EXHIBIT 99.1
 
1550 Peachtree Street, N.W.  Atlanta, Georgia 30309
 
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 Second Quarter 2010 Results
 
 
·
Second quarter revenue was $460.7 million, up 7 percent from the second quarter of 2009.
 
 
·
Second quarter diluted EPS from continuing operations attributable to Equifax was $0.45 and second quarter adjusted EPS was $0.58.
 
ATLANTA, July 28, 2010 — Equifax Inc. (NYSE: EFX) today announced financial results for the quarter ended June 30, 2010.  The company reported revenue from continuing operations of $460.7 million in the second quarter of 2010, a 7 percent increase from the second quarter of 2009.  Revenue increased 6 percent from the prior year excluding the favorable effect of foreign exchange rates.  Second quarter 2010 net income from continuing operations attributable to Equifax was $57.7 million, a 2 percent increase from the prior year.  Diluted earnings per share (“EPS”) from continuing operations attributable to Equifax for the second quarter of 2010 was $0.45 compared to $0.44 in the same period of the prior year.  On a non-GAAP basis, adjusted EPS attributable to Equifax, which includes the operating results of discontinued operations, but excludes the impact of acquisition-related amortization expense and the gain on the sale of our APPRO product line, was $0.58 compared to $0.57 in the second quarter of 2009.

“For the second quarter, we experienced broad-based revenue growth that was better than expected as overall market conditions began to improve and we continued to benefit from our new product innovations.  At the individual business unit level, International, TALX, North America Personal Solutions, and North America Commercial all exceeded our expectations.  US Consumer Information Solutions revenue was flat, in line with our expectations, while they significantly improved their operating margin from the first quarter," said Richard F. Smith, Equifax's Chairman and Chief Executive Officer. "We continue to be optimistic and expect improved, year-over-year performance for the third quarter consistent with the full year outlook we expressed at the beginning of the year."
 
Second Quarter 2010 Report
 
 
·
Revenue increased 7 percent versus the second quarter of 2009.
 
 
·
Operating margin from continuing operations was 23.0 percent for the second quarter of 2010, down from an operating margin of 23.8 percent in the second quarter of 2009.
 
 
 

 
 
 
·
We recorded a gain from the sale of our APPRO product line in April of approximately $12 million, after tax.  On July 1, 2010, we completed the sale of our Direct Marketing Services division for $117 million, subject to certain adjustments.  Both of these businesses are reported as discontinued operations and were previously included in the results of our U.S. Consumer Information Solutions segment.
 
 
·
Total debt at June 30, 2010 was $1.07 billion, down $107.2 million from December 31, 2009.
 
 
·
We repurchased 1.7 million of our common shares on the open market for $55.4 million during the second quarter of 2010.  At June 30, 2010, our remaining authorization for future share repurchases was $207.2 million.

 
U.S. Consumer Information Solutions (USCIS)
Total revenue was $184.6 million in the second quarter of 2010 compared to $184.7 million in the second quarter of 2009.

 
·
Online Consumer Information Solutions revenue was $120.3 million, down 7 percent from a year ago.
 
·
Mortgage Solutions revenue was $28.8 million, up 1 percent from a year ago.
 
·
Consumer Financial Marketing Services revenue was $35.5 million, up 30 percent when compared to a year ago.

Operating margin for USCIS was 37.1 percent in the second quarter of 2010 compared to 37.4 percent in the second quarter of 2009.

International
Total revenue was $118.2 million in the second quarter of 2010, a 12 percent increase over the second quarter of 2009.  In local currency, revenue was up 7 percent compared to the second quarter of 2009.

 
·
Latin America revenue was $56.7 million, up 12 percent in local currency and 21 percent in U.S. dollars from a year ago.
 
·
Europe revenue was $32.5 million, up 4 percent in local currency, but down 1 percent in U.S. dollars from a year ago.
 
·
Canada Consumer revenue was $29.0 million, up 1 percent in local currency and 15 percent in U.S. dollars from a year ago.

Operating margin for International was 25.4 percent in the second quarter of 2010 compared to 25.3 percent in the second quarter of 2009.

TALX
Total revenue was $99.0 million in the second quarter of 2010, a 15 percent increase over the second quarter of 2009.

