Equifax 2007 Annual Report Download - page 34

The International segment consists of Canada Consumer,
Europe and Latin America. Canada Consumer’s products and
services are similar to our USCIS offerings, while Europe
and Latin America are made up of varying mixes of product lines
that are in our USCIS, North America Commercial Solutions and
North America Personal Solutions reportable segments.
Geographic Information. We currently operate in 14 countries:
Argentina, Brazil, Canada, Chile, Costa Rica, El Salvador, Honduras,
Peru, Portugal, the Republic of Ireland, Spain, the U.K., Uruguay,
and the U.S. Our operations in Costa Rica and the Republic of
Ireland focus on data processing and customer support activities.
Of the countries we operate in, 73% of our revenue was generated
in the U.S. during the twelve months ended December 31, 2007.
Key Performance Indicators. Management focuses on a variety
of key indicators to monitor operating and fi nancial performance.
These performance indicators include measurements of operating
revenue, operating revenue growth, operating income, operating
margin, net income, diluted earnings per share, cash provided by
operating activities and capital expenditures. The key performance
indicators for the twelve months ended December 31, 2007, 2006
and 2005, were as follows:
Key Performance Indicators
Twelve Months Ended
December 31,
(Dollars in millions, except per share data) 2007 2006 2005
Operating revenue $1,843.0 $1,546.3 $1,443.4
Operating revenue growth 19% 7% 13%
Operating income $ 486.2 $ 436.1 $ 422.0
Operating margin 26.4% 28.2% 29.2%
Income from continuing operations $ 272.7 $ 274.5 $ 246.5
Diluted earnings per share
from continuing operations $ 2.02 $ 2.12 $ 1.86
Cash provided by
operating activities $ 449.9 $ 372.1 $ 337.8
Capital expenditures $ 118.5 $ 52.0 $ 46.2
Operational Highlights.
• On May 15, 2007, we completed the acquisition of all
of the outstanding shares of TALX, a leading provider of
employment and income verification and human resources
business process outsourcing services. The acquisition aligns
with our long-term growth strategy of expanding into new
markets with unique data.
• We achieved double digit revenue growth in our International,
North America Personal Solutions and North America
Commercial Solutions operating segments when compared
with 2006.
• We repurchased 17.9 million shares of our common stock
on the open market for $718.7 million during 2007.
• On June 28, 2007, we issued $300.0 million principal amount
of 6.3%, ten-year senior notes and $250.0 million principal
amount of 7.0%, thirty-year senior notes in underwritten
public offerings.
Business Environment, Company Outlook and Strategy
Our fi nancial condition and operating performance are affected
by the rate at which the economies of the U.S. and the other countries
in which we operate grow, as well as levels of consumer spending
and confi dence regarding jobs, the health of the economy and the
unemployment rate. Changes in overall economic conditions in
the U.S. and other countries in which we operate generally impact the
demand for consumer credit and accordingly for our credit infor-
mation, marketing services, employment and income information, as
well as other products and services. We do not expect meaningful
improvement in revenue from our USCIS business in 2008. We do,
however, expect our other operating segments to grow revenues
when compared to 2007 due to new product innovation, attracting
new customers and growing volumes with our existing customers.
The demand for our services is infl uenced by price and service
competition among a limited number of providers; investment in
proprietary credit information databases; changes in customer
requirements; continued consolidation in the lending, credit card and
telecommunications industries; emerging new market segments;
and technological innovation. To improve our competitive position
requires that we continue to focus on developing applications to
differentiate our products and services from those of our competitors;
efficient operational processing to offset price compression;
competitive pricing; technological competence; and protection of
sensitive data. Other signifi cant factors include brand recognition,
customer responsiveness and service quality, ability to successfully
integrate acquisitions and regulatory compliance.
We expect to be able to respond to these challenges by focusing
on these strategic objectives:
• Increase penetration of our customers’ information solutions
needs through new products, value-based pricing, expanded
services and improved sales and customer support;
• Deploy enabling technology systems and analytics globally;
• Invest in unique data sources; and
• Pursue new vertical markets and expand into
emerging markets.
32 EQUIFAX | 2007 ANNUAL REPORT