Equifax Reports Strong Fourth Quarter and Full Year 2010 Results
ATLANTA, Feb. 9, 2011 /PRNewswire/ --
-- Fourth quarter revenue was $482 million, up 11 percent from the fourth
quarter of 2009.
-- Fourth quarter diluted EPS from continuing operations attributable to
Equifax was $0.50, up 16 percent from the fourth quarter of 2009.
-- Fourth quarter adjusted EPS from continuing operations attributable to
Equifax was $0.62, up 10 percent from the fourth quarter of 2009.
-- Full year 2010 revenue was $1.86 billion, up 8 percent from full year
2009 revenue.
-- Full year 2010 diluted EPS from continuing operations attributable to
Equifax was $1.86, up 9 percent from full year 2009 and full year 2010
adjusted EPS from continuing operations attributable to Equifax was
$2.31, up 6 percent from full year 2009.
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Equifax Inc. (NYSE: EFX) today announced financial results for the quarter ended December 31, 2010. The company reported revenue from continuing operations of $482 million in the fourth quarter of 2010, an 11 percent increase from the fourth quarter of 2009. Fourth quarter 2010 net income from continuing operations attributable to Equifax was $62.2 million, a 13 percent increase from the prior year. On a non-GAAP basis, adjusted EPS from continuing operations attributable to Equifax, excluding the impact of acquisition-related amortization expense, was $0.62.
For the full year 2010, revenue from continuing operations was $1.86 billion, an 8 percent increase from 2009. Full year 2010 net income from continuing operations attributable to Equifax was $235.2 million compared to $217.8 million in 2009, up 8 percent. Diluted EPS from continuing operations was $1.86 compared to $1.70 for the full year 2009. On a non-GAAP basis, full year adjusted EPS from continuing operations, which excludes the impact of acquisition-related amortization expense, restructuring charges (both net of tax) and an income tax benefit, was $2.31, up 6 percent from the prior year period.
"Our solid performance in the fourth quarter completes a year where this management team executed very well and made significant investments in our strategic initiatives, including New Product Innovation, merger and acquisition activity, and Decision 360 ®. Constant dollar organic growth for the quarter was 9 percent, the strongest growth we have experienced in several years," said Richard F. Smith, Equifax's Chairman and Chief Executive Officer. "As a result, our strong performance and the opportunities that we are pursuing gave the Board the confidence to increase our quarterly dividend from 4 cents per share to 16 cents per share. We enter 2011 a much stronger and better positioned company to take on challenges as well as capitalize on market opportunities."
Fourth Quarter 2010 Report
-- In addition to the financial highlights noted above, operating margin
from continuing operations was 22.8 percent for the fourth quarter of
2010. On a non-GAAP basis, excluding the impact of a 2009 restructuring
charge, operating margin in 2009 was also 22.8 percent.
-- On October 1, 2010, we acquired Anakam, Inc., a provider of large-scale,
software-based, multi-factor authentication solutions for approximately
$64 million. The results of this acquisition are included in our U.S.
Consumer Information Solutions segment.
-- The Board of Directors declared a quarterly dividend of $0.16 per share,
a 300 percent increase from previous quarterly dividends of $0.04 per
share.
-- We repurchased 1.5 million of our common shares on the open market for
$51 million during the fourth quarter of 2010. At December 31, 2010, our
remaining authorization for future share repurchases was $104.5 million.
U.S. Consumer Information Solutions (USCIS)
Total revenue was $191.2 million in the fourth quarter of 2010 compared to $170.1 million in the fourth quarter of 2009, an increase of 12 percent.
-- Online Consumer Information Solutions revenue was $116.8 million, up 1
percent from a year ago.
-- Mortgage Solutions revenue was $29.3 million, up 27 percent from a year
ago.
-- Consumer Financial Marketing Services revenue was $45.1 million, up 46
percent when compared to a year ago.
Operating margin for USCIS was 36.3 percent in the fourth quarter of 2010 compared to 33.8 percent in the fourth quarter of 2009.
