ATLANTA, July 21, 2021 /PRNewswire/ — Equifax Inc. (NYSE:EFX) right now introduced monetary outcomes for the quarter ended June 30, 2021.


EFX logo

  • Highest ever quarterly income of $1.2 billion, up 26%; sixth consecutive quarter of double-digit income progress and EPS progress
  • Broad-based income progress with Workforce Solutions up 40%, USIS up 11%, and International up 39% in reported forex and 25% in native forex
  • Continued progress on EFX Cloud information and know-how transformation
  • Delivered 46 new merchandise leveraging EFX Cloud
  • Executing EFX2023 strategic framework leveraging EFX Cloud for innovation, new merchandise and progress
  • Increasing full-year income and EPS steering

“We continued our strong financial performance with our sixth consecutive quarter of strong double-digit revenue growth and EPS growth, building on our strong first quarter and 2020 results. Our record $1.235 billion revenue and 26% overall revenue growth was powered by broad-based growth from Workforce Solutions, USIS, and International. Workforce Solutions continues to drive our results, with revenue growth of 40% in the quarter despite a decline in the mortgage market from last year’s elevated levels,” stated Mark W. Begor, Equifax Chief Executive Officer. “We are continuing to execute on our EFX2023 growth strategy, leveraging the EFX Cloud to drive innovation, new product roll-outs and growth, while expanding our differentiated data sets and decisioning power to bring new and unique solutions to our customers that only Equifax can deliver. Our strong outperformance, balance sheet, and cash generation is allowing us to reinvest in the EFX Cloud and bolt-on acquisitions to enhance our capabilities. We are confident in our outlook for 2021 and are again raising our full-year financial guidance, reflecting this to a range of $4,760 million to $4,800 million, and our Adjusted EPS guidance to a range of $7.25 to $7.45.”

Financial Results Summary

The firm reported income of $1,234.8 million within the second quarter of 2021, up 26 % in comparison with the second quarter of 2020 on a reported foundation and 23 % on a neighborhood forex foundation.

Net revenue attributable to Equifax of $215.1 million was up 115 % within the second quarter of 2021 in comparison with internet revenue attributable to Equifax of $100.2 million within the second quarter of 2020.

Diluted EPS attributable to Equifax was $1.74 for the second quarter of 2021, up 113 % in comparison with $0.82 within the second quarter of 2020.

Workforce Solutions second quarter outcomes

  • Total income was $495.7 million within the second quarter of 2021, a 40 % enhance in comparison with the second quarter of 2020. Operating margin for Workforce Solutions was 53.5 % within the second quarter of 2021 in comparison with 49.4 % within the second quarter of 2020. Adjusted EBITDA margin for Workforce Solutions was 58.0 % within the second quarter of 2021 in comparison with 56.3 % within the second quarter of 2020.
  • Verification Services income was $394.5 million, up 57 % in comparison with the second quarter of 2020.
  • Employer Services income was $101.2 million, flat in comparison with the second quarter of 2020.

USIS second quarter outcomes

  • Total income was $405.8 million within the second quarter of 2021, up 11 % in comparison with $365.6 million within the second quarter of 2020. Operating margin for USIS was 31.1 % within the second quarter of 2021 in comparison with 30.9 % within the second quarter of 2020. Adjusted EBITDA margin for USIS was 40.3 % within the second quarter of 2021 in comparison with 44.1 % within the second quarter of 2020.
  • Online Information Solutions income was $298.0 million, up 13 % in comparison with the second quarter of 2020.
  • Mortgage Solutions income was $49.3 million, down 4 % in comparison with the second quarter of 2020.
  • Financial Marketing Services income was $58.5 million, up 14 % in comparison with the second quarter of 2020.

International second quarter outcomes

  • Total income was $250.9 million within the second quarter of 2021, up 39 % and up 25 % in comparison with the second quarter of 2020 on a reported and native forex foundation, respectively. Operating margin for International was 11.7 % within the second quarter of 2021, in comparison with damaging 3.4 % within the second quarter of 2020. Adjusted EBITDA margin for International was 27.3 % within the second quarter of 2021, in comparison with 21.9 % within the second quarter of 2020.
  • Asia Pacific income was $91.4 million, up 40 % and up 21 % in comparison with the second quarter of 2020 on a reported and native forex foundation, respectively.
  • Europe income was $68.4 million, up 42 % and up 27 % in comparison with the second quarter of 2020 on a reported and native forex foundation, respectively.
  • Latin America income was $44.0 million, up 29 % and up 30 % in comparison with the second quarter of 2020 on a reported and native forex foundation, respectively.
  • Canada income was $47.1 million, up 42 % and up 26 % in comparison with the second quarter of 2020 on a reported and native forex foundation, respectively.

Global Consumer Solutions second quarter outcomes

  • Total income was $82.4 million within the second quarter of 2021, down 2 % and down 3 % in comparison with the second quarter of 2020 on a reported and native forex foundation, respectively. Operating margin was 14.5 % within the second quarter of 2021 in comparison with 9.3 % within the second quarter of 2020. Adjusted EBITDA margin was 22.5 % within the second quarter of 2021, in comparison with 20.8 % within the second quarter of 2020.

