10-KPeriod: FY2012

EQUIFAX INC Annual Report, Year Ended Dec 31, 2012

Filed February 22, 2013For Securities:EFX

Summary

Equifax Inc.'s 2012 Form 10-K report details a year of significant growth and strategic acquisitions, primarily driven by its U.S. Consumer Information Solutions (USCIS) segment, which saw a 16% revenue increase. The company bolstered its position through the substantial acquisition of CSC Credit Services for $1.0 billion, financed by a mix of cash, senior notes, and commercial paper. This acquisition is expected to contribute to continued revenue growth in 2013, offsetting a projected slowdown in the mortgage market. Financially, Equifax demonstrated strong operating performance, with a 10% increase in consolidated operating revenue to $2.16 billion and a 4% rise in operating income to $489 million. Diluted earnings per share from continuing operations grew to $2.22. The company also repurchased approximately $85.1 million of its common stock. A notable event impacting profitability was a $38.7 million pension settlement charge in the fourth quarter, which affected the operating margin. The company's liquidity remains strong, supported by significant cash flow from operations and an extended revolving credit facility.

Financial Highlights

53 data points
Beta

Revenue

$2.07B

Net Income

$272.10M

13.1% Net Margin

EPS (Diluted)

$2.22

Total Assets

$4.52B

Cash & Equivalents

$146.80M

Free Cash Flow

$496.30M

Financial Statements
Beta
Revenue$2.07B
SG&A Expenses$673.50M
Operating Expenses$1.59B
Operating Income$480.00M
Interest Expense$55.40M
Net Income$272.10M
EPS (Basic)$2.27
EPS (Diluted)$2.22
Shares Outstanding (Basic)119.90M
Shares Outstanding (Diluted)122.50M

Key Highlights

  • 1Revenue increased by 10% to $2.16 billion in 2012, driven by strong performance in the U.S. Consumer Information Solutions segment.
  • 2Acquired CSC Credit Services for $1.0 billion in December 2012 to expand its U.S. Consumer Information Solutions offerings.
  • 3Operating income grew by 4% to $489 million, with an operating margin of 22.6%, impacted by a $38.7 million pension settlement charge.
  • 4Diluted Earnings Per Share (EPS) from continuing operations increased to $2.22, up from $1.87 in the prior year.
  • 5The company repurchased approximately $85.1 million of its common stock during the year.
  • 6International revenue saw a slight decrease of 1% in 2012, primarily due to the deconsolidation of its Brazilian business, while other international operations showed growth.
  • 7Workforce Solutions segment revenue grew 15%, largely due to a 34% increase in Verification Services driven by mortgage refinancing activity.

Frequently Asked Questions

The primary growth driver for Equifax in 2012 was its U.S. Consumer Information Solutions (USCIS) segment, which experienced a 16% revenue increase, largely due to strong performance in mortgage-related services and new product initiatives.

The $1.0 billion acquisition of CSC Credit Services was financed through a combination of available cash, the issuance of $500 million in 3.30% ten-year senior notes, and commercial paper borrowings. This acquisition is expected to contribute to Equifax's revenue growth in 2013, offsetting an anticipated decline in mortgage volumes.

Equifax recorded a $38.7 million pension settlement charge in the fourth quarter of 2012, which negatively impacted its operating margin. Despite this, the company achieved an overall increase in operating income and net income for the year.

International revenue experienced a slight decrease of 1% in 2012, mainly due to the deconsolidation of its Brazilian business. However, other international operations, particularly in Europe and Canada, demonstrated growth in local currencies, driven by increased sales in personal solutions, analytical services, and fraud mitigation products.