10-KPeriod: FY2011

EQUIFAX INC Annual Report, Year Ended Dec 31, 2011

Filed February 23, 2012For Securities:EFX

Summary

Equifax Inc. reported solid performance for the fiscal year ended December 31, 2011, with a 5% increase in operating revenue to $1.96 billion, driven by growth across its key segments, particularly North America Personal Solutions and North America Commercial Solutions. The company demonstrated improved operating leverage, leading to a 10% increase in operating income to $471 million and a 90 basis point expansion in operating margin to 24.0%. Diluted earnings per share from continuing operations remained stable at $1.87, while net income attributable to Equifax was $232.9 million. The company continued its strategic focus on diversification, new product innovation, and international expansion, with 26% of its revenue generated internationally. Significant events during the year included the merger of its Brazilian business with Boa Vista Serviços S.A., the acquisition of DataVision Resources, and continued share repurchases, signaling a commitment to returning value to shareholders. The company maintained a strong balance sheet with total debt at $1.01 billion, and a leverage ratio of 1.61, well within its debt covenants.

Financial Highlights

53 data points
Beta

Revenue

$1.89B

Net Income

$232.90M

12.3% Net Margin

EPS (Diluted)

$1.88

Total Assets

$3.52B

Cash & Equivalents

$127.70M

Free Cash Flow

$408.70M

Financial Statements
Beta
Revenue$1.89B
SG&A Expenses$560.10M
Operating Expenses$1.42B
Operating Income$468.60M
Interest Expense$55.10M
Net Income$232.90M
EPS (Basic)$1.91
EPS (Diluted)$1.88
Shares Outstanding (Basic)121.90M
Shares Outstanding (Diluted)123.70M

Key Highlights

  • 1Operating revenue increased by 5% to $1.96 billion, driven by broad-based growth across segments.
  • 2Operating income grew by 10% to $471 million, with an improved operating margin of 24.0%.
  • 3North America Personal Solutions saw a 15% revenue increase, and North America Commercial Solutions grew revenue by 11%.
  • 4International revenue grew 2%, with strong performance in Europe and Canada, despite the deconsolidation of the Brazilian business.
  • 5The company repurchased 4.2 million shares of common stock for $142.3 million.
  • 6Equifax maintained a strong financial position with a leverage ratio of 1.61 and $468.6 million available under its Senior Credit Facility.
  • 7The company actively pursued strategic acquisitions, including DataVision Resources, to broaden its product offerings and market position.

Frequently Asked Questions

Equifax's operating revenue increased by 5% to $1.96 billion in 2011 compared to 2010. This growth was primarily driven by strong execution of key strategic initiatives across its businesses, with notable revenue increases in North America Personal Solutions (15%) and North America Commercial Solutions (11%). The deconsolidation of its Brazilian business negatively impacted reported revenue, but underlying growth in other geographies was strong.

Equifax demonstrated improved profitability in 2011. Operating income increased by 10% to $471 million, and the operating margin expanded by 90 basis points to 24.0%. This improvement was attributed to operating leverage from revenue growth and a favorable business mix, as well as the deconsolidation of the Brazilian business which had a minimal impact on operating profit.

In 2011, Equifax completed the merger of its Brazilian business into Boa Vista Serviços S.A., exchanging its business for a 15% equity interest. It also acquired DataVision Resources for $50.0 million to enhance its TALX Workforce Solutions segment. Additionally, the company continued to repurchase its common stock and invested in international ventures in India and Russia.

Equifax projected that the overall business environment would remain challenging in 2012, with various countries dealing with economic issues. However, the company expected to deliver long-term average organic revenue growth between 6% and 8%, with an additional 1% to 2% from strategic acquisitions. Earnings per share were expected to grow at a somewhat faster rate than revenue due to operating and financial leverage.