Exhibit 99.1

 

 

NEWS RELEASE

 

Contact:

 

Jeff Dodge		Tim Klein
Investor Relations		Media Relations
(404) 885-8804		(404) 885-8555
jeff.dodge@equifax.com		tim.klein@equifax.com

 

Equifax Reports Fourth Quarter and Full Year 2008 Results; Provides First Quarter 2009 Guidance

 

·                  Fourth quarter EPS increased 2 percent and fourth quarter adjusted EPS increased 3 percent over 2007.

 

·                  Fourth quarter revenue decreased 4 percent in local currency and declined 9 percent in U.S. dollars versus 2007.

 

·                  Full year 2008 revenue was up 5 percent over 2007.

 

·                  Full year EPS increased 4 percent and adjusted EPS increased 7 percent over 2007.

 

ATLANTA, February 4, 2009 — Equifax Inc. (NYSE: EFX) today announced financial results for the quarter and year ended December 31, 2008.  The company reported revenue of $446.6 million in the fourth quarter of 2008, a 9 percent decrease from the prior year period, of which 5 percent was due to the unfavorable effect of foreign exchange rates.  Operating income for the fourth quarter of 2008 was $116.1 million, a 3 percent decrease from the same period of 2007.  Fourth quarter 2008 net income was $64.0 million, a 2 percent decrease from the prior year.  Diluted earnings per share (“EPS”) for the fourth quarter of 2008 was $0.50 compared to $0.49 in the same period of the prior year, a 2 percent increase.  On a non-GAAP basis, EPS, excluding the impact of acquisition-related amortization expense (“adjusted EPS”), was $0.61, up 3 percent from the same period of 2007.

 

For the full year 2008, revenue increased 5 percent to $1.94 billion compared to 2007.  Foreign currency did not have a material impact on 2008 full year revenue.  Operating income for 2008 was $477.2 million, a 2 percent decrease from 2007.  Full year net income for 2008 increased slightly from 2007 to $272.8 million.  EPS was $2.09 compared to $2.02 for the full year 2007, a 4 percent increase.  On a non-GAAP basis, EPS, excluding the impact of acquisition-related amortization expense, restructuring and asset write-down charges and an income tax benefit recorded in the third quarter of 2008, was $2.48, up 7 percent from the prior year period.

 

“2008 was one of the most challenging business environments we have ever faced. Although economic conditions deteriorated throughout the year, we concentrated our efforts on key revenue initiatives to help our clients meet their information and risk management needs in this difficult environment and to better position each of our business units for long-term growth.  In 2008, new product innovation delivered over $70 million of revenue.  We also launched four new business initiatives addressing opportunities in Capital Markets, Collections, Identity

 

 

Management and Government.  Settlement Services, our largest new business initiative grew four-fold in 2008, offsetting double digit declines in core Mortgage Reporting revenue.  We continue to realize revenue synergies with The Work Number as we have closed sixty new deals in 2008,” said Richard F. Smith, Equifax’s Chairman and Chief Executive Officer.  “We reallocated our resources and took the actions needed to reduce operating expenses and maintain strong operating margins. Our business model is resilient, our balance sheet remains strong, and we believe we are well positioned to deliver on our long-term growth objectives.  Many challenges remain as we enter 2009. However, we have a diversified business portfolio and solid momentum with our new product initiatives that we expect will continue to deliver solid financial performance.”

 

Fourth Quarter 2008 Highlights

 

·                  Operating margin was 26.0 percent compared to 24.5 percent in the fourth quarter of 2007.

 

·                  EBITDA (a non-GAAP financial measure defined as operating income adding back depreciation and amortization expense) was $154.2 million, down 2 percent from the fourth quarter of 2007.

 

·                  The effective tax rate for the fourth quarter of 2008 was 36.6 percent, up from 33.1 percent in the fourth quarter of 2007.

 

·                  Total debt was $1.22 billion at December 31, 2008, a decrease of $89 million from September 30, 2008.  Our revolving credit facility of $850 million, which currently matures in July 2011, had $420 million outstanding at December 31, 2008.

 

U.S. Consumer Information Solutions (USCIS)

Total revenue was $208.4 million in the fourth quarter of 2008, a 9 percent decrease from the fourth quarter of 2007.

