Equifax 2015 Annual Report Download - page 82

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– 81 –
RECONCILIATIONS RELATED TO NON-GAAP FINANCIAL MEASURES
RECONCILIATIONS RELATED TO NON-GAAP FINANCIAL MEASURES
The reference in the “Financial Highlights” section to “Diluted earnings per share attributable to Equifax,
adjusted for certain items,” 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 management 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.
2015 2014
Diluted earnings per share attributable to Equifax - GAAP $3.55 $2.97
Veda acquisition related amounts ——
Income from the settlement of escrow amounts (0.09)—
Accrual for certain legal claims 0.04 —
Impairment of BVS investment 0.08 —
State income tax benefit (0.07)—
Realignment of internal resources and other costs 0.12 —
Settlement of a legal dispute over certain software agreements —0.04
Acquisition-related amortization expense, net of tax, and cash income tax benefit of
acquisition-related amortization expense of certain acquired intangibles 0.87 0.88
Diluted earnings per share attributable to Equifax, adjusted for certain items - Non-GAAP $4.50 $3.89
Diluted Earnings per Share, Adjusted for Certain Items and Adjusted Earnings per Share - These non-GAAP
measures exclude the following items:
Veda acquisition related amounts for due diligence and fees incurred as a direct result of the proposed
acquisition, as well as integration expense in the first year following the closure of the acquisition - During the fourth
quarter of 2015, we recorded $0.5 million ($0.3 million, net of tax) for Veda acquisition related amounts. $3.7 million relates to
due diligence expenses and fees incurred as a direct result of the proposed acquisition, recorded in selling, general, and
administrative expenses on our consolidated statement of income. $4.2 million relates to a mark-to-market gain on foreign
currency options and amortization of acquisition specific debt issuance costs, recorded in other income, net, on our consolidated
statement of income and does not impact our operating margin. The foreign currency options will expire or will be exercised in
Q1 2016. During 2015, there was no adjustment for integration expense, however, management plans to exclude integration
expense for the first year following the closure of the acquisition. Management believes excluding this charge is useful as it
allows investors to evaluate our performance for different periods on a more comparable basis. Management makes these
adjustments to net income when measuring profitability, evaluating performance trends, setting performance objectives and
calculating our return on invested capital. This is consistent with how management reviews and assesses Equifax’s historical
performance and is useful when planning, forecasting and analyzing future periods.
Income from the settlement of escrow amounts related to a past acquisition - During the third quarter of 2015, we
recorded income of $12.3 million ($11.1 million, net of tax) from the settlement of escrow amounts related to an acquisition
completed in January 2014. Management believes excluding this income from certain financial results provides meaningful
supplemental information regarding our financial results for the year ended December 31, 2015, as compared to the
corresponding period in 2014, since an income 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.
Accrual for certain legal claims - During the third quarter of 2015, we recorded a charge of $7.5 million ($4.7
million, net of tax) related to an accrual for certain legal claims. Management believes excluding this charge from certain
financial results provides meaningful supplemental information regarding our financial results for the year ended December 31,
2015, as compared to the corresponding period in 2014, since a charge of such an amount is not comparable among the periods.
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