ATLANTA, Feb. 7, 2024
/PRNewswire/ -- Equifax Inc. (NYSE: EFX) today announced financial
results for the quarter and full year ended December 31, 2023.
- Fourth quarter 2023 revenue of $1.327
billion grew strong 11%, with 14% non-mortgage local
currency revenue growth
- Workforce Solutions 4Q revenue growth of 10%, with strong 17%
non-mortgage revenue growth and Verification Services non-mortgage
revenue growth of very strong 27% with strong growth in Government
and Talent
- USIS 4Q revenue growth of 5% with 16% mortgage revenue growth
and 3% non-mortgage revenue growth
- International 4Q revenue growth of 20% on a reported basis and
22% on a local currency basis, with organic local currency revenue
growth of 6%
- Strong new product innovation leveraging new EFX Cloud with 14%
4Q new product Vitality Index
- Full year 2023 revenue growth of 3%, to $5.265 billion, despite the significant 17%
decline in mortgage revenue from higher rates
- Strong execution of 2023 $210
million Cloud spending reduction plan
- Issuing full-year 2024 guidance midpoint expectation for
revenue of $5.720 billion, up 8.6%,
with strong non-mortgage local currency revenue growth of over
10.5% and Adjusted EPS of $7.35. This
reflects an expected 16%+ decline in our outlook for 2024 U.S.
mortgage credit inquiries
"Equifax performed extremely well in the fourth quarter against
our EFX2025 strategic priorities in a very challenging mortgage
market delivering revenue of $1.327
billion, up a strong 11% and Adjusted EPS of $1.81 per share up 19% versus last year, from
strong revenue growth and execution of our 2023 $210 million Cloud spending reduction plan. Our
non-mortgage business, which was over 80% of Equifax revenue in the
fourth quarter, delivered very strong broad based 14% local
currency revenue growth, from continued strong new product
performance with record New Product Vitality Index of 14%.
Workforce Solutions, our largest and fastest growing business,
delivered an exceptional quarter with very strong 27% non-mortgage
Verification Services revenue growth led by the Government and
Talent businesses. USIS delivered revenue growth of 5% from strong
16% mortgage revenue growth and International had a strong quarter,
finishing with organic local currency revenue growth of 6%," said
Mark W. Begor, Equifax Chief
Executive Officer.
"We are issuing our full-year 2024 guidance midpoint expectation
for revenue of $5.720 billion, up
8.6% on a reported basis and organic local currency growth of 8.5%.
Non-mortgage local currency revenue growth is expected to be over
10.5% versus 2023 and Adjusted EPS of $7.35. While Equifax continues to execute well
against its EFX2025 strategic priorities, our 2024 guidance
reflects an expectation of an over 16% decline in our 2024 U.S.
mortgage credit inquiries, compared to down 34% in 2023, with first
half mortgage credit inquiries weaker than second half. Across USIS
and Workforce Solutions, we expect to outperform the U.S. mortgage
market by about 24%. EBITDA margins are expected to expand to
33.3%, reflecting organic revenue growth and the additional cost
savings from Cloud spending reductions plans as well as higher
costs from normalization of incentive plans.
We have strong momentum as we enter 2024 and are confident in
the future of the New Equifax as we deliver strong double-digit
non-mortgage revenue growth, finalize our Cloud transformation,
leverage our new Cloud capabilities to accelerate new product
roll-outs that 'Only Equifax' can provide, and invest in new
products, data, analytics, and AI capabilities which are expected
to drive growth in 2024 and beyond. We are energized about the New
Equifax and remain confident in our long-term 8-12% revenue growth
framework that is expected to deliver higher margins and free cash
flow."
Financial Results Summary
The Company reported revenue of $1,326.5
million in the fourth quarter of 2023, an 11% increase on
both a reported basis and a local currency basis from the fourth
quarter of 2022.
Fourth quarter 2023 diluted EPS attributable to Equifax was
$1.06 per share, up from $0.88 per share in the fourth quarter of
2022.
Net income attributable to Equifax of $132.4 million in the fourth quarter of 2023 was
up from $108.2 million in the fourth
quarter of 2022.
For the full year 2023, revenue was $5,265.2 million, a 3% increase from 2022 on a
reported basis and 4% increase on a local currency basis. Diluted
EPS attributable to Equifax was $4.40
per share, down from $5.65 per share
for the full year 2022. Net income attributable to Equifax was
$545.3 million, down from net income
of $696.2 million for the full year
2022.
Workforce Solutions fourth quarter results
- Total revenue was $559.5 million
in the fourth quarter of 2023, up 10% compared to the fourth
quarter of 2022. Operating margin for Workforce Solutions was 41.9%
in the fourth quarter of 2023 compared to 36.5% in the fourth
quarter of 2022. Adjusted EBITDA margin for Workforce Solutions was
51.2% in the fourth quarter of 2023, compared to 46.8% in the
fourth quarter of 2022.
- Verification Services revenue was $457.1
million, up 15% when compared to the fourth quarter of
2022.
- Employer Services revenue was $102.4
million, down 7% when compared to the fourth quarter of
2022.
USIS fourth quarter results
- Total revenue was $427.7 million
in the fourth quarter of 2023, up 5% compared to the fourth quarter
of 2022. Operating margin for USIS was 22.0% in the fourth quarter
of 2023, compared to 21.4% in the fourth quarter of 2022. Adjusted
EBITDA margin for USIS was 35.1% in the fourth quarter of 2023,
compared to 35.3% in the fourth quarter of 2022.
- Online Information Solutions revenue was $327.5 million, up 6% compared to the fourth
quarter of 2022.
- Mortgage Solutions revenue was $22.9
million, down 12% when compared to the fourth quarter of
2022.
- Financial Marketing Services revenue was $77.3 million, up 7% when compared to the fourth
quarter of 2022.
International fourth quarter results
- Total revenue was $339.3 million
in the fourth quarter of 2023, up 20% and up 22% from the fourth
quarter of 2022 on a reported and local currency basis,
respectively. Operating margin for International was 17.9% in the
fourth quarter of 2023, compared to 12.4% in the fourth quarter of
2022. Adjusted EBITDA margin for International was 31.2% in the
fourth quarter of 2023, compared to 25.8% in the fourth quarter of
2022.
- Asia Pacific revenue was
$82.2 million, down 3% from the
fourth quarter of 2022 on a reported basis and down 2% on a local
currency basis.
- Europe revenue was
$93.6 million, up 15% from the fourth
quarter of 2022 on a reported basis and up 9% on a local currency
basis.
- Latin America revenue was
$98.6 million, up 85% from the fourth
quarter of 2022 on a reported basis and up 103% on a local currency
basis.
- Canada revenue was
$64.9 million, up 1% from the fourth
quarter of 2022 on both a reported basis and a local currency
basis.
Adjusted EPS and Adjusted EBITDA Margin
- Adjusted EPS attributable to Equifax was $1.81 for the fourth quarter of 2023, up 19%
compared to the fourth quarter of 2022. Adjusted EBITDA margin was
33.7% for the fourth quarter of 2023, compared to 31.0% in the
fourth quarter of 2022.
- Full year adjusted EPS attributable to Equifax was $6.71, down 11% from the prior year period. Full
year adjusted EBITDA margin was 32.2% compared to 33.6% in
2022.
- These financial measures exclude certain items as described
further in the Non-GAAP Financial Measures section below.
2024 First Quarter
and Full Year Guidance
|
|
|
|
Q1
2024
|
|
FY
2024
|
|
Low-End
|
|
High-End
|
|
Low-End
|
|
High-End
|
Reported
Revenue
|
$1.375
billion
|
|
$1.395
billion
|
|
$5.670
billion
|
|
$5.770
billion
|
Reported Revenue
Growth
|
5.6 %
|
|
7.1 %
|
|
7.7 %
|
|
9.6 %
|
Local Currency Growth
(1)
|
7.1 %
|
|
8.6 %
|
|
9.6 %
|
|
11.5 %
|
Organic Local Currency
Growth (1)
|
4.0 %
|
|
5.5 %
|
|
7.6 %
|
|
9.5 %
|
Adjusted Earnings Per
Share
|
$1.33 per
share
|
|
$1.43 per
share
|
|
$7.20 per
share
|
|
$7.50 per
share
|
|
|
(1)
|
Refer to page 9 for
definitions.
|
About Equifax
At Equifax (NYSE: EFX), we believe knowledge drives progress. As
a global data, analytics, and technology company, we play an
essential role in the global economy by helping financial
institutions, companies, employers, and government agencies make
critical decisions with greater confidence. Our unique blend of
differentiated data, analytics, and cloud technology drives
insights to power decisions to move people forward. Headquartered
in Atlanta and supported by
nearly 15,000 employees worldwide, Equifax operates or has
investments in 24 countries in North
America, Central and South
America, Europe, and the
Asia Pacific region. For more
information, visit Equifax.com.
Earnings Conference Call and Audio Webcast
In conjunction with this release, Equifax will host a conference
call on February 8, 2024 at 8:30 a.m.