 

·                  Online Consumer Information Solutions revenue was $135.2 million, down 10 percent;

·                  Mortgage Solutions revenue was $18.2 million, up 43 percent;

·                  Credit Marketing Services revenue was $30.8 million, down 17 percent; and

·                  Direct Marketing Services revenue was $24.2 million, down 14 percent.

 

Operating margin for USCIS was 36.4 percent in the fourth quarter of 2008, down slightly from 36.6 percent in the fourth quarter of 2007.

 

International

Total revenue was $105.8 million in the fourth quarter of 2008, an 18 percent decrease from the fourth quarter of 2007. In local currency, revenue was flat when compared to the same period in the prior year.  Compared to the fourth quarter of 2007:

 

·                  Latin America revenue was $46.3 million, up 7 percent in local currency, but down 10 percent in U.S. dollars;

·                  Europe revenue was $35.9 million, down 8 percent in local currency and down 27 percent in U.S. dollars; and

·                  Canada Consumer revenue was $23.6 million, up 2 percent in local currency, but down 17 percent in U.S. dollars.

 

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Operating margin for International was 27.0 percent in the fourth quarter of 2008, down from 28.6 percent in the fourth quarter of 2007.

 

TALX

Total revenue was $75.4 million in the fourth quarter of 2008, a 2 percent increase from the fourth quarter of 2007.  Compared to the fourth quarter of 2007:

 

·                  The Work Number revenue was $31.3 million, up 12 percent;

·                  Tax and Talent Management Services revenue was $44.1 million, down 4 percent; Tax Management Services revenue was up 6 percent largely offsetting a decline in Talent Management Services.

 

Operating margin was 19.9 percent, down slightly from 20.0 percent in the fourth quarter of 2007.  During the quarter, total records in the employment database grew to 188.9 million, up 14 percent from a year ago.

 

North America Personal Solutions

Total revenue was $37.1 million, a 3 percent decrease from the fourth quarter of 2007. Operating margin was 33.9 percent, up from 26.1 percent in the fourth quarter of 2007.

 

North America Commercial Solutions

Total revenue was $19.9 million, flat in local currency, but a 6 percent decrease in U.S. dollars compared to the fourth quarter of 2007. Operating margin was 28.3 percent, down from 30.2 percent in the fourth quarter of 2007.

 

Full Year 2008 Highlights

 

·                  Revenue increased 5 percent to $1.9 billion.

 

·                  Adjusted EBITDA (a non-GAAP financial measure defined as operating income adding back depreciation and amortization expense and restructuring charges) was $647.0 million for the full year 2008, up 5 percent from 2007.

 

·                  Operating margin decreased to 24.7 percent for the full year 2008 from 26.4 percent for the full year 2007.  On a non-GAAP basis, excluding the impact of acquisition-related amortization expense and restructuring and asset write-down charges recorded during the third quarter of 2008, operating margin for the full year 2008 was flat at 30.0 percent when compared to 2007.

 

·                  The effective tax rate for the full year 2008 was 32.8 percent, down from 35.8 percent in 2007.

 

·                  Total debt was $1.22 billion at December 31, 2008, a decrease of $168 million from December 31, 2007.

 

·                  We repurchased 4.5 million of our common shares on the open market for $155.7 million during the full year 2008.  At December 31, 2008, our remaining authorization for future share repurchases was $158.2 million.

 

USCIS

Total revenue was $890.8 million in 2008, an 8 percent decrease from 2007.

 

·                  Online Consumer Information Solutions revenue was $594.5 million, down 7 percent;

 

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·                  Mortgage Solutions revenue was $70.2 million, up 6 percent;

·                  Credit Marketing Services revenue was $132.0 million, down 16 percent; and

·                  Direct Marketing Services revenue was $94.1 million, down 13 percent.

 

Operating margin for USCIS was 37.9 percent in the full year 2008, down from 39.6 percent in the full year 2007.

 

International

Total revenue was $505.7 million in 2008, a 7 percent increase from 2007. In local currency, revenue was also up 7 percent when compared to the same period in the prior year.  Compared to the full year of 2007:

 

·                  Latin America revenue was $219.9 million, up 15 percent in local currency and up 20 percent in U.S. dollars;

·                  Europe revenue was $175.0 million, flat in local currency, but down 5 percent in U.S. dollars; and

·                  Canada Consumer revenue was $110.8 million, up 3 percent in local currency and up 4 percent in U.S. dollars.

 

Operating margin for International was 29.6 percent in the full year 2008, down from 29.8 percent in the full year 2007.

