ATLANTA, Feb. 3 /PRNewswire-FirstCall/ -- -- Fourth quarter revenue
was $464.3 million, up 3 percent from the third quarter of 2009 and
4 percent from the fourth quarter of 2008; 3 business units
delivered double-digit revenue growth from fourth quarter of 2008.
-- Fourth quarter EPS was $0.47 and fourth quarter adjusted EPS was
$0.61. -- Completed two strategic acquisitions -- IXI Corporation
and Rapid Reporting Verification Company. -- Full year 2009 revenue
was $1.82 billion compared to $1.94 billion in 2008. -- Full year
2009 EPS was $1.83 per share and full year adjusted EPS was $2.33.
Equifax Inc. (NYSE:EFX) today announced financial results for the
quarter and year ended December 31, 2009. The company reported
revenue of $464.3 million in the fourth quarter of 2009, a 4
percent increase from the fourth quarter of 2008, of which 3
percent was due to the favorable effect of foreign exchange rates.
Fourth quarter 2009 net income was $60.2 million, a 6 percent
decrease from the prior year. On a non-GAAP basis, excluding
acquisition-related amortization expense, a restructuring charge
(both net of tax) and an income tax benefit, net income was $77.9
million, flat when compared to the fourth quarter of 2008. Diluted
earnings per share ("EPS") for the fourth quarter of 2009 was $0.47
compared to $0.50 in the same period of the prior year. On a
non-GAAP basis, adjusted EPS, which excludes the impact of
acquisition-related amortization expense, the restructuring charge
and income tax benefit, was $0.61, flat when compared to the fourth
quarter of 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20060224/CLF037LOGO ) For the
full year 2009, revenue was $1.82 billion, a 6 percent decrease
from 2008 of which 3 percent was due to the unfavorable effect of
foreign exchange rates. Full year 2009 net income was $233.9
million compared to $272.8 million in 2008, down 14 percent. On a
non-GAAP basis, excluding acquisition-related amortization expense,
restructuring charges (both net of tax) and certain income tax
benefits, net income was $297.7 million, an 8 percent decrease from
2008. EPS was $1.83 compared to $2.09 for the full year 2008. On a
non-GAAP basis, adjusted EPS, which excludes the impact of
acquisition-related amortization expense, restructuring charges and
income tax benefits, was $2.33, down 6 percent from the prior year
period. "We delivered solid performance in the fourth quarter,
aggressively managing our expense base and continuing to drive
double digit revenue growth in TALX and Mortgage Solutions. We also
completed two strategic acquisitions that will add to our growth in
2010 and beyond through new product initiatives and further market
penetration," said Richard F. Smith, Equifax's Chairman and Chief
Executive Officer. "Throughout 2009 we prepared ourselves for the
opportunities and challenges of 2010 and enter the year in a much
stronger position. We expanded the strategic charter of our
Technology and Analytical Services organization, created exciting
new products that leverage our increasingly unique data assets and
decisioning capabilities, leveraged LEAN and other expense
initiatives to improve our operating leverage, and established a
Key Client Program to drive product penetration with our largest
and most influential customers." Fourth Quarter 2009 Report --
Revenue increased 3 percent versus the third quarter of 2009. --
During the fourth quarter of 2009, we took further steps to realign
our business to better support our strategic objectives and
recorded a $16.4 million restructuring charge primarily related to
severance expense associated with staff reductions. We also
recognized a tax benefit of $7.3 million related to our ability to
utilize foreign tax credits beyond 2009. -- Operating margin was
19.7 percent. On a non-GAAP basis, excluding the impact of a
restructuring charge, operating margin was 23.2 percent in the
fourth quarter of 2009 compared to 23.5 percent in the third
quarter of 2009 and 26.0 percent in the fourth quarter of 2008. --
Total debt at December 31, 2009 increased $105.0 million from
September 30, 2009 reflecting additional borrowings to finance a
portion of our fourth quarter acquisitions. U.S. Consumer
Information Solutions (USCIS) Total revenue was $199.0 million in
the fourth quarter of 2009, down 1 percent from the third quarter
of 2009 and 4 percent from the fourth quarter of 2008. --Online
Consumer Information Solutions revenue was $122.2 million, down 10
percent from a year ago. --Mortgage Solutions revenue was $23.0
million, up 27 percent from a year ago. --Consumer Financial
Marketing Services revenue was $30.9 million, flat when compared to
a year ago. --Direct Marketing Services revenue was $22.9 million,
down 6 percent from a year ago. Operating margin for USCIS was 33.2
percent in the fourth quarter of 2009 compared to 34.6 percent in
the third quarter of 2009. Fourth quarter 2008 operating margin was
36.4 percent. International Total revenue was $117.7 million in the
fourth quarter of 2009, a 2 percent increase over the third quarter
of 2009 and an 11 percent increase over the fourth quarter of 2008.