International
Total revenue was $125.9 million in the fourth quarter of 2010, a 7 percent increase over the fourth quarter of 2009. In local currency, revenue was up 6 percent compared to the fourth quarter of 2009.
-- Latin America revenue was $60.4 million, up 7 percent in local currency
and 10 percent in U.S. dollars from a year ago.
-- Europe revenue was $36.2 million, up 6 percent in local currency and 1
percent in U.S. dollars from a year ago.
-- Canada Consumer revenue was $29.3 million, up 5 percent in local
currency and 10 percent in U.S. dollars from a year ago.
Operating margin for International was 23.6 percent in the fourth quarter of 2010 compared to 27.5 percent in the fourth quarter of 2009.
TALX
Total revenue was $102.2 million in the fourth quarter of 2010, a 14 percent increase over the fourth quarter of 2009.
-- The Work Number revenue was $54.2 million, up 30 percent from a year
ago.
-- Tax and Talent Management Services revenue was $48 million, consistent
with a year ago.
Operating margin for TALX was 24.4 percent in the fourth quarter of 2010 compared to 21.1 percent in the fourth quarter of 2009.
North America Personal Solutions
Revenue was $37.8 million, a 5 percent increase from the fourth quarter of 2009. Operating margin was 30.9 percent, up from 28.1 percent in the fourth quarter of 2009.
North America Commercial Solutions
Revenue was $24.9 million, up 11 percent in local currency and up 12 percent in U.S. dollars compared to the fourth quarter of 2009. Operating margin was 32.3 percent, compared to 34 percent in the fourth quarter of 2009.
Full Year 2010 Report
-- Revenue from continuing operations was $1.86 billion, up 8 percent from
$1.72 billion in 2009.
-- Total revenue from continuing operations for USCIS was $743.0
million in 2010, a 4 percent increase from 2009.
-- Total revenue for International was $482.8 million in 2010, a 10
percent increase from 2009. In local currency, revenue was up 5
percent when compared to the same period in the prior year.
-- Total revenue for TALX was $395.6 million in 2010, a 14 percent
increase over 2009.
-- Total revenue for North America Personal Solutions was $157.6
million in 2009, a 6 percent increase from 2009.
-- Total revenue for North America Commercial Solutions was $80.5
million in 2010, a 15 percent increase from 2009. In local
currency, revenue was up 12 percent when compared to 2009.
-- During 2010, we sold our APPRO loan origination software business
("APPRO"), for approximately $72 million, and we also sold substantially
all the assets of our Direct Marketing Services division ("DMS") for
approximately $117 million. Both of these businesses are reported as
discontinued operations and were previously included in the results of
our U.S. Consumer Information Solutions segment.
-- Operating margin from continuing operations was 23.1 percent for the
full year 2010. On a non-GAAP basis, excluding the impact of a 2009
restructuring charge, operating margin in 2009 was 23.7 percent.
-- Total debt was $1.0 billion at December 31, 2010, a decrease of $174.5
million from December 31, 2009.
First Quarter 2011 Outlook
Based on the current level of domestic and international business activity and current foreign exchange rates, consolidated revenue from continuing operations for the first quarter of 2011 is expected to be up 6 to 8 percent from the year-ago quarter. First quarter 2011 adjusted EPS from continuing operations attributable to Equifax, which excludes the impact of acquisition-related amortization expense, is expected to be between $0.56 and $0.59, up 6 to 11 percent from 2010.
About Equifax (www.equifax.com)
Equifax empowers businesses and consumers with information they can trust. A global leader in information solutions, 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.
With a strong heritage of innovation and leadership, Equifax continuously delivers 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, 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 15 other countries. Equifax is a member of Standard & Poor's (S&P) 500® 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, February 10, 2010, 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 earnings release presents operating income and margin excluding restructuring charges and diluted EPS from continuing operations attributable to Equifax which excludes acquisition-related amortization expense, restructuring charges in the prior year, all net of tax, and an income tax benefit in the prior year. 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 an alternative measure 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 "Investor Center/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 and the demand for Equifax's products and services. Other risk factors include our ability to develop new products and services, respond to pricing and other competitive pressures, complete and integrate acquisitions and other investments and achieve targeted cost efficiencies; risks relating to illegal third party efforts to access data; changes in laws and regulations governing our business, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations, 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, 2009 under Item 1A, "Risk Factors", and our other filings with the Securities and Exchange Commission.