 

TALX

Total revenue was $305.1 million and operating margin was 17.4 percent for the full year 2008.

 

North America Personal Solutions

Total revenue was $162.6 million in 2008, a 6 percent increase from 2007. Operating margin was 28.4 percent in the full year 2008, up from 22.1 percent in the full year 2007.

 

North America Commercial Solutions

Total revenue was $71.5 million in 2008, a 6 percent increase from 2007. Operating margin was 19.0 percent in the full year 2008, up from 17.7 percent in full year 2007.

 

First Quarter 2009 Outlook

 

Based on the current domestic and international business environment and current foreign exchange rates, Equifax expects consolidated revenue for the first quarter of 2009 to be in a similar range as reported revenue for the fourth quarter of 2008.  Adjusted EPS is expected to be between $0.52 and $0.57.  As a result of uncertainty about economic and market conditions, the Company is not providing financial guidance for the full year.

 

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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® 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 5, 2009, 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 operating margin excluding acquisition-related amortization expense, restructuring and asset write-down charges; net income and diluted EPS excluding acquisition-related amortization expense, restructuring and asset write-down charges, all net of tax, and income tax benefit; EBITDA, which we define as operating income adding back depreciation and amortization expense; and Adjusted EBITDA, which is EBITDA adding back certain restructuring charges.  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, net income or EPS as determined in accordance with GAAP.  EBITDA and Adjusted EBITDA as we have calculated may not be comparable to similarly titled measures reported by other companies.

 

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

 

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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, 2007 under Item 1A, “Risk Factors”, and our other filings with the Securities and Exchange Commission.

 

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EQUIFAX

CONSOLIDATED STATEMENTS OF INCOME

 

		Three Months Ended
		December 31,
(In millions, except per share amounts)		2008			2007
		(Unaudited)
Operating revenue		$	446.6		$	490.9
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)		181.3			198.5
Selling, general and administrative expenses		111.1			134.4
Depreciation and amortization		38.1			37.8
Total operating expenses		330.5			370.7
Operating income		116.1			120.2
Interest expense		(17.4		)	(20.9		)
Minority interests in earnings, net of tax		(1.2		)	(1.7		)
Other income, net		3.5			0.6
Income before income taxes		101.0			98.2
Provision for income taxes		(37.0		)	(32.5		)
Net income		$	64.0		$	65.7
Basic earnings per common share		$	0.51		$	0.50
Weighted-average shares used in computing basic earnings per share		126.3			130.9
Diluted earnings per common share		$	0.50		$	0.49
Weighted-average shares used in computing diluted earnings per share		128.0			133.8
Dividends per common share		$	0.04		$	0.04

 

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EQUIFAX

CONSOLIDATED STATEMENTS OF INCOME

 

		Twelve Months Ended
		December 31,
(In millions, except per share amounts)		2008			2007
		(Unaudited)
Operating revenue		$	1,935.7		$	1,843.0
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)		778.8			752.0
Selling, general and administrative expenses		524.3			477.1
Depreciation and amortization		155.4			127.7
Total operating expenses		1,458.5			1,356.8
Operating income		477.2			486.2
Interest expense		(71.3		)	(58.5		)
Minority interests in earnings, net of tax		(6.2		)	(6.1		)
Other income, net		6.2			3.0
Income before income taxes		405.9			424.6
Provision for income taxes		(133.1		)	(151.9		)
Net income		$	272.8		$	272.7
Basic earnings per common share		$	2.13		$	2.07
Weighted-average shares used in computing basic earnings per share		128.1			132.0
Diluted earnings per common share		$	2.09		$	2.02
Weighted-average shares used in computing diluted earnings per share		130.4			135.1
Dividends per common share		$	0.16		$	0.16

 

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EQUIFAX

CONSOLIDATED BALANCE SHEETS

 