 
·
The Work Number revenue was $50.0 million, up 28 percent from a year ago.
 
·
Tax and Talent Management Services revenue was $49.0 million, up 4 percent from a year ago.

Operating margin for TALX was 23.2 percent in the second quarter of 2010, consistent with the operating margin in the second quarter of 2009.

 
2

 

 
North America Personal Solutions
Revenue was $40.3 million, an 8 percent increase from the second quarter of 2009. Operating margin was 25.4 percent, up from 21.5 percent in the second quarter of 2009.

North America Commercial Solutions
Revenue was $18.6 million, up 13 percent in local currency and up 18 percent in U.S. dollars compared to the second quarter of 2009.  Operating margin was 20.2 percent, up from 15.4 percent in the second quarter of 2009.

Third Quarter 2010 Outlook
 
Based on the current level of domestic and international business activity and current foreign exchange rates, consolidated revenue for the third quarter of 2010 is expected to be up in the mid to upper single-digits from the year-ago quarter.  Third quarter 2010 adjusted EPS, which excludes the impact of acquisition-related amortization expense and the gain that will be recognized from the DMS sale, is expected to be between $0.55 and $0.59.
 
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 14 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, July 29, 2010, 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 diluted EPS attributable to Equifax which includes the results of discontinued operations, but excludes acquisition-related amortization expense, gain from sale of business and a restructuring charge in the prior year, all net of tax.  These are important financial measures for Equifax but are not financial measures as defined by GAAP.

 
3

 
 
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 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, 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, 2009 under Item 1A, “Risk Factors”, and our other filings with the Securities and Exchange Commission.

 
4

 
 
EQUIFAX
CONSOLIDATED STATEMENTS OF INCOME

   
Three Months Ended
 
   
June 30,
 
   
2010
   
2009
 
(In millions, except per share amounts)
 
(Unaudited)
 
Operating revenue
  $ 460.7     $ 429.1  
Operating expenses:
               
Cost of services (exclusive of depreciation and amortization below)
    188.3       180.4  
Selling, general and administrative expenses
    126.9       111.1  
Depreciation and amortization
    39.7       35.6  
Total operating expenses
    354.9       327.1  
Operating income
    105.8       102.0  
Interest expense
    (14.1 )     (14.5 )
Other income, net
    0.8       3.1  
Consolidated income from continuing operations before income taxes
    92.5       90.6  
Provision for income taxes
    (32.7 )     (32.7 )
Consolidated income from continuing operations
    59.8       57.9  
Discontinued operations, net of tax
    13.6       3.2  
Consolidated net income
    73.4       61.1  
Less:  Net income attributable to noncontrolling interests
    (2.1 )     (1.5 )
Net income attributable to Equifax
  $ 71.3     $ 59.6  
Amounts attributable to Equifax:
               
Income from continuing operations, net of tax
  $ 57.7     $ 56.4  
Discontinued operations, net of tax
    13.6       3.2  
Net income
  $ 71.3     $ 59.6  
Basic earnings per common share:
               
Income from continuing operations attributable to Equifax
  $ 0.46     $ 0.44  
Discontinued operations attributable to Equifax
    0.11       0.03  
Net income attributable to Equifax
  $ 0.57     $ 0.47  
Weighted-average shares used in computing basic earnings per share
    125.7       126.3  
Diluted earnings per common share:
               
Income from continuing operations attributable to Equifax
  $ 0.45     $ 0.44  
Discontinued operations attributable to Equifax
    0.11       0.03  
Net income attributable to Equifax
  $ 0.56     $ 0.47  
Weighted-average shares used in computing diluted earnings per share
    127.3       127.8  
Dividends per common share
  $ 0.04     $ 0.04  
 
 
5

 
 
EQUIFAX
CONSOLIDATED STATEMENTS OF INCOME

   
Six Months Ended
 
   
June 30,
 
   
2010
   
2009
 
(In millions, except per share amounts)
 
(Unaudited)
 
Operating revenue
  $ 903.7     $ 855.6  
Operating expenses:
               