In local currency, revenue was down 1 percent when compared to both
the third quarter of 2009 and the fourth quarter of 2008. --Latin
America revenue was $55.1 million, up 3 percent in local currency
and 19 percent in U.S. dollars from a year ago. --Europe revenue
was $35.9 million, down 6 percent in local currency and flat in
U.S. dollars from a year ago. --Canada Consumer revenue was $26.7
million, down 1 percent in local currency, but up 13 percent in
U.S. dollars from a year ago. Operating margin for International
was 27.5 percent in the fourth quarter of 2009 compared to 27.0
percent in both the third quarter of 2009 and fourth quarter of
2008. TALX Total revenue was $89.4 million in the fourth quarter of
2009, an 8 percent increase over the third quarter of 2009 and a 19
percent increase over the fourth quarter of 2008. --The Work Number
revenue was $41.6 million, up 33 percent from a year ago. --Tax and
Talent Management Services revenue was $47.8 million, up 8 percent
from a year ago. Operating margin for TALX was 21.1 percent in the
fourth quarter of 2009, down slightly from 21.4 percent in the
third quarter of 2009, but up from 19.9 percent in the fourth
quarter of 2008. North America Personal Solutions Total revenue was
$36.0 million, a 3 percent decrease from both the third quarter of
2009 and fourth quarter of 2008. Operating margin was 28.1 percent,
up from 27.3 percent in the third quarter of 2009, but down from
33.9 percent in the fourth quarter of 2008. North America
Commercial Solutions Total revenue was $22.2 million, up 38 percent
in both local currency and U.S. dollars from the third quarter of
2009. Revenue was up 8 percent in local currency and 11 percent in
U.S. dollars compared to the fourth quarter of 2008. Operating
margin was 34.0 percent, up from 17.8 percent in the third quarter
of 2009 and from 28.3 percent in the fourth quarter of 2008. Full
Year 2009 Report -- Revenue was $1.82 billion, down from $1.94
billion in 2008. -- Total revenue for USCIS was $820.7 million in
2009, an 8 percent decrease from 2008. -- Total revenue for
International was $438.6 million in 2009, a 13 percent decrease
from 2008. In local currency, revenue was down 4 percent when
compared to the same period in the prior year. -- Total revenue for
TALX was $346.4 million in 2009, a 14 percent increase over 2008.
-- Total revenue for North America Personal Solutions was $149.0
million in 2009, an 8 percent decrease from 2008. -- Total revenue
for North America Commercial Solutions was $69.8 million in 2009,
flat in local currency and down 2 percent in U.S. dollars from
2008. -- During 2009, we recorded restructuring charges of $24.8
million primarily related to severance expense associated with
staff reductions. We also recognized a $7.3 million tax benefit
related to our ability to utilize foreign tax credits beyond 2009.
