and liabilities, excluding
effects of acquisitions:
Accounts receivable, net 6.4 (8.3)
Prepaid expenses and other current assets (10.2) (2.5)
Other assets (5.5) (3.1)
Current liabilities, excluding debt (42.2) (16.9)
Other long-term liabilities, excluding debt (13.5) 6.1
----- ---
Cash provided by operating activities 145.6 189.6
----- -----
Investing activities:
Capital expenditures (34.0) (58.4)
Investment in unconsolidated affiliates 1.5 (4.4)
Acquisitions, net of cash acquired - (11.0)
----- -----
Cash used in investing activities (32.5) (73.8)
----- -----
Financing activities:
Net short-term borrowings (repayments) 282.4 (94.9)
Net (repayments) borrowings under long-term
revolving credit facilities (370.0) 50.0
Proceeds from issuance of long-term debt - 2.2
Payments on long-term debt (6.5) (3.1)
Treasury stock purchases (9.1) (81.1)
Dividends paid to Equifax shareholders (10.1) (10.3)
Dividends paid to noncontrolling interests (2.5) (2.8)
Proceeds from exercise of stock options 4.8 13.5
Excess tax benefits from stock-based compensation
plans 0.5 1.6
Other (0.5) (0.5)
------ ------
Cash used in financing activities (111.0) (125.4)
------ ------
Effect of foreign currency exchange rates on cash
and cash equivalents 3.3 0.6
--- ---
Increase (decrease) in cash and cash equivalents 5.4 (9.0)
Cash and cash equivalents, beginning of period 58.2 81.6
---- ----
Cash and cash equivalents, end of period $63.6 $72.6
===== =====
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 June 30,
------------- ---------------------------
Local
Currency
Operating revenue: 2009 2008 $ Change % Change % Change*
---- ---- -------- -------- ---------
Online Consumer
Information Solutions $134.8 $151.4 $(16.6) -11%
Mortgage Reporting
Solutions 28.6 17.9 10.7 60%
Credit Marketing
Services 27.4 35.7 (8.3) -23%
Direct Marketing
Services 20.2 23.6 (3.4) -15%
---- ---- ----
Total U.S.
Consumer
Information
Solutions 211.0 228.6 (17.6) -8%
Europe 33.0 46.4 (13.4) -29% -12%
Latin America 47.0 61.1 (14.1) -23% -8%
Canada Consumer 25.2 30.0 (4.8) -16% -3%
---- ---- ----
Total International 105.2 137.5 (32.3) -24% -8%
The Work Number 39.0 31.7 7.3 23%
Tax and Talent
Management Services 47.0 45.0 2.0 4%
---- ---- ---
Total TALX 86.0 76.7 9.3 12%
North America
Personal Solutions 37.5 41.5 (4.0) -10%
North America
Commercial
Solutions 15.7 17.6 (1.9) -11% -5%
---- ---- ----
Total operating
revenue $455.4 $501.9 $(46.5) -9% -5%
====== ====== ======
(in millions) Six Months Ended June 30,
------------- -------------------------
Local
Currency
Operating revenue: 2009 2008 $ Change % Change % Change*
---- ---- -------- -------- ---------
Online Consumer
Information Solutions $272.0 $308.2 $(36.2) -12%
Mortgage Reporting
Solutions 54.0 35.3 18.7 53%
Credit Marketing
Services 54.7 71.2 (16.5) -23%
Direct Marketing
Services 40.3 47.1 (6.8) -14%
---- ---- ----
Total U.S.