(ET) via a live audio webcast. To access the webcast and
related presentation materials, go to the Investor Relations
section 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 adjusted EPS attributable to
Equifax which is diluted EPS attributable to Equifax adjusted (to
the extent noted above for different periods) for
acquisition-related amortization expense, accrual for legal and
regulatory matters related to the 2017 cybersecurity incident, fair
market value adjustment and gain on sale of equity investments,
pension mark-to-market fair value adjustment, foreign currency
impact of certain intercompany loans, acquisition-related costs
other than acquisition amortization, realignment of resources and
other costs, income tax effect of stock awards recognized upon
vesting or settlement, Argentina
highly inflationary foreign currency adjustment, gain on settlement
of Canada pension plan, and
adjustments to deferred tax balances. All adjustments are net of
tax, with a reconciling item with the aggregated tax impact of the
adjustments. This earnings release also presents (i) adjusted
EBITDA and adjusted EBITDA margin which is defined as consolidated
net income attributable to Equifax plus net interest expense,
income taxes, depreciation and amortization, and also excludes
certain one-time items, (ii) local currency revenue change which is
calculated by conforming 2023 results using 2022 exchange rates and
(iii) organic local currency revenue growth which is defined as
local currency revenue growth, adjusted to reflect an increase in
prior year Equifax revenue from the revenue of acquired companies
in the prior year period. These are important financial measures
for Equifax but are not financial measures as defined by GAAP.
These non-GAAP financial measures should be reviewed in
conjunction with the relevant GAAP financial measures and are not
presented as an alternative measure of 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 Relations/Financial Information/Non-GAAP Financial
Measures" on our website at www.equifax.com.
Forward-Looking Statements
This release contains forward-looking statements and
forward-looking information. These statements can be identified by
expressions of belief, expectation or intention, as well as
statements that are not historical fact. These statements are based
on certain factors and assumptions including with respect to
foreign exchange rates, revenue growth, results of operations and
financial performance, strategic initiatives, business plans,
prospects and opportunities, the U.S. mortgage market, economic
conditions and effective tax rates.
While the Company believes these factors and assumptions to be
reasonable based on information currently available, they may prove
to be incorrect. Several factors could cause actual results to
differ materially from those expressed or implied in the
forward-looking statements. These factors relate to (i) actions
taken by us, including, but not limited to, restructuring actions,
strategic initiatives (such as our cloud technology
transformation), capital investments and asset acquisitions or
dispositions, as well as (ii) developments beyond our control,
including, but not limited to, changes in the U.S. mortgage market
environment and changes more generally in U.S. and worldwide
economic conditions (such as changes in interest rates and
inflation levels) that materially impact consumer spending, home
prices, investment values, consumer debt, unemployment rates and
the demand for Equifax's products and services. Deteriorations in
economic conditions or increases in interest rates could lead to a
decline in demand for our products and services and negatively
impact our business. It may also impact financial markets and
corporate credit markets, which could adversely impact our access
to financing or the terms of any financing.
Other risk factors relevant to our business include: (i) any
compromise of Company, customer or consumer information due to
security breaches and other disruptions to our information
technology infrastructure; (ii) the failure to achieve and maintain
key industry or technical certifications; (iii) the failure to
realize the anticipated benefits of our cloud technology
transformation strategy; (iv) operational disruptions and strain on
our resources caused by our transition to cloud-based technologies;
(v) our ability to meet customer requirements for high system
availability and response time performance; (vi) effects on our
business if we provide inaccurate or unreliable data to customers;
(vii) our ability to maintain access to credit, employment,
financial and other data from external sources; (viii) the impact
of competition; (ix) our ability to maintain relationships with key
customers; (x) our ability to successfully introduce new products,
services and analytical capabilities; (xi) the impact on the demand
for some of our products and services due to the availability of
free or less expensive consumer information; (xii) our ability to
comply with our obligations under settlement agreements arising out
of the 2017 cybersecurity incident; (xiii) potential adverse
developments in new and pending legal proceedings, government
investigations and regulatory enforcement actions; (xiv) changes
in, and the effects of, laws, regulations and government policies
governing our business, including oversight by the Consumer
Financial Protection Bureau in the U.S., the U.K. Financial Conduct
Authority and Information Commissioner's Office in the U.K., and
the Office of Australian Information Commission and the Australian
Competition and Consumer Commission in Australia; (xv) the impact of privacy laws and
regulations; (xvi) the economic, political and other risks
associated with international sales and operations; (xvii) the
impact on our reputation and business if we are unable to fulfill
our environmental, social and governance commitments; (xviii) our
ability to realize the anticipated strategic and financial benefits
from our acquisitions, joint ventures and other alliances; (xix)
any damage to our reputation due to our dependence on outsourcing
certain portions of our operations; (xx) the termination or
suspension of our government contracts; (xxi) the impact of
infringement or misappropriation of intellectual property by us
against third parties or by third parties against us; (xxii) an
increase in our cost of borrowing and our ability to access the
capital markets due to a credit rating downgrade; (xxiii) our
ability to hire and retain key personnel; (xxiv) the impact of
adverse changes in the financial markets and corresponding effects
on our retirement and post-retirement pension plans; (xxv) the
impact of health epidemics, pandemics and similar outbreaks on our
business; and (xxvi) risks associated with our use of certain
artificial intelligence and machine learning models.
A summary of additional risks and uncertainties can be found in
our Annual Report on Form 10-K for the year ended December 31,
2022 including without limitation under the captions "Item 1.
Business -- Governmental Regulation" and "-- Forward-Looking
Statements" and "Item 1A. Risk Factors" and in our other filings
with the U.S. Securities and Exchange Commission. Forward-looking
statements are given only as at the date of this release and the
Company disclaims any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
EQUIFAX
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
Three Months
Ended
December
31,
|
|
|
2023
|
|
2022
|
(In millions, except
per share amounts)
|
|
(Unaudited)
|
Operating
revenue
|
|
$
1,326.5
|
|
$
1,198.0
|
Operating
expenses:
|
|
|
|
|
Cost of services
(exclusive of depreciation and amortization below)
|
|
581.6
|
|
539.2
|
Selling, general and
administrative expenses
|
|
343.4
|
|
340.4
|
Depreciation and
amortization
|
|
156.4
|
|
142.3
|
Total operating
expenses
|
|
1,081.4
|
|
1,021.9
|
Operating
income
|
|
245.1
|
|
176.1
|
Interest
expense
|
|
(60.3)
|
|
(54.6)
|
Other (expense)
income, net
|
|
(2.0)
|
|
19.8
|
Consolidated income
before income taxes
|
|
182.8
|
|
141.3
|
Provision for income
taxes
|
|
(48.3)
|
|
(32.2)
|
Consolidated net
income
|
|
134.5
|
|
109.1
|
Less: Net income
attributable to noncontrolling interests including redeemable
noncontrolling interests
|
|
(2.1)
|
|
(0.9)
|
Net income attributable
to Equifax
|
|
$
132.4
|
|
$
108.2
|
Basic earnings per
common share:
|
|
|
|
|
Net income
attributable to Equifax
|
|
$
1.07
|
|
$
0.88
|
Weighted-average shares
used in computing basic earnings per share
|
|
123.3
|
|
122.5
|
Diluted earnings per
common share:
|
|
|
|
|
Net income
attributable to Equifax
|
|
$
1.06
|
|
$
0.88
|
Weighted-average shares
used in computing diluted earnings per share
|
|
124.4
|
|
123.3
|
Dividends per common
share
|
|
$
0.39
|
|
$
0.39
|
EQUIFAX
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
Twelve Months
Ended
December
31,
|
|
|
2023
|
|
2022
|
(In millions, except
per share amounts)
|
|
(Unaudited)
|
Operating
revenue
|
|
$
5,265.2
|
|
$
5,122.2
|
Operating
expenses:
|
|
|
|
|
Cost of services
(exclusive of depreciation and amortization below)
|
|
2,335.1
|
|
2,177.2
|
Selling, general and
administrative expenses
|
|
1,385.7
|
|
1,328.9
|
Depreciation and
