易速傳真 (EFX) 2015 Q4 法說會逐字稿

Good day and welcome to the fourth quarter 2015 earnings call.

Today's conference is being recorded.

At this time, I would like to turn the conference over to Jeff Dodge.

Please go ahead.

Thank you, and good morning, everyone.

Welcome to today's conference call.

I'm Jeff Dodge, Investor Relations, and with me today are Rick Smith, our Chairman and Chief Executive Officer, and John Gamble, Chief Financial Officer.

Today's call is being recorded.

An archive of the recording will be available later today in the Investor Relations section of the About Equifax tab of our website, at www.equifax.com.

In the fourth quarter of 2015, we realigned the reporting structure of our direct-to-consumer reseller business so that it now reports into our Personal Solutions business.

Previously, direct-to-consumer resellers were reported within the USIS and International segments, based on the country of the customer.

We have provided the quarterly history for Personal Solutions, USIS and International in the new format for each quarter in 2014 and 2015 in the Q&A section of our earnings release.

All discussion of the 2015 business unit performance and their outlook for 2016 will be consistent with the new structure.

Earlier this week, the Veda shareholders voted to accept Equifax's acquisition offer, and we also received subsequent approval from the courts.

Therefore, the 2016 guidance provided today, as well as the updated long-term business model for Equifax, which is included in the Q&A section of our earnings release, both include the impact of the Veda acquisition.

However, our guidance for the first quarter of 2016 will not include any impact for Veda, including the incremental cost of the debt, given the short amount of time Veda will be part of Equifax in the quarter.

During this call, as in previous earnings releases, we will be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted operating margin, which will be adjusted for certain items which affect the comparability of the underlying operational performance.

In 2016, we will be emphasizing adjusted EBITDA margin in discussing our operational performance.

Adjusted EBITDA is defined as operating income, adding back depreciation, amortization, and the impact of certain one-time items, including the acquisition and integration expenses from Veda, which are also reflected in our calculation of adjusted EPS.

These non-GAAP measures are detailed in reconciliation tables posted on our website.

During this call, we will be making certain forward-looking statements to help you understand Equifax and its business environment.

These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations.

Certain risk factors inherent in our business are set forth in the filings with the SEC, including our 2014 Form 10-K and the subsequent filings.

Please refer to our various investor presentations, which are posted in the Investors Relations section of our website, for further details.

Now I'd like to turn it over to Rick.

Thank you, Jeff, and good morning, everyone.

Thank you, as always, for joining us this morning.

Execution across all four of our business units continues to be very strong and enabled us to deliver yet another strong quarter in the fourth quarter, as well as the full year.

For the quarter, fourth quarter 2015, total revenue was $666 million, up 7% on a reported basis and up 10% on a local currency basis from 2014.

For the quarter, FX created $18 million of year-over-year headwind for us.

The adjusted operating margin was 27.1%, up from 26.5% in the fourth quarter of 2014.

Adjusted EPS was $1.14, up 12% from $1.02 in 2014.

And just to refresh your memory, that exceeded the upper end of our guidance range we provided on the last call, which was $1.10 to $1.12.

Finally, given our strong performance in 2015, our Board of Directors approved a 14% increase in our quarterly dividend, up to now $0.33 a quarter.

And this is, as you probably all know, the sixth consecutive double-digit increase in our dividend rate, reflecting the strong performance of the Company.

I think you will agree, on many dimensions, 2015 was an outstanding year for our 117-year-old business and we exceeded our expectations.

We had broad-based contributions from each business unit.

Investing verticals in across the vast majority of our geographies, our team delivered.

We're well-positioned for a strong 2016.

We'll talk about the economic environment later in the Q&A, and I'm proud of the team for their continued commitment to innovation, execution, outstanding customer service.

For the full year, total revenue was $2.7 billion, up 9% on a reported basis and up 12% on a local currency basis from 2014.

For the year, FX created a $76 million year-over-year headwind.

Adjusted operating margin was 27.4%, up 90 basis points from 26.5% in 2014, and well above the targeted 25 basis points or so increase we have guided to in the past.

Adjusted EPS was $4.15, up 16% from $3.89 a year ago.(sic-see press release �$4.50�) And just as a reminder, that performance in 2015 was all organically driven, as we had no acquisitions in the year.

As I always do, I will transition to the business units for some brief commentary before John gives you the details.

I will go through some highlights for the business, as well, and then we'll get into more specifics.

But I want to talk, first of all, Jeff mentioned in his opening comments, we repositioned PSOL in 2015.

You know that this team has been working diligently on their new growth model, which I fully support and it's yielding benefits, and John will go through some of those numbers.

At the same time, I made the decision that it was important that we had one team, one leader, one business that would manage all strategy, all product positioning in the geographies for our consumer business, regardless of that business going direct to the consumer or if it was going through a reseller.