-- Operating margin was 22.3 percent for the full year 2009
compared to 24.7 percent for the full year 2008. On a non-GAAP
basis, excluding the impact of restructuring and asset write-down
charges, operating margin for the full year 2009 was 23.7 percent
compared to 25.5 percent for the full year 2008. -- Total debt was
$1.17 billion at December 31, 2009, a decrease of $45.2 million
from December 31, 2008. First Quarter 2010 Outlook Based on the
current level of domestic and international business activity and
current foreign exchange rates, consolidated revenue for the first
quarter of 2010 is expected to be up in the low single digit range
from the year-ago quarter. First quarter 2010 adjusted EPS is
expected to be between $0.53 and $0.57. About Equifax
(http://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, February 4,
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
http://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 and asset
write-down charges and net income and diluted EPS excluding
acquisition-related amortization expense, restructuring and asset
write-down charges, both net of tax, and income tax benefits. 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. 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 http://www.equifax.com/. Forward-Looking Statements
Management believes certain statements in this earnings release may
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
are made on the basis of management's views and assumptions
regarding future events and business performance as of the time the
statements are made. Management does not undertake any obligation
to update any forward-looking statements. Actual results may differ
materially from those expressed or implied. Such differences may
result from actions taken by Equifax, including restructuring or
strategic initiatives (including capital investments or asset
acquisitions or dispositions), as well as from developments beyond
Equifax's control, including but not limited to changes in
worldwide and U.S. economic conditions that materially impact
consumer spending, consumer debt and employment, changes in demand
for Equifax's products and services, our ability to develop new
products and services, pricing and other competitive pressures, our
ability to achieve targeted cost efficiencies, risks relating to
illegal third party efforts to access data, risks associated with
our ability to complete and integrate acquisitions and other
investments, changes in laws and regulations governing our
business, including federal or state responses to identity theft
concerns, and the outcome of our pending litigation. Certain
additional factors are set forth in Equifax's Annual Report on Form
10-K for the year ended December 31, 2008 under Item 1A, "Risk
Factors", and our other filings with the Securities and Exchange
Commission. EQUIFAX CONSOLIDATED STATEMENTS OF INCOME
--------------------------------- Three Months Ended December 31,
------------ 2009 2008 ---- ---- (In millions, except per share
amounts) (Unaudited) ----------- Operating revenue $464.3 $446.6
------ ------ Operating expenses: Cost of services (exclusive of
depreciation and amortization below) 196.1 184.4 Selling, general
and administrative expenses 134.9 108.0 Depreciation and
amortization 41.9 38.1 ---- ---- Total operating expenses 372.9
330.5 ----- ----- Operating income 91.4 116.1 Interest expense
(14.1) (17.4) Other income, net 0.3 3.5 --- --- Consolidated income
before income taxes 77.6 102.2 Provision for income taxes (15.7)
(37.0) ----- ----- Consolidated net income 61.9 65.2 Less: Net
income attributable to noncontrolling interests (1.7) (1.2) ----
---- Net income attributable to Equifax $60.2 $64.0 ===== =====
Basic earnings per common share $0.48 $0.51 ===== =====
