EXHIBIT 99.8
Equifax Inc.
Exhibit 99.8 to Form 10-K CORE BUSINESS RESULTS OF OPERATIONS
Information in this Exhibit 99.8 is provided to give further clarification as
to reconciling items between Equifax's "As Reported" results from continuing
operations and its "Core Business" results from continuing operations, as
discussed in Management's Discussion and Analysis of Financial Condition and
Results of Operations. Information reported in this Exhibit excludes the
discontinued operations of Certegy (see Note 2 of Notes to Consolidated
Financial Statements).
In October 2001, the Company divested its City Directory business and, in the
fourth quarter of 2000, sold its global risk management and U.K. vehicle
information businesses. The operating results of these businesses have been
classified as Divested Operations for segment reporting purposes (see Note 4 of
Notes to Consolidated Financial Statements).
In the fourth quarter of 2001, the Company recorded restructuring and other
charges in connection with efforts to properly size and configure its post-spin
business and to align the cost structure in international operations. The charge
totaled $60.4 million ($35.3 million after tax or $0.25 per diluted share) and
consisted of $37.2 million for employee severance and facilities consolidation
and $23.2 million to write down several technology investments (see Note 5 of
Notes to Consolidated Financial Statements).
The Company's "Core Business" operating results have been adjusted to exclude
the impacts of Divested Operations and the 2001 restructuring and other charges.
Management believes the "Core Business" results are more useful in analyzing the
underlying business by providing a consistent comparison of the Company's
historical operating performance. Three year summaries of "As Reported" results,
referenced reconciling adjustments, and "Core Business" results are presented on
page 2 of this Exhibit. The referenced reconciling adjustments are then
discussed in more detail on page 3 of this Exhibit.
1
Equifax Inc.
Exhibit 99.8 to Form 10-K CORE BUSINESS RESULTS OF OPERATIONS
The following schedule provides consolidated statements of income for the
continuing operations of the Company (which excludes Certegy) for "As Reported"
results, "Core Business" results, and a summary of reconciling adjustments
between the two sets of statements:
(In millions, except per share amounts) AS REPORTED RESULTS:
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Year Ended December 31 2001 2000 1999
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Operating revenue $1,139.0 $1,189.2 $1,092.7
---------------- ---------------- ----------------
Costs and expenses:
Operating costs and expenses 824.8 880.6 806.4
Restructuring and other charges (Note 5) 60.4 - -
---------------- ---------------- ----------------
Total costs and expenses 885.2 880.6 806.4
---------------- ---------------- ----------------
Operating income 253.8 308.6 286.3
Other income (expense), net (1.2) 3.7 10.8
Interest expense (47.8) (55.8) (42.2)
Minority interests in earnings (2.2) (7.1) (7.3)
---------------- ---------------- ----------------
Income from continuing operations before income taxes 202.6 249.4 247.6
Provision for income taxes (85.3) (108.3) (99.9)
---------------- ---------------- ----------------
Income from continuing operations $117.3 $141.1 $147.7
================ ================ ================
Per common share (diluted):
Income from continuing operations $0.84 $1.04 $1.06
=============== ================ ================
Shares used in computing diluted earnings per share 139.0 136.0 139.6
================ ================ ================
RECONCILING ADJUSTMENTS
(In millions) TO CORE BUSINESS RESULTS:
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Year Ended December 31 REF # 2001 2000 1999
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Operating revenue 1 $(29.2) $(162.0) $(175.7)
---------------- ---------------- ----------------
Costs and expenses:
Operating costs and expenses (32.8) (153.0) (156.8)
Restructuring and other charges (Note 5) (60.4) - -
---------------- ---------------- ----------------
Total costs and expenses (93.2) (153.0) (156.8)
---------------- ---------------- ----------------
Operating income 2 64.0 (9.0) (18.9)
Other income (expense), net 3 5.9 7.4 0.2
Interest expense 4 - 7.5 9.3
Minority interests in earnings 5 (1.0) - -
---------------- ---------------- ----------------
Income from continuing operations
before income taxes 68.9 5.9 (9.4)
Provision for income taxes 6 (26.5) 3.2 1.8
---------------- ---------------- ----------------
Income from continuing operations $ 42.4 $ 9.1 $ (7.6)