Cost of services (exclusive of depreciation and amortization below)
    378.4       357.5  
Selling, general and administrative expenses
    236.4       228.8  
Depreciation and amortization
    78.8       70.4  
Total operating expenses
    693.6       656.7  
Operating income
    210.1       198.9  
Interest expense
    (28.3 )     (28.8 )
Other income, net
    0.3       5.6  
Consolidated income from continuing operations before income taxes
    182.1       175.7  
Provision for income taxes
    (66.4 )     (65.3 )
Consolidated income from continuing operations
    115.7       110.4  
Discontinued operations, net of tax
    16.3       6.8  
Consolidated net income
    132.0       117.2  
Less:  Net income attributable to noncontrolling interests
    (4.0 )     (3.2 )
Net income attributable to Equifax
  $ 128.0     $ 114.0  
Amounts attributable to Equifax:
               
Income from continuing operations, net of tax
  $ 111.7     $ 107.2  
Discontinued operations, net of tax
    16.3       6.8  
Net income
  $ 128.0     $ 114.0  
Basic earnings per common share:
               
Income from continuing operations attributable to Equifax
  $ 0.89     $ 0.85  
Discontinued operations attributable to Equifax
    0.13       0.05  
Net income attributable to Equifax
  $ 1.02     $ 0.90  
Weighted-average shares used in computing basic earnings per share
    126.0       126.3  
Diluted earnings per common share:
               
Income from continuing operations attributable to Equifax
  $ 0.87     $ 0.84  
Discontinued operations attributable to Equifax
    0.13       0.05  
Net income attributable to Equifax
  $ 1.00     $ 0.89  
Weighted-average shares used in computing diluted earnings per share
    127.7       127.6  
Dividends per common share
  $ 0.08     $ 0.08  
 
 
6

 

EQUIFAX
CONSOLIDATED BALANCE SHEETS

   
June 30,
   
December 31,
 
   
2010
   
2009
 
(In millions, except par values)
 
(Unaudited)
       
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 70.1     $ 103.1  
Trade accounts receivable, net of allowance for doubtful accounts of $10.9 and $15.1 at June 30, 2010 and December 31, 2009, respectively
    260.5       258.7  
Prepaid expenses
    32.2       27.6  
Other current assets
    110.2       27.4  
Total current assets
    473.0       416.8  
Property and equipment:
               
Capitalized internal-use software and system costs
    293.6       316.6  
Data processing equipment and furniture
    171.7       184.2  
Land, buildings and improvements
    166.1       164.5  
Total property and equipment
    631.4       665.3  
Less accumulated depreciation and amortization
    (330.5 )     (346.0 )
Total property and equipment, net
    300.9       319.3  
Goodwill
    1,855.4       1,943.2  
Indefinite-lived intangible assets
    95.5       95.5  
Purchased intangible assets, net
    610.5       687.0  
Other assets, net
    96.8       88.7  
Total assets
  $ 3,432.1     $ 3,550.5  
                 
LIABILITIES AND EQUITY
               
Current liabilities:
               
Short-term debt and current maturities
  $ 87.5     $ 154.2  
Capitalized lease obligation
    -       29.0  
Accounts payable
    26.2       35.9  
Accrued expenses
    62.6       67.7  
Accrued salaries and bonuses
    37.3       58.1  
Deferred revenue
    62.9       69.8  
Other current liabilities
    93.2       77.5  
Total current liabilities
    369.7       492.2  
Long-term debt
    979.4       990.9  
Deferred income tax liabilities, net
    236.5       249.3  
Long-term pension and other postretirement benefit liabilities
    117.3       142.5  
Other long-term liabilities
    50.3       60.6  
Total liabilities
    1,753.2       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 June 30, 2010 and December 31, 2009; Outstanding shares - 125.0 and 126.2 at June 30, 2010 and December 31, 2009, respectively
    236.6       236.6  
Paid-in capital
    1,101.0       1,102.0  
Retained earnings
    2,612.1       2,494.2  
Accumulated other comprehensive loss
    (332.2 )     (318.7 )
Treasury stock, at cost, 62.2 shares and 61.0 shares at June 30, 2010 and December 31, 2009, respectively
    (1,912.6 )     (1,871.7 )
Stock held by employee benefits trusts, at cost, 2.1 shares at June 30, 2010 and December 31, 2009
    (41.2 )     (41.2 )
Total Equifax shareholders' equity
    1,663.7       1,601.2  
Noncontrolling interests
    15.2       13.8  
Total equity
    1,678.9       1,615.0  
Total liabilities and equity
  $ 3,432.1     $ 3,550.5  