Weighted-average shares used in computing basic earnings per share
126.4 126.3 ===== ===== Diluted earnings per common share $0.47
$0.50 ===== ===== Weighted-average shares used in computing diluted
earnings per share 127.5 128.0 ===== ===== Dividends per common
share $0.04 $0.04 ===== ===== EQUIFAX CONSOLIDATED STATEMENTS OF
INCOME --------------------------------- Twelve Months Ended
December 31, ------------ 2009 2008 ---- ---- (In millions, except
per share amounts) (Unaudited) ----------- Operating revenue
$1,824.5 $1,935.7 -------- -------- Operating expenses: Cost of
services (exclusive of depreciation and amortization below) 767.8
792.0 Selling, general and administrative expenses 490.3 511.1
Depreciation and amortization 158.8 155.4 ----- ----- Total
operating expenses 1,416.9 1,458.5 ------- ------- Operating income
407.6 477.2 Interest expense (57.0) (71.3) Other income, net 6.0
6.2 --- --- Consolidated income before income taxes 356.6 412.1
Provision for income taxes (116.1) (133.1) ------ ------
Consolidated net income 240.5 279.0 Less: Net income attributable
to noncontrolling interests (6.6) (6.2) ---- ---- Net income
attributable to Equifax $233.9 $272.8 ====== ====== Basic earnings
per common share $1.85 $2.13 ===== ===== Weighted-average shares
used in computing basic earnings per share 126.3 128.1 ===== =====
Diluted earnings per common share $1.83 $2.09 ===== =====
Weighted-average shares used in computing diluted earnings per
share 127.9 130.4 ===== ===== Dividends per common share $0.16
$0.16 ===== ===== EQUIFAX CONSOLIDATED BALANCE SHEETS
--------------------------- December 31, ------------ 2009 2008
---- ---- (In millions, except par values) (Unaudited) -----------
ASSETS Current assets: Cash and cash equivalents $103.1 $58.2 Trade
accounts receivable, net of allowance for doubtful accounts of
$15.1 and $14.5 at December 31, 2009 and 2008, respectively 258.7
253.4 Prepaid expenses 27.6 22.9 Other current assets 27.4 19.3
---- ---- Total current assets 416.8 353.8 ----- ----- Property and
equipment: Capitalized internal-use software and system costs 316.6
313.9 Data processing equipment and furniture 184.2 176.6 Land,
buildings and improvements 164.5 124.0 ----- ----- Total property
and equipment 665.3 614.5 Less accumulated depreciation and
amortization (346.0) (328.2) ------ ------ Total property and
equipment, net 319.3 286.3 ----- ----- Goodwill 1,943.2 1,760.0
Indefinite-lived intangible assets 95.5 95.1 Purchased intangible
assets, net 687.0 682.2 Other assets, net 88.7 82.9 ------ ------
Total assets $3,550.5 $3,260.3 ======== ======== LIABILITIES AND
EQUITY Current liabilities: Short-term debt and current maturities
$154.2 $31.9 Capital lease obligation 29.0 - Accounts payable 35.9
29.9 Accrued expenses 67.7 57.6 Accrued salaries and bonuses 58.1
54.2 Deferred revenue 69.8 65.7 Other current liabilities 77.5 78.7
---- ---- Total current liabilities 492.2 318.0 Long-term debt
990.9 1,187.4 Deferred income tax liabilities, net 249.3 215.3
Long-term pension and other postretirement benefit liabilities
142.5 166.0 Other long-term liabilities 60.6 50.1 ------ ------
Total liabilities 1,935.5 1,936.8 ------- ------- Equifax
shareholders' equity: Preferred stock, $0.01 par value: Authorized
shares -10.0; Issued shares -none - - Common stock, $1.25 par
value: Authorized shares -300.0; Issued shares -189.3 and 189.2 at
December 31, 2009 and 2008, respectively; Outstanding shares -126.2
and 126.3 at December 31, 2009 and 2008, respectively 236.6 236.5
Paid-in capital 1,102.0 1,075.2 Retained earnings 2,494.2 2,281.0
Accumulated other comprehensive loss (318.7) (390.6) Treasury
stock, at cost, 61.0 shares and 59.7 shares at December 31, 2009