amortization
|
|
610.8
|
|
560.1
|
Total operating
expenses
|
|
4,331.6
|
|
4,066.2
|
Operating
income
|
|
933.6
|
|
1,056.0
|
Interest
expense
|
|
(241.4)
|
|
(183.0)
|
Other income,
net
|
|
25.7
|
|
56.7
|
Consolidated income
before income taxes
|
|
717.9
|
|
929.7
|
Provision for income
taxes
|
|
(166.2)
|
|
(229.5)
|
Consolidated income
from continuing operations
|
|
551.7
|
|
700.2
|
Less: Net income
attributable to noncontrolling interests including redeemable
noncontrolling interests
|
|
(6.4)
|
|
(4.0)
|
Net income attributable
to Equifax
|
|
$
545.3
|
|
$
696.2
|
Basic earnings per
common share:
|
|
|
|
|
Net income
attributable to Equifax
|
|
$
4.44
|
|
$
5.69
|
Weighted-average shares
used in computing basic earnings per share
|
|
122.9
|
|
122.4
|
Diluted earnings per
common share:
|
|
|
|
|
Net income
attributable to Equifax
|
|
$
4.40
|
|
$
5.65
|
Weighted-average shares
used in computing diluted earnings per share
|
|
123.9
|
|
123.3
|
Dividends per common
share
|
|
$
1.56
|
|
$
1.56
|
EQUIFAX
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
December
31,
|
|
|
2023
|
|
2022
|
(In millions, except par values)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
216.8
|
|
$
285.2
|
Trade accounts receivable, net of allowance for doubtful accounts of $16.7 and $19.1 at
December 31, 2023 and 2022, respectively
|
|
917.2
|
|
857.7
|
Prepaid expenses
|
|
142.5
|
|
134.3
|
Other current assets
|
|
88.8
|
|
93.3
|
Total current assets
|
|
1,365.3
|
|
1,370.5
|
Property and equipment:
|
|
|
|
|
Capitalized internal-use software and system costs
|
|
2,541.0
|
|
2,139.1
|
Data processing equipment and furniture
|
|
247.9
|
|
281.4
|
Land, buildings and improvements
|
|
272.9
|
|
261.6
|
Total property and equipment
|
|
3,061.8
|
|
2,682.1
|
Less accumulated depreciation and amortization
|
|
(1,227.8)
|
|
(1,095.1)
|
Total property and equipment, net
|
|
1,834.0
|
|
1,587.0
|
Goodwill
|
|
6,829.9
|
|
6,383.9
|
Indefinite-lived intangible assets
|
|
94.8
|
|
94.8
|
Purchased intangible assets, net
|
|
1,858.8
|
|
1,818.5
|
Other assets, net
|
|
306.2
|
|
293.2
|
Total assets
|
|
$
12,289.0
|
|
$ 11,547.9
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Short-term debt and current maturities
of long-term debt
|
|
$
963.4
|
|
$
967.2
|
Accounts payable
|
|
197.6
|
|
250.8
|
Accrued expenses
|
|
245.1
|
|
229.0
|
Accrued salaries and bonuses
|
|
168.7
|
|
138.7
|
Deferred revenue
|
|
118.5
|
|
132.9
|
Other current liabilities
|
|
334.7
|
|
296.6
|
Total current liabilities
|
|
2,028.0
|
|
2,015.2
|
Long-term debt
|
|
4,747.8
|
|
4,820.1
|
Deferred income tax liabilities, net
|
|
474.9
|
|
460.3
|
Long-term pension and other postretirement benefit liabilities
|
|
100.1
|
|
100.4
|
Other long-term liabilities
|
|
250.7
|
|
178.6
|
Total liabilities
|
|
7,601.5
|
|
7,574.6
|
Redeemable
noncontrolling interests
|
|
135.1
|
|
—
|
Equifax shareholders' equity:
|
|
|
|
|
Preferred stock, $0.01 par value: Authorized shares - 10.0; Issued shares - none
|
|
—
|
|
—
|
Common stock, $1.25 par value: Authorized shares - 300.0;
Issued shares - 189.3 at December 31, 2023 and 2022;
Outstanding shares -
123.3 and 122.5 at December 31, 2023 and 2022, respectively
|
|
236.6
|
|
236.6
|
Paid-in
capital
|
|
1,761.3
|
|
1,594.2
|
Retained earnings
|
|
5,608.6
|
|
5,256.0
|
Accumulated other comprehensive loss
|
|
(431.2)
|
|
(473.7)
|
Treasury stock, at
cost, 65.4 shares and 66.2 shares at December 31, 2023 and
2022,
respectively
|
|
(2,635.3)
|
|
(2,650.7)
|
Stock held by employee benefits trusts, at cost,
0.6
shares at December 31, 2023 and 2022
|
|
(5.9)
|
|
(5.9)
|
Total Equifax shareholders' equity
|
|
4,534.1
|
|
3,956.5
|
Noncontrolling interests
|
|
18.3
|
|
16.8
|
Total shareholders' equity
|
|
4,552.4
|
|
3,973.3
|
Total liabilities,
redeemable noncontrolling interests, and
shareholders' equity
|
|
$
12,289.0
|
|
$ 11,547.9
|
EQUIFAX
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Twelve Months
Ended
December
31,
|
|
|
2023
|
|
2022
|
(In
millions)
|
|
(Unaudited)
|
Operating
activities:
|
|
|
|
|
Consolidated net
income
|
|
$
551.7
|
|
$
700.2
|
Adjustments to
reconcile consolidated net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
619.8
|
|
568.6
|
Stock-based
compensation expense
|
|
71.8
|
|
62.6
|
Deferred income
taxes
|
|
(70.2)
|
|
88.1
|
Gain on fair market
value adjustment and gain on sale of equity investment
|
|
(13.8)
|
|
(36.8)
|
Changes in assets and
liabilities, excluding effects of acquisitions:
|
|
|
|
|
Accounts receivable,
net
|
|
(32.3)
|
|
(138.6)
|
Other assets, current
and long-term
|
|
(13.0)
|
|
(22.4)
|
Current and long-term
liabilities, excluding debt
|
|
2.8
|
|
(464.6)
|
Cash provided by
operating activities
|
|
1,116.8
|
|
757.1
|
Investing
activities:
|
|
|
|
|
Capital
expenditures
|
|
(601.3)
|
|
(624.5)
|
Acquisitions, net of
cash acquired
|
|
(283.8)
|
|
(433.8)
|
Cash received from
divestitures
|
|
6.9
|
|
98.8
|
Cash used in investing
activities
|
|
(878.2)
|
|
(959.5)
|
Financing
activities:
|
|
|
|
|
Net short-term
(payments) borrowings
|
|
(371.2)
|
|
242.2
|
Payments on long-term
debt
|
|
(579.3)
|
|
(500.0)
|
Proceeds from issuance
of long-term debt
|
|
872.9
|
|
749.3
|
Dividends paid to
Equifax shareholders
|
|
(191.8)
|
|
(191.1)
|
Distributions paid to
noncontrolling interests
|
|
(45.6)
|
|
(3.1)
|
Proceeds from exercise
of stock options and employee stock purchase plan
|
|
32.3
|
|
16.9
|
Payment of taxes
related to settlement of equity awards
|
|
(17.3)
|
|
(33.9)
|
Purchase of redeemable
noncontrolling interests
|
|
—
|
|
(0.4)
|
Debt issuance
costs
|
|
(6.2)
|
|
(6.2)
|
Cash (used in) provided
by financing activities
|
|
(306.2)
|
|
273.7
|
Effect of foreign
currency exchange rates on cash and cash equivalents
|
|
(0.8)
|
|
(10.8)
|
(Decrease) increase in
cash and cash equivalents
|
|
(68.4)
|
|
60.5
|
Cash and cash
equivalents, beginning of period
|
|
285.2
|
|
224.7
|
Cash and cash
equivalents, end of period
|
|
$
216.8
|
|
$
285.2
|
Common Questions & Answers (Unaudited)
(Dollars in
millions)
1. Can you provide a further analysis of
operating revenue for the fourth quarter and the full year by
operating segment?
Operating revenue consists of the following components:
(In
millions)
|
|
Three Months
Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local
Currency
|
|
Organic Local
Currency
|
Operating
revenue:
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
|
% Change
(1)
|
|
% Change
(2)
|
Verification
Services
|
|
$
457.1
|
|
$
398.6
|
|
$
58.5
|
|
15 %
|
|
|
|
15 %
|
Employer
Services
|
|
102.4
|
|
109.8
|
|
(7.4)
|
|
(7) %
|
|
|
|
(7) %
|
Total Workforce
Solutions
|
|
559.5
|
|
508.4
|
|
51.1
|
|
10 %
|
|
|
|
10 %
|
Online Information
Solutions
|
|
327.5
|
|
308.0
|
|
19.5
|
|
6 %
|
|
|
|
6 %
|
Mortgage
Solutions
|
|
22.9
|
|
26.0
|
|
(3.1)
|
|
(12) %
|
|
|
|
(12) %
|
Financial Marketing
Services
|
|
77.3
|
|
71.9
|
|
5.4
|
|
7 %
|
|
|
|
7 %
|
Total U.S. Information
Solutions
|
|
427.7
|
|
405.9
|
|
21.8
|
|
5 %
|
|
|
|
5 %
|
Asia Pacific
|
|
82.2
|
|
84.6
|
|
(2.4)
|
|
(3) %
|
|
(2) %
|
|
(2) %
|
Europe
|
|
93.6
|
|
81.5
|
|
12.1
|
|
15 %
|
|
9 %
|
|
9 %
|
Latin
America
|
|
98.6
|
|
53.3
|
|
45.3
|
|
85 %
|
|
103 %
|
|
15 %
|
Canada
|
|
64.9
|
|
64.3
|
|
0.6
|
|
1 %
|
|
1 %
|
|
1 %
|
Total
International
|
|
339.3
|
|
283.7
|
|
55.6
|
|
20 %
|
|
22 %
|
|
6 %
|
Total operating
revenue
|
|
$
1,326.5
|
|
$
1,198.0
|
|
$
128.5
|
|
11 %
|
|
11 %
|
|
8 %
|
(In
millions)
|
|
Twelve Months
Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local
Currency
|
|
Organic Local
Currency
|
Operating
revenue:
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
|
% Change
(1)
|
|
% Change
(2)
|
Verification
Services
|
|
$
1,846.2
|
|
$
1,871.0
|
|
$
(24.8)
|
|
(1) %
|
|
|
|
(1) %
|
Employer
Services
|
|
469.6
|
|
454.4
|
|
15.2
|
|
3 %
|
|
|
|
— %
|
Total Workforce
Solutions
|
|
2,315.8
|
|
2,325.4
|
|
(9.6)
|
|
— %
|
|
|
|
(1) %
|
Online Information
Solutions
|
|
1,375.2
|
|
1,295.4
|
|
79.8
|
|
6 %
|
|
|
|
4 %
|
Mortgage
Solutions
|
|
113.7
|
|
138.3
|
|
(24.6)
|
|
(18) %
|
|
|
|
(18) %
|
Financial Marketing
Services
|
|
231.5
|
|
224.0
|
|
7.5
|
|
3 %
|
|
|
|
3 %
|
Total U.S. Information
Solutions
|
|
1,720.4
|
|
1,657.7
|
|
62.7
|
|
4 %
|
|
|
|
2 %
|
Asia Pacific
|
|
345.3
|
|
348.4
|
|
(3.1)
|
|
(1) %
|
|
4 %
|
|
4 %
|
Europe
|
|
333.2
|
|
327.8
|
|
5.4
|
|
2 %
|
|
— %
|
|
— %
|
Latin
America
|
|
290.9
|
|
206.8
|
|
84.1
|
|
41 %
|
|
56 %
|
|
17 %
|
Canada
|
|
259.6
|
|
256.1
|
|
3.5
|
|
1 %
|
|
4 %
|
|
4 %
|
Total
International
|
|
1,229.0
|
|
1,139.1
|
|
89.9
|
|
8 %
|
|
12 %
|
|
6 %
|
Total operating
revenue
|
|
$
5,265.2
|
|
$
5,122.2
|
|
$
143.0
|
|
3 %
|
|
4 %
|
|
2 %
|
|
|
(1)
|
Local currency revenue
change is calculated by conforming 2023 results using 2022 exchange
rates.
|
|
|
(2)
|
Organic local currency
revenue growth is defined as local currency revenue growth,
adjusted to reflect an increase in prior year Equifax revenue from
the revenue of acquired companies in the prior year period. This
adjustment is made for 12 months following the
acquisition.
|
2. What is the estimate of the change in overall U.S.
Mortgage Market credit inquiry volume that is included in the 2024
first quarter and full year guidance provided?