 
7

 

EQUIFAX
CONSOLIDATED STATEMENTS OF CASH FLOWS

   
Six Months Ended
 
   
June 30,
 
   
2010
   
2009
 
(In millions)
 
(Unaudited)
 
Operating activities:
           
Consolidated net income
  $ 132.0     $ 117.2  
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
               
Gain on divestiture
    (12.3 )     -  
Depreciation and amortization
    84.3       77.3  
Stock-based compensation expense
    10.9       9.8  
Tax effects of stock-based compensation plans
    1.4       0.1  
Excess tax benefits from stock-based compensation plans
    (1.4 )     (0.5 )
Deferred income taxes
    0.6       6.7  
Changes in assets and liabilities, excluding effects of acquisitions:
               
Accounts receivable, net
    (8.4 )     6.4  
Prepaid expenses and other current assets
    (1.2 )     (10.2 )
Other assets
    4.0       (5.5 )
Current liabilities, excluding debt
    (41.6 )     (42.2 )
Other long-term liabilities, excluding debt
    (29.4 )     (13.5 )
Cash provided by operating activities
    138.9       145.6  
Investing activities:
               
Capital expenditures
    (66.9 )     (34.0 )
Acquisitions, net of cash acquired
    (14.7 )     -  
Cash received from divestiture
    66.7       -  
Dividend from unconsolidated affiliate
    1.0       1.5  
Cash used in investing activities
    (13.9 )     (32.5 )
Financing activities:
               
Net short-term borrowings (repayments)
    (66.9 )     282.4  
Net repayments under long-term revolving credit facilities
    (5.0 )     (370.0 )
Payments on long-term debt
    (18.7 )     (6.5 )
Treasury stock purchases
    (64.8 )     (9.1 )
Dividends paid to Equifax shareholders
    (9.9 )     (10.1 )
Dividends paid to noncontrolling interests
    (2.3 )     (2.5 )
Proceeds from exercise of stock options
    12.4       4.8  
Excess tax benefits from stock-based compensation plans
    1.4       0.5  
Other
    (0.5 )     (0.5 )
Cash used in financing activities
    (154.3 )     (111.0 )
Effect of foreign currency exchange rates on cash and cash equivalents
    (3.7 )     3.3  
(Decrease) increase in cash and cash equivalents
    (33.0 )     5.4  
Cash and cash equivalents, beginning of period
    103.1       58.2  
Cash and cash equivalents, end of period
  $ 70.1     $ 63.6  

 
8

 
 
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
 
 
 
2010
   
2009
   
$ Change
   
% Change
   
% Change*
 
Operating revenue: 
                                     
Online Consumer Information Solutions
  $ 120.3     $ 128.7     $ (8.4 )     -7 %      
Mortgage Solutions
    28.8       28.6       0.2       1 %      
Consumer Financial Marketing Services
    35.5       27.4       8.1       30 %      
Total U.S. Consumer Information Solutions
    184.6       184.7       (0.1 )     0 %      
Europe
    32.5       32.9       (0.4 )     -1 %     4 %
Latin America
    56.7       47.1       9.6       21 %     12 %
Canada Consumer
    29.0       25.2       3.8       15 %     1 %
Total International
    118.2       105.2       13.0       12 %     7 %
The Work Number
    50.0       39.0       11.0       28 %        
Tax and Talent Management Services
    49.0       47.0       2.0       4 %        
Total TALX
    99.0       86.0       13.0       15 %        
North America Personal Solutions
    40.3       37.5       2.8       8 %        
North America Commercial Solutions
    18.6       15.7       2.9       18 %     13 %
Total operating revenue
  $ 460.7     $ 429.1     $ 31.6       7 %     6 %

(in millions)
 
Six Months Ended June 30,
 
                           
Local Currency
 
 
 
2010
   
2009
   
$ Change
   
% Change
   
% Change*
 
Operating revenue:
                                     