So we made the decision to realign that under Dann Adams now, who leads our direct-to-consumer businesses globally.

I think that just gives us more continuity going forward.

Now on to the businesses themselves.

USIS delivered an impressive 8% revenue growth for the year, while expanding its operating margins 290 basis points.

Our Insights-driven strategy, which we've talked about, has resonated extremely well with our largest clients in our Key Client Program.

Our KCP customers are purchasing multiple Decision 360 products and services; in aggregate, access almost five Equifax data products, which is remarkable.

Across our top 100 clients, Decision 360 products and services are increasing, as well; and there, they're accessing about three products, on average.

So D360 is really making a difference in the marketplace for us.

In USIS, our fraud and identity management solutions business again delivered healthy 22% growth for the year, largely driven by their ID authentication and management solution products.

Our enterprise vertical strategy has made significant contributions to our total company revenue growth.

We experienced industry executives in these verticals, we are better able to leverage our diverse data assets, analytic expertise, and IT platforms to deliver premier decision solutions.

USIS leads many of our enterprise vertical initiatives.

I will give you an example of a few of those.

In 2015, our Mortgage vertical grew 25% in USIS and 29% for the total company.

This again compares favorably to the average mortgage banker's application index, which was up 17% for the year.

So that trend of outperforming the mortgage market has continued now for many, many years.

Next example is in the auto vertical, which USIS revenue grew 6% and total company grew 9%.

This also compares very favorably to the overall market, where vehicle sales were approximately 5%.

And more recently, our retail banking vertical grew USIS revenue 17% and total company revenue by 18%.

So you get a sense there that this enterprise focus, taking all of our data assets and getting seasoned leaders in these vertical, delivering those unique assets to our customers, is enabling us to grow significantly, and in many cases faster than the market itself.

For years now, we've been working with Fannie Mae on ways to better leverage our information to further improve the underwriting process for mortgage loans.

Late in 2015, Fannie Mae made the decision to incorporate trended data into the underwriting process for mortgage lending.

We talked about this with you in the past.

This initiative will be an important contributor to revenue in both 2016 and 2017.

It also represents a significant structural change in the loan underwriting, as it sets the stage for applications outside the mortgage lending to increasingly use trended data and our world-class analytical talent and leverage our Cambrian platform, which we've talked about before.

We are well-positioned to take advantage of those opportunities as they arise.

Live testing is expected to begin the second quarter of 2016 and go live mid-year.

More importantly, trended data will be available through our core credit online delivery system, making the information available for all solutions that access our credit database.

Opportunities for USIS in 2016 and beyond are significant.

Trended data, ID and fraud, further penetration with targeted vertical markets are all expected to make important contributions to sustained revenue growth.

A multi-year model for USIS remains, as we have communicated to you before, with top line growth in the 5% to 7% range and adjusted EBITDA margin, which we'll now talk about going forward is expected to be in the high 40s, expanding to the low 50s over time.

International delivered 12% local currency revenue growth, with strong performance coming from our operations in Europe and Latin America.

Revenue in International's three largest verticals, FIs, telcos, and small to medium-size enterprises, grew 13% in 2015.

Our decision platforms, analytic solutions, and debt management revenue grew 12% in 2015.

Europe had an outstanding year, driven largely by broad based growth in our UK operations.

By industry, FIs, telco, SMEs all grew high to low double digits for the year.

By offering decision solutions, analytical services, and debt management all grew at double-digit rates in 2015.

TDX has been working, as you know, with the UK government to manage their past due consumer debt in fourth quarter 2015 and started receiving accounts at that time.

And we started placing those accounts with the collection agencies, analyzing the data, in the fourth quarter of last year.

And while still early, the performance to date is slightly ahead of our expectations.

This opportunity, along with our ongoing sales efforts, is expected to be a significant strategic initiative, driving growth for International for years to come.

International has historically delivered some of our strongest performance in new product innovation, which has been a significant contributor to incremental revenue growth, further market penetration, and obviously, customer loyalty, because we're building new products and solutions that we couldn't build in the past.

This broad-based effort towards innovation continues to fuel growth for International.

For the year, six geographies in International, representing almost 66% of their revenue, delivered an NPI Vitality Index of 10% or greater, which is fabulous.

International has some exciting opportunities ahead of it.

In addition to Veda, which I'll come back and talk about later, which will become a part of the International operation, in 2016, we'll broadly expand Cambrian, deploying it across the international geographies, substantially enhancing our ability to deliver analytical insights and drive growth.

The continued excellent performance with new products and cost benefits from the regionalization efforts begun last year, as well as the addition to Veda, will expand EBITDA margins in 2016 and beyond.

We have moderately raised our expectations for multi-year growth in International now to a range of 8% to 10%, with adjusted EBITDA margins in the low 30s, growing to the mid-30s over time.

