Equifax 2012 Annual Report Download - page 14

As used herein, the terms Equifax, the Company, we, our and us
refer to Equifax Inc., a Georgia corporation, and its consolidated
subsidiaries as a combined entity, except where it is clear that the
terms mean only Equifax Inc.
All references to earnings per share data in Management’s Discus-
sion and Analysis, or MD&A, are to diluted earnings per share, or
EPS, unless otherwise noted. Diluted EPS is calculated to reflect the
potential dilution that would occur if stock options or other contracts
to issue common stock were exercised and resulted in additional
common shares outstanding.
BUSINESS OVERVIEW
We are a leading global provider of information solutions and human
resources business process outsourcing services for businesses and
consumers. We leverage some of the largest sources of consumer
and commercial data, along with advanced analytics and proprietary
decisioning technology, to create customized insights which enable
our business clients to grow faster, more efficiently and more profit-
ably, and to inform and empower consumers.
Clients rely on us for consumer and business credit intelligence,
credit portfolio management, fraud detection, decisioning technology,
marketing tools, and human resources and payroll services. We also
offer a portfolio of products that enable individual consumers to man-
age their financial affairs and protect their identity. Our revenue
stream is diversified among individual consumers and among busi-
nesses across a wide range of industries and international
geographies.
Segment and Geographic Information
Segments. The U.S. Consumer Information Solutions, or USCIS,
segment, the largest of our five segments, consists of three product
and service lines: Online Consumer Information Solutions, or OCIS;
Mortgage Solutions; and Consumer Financial Marketing Services.
OCIS and Mortgage Solutions revenue is principally transaction-
based and is derived from our sales of products such as consumer
credit reporting and scoring, mortgage settlement services, identity
management and authentication, fraud detection and modeling
services. USCIS also markets certain of our decisioning products
which facilitate and automate a variety of consumer credit-oriented
decisions. Consumer Financial Marketing Services revenue is
principally project- and subscription-based and is derived from our
sales of batch credit, consumer wealth or demographic information
such as those that assist clients in acquiring new customers, cross-
selling to existing customers and managing portfolio risk.
The International segment consists of Latin America, Europe and
Canada Consumer. 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.
The Workforce Solutions segment consists of the Verification
Services and Employer Services business units. Verification Services
revenue is transaction based and is derived primarily from employ-
ment, income and social security number verifications. Employer
Services revenues are derived from our provision of certain human
resources business process outsourcing services that include both
transaction- and subscription-based product offerings. These
services assist our clients with the administration of unemployment
claims and employer-based tax credits, the handling of certain
payroll-related transaction processing, and the management of the
assessment of new hires.
North America Personal Solutions revenue is both transaction- and
subscription-based and is derived from the sale of credit monitoring
and identity theft protection products, which we deliver to consumers
through the mail and electronically via the internet.
North America Commercial Solutions revenue is principally transac-
tion based, with the remainder project based, and is derived from the
sale of business information, credit scores and portfolio analytics that
enable clients to utilize our reports to make financial, marketing and
purchasing decisions related to businesses.
During the first quarter of 2013, we divested of two non-strategic
business lines, Equifax Settlement Services which was part of our
Mortgage business within the USCIS operating segment and gener-
ated $66.5 million of revenue in 2012 and Talent Management
Services which was part of our Employer Services business within
our Workforce Solutions operating segment and generated $21.0
million of revenue in 2012, for a total of approximately $48 million.
The historical results of these operations will be classified as
discontinued operations in the Consolidated Statements of Income
beginning in the first quarter of 2013.
Geographic Information. We currently operate in the following
countries: Argentina, Brazil, Canada, Chile, Costa Rica, Ecuador, El
Salvador, Honduras, Paraguay, Peru, Portugal, the Republic of
Ireland, Spain, the U.K., Uruguay, and the U.S. Our operations in the
Republic of Ireland focus on data handling and customer support
activities. We have an investment in the second largest consumer
and commercial credit information company in Brazil and offer
consumer credit services in India and Russia through joint ventures.
Of the countries we operate in, 76% of our revenue was generated in
the U.S. during the twelve months ended December 31, 2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
12 Equifax 2012 Annual Report