and 2008, respectively (1,871.7) (1,837.9) Stock held by employee
benefits trusts, at cost, 2.1 shares and 3.2 shares at December 31,
2009 and 2008, respectively (41.2) (51.8) ----- ----- Total Equifax
shareholders' equity 1,601.2 1,312.4 Noncontrolling interests 13.8
11.1 ---- ---- Total equity 1,615.0 1,323.5 ------- ------- Total
liabilities and equity $3,550.5 $3,260.3 ======== ======== EQUIFAX
CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------- Twelve Months Ended December
31, ------------ 2009 2008 ---- ---- (In millions) (Unaudited)
Operating activities: Consolidated net income $240.5 $279.0
Adjustments to reconcile consolidated net income to net cash
provided by operating activities: Depreciation and amortization
158.8 155.4 Stock-based compensation expense 19.6 19.9 Tax effects
of stock-based compensation plans 0.9 2.9 Excess tax benefits from
stock-based compensation plans (1.3) (2.1) Deferred income taxes
14.7 7.7 Changes in assets and liabilities, excluding effects of
acquisitions: Accounts receivable, net 12.8 24.2 Prepaid expenses
and other current assets (1.4) 3.5 Other assets (6.9) (2.2) Current
liabilities, excluding debt 3.3 (23.4) Other long-term liabilities,
excluding debt (22.6) (16.8) ----- ----- Cash provided by operating
activities 418.4 448.1 ----- ----- Investing activities: Capital
expenditures (70.7) (110.5) Investment in unconsolidated affiliates
(3.4) (3.7) Acquisitions, net of cash acquired (196.0) (27.4)
------ ----- Cash used in investing activities (270.1) (141.6)
------ ------ Financing activities: Net short-term borrowings
(repayments) 101.8 (184.8) Net (repayments) borrowings under
long-term revolving credit facilities (415.2) 45.0 Proceeds from
issuance of long-term debt 274.4 2.3 Payments on long-term debt
(31.8) (17.8) Treasury stock purchases (23.8) (155.7) Dividends
paid to Equifax shareholders (20.2) (20.5) Dividends paid to
noncontrolling interests (4.0) (3.4) Proceeds from exercise of
stock options 10.2 14.7 Excess tax benefits from stock-based
compensation plans 1.3 2.1 Other (1.0) (1.0) ------ ------ Cash
used in financing activities (108.3) (319.1) ------ ------ Effect
of foreign currency exchange rates on cash and cash equivalents 4.9
(10.8) --- ----- Increase (decrease) in cash and cash equivalents
44.9 (23.4) Cash and cash equivalents, beginning of period 58.2
81.6 ---- ---- Cash and cash equivalents, end of period $103.1
$58.2 ====== ===== 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 Operating
Currency revenue: 2009 2008 $Change % Change % Change* ---- ----
------- -------- --------- Online Consumer Information Solutions
$122.2 $135.2 $(13.0) -10% Mortgage Solutions 23.0 18.2 4.8 27%
Consumer Financial Marketing Services 30.9 30.8 0.1 0% Direct
Marketing Services 22.9 24.2 (1.3) -6% ---- ---- ---- Total U.S.
Consumer Information Solutions 199.0 208.4 (9.4) -4% Europe 35.9
35.9 - 0% -6% Latin America 55.1 46.3 8.8 19% 3% Canada Consumer
26.7 23.6 3.1 13% -1% ---- ---- --- Total International 117.7 105.8
11.9 11% -1% The Work Number 41.6 31.3 10.3 33% Tax and Talent
Management Services 47.8 44.1 3.7 8% ---- ---- --- Total TALX 89.4
75.4 14.0 19% North America Personal Solutions 36.0 37.1 (1.1) -3%
North America Commercial Solutions 22.2 19.9 2.3 11% 8% ---- ----
--- Total operating revenue $464.3 $446.6 $17.7 4% 1% ====== ======
===== (in millions) Twelve Months Ended December 31, -------------
-------------------------------- Local Currency Operating revenue:
2009 2008 $Change % Change % Change* ---- ---- ------- --------
--------- Online Consumer Information Solutions $525.6 $594.5
$(68.9) -12% Mortgage Solutions 99.5 70.2 29.3 42% Consumer
Financial Marketing Services 111.3 132.0 (20.7) -16% Direct
Marketing Services 84.3 94.1 (9.8) -10% ---- ---- ---- Total U.S.