Adjusted EPS and Adjusted EBITDA Margin

  • Adjusted EPS attributable to Equifax was $1.98 within the second quarter of 2021, up 21 % in comparison with the second quarter of 2020.
  • Adjusted EBITDA margin was 34.9 % within the second quarter of 2021 in comparison with 36.5 % within the second quarter of 2020.
  • These monetary measures exclude changes as described additional within the Non-GAAP Financial Measures part under.

 

2021 Third Quarter and Full Year Guidance




Q3 2021


FY 2021


Low-End


High-End


Low-End


High-End

Reported Revenue

$1,160 million


$1,180 million


$4,760 million


$4,800 million

Reported Revenue Growth

8.6%


10.5%


15.3%


16.3%

Local Currency Growth (1)

7.6%


9.5%


13.8%


14.8%

Organic Local Currency Growth (1)

5.8%


7.7%


11.9%


12.9%

Adjusted Earnings Per Share

$1.62 per share


$1.72 per share


$7.25 per share


$7.45 per share

Share Repurchases



More than $100 million


(1)  Refer to web page 9 for definitions.

About Equifax

At Equifax (NYSE:EFX), we consider information drives progress. As a worldwide information, analytics, and know-how firm, we play a necessary function within the international financial system by serving to monetary establishments, corporations, employers, and authorities companies make crucial selections with higher confidence. Our distinctive mix of differentiated information, analytics, and cloud know-how drives insights to energy selections to maneuver individuals ahead. Headquartered in Atlanta and supported by greater than 11,000 staff worldwide, Equifax operates or has investments in 24 nations in North America, Central and South America, Europe, and the Asia Pacific area. For extra data, go to Equifax.com.

Earnings Conference Call and Audio Webcast

In conjunction with this launch, Equifax will host a convention name on July 22, 2021 at 8:30 a.m. (ET) through a dwell audio webcast. To entry the webcast and associated presentation supplies, go to the Investor Relations part of our web site at www.equifax.com. The dialogue might be accessible through replay on the identical website shortly after the conclusion of the webcast. This press launch can also be accessible at that web site.

Non-GAAP Financial Measures

This earnings launch presents adjusted EPS attributable to Equifax which is diluted EPS attributable to Equifax adjusted (to the extent famous above for various intervals) for acquisition-related amortization expense, prices associated to the 2017 cybersecurity incident (these prices are comprised of authorized charges for 2021, and authorized charges and incremental prices to transformation our data know-how infrastructure and information safety for 2020), truthful worth adjustment of fairness investments, international forex influence of sure intercompany loans, acquisition-related prices apart from acquisition amortization, revenue tax impact of inventory awards acknowledged upon vesting or settlement, Argentina extremely inflationary international forex adjustment and revenue tax results of Q1 2020 achieve on truthful market worth adjustment of fairness funding. All changes are internet of tax, with a reconciling merchandise with the aggregated tax influence of the changes. This earnings launch additionally presents adjusted EBITDA and adjusted EBITDA margin which is outlined as consolidated internet revenue attributable to Equifax plus internet curiosity expense, revenue taxes, depreciation and amortization, and in addition excludes sure one-time gadgets. These are vital monetary measures for Equifax however aren’t monetary measures as outlined by GAAP.

These non-GAAP monetary measures ought to be reviewed together with the related GAAP monetary measures and aren’t offered in its place measure of internet revenue or EPS as decided in accordance with GAAP.

Reconciliations of those non-GAAP monetary measures to probably the most instantly comparable GAAP monetary measures and associated notes are offered within the Q&A. This data will also be discovered underneath “Investor Relations/Financial Information/Non-GAAP Financial Measures” on our web site at www.equifax.com.

Forward-Looking Statements

This launch accommodates forward-looking statements and forward-looking data. These statements might be recognized by expressions of perception, expectation or intention, in addition to statements that aren’t historic reality. These statements are primarily based on sure components and assumptions together with with respect to international change charges, anticipated progress, outcomes of operations, efficiency, the end result of authorized proceedings, enterprise prospects and alternatives and efficient tax charges. While the Company believes these components and assumptions to be affordable primarily based on data at the moment accessible, they could show to be incorrect.