================ ---------------- ----------------
(In millions, except per share amounts) CORE BUSINESS RESULTS:
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Year Ended December 31 2001 2000 1999
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Operating revenue $1,109.8 $1,027.2 $917.0
---------------- ---------------- ----------------
Costs and expenses:
Operating costs and expenses 792.0 727.6 649.6
Restructuring and other charges (Note 5) - - -
---------------- ---------------- ----------------
Total costs and expenses 792.0 727.6 649.6
---------------- ---------------- ----------------
Operating income 317.8 299.6 267.4
Other income (expense), net 4.7 11.1 11.0
Interest expense (47.8) (48.3) (32.9)
Minority interests in earnings (3.2) (7.1) (7.3)
---------------- ---------------- ----------------
Income from continuing operations before income taxes 271.5 255.3 238.2
Provision for income taxes (111.8) (105.1) (98.1)
---------------- ---------------- ----------------
Income from continuing operations $159.7 $150.2 $140.1
================ ================ ================
Per common share (diluted):
Income from continuing operations $1.15 $1.10 $1.00
================ ================ ================
Shares used in computing diluted earnings per share 139.0 136.0 139.6
================ ================ ================
2
Equifax Inc.
Exhibit 99.8 to Form 10-K CORE BUSINESS RESULTS OF OPERATIONS
The reconciling adjustments referenced on page 2 are described below:
1 Core Business operating revenue has been adjusted to exclude the results
of the Divested Operations as follows:
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(In millions) 2001 2000 1999
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City Directory $(29.2) $(28.7) $ -
Risk management businesses - (110.6) (148.5)
Vehicle information business - (22.7) (27.2)
------------ ----------- -----------
$(29.2) $(162.0) $(175.7)
============ =========== ===========
2 Core Business operating income has been adjusted to exclude the results of
the Divested Operations, as well as the $60.4 million restructuring and
other charges (see Note 5 of Notes to Consolidated Financial Statements)
as follows (operating losses below are shown unbracketed):
- ---------------------------------------------------------------------------------------------------------------------
(In millions) 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
City Directory $ 3.6 $ 4.8 $ -
Risk management businesses - (16.1) (20.1)
Vehicle information business - 2.3 1.2
Restructuring and other charges 60.4 - -
------------ ----------- -----------
$64.0 $ (9.0) $(18.9)
============ =========== ===========
3 Core Business other income (expense), net has been adjusted for the
following items related to Divested Operations:
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(In millions) 2001 2000 1999
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Exclude the loss on sale of:
City Directory $5.8 $ - $ -
Risk management businesses - 1.9 -
Vehicle information business - 2.3 -
Exclude the gain on sale of 3 risk management offices - - (4.1)
Adjust interest income for the $41 million note proceeds
received on the sale of one of the businesses divested
in 2000, as if the note had been received January 1, 1999 - 3.4 4.5
Exclude other income (expense), net of the
Divested Operations businesses 0.1 (0.2) (0.2)
------------ ------------ ------------
$5.9 $ 7.4 $ 0.2
============ ============ ============
4 Core Business interest expense has been adjusted for the following items
related to Divested Operations:
- ---------------------------------------------------------------------------------------------------------------------
(In millions) 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
Adjust interest expense to reflect using the cash proceeds
from the sale of the risk management businesses to
reduce debt, as if those proceeds had been received
January 1, 1999 $ - $ 5.0 $ 6.8
Adjust interest expense to reflect using the cash
proceeds from the sale of the vehicle information
business to reduce debt, as if those proceeds had
been received January 1, 1999 - 2.5 2.5
------------ ------------ ------------
$ - $ 7.5 $ 9.3
============ ============ ============
5 Core Business minority interests in earnings has been adjusted by $1.0
million to exclude the impact that the $60.4 million restructuring and
other charges had on businesses that are not fully owned by the Company,
since that item has been excluded from Core Business operating income as
noted in REF #2 above.
6 Core Business provision for income taxes has been adjusted to reflect the
impact of the previously discussed adjustments.
3