Online Consumer Information Solutions
  $ 240.0     $ 259.6     $ (19.6 )     -8 %      
Mortgage Solutions
    52.0       54.0       (2.0 )     -4 %      
Consumer Financial Marketing Services
    65.7       54.7       11.0       20 %      
Total U.S. Consumer Information Solutions
    357.7       368.3       (10.6 )     -3 %      
Europe
    66.4       66.0       0.4       1 %     -1 %
Latin America
    111.8       93.0       18.8       20 %     9 %
Canada Consumer
    56.2       47.0       9.2       20 %     3 %
Total International
    234.4       206.0       28.4       14 %     4 %
The Work Number
    99.7       79.6       20.1       25 %        
Tax and Talent Management Services
    94.6       94.3       0.3       0 %        
Total TALX
    194.3       173.9       20.4       12 %        
North America Personal Solutions
    80.0       75.9       4.1       5 %        
North America Commercial Solutions
    37.3       31.5       5.8       18 %     13 %
Total operating revenue
  $ 903.7     $ 855.6     $ 48.1       6 %     3 %

(in millions)
 
Three Months Ended June 30,
 
         
Operating
         
Operating
             
 
 
2010
   
Margin
   
2009
   
Margin
   
$ Change
   
% Change
 
Operating income:
                                               
U.S. Consumer Information Solutions
  $ 68.3       37.1 %   $ 69.1       37.4 %   $ (0.8 )     -1 %
International
    30.1       25.4 %     26.6       25.3 %     3.5       13 %
TALX
    23.0       23.2 %     20.0       23.2 %     3.0       15 %
North America Personal Solutions
    10.2       25.4 %     8.0       21.5 %     2.2       27 %
North America Commercial Solutions
    3.7       20.2 %     2.4       15.4 %     1.3       54 %
General Corporate Expense
    (29.5 )  
nm
      (24.1 )  
nm
      (5.4 )     -23 %
Total operating income
  $ 105.8       23.0 %   $ 102.0       23.8 %   $ 3.8       4 %

(in millions)
 
Six Months Ended June 30,
 
         
Operating
         
Operating
             
 
 
2010
   
Margin
   
2009
   
Margin
   
$ Change
   
% Change
 
Operating income:
                                               
U.S. Consumer Information Solutions
  $ 128.4       35.9 %   $ 138.8       37.7 %   $ (10.4 )     -8 %
International
    58.8       25.1 %     55.5       26.9 %     3.3       6 %
TALX
    44.5       22.9 %     38.8       22.3 %     5.7       15 %
North America Personal Solutions
    20.2       25.3 %     14.0       18.4 %     6.2       45 %
North America Commercial Solutions
    8.1       21.9 %     4.7       14.9 %     3.4       73 %
General Corporate Expense
    (49.9 )  
nm
      (52.9 )  
nm
      3.0       5 %
Total operating income
  $ 210.1       23.3 %   $ 198.9       23.3 %   $ 11.2       6 %

nm - not meaningful
* Reflects percentage change in revenue conforming 2010 results using 2009 exchange rates.

 
9

 
 
Common Questions & Answers (Unaudited)
(Dollars in millions)

2.
What drove the fluctuation in the effective tax rate?
Our effective income tax rate from continuing operations was 35.3% for the three months ended June 30, 2010, down from 36.1% for the same period in 2009, due primarily to the impact of a favorable UK audit settlement recorded during the second quarter of 2010.

3.
Can you provide depreciation and amortization by segment?
Depreciation and amortization are as follows:

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2010
   
2009
   
2010
   
2009
 
U.S. Consumer Information Solutions
  $ 9.9     $ 8.5     $ 19.9     $ 16.8  
International
    6.2       5.8       12.1       11.1  
TALX
    16.8       15.4       33.4       30.9  
North America Personal Solutions
    1.4       1.1       2.7       2.2  
North America Commercial Solutions
    1.6       1.4       3.1       2.8  
General Corporate Expense
    3.8       3.4       7.6       6.6  
Total depreciation and amortization
  $ 39.7     $ 35.6     $ 78.8     $ 70.4  