Both those measures of top line and EBITDA margin reflect the anticipated close of Veda.

On to Workforce Solutions, they grew 18%.

Last year was an outstanding performance, as was their 510 basis point margin expansion for the year.

Core product growth, along with a number of new product initiatives, all contributed to this outstanding performance.

Verification Services' strong and broad-based growth of 25% in the year continues to be driven by adding records for the Work Number database.

As our coverage of individual employment records increases, the value of our services enables us to further penetrate our key target verticals, including mortgage, auto, consumer finance, government and pre-employment.

And all those verticals, every one of them, was up a very strong double-digit for the year.

Just amazingly strong, balanced growth.

At year-end, the Work Number database reached almost 280 million records.

And as we've stated before, we are well on our way to achieving 300 million records in total.

The recent emergence of what they called the instant mortgage facilitated through online processes generated new growth opportunities for automated income and employment verification.

We recently signed one of the largest players in this space, because of our unique ability to deliver both the credit information, as well as the employment and income verification simultaneously, thus speeding up the process and enhancing the consumer experience.

Within EWS, the Employer Services business also had another very strong year in 2015, growing 8%.

Much of this growth was driven by our Workforce Analytics offering, which we've talked to you about before.

This allows employers to ensure that they are compliant with the Affordable Care Act, as well as providing ACA required tax information to employees.

Workforce Analytics doubled their business in 2015 and is expected to more than double again in 2016.

Our Workforce Analytics client base now is approaching over 800 clients, with a pipeline that remains very strong.

To date, our solution has largely been focused on our larger enterprise customers.

In 2016, we're starting to go down market, enabling us to capture relationships with smaller employees, which we can offer cross-sell opportunities with our other Employer Services offerings.

Healthcare-related revenue generated by both our income verification and the Affordable Care Act compliance solutions more than doubled in 2015 versus 2014.

Workforce Solutions has delivered a stellar performance, not just in 2015, but over the last nine years.

As a business, they were quick to adopt our approach to innovate and to embrace Lean.

As a result, they have outperformed on revenue growth and substantially improved their margin.

Looking forward, expanding and further penetrating the key markets and verticals, increasing the number of records in the Work Number database, and globalizing their footprint will continue to drive revenue growth and margin expansion.

Our multi-year expectation for Workforce Solutions has been increased, now expecting revenue growth of 9% to 11%, with adjusted EBITDA margin in the high 40% range, expanding to low 50s over time.

Personal Solutions finalized its strategic transformation and is executing well against its four-pronged strategy.

For the year, the newly constructed Global Personal Solutions delivered 19% local currency growth -- revenue growth -- and is well-positioned for 2016 and beyond.

Revenue growth from our direct and indirect consumer activities continues to meet our expectations.

Revenue growth in our Personal Solutions business in Canada and the UK was up a nice 7% in 2015.

In the US, we continue to perform consistent with our expectations, with increasing ARPU and lowering subscriber churn.

Our direct -to-consumer resellers were the most significant contributor to Personal Solutions in 2015.

We've talked about that when it was a part of USIS.

Our reseller revenues in both Canada and the UK grew solid, as well, a solid double-digit, in fact, in 2015.

And the resale revenue in the US was very strong, primarily driven by the two-year contract with a leading company in the space, Credit Karma.

We've talked to you about that.

We're also well positioned for continued growth in 2016.

You may have seen the addition of a new reseller, LifeLock, we signed a multi-year contract a few months back.

With our broad-based portfolio of data assets, we believe there will be additional opportunities in 2016 and beyond to provide a broader array of credit, income and fraud services to consumers through our direct and reseller channel.

Under the new organizational structure, our multi-year expectations for revenue growth in PSOL is now 5% to 8%, up from the previous target of 4% to 6%.

Adjusted EBITDA margin is expected to be in the low 30s, expanding to the mid-30s over time.

The outsized growth in 2015 was primarily driven by the startup of our relationship with Credit Karma, the largest of our DTC, direct-to-consumer, resellers.

In 2016, we will anniversary this revenue, so long-term growth rates for PSOL revert back to more normal levels again of 5% to 8%, good strong growth going forward.

Now on to some corporate highlights, before I turn the mic over to John to give you more details on the financials.

Today, we're truly a global company, with a global set of processes deployed around the world, a global structure, a global culture, and a group that is all focused on a core set of global strategic imperatives.

Over the years, we have globalized our most critical and fundamental management disciplines to facilitate greater linkage between our strategy and our execution; and through this effort, we have streamlined our product innovation and placement, we've enabled greater leverage of our IT platforms, we've optimized the investment in our talent, and more effectively moved our talent and products where the greatest opportunities exist.

This globalization also enables us to better and more quickly leverage the skills and expertise developed in one market, i.e.

in USIS, into another market international.

Again, that's both processes, products and people.