		December 31,
(In millions, except par values)		2008			2007
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	58.2		$	81.6
Trade accounts receivable, net of allowance for doubtful accounts of $14.5 and $8.9 at December 31, 2008 and 2007, respectively		253.4			295.8
Prepaid expenses		22.9			25.8
Other current assets		19.3			21.8
Total current assets		353.8			425.0
Property and equipment:
Capitalized internal-use software and system costs		313.9			292.2
Data processing equipment and furniture		176.6			184.7
Land, buildings and improvements		124.0			89.5
Total property and equipment		614.5			566.4
Less accumulated depreciation and amortization		(328.2		)	(306.9		)
Total property and equipment, net		286.3			259.5
Goodwill		1,760.0			1,834.6
Indefinite-lived intangible assets		95.1			95.7
Purchased intangible assets, net		682.2			764.5
Prepaid pension asset		8.3			72.2
Other assets, net		74.6			72.4
Total assets		$	3,260.3		$	3,523.9
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current maturities		$	31.9		$	222.1
Accounts payable		29.9			31.1
Accrued expenses		57.6			79.4
Accrued salaries and bonuses		54.2			63.5
Deferred revenue		65.7			69.9
Other current liabilities		78.7			80.9
Total current liabilities		318.0			546.9
Long-term debt		1,187.4			1,165.2
Deferred income tax liabilities, net		215.3			277.1
Long-term pension and other postretirement benefit liabilities		166.0			62.8
Other long-term liabilities		61.2			72.7
Total liabilities		1,947.9			2,124.7
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 - 189.2 and 188.5 at December 31, 2008 and 2007, respectively; Outstanding shares - 126.3 and 129.7 at December 31, 2008 and 2007, respectively		236.5			235.6
Paid-in capital		1,075.2			1,040.8
Retained earnings		2,281.0			2,030.0
Accumulated other comprehensive loss		(390.6		)	(170.5		)
Treasury stock, at cost, 59.7 shares and 55.1 shares at December 31, 2008 and 2007, respectively		(1,837.9		)	(1,679.0		)
Stock held by employee benefits trusts, at cost, 3.2 shares and 3.7 shares at December 31, 2008 and 2007, respectively		(51.8		)	(57.7		)
Total shareholders’ equity		1,312.4			1,399.2
Total liabilities and shareholders’ equity		$	3,260.3		$	3,523.9

 

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EQUIFAX

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Twelve Months Ended
		December 31,
(In millions)		2008			2007
		(Unaudited)
Operating activities:
Net income		$	272.8		$	272.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		155.4			127.7
Stock-based compensation expense		19.9			17.6
Tax effects of stock-based compensation plans		2.9			6.6
Excess tax benefits from stock-based compensation plans		(2.1		)	(7.0		)
Deferred income taxes		7.7			7.9
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable, net		24.2			(1.6		)
Prepaid expenses and other current assets		3.5			(5.3		)
Other assets		(2.2		)	(18.7		)
Current liabilities, excluding debt		(23.4		)	38.9
Other long-term liabilities, excluding debt		(14.0		)	11.1
Cash provided by operating activities		444.7			449.9
Investing activities:
Capital expenditures		(110.5		)	(118.5		)
Acquisitions, net of cash acquired		(27.4		)	(303.8		)
Investment in unconsolidated affiliates		(3.7		)	—
Cash used in investing activities		(141.6		)	(422.3		)
Financing activities:
Net short-term (repayments) borrowings		(184.8		)	139.7
Net borrowings under long-term revolving credit facilities		45.0			253.4
Proceeds from issuance of long-term debt		2.3			545.7
Payments on long-term debt		(17.8		)	(250.0		)
Treasury stock purchases		(155.7		)	(718.7		)
Dividends paid		(20.5		)	(20.7		)
Proceeds from exercise of stock options		14.7			31.6
Excess tax benefits from stock-based compensation plans		2.1			7.0
Other		(1.0		)	(5.6		)
Cash used in financing activities		(315.7		)	(17.6		)
Effect of foreign currency exchange rates on cash and cash equivalents		(10.8		)	3.8
(Decrease) increase in cash and cash equivalents		(23.4		)	13.8
Cash and cash equivalents, beginning of period		81.6			67.8
Cash and cash equivalents, end of period		$	58.2		$	81.6

 

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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:

 