EQUIFAX
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
December 31,
2010 2009
(In millions, except per share amounts) (Unaudited)
Operating revenue $ 482.0 $ 435.4
Operating expenses:
Cost of services (exclusive of depreciation and
amortization below) 193.3 183.8
Selling, general and administrative expenses 137.0 130.2
Depreciation and amortization 42.0 38.5
Total operating expenses 372.3 352.5
Operating income 109.7 82.9
Interest expense (13.8) (14.1)
Other income, net 0.3 0.4
Consolidated income from continuing operations before
income taxes 96.2 69.2
Provision for income taxes (32.2) (12.6)
Consolidated income from continuing operations 64.0 56.6
Discontinued operations, net of tax - 5.3
Consolidated net income 64.0 61.9
Less: Net income attributable to noncontrolling interests (1.8) (1.7)
Net income attributable to Equifax $ 62.2 $ 60.2
Amounts attributable to Equifax:
Income from continuing operations attributable to Equifax $ 62.2 $ 54.9
Discontinued operations, net of tax - 5.3
Net income $ 62.2 $ 60.2
Basic earnings per common share:
Income from continuing operations attributable to Equifax $ 0.51 $ 0.44
Discontinued operations attributable to Equifax - 0.04
Net income attributable to Equifax $ 0.51 $ 0.48
Weighted-average shares used in computing basic earnings
per share 123.1 126.4
Diluted earnings per common share:
Income from continuing operations attributable to Equifax $ 0.50 $ 0.43
Discontinued operations attributable to Equifax - 0.04
Net income attributable to Equifax $ 0.50 $ 0.47
Weighted-average shares used in computing diluted earnings
per share 124.9 127.5
Dividends per common share $ 0.16 $ 0.04
EQUIFAX
CONSOLIDATED STATEMENTS OF INCOME
Twelve Months Ended
December 31,
2010 2009
(In millions, except per share amounts) (Unaudited)
Operating revenue $ 1,859.5 $ 1,716.0
Operating expenses:
Cost of services (exclusive of depreciation and
amortization below) 759.9 718.8
Selling, general and administrative expenses 507.4 470.2
Depreciation and amortization 162.2 145.2
Total operating expenses 1,429.5 1,334.2
Operating income 430.0 381.8
Interest expense (56.1) (57.0)
Other income, net 1.3 6.2
Consolidated income from continuing operations before
income taxes 375.2 331.0
Provision for income taxes (131.9) (106.6)
Consolidated income from continuing operations 243.3 224.4
Discontinued operations, net of tax 31.5 16.1
Consolidated net income 274.8 240.5
Less: Net income attributable to noncontrolling interests (8.1) (6.6)
Net income attributable to Equifax $ 266.7 $ 233.9
Amounts attributable to Equifax:
Income from continuing operations attributable to Equifax $ 235.2 $ 217.8
Discontinued operations, net of tax 31.5 16.1
Net income $ 266.7 $ 233.9
Basic earnings per common share:
Income from continuing operations attributable to Equifax $ 1.89 $ 1.72
Discontinued operations attributable to Equifax 0.25 0.13
Net income attributable to Equifax $ 2.14 $ 1.85
Weighted-average shares used in computing basic earnings
per share 124.8 126.3
Diluted earnings per common share:
Income from continuing operations attributable to Equifax $ 1.86 $ 1.70
Discontinued operations attributable to Equifax 0.25 0.13
Net income attributable to Equifax $ 2.11 $ 1.83
Weighted-average shares used in computing diluted
earnings per share 126.5 127.9
Dividends per common share $ 0.28 $ 0.16
EQUIFAX