The change year over year in total U.S. mortgage credit
inquiries received by Equifax in the fourth quarter of 2023 was a
decline of 17%. The guidance provided on page 3 assumes a change
year over year in total U.S. Mortgage Market Credit inquiries
received by Equifax in the first quarter of 2024 to be a decline of
about 26%. For full year 2024 our guidance assumes a decline of
over 16%.
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,
defined as net income adjusted for acquisition-related amortization
expense, accrual for legal and regulatory matters related to the
2017 cybersecurity incident, fair market value adjustment and gain
on sale of equity investments, pension mark-to-market fair value
adjustment, foreign currency impact of certain intercompany loans,
acquisition-related costs other than acquisition amortization,
realignment of resources and other costs, income tax effect of
stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency
adjustment, gain on settlement of Canada pension plan, adjustments to deferred
tax balances and aggregated tax impact of these
adjustments:
|
|
Three Months
Ended
December
31,
|
|
|
|
|
(In millions, except
per share amounts)
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
Net income attributable
to Equifax
|
|
$
132.4
|
|
$
108.2
|
|
$
24.2
|
|
22 %
|
Acquisition-related
amortization expense of certain acquired intangibles
(1)
|
|
65.4
|
|
62.3
|
|
3.1
|
|
5 %
|
Accrual for legal and
regulatory matters related to the 2017 cybersecurity incident
(2)
|
|
1.9
|
|
0.2
|
|
1.7
|
|
nm
|
Fair market value
adjustment of equity investment (3)
|
|
—
|
|
(14.2)
|
|
14.2
|
|
nm
|
Pension mark-to-market
fair value adjustment (4)
|
|
0.1
|
|
(1.4)
|
|
1.5
|
|
nm
|
Foreign currency impact
of certain intercompany loans (5)
|
|
1.3
|
|
1.4
|
|
(0.1)
|
|
(7) %
|
Acquisition-related
costs other than acquisition amortization (6)
|
|
27.2
|
|
25.3
|
|
1.9
|
|
8 %
|
Realignment of
resources and other costs (7)
|
|
19.4
|
|
24.0
|
|
(4.6)
|
|
(19) %
|
Income tax effects of
stock awards that are recognized upon vesting or settlement
(8)
|
|
(0.6)
|
|
(0.5)
|
|
(0.1)
|
|
20 %
|
Argentina highly
inflationary foreign currency adjustment (9)
|
|
3.2
|
|
0.1
|
|
3.1
|
|
nm
|
Adjustments to deferred
tax balances (11)
|
|
1.0
|
|
—
|
|
1.0
|
|
nm
|
Tax impact of
adjustments (12)
|
|
(25.9)
|
|
(18.3)
|
|
(7.6)
|
|
42 %
|
Net income attributable
to Equifax, adjusted for items listed above
|
|
$
225.4
|
|
$
187.1
|
|
$
38.3
|
|
20 %
|
Diluted EPS
attributable to Equifax, adjusted for items listed above
|
|
$
1.81
|
|
$
1.52
|
|
$
0.29
|
|
19 %
|
Weighted-average shares
used in computing diluted EPS
|
|
124.4
|
|
123.3
|
|
|
|
|
|
|
Twelve Months
Ended
December
31,
|
|
|
|
|
(In millions, except
per share amounts)
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
Net income attributable
to Equifax
|
|
$
545.3
|
|
$
696.2
|
|
$ (150.9)
|
|
(22) %
|
Acquisition-related
amortization expense of certain acquired intangibles
(1)
|
|
250.7
|
|
236.7
|
|
14.0
|
|
6 %
|
Accrual for legal and
regulatory matters related to the 2017 cybersecurity incident
(2)
|
|
16.8
|
|
1.5
|
|
15.3
|
|
nm
|
Fair market value
adjustment and gain on sale of equity investments
(3)
|
|
(13.4)
|
|
(33.2)
|
|
19.8
|
|
(60) %
|
Pension mark-to-market
fair value adjustment (4)
|
|
0.1
|
|
(1.4)
|
|
1.5
|
|
nm
|
Foreign currency impact
of certain intercompany loans (5)
|
|
(1.0)
|
|
(1.3)
|
|
0.3
|
|
(23) %
|
Acquisition-related
costs other than acquisition amortization (6)
|
|
103.2
|
|
68.2
|
|
35.0
|
|
51 %
|
Realignment of
resources and other costs (7)
|
|
34.6
|
|
24.0
|
|
10.6
|
|
44 %
|
Income tax effects of
stock awards that are recognized upon vesting or settlement
(8)
|
|
(3.4)
|
|
(6.8)
|
|
3.4
|
|
(50) %
|
Argentina highly
inflationary foreign currency adjustment (9)
|
|
3.8
|
|
(0.2)
|
|
4.0
|
|
nm
|
Gain on settlement of
Canada pension plan (10)
|
|
—
|
|
(2.2)
|
|
2.2
|
|
nm
|
Adjustments to deferred
tax balances (11)
|
|
(27.2)
|
|
3.9
|
|
(31.1)
|
|
nm
|
Tax impact of
adjustments (12)
|
|
(78.0)
|
|
(52.8)
|
|
(25.2)
|
|
48 %
|
Net income attributable
to Equifax, adjusted for items listed above
|
|
$
831.5
|
|
$
932.6
|
|
$ (101.1)
|
|
(11) %
|
Diluted EPS
attributable to Equifax, adjusted for items listed above
|
|
$
6.71
|
|
$
7.56
|
|
$ (0.85)
|
|
(11) %
|
Weighted-average shares
used in computing diluted EPS
|
|
123.9
|
|
123.3
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of 2023, we recorded acquisition-related amortization
expense of certain acquired intangibles of $65.4 million ($52.5
million, net of tax). We calculate this financial measure by
excluding the impact of acquisition-related amortization expense
and including a benefit to reflect the significant cash income tax
savings resulting from the income tax deductibility of amortization
for certain acquired intangibles. The $12.9 million of tax is
comprised of $17.0 million of tax expense net of $4.1 million of a
cash income tax benefit. During the fourth quarter of 2022, we
recorded acquisition-related amortization expense of certain
acquired intangibles of $62.3 million ($50.5 million, net of tax).
The $11.8 million of tax is comprised of $15.9 million of tax
expense net of $4.1 million of a cash income tax
benefit.
|
|
|
|
For the year ended
December 31, 2023, we recorded acquisition-related amortization
expense of certain acquired intangibles of $250.7 million ($201.9
million, net of tax). The $48.8 million of tax is comprised of
$65.1 million of tax expense net of $16.3 million of a cash income
tax benefit. For the year ended December 31, 2022, we recorded
acquisition-related amortization expense of certain acquired
intangibles of $236.7 million ($192.5 million, net of tax). The
$44.2 million of tax is comprised of $60.4 million of tax expense
net of $16.2 million of a cash income tax benefit. See the Notes to
this reconciliation for additional detail.
|
|
|
(2)
|
During the fourth
quarter of 2023, we recorded an accrual for legal and regulatory
matters related to the 2017 cybersecurity incident of $1.9 million
($1.9 million, net of tax). For the year ended December 31, 2023 we
recorded an accrual for legal and regulatory matters related to the
2017 cybersecurity incident of $16.8 million ($16.7 million, net of
tax) primarily driven by our accrual for a penalty associated with
resolution of the investigation of the incident by the Financial
Conduct Authority in the United Kingdom. During the fourth quarter
of 2022, we recorded an accrual for legal and regulatory matters
related to the 2017 cybersecurity incident of $0.2 million ($0.2
million, net of tax). For the year ended December 31, 2022, we
recorded an accrual for legal and regulatory matters related to the
2017 cybersecurity incident of $1.5 million ($1.2 million, net of
tax).
|
|
|
(3)
|
For the year ended
December 31, 2023, we recorded a $13.4 million ($8.8 million, net
of tax) gain on the fair market value adjustment of an equity
investment and gain on sale of equity method investments. During
the fourth quarter of 2022, we recorded a $14.2 million ($9.0
million, net of tax) gain on the fair market value adjustment of an
equity investment. For the year ended December 31, 2022, we
recorded a $33.2 million ($17.4 million, net of tax) gain on the
fair market value adjustment of an equity investment and gain on
sale of equity method investments. The changes in fair value were
recorded to the Other Income (Expense), net line item within the
Consolidated Statements of Income. See the Notes to this
reconciliation for additional detail.