Consumer Information Solutions 820.7 890.8 (70.1) -8% Europe 138.4
175.0 (36.6) -21% -9% Latin America 200.4 219.9 (19.5) -9% 0%
Canada Consumer 99.8 110.8 (11.0) -10% -4% ---- ----- ----- Total
International 438.6 505.7 (67.1) -13% -4% The Work Number 158.2
131.9 26.3 20% Tax and Talent Management Services 188.2 173.2 15.0
9% ----- ----- ---- Total TALX 346.4 305.1 41.3 14% North America
Personal Solutions 149.0 162.6 (13.6) -8% North America Commercial
Solutions 69.8 71.5 (1.7) -2% 0% ---- ---- ---- Total operating
revenue $1,824.5 $1,935.7 $(111.2) -6% -3% ======== ========
======= (in millions) Three Months Ended December 31, -------------
------------------------------- Operating Operating Operating
income: 2009 Margin 2008 Margin $Change % Change ---- ------ ----
------ ------- -------- U.S. Consumer Information Solutions $66.0
33.2% $75.9 36.4% $(9.9) -13% International 32.3 27.5% 28.5 27.0%
3.8 13% TALX 18.9 21.1% 15.0 19.9% 3.9 26% North America Personal
Solutions 10.2 28.1% 12.6 33.9% (2.4) -20% North America Commercial
Solutions 7.5 34.0% 5.7 28.3% 1.8 34% General Corporate Expense
(43.5) nm (21.6) nm (21.9) -101% ----- ----- ----- Total operating
income $91.4 19.7% $116.1 26.0% $(24.7) -21% ===== ====== ======
(in millions) Twelve Months Ended December 31, -------------
-------------------------------- Operating Operating Operating
income: 2009 Margin 2008 Margin $Change % Change ---- ------ ----
------ ------- -------- U.S. Consumer Information Solutions $285.2
34.8% $337.1 37.9% $(51.9) -15% International 118.9 27.1% 149.9
29.6% (31.0) -21% TALX 75.4 21.8% 53.1 17.4% 22.3 42% North America
Personal Solutions 34.3 23.0% 46.3 28.4% (12.0) -26% North America
Commercial Solutions 15.1 21.7% 13.6 19.0% 1.5 11% General
Corporate Expense (121.3) nm (122.8) nm 1.5 1% ------ ------ ---
Total operating income $407.6 22.3% $477.2 24.7% $(69.6) -15%
====== ====== ====== nm - not meaningful * Reflects percentage
change in revenue conforming 2009 results using 2008 exchange
rates. Common Questions & Answers (Unaudited) (Dollars in
millions) 2. Can you provide the percentage change in revenue from
the third quarter of 2009 in U.S. dollars and local currency? U.S.
Dollars Local Currency Operating revenue: % Change % Change*
-------- --------- U.S. Consumer Information Solutions -1%
International 2% -1% TALX 8% North America Personal Solutions -3%
North America Commercial Solutions 38% 38% Total operating revenue
3% 2% * Reflects percentage change in revenue conforming Q4 2009
results using Q3 2009 exchange rates. 3. What drove the fluctuation
in the effective tax rate? Our effective income tax rate was 20.3%
for the three months ended December 31, 2009, down from 36.2% for
the same period in 2008, 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.
Additionally, we recorded favorable discrete items during the
fourth quarter of 2009 related to foreign and state taxes. The
effective tax rate was 32.6% for the twelve months ended December
31, 2009, up from 32.3% for the same period in 2008. Our 2009 rate
reflects the previously mentioned income tax benefits and our 2008
rate reflects the reversal of a $14.6 million income tax reserve
related to the expiration of the statute of limitations for an
uncertain tax position regarding our Brazilian operations. 4. Can
you provide depreciation and amortization by segment? Depreciation
and amortization are as follows: Three Months Ended Twelve Months
Ended December 31, December 31, ------------ ------------ 2009 2008
2009 2008 ---- ---- ---- ---- U.S. Consumer Information Solutions
$13.3 $11.9 $49.0 $46.2 International 6.1 5.4 23.2 23.8 TALX 16.2
15.5 62.6 62.6 North America Personal Solutions 1.3 0.8 4.8 3.1
North America Commercial Solutions 1.5 1.4 5.8 5.4 General
Corporate Expense 3.5 3.1 13.4 14.3 --- --- ---- ---- Total
depreciation and amortization $41.9 $38.1 $158.8 $155.4 ===== =====
====== ====== 5. What was the currency impact on the foreign
operations? The U.S. dollar impact on operating revenue and
operating income is as follows: Three Months Ended December 31,
2009 ------------------------------------ Operating Revenue
