Equifax 2012 Annual Report Download - page 74

72 Equifax 2012 Annual Report
The reference in the ‘‘Financial Highlights’’ section to ‘‘Diluted earn-
ings per share from continuing operations attributable to Equifax,
adjusted for certain items,’’ ‘‘Adjusted operating revenue’’ and
‘‘Adjusted operating margin’’ on the inside cover excludes certain
items from the nearest equivalent presentation under U.S. generally
accepted accounting principles, or GAAP. The non-GAAP measures
are provided to show the performance of our core operations without
the effect of the excluded items, consistent with how our manage-
ment reviews and assesses Equifax’s historical performance when
measuring operating profitability, evaluating performance trends and
setting performance objectives. The non-GAAP measures are not a
measurement of financial performance under GAAP, should not be
considered as an alternative to net income, operating income,
operating margin or earnings per share, and may not be comparable
to non-GAAP financial measures used by other companies.
2012 20èè
Diluted earnings per share from continuing operations attributable to Equifax — GAAP $ 2.22 $ 1.87
Fees associated with the acquisition of CSC Credit Services, net of tax 0.03 —
Pension settlement, net of tax 0.20 —
Income tax impact of international tax restructuring 0.17 —
Income tax benefits (0.13) (0.03)
Loss on deconsolidation of Brazilian business —0.22
Acquisition-related amortization expense, net of tax 0.48 0.46
Diluted earnings per share from continuing operations attributable to Equifax, adjusted for certain items — Non-GAAP $ 2.97 $ 2.52
Diluted Earnings per Share, Adjusted for Certain Items and
Adjusted Earnings per Share — These non-GAAP measures
exclude the following items:
Fees associated with the acquisition of CSC Credit
Services — During the fourth quarter of 2012, the Company
acquired certain business assets and the operations of CSC Credit
Services, Inc., a subsidiary of Computer Sciences Corporation. In
conjunction with this acquisition, the Company incurred
approximately $5.0 million of transaction fees ($3.2 million, net of
tax). Management believes excluding these fees from certain
financial results provides meaningful supplemental information
regarding our financial results for the three and twelve months
ended December 31, 2012, as compared to 2011, since an
acquisition and fees of such an amount are not comparable
among the periods. This is consistent with how our management
reviews and assesses Equifax’s historically performance and is
useful when planning, forecasting and analyzing future periods.
Pension settlement — During the fourth quarter of 2012, the
Company offered certain employees a voluntary lump sum pay-
ment option of their pension benefits or a reduced monthly
annuity. The Company recorded a non-cash settlement charge of
$38.7 million ($24.1 million, net of tax). Management believes
excluding this charge from certain financial results provides
meaningful supplemental information regarding our financial results
for the three and twelve months ended December 31, 2012, as
compared to 2011, since this charge is unusual in nature and not
comparable among the periods. This is consistent with how our
management reviews and assesses Equifax’s historically
performance and is useful when planning, forecasting and analyz-
ing future periods.
International tax restructuring — During the fourth quarter of
2012, the Company completed an international tax restructuring
resulting in the recognition of tax expense of $20.5 million.
Management believes excluding this income tax expense from
certain financial results provides meaningful supplemental informa-
tion regarding our financial results for the three and twelve months
ended December 31, 2012, as compared to 2011, since income
tax expense associated with tax restructuring 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 analyz-
ing future periods.
Income tax benefits — During the fourth quarter of 2012, the
Company recorded a tax benefit as a result of tax authorities
approving a tax method change which impacted the tax expense
recorded in connection with the merger of our Brazilian business in
the second quarter of 2011. During the fourth quarter of 2011, the
Company recorded a cumulative income tax benefit resulting from
the recognition of an income tax deduction related to several prior
years. Management believes excluding these income tax benefits
from certain financial results provides meaningful supplemental
information regarding our financial results for the three and twelve
months ended December 31, 2012, as compared to 2011, since
these specific income tax benefits of such an amount 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 analyz-
ing future periods.
RECONCILIATIONS RELATED TO NON-GAAP FINANCIAL MEASURES