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2010 2009
(In millions, except par values) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 119.4 $ 103.1
Trade accounts receivable, net of allowance for
doubtful accounts of $7.5 and $15.1 at
December 31, 2010 and 2009, respectively 262.6 258.7
Prepaid expenses 26.1 27.6
Other current assets 21.1 27.4
Total current assets 429.2 416.8
Property and equipment:
Capitalized internal-use software and system costs 315.9 316.6
Data processing equipment and furniture 181.0 184.2
Land, buildings and improvements 169.5 164.5
Total property and equipment 666.4 665.3
Less accumulated depreciation and amortization (368.0) (346.0)
Total property and equipment, net 298.4 319.3
Goodwill 1,914.7 1,943.2
Indefinite-lived intangible assets 95.6 95.5
Purchased intangible assets, net 593.9 687.0
Other assets, net 101.8 88.7
Total assets $ 3,433.6 $ 3,550.5
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities $ 20.7 $ 183.2
Accounts payable 24.6 35.9
Accrued expenses 61.9 67.7
Accrued salaries and bonuses 71.9 58.1
Deferred revenue 58.7 69.8
Other current liabilities 81.7 77.5
Total current liabilities 319.5 492.2
Long-term debt 978.9 990.9
Deferred income tax liabilities, net 244.2 249.3
Long-term pension and other postretirement benefit
liabilities 129.0 142.5
Other long-term liabilities 53.6 60.6
Total liabilities 1,725.2 1,935.5
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, 2010 and
2009;
Outstanding shares - 122.6 and 126.2 at December
31, 2010 and 2009, respectively 236.6 236.6
Paid-in capital 1,105.8 1,102.0
Retained earnings 2,725.7 2,494.2
Accumulated other comprehensive loss (344.5) (318.7)
Treasury stock, at cost, 64.6 shares and 61.0
shares at December 31, 2010 and 2009, respectively (1,991.0) (1,871.7)
Stock held by employee benefits trusts, at cost,
2.1 shares at December 31, 2010 and 2009 (41.2) (41.2)
Total Equifax shareholders' equity 1,691.4 1,601.2
Noncontrolling interests 17.0 13.8
Total equity 1,708.4 1,615.0
Total liabilities and equity $ 3,433.6 $ 3,550.5
EQUIFAX
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twelve Months Ended
December 31,
2010 2009
(In millions) (Unaudited)
Operating activities:
Consolidated net income $ 274.8 $ 240.5
Adjustments to reconcile consolidated net income to net
cash provided
by operating activities:
Gain on divestitures (27.1) -
Depreciation and amortization 167.8 158.8
Stock-based compensation expense 21.8 19.6
Excess tax benefits from stock-based compensation plans (3.5) (1.3)
Deferred income taxes 0.1 14.7
Changes in assets and liabilities, excluding effects of
acquisitions:
Accounts receivable, net (3.6) 12.8
Prepaid expenses and other current assets 6.1 (1.4)
Other assets (1.4) (6.9)
Current liabilities, excluding debt (32.4) 4.2
Other long-term liabilities, excluding debt (50.0) (22.6)
Cash provided by operating activities 352.6 418.4
Investing activities:
Capital expenditures (99.8) (70.7)
Acquisitions, net of cash acquired (82.6) (196.0)
Proceeds received from divestitures 181.7 -
Investment in unconsolidated affiliates, net 1.7 (3.4)
Cash provided by (used in) investing activities 1.0 (270.1)
Financing activities:
Net short-term (repayments) borrowings (134.0) 101.8
Net repayments under long-term revolving credit facilities (5.0) (415.2)
Payments on long-term debt (20.8) (31.8)