Everybody in the Company is measured and evaluated on what they contribute to our imperatives, regardless of what part of the organization they reside.

Having reinvigorated our NPI, New Product Innovation, what we talked to you about last year, of our 2.0 next phase of innovation, we launched 64 new products last year.

Along with the pipeline of 2016 launches, we expect the revenue contributions to deliver strong NPI growth in 2016 and beyond.

Our largest and most diverse growth opportunities are executed under our Enterprise Growth Initiatives.

We call it EGI.

In 2015, year-over-year revenue growth from these large initiatives was over 20%.

So 20% growth over 2014.

In 2015, we exceeded our expectations for NPI revenues by 6%.

Furthermore, I've discussed with you in the past, the class of products we launched in 2015, under our revitalized effort of 2.0, are expected to deliver a record level of revenue -- year three revenue -- when compared to prior year launches.

It is the healthiest class of products that we've launched since NPI has been in existence here.

One of the more exciting new product opportunities revolves around trended data.

The effort and investment we're making to fulfill our commitment to Fannie Mae will be leveraged across all of our unique data assets.

We firmly believe that the next horizon for information-based solution is trended data, which will underpin more powerful decisioning solutions for our customers and significantly improve our competitive position.

So to be clear, our focus is trending as many of our unique data assets, which are truly unique only to Equifax or our customers, to provide these values.

So things like the Work Number, NC+, and others.

Finally, as with many of our corporate management doctrines, our global NPI process will be implemented in Veda, once we complete the acquisition.

And I will get to Veda in a moment.

In 2015, we launched our big data platform, called Cambrian.

Cambrian will enable faster development and delivery analytic insights, including improving the speed at which we develop new products.

It will also greatly enhance our Decision 360 capabilities and provide significant competitive advantage using advanced analytic techniques.

All the corporate imperative thrust has been abound Lean.

Lean continues to make incremental contributions to our expense leverage and exceeded our goal by contributing over 30% greater benefit in 2015 than we had budgeted.

And we have leveraged our expertise in Lean principles to deepen our relationships with some of our largest customers, through projects that help them streamline many of their operational activities.

And that obviously provides a competitive differentiator versus the marketplace.

Let me close, before I give it to John, and talk a little bit about Veda.

I'm sure many of you are aware that the regulatory approval Veda received in December enabled them to schedule a shareholder meeting, which Jeff alluded to a little bit ago.

They had their shareholder meeting on February 8 and gained approval there.

And they have also received a final court approval this week.

And at this point, it is our expectation to close the acquisition towards the end of February of this year.

We are very excited about this opportunity.

They represent for us their great strategy, strong financial performance, outstanding management team, great market position.

And they also give us a significant opportunity in the Asia-Pacific geography of further broaden, enhancing our geographic footprint, which is important to us as we diversify our revenue stream.

As we move into our first quarter earnings call, and beyond, obviously, we will keep you apprised of the strategic and the financial progress that the team is making with this new asset.

In closing, our performance in 2015 exemplifies the culture and the strength of our management team and our dedication, the entire organization, to innovate and execute for our customers.

It's a culture and a process that has taken years to develop, and it underpins the confidence we have in our ability to continue to delivering on our commitments and to make our customers and shareholders satisfied with that performance.

Our strategic imperatives as we enter 2016 are in a few areas that are very important to us.

We cascade these around the world.

One, obviously, is deliver strong and consistent profitable growth and shareholder returns.

Two, to develop unparalleled analytical insights, leveraging the unique data assets that Equifax has.

Three is to innovate for market leadership in the key domains and verticals in which we operate.

Four is to serve as a trusted steward and advocate for customers and consumers around the world.

And obviously, in closing, last, to invest in talent to drive that strategy and foster a culture of innovation.

So with that, John?

As you always do, please feel free to finish this.

Thank you, Rick, and good morning.

As before, I will generally be referring to the financial results from continuing operations represented on a GAAP basis.

Now let me turn to the business units' financial performance for the fourth quarter.

As Jeff mentioned at the opening, all BU information is based on the new segments, with direct-to-consumer resellers moved to PSOL from USIS and International.

Going forward, given the substantial amortization expense related to the Veda acquisition, we will increase our discussion of EBITDA for Equifax and the operating segments.

US Information Solutions revenue in 4Q 2015 was $296 million, up 7% when compared to the fourth quarter of 2014.

For the full year, revenue of $1.2 billion was up 8%.

This compares favorably to our long-term expectation for USIS of 5% to 7% growth, as both mortgage and automotive were very strong in 2015.

Online Information Solutions revenue was $204 million in 4Q 2015, up 6% year-to-year, and $842 million for the full year, up 8% when compared to the prior year.

Mortgage Solutions revenue was $28 million in 4Q 2015, up 10% year-to-year, and $124 million for calendar year 2015, up 17%.