		Three Months Ended December 31,
													Local Currency
(in millions)		2008			2007			$ Change			% Change		% Change*
Operating revenue:
Online Consumer Information Solutions		$	135.2		$	150.6		$	(15.4	)	-10	%
Mortgage Solutions		18.2			12.7			5.5			43	%
Credit Marketing Services		30.8			37.1			(6.3		)	-17	%
Direct Marketing Services		24.2			28.3			(4.1		)	-14	%
Total U.S. Consumer Information Solutions		208.4			228.7			(20.3		)	-9	%
Europe		35.9			48.8			(12.9		)	-27	%	-8	%
Latin America		46.3			51.6			(5.3		)	-10	%	7	%
Canada Consumer		23.6			28.5			(4.9		)	-17	%	2	%
Total International		105.8			128.9			(23.1		)	-18	%	0	%
The Work Number		31.3			28.1			3.2			12	%
Tax and Talent Management Services		44.1			45.7			(1.6		)	-4	%
Total TALX		75.4			73.8			1.6			2	%
North America Personal Solutions		37.1			38.3			(1.2		)	-3	%
North America Commercial Solutions		19.9			21.2			(1.3		)	-6	%	0	%
Total operating revenue		$	446.6		$	490.9		$	(44.3	)	-9	%	-4	%

 

		Twelve Months Ended December 31,
													Local Currency
(in millions)		2008			2007			$ Change			% Change		% Change*
Operating revenue:
Online Consumer Information Solutions		$	594.5		$	639.0		$	(44.5	)	-7	%
Mortgage Solutions		70.2			66.1			4.1			6	%
Credit Marketing Services		132.0			156.4			(24.4		)	-16	%
Direct Marketing Services		94.1			108.2			(14.1		)	-13	%
Total U.S. Consumer Information Solutions		890.8			969.7			(78.9		)	-8	%
Europe		175.0			183.8			(8.8		)	-5	%	0	%
Latin America		219.9			182.5			37.4			20	%	15	%
Canada Consumer		110.8			106.5			4.3			4	%	3	%
Total International		505.7			472.8			32.9			7	%	7	%
The Work Number**		131.9			72.6			59.3			82	%
Tax and Talent Management Services**		173.2			106.8			66.4			62	%
Total TALX**		305.1			179.4			125.7			70	%
North America Personal Solutions		162.6			153.5			9.1			6	%
North America Commercial Solutions		71.5			67.6			3.9			6	%	5	%
Total operating revenue		$	1,935.7		$	1,843.0		$	92.7		5	%	5	%

 

		Three Months Ended December 31,
					Operating					Operating
(in millions)		2008			Margin		2007			Margin		$ Change			% Change
Operating income:
U.S. Consumer Information Solutions		$	75.9		36.4	%	$	83.7		36.6	%	$	(7.8	)	-9	%
International		28.5			27.0	%	36.9			28.6	%	(8.4		)	-23	%
TALX		15.0			19.9	%	14.8			20.0	%	0.2			2	%
North America Personal Solutions		12.6			33.9	%	10.0			26.1	%	2.6			26	%
North America Commercial Solutions		5.7			28.3	%	6.4			30.2	%	(0.7		)	-12	%
General Corporate Expense		(21.6		)	nm		(31.6		)	nm		10.0			31	%
Total operating income		$	116.1		26.0	%	$	120.2		24.5	%	$	(4.1	)	-3	%

 

		Twelve Months Ended December 31,
					Operating					Operating
(in millions)		2008			Margin		2007			Margin		$ Change			% Change
Operating income:
U.S. Consumer Information Solutions		$	337.1		37.9	%	$	383.5		39.6	%	$	(46.4	)	-12	%
International		149.9			29.6	%	141.1			29.8	%	8.8			6	%
TALX**		53.1			17.4	%	29.3			16.3	%	23.8			81	%
North America Personal Solutions		46.3			28.4	%	34.0			22.1	%	12.3			36	%
North America Commercial Solutions		13.6			19.0	%	12.0			17.7	%	1.6			13	%
General Corporate Expense		(122.8		)	nm		(113.7		)	nm		(9.1		)	-8	%
Total operating income		$	477.2		24.7	%	$	486.2		26.4	%	$	(9.0	)	-2	%

 

nm - - not meaningful

* Reflects percentage change in revenue conforming 2008 results using 2007 exchange rates.

** TALX 2007 results represent the period from its acquisition on May 15, 2007 through December 31, 2007.

 

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Common Questions & Answers (Unaudited)

(Dollars in millions)

 

2.    What drove the fluctuation in the effective tax rate?

Our effective income tax rate was 36.6% for the three months ended December 31, 2008, up from 33.1% for the same period in 2007, due primarily to discrete items recorded during the fourth quarter 2007 including a $2.9 million benefit for refunds related to our 2002 and 2003 U.S. federal income tax filings.