Proceeds from issuance of long-term debt - 274.4
Treasury stock purchases (167.5) (23.8)
Dividends paid to Equifax shareholders (35.2) (20.2)
Dividends paid to noncontrolling interests (5.1) (4.0)
Proceeds from exercise of stock options 29.3 10.2
Excess tax benefits from stock-based compensation plans 3.5 1.3
Other (0.5) (1.0)
Cash used in financing activities (335.3) (108.3)
Effect of foreign currency exchange rates on cash and cash
equivalents (2.0) 4.9
Increase in cash and cash equivalents 16.3 44.9
Cash and cash equivalents, beginning of period 103.1 58.2
Cash and cash equivalents, end of period $ 119.4 $ 103.1
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,
Local Currency
Operating revenue: 2010 2009 $ Change % Change % Change*
Online Consumer
Information Solutions $ 116.8 $ 116.2 $ 0.6 1%
Mortgage Solutions 29.3 23.0 6.3 27%
Consumer Financial
Marketing Services 45.1 30.9 14.2 46%
Total U.S. Consumer
Information Solutions 191.2 170.1 21.1 12%
Latin America 60.4 55.1 5.3 10% 7%
Europe 36.2 35.9 0.3 1% 6%
Canada Consumer 29.3 26.7 2.6 10% 5%
Total International 125.9 117.7 8.2 7% 6%
The Work Number 54.2 41.6 12.6 30%
Tax and Talent Management
Services 48.0 47.8 0.2 0%
Total TALX 102.2 89.4 12.8 14%
North America Personal
Solutions 37.8 36.0 1.8 5%
North America Commercial
Solutions 24.9 22.2 2.7 12% 11%
Total operating revenue $ 482.0 $ 435.4 $ 46.6 11% 10%
(in millions) Twelve Months Ended December 31,
Local Currency
Operating revenue: 2010 2009 $ Change % Change % Change*
Online Consumer
Information Solutions $ 485.2 $ 501.4 $ (16.2) -3%
Mortgage Solutions 113.5 99.5 14.0 14%
Consumer Financial
Marketing Services 144.3 111.3 33.0 30%
Total U.S. Consumer
Information Solutions 743.0 712.2 30.8 4%
Latin America 231.3 200.4 30.9 15% 8%
Europe 137.6 138.4 (0.8) -1% 2%
Canada Consumer 113.9 99.8 14.1 14% 4%
Total International 482.8 438.6 44.2 10% 5%
The Work Number 209.1 158.2 50.9 32%
Tax and Talent
Management Services 186.5 188.2 (1.7) -1%
Total TALX 395.6 346.4 49.2 14%
North America
Personal Solutions 157.6 149.0 8.6 6%
North America
Commercial Solutions 80.5 69.8 10.7 15% 12%
Total operating
revenue $ 1,859.5 $ 1,716.0 $ 143.5 8% 7%
(in millions) Three Months Ended December 31,
Operating Operating
Operating income: 2010 Margin 2009 Margin $ Change % Change
U.S. Consumer
Information
Solutions $ 69.4 36.3% $ 57.5 33.8% $ 11.9 21%
International 29.7 23.6% 32.3 27.5% (2.6) -8%
TALX 24.9 24.4% 18.9 21.1% 6.0 32%
North America
Personal Solutions 11.7 30.9% 10.2 28.1% 1.5 15%
North America
Commercial Solutions 8.0 32.3% 7.5 34.0% 0.5 7%
General Corporate
Expense (34.0) nm (43.5) nm 9.5 22%
Total operating
income $ 109.7 22.8% $ 82.9 19.1% $ 26.8 32%
(in millions) Twelve Months Ended December 31,
Operating Operating
Operating income: 2010 Margin 2009 Margin $ Change % Change
U.S. Consumer
Information
Solutions $ 269.8 36.3% $ 259.4 36.4% $ 10.4 4%
International 119.4 24.7% 118.9 27.1% 0.5 0%
TALX 92.1 23.3% 75.4 21.8% 16.7 22%
North America
Personal Solutions 44.6 28.3% 34.3 23.0% 10.3 30%
North America
Commercial
Solutions 19.5 24.2% 15.1 21.7% 4.4 29%
General Corporate
Expense (115.4) nm (121.3) nm 5.9 5%
Total operating
income $ 430.0 23.1% $ 381.8 22.3% $ 48.2 13%
nm - not meaningful
* Reflects percentage change in revenue conforming 2010 results using 2009
exchange rates.
