Equifax 2013 Annual Report Download

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Delivering
Innovation
2013 Annual Report

Table of contents

  • Page 1
    2013 Annual Report Delivering Innovation

  • Page 2
    .... Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com. Equifax (EFX) Highlights Twelve months ended December 31, 2013 2012 Change Operating revenue $2,303.9 $2,073.0 11% Adjusted operating revenue (Non-GAAP...

  • Page 3
    ... our customers make better decisions that improve their business operations and create new growth opportunities for them and us. For example, our Workforce Solutions business unit, which provides income and employment verification services and onboarding, compliance and pay reporting, is assisting...

  • Page 4
    ... and higher growth opportunities. As a result, in 2013, we sold our mortgage settlement services business (Equifax Settlement Services) as well as an employee testing and assessment firm (Talent Management Services). EQUIFAX EQUIFAX REVENUE REVENUE BY BY INDUSTRY* INDUSTRY* (2013) (2013) credit...

  • Page 5
    ...of our business solutions referenced under ''Business Environment and Company Outlook.'' These risks and uncertainties include, but are not limited to, those described below in this Annual Report, in our 2013 Annual Report on Form 10-K under ''Risk Factors,'' and those described from time to time in...

  • Page 6
    ..., 2012, we acquired certain credit services business assets and operations of Computer Sciences Corporation (the ''CSC Credit Services Acquisition'') for $1.0 billion. We financed the acquisition with available cash, the issuance of $500 million of 3.30% ten-year senior notes, and commercial paper...

  • Page 7
    ... 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, 77% of our revenue was generated in the U.S. during the twelve months ended December 31, 2013. Key Performance Indicators. Management...

  • Page 8
    ... 2012 to fund the CSC Credit Services Acquisition. Our consolidated debt balance decreased, as compared to the prior year, as a result of paying down $265.0 million of commercial paper during 2013 that was used to partially fund the CSC Credit Services Acquisition. The decrease in the average cost...

  • Page 9
    ....2 million, or 24%, in 2013 compared to 2012 due to increased operating income in all five of our operating segments, net of associated income taxes and higher interest expense as a result of our CSC Credit Services Acquisition. Net income attributable to Equifax for 2013, as compared to the prior...

  • Page 10
    ... to the CSC Credit Services Acquisition. In 2012, USCIS operating margins increased 60 basis points to 39.7% due to the benefits of strong revenue growth in a business with significant fixed costs. from personal solutions offerings and from consumer credit information sold into new vertical...

  • Page 11
    ... acquisition of TrustedID completed in the third quarter of 2013. The increase in the direct to consumer, Equifax-branded U.S.-based subscription service revenue was driven by new product sales and higher average revenue per subscriber, reï¬,ecting additional features in the Equifax product offering...

  • Page 12
    ... of our North America Personal Solutions business unit. During the fourth quarter of 2013, we completed two acquisitions in Paraguay and Mexico in the Latin America region of our International segment. In the first quarter of 2013, we divested of two non-strategic business lines, Equifax Settlement...

  • Page 13
    ... year in which our customers have higher volumes of credit granting decisions, most commonly the second and third calendar quarters. Revenues in our North America Commercial business and the Consumer Financial Marketing Services business line within USCIS are typically highest in the fourth quarter...

  • Page 14
    ... Solutions, Mortgage Solutions and Consumer Financial Marketing Services), Identity Management (part of Online Consumer Information Solutions), Europe, Latin America, Canada Consumer, North America Personal Solutions, North America Commercial Solutions, Verification Services, and Employer Services...

  • Page 15
    ... December 31, 2013 $ 971.4 61.1 124.2 247.5 29.3 16.7 37.2 738.7 169.0 $2,395.1 from publicly available information. Latin America and ID Management have benchmark companies that conduct operations of businesses of a similar type, such as Experian Group Limited and Fair Isaac Corporation. Valuation...

  • Page 16
    ... and our pre-tax operating profit by $16.7 million. A 10% stronger U.S. dollar would have resulted in similar decreases to our revenue and pre-tax operating profit for 2013 and 2012. On average across our mix of international businesses, foreign currencies at December 31, 2013, were weaker against...

  • Page 17
    ... control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit Committee of its Board of Directors. During 2013, the Company acquired three businesses. Refer to Note...

  • Page 18
    ..., presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Equifax Inc.'s internal control over financial reporting as of December 31, 2013, based on criteria...

  • Page 19
    ... Capitalized internal-use software and system costs Data processing equipment and furniture Land, buildings and improvements Total property and equipment Less accumulated depreciation and amortization Total property and equipment, net Goodwill Indefinite-lived intangible assets Purchased intangible...

  • Page 20
    ... of cost method investment Depreciation and amortization Stock-based compensation expense Excess tax benefits from stock-based compensation plans Deferred income taxes Pension settlement charge Changes in assets and liabilities, excluding effects of acquisitions: Accounts receivable, net Prepaid...