Several components may trigger precise outcomes to vary materially from these expressed or implied within the forward-looking statements, together with, however not restricted to, actions taken by us, together with restructuring or strategic initiatives (together with our know-how, information and safety cloud transformation, capital investments and asset acquisitions or inclinations), in addition to developments past our management, together with, however not restricted to, the influence of COVID-19 and adjustments in U.S. and worldwide financial circumstances that materially influence client spending, client debt and employment and the demand for Equifax’s services and products. The extent to which the COVID-19 pandemic may negatively influence our operations will rely on future developments that are extremely unsure and can’t be predicted with confidence, together with the period of the outbreak, new data which can emerge regarding the severity of the COVID-19 pandemic, the actions taken to manage the unfold of COVID-19 or deal with its influence, and adjustments in U.S. and worldwide financial circumstances. Further deteriorations in financial circumstances, because of COVID-19 or in any other case, may result in an additional or extended decline in demand for our services and products and negatively influence our enterprise. It can also influence monetary markets and company credit score markets which may adversely influence our entry to financing or the phrases of any financing. We can’t right now predict the extent of the influence of the COVID-19 pandemic and ensuing financial influence, however it may have a cloth antagonistic impact on our enterprise, monetary place, outcomes of operations and money flows. Other threat components embody the influence of our know-how and safety transformation and enhancements in our data know-how and information safety infrastructure; adjustments in tax laws; antagonistic or unsure financial circumstances and adjustments in credit score and monetary markets; uncertainties relating to the final word quantity and timing of funds for the authorized proceedings and authorities investigations associated to the 2017 cybersecurity incident; potential antagonistic developments in new and pending authorized proceedings or authorities investigations; dangers related to our means to adjust to enterprise observe commitments and related obligations underneath settlement agreements and consent orders entered into in reference to the 2017 cybersecurity incident; financial, political and different dangers related to worldwide gross sales and operations; dangers regarding unauthorized entry to information or breaches of confidential data on account of felony conduct, assaults by hackers, worker or insider malfeasance and/or human error; adjustments in, and the results of, legal guidelines and laws and authorities insurance policies governing or affecting our enterprise, together with, with out limitation, our examination and supervision by the Consumer Financial Protection Bureau, a federal company that holds major duty for the regulation of client safety with respect to monetary services and products within the U.S., oversight by the U.Ok. Financial Conduct Authority and Information Commissioner’s Office of our debt collections companies and core credit score reporting companies within the U.Ok., oversight by the Office of Australian Information Commission, the Australian Competition and Consumer Commission and different regulatory entities of our credit score reporting enterprise in Australia and the influence of present privateness legal guidelines and laws, together with the European General Data Protection Regulation and the California Consumer Privacy Act, or any future privateness legal guidelines and laws; federal or state responses to identification theft issues; our means to efficiently develop and market new services and products, reply to pricing and different aggressive pressures, full and combine acquisitions and different investments and obtain focused value efficiencies; timing and quantity of capital expenditures; adjustments in capital markets and corresponding results on the Company’s investments and profit plan obligations; international forex change charges and earnings repatriation limitations; and the selections of taxing authorities which may have an effect on our efficient tax charges. A abstract of further dangers and uncertainties might be present in our Annual Report on Form 10-Ok for the yr ended December 31, 2020 together with with out limitation underneath the captions “Item 1. Business — Governmental Regulation” and “– Forward-Looking Statements” and “Item 1A. Risk Factors,” and in our different filings with the U.S. Securities and Exchange Commission. Forward-looking statements are given solely as on the date of this launch and the Company disclaims any obligation to replace or revise the forward-looking statements, whether or not because of new data, future occasions or in any other case, besides as required by regulation.

 

EQUIFAX

CONSOLIDATED STATEMENTS OF INCOME




Three Months Ended June 30,



2021


2020

(In millions, except per share amounts)


(Unaudited)

Operating income


$

1,234.8



$

982.8


Operating bills:





Cost of companies (unique of depreciation and amortization under)


483.0



409.3


Selling, basic and administrative bills


328.4



309.9


Depreciation and amortization


117.4



96.8


     Total working bills


928.8



816.0


Operating revenue


306.0



166.8


Interest expense


(34.9)



(36.6)


Other revenue (expense), internet


6.0



(1.8)


Consolidated revenue earlier than revenue taxes


277.1



128.4


Provision for revenue taxes


(61.2)



(28.0)


Consolidated internet revenue


215.9



100.4


Less: Net revenue attributable to noncontrolling pursuits together with redeemable noncontrolling pursuits


(0.8)



(0.2)


Net revenue attributable to Equifax


$

215.1



$

100.2


Basic earnings per frequent share:





Net revenue attributable to Equifax


$

1.77



$

0.83


Weighted-average shares utilized in computing primary earnings per share


121.8



121.4


Diluted earnings per frequent share:





Net revenue attributable to Equifax


$

1.74



$

0.82


Weighted-average shares utilized in computing diluted earnings per share


123.5



122.7


Dividends per frequent share


$

0.39



$

0.39


 

EQUIFAX

CONDENSED CONSOLIDATED BALANCE SHEETS




June 30, 2021


December 31, 2020

(In hundreds of thousands, besides par values)


(Unaudited)

ASSETS





Current belongings:





Cash and money equivalents


$

458.1



$

1,684.6


Trade accounts receivable, internet of allowance for uncertain accounts of $11.2 and $12.9 at June 30, 2021 and December 31, 2020, respectively


694.0



630.6


Prepaid bills


129.7



104.1


Other present belongings


47.7



59.0


     Total present belongings


1,329.5



2,478.3


Property and gear:





Capitalized internal-use software program and system prices


1,557.9



1,374.5


Data processing gear and furnishings


303.5



299.9


Land, buildings and enhancements


244.9



239.1


     Total property and gear


2,106.3



1,913.5


Less collected depreciation and amortization


(890.7)



(774.1)


     Total property and gear, internet


1,215.6



1,139.4


Goodwill


5,085.1



4,495.8


Indefinite-lived intangible belongings


95.2



94.9


Purchased intangible belongings, internet


1,221.9



997.8


Other belongings, internet


393.0



405.6


Total belongings


$

9,340.3



$

9,611.8


LIABILITIES AND EQUITY





Current liabilities:





Short-term debt and present maturities of long-term debt


$

600.7



$

1,101.1


Accounts payable


171.3



159.1


Accrued bills


219.1



251.8


Accrued salaries and bonuses


182.0



250.3


Deferred income


110.2



108.3


Other present liabilities


591.9



612.5


Total present liabilities


1,875.2



2,483.1


Long-term debt


3,280.9



3,277.3


Deferred revenue tax liabilities, internet


378.3



332.3


Long-term pension and different postretirement profit liabilities


122.4



130.7


Other long-term liabilities


184.9



178.1


Total liabilities


5,841.7



6,401.5


Preferred inventory, $0.01 par worth: Authorized shares – 10.0; Issued shares – none