Total mortgage-related revenue was up 16% and 17% in the quarter for USIS and Equifax, respectively.

For calendar year 2015, mortgage-related revenue was up 25% and 29% for USIS and Equifax, respectively.

This compares favorably to the average Mortgage Bankers Application Index, which was up 14% in the fourth quarter and 17% for the calendar year.

Financial Marketing Services revenue was $64 million in 4Q 2015, up 7% year-to-year and up $205 million for calendar year 2015, up 5% year-to-year.

The operating margin for US Information Solutions was 41.6% in 4Q 2015 and 41.9% for calendar year 2015, up 50 basis points and 290 basis points, respectively.

Adjusted EBITDA margin was 48.5% in 4Q 2015 and 49.7% in calendar year 2015.

We expect to see continued expansion in the USIS EBITDA margins in 2016.

International's revenue was $143 million in 4Q 2015, down 1% on a reported basis, but up 11% on a local currency basis.

Revenue was $569 million for calendar year 2015, down 1% on a reported basis, but up 12% on a local currency basis.

By region, Europe's revenue was $64 million in 4Q 2015, up 3% in US dollars and up 10% in local currency.

For calendar year 2015, Europe revenue was $247 million, up 2% in US dollars and up 12% in local currency.

Latin America's revenue was $49 million in 4Q 2015, up 2% in US dollars and 18% in local currency.

Revenue was $200 million for calendar year 2015, up 4% in US dollars and 17% in local currency.

Latin America showed outstanding local currency growth throughout 2015, led by strong growth across Argentina, Uruguay and Paraguay.

Canada revenue was $29 million, down 11% in US dollars, but up 5% in local currency.

Revenue for calendar year 2015 was $122 million in US dollars, down 11% in US dollars, but up 3% in local currency.

Canada's performance strengthened very nicely in the second half and has momentum going into 2016.

International's operating margin was 20.7% in 4Q 2015 and 20% in calendar year 2015.

EBITDA margins were 27.2% in 4Q 2015 and 27% in calendar year 2015.

Both operating and EBITDA margins were down year-to-year in International; however, both showed sequential improvement in the fourth quarter relative to the third.

In 2016, we expect to see continued margin improvement, driven by continued strong local currency growth and the benefits of regionalization, as well as from the addition of Veda.

We will see some margin pressure related to weakened foreign currencies, particularly with the Canadian dollar and the devaluation of the Argentinian peso.

Workforce Solutions revenue was $144 million in the quarter, up 12% year-to-year, and $578 million in calendar year 2015, up 18% year-to-year.

This reflects continued very strong growth in Verification Services, up 14% in fourth quarter and 25% year-to-year.

Employer Services also delivered a very strong performance, up 8% in the fourth quarter and 8% in the calendar year.

This was driven by success in their compliance center offerings and their solution for employers' compliance with the requirements of the ACA.

The Workforce Solutions operating margin was 36.8% in 4Q 2015 and 37.9% in calendar year 2015, up 430 basis points and 510 basis points, respectively.

Workforce Solutions EBITDA margins 44.3% in the fourth quarter and 45.1% in the calendar year.

We expect continued strong expansion in the Workforce Solutions EBITDA margins in 2016.

Global Personal Solutions revenue was $84 million in 4Q 2015, up 12% on a reported basis and up 14% on a local currency basis.

Revenue in calendar year 2015 was $346 million, up 18% on a reported basis and up 19% on a local currency basis.

PSOL's business has two main areas, credit and identity monitoring services, sold through direct and indirect channels, that protect and monitor consumers' ID and enable consumers to gain better access to credit, and credit and other data sales sold through our DTC reseller partners.

Credit and identity monitoring services sold through the indirect channel represent those circumstances where Equifax provides white level online credit and identity services through partners.

In 2015, ongoing revenue from credit and identity monitoring services grew at the high end of the 4% to 6% guidance range we had previously provided for the PSOL segment, prior to the addition of DTC resellers.

DTC resellers revenue represent sales of credit and other data to resellers.

In these cases, Equifax provides data and analytics, but not the web properties with which the customer directly interacts.

Examples of this business are our relationships with Credit Karma and LifeLock.

DTC reseller revenue showed substantial growth in 2015, driven primarily by our relationship with Credit Karma which began in 4Q 2014.

Our DTC reseller revenue should continue to grow faster than our direct-to-consumer sales, but as Rick mentioned, not at the very high rate we saw in 2015.

Looking forward, as previously mentioned, we expect this overall segment to grow 5% to 8%.

Operating margin was 27% in 4Q 2015 and 27.5% for calendar year 2015, consistent with our expectations.

EBITDA margins were 29.7% in 4Q 2015 and 30.2% in calendar year 2015.

PSOL revenue and operating margin in 4Q 2014 were very strong, reflecting a large reach deal won in 4Q 2014.