Operating Income ----------------- ---------------- Amount % Amount
% ------ --- ------ --- Canada Consumer $3.5 14% $1.4 15% Canada
Commercial 0.8 14% 0.3 16% Europe 2.0 6% 0.4 7% Latin America 7.3
16% 1.1 9% --- --- $13.6 3% $3.2 3% ===== ==== Twelve Months Ended
December 31, 2009 ------------------------------------- Operating
Revenue Operating Income ----------------- ---------------- Amount
% Amount % ------ --- ------ --- Canada Consumer $(7.0) -6% $(2.8)
-6% Canada Commercial (1.7) -7% (0.7) -8% Europe (21.3) -12% (4.2)
-11% Latin America (18.9) -9% (6.7) -10% ----- ---- $(48.9) -3%
$(14.4) -3% ====== ====== 6. Can you provide detail regarding your
fourth quarter 2009 acquisitions? On October 27, 2009, we acquired
IXI Corporation ("IXI"), a provider of information on consumer
financial assets, income and spending for $124.0 million. The
results of IXI are included in our Consumer Financial Marketing
Services reporting unit, which also includes our Credit Marketing
Services business. On November 2, 2009, we acquired Rapid Reporting
Verification Company ("Rapid"), a provider of IRS tax transcript
information and social security number authentication services for
$72.5 million. The results of Rapid are included in The Work Number
reporting unit. 7. 2008 expense reclassification Certain prior year
amounts have been reclassified to conform to current year
presentation. $3.1 million and $13.2 million of selling, general
and administrative expense for the three and twelve months ended
December 31, 2008, respectively, have been reclassified to cost of
services. Reconciliations of Non-GAAP Financial Measures to the
Comparable GAAP Financial Measures (Unaudited) (Dollars in
millions, except per share amounts) A. Reconciliation of net income
attributable to Equifax to diluted EPS, adjusted for
acquisition-related amortization expense, restructuring and asset
write-down charges and income tax benefit: Three Months Ended
December 31, ------------ 2009 2008 $Change % Change ---- ----
------- -------- Net income attributable to Equifax $60.2 $64.0
$(3.8) -6% Restructuring charge, net of tax (1) 10.4 - 10.4 nm
Income tax benefit (2) (7.3) - (7.3) nm ---- --- ---- Net income
attributable to Equifax, adjusted for restructuring charge and
income tax benefit 63.3 64.0 (0.7) -1% Acquisition-related
amortization expense, net of tax 14.6 13.7 0.9 7% ---- ---- --- Net
income attributable to Equifax, adjusted for restructuring charge,
income tax benefit and acquisition-related amortization expense
$77.9 $77.7 $0.2 0% ===== ===== ==== Diluted EPS, adjusted for
restructuring charge, income tax benefit and acquisition-related
amortization expense $0.61 $0.61 $- 0% ===== ===== ===
Weighted-average shares used in computing diluted EPS 127.5 128.0
Twelve Months Ended December 31, ------------ 2009 2008 $Change %
Change ---- ---- ------- -------- Net income attributable to
Equifax $233.9 $272.8 $(38.9) -14% Restructuring and asset
write-down charges, net of tax (1) 15.8 10.5 5.3 50% Income tax
benefits(2) (7.3) (14.6) 7.3 -50% ---- ----- --- Net income
attributable to Equifax, adjusted for restructuring and asset
write-down charges and income tax benefits 242.4 268.7 (26.3) -10%
Acquisition-related amortization expense, net of tax 55.3 54.7 0.6
1% ---- ---- --- Net income attributable to Equifax, adjusted for
restructuring and asset write-down charges, income tax benefits and
acquisition-related amortization expense $297.7 $323.4 $(25.7) -8%
====== ====== ====== Diluted EPS, adjusted for restructuring and
asset write-down charges, income tax benefits and acquisition-
related amortization expense $2.33 $2.48 $(0.15) -6% ===== =====
====== Weighted-average shares used in computing diluted EPS 127.9
130.4 nm - not meaningful (1) Restructuring and asset write-down
charges include $16.4 million of primarily severance expense in the
fourth quarter of 2009, $8.4 million of severance expense in the
first quarter of 2009, and $10.3 million of severance expense, $4.1
million of certain contractual costs and $2.4 million of asset
write-down charges in the third quarter of 2008. 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.