Common inventory, $1.25 par worth: Authorized shares – 300.0;

Issued shares – 189.3 at June 30, 2021 and December 31, 2020;

Outstanding shares – 121.8 at June 30, 2021 and December 31, 2020


236.6



236.6


Paid-in capital


1,506.8



1,470.7


Retained earnings


4,505.7



4,185.4


Accumulated different complete loss


(156.8)



(171.4)


Treasury inventory, at value, 66.9 shares at June 30, 2021 and December 31, 2020


(2,625.9)



(2,547.0)


Stock held by worker profit trusts, at value, 0.6 shares at June 30, 2021 and December 31, 2020


(5.9)



(5.9)


Total Equifax shareholders’ fairness


3,460.5



3,168.4


Noncontrolling pursuits together with redeemable noncontrolling pursuits


38.1



41.9


Total fairness


3,498.6



3,210.3


Total liabilities and fairness


$

9,340.3



$

9,611.8


 

EQUIFAX

CONSOLIDATED STATEMENTS OF CASH FLOWS 




Six Months Ended June 30,



2021


2020

(In hundreds of thousands)


(Unaudited)

Operating actions:





Consolidated internet revenue


$

418.8



$

219.2


Adjustments to reconcile consolidated internet revenue to internet money offered by working actions:





Depreciation and amortization


236.4



192.1


Stock-based compensation expense


33.9



31.7


Deferred revenue taxes


14.1



32.3


Loss (achieve) on truthful market worth adjustment of fairness investments


17.5



(32.9)


Gain on divestiture


(0.2)




Changes in belongings and liabilities, excluding results of acquisitions:





Accounts receivable, internet


(51.3)



(65.3)


Other belongings, present and long-term


5.3



29.3


Current and long run liabilities, excluding debt


(123.4)



(124.4)


Cash offered by working actions


551.1



282.0


Investing actions:





Capital expenditures


(235.5)



(192.8)


Acquisitions, internet of money acquired


(861.6)



(48.1)


Cash acquired from divestiture


1.5




Investment in unconsolidated associates, internet




(10.0)


Cash utilized in investing actions


(1,095.6)



(250.9)


Financing actions:





Net short-term (repayments) borrowings


(0.6)



0.8


Payments on long-term debt


(500.1)



(125.0)


Borrowings on long-term debt




1,123.3


Treasury inventory purchases


(69.9)




Dividends paid to Equifax shareholders


(95.0)



(94.6)


Dividends paid to noncontrolling pursuits


(5.8)



(1.6)


Proceeds from train of inventory choices and worker inventory buy plan


25.1



22.9


Payment of taxes associated to settlement of fairness awards


(30.4)




Purchase of redeemable noncontrolling pursuits


(3.6)




Debt issuance prices




(9.8)


Other




0.3


Cash (utilized in) offered by financing actions


(680.3)



916.3


Effect of international forex change charges on money and money equivalents


(1.7)



(1.3)


(Decrease) Increase in money and money equivalents


(1,226.5)



946.1


Cash and money equivalents, starting of interval


1,684.6



401.3


Cash and money equivalents, finish of interval


$

458.1



$

1,347.4


 

Common Questions & Answers (Unaudited)
(Dollars in hundreds of thousands)

1.    Can you present an additional evaluation of working income by working section?

Operating income consists of the next parts:

(In hundreds of thousands)


Three Months Ended June 30,



















Local
Currency


Organic Local
Currency

Operating income:


2021


2020


$ Change


% Change


% Change (1)


% Change (2)

Verification Services


$

394.5



$

251.9



$

142.6



57

%




55

%

Employer Services


101.2



101.0



0.2



%




(4)

%

Total Workforce Solutions


495.7



352.9



142.8



40

%




38

%

Online Information Solutions


298.0



262.9



35.1



13

%




8

%

Mortgage Solutions


49.3



51.2



(1.9)



(4)

%




(4)

%

Financial Marketing Services


58.5



51.5



7.0



14

%




14

%

Total U.S. Information Solutions


405.8



365.6



40.2



11

%




7

%

Asia Pacific


91.4



65.2



26.2



40

%


21

%


21

%

Europe


68.4



48.0



20.4



42

%


27

%


26

%

Latin America


44.0



34.2



9.8



29

%


30

%


29

%

Canada


47.1



33.1



14.0



42

%


26

%


26

%

Total International


250.9



180.5



70.4



39

%


25

%


25

%

Global Consumer Solutions


82.4



83.8



(1.4)



(2)

%


(3)

%


(3)

%

Total working income


$

1,234.8



$

982.8



$

252.0



26

%


23

%


20

%



(1)

Local forex income change is calculated by conforming 2021 outcomes utilizing 2020 change charges.



(2)

Organic native forex income progress is outlined as native forex income progress, adjusted to replicate a rise in prior yr Equifax income from the income of acquired corporations within the prior yr interval. This adjustment is made for 12 months following the acquisition.