4Q 2015 operating margin of 27% was consistent with our expectations and our guidance and reflects the impact of our decision to invest more in marketing in 2015, as well as the addition of DTC reseller business to PSOL.

In the fourth quarter, general corporate expense was $51 million.

Excluding $3.7 million for one-time expenses associated with the Veda acquisition, general corporate expense was up slightly from 3Q, consistent with our guidance.

For the first quarter of 2016, we expect general corporate expense, excluding Veda-related acquisition and integration expenses, to be in the range of $55 million to $60 million and run at a slightly lower rate throughout the remaining quarters of the year.

The adjusted operating margin at 27.1% in 4Q 2015 and 27.4% in calendar year 2015 were up 60 basis points and 90 basis points year-to-year, respectively.

Adjusted EBITDA margins were 34.4% in 4Q 2015 and 34.8% in calendar year 2015.

We expect to see improvements in our adjusted EBITDA margin in 2016, expanding by about 75 basis points.

Our GAAP effective tax rate for the fourth quarter was 32.6%, equal to our expectation and in our guidance.

For the full year, our non-GAAP effective tax rate after adjusting for non-GAAP items, the Missouri state tax law change in the second quarter, and the TDX escrow adjustment in the third quarter, was 33.7%, consistent with our comments during our third quarter release.

Looking forward into 2016, our expectation is for a GAAP effective tax rate of about 33%.

Operating cash flow was $205 million in 4Q 2015 and $742 million in calendar year 2015.

Both were very strong, reflecting strong earnings and working capital performance.

Free cash flow, equal to operating cash flow less capital expenditures, was very strong in 2015, at $596 million, up 12% from 2014.

Capital expenditures for the quarter were $53 million, and for calendar year 2015 were $146 million.

Consistent with our comments throughout the year, the increase in capital spending versus 2014 reflects the acceleration of our investment in new product innovation, deployment of global platforms, including Cambrian and other analytics, interconnect, fraud, and our new PSOL infrastructure.

As we look forward to 2016, we expect capital spending, including Veda, to be in the range of 5% to 6% of revenue.

This is consistent with 2015 and reflects a continuation of our current investments, as well as some additional spending in the near term as we integrate Veda.

This is slightly higher than our expected long-term rate of capital spending of about 5% of revenue, due to the Veda integration.

As Rick indicated, we have received Veda shareholder approval and approval from the Australian courts to complete the purchase of Veda.

We expect the acquisition to close on about February 25.

Total purchase price, including assumed debt and fees, is approximately $1.9 billion.

At the close of the Veda transaction, we will have debt outstanding of just under $3.1 billion and debt to EBITDA on a trailing basis of just under 3 times.

As indicated previously, we expect to maintain our current credit ratings.

In 2016, we will focus on using our very strong cash flow for debt reduction and returning our leverage to a level consistent with our current credit ratings.

Therefore, we do not intend to repurchase shares in 2016.

We will, however, continue with acquisitions beyond Veda in 2016, with a goal of delivering on our long-term model of an additional 1 to 2 points of revenue growth.

Assuming acquisitions consistent with our targets in 2016 and 2017, we would expect to repurchase shares in 2017.

As we discussed last quarter, we will exclude Veda transactions and other acquisition expenses and integration expenses incurred in the first year after the Veda acquisition through 1Q 2017 in calculating adjusted EPS and adjusted operating margin and EBITDA margin.

We will provide information regarding transaction and acquisition expenses incurred with the acquisition, as well as integration expenses we expect to incur related to the Veda acquisition after the transaction closes at our 1Q 2016 earnings release conference call.

Also, Jeff mentioned at the beginning of the call, given the relatively short time we will own Veda in the quarter, our 1Q 2016 guidance does not include the impact of Veda, nor the incremental debt costs, including interest expense, related to the acquisition.

We will provide you details on the impact of Veda on 1Q 2016 during our 1Q 2016 earnings call in April.

The 2016 full-year guidance Rick will provide includes Veda.

For 2016, we have assumed Veda will be a part of Equifax for 10 months.

Veda revenue for the 10 months is assumed to be US $220 million to $230 million.

This includes an estimate of the impact to revenue of US GAAP, which will be updated as we close 1Q 2016.

The benefit to adjusted EPS from Veda, net of acquisition financing cost, is about $0.10 to $0.15 per share.

As a reminder, adjusted EPS excludes acquisition amortization expense.

For modeling purposes, you can assume an average cost of our Veda acquisition debt during 2016 of about 2.5%.

Veda's seasonality of revenue is similar to Equifax, with Q2 revenue typically the highest from a seasonality perspective, 1Q generally the lowest revenue, and 3Q and 4Q somewhat similar in terms of revenue.

The spread between 2Q and 1Q revenue has recently been in the range of 7% to 10%.

Now let me turn it back to Rick.

Thank you, John.

Some summary comments before we go to the Q&A.