|
|
|
(4)
|
During the fourth
quarter of 2023, we recorded a $0.1 million loss ($0.1 million, net
of tax) related to the mark-to-market fair value adjustment of our
pension and postretirement benefit plans. During the fourth quarter
of 2022 we recorded a $1.4 million gain ($1.0 million, net of tax)
related to the mark-to-market fair value adjustment of our pension
and postretirement benefit plans. See the Notes to this
reconciliation for additional detail.
|
|
|
(5)
|
During the fourth
quarter of 2023 and for the year ended December 31, 2023, we
recorded a foreign currency loss on certain intercompany loans of
$1.3 million and a foreign currency gain on certain intercompany
loans of $1.0 million, respectively. During the fourth quarter of
2022 and for the year ended December 31, 2022, we recorded a
foreign currency loss of $1.4 million and a foreign currency gain
of $1.3 million, respectively, related to certain intercompany
loans. The impact was recorded to the Other Income (Expense), net
line item within the Consolidated Statements of Income. See the
Notes to this reconciliation for additional detail.
|
|
|
(6)
|
During the fourth
quarter of 2023 and for the year ended December 31, 2023, we
recorded $27.2 million ($19.7 million, net of tax) and $103.2
million ($79.5 million, net of tax), respectively, for
acquisition-related costs other than acquisition amortization.
During the fourth quarter of 2022 and for the year ended December
31, 2022, we recorded $25.3 million ($19.2 million, net of tax) and
$68.2 million ($50.6 million, net of tax), respectively, for
acquisition-related costs other than acquisition amortization.
These costs primarily related to integration costs resulting from
recent acquisition activity and were recorded in operating income.
See the Notes to this reconciliation for additional
detail.
|
|
|
(7)
|
During the fourth
quarter of 2023 and for the year ended December 31, 2023, we
recorded $19.4 million ($13.9 million, net of tax) and $34.6
million ($24.6 million, net of tax), respectively, of restructuring
charges for the realignment of resources and other costs. During
the fourth quarter of 2022, we recorded $24.0 million ($18.0
million, net of tax) of restructuring charges for the realignment
of resources and other costs. These restructuring charges
predominantly relate to the reduction of headcount and contract
terminations in order to support the Company's strategic objectives
and increase the integration of our global operations. See the
Notes to this reconciliation for additional detail.
|
|
|
(8)
|
During the fourth
quarter and for the year ended December 31, 2023, we recorded a tax
benefit of $0.6 million and $3.4 million, respectively, related to
the tax effects of deductions for stock compensation in excess of
amounts recorded for compensation costs. During the fourth quarter
and for the year ended December 31, 2022, we recorded a tax benefit
of $0.5 million and $6.8 million, respectively, related to the tax
effects of deductions for stock compensation in excess of amounts
recorded for compensation costs. See the Notes to this
reconciliation for additional detail.
|
|
|
(9)
|
Argentina experienced
multiple periods of increasing inflation rates, devaluation of the
peso, and increasing borrowing rates. As such, Argentina was deemed
a highly inflationary economy by accounting policymakers. For the
fourth quarter and year ended December 31, 2023, we recorded a
foreign currency loss of $3.2 million and $3.8 million,
respectively, related to the impact of remeasuring the peso
denominated monetary assets and liabilities as a result of
Argentina being a highly inflationary economy. For the fourth
quarter and year ended December 31, 2022, we recorded a $0.1
million foreign currency loss and a $0.2 million foreign currency
gain, respectively, related to the impact of remeasuring the peso
denominated monetary assets and liabilities as a result of
Argentina being a highly inflationary economy. See the Notes to
this reconciliation for additional detail.
|
|
|
(10)
|
During the third
quarter of 2022 and the year ended December 31, 2022, we recorded a
gain on the settlement of our Canada pension plan of $2.2 million
($3.1 million, net of tax). We received a tax deduction for the
settlement payments made resulting in a tax benefit. The impact is
recorded to the Other income, net line item within the Consolidated
Statements of Income. See the Notes to this reconciliation for
additional details.
|
|
|
(11)
|
During the fourth
quarter of 2023 and the year ended December 31, 2023, we recorded a
tax expense of $1.0 million and a tax benefit of $27.2 million,
respectively, related to the write off of a deferred tax liability
related to our original investment in Boa Vista Serviços as a
result of our purchase of the remaining interest in Boa Vista
Serviços in the third quarter of 2023. During the first quarter of
2022 and the year ended December 31, 2022, we recorded a tax
expense of $3.9 million related to adjustments to deferred tax
balances resulting from changes in state tax law. See Notes to this
reconciliation for additional detail.
|
|
|
(12)
|
During the fourth
quarter of 2023, we recorded the tax impact of adjustments of $25.9
million comprised of (i) acquisition-related amortization expense
of certain acquired intangibles of $12.9 million ($17.0 million of
tax expense net of $4.1 million of a cash income tax benefit), (ii)
a tax adjustment of $7.5 million related to acquisition-related
costs other than acquisition amortization, and (iii) a tax
adjustment of $5.5 million related to the realignment of resources
and other costs. During the fourth quarter of 2022, we recorded the
tax impact of adjustments of $18.3 million comprised of (i)
acquisition-related amortization expense of certain acquired
intangibles of $11.8 million ($15.9 million of tax expense net of
$4.1 million of a cash income tax benefit), (ii) a tax adjustment
of $5.2 million related to the fair market value adjustment of an
equity investment, (iii) a tax adjustment of $0.4 million related
to the fourth quarter mark-to-market fair value adjustment of our
pension and postretirement benefit plans, (iv) a tax adjustment of
$6.1 million related to acquisition-related costs other than
acquisition amortization, and (v) a tax adjustment of $6.0 million
related to the realignment of resources.
|
|
|
|
For the year ended
December 31, 2023, we recorded the tax impact of adjustments of
$78.0 million comprised of (i) acquisition-related amortization
expense of certain acquired intangibles of $48.8 million ($65.1
million of tax expense net of $16.3 million of a cash income tax
benefit), (ii) a tax adjustment of $0.1 million related to an
accrual for legal and regulatory matters related to the 2017
cybersecurity incident, (iii) a tax adjustment of $4.6 million
related to the gain on fair market value adjustment and gain on
sale of equity investments, (iv) a tax adjustment of
$23.7 million related to acquisition-related costs other than
acquisition amortization, and (v) a tax adjustment of
$10.0 million related to the realignment of resources. For the
year ended December 31, 2022, we recorded the tax impact of
adjustments of $52.8 million comprised of (i) acquisition-related
amortization expense of certain acquired intangibles of
$44.2 million ($60.4 million of tax expense net of
$16.2 million of a cash income tax benefit), (ii) a tax
adjustment of $0.3 million related to an accrual for legal and
regulatory matters related to the 2017 cybersecurity incident,
(iii) a tax adjustment of $15.8 million related to the gain on
fair market value adjustment and gain on sale of equity
investments, (iv) a tax adjustment of $0.4 million related to
the fourth quarter mark-to-market fair value adjustment of our
pension and postretirement benefit plans, (v) a tax adjustment of
$17.6 million related to acquisition-related costs other than
acquisition amortization, (vi) a tax adjustment of
$6.0 million related to the realignment of resources, and
(vii) a tax adjustment of $0.9 million related to the gain on
settlement of our Canada pension plan.