  • Page 21
    ... products and services enable businesses to make credit and service decisions, manage their portfolio risk, automate or outsource certain payroll-related, tax and human resources business processes, and develop marketing strategies concerning consumers and commercial enterprises. We serve customers...

  • Page 22
    ... or when the credit is utilized by our client, depending on the provisions of the client contract. We have certain offerings that are sold as multiple element arrangements. The multiple elements may include consumer or commercial information, file updates for certain solutions, services provided by...

  • Page 23
    ... based on projected discounted future cash ï¬,ows. An impairment charge is recognized if the asset's estimated fair value is less than its carrying value. We completed our annual impairment testing for goodwill and indefinite-lived intangible assets during the twelve months ended December 31, 2013...

  • Page 24
    ... part of our North America Personal Solutions business unit. During the fourth quarter of 2013, we also completed two acquisitions in Paraguay and Mexico in the Latin America region of our International segment. The total purchase price of these acquisitions was $98.8 million. 2012 Acquisitions and...

  • Page 25
    ... our product offerings, during the twelve months ended December 31, 2011, we completed smaller acquisitions of information services businesses in the European and Latin American regions of our International segment as well as our U.S. Consumer Information Solutions and Workforce Solutions segments...

  • Page 26
    ... Intangible Assets. Purchased intangible assets net, recorded on our Consolidated Balance Sheets at December 31, 2013 and 2012, are as follows: December 31, 2013 (In millions) Definite-lived intangible assets: Purchased data files Acquired software and technology Customer relationships Reacquired...

  • Page 27
    ... period has been completed prior to the change in control event, the awards will be paid out based on the Company's performance at that time; otherwise the payout of shares will be at 100% of the target award. Guarantees. We will from time to time issue standby letters of credit, performance bonds...

  • Page 28
    ... at December 31, 2013 and 2012, were as follows: December 31, (In millions) Deferred income tax assets: Employee pension benefits Net operating and capital loss carryforwards Foreign tax credits Employee compensation programs Reserves and accrued expenses Deferred revenue Other Gross deferred...

  • Page 29
    ... Omnibus Incentive Plan requires that stock options be granted at exercise prices not less than market value on the date of grant. Generally, stock options are subject to graded vesting for periods of up to three years based on service, with 33% vesting for each year of completed service, and expire...

  • Page 30
    ...number of shares of securities or other property of Equifax having a market value equal to two times the exercise price of the Right. If Equifax were acquired in a merger or other business combination, each Right would entitle its holder to purchase the number of the acquiring company's common stock...

  • Page 31
    ...ts 2013 2012 The following represents the amount of prior service cost and actuarial loss included in accumulated other comprehensive loss that is expected to be recognized in net periodic benefit cost during the twelve months ending December 31, 2014: (In millions) Actuarial loss, net of taxes of...

  • Page 32
    ... of capital coming via cash distributions from the sale of underlying fund assets. The Plan intends to hold these investments through each fund's normal life cycle and wind down period. Fair value is reported by the fund manager based on observable market prices for actively traded assets within...

  • Page 33
    ... social security number verification services (known as Verification Services) and employment tax and talent management services (known as Employer Services). North America Personal Solutions. This segment includes credit information, credit monitoring and identity theft protection products sold...

  • Page 34
    ... DATA (UNAUDITED) Quarterly financial data for 2013 and 2012 was as follows: Three Months Ended Operating income: U.S. Consumer Information Solutions International Workforce Solutions North America Personal Solutions North America Commercial Solutions General Corporate Expense Total operating...

  • Page 35
    ... business lines, Equifax Settlement Services and Talent Management Services for a total of $47.5 million. For additional information, see Note 3 of the Notes to Consolidated Financial Statements. • During 2013 and 2012, we made several acquisitions, including the CSC Credit Services Acquisitions...

  • Page 36
    ...per share from continuing operations attributable to Equifax - GAAP Collection of certain reserved 2012 billings Change related to resource alignment Impairment of BVS investment Fees associated with the acquisition of CSC credit services Pension settlement International tax restructuring Income tax...

  • Page 37
    ...the Company offered certain employees a voluntary lump sum payment 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...

  • Page 38
    ... 138.68 2012 214.32 172.37 180.92 2013 277.58 228.99 277.99 Equifax, EFX and The Work Number are registered trademarks of Equifax Inc. Inform > Enrich > Empower, Decision360, Undisclosed Debt Monitoring, Self-Employed Verification, Equifax Complete, Small Business Navigator, Small Business Assets...

  • Page 39
    Equifax Inc. 1550 Peachtree Street, N.W. Atlanta, GA 30309 404-885-8000 www.equifax.com Form #3202-13