Consumer
Information
Solutions 421.0 461.8 (40.8) -9%
Europe 66.0 94.2 (28.2) -30% -10%
Latin America 93.0 114.3 (21.3) -19% -1%
Canada Consumer 47.0 58.9 (11.9) -20% -5%
---- ---- -----
Total International 206.0 267.4 (61.4) -23% -5%
The Work Number 79.6 68.0 11.6 17%
Tax and Talent
Management Services 94.3 88.3 6.0 7%
---- ---- ---
Total TALX 173.9 156.3 17.6 11%
North America
Personal Solutions 75.9 84.6 (8.7) -10%
North America
Commercial
Solutions 31.5 34.9 (3.4) -9% -3%
---- ---- ----
Total operating
revenue $908.3 $1,005.0 $(96.7) -10% -5%
====== ======== ======
(in millions) Three Months Ended June 30,
------------- ---------------------------
Operat- Operat-
Operating ing ing $ %
income: 2009 Margin 2008 Margin Change Change
---- ------ ---- ------ ------ -----
U.S. Consumer
Information
Solutions $74.3 35.2% $86.9 38.0% $(12.6) -14%
International 26.6 25.3% 42.0 30.6% (15.4) -37%
TALX 20.0 23.2% 13.6 17.7% 6.4 47%
North America
Personal
Solutions 8.0 21.5% 10.4 25.1% (2.4) -23%
North America
Commercial
Solutions 2.4 15.4% 2.8 16.0% (0.4) -14%
General
Corporate
Expense (24.1) nm (28.0) nm 3.9 14%
----- ----- ---
Total
operating
income $107.2 23.5% $127.7 25.4% $(20.5) -16%
====== ====== ======
(in millions) Six Months Ended June 30,
------------- -------------------------
Operat- Operat-
Operating ing ing $ %
income: 2009 Margin 2008 Margin Change Change
---- ------ ---- ------ ------ ------
U.S. Consumer
Information
Solutions $149.8 35.6% $177.0 38.3% $(27.2) -15%
International 55.5 26.9% 81.6 30.5% (26.1) -32%
TALX 38.8 22.3% 26.3 16.8% 12.5 47%
North America
Personal
Solutions 14.0 18.4% 21.5 25.4% (7.5) -35%
North America
Commercial
Solutions 4.7 14.9% 5.4 15.6% (0.7) -14%
General
Corporate
Expense (52.9) nm (57.9) nm 5.0 9%
----- ----- ---
Total operating
income $209.9 23.1% $253.9 25.3% $(44.0) -17%
====== ====== ======
nm - not meaningful
* Reflects percentage change in revenue conforming 2009 results using
2008 exchange rates.
Common Questions & Answers (Unaudited)
(Dollars in millions)
2. Can you provide the percentage change in revenue from the first
quarter of 2009 in U.S. dollars and local currency?
U.S. Dollars Local Currency
Operating revenue: % Change % Change*
-------- ---------
U.S. Consumer Information Solutions 0%
International 4% -2%
TALX -2%
North America Personal Solutions -3%
North America Commercial Solutions -1% -3%
Total operating revenue 1% -1%
* Reflects percentage change in revenue conforming Q2 2009 results
using Q1 2009 exchange rates.
3. What drove the fluctuation in the effective tax rate?
Our effective income tax rate was 36.1% for the three months ended
June 30, 2009, up from 34.8% for the same period in 2008, due
primarily to a favorable discrete item recorded during 2008 related
to our foreign tax credit utilization. The effective tax rate was
37.2% for the six months ended June 30, 2009, up from 35.8% for the
same period in 2008, due primarily to the item discussed above and
an unfavorable discrete item recorded during the first quarter of
2009 related to the effect of a change in California state income
taxes on our deferred tax liabilities.
4. Can you provide depreciation and amortization by segment?
Depreciation and amortization are as follows:
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
U.S. Consumer Information Solutions $12.0 $11.3 $23.7 $22.6
International 5.8 6.1 11.1 12.2
TALX 15.4 15.4 30.9 31.1
North America Personal Solutions 1.1 0.7 2.2 1.4
North America Commercial Solutions 1.4 1.5 2.8 2.8
General Corporate Expense 3.4 3.0 6.6 5.8
--- --- --- ---
Total depreciation and amortization $39.1 $38.0 $77.3 $75.9
===== ===== ===== =====
5. 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 June
30, 2009
-----------------------
Operating Operating
Revenue Income
--------- ---------
Amount % Amount %
------ --- ------ ---
Canada Consumer $(4.0) -13% $(1.6) -13%
Canada Commercial (0.9) -13% (0.4) -14%
Europe (7.9) -17% (1.4) -14%
Latin America (9.2) -15% (2.3) -11%
---- ----
$(22.0) -4% $(5.7) -4%
====== =====
Six Months Ended June 30,
2009
-------------------------
Operating Operating
Revenue Income
--------- ---------
Amount % Amount %
------ --- ------ ---
Canada Consumer $(9.1) -15% $(3.6) -15%
Canada Commercial (2.1) -16% (0.9) -17%
Europe (18.6) -20% (3.6) -18%
Latin America (20.3) -18% (5.9) -16%
----- ----
$(50.1) -5% $(14.0) -6%
====== ======
6. 2008 expense reclassification
Certain prior year amounts have been reclassified to conform to
current year presentation. $3.4 million and $6.8 million of selling,
general and administrative expense for the three and six months ended
June 30, 2008, respectively, have been reclassified to cost of
services.