|
Reconciliations of Non-GAAP Financial Measures to the
Comparable GAAP Financial Measures (Unaudited)
(Dollars in
millions, except per share amounts)
B. Reconciliation of net income
attributable to Equifax to adjusted EBITDA, defined as net income
excluding income taxes, interest expense, net, depreciation and
amortization expense, accrual for legal and regulatory matters
related to the 2017 cybersecurity incident, fair market value
adjustment and gain on sale of equity investments, pension
mark-to-market fair value adjustment, foreign currency impact of
certain intercompany loans, acquisition-related costs other than
acquisition amortization, realignment of resources and other costs,
Argentina highly inflationary
foreign currency adjustment, gain on settlement of Canada pension plan and presentation of
adjusted EBITDA margin:
|
|
Three Months
Ended
December
31,
|
|
|
|
|
(In
millions)
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
Revenue
|
|
$
1,326.5
|
|
$
1,198.0
|
|
$
128.5
|
|
11 %
|
Net income attributable
to Equifax
|
|
$
132.4
|
|
$
108.2
|
|
$
24.2
|
|
22 %
|
Income taxes
|
|
48.3
|
|
32.2
|
|
16.1
|
|
50 %
|
Interest expense,
net*
|
|
56.4
|
|
53.0
|
|
3.4
|
|
6 %
|
Depreciation and
amortization
|
|
156.4
|
|
142.3
|
|
14.1
|
|
10 %
|
Accrual for legal and
regulatory matters related to 2017 cybersecurity incident
(1)
|
|
1.9
|
|
0.2
|
|
1.7
|
|
nm
|
Fair market value
adjustment of equity investment (2)
|
|
—
|
|
(14.2)
|
|
14.2
|
|
nm
|
Pension mark-to-market
fair value adjustment (3)
|
|
0.1
|
|
(1.4)
|
|
1.5
|
|
nm
|
Foreign currency impact
of certain intercompany loans (4)
|
|
1.3
|
|
1.4
|
|
(0.1)
|
|
(7) %
|
Acquisition-related
costs other than acquisition amortization (5)
|
|
27.2
|
|
25.3
|
|
1.9
|
|
8 %
|
Realignment of
resources and other costs (6)
|
|
19.4
|
|
24.0
|
|
(4.6)
|
|
(19) %
|
Argentina highly
inflationary foreign currency adjustment (7)
|
|
3.2
|
|
0.1
|
|
3.1
|
|
nm
|
Adjusted EBITDA,
excluding the items listed above
|
|
$
446.6
|
|
$
371.1
|
|
$
75.5
|
|
20 %
|
Adjusted EBITDA
margin
|
|
33.7 %
|
|
31.0 %
|
|
|
|
|
|
|
Twelve Months
Ended
December
31,
|
|
|
|
|
(In
millions)
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
Revenue
|
|
$
5,265.2
|
|
$
5,122.2
|
|
$
143.0
|
|
3 %
|
Net income attributable
to Equifax
|
|
$
545.3
|
|
$
696.2
|
|
$
(150.9)
|
|
(22) %
|
Income taxes
|
|
166.2
|
|
229.5
|
|
(63.3)
|
|
(28) %
|
Interest expense,
net*
|
|
227.2
|
|
180.4
|
|
46.8
|
|
26 %
|
Depreciation and
amortization
|
|
610.8
|
|
560.1
|
|
50.7
|
|
9 %
|
Accrual for legal and
regulatory matters related to 2017 cybersecurity incident
(1)
|
|
16.8
|
|
1.5
|
|
15.3
|
|
nm
|
Fair market value
adjustment and gain on sale of equity investments
(2)
|
|
(13.4)
|
|
(33.2)
|
|
19.8
|
|
(60) %
|
Pension mark-to-market
fair value adjustment (3)
|
|
0.1
|
|
(1.4)
|
|
1.5
|
|
nm
|
Foreign currency impact
of certain intercompany loans (4)
|
|
(1.0)
|
|
(1.3)
|
|
0.3
|
|
(23) %
|
Acquisition-related
costs other than acquisition amortization (5)
|
|
103.2
|
|
68.2
|
|
35.0
|
|
51 %
|
Realignment of
resources and other costs (6)
|
|
34.6
|
|
24.0
|
|
10.6
|
|
44 %
|
Argentina highly
inflationary foreign currency adjustment (7)
|
|
3.8
|
|
(0.2)
|
|
4.0
|
|
nm
|
Gain on settlement of
Canada pension plan (8)
|
|
—
|
|
(2.2)
|
|
2.2
|
|
nm
|
Adjusted EBITDA,
excluding the items listed above
|
|
$
1,693.6
|
|
$
1,721.6
|
|
$
(28.0)
|
|
(2) %
|
Adjusted EBITDA
margin
|
|
32.2 %
|
|
33.6 %
|
|
|
|
|
|
*Excludes interest
income of $3.9 million and $1.6 million for the fourth quarter of
2023 and 2022, respectively. Also, excludes interest income of
$14.2 million and $2.6 million for the years ended December 31,
2023 and 2022, respectively.
|
|
|
(1)
|
During the fourth
quarter of 2023, we recorded an accrual for legal and regulatory
matters related to the 2017 cybersecurity incident of $1.9 million
($1.9 million, net of tax). For the year ended December 31, 2023 we
recorded an accrual for legal and regulatory matters related to the
2017 cybersecurity incident of $16.8 million ($16.7 million, net of
tax) primarily driven by our accrual for a penalty associated with
resolution of the investigation of the incident by the Financial
Conduct Authority in the United Kingdom. During the fourth quarter
of 2022, we recorded an accrual for legal and regulatory matters
related to the 2017 cybersecurity incident of $0.2 million ($0.2
million, net of tax). For the year ended December 31, 2022, we
recorded an accrual for legal and regulatory matters related to the
2017 cybersecurity incident of $1.5 million ($1.2 million, net of
tax).
|
|
|
(2)
|
For the year ended
December 31, 2023, we recorded a $13.4 million ($8.8 million, net
of tax) gain on the fair market value adjustment of an equity
investment and gain on sale of equity method investments. During
the fourth quarter of 2022 we recorded a $14.2 million ($9.0
million, net of tax) gain on the fair market value adjustment of an
equity investment. For the year ended December 31, 2022, we
recorded a $33.2 million ($17.4 million, net of tax) gain on the
fair market value adjustment of an equity investment and gain on
sale of equity method investments. The changes in fair value were
recorded to the Other Income (Expense), net line item within the
Consolidated Statements of Income. See the Notes to this
reconciliation for additional detail.
|
|
|
(3)
|
During the fourth
quarter of 2023, we recorded a $0.1 million loss ($0.1 million, net
of tax) related to the mark-to-market fair value adjustment of our
pension and postretirement benefit plans. During the fourth quarter
of 2022 we recorded a $1.4 million gain ($1.0 million, net of tax)
related to the mark-to-market fair value adjustment of our pension
and postretirement benefit plans. See the Notes to this
reconciliation for additional detail.
|
|
|
(4)
|
During the fourth
quarter of 2023 and for the year ended December 31, 2023, we
recorded a foreign currency loss on certain intercompany loans of
$1.3 million and a foreign currency gain on certain intercompany
loans of $1.0 million, respectively. During the fourth quarter of
2022 and for the year ended December 31, 2022, we recorded a
foreign currency loss of $1.4 million and a foreign currency gain
of $1.3 million, respectively, related to certain intercompany
loans. The impact was recorded to the Other Income (Expense), net
line item within the Consolidated Statements of Income. See the
Notes to this reconciliation for additional detail.
|
|
|
(5)
|
During the fourth
quarter of 2023 and for the year ended December 31, 2023, we
recorded $27.2 million ($19.7 million, net of tax) and $103.2
million ($79.5 million, net of tax), respectively, for
acquisition-related costs other than acquisition amortization.
During the fourth quarter of 2022 and for the year ended December
31, 2022, we recorded $25.3 million ($19.2 million, net of tax) and
$68.2 million ($50.6 million, net of tax), respectively, for
acquisition-related costs other than acquisition amortization.
These costs primarily related to integration costs resulting from
recent acquisition activity and were recorded in operating income.
See the Notes to this reconciliation for additional
detail.
|
|
|
(6)
|
During the fourth
quarter of 2023 and for the year ended December 31, 2023, we
recorded $19.4 million ($13.9 million, net of tax) and $34.6
million ($24.6 million, net of tax), respectively, of restructuring
charges for the realignment of resources and other costs. During
the fourth quarter of 2022, we recorded $24.0 million ($18.0
million, net of tax) of restructuring charges for the realignment
of resources and other costs. These restructuring charges
predominantly relate to the reduction of headcount and contract
terminations in order to support the Company's strategic objectives
and increase the integration of our global operations. See the
Notes to this reconciliation for additional
detail.
|
|
|
(7)
|
Argentina experienced
multiple periods of increasing inflation rates, devaluation of the
peso, and increasing borrowing rates. As such, Argentina was deemed
a highly inflationary economy by accounting policymakers. For the
fourth quarter and year ended December 31, 2023, we recorded a
foreign currency loss of $3.2 million and $3.8 million,
respectively, related to the impact of remeasuring the peso
denominated monetary assets and liabilities as a result of
Argentina being a highly inflationary economy. For the fourth
quarter and year ended December 31, 2022, we recorded a $0.1
million foreign currency loss and a $0.2 million foreign currency
gain, respectively, related to the impact of remeasuring the peso
denominated monetary assets and liabilities as a result of
Argentina being a highly inflationary economy. See the Notes to
this reconciliation for additional detail.
|
|
|
(8)
|
During the third
quarter of 2022 and the year ended December 31, 2022, we recorded a
gain on the settlement of our Canada pension plan of $2.2 million
($3.1 million, net of tax). We received a tax deduction for the
settlement payments made resulting in a tax benefit. The impact is
recorded to the Other income, net line item within the Consolidated
Statements of Income. See the Notes to this reconciliation for
additional details.