 

2.    What are the prices associated to the know-how transformation?

Costs associated to the know-how transformation are outlined as incremental prices to remodel our data know-how infrastructure and information safety. From January 1, 2018 by December 31, 2020, these know-how transformation prices have been excluded from adjusted internet revenue and adjusted EBITDA. Beginning within the first quarter of 2021, know-how transformation prices have been included in our adjusted internet revenue and adjusted EBITDA. Technology transformation prices for the second quarter of 2021 are being offered for comparability to prior intervals. We recorded $37.8 million for the second quarter of 2021 and $85.2 million for the second quarter of 2020 for know-how transformation prices.

3.    What is the estimate of the change in total U.S. Mortgage Market transaction quantity that’s included within the 2021 third quarter and full yr steering offered?

Equifax estimates the change yr over yr in total U.S. Mortgage Market transaction quantity as being equal to the change in complete U.S. mortgage credit score inquiries acquired by Equifax. The change yr over yr in complete U.S. mortgage credit score inquiries acquired by Equifax within the first quarter of 2021 was a rise of 21% and the second quarter of 2021 was a decline of 5%. The steering offered on web page 3 assumes a change yr over yr in complete U.S. mortgage credit score inquiries acquired by Equifax within the third quarter of 2021 to be a decline of roughly 23% and for the total yr 2021 to be a decline of roughly 8%. These percentages offered are rounded to the closest entire quantity.

Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited)
(Dollars in hundreds of thousands, besides per share quantities)

A.    Reconciliation of internet revenue attributable to Equifax to diluted EPS attributable to Equifax, outlined as internet revenue adjusted for acquisition-related amortization expense, prices associated to the 2017 cybersecurity incident, truthful worth adjustment of fairness investments, international forex influence of sure intercompany loans, acquisition-related prices apart from acquisition amortization, revenue tax impact of inventory awards acknowledged upon vesting or settlement, Argentina extremely inflationary international forex adjustment, revenue tax results of Q1 2020 achieve on truthful market worth adjustment of fairness funding and revenue tax changes:



Three Months Ended June 30,





(In hundreds of thousands, besides per share quantities)


2021


2020


$ Change


% Change

Net revenue attributable to Equifax


$

215.1



$

100.2



$

114.9



115

%

Acquisition-related amortization expense of sure acquired intangibles (1)


40.1



34.8



5.3



15

%

2017 cybersecurity incident associated prices (2)


(1.1)



87.3



(88.4)



nm

Fair market worth adjustment of fairness investments (3)


5.6





5.6



nm

Foreign forex influence of sure intercompany loans (4)


(2.7)



10.3



(13.0)



(126)

%

Acquisition-related prices apart from acquisition amortization (5)


0.9





0.9



nm

Income tax results of inventory awards which are acknowledged upon vesting or settlement (6)


(4.6)



(0.9)



(3.7)



411

%

Argentina extremely inflationary international forex adjustment (7)


0.1



0.2



(0.1)



nm

Income tax results of Q1 2020 achieve on truthful market worth adjustment of fairness funding (8)




(2.4)



2.4



nm

Tax influence of changes (9)


(8.3)



(29.0)



20.7



(71)

%

Net revenue attributable to Equifax, adjusted for gadgets listed above


$

245.1



$

200.5



$

44.6



22

%

Diluted EPS attributable to Equifax, adjusted for the gadgets listed above


$

1.98



$

1.63



$

0.35



21

%

Weighted-average shares utilized in computing diluted EPS


123.5



122.7








nm – not significant



(1)

During the second quarter of 2021, we recorded acquisition-related amortization expense of sure acquired intangibles of $40.1 million ($33.8 million, internet of tax). We calculate this monetary measure by excluding the influence of acquisition-related amortization expense and together with a profit to replicate the numerous money revenue tax financial savings ensuing from the revenue tax deductibility of amortization for sure acquired intangibles. The $6.3 million of tax is comprised of $10.3 million of tax expense internet of $4.0 million of a money revenue tax profit. During the second quarter of 2020, we recorded acquisition-related amortization expense of sure acquired intangibles of $34.8 million ($29.7 million, internet of tax). The $5.1 million of tax is comprised of $9.1 million of tax expense internet of $4.0 million of a money revenue tax profit. See the Notes to this reconciliation for added element.



(2)

During the second quarter of 2021, we recorded a internet profit for authorized charges internet of recoveries associated to the 2017 cybersecurity incident of $1.1 million ($0.8 million, internet of tax). During the second quarter of 2020, we recorded pre-tax bills associated to the 2017 cybersecurity incident of $87.3 million ($63.4 million, internet of tax). $85.2 million of those bills associated to incremental prices to remodel our data know-how infrastructure and information safety and the remaining $2.1 million associated to 2017 cybersecurity incident authorized charges. $87.6 million of cybersecurity incident associated prices have been recorded in working revenue, with a $0.3 million discount to depreciation and amortization expense. See the Notes to this reconciliation for added element.



(3)

During the second quarter of 2021, we recorded an unrealized loss on the truthful market worth adjustment of an fairness funding of $5.6 million ($3.5 million, internet of tax). This truthful worth adjustment was recorded to Other revenue (expense), internet line merchandise inside the Consolidated Statements of Income. See the Notes to this reconciliation for added particulars.



(4)

During the second quarter of 2021, we recorded international forex positive factors on sure intercompany loans of $2.7 million. During the second quarter of 2020, we recorded international forex losses on sure intercompany loans of $10.3 million. The influence was recorded to the Other revenue (expense), internet line merchandise inside the Consolidated Statements of Income. See the Notes to this reconciliation for added element.



