10-KPeriod: FY2005

EQUIFAX INC Annual Report, Year Ended Dec 31, 2005

Filed March 2, 2006For Securities:EFX

Summary

Equifax Inc. reported strong performance for the fiscal year ended December 31, 2005, with operating revenue increasing by 13% to $1.44 billion. This growth was driven by all reporting segments, particularly North America, which accounted for 81% of revenue and showed a 13% increase. The company also saw significant growth in Latin America (38%) and a stable performance in Europe. Key financial highlights include a 9% increase in operating income to $422 million and a 4% rise in income from continuing operations to $246.5 million, translating to diluted EPS of $1.86. The company's strategic focus on leveraging information, analytics, and enabling technologies appears to be yielding positive results. Investments in acquisitions, such as APPRO Systems and BeNow, are expected to further bolster capabilities. However, the company is navigating increased operating expenses, particularly related to CEO transition and marketing initiatives, which slightly compressed operating margins.

Key Highlights

  • 1Operating revenue grew 13% to $1.44 billion in 2005, driven by broad-based segment performance.
  • 2North America remains the largest segment, contributing 81% of revenue with a 13% year-over-year increase.
  • 3Latin America demonstrated significant growth, with revenue up 38%.
  • 4Diluted earnings per share (EPS) from continuing operations rose to $1.86 from $1.78 in the prior year.
  • 5Operating income increased by 12% to $422 million.
  • 6The company made strategic acquisitions in 2005, including APPRO Systems and BeNow, to enhance its technology and marketing services capabilities.
  • 7Operating expenses increased by 14%, impacted by higher salary, incentive, and marketing costs, leading to a slight decrease in operating margin from 30% to 29%.

Frequently Asked Questions

Equifax's revenue growth in 2005 was driven by a 13% increase to $1.44 billion. This growth was broad-based across its reporting segments, with North America showing a 13% increase, Latin America a significant 38% increase, and Europe remaining stable. The company's Information Services, Marketing Services, and Personal Solutions businesses all contributed to this expansion, supported by acquisitions like APPRO Systems and BeNow.

The FACT Act resulted in increased compliance costs for Equifax, impacting operating expenses. The company incurred significant costs for implementing its requirements, including operating expenses and capital investments. While these compliance costs increased expenses, the company also generated $38 million in regulatory recovery fee revenue related to the FACT Act in 2005.

Equifax anticipates continued solid performance in 2006, expecting moderate U.S. economic expansion. The company expects its U.S. Consumer and Commercial Services and Marketing Services businesses to perform well. Personal Solutions is also projected to grow due to consumer focus on identity theft and financial responsibility. Latin America is expected to maintain solid, albeit more moderate, growth, while Europe may continue to face challenges due to the U.K. economic environment. The company plans to focus on enhancing customer decisioning intelligence and expanding its Personal Solutions offerings.

In 2005, Equifax made two key acquisitions: APPRO Systems, Inc. (APPRO) in March, to strengthen its North America Information Services capabilities, and BeNow, Inc. in August, to enhance its Marketing Services business and enabling technology. These acquisitions are part of Equifax's strategy to expand its product and service offerings.