We recorded a $14.6 million income tax benefit in 2008 related to
uncertain tax positions associated with our Brazilian operations,
for which the statute of limitations expired during the third
quarter of 2008. See the Notes to this reconciliation for
additional detail. Reconciliations of Non-GAAP Financial Measures
to the Comparable GAAP Financial Measures (Unaudited) (Dollars in
millions, except per share amounts) B. Reconciliation of operating
income to adjusted operating income, excluding restructuring and
asset write-down charges, and presentation of adjusted operating
margin: Three Months Ended December 31, ------------ 2009 2008
$Change % Change ---- ---- ------- -------- Revenue $464.3 $446.6
$17.7 4% Operating income $91.4 $116.1 $(24.7) -21% Restructuring
charge (1) 16.4 - 16.4 nm ---- --- ---- Adjusted operating income,
excluding restructuring charge $107.8 $116.1 $(8.3) -7% ======
====== ===== Adjusted operating margin 23.2% 26.0% Twelve Months
Ended December 31, ------------ 2009 2008 $Change % Change ----
---- ------- -------- Revenue $1,824.5 $1,935.7 $(111.2) -6%
Operating income $407.6 $477.2 $(69.6) -15% Restructuring and asset
write-down charges (1) 24.8 16.8 8.0 47% ---- ---- --- Adjusted
operating income, excluding restructuring and asset write-down
charges $432.4 $494.0 $(61.6) -12% ====== ====== ====== Adjusted
operating margin 23.7% 25.5% C. Reconciliation of our effective tax
rate to an effective tax rate, excluding certain items: Three
Months Ended Twelve Months Ended December 31, December 31,
------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ----
Effective tax rate 20.3% 36.2% 32.6% 32.3% Income tax benefits(2)
9.4% - 2.1% 3.5% ---- ---- ---- ---- Effective tax rate, excluding
certain items 29.7% 36.2% 34.7% 35.8% ==== ==== ==== ==== nm - not
meaningful (1) Restructuring and asset write-down charges include
$16.4 million of primarily severance expense in the fourth quarter
of 2009, $8.4 million of severance expense in the first quarter of
2009, and $10.3 million of severance expense, $4.1 million of
certain contractual costs and $2.4 million of asset write-down
charges in the third quarter of 2008. 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.
We recorded a $14.6 million income tax benefit in 2008 related to
uncertain tax positions associated with our Brazilian operations,
for which the statute of limitations expired during the third
quarter of 2008. See the Notes to this reconciliation for
additional detail. Notes to Reconciliations of Non-GAAP Financial
Measures to the Comparable GAAP Financial Measures Restructuring
and Asset Write-Down Charges - During the fourth and first quarters
of 2009, the company 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. During the third
quarter of 2008, we recorded restructuring and asset write-down
charges of $16.8 million, pretax ($10.5 million, net of tax). Of
this amount, $10.3 million related to severance expense and $4.1
million related to certain contractual costs, including office exit
and cancellation fees, both of which were recorded in selling,
general and administrative expenses on our Consolidated Statements
of Income. The remaining $2.4 million represents software asset
write-down charges that were recorded in depreciation and
amortization on our Consolidated Statements of Income. Management
believes excluding these charges from certain financial results
provides meaningful supplemental information regarding our
financial results for the three and twelve months ended December
31, 2009, as compared to 2008, since charges 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. Income Tax Benefits - 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. During the
third quarter of 2008, the applicable statute of limitations
related to an uncertain tax position regarding our Brazilian
operations expired resulting in the reversal of the related income
tax reserves. The reversal of the reserves resulted in the
recognition of a $14.6 million income tax benefit. These income tax
benefits were recorded in provision for income taxes on our
Consolidated Statements of Income. Management believes excluding
these income tax benefits from certain financial results provides
meaningful supplemental information regarding our financial results
for the years ended December 31, 2009 and 2008, 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. Net income and
diluted EPS, adjusted for acquisition-related amortization expense,
restructuring and asset write-down charges and income tax benefits
- We calculate these financial measures by excluding
acquisition-related amortization expense, restructuring and asset
write-down charges, all net of tax, and income tax benefits from
the determination of net income 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 and asset
write-down charges - Management believes excluding the
restructuring and asset write-down 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.
http://www.newscom.com/cgi-bin/prnh/20060224/CLF037LOGO
http://photoarchive.ap.org/ DATASOURCE: Equifax Inc. CONTACT: Jeff
Dodge, Investor Relations, +1-404-885-8804, , or Tim Klein, Media
Relations, +1-404-885-8555, Web Site: http://www.equifax.com/
Copyright