(5)

During the second quarter of 2021, we recorded $0.9 million ($0.7 million, internet of tax) for acquisition prices apart from acquisition-related amortization. These prices primarily associated to transaction prices ensuing from the acquisition and have been recorded in working revenue. See the Notes to this reconciliation for added element.



(6)

During the second quarter of 2021, we recorded a tax good thing about $4.6 million associated to the tax results of deductions for inventory compensation in extra of quantities recorded for compensation prices. During the second quarter of 2020, we recorded a tax good thing about $0.9 million associated to the tax results of deductions for inventory compensation expense in extra of quantities recorded for compensation prices. See the Notes to this reconciliation for added element.



(7)

Argentina skilled a number of intervals of accelerating inflation charges, devaluation of the peso, and growing borrowing charges. As such, Argentina was deemed a extremely inflationary financial system by accounting policymakers. During the second quarter of 2021 and second quarter of 2020, we recorded international forex losses of $0.1 million and $0.2 million, respectively, associated to the influence of remeasuring the peso denominated financial belongings and liabilities because of Argentina being a extremely inflationary financial system. See the Notes to this reconciliation for added element.



(8)

During the second quarter of 2020, we recorded revenue tax results of the Q1 2020 achieve on truthful market worth adjustment of fairness funding of $2.4 million. See the Notes to this reconciliation for added element.



(9)

During the second quarter of 2021, we recorded the tax influence of changes of $8.3 million comprised of (i) acquisition-related amortization expense of sure acquired intangibles of $6.3 million ($10.3 million of tax expense internet of $4.0 million of money revenue tax profit), (ii) an adjustment of $0.3 million for authorized charges internet of recoveries associated to the 2017 cybersecurity incident which resulted in a internet profit for the quarter, (iii) a tax adjustment of $2.1 million associated to the loss on truthful market worth adjustment of fairness investments and (iv) a tax adjustment of $0.2 million associated to acquisition prices apart from acquisition-related amortization.




During the second quarter of 2020, we recorded the tax influence of changes of $29.0 million comprised of (i) acquisition-related amortization expense of sure acquired intangibles of $5.1 million ($9.1 million of tax expense internet of $4.0 million of money revenue tax profit) and (ii) a tax adjustment of $23.9 million associated to bills for the 2017 cybersecurity incident.

 

B.    Reconciliation of internet revenue attributable to Equifax to adjusted EBITDA, outlined as internet revenue excluding revenue taxes, curiosity expense, internet, depreciation and amortization expense, prices associated to the 2017 cybersecurity incident, truthful worth adjustment of fairness investments, international forex influence of sure intercompany loans, acquisition-related prices apart from acquisition amortization and Argentina extremely inflationary international forex adjustment, and presentation of adjusted EBITDA margin: 



Three Months Ended June 30,





 (in hundreds of thousands)


2021


2020


$ Change


% Change

Revenue


$

1,234.8



$

982.8



$

252.0



26

%










Net revenue attributable to Equifax


$

215.1



$

100.2



$

114.9



115

%

Income taxes


61.2



28.0



33.2



119

%

Interest expense, internet*


34.7



35.8



(1.1)



(3)

%

Depreciation and amortization


117.4



96.8



20.6



21

%

2017 cybersecurity incident associated prices (1)


(1.1)



87.6



(88.7)



nm

Fair market worth adjustment of fairness investments (2)


5.6





5.6



nm

Foreign forex influence of sure intercompany loans (3)


(2.7)



10.3



(13.0)



(126)

%

Acquisition-related prices apart from acquisition amortization (4)


0.9





0.9



nm

Argentina extremely inflationary international forex adjustment (5)


0.1



0.2



(0.1)



nm

Adjusted EBITDA, excluding the gadgets listed above


$

431.2



$

358.9



$

72.3



20

%

Adjusted EBITDA margin


34.9

%


36.5

%







nm – not significant


*Excludes curiosity revenue of $0.2 million in 2021 and $0.8 million 2020.



(1)

During the second quarter of 2021, we recorded a internet profit for authorized charges internet of recoveries associated to the 2017 cybersecurity incident of $1.1 million ($0.8 million, internet of tax). During the second quarter of 2020, we recorded pre-tax bills associated to the 2017 cybersecurity incident of $87.3 million ($63.4 million, internet of tax). $85.2 million of those bills associated to incremental prices to remodel our data know-how infrastructure and information safety and the remaining $2.1 million associated to 2017 cybersecurity incident authorized charges. $87.6 million of cybersecurity incident associated prices have been recorded in working revenue, with a $0.3 million discount to depreciation and amortization expense. See the Notes to this reconciliation for added element.



(2)

During the second quarter of 2021, we recorded an unrealized loss on the truthful market worth adjustment of an fairness funding of $5.6 million ($3.5 million, internet of tax). This truthful worth adjustment was recorded to Other revenue (expense), internet line merchandise inside the Consolidated Statements of Income. See the Notes to this reconciliation for added particulars.



(3)

During the second quarter of 2021, we recorded international forex positive factors on sure intercompany loans of $2.7 million. During the second quarter of 2020, we recorded international forex losses on sure intercompany loans of $10.3 million. The influence was recorded to the Other revenue (expense), internet line merchandise inside the Consolidated Statements of Income. See the Notes to this reconciliation for added element.