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 June 30, 2010
 
   
Operating Revenue
   
Operating Income
 
   
Amount
   
%
   
Amount
   
%
 
Canada Consumer
  $ 3.5       14 %   $ 1.3       13 %
Canada Commercial
    0.7       13 %     0.3       12 %
Europe
    (1.6 )     -5 %     (0.3 )     -6 %
Latin America
    3.9       8 %     0.2       2 %

   
Six Months Ended June 30, 2010
 
   
Operating Revenue
   
Operating Income
 
   
Amount
   
%
   
Amount
   
%
 
Canada Consumer
  $ 7.9       17 %   $ 3.1       17 %
Canada Commercial
    1.7       16 %     0.7       15 %
Europe
    0.9       1 %     0.1       1 %
Latin America
    10.7       12 %     1.0       4 %

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       63.0       35 %     36 %
Q4 2009
    199.0       170.1       66.0       57.6       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 %

 
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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 attributable to Equifax, adjusted for acquisition-related amortization expense, gain from sale of business and restructuring charge:

   
Three Months Ended
             
   
June 30,
             
   
2010
   
2009
   
$ Change
   
% Change
 
                         
Net income attributable to Equifax   
  $ 71.3     $ 59.6     $ 11.7       20 %
Gain from sale of business, net of tax (1)
    (11.9 )     -       (11.9 )  
nm
 
Net income attributable to Equifax, adjusted for gain from sale of business
    59.4       59.6       (0.2 )     0 %
Acquisition-related amortization expense, net of tax
    14.7       13.5       1.2       9 %
Net income attributable to Equifax, adjusted for gain from sale of business and acquisition-related amortization expense
  $ 74.1     $ 73.1     $ 1.0       1 %
Diluted EPS attributable to Equifax, adjusted for gain from sale of business and acquisition-related amortization expense
  $ 0.58     $ 0.57     $ 0.01       2 %
Weighted-average shares used in computing diluted EPS  
    127.3       127.8                  

   
Six Months Ended
             
   
June 30,
             
   
2010
   
2009
   
$ Change
   
% Change
 
                         
Net income attributable to Equifax
  $ 128.0     $ 114.0     $ 14.0       12 %
Gain from sale of business, net of tax (1)
    (11.9 )     -       (11.9 )  
nm
 
Restructuring charges, net of tax (2)
    -       5.4       (5.4 )  
nm
 
Net income attributable to Equifax, adjusted for gain from sale of business and restructuring charges
    116.1       119.4       (3.3 )     -3 %
Acquisition-related amortization expense, net of tax
    29.7       27.0       2.7       10 %
Net income attributable to Equifax, adjusted for gain from sale of business, restructuring charges and acquisition-related amortization expense
  $ 145.8     $ 146.4     $ (0.6 )     0 %
Diluted EPS, adjusted for gain from sale of business, restructuring charges and acquisition-related amortization expense
  $ 1.14     $ 1.15     $ (0.01 )     0 %
Weighted-average shares used in computing diluted EPS
    127.7       127.6                  

nm - not meaningful
(1) Gain from sale of business includes gain from the sale of APPRO and certain direct costs of dispositions, net of tax.  See the Notes to this reconciliation for additional detail.
(2) Restructuring charge includes $8.4 million of severance expense in the first quarter of 2009.  See the Notes to this reconciliation for additional detail.

 
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Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures
 
Gain from Sale of Business – During the second quarter of 2010, the Company sold its APPRO loan origination software business.  The Company recorded an $11.9 million gain, net of tax which includes the gain from the sale along with certain direct costs of business dispositions.  Management believes excluding this gain from certain financial results provides meaningful supplemental information regarding our financial results for the three and six months ended June 30, 2010, as compared to 2009, since a gain 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.
 
Restructuring Charge – During the first quarter of 2009, the Company recorded a restructuring charge primarily related to severance expense of $8.4 million, pretax, ($5.4 million, net of tax) 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 2010, 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.
 
Diluted EPS attributable to Equifax, adjusted for acquisition-related amortization expense and restructuring charge - We calculate this financial measure by excluding acquisition-related amortization expense and the 2009 restructuring charge, both net of tax, from the determination of net income attributable to Equifax in the calculation of diluted EPS.  Net income attributable to Equifax includes the results of our discontinued operation as management has had responsibility for operating profitability of this business during the period presented. 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.

 
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