|
C. Reconciliation of operating income by segment
to Adjusted EBITDA, excluding depreciation and amortization
expense, other income, net, noncontrolling interest, accrual for
legal and regulatory matters related to the 2017 cybersecurity
incident, fair market value adjustment and gain on sale of equity
investments, pension mark-to-market fair value adjustment, foreign
currency impact of certain intercompany loans, acquisition-related
costs other than acquisition amortization, realignment of resources
and other costs, Argentina highly
inflationary foreign currency adjustment, gain on settlement of
Canada pension plan and
presentation of adjusted EBITDA margin for each of the
segments:
(In
millions)
|
|
Three Months Ended
December 31, 2023
|
|
|
Workforce
Solutions
|
|
U.S. Information
Solutions
|
|
International
|
|
General
Corporate
Expense
|
|
Total
|
|
|
|
|
|
Revenue
|
|
$
559.5
|
|
$
427.7
|
|
$
339.3
|
|
—
|
|
$
1,326.5
|
Operating
Income
|
|
234.7
|
|
93.9
|
|
60.6
|
|
(144.1)
|
|
245.1
|
Depreciation and
Amortization
|
|
44.4
|
|
52.6
|
|
41.7
|
|
17.7
|
|
156.4
|
Other expense,
net*
|
|
(0.1)
|
|
(0.1)
|
|
(3.1)
|
|
(2.6)
|
|
(5.9)
|
Noncontrolling
interest
|
|
—
|
|
—
|
|
(2.1)
|
|
—
|
|
(2.1)
|
Adjustments
(1)
|
|
7.5
|
|
3.7
|
|
8.7
|
|
33.2
|
|
53.1
|
Adjusted
EBITDA
|
|
$
286.5
|
|
$
150.1
|
|
$
105.8
|
|
$
(95.8)
|
|
$
446.6
|
Operating
Margin
|
|
41.9 %
|
|
22.0 %
|
|
17.9 %
|
|
nm
|
|
18.5 %
|
Adjusted EBITDA
Margin
|
|
51.2 %
|
|
35.1 %
|
|
31.2 %
|
|
nm
|
|
33.7 %
|
(In
millions)
|
|
Twelve Months Ended
December 31, 2023
|
|
|
Workforce
Solutions
|
|
U.S. Information
Solutions
|
|
International
|
|
General
Corporate
Expense
|
|
Total
|
|
|
|
|
|
Revenue
|
|
$
2,315.8
|
|
$
1,720.4
|
|
$
1,229.0
|
|
—
|
|
$
5,265.2
|
Operating
Income
|
|
969.3
|
|
365.0
|
|
167.8
|
|
(568.5)
|
|
933.6
|
Depreciation and
Amortization
|
|
176.4
|
|
205.8
|
|
147.6
|
|
81.0
|
|
610.8
|
Other (expense) income,
net*
|
|
(0.2)
|
|
0.3
|
|
15.7
|
|
(4.3)
|
|
11.5
|
Noncontrolling
interest
|
|
—
|
|
—
|
|
(6.4)
|
|
—
|
|
(6.4)
|
Adjustments
(1)
|
|
35.5
|
|
22.1
|
|
1.1
|
|
85.4
|
|
144.1
|
Adjusted
EBITDA
|
|
$
1,181.0
|
|
$
593.2
|
|
$
325.8
|
|
$
(406.4)
|
|
$
1,693.6
|
Operating
Margin
|
|
41.9 %
|
|
21.2 %
|
|
13.7 %
|
|
nm
|
|
17.7 %
|
Adjusted EBITDA
Margin
|
|
51.0 %
|
|
34.5 %
|
|
26.5 %
|
|
nm
|
|
32.2 %
|
|
*Excludes interest
income of $3.9 million in the fourth quarter and
$14.2 million for the year ended December 31, 2023.
|
(In
millions)
|
|
Three Months Ended
December 31, 2022
|
|
|
Workforce
Solutions
|
|
U.S. Information
Solutions
|
|
International
|
|
General
Corporate
Expense
|
|
Total
|
|
|
|
|
|
Revenue
|
|
$
508.4
|
|
$
405.9
|
|
$
283.7
|
|
—
|
|
$
1,198.0
|
Operating
Income
|
|
185.4
|
|
86.7
|
|
35.1
|
|
(131.1)
|
|
176.1
|
Depreciation and
Amortization
|
|
41.4
|
|
50.5
|
|
32.4
|
|
18.0
|
|
142.3
|
Other income (expense),
net*
|
|
—
|
|
0.1
|
|
18.8
|
|
(0.7)
|
|
18.2
|
Noncontrolling
interest
|
|
—
|
|
—
|
|
(0.9)
|
|
—
|
|
(0.9)
|
Adjustments
(2)
|
|
10.8
|
|
5.8
|
|
(12.1)
|
|
30.9
|
|
35.4
|
Adjusted
EBITDA
|
|
$
237.6
|
|
$
143.1
|
|
$
73.3
|
|
$
(82.9)
|
|
$
371.1
|
Operating
Margin
|
|
36.5 %
|
|
21.4 %
|
|
12.4 %
|
|
nm
|
|
14.7 %
|
Adjusted EBITDA
Margin
|
|
46.8 %
|
|
35.3 %
|
|
25.8 %
|
|
nm
|
|
31.0 %
|
(In
millions)
|
|
Twelve Months Ended
December 31, 2022
|
|
|
Workforce
Solutions
|
|
U.S. Information
Solutions
|
|
International
|
|
General
Corporate
Expense
|
|
Total
|
|
|
|
|
|
Revenue
|
|
$
2,325.4
|
|
$
1,657.7
|
|
$
1,139.1
|
|
—
|
|
$
5,122.2
|
Operating
Income
|
|
1,006.0
|
|
402.1
|
|
147.0
|
|
(499.1)
|
|
1,056.0
|
Depreciation and
Amortization
|
|
162.2
|
|
191.4
|
|
132.0
|
|
74.5
|
|
560.1
|
Other income (expense),
net*
|
|
—
|
|
29.3
|
|
(20.5)
|
|
45.3
|
|
54.1
|
Noncontrolling
interest
|
|
—
|
|
—
|
|
(4.0)
|
|
—
|
|
(4.0)
|
Adjustments
(2)
|
|
25.3
|
|
(13.1)
|
|
38.1
|
|
5.1
|
|
55.4
|
Adjusted
EBITDA
|
|
$
1,193.5
|
|
$
609.7
|
|
$
292.6
|
|
$
(374.2)
|
|
$
1,721.6
|
Operating
Margin
|
|
43.3 %
|
|
24.3 %
|
|
12.9 %
|
|
nm
|
|
20.6 %
|
Adjusted EBITDA
Margin
|
|
51.3 %
|
|
36.8 %
|
|
25.7 %
|
|
nm
|
|
33.6 %
|
|
*Excludes interest
income $1.6 million in the fourth quarter and $2.6 million for the
year ended December 31, 2022.
|
|
|
(1)
|
During the fourth
quarter of 2023, we recorded pre-tax expenses of $1.9 million for
an accrual for legal and regulatory matters related to the 2017
cybersecurity incident, a $0.1 million loss related to
mark-to-market fair value adjustment of our pension and
postretirement benefit plans, $1.3 million foreign currency loss on
certain intercompany loans, $27.2 million for acquisition-related
costs other than acquisition amortization, $19.4 million of
restructuring charges for the realignment of resources and other
costs, and a $3.2 million foreign currency loss related to the
impact of remeasuring the peso denominated monetary assets and
liabilities as a result of Argentina being a highly inflationary
economy.
|
|
|
|
For the year ended
December 31, 2023, we recorded $16.8 million for an accrual for
legal and regulatory matters related to the 2017 cybersecurity
incident, a $13.4 million gain on the fair market value adjustment
of equity investments and gain related to the sale of equity method
investments, a $0.1 million loss related to mark-to-market fair
value adjustment of our pension and postretirement benefit plans,
$1.0 million foreign currency gain on certain intercompany loans,
$103.2 million for acquisition-related costs other than
acquisition amortization, $34.6 million of restructuring charges
for the realignment of resources and other costs, and a foreign
currency loss of $3.8 million related to the impact of
remeasuring the peso denominated monetary assets and liabilities as
a result of Argentina being a highly inflationary
economy.
|
|
|
(2)
|
During the fourth
quarter of 2022, we recorded pre-tax expenses of $0.2 million for
an accrual for legal and regulatory matters related to the 2017
cybersecurity incident, $14.2 million unrealized gain on the fair
market value adjustment of an equity investment, a $1.4 million
gain related to the mark-to-market fair value adjustment of our
pension and postretirement benefit plans, $1.4 million foreign
currency loss on certain intercompany loans, $25.3 million in
acquisition-related costs other than acquisition amortization,
$24.0 million of restructuring charges for the realignment of
resources and other costs, and a $0.1 million foreign currency loss
related to the impact of remeasuring the peso denominated monetary
assets and liabilities as a result of Argentina being a highly
inflationary economy.
|
|
|
|
For year ended December
31, 2022, we recorded $1.5 million for an accrual for legal and
regulatory matters related to the 2017 cybersecurity incident, a
$33.2 million unrealized gain related to the fair market value
adjustment of equity investments and gain on sale of equity
investments, a $1.4 million gain related to the mark-to-market fair
value adjustment of our pension and postretirement benefit plans,
$1.3 million foreign currency gain on certain intercompany loans,
$68.2 million for acquisition-related costs other than acquisition
amortization, $24.0 million of restructuring charges for the
realignment of resources and other costs, a $0.2 million foreign
currency gain related to the impact of remeasuring the peso
denominated monetary assets and liabilities as a result of
Argentina being a highly inflationary economy, and a gain of $2.2
million on the settlement of our Canada pension plan.
|
Notes to Reconciliations of Non-GAAP Financial Measures to
the Comparable GAAP Financial Measures
Diluted EPS attributable to Equifax is adjusted for the
following items:
Acquisition-related amortization expense - During the
fourth quarter of 2023 and 2022, we recorded acquisition-related
amortization expense of certain acquired intangibles of
$65.4 million ($52.5 million, net of tax) and $62.3 million ($50.5
million, net of tax), respectively. For the years ended
December 31, 2023 and 2022, we
recorded acquisition-related amortization expense of certain
acquired intangibles of $250.7
million ($201.9 million, net
of tax) and $236.7 million
($192.5 million, net of tax),
respectively.
We calculate this financial measure by excluding the impact of
acquisition-related amortization expense and including a benefit to
reflect the material cash income tax savings resulting from the
income tax deductibility of amortization for certain acquired
intangibles. These financial measures are not prepared in
conformity with GAAP. Management believes excluding the impact of
amortization expense is useful because excluding
acquisition-related amortization, and other items that are not
comparable allows investors to evaluate our performance for
different periods on a more comparable basis. Certain acquired
intangibles result in material cash income tax savings which are
not reflected in earnings. Management believes that including a
benefit to reflect the cash income tax savings is useful as it
allows investors to better value Equifax. Management makes these
adjustments to earnings when measuring profitability, evaluating
performance trends, setting performance objectives and calculating
our return on invested capital.