(4)

During the second quarter of 2021, we recorded $0.9 million ($0.7 million, internet of tax) for acquisition prices apart from acquisition-related amortization. These prices primarily associated to transaction prices ensuing from the acquisition and have been recorded in working revenue. See the Notes to this reconciliation for added element.



(5)

Argentina skilled a number of intervals of accelerating inflation charges, devaluation of the peso, and growing borrowing charges. As such, Argentina was deemed a extremely inflationary financial system by accounting policymakers. During the second quarter of 2021 and second quarter of 2020, we recorded international forex losses of $0.1 million and $0.2 million, respectively, associated to the influence of remeasuring the peso denominated financial belongings and liabilities because of Argentina being a extremely inflationary financial system. See the Notes to this reconciliation for added element.

 

C.    Reconciliation of working revenue by section to Adjusted EBITDA, excluding depreciation and amortization expense, different revenue, internet, noncontrolling curiosity, prices associated to the 2017 cybersecurity incident, truthful worth adjustment of fairness investments, international forex influence of sure intercompany loans, acquisition-related prices apart from acquisition amortization and Argentina extremely inflationary international forex adjustment, and presentation of adjusted EBITDA margin for every of the segments:

(In hundreds of thousands)

Three Months Ended June 30, 2021



Workforce
Solutions


U.S. Information
Solutions


International


Global
Consumer

Solutions


General
Corporate
Expense


Total







Revenue


$

495.7



$

405.8



$

250.9



$

82.4





$

1,234.8


Operating revenue


265.2



126.1



29.3



11.9



(126.5)



306.0


Depreciation and amortization


22.2



36.4



33.8



6.7



18.3



117.4


Other revenue, internet*




0.8



0.5





4.5



5.8


Noncontrolling curiosity






(0.8)







(0.8)


Adjustments (1)




0.4



5.7





(3.3)



2.8


Adjusted EBITDA


$

287.4



$

163.7



$

68.5



$

18.6



$

(107.0)



$

431.2


Operating margin


53.5

%


31.1

%


11.7

%


14.5

%


nm



24.8

%

Adjusted EBITDA margin


58.0

%


40.3

%


27.3

%


22.5

%


nm



34.9

%


























nm – not significant

*Excludes curiosity revenue of $0.2 million in International.

 

(In hundreds of thousands)


Three Months Ended June 30, 2020



Workforce
Solutions


U.S. Information
Solutions


International


Global
Consumer
Solutions


General
Corporate
Expense


Total







Revenue


$

352.9



$

365.6



$

180.5



$

83.8





$

982.8


Operating revenue


174.2



113.1



(6.2)



7.8



(122.1)



166.8


Depreciation and amortization


17.7



28.9



31.7



4.2



14.3



96.8


Other revenue (expense), internet*




0.6



4.4





(7.6)



(2.6)


Noncontrolling curiosity






(0.2)







(0.2)


Adjustments (1)


7.0



18.6



9.8



5.4



57.3



98.1


Adjusted EBITDA


$

198.9



$

161.2



$

39.5



$

17.4



$

(58.1)



$

358.9


Operating margin


49.4

%


30.9

%


(3.4)

%


9.3

%


nm



17.0

%

Adjusted EBITDA margin


56.3

%


44.1

%


21.9

%


20.8

%


nm



36.5

%


























nm – not significant

*Excludes curiosity revenue of $0.2 million in International and $0.6 million in General Corporate Expense.



(1)

During the second quarter of 2021, we recorded a $1.1 million internet profit associated to authorized charges internet of recoveries associated to the 2017 cybersecurity incident, a $5.6 million unrealized loss on the truthful worth adjustment of an fairness funding, a $2.7 million constructive international forex influence of sure intercompany loans, $0.9 million in acquisition prices apart from acquisition-related amortization, and a international forex lack of $0.1 million associated to the influence of remeasuring the peso denominated financial belongings and liabilities because of Argentina being a extremely inflationary financial system.




During the second quarter of 2020, we recorded pre-tax bills, excluding depreciation and amortization, associated to the 2017 cybersecurity incident of $87.6 million, a $10.3 million international forex influence of sure intercompany loans, and a international forex lack of $0.2 million associated to the influence of remeasuring the peso denominated financial belongings and liabilities because of Argentina being a extremely inflationary financial system.

 

Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures

Diluted EPS attributable to Equifax is adjusted for the next gadgets:

Acquisition-related amortization expense – We calculate this monetary measure by excluding the influence of acquisition-related amortization expense and together with a profit to replicate the fabric money revenue tax financial savings ensuing from the revenue tax deductibility of amortization for sure acquired intangibles. These monetary measures aren’t ready in conformity with GAAP. Management believes excluding the influence of amortization expense is beneficial as a result of excluding acquisition-related amortization, and different gadgets that aren’t comparable permits buyers to judge our efficiency for various intervals on a extra comparable foundation. Certain acquired intangibles lead to materials money revenue tax financial savings which aren’t mirrored in earnings. Management believes that together with a profit to replicate the money revenue tax financial savings is beneficial because it permits buyers to higher worth Equifax. Management makes these changes to earnings when measuring profitability, evaluating efficiency traits, setting efficiency aims and calculating our return on invested capital.