Common Questions & Answers (Unaudited)
(Dollars in millions)
2. What drove the fluctuation in the effective tax rate?
Our effective tax rate was 33.5% for the three months ended December 31,
2010 up from 18.2% for the same period in 2009 due primarily to the
recognition of a $7.3 million income tax benefit during the fourth quarter
of 2009 related to our ability to utilize foreign tax credits beyond 2009.
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,
2010 2009 2010 2009
U.S. Consumer Information Solutions $ 11.0 $ 9.9 $ 41.4 $ 35.4
International 6.7 6.1 25.6 23.2
TALX 17.3 16.2 67.9 62.6
North America Personal Solutions 1.4 1.3 5.4 4.8
North America Commercial Solutions 1.6 1.5 6.2 5.8
General Corporate Expense 4.0 3.5 15.7 13.4
Total depreciation and amortization $ 42.0 $ 38.5 $ 162.2 $145.2
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, 2010
Operating Revenue Operating Income
Amount % Amount %
Canada Consumer $ 1.2 4% $ 0.5 4%
Canada Commercial 0.3 4% 0.1 4%
Europe (1.7) -5% (0.4) -5%
Latin America 1.2 2% 0.1 1%
Twelve Months Ended December 31, 2010
Operating Revenue Operating Income
Amount % Amount %
Canada Consumer $ 10.6 11% $ 4.2 10%
Canada Commercial 2.3 10% 0.9 10%
Europe (3.2) -2% (0.8) -3%
Latin America 14.3 7% 1.4 2%
5. What are the 2009 and 2008 quarterly revenue and operating income impacts
of the discontinued operations on the U.S. Consumer Information Solutions
segment?
U.S. Consumer Information Solutions
Operating Revenue Operating Income Operating Margin
As Reported Adjusted As Reported Adjusted As Reported Adjusted
Q1 2009 $ 210.0 $ 183.6 $ 75.5 $ 69.7 36% 38%
Q2 2009 211.0 184.7 74.3 69.1 35% 37%
Q3 2009 200.7 173.8 69.4 63.1 35% 36%
Q4 2009 199.0 170.1 66.0 57.5 33% 34%
2009 $ 820.7 $ 712.2 $ 285.2 $ 259.4 35% 36%
Q1 2008 $ 233.2 $ 202.7 $ 90.1 $ 81.8 39% 40%
Q2 2008 228.6 198.0 86.9 77.9 38% 39%
Q3 2008 220.6 190.8 84.2 75.3 38% 39%
Q4 2008 208.4 177.2 75.9 63.9 36% 36%
2008 $ 890.8 $ 768.7 $ 337.1 $ 298.9 38% 39%
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 from continuing operations attributable to Equifax,
adjusted for acquisition-related amortization expense, restructuring charge and
income tax benefit:
Three Months Ended
December 31,
2010 2009 $ Change % Change
Net income from continuing operations
attributable to Equifax 62.2 54.9 7.3 13%
Restructuring charge, net of tax (1) - 10.4 (10.4) nm
Income tax benefit (2) - (7.3) 7.3 nm
Net income from continuing operations
attributable to Equifax,
adjusted for restructuring charge
and income tax benefit 62.2 58.0 4.2 7%
Acquisition-related amortization
expense, net of tax 14.7 13.6 1.1 8%
Net income from continuing operations
attributable to Equifax,
adjusted for restructuring charge,
income tax benefit and
acquisition-related amortization
expense $ 76.9 $ 71.6 $ 5.3 7%
Diluted EPS from continuing
operations attributable to Equifax,
adjusted for restructuring charge,
income tax benefit and
acquisition-related amortization
expense $ 0.62 $ 0.56 $ 0.06 10%
Weighted-average shares used in
computing diluted EPS 124.9 127.5
Twelve Months Ended
December 31,
2010 2009 $ Change % Change
Net income from continuing operations
attributable to Equifax 235.2 217.8 17.4 8%
Restructuring charge, net of tax (1) - 15.8 (15.8) nm
Income tax benefit (2) - (7.3) 7.3 nm
Net income from continuing operations
attributable to Equifax,
adjusted for restructuring charge
and income tax benefit 235.2 226.3 8.9 4%
Acquisition-related amortization
expense, net of tax 57.2 51.2 6.0 12%
Net income from continuing operations
attributable to Equifax,
adjusted for restructuring charge,
income tax benefit and
acquisition-related amortization
expense $ 292.4 $ 277.5 $ 14.9 5%
Diluted EPS from continuing
operations attributable to Equifax,
adjusted for restructuring charge,
income tax benefit and
acquisition-related amortization
expense $ 2.31 $ 2.17 $ 0.14 6%
Weighted-average shares used in
computing diluted EPS 126.5 127.9
nm - not meaningful
(1) Restructuring charge includes $16.4 million of primarily severance expense
in the fourth quarter of 2009 and $8.4 million of severance expense in the
first quarter of 2009. See the Notes to this reconciliation for additional
detail.
