Equifax 2012 Annual Report Download - page 75

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Equifax 2012 Annual Report
Loss on the deconsolidation of Brazilian business — During
the second quarter of 2011, the Company completed the merger
of our Brazilian business with and into Boa Vista Servicos, S.A.
(‘‘BVS’’) in exchange for a 15 percent equity interest in BVS. The
Company recorded a $27.8 million loss on the transaction.
Management believes excluding the loss from certain financial
results provides meaningful supplemental information regarding
our financial results for the twelve months ended December 31,
2011, as compared to 2012, since a deconsolidation and loss 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 analyzing future periods.
Acquisition-Related Amortization Expense — Excluding
acquisition-related amortization expense, net of tax, and including
a benefit to reflect the material cash income tax savings resulting
from the income tax deductibility of amortization for certain
acquired intangibles for a total of $59.0 million and $57.0 million in
2012 and 2011, respectively, provides meaningful supplemental
information regarding our financial results for the years ended
December 31, 2012 and 2011, as it allows investors to evaluate
our performance for different periods on a more comparable basis
by excluding items that relate to acquisition-related intangible
assets.
2012 2011
Operating revenue $2,160.5 $1,959.8
Brazil Revenue —(35.4)
Adjusted operating revenue — Non-GAAP $2,160.5 $1,924.4
Adjusted Operating Revenue — This non-GAAP measure excludes
the following item:
Adjusted Operating Revenue, Excluding the Results of our
Brazilian Operations — Management believes excluding the
Brazilian revenue from the calculation of operating revenue, on a
non-GAAP basis, is useful because it allows investors to evaluate
the Company’s growth on a basis consistent with the current
composition of our business.
2012 2011
Operating revenue $2,160.5 $1,959.8
Operating income $ 489.0 $ 471.0
Fees associated with the acquisition of CSC Credit Services 5.0 —
Pension settlement 38.7 —
Adjusted operating income — Non-GAAP $ 532.7 $ 471.0
Adjusted operating margin — Non-GAAP 24.7% 24.0%
Adjusted Operating Income and Operating Margin — 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.