Accrual for legal and regulatory matters related to the 2017
cybersecurity incident - Accrual for legal and regulatory
matters related to the 2017 cybersecurity incident includes legal
fees to respond to subsequent litigation and government
investigations for the periods presented. During the fourth quarter
of 2023 and for the year ended December 31,
2023, we recorded an accrual for legal and regulatory
matters related to the 2017 cybersecurity incident of $1.9 million ($1.9 million, net of tax) and $16.8 million ($16.7 million, net of tax), respectively.
During the fourth quarter of 2022 and for year ended December 31, 2022, we recorded an accrual for
legal and regulatory matters related to the 2017 cybersecurity
incident of $0.2 million
($0.2 million, net of tax) and
$1.5 million ($1.2 million, net of tax), respectively.
Management believes excluding these charges is useful as it allows
investors to evaluate our performance for different periods on a
more comparable basis. Management makes these adjustments to net
income when measuring profitability, evaluating performance trends,
setting performance objectives and calculating our return on
invested capital. This is consistent with how management reviews
and assesses Equifax's historical performance and is useful when
planning, forecasting and analyzing future periods.
Fair market value adjustment and gain on sale of equity
investments - During the year ended December 31, 2023, we recorded a $13.4 million ($8.8 million, net of tax) gain related to
adjusting our investment in Brazil
to fair value at the date of the acquisition and gain related to
the sale of an equity method investment. On August 7, 2023, we purchased the remaining
interest of our equity investment in Brazil. The investment in Brazil has a readily determinable fair value
and the carrying value of the investment was adjusted to fair value
as of the close date, resulting in a loss. Prior to the
acquisition, the investment in Brazil was adjusted to fair value at the end
of each reporting period, with unrealized gains or losses recorded
within the Consolidated Statements of Income in Other income, net.
During the fourth quarter of 2022 and for the year ended
December 31, 2022, we recorded a
$14.2 million ($9.0 million, net of tax) and $33.2 million ($17.4 million, net of tax) unrealized gain
related to adjusting our investment in Brazil to fair value and gain related to the
sale of equity method investments. 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,
2023 and 2022, since the non-operating gains or losses 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.
Pension mark-to-market fair value adjustment - We
utilize a mark-to-market method of accounting for recognizing
actuarial gains and losses and expected return on plan assets for
our defined benefit pension and other postretirement benefit plans.
Under our accounting methodology for recognizing actuarial gains
and losses and expected return on plan assets for our defined
benefit pension and other postretirement benefit plans,
remeasurement of projected benefit obligation and plan assets are
immediately recognized in earnings through net periodic benefit
cost within Other Income (Expense) on the Consolidated Statements
of Income, with pension and postretirement plans to be remeasured
annually in the fourth quarter, or on an interim basis as
triggering events require remeasurement. During the fourth quarter
of 2023 and for the year ended December 31,
2023, we recorded a $0.1
million ($0.1 million,
net of tax) loss related to the mark-to-market fair value
adjustment of our pension and postretirement benefit plans. During
the fourth quarter of 2022 and for the year ended December 31, 2022, we recorded a $1.4 million ($1.0 million, net of tax) gain related to
the mark-to-market fair value adjustment of our pension and
postretirement benefit plans. Management believes excluding these
charges from certain financial results provides meaningful
supplemental information regarding our financial results, since the
non-operating gains and losses 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.
Foreign currency impact of certain intercompany loans -
During the fourth quarter of 2023 and for the year ended
December 31, 2023, we recorded a
$1.3 million foreign currency loss
and a $1.0 million foreign currency
gain, respectively, related to certain intercompany loans. During
the fourth quarter of 2022 and for the year ended December 31, 2022, we recorded a $1.4 million foreign currency loss and a
$1.3 million foreign currency gain,
respectively, related to certain intercompany loans. The impact was
recorded to the Other Income (Expense), net line item within the
Consolidated Statements of Income. Management believes excluding
this charge is useful as it allows investors to evaluate our
performance for different periods on a more comparable basis. This
is consistent with how management reviews and assesses Equifax's
historical performance and is useful when planning, forecasting and
analyzing future periods.
Acquisition-related costs other than acquisition
amortization - During the fourth quarter and for the year
ended December 31, 2023, we recorded
$27.2 million ($19.7 million, net of tax) and $103.2 million ($79.5 million, net of tax) for
acquisition-related costs other than acquisition amortization.
During the fourth quarter and for the year ended December 31, 2022, we recorded $25.3 million ($19.2 million, net of tax) and $68.2 million ($50.6 million, net of tax) for
acquisition-related costs other than acquisition amortization.
These costs primarily related to transaction and integration costs
resulting from recent acquisitions and were recorded in operating
income. Management believes excluding this charge from certain
financial results provides meaningful supplemental information
regarding our financial results, 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.
Charge related to the realignment of resources and other
costs - During the fourth quarter of 2023 and for the year
ended December 31, 2023, we recorded
a restructuring charge of $19.4 million ($13.9 million, net of tax) and $34.6 million ($24.6 million, net of tax), respectively,
related to the realignment of resources and other costs. During the
fourth quarter of 2022, we recorded a restructuring charge of
$24.0 million ($18.0 million, net of tax) related to the
realignment of resources and other costs. These restructuring
charges predominantly relate to the reduction of headcount and
contract terminations in order to support the Company's strategic
objectives and increase the integration of our global operations.
Management believes excluding this charge from certain financial
results provides meaningful supplemental information regarding our
financial results for the years ended December 31, 2023 and 2022, since the charges 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 effects of stock awards that are recognized upon
vesting or settlement - During the fourth quarter and for
the year ended December 31, 2023, we
recorded a tax benefit of $0.6 million and $3.4 million, respectively, related to the
tax effects of deductions for stock compensation in excess of
amounts recorded for compensation costs. During the fourth quarter
and for the year ended December 31,
2022, we recorded a tax benefit of $0.5 million and $6.8 million, respectively, related to the
tax effects of deductions for stock compensation in excess of
amounts recorded for compensation costs. Management believes
excluding this tax effect from financial results provides
meaningful supplemental information regarding our financial results
for the three and twelve months ended December 31, 2023, as compared to the
corresponding periods in 2022, because these amounts are
non-operating and relate to income tax benefits or deficiencies for
stock awards recognized when tax amounts differ from recognized
stock compensation cost. This is consistent with how management
reviews and assesses Equifax's historical performance and is useful
when planning, forecasting and analyzing future periods.
Argentina highly
inflationary foreign currency adjustment - Argentina experienced multiple periods of
increasing inflation rates, devaluation of the peso, and increasing
borrowing rates. As such, Argentina was deemed a highly inflationary
economy by accounting policymakers. During
the fourth quarter of 2023 and for the year ended
December 31, 2023, we recorded a
foreign currency loss of $3.2 million and $3.8 million, respectively, related to the
impact of remeasuring the peso denominated monetary assets and
liabilities as a result of Argentina being a highly inflationary economy.
During the fourth quarter and the year ended December 31, 2022, we recorded a foreign currency
loss of $0.1 million and a foreign
currency gain of $0.2 million,
respectively. Management believes excluding this charge is useful
as it allows investors to evaluate our performance for different
periods on a more comparable basis. This is consistent with how
management reviews and assesses Equifax's historical performance
and is useful when planning, forecasting and analyzing future
periods.
Gain on settlement of Canada
pension plan - During the third quarter of 2022, we recorded a
gain on the settlement of our Canada pension plan of $2.2 million ($3.1 million, net of tax). We received a tax
deduction for the settlement payments made resulting in a tax
benefit. Management believes excluding this charge is useful as it
allows investors to evaluate our performance for different periods
on a more comparable basis. The impact is recorded to the Other
income, net line item within the Consolidated Statements of Income.
See the Notes to this reconciliation for additional details.
Adjustments to deferred tax balances - During the
fourth quarter of 2023, we recorded a tax expense of
$1.0 million. During the year
ended December 31, 2023, we recorded
a tax benefit of $27.2 million
related to the write off of a deferred tax liability related to our
original investment in Boa Vista Serviços as a result of our
purchase of the remaining interest in Boa Vista Serviços in the
third quarter of 2023. We determined the deferred tax balance
should no longer be recorded as a result of our purchase of the
remaining interest in Boa Vista Serviços during the third quarter
of 2023. During the first quarter of 2022, we recorded a tax
expense of $3.9 million related to
adjustments to deferred tax balances resulting from changes in U.S.
state tax law. Management believes excluding this tax effect from
certain financial results provides meaningful supplemental
information regarding our financial results for both periods since
a charge of such amount is not comparable among the periods. This
is consistent with how management reviews and assesses Equifax's
historical performance and is useful when planning, forecasting and
analyzing future periods.
Adjusted EBITDA and EBITDA margin - Management defines
adjusted EBITDA as consolidated net income attributable to Equifax
plus net interest expense, income taxes, depreciation and
amortization, and also excludes certain one-time items. Management
believes the use of adjusted EBITDA and adjusted EBITDA margin
allows investors to evaluate our performance for different periods
on a more comparable basis.
Contact:
|
|
|
|
Trevor Burns
|
Kate Walker
|
Investor
Relations
|
Media
Relations
|
trevor.burns@equifax.com
|
mediainquiries@equifax.com
|
|
|
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SOURCE Equifax Inc.