(2) We recorded a $7.3 million income tax benefit during the fourth quarter of
2009 related to our ability to utilize foreign tax credits beyond 2009. See
the Notes to this reconciliation for additional detail.
B. Reconciliation of operating income to adjusted operating income, excluding
restructuring charge, and presentation of adjusted operating margin:
Three Months Ended
December 31,
2010 2009 $ Change % Change
Revenue $ 482.0 $ 435.4 $ 46.6 11%
Operating income $ 109.7 $ 82.9 $ 26.8 32%
Restructuring charge (1) - 16.4 (16.4) nm
Adjusted operating income, excluding
restructuring charge $ 109.7 $ 99.3 $ 10.4 10%
Adjusted operating margin 22.8% 22.8%
Twelve Months Ended
December 31,
2010 2009 $ Change % Change
Revenue $ 1,859.5 $ 1,716.0 $ 143.5 8%
Operating income $ 430.0 $ 381.8 $ 48.2 13%
Restructuring charge (1) - 24.8 (24.8) nm
Adjusted operating income, excluding
restructuring charge $ 430.0 $ 406.6 $ 23.4 6%
Adjusted operating margin, excluding
restructuring charge 23.1% 23.7%
nm - not meaningful
(1) Restructuring charge includes $16.4 million of primarily severance expense
in the fourth quarter of 2009 and $8.4 million of severance expense in the
first quarter of 2009. 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 fourth and first quarters of 2009, we recorded restructuring charges primarily related to severance expense of $16.4 million, pretax, ($10.4 million, net of tax) and $8.4 million, pretax, ($5.4 million, net of tax) respectively, 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 three and twelve months ended December 31, 2010, as compared to 2009, since a charge of such an amount is not comparable among the periods. This is consistent with how our management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods.
Income Tax Benefit – During the fourth quarter of 2009, we recorded a $7.3 million income tax benefit related to our ability to utilize foreign tax credits beyond 2009. The income tax benefit was recorded in provision for income taxes on our Consolidated Statements of Income. Management believes excluding the income tax benefit from certain financial results provides meaningful supplemental information regarding our financial results for the year ended December 31, 2010, as compared to 2009, since income tax benefits of such material amounts are not comparable among the periods. This is consistent with how our management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods.
Diluted EPS from continuing operations attributable to Equifax, adjusted for acquisition-related amortization expense, restructuring charge and income tax benefit - We calculate this financial measure by excluding acquisition-related amortization expense and the 2009 restructuring charges, all net of tax, and the 2009 income tax benefit from the determination of net income attributable to Equifax in the calculation of diluted EPS. These financial measures are not prepared in conformity with GAAP. Management believes that these measures are 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.
Adjusted operating income and operating margin, excluding restructuring charges - Management believes excluding the restructuring charges 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.
SOURCE Equifax
Released February 9, 2011