Costs associated to the 2017 cybersecurity incident – Costs associated to the 2017 cybersecurity incident embody authorized charges to reply to subsequent litigation and authorities investigations. Through the yr ended December 31, 2020, these prices additionally included incremental prices to remodel our data know-how, information safety and infrastructure. During the second quarters of 2021 and 2020, we recorded a internet good thing about $1.1 million ($0.8 million, internet of tax) and expense of $87.3 million ($63.4 million, internet of tax), respectively. Management believes excluding these costs is beneficial because it permits buyers to judge our efficiency for various intervals on a extra comparable foundation. Management makes these changes to internet revenue when measuring profitability, evaluating efficiency traits, setting efficiency aims and calculating our return on invested capital. This is in keeping with how administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting and analyzing future intervals. Costs associated to the 2017 cybersecurity incident don’t embody losses accrued for sure authorized proceedings and authorities investigations associated to the 2017 cybersecurity incident.

Fair market worth adjustment of fairness investments – During the second quarter of 2021, we recorded a $5.6 million ($3.5 million, internet of tax) unrealized loss associated to adjusting our funding in Brazil to truthful worth. The funding had beforehand been recorded on our books at value much less impairment, because it didn’t have a readily determinable truthful worth. Subsequent to the preliminary public providing, our funding in Brazil has been adjusted to truthful worth, and can proceed to be adjusted to truthful worth on the finish of every reporting interval, with unrealized positive factors or losses to be recorded inside the Consolidated Statements of Income in Other revenue (expense), internet. Management believes excluding these costs from sure monetary outcomes supplies significant supplemental data relating to our monetary outcomes for the three months ended June 30, 2021, for the reason that non-operating positive factors or losses aren’t comparable among the many intervals. This is in keeping with how our administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting and analyzing future intervals.

Foreign forex influence of sure intercompany loans – During the second quarter of 2021, we recorded a $2.7 million achieve associated to international forex influence of sure intercompany loans. Management believes excluding this cost is beneficial because it permits buyers to judge our efficiency for various intervals on a extra comparable foundation. This is in keeping with how administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting and analyzing future intervals.

Acquisition associated prices for transaction bills incurred as a direct results of the acquisition – During the second quarter of 2021, we recorded $0.9 million ($0.7 million, internet of tax) for acquisition prices apart from acquisition-related amortization. These prices primarily associated to transaction prices ensuing from the acquisition and have been recorded in working revenue. Management believes excluding this cost from sure monetary outcomes supplies significant supplemental data relating to our monetary outcomes, since a cost of such an quantity shouldn’t be comparable among the many intervals. This is in keeping with how our administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting, and analyzing future intervals.

Income tax results of inventory awards which are acknowledged upon vesting or settlement – During the second quarter of 2021, we recorded a tax good thing about $4.6 million associated to the tax results of deductions for inventory compensation in extra of quantities recorded for compensation prices. During the second quarter of 2020, we recorded a tax good thing about $0.9 million associated to the tax results of deductions for inventory compensation expense in extra of quantities recorded for compensation prices. Management believes excluding this tax impact from monetary outcomes supplies significant supplemental data relating to our monetary outcomes for the three months ended June 30, 2021 and 2020 as a result of these quantities are non-operating and relate to revenue tax advantages or deficiencies for inventory awards acknowledged when tax quantities differ from acknowledged inventory compensation value. This is in keeping with how administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting and analyzing future intervals.

Argentina extremely inflationary international forex adjustment – Argentina skilled a number of intervals of accelerating inflation charges, devaluation of the peso, and growing borrowing charges. As such, Argentina was deemed a extremely inflationary financial system by accounting policymakers. We recorded international forex losses of $0.1 million throughout the second quarter of 2021 and $0.2 million throughout the second quarter of 2020 because of remeasuring the peso denominated financial belongings and liabilities on account of Argentina being extremely inflationary. Management believes excluding these costs are helpful because it permits buyers to judge our efficiency for various intervals on a extra comparable foundation. This is in keeping with how administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting and analyzing future intervals.

Income tax results of Q1 2020 achieve on truthful market worth adjustment of fairness funding – During the primary quarter of 2020, we recorded a achieve associated to adjusting our fairness technique funding in India, together with the acquisition of the remaining curiosity of our three way partnership. Prior to the acquisition of the remaining curiosity, Equifax didn’t have management over the three way partnership. As a results of the transaction, Equifax acknowledged a achieve associated to the remeasurement of the preexisting fairness curiosity within the India three way partnership on the acquisition-date truthful worth of the enterprise mixture. Additional revenue tax results associated to this transaction have been recorded within the second quarter of 2020. Management believes excluding this achieve and associated revenue tax results from sure monetary outcomes supplies significant supplemental data relating to our monetary outcomes for the three months ended June 30, 2020, for the reason that non-operating achieve shouldn’t be comparable among the many intervals. This is in keeping with how our administration opinions and assesses Equifax’s historic efficiency and is beneficial when planning, forecasting and analyzing future intervals.

Adjusted EBITDA and EBITDA margin – Management defines adjusted EBITDA as consolidated internet revenue attributable to Equifax plus internet curiosity expense, revenue taxes, depreciation and amortization, and in addition excludes sure one-time gadgets. Management believes using adjusted EBITDA and adjusted EBITDA margin permits buyers to judge our efficiency for various intervals on a extra comparable foundation.

 

 

Cision View unique content material to obtain multimedia:https://www.prnewswire.com/news-releases/equifax-releases-second-quarter-2021-results-301338911.html

SOURCE Equifax Inc.



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