 

Our effective income tax rate was 32.8% for the twelve months ended December 31, 2008, down from 35.8% for the same period in 2007. The 2008 rate reflects the reversal of a $14.6 million income tax reserve related to an uncertain tax position regarding our Brazilian operations, for which the statute of limitations expired in the third quarter of 2008.

 

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,
		2008			2007			2008			2007
U.S. Consumer Information Solutions		$	11.9		$	11.6		$	46.2		$	47.0
International		5.4			5.9			23.8			21.4
TALX		15.5			15.0			62.6			38.3
North America Personal Solutions		0.8			0.6			3.1			2.9
North America Commercial Solutions		1.4			1.4			5.4			5.5
General Corporate Expense		3.1			3.3			14.3			12.6
Total depreciation and amortization		$	38.1		$	37.8		$	155.4		$	127.7

 

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, 2008
		Operating Revenue					Operating Income
		Amount			%		Amount			%
Canada Consumer		$	(5.5	)	-19	%	$	(2.1	)	-20	%
Canada Commercial		(1.3		)	-17	%	(0.5		)	-16	%
Europe		(9.1		)	-19	%	(1.7		)	-16	%
Latin America		(9.0		)	-18	%	(2.6		)	-17	%
		$	(24.9	)	-5	%	$	(6.9	)	-5	%

 

		Twelve Months Ended December 31, 2008
		Operating Revenue					Operating Income
		Amount			%		Amount			%
Canada Consumer		$	1.2		1	%	$	0.7		2	%
Canada Commercial		0.3			1	%	0.1			2	%
Europe		(8.4		)	-5	%	(1.9		)	-4	%
Latin America		9.3			5	%	2.8			5	%
		$	2.4		0	%	$	1.7		0	%

 

12

 

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

(Dollars in millions, except per share amounts)

 

A.   Reconciliation of operating income to adjusted operating income, excluding acquisition-related amortization expense, restructuring and asset write-down charges, and presentation of adjusted operating margin:

 

		Twelve Months Ended
		December 31,
		2008			2007
Revenue		$	1,935.7		$	1,843.0
Operating income		$	477.2		$	486.2
Acquisition-related amortization expense		86.7			65.8
Restructuring and asset write-down charges (1)		16.8			—
Adjusted operating income, excluding acquisition-related amortization expense, restructuring and asset write-down charges		$	580.7		$	552.0
Adjusted operating margin		30.0		%	30.0		%

 

B.   Reconciliation of net income to net income, adjusted for acquisition-related amortization expense, restructuring and asset write-down charges and income tax benefit, and net income to diluted EPS, adjusted for acquisition-related amortization expense, restructuring and asset write-down charges and income tax benefit:

 

		Three Months Ended
		December 31,
		2008			2007			$ Change			% Change
Net income		$	64.0		$	65.7		$	(1.7	)	-3	%
Acquisition-related amortization expense, net of tax		13.7			13.3			0.4			3	%
Net income, adjusted for acquisition-related amortization expense		$	77.7		$	79.0		$	(1.3	)	-2	%
Diluted EPS, adjusted for acquisition-related amortization expense		$	0.61		$	0.59		$	0.02		3	%
Weighted-average shares used in computing diluted EPS		128.0			133.8

 

		Twelve Months Ended
		December 31,
		2008			2007			$ Change			% Change
Net income		$	272.8		$	272.7		$	0.1		0	%
Restructuring and asset write-down charges, net of tax (1)		10.5			—			10.5			nm
Income tax benefit (2)		(14.6		)	—			(14.6		)	nm
Net income, adjusted for restructuring and asset write-down charges and income tax benefit		268.7			272.7			(4.0		)	-1	%
Acquisition-related amortization expense, net of tax		54.7			40.7			14.0			34	%
Net income, adjusted for acquisition-related amortization expense, restructuring and asset write-down charges and income tax benefit		$	323.4		$	313.4		$	10.0		3	%
Diluted EPS, adjusted for acquisition-related amortization expense, restructuring and asset write-down charges and income tax benefit		$	2.48		$	2.32		$	0.16		7	%
Weighted-average shares used in computing diluted EPS		130.4			135.1

 

nm - - not meaningful

 

(1)   Restructuring and asset write-down charges include severance of $10.3 million, certain contractual costs of $4.1 million and asset write-down charges of $2.4 million.  See the Notes to this reconciliation for additional detail.

(2)   See Question #2 in the Q&A section of this document.

 

13