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 attributable to Equifax to diluted EPS,
adjusted for acquisition-related amortization expense and
restructuring charge:
Three Months Ended
June 30,
--------
2009 2008 $ Change % Change
---- ---- -------- -------
Net income attributable to Equifax $59.6 $70.8 $(11.2) -16%
Acquisition-related amortization
expense, net of tax 13.5 13.6 (0.1) -1%
---- ---- ----
Net income attributable to Equifax,
adjusted for acquisition-related
amortization expense $73.1 $84.4 $(11.3) -13%
===== ===== ======
Diluted EPS, adjusted for acquisition-
related amortization expense $0.57 $0.64 $(0.07) -11%
===== ===== ======
Weighted-average shares used in computing
diluted EPS 127.8 131.5
Six Months Ended
June 30,
--------
2009 2008 $ Change % Change
---- ---- -------- --------
Net income attributable to Equifax $114.0 $136.5 $(22.5) -16%
Restructuring charge, net of tax (1) 5.4 - 5.4 nm
--- --- ---
Net income attributable to Equifax,
adjusted for restructuring charge 119.4 136.5 (17.1) -13%
Acquisition-related amortization
expense, net of tax 27.0 27.2 (0.2) -1%
---- ---- ----
Net income attributable to Equifax,
adjusted for acquisition-related
amortization expense and restructuring
charge $146.4 $163.7 $(17.3) -11%
====== ====== ======
Diluted EPS, adjusted for acquisition-
related amortization expense
and restructuring charge $1.15 $1.24 $(0.09) -8%
===== ===== ======
Weighted-average shares used in computing
diluted EPS 127.6 131.8
B. Reconciliation of operating income to adjusted operating income,
excluding restructuring charge, and presentation of adjusted operating
margin:
Three Months Ended
June 30, March 31,
-------- ---------
2009 2009 $ Change % Change
---- ---- ------- --------
Revenue $455.4 $452.9 $2.5 1%
Operating income $107.2 $102.7 $4.5 4%
Restructuring charge (1) - 8.4 (8.4) nm
--- --- ----
Adjusted operating income,
excluding restructuring
charge $107.2 $111.1 $(3.9) -3%
====== ====== =====
Adjusted operating margin 23.5% 24.5%
nm - not meaningful
(1) Restructuring charge primarily represents severance expense of $8.4
million included in general corporate expense which is reflected in
selling, general and administrative expenses on our Consolidated
Statements of Income. See the Notes to this reconciliation for
additional detail.
Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures
Restructuring Charge -- During the first quarter of 2009, the company recorded an $8.4 million, pretax, ($5.4 million, net of tax) restructuring charge primarily related to severance expense in selling, general and administrative expenses on our Consolidated Statements of Income. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results for the six months ended June 30, 2009, as compared to the same period in 2008, since a charge of such a material amount is not comparable to similar activity in the prior year. This is consistent with how our management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods.
Adjusted operating income and operating margin, excluding restructuring charge - Management believes excluding the restructuring charge from the calculation of operating income and margin, on a non-GAAP basis, is useful because management excludes items that are not comparable when measuring operating profitability, evaluating performance trends, and setting performance objectives, and it allows investors to evaluate our performance for different periods on a more comparable basis by excluding items that impact comparability.
Diluted EPS, adjusted for acquisition-related amortization expense and restructuring charge -- We calculate this financial measure by excluding acquisition-related amortization expense and the restructuring charge, both net of tax, from the determination of net income in the calculation of diluted EPS. This financial measure is not prepared in conformity with GAAP. Management believes that this measure is useful because management excludes acquisition-related amortization expense and other items that are not comparable when measuring operating profitability, evaluating performance trends, and setting performance objectives, and it allows investors to evaluate our performance for different periods on a more comparable basis by excluding items that relate to acquisition-related intangible assets and items that impact comparability.
SOURCE Equifax Inc.
Released July 22, 2009