As I have mentioned before to all of you, and as many of you have noted in our conversations and in your write-ups, the level of execution and the momentum that this team has generated in 2015 is the best in my 10 years here.

I think it's just truly remarkable what they've done.

We are well positioned for growth opportunities that lie ahead and our ability to take on many of the challenges that may confront us.

In the coming years, the incremental revenue that will be contributed from the class of new products that we just launched is expected to exceed our historical average.

That gives wind at our back.

Our Enterprise Growth Initiatives, including expanding Insights driven by Cambrian, healthcare, trended data, and auto, will not only enhance our competitive position, but also deliver growth opportunities for years to come.

All of these efforts are expected, in our opinion, to offset the anticipated slowdown of the US mortgage market, which, as you know, started to decelerate over the course of 2015.

While it's impossible to predict where the mortgage market's going to go -- especially when I look this morning at 10-year Treasuries at under 1.6 -- forecast range from down 20% to up mid-single digits.

Our forecast that we have given you for 2016 is anticipating that the mortgage market will be down single digits in 2016.

And obviously, our expectation as a team in both Workforce Solutions and USIS, as they have done for many, many years, outperforms that quite significantly.

Obviously, if rates continue to stay low, as they are, there may be some market upside to what occurs in the mortgage market.

And we'll know, obviously, as we head deeper into the year.

2016 is yet again expected to be another strong year performance for the Company.

For the year, we expect revenue, including the impact of Veda, to be between $3 billion and $3.1 billion, reflecting constant currency revenue growth of 15% to 19%.

And that's going to be partially offset by about 2 points to 3 points of FX headwind.

This is consistent with our comments in October that the organic constant currency growth would be at the high end of our long-term range of 6% to 8%.

I've got to say it again.

That's at the high end of that range, coming off of constant currency growth last year of 12%.

So it's, I think, quite remarkable.

As John mentioned, we also expect to add a number of 1 and 2 points of tuck-in acquisitions throughout the year.

These additional acquisitions are obviously beyond Veda, which, as he said, is not included -- I'm sorry, in the first quarter of 2016 outlook.

Adjusted EPS is expected to be between $4.95 and $5.05, which is up 10% to 12% for the year, excluding approximately $0.13 per share of negative impact from FX.

This reflects constant currency organic EPS growth of 13% to 15%.

For the first quarter, we expect organic revenue to be between $685 million and $695 million, reflecting constant currency organic revenue growth of 8% to 10%, that will be partially offset by about 3 points of FX headwind in the quarter.

First quarter adjusted EPS is expected to be between $1.14 and $1.16, which is up 7% to 8%, excluding $0.04 per share of negative impact from FX.

This reflects constant currency organic EPS growth of 10% to 12% for the first quarter.

Again, we expect to close Veda in the first quarter, but we're not including that in the estimate.

Maybe during Q&A, we'll talk about why it's not in the first quarter, for that one month.

In 2016, we're also going to shift our focus to adjusted EBITDA margin.

You've heard us talk about that throughout the call, since it better represents the true operating performance of the Company.

2016, we expect our adjusted EBITDA margin to expand by a solid 75 basis points over last year's 34.8% EBITDA margin.

In our modified multi-year business model, we expect adjusted EBITDA margins to be in the upper 30% to 40% range with annual acceleration of at least 25 basis points.

So with that, Operator, if you would open up for questions for our audience, that would be great.

(Operator Instructions)

David Togut, Evercore ISI.

Thank you.

Good morning, Rick and John, and congratulations on the strong results.

Thank you, David.

Rick, could you give us your outlook for the health of the consumer by major geographies served?

Given some of the trends we're seeing globally, do you think the consumer will hold up?

Dave, that's a great question.

Obviously, with the volatility we've seen this five or six weeks of 2016, John and I spend a lot of time with our teams talking about that.

And I can't for the life of me at this juncture draw a connection between equity market volatility and the health of the consumer in our major markets around the world.

And as you know, we operate in about 19 different countries and have a great pulse on what's going on with the customer, in many cases, on a daily basis across different verticals, different industry sectors, and combine that with some very smart people internally and externally we leverage on a routine basis, economists that help us think through consumer small business lending trends.

And we are not seeing a slowdown in our markets.

Maybe an exception here or there, but nothing material, David, that gives me concern that the forecast we just gave you for guidance is not very attainable.

We're just not seeing that strong correlation.

So at this juncture, in our major markets around the world, the consumers continue to be healthy.

We describe it, I think it was a few quarters ago, it was in a sweet spot.

I still believe that, and we feel it and we see it in our numbers.

Great.

Thank you.

And then could you talk about operating leverage for 2016?

Most of your margin comments were more mid- to long-term, which were very helpful.

But we saw Workforce Solutions margin up in the fourth quarter, for example, 430 basis points.

So how should we think about margin profile by business segment for this year?

Let me get the aggregate, and I'll think through it, and maybe John can fill the details.

But I did guide at the very end about 75 basis -- we're talking EBITDA now, David -- 75 basis points of margin expansion at the corporate level 2016 over 2015.

What you're going to see there is continued margin expansion in businesses that have been expanding now for quite some time.

That's EWS, as you alluded to, and USIS.

That trend will continue.

Number two, we intentionally made investments in PSOL in 2015 to position them for better growth in 2016 and beyond.

That's behind us now, to start to see margin expansion in PSOL from the levels you saw in 2015.

We also invested in two main areas in International that are behind us now.

One was, as you are very well aware, standing up of the UK government contract, which was a year-long heavy investment, and now the revenue starts to come, because there was virtually no revenue in 2015.

Secondly, we talked about regionalization of platforms and people and processes that give us a long-term more cost efficient international model.

Those investments were largely made in 2015.

Those have now been anniversaried.

So you will start to see International and PSOL margins expanding this year.

And obviously, International, I think I alluded to it, their margins will be enhanced with the addition of a very high margin, successful business in Veda.

Beyond that, do you have any other trends?

The only thing I would add is compliance and security expenses continue tremendous growth in 2014, 2015.

Still more substantial investment in 2016.

But we do expect over time, those are going to moderate in terms of the increases, although still be substantial.

So we should see some accretion over time related to the moderation of those gross.

I'll make a statement here on it, John.

Correct me if I'm wrong, David, to give you a little more texture, maybe what you're looking for.

If you look at each individual BU and you look sequentially 2016 versus 2015, every BU's EBITDA margin will go up from 2015 into 2016, is the expectation.

You'll see much larger expansion in the USIS and EWS as you've seen over the past several years, should see some across PSOL and International.

And then overall, we will expand because you're not going to see the degradation from the last two.

That's very helpful.

Thank you.

Just a quick final question.

Rick, you called out 280 million Work Number records, which is up pretty substantially.

Can you give us a sense of how you're thinking of the growth of this business, particularly as the Work Number records increase?

Are you seeing a much greater hit rate on searches by clients?

David, I think this business, all four businesses are executing high, great growth opportunities.

These guys are in the early stages of their growth opportunity.

It's not only going from 280 million to 300 million that does increase the hit rate, as you mentioned.

We're so early, and I gave you some sense for the growth rate by verticals.

And it's amazing, these are very, very high double digit growth rates in the Verification side.

But we are so lightly penetrated in many of the high growth markets.

There's years of growth to go on the verification side in the US alone, then you add to that, which was not the heart of your question, growth from the analytics platform that we've built on the employer side.

And I gave a little comment which I didn't expand upon, but I will now, in my prepared comments, David, the appetite for customers in geographies around the world for us to take this platform of the Work Number to their geographies is stronger now than it's ever been.

And we have got a team working full speed on a couple of million geographies around the world, which I'm not going to get into a lot of detail on where, but to solve the same problems that we're solving here solving here, there.

So long way of saying, the growth opportunity is significant, it's multi-year, and it's not just the US.

Understood.

Thank you very much.

Thank you, David.

Paul Ginocchio, Deutsche Bank.

Rick, a couple questions on the trended data.

I was wondering first, probably too sensitive, but if you wanted to talk about maybe the price premium or the ASP for trended data versus a credit snapshot.

Also wanted to know what percentage of mortgages currently use or pull the Work Number and where you think that's going to be, what it is currently, what it could be at year end, and maybe what you could think it could be out two to three years from now?

Thank you.

Yes, your comments are accurate.

I'm not going to go into the level of pricing increase we get from trended data.

But the way to look at it is the value derived on an ROI basis from the mortgage underwriters from looking at data over multiple years versus a shot in time is significant.

As a result, they are willing to pay more for trended data.

The other point I alluded to in my prepared comments, Paul, was we're going to trend more than just the credit file and take our really unique data assets that no one else has and start trending those.

Think about the value of trending income data versus taking a snapshot in time.

And then you take the utility data.

So the trending -- I really mean this sincerely -- the trending of data, especially the unique data sets we have, I think creates innovative products and solutions for years to come.

As far as the mortgage market on Workforce Solutions, again we don't disclose that level of detail.

I'd leave it at this, though.

There's still significant room -- and David Togut alluded to this -- as the database grows, the hit rate goes up and that benefits all verticals, including mortgage.

But we still have penetration opportunities, not just on hit rate, but by account in the mortgage arena in EWS, much like we do in auto, insurance, credit card, government and others, for the Work Number.

If I could just ask a follow-up.

I think you left guidance for USIS relatively stable under the new system versus the old.

And I'm just wondering, with the opportunity that trended presents to you, why wouldn't you have notched that up a little bit?

There's a couple things.

One, short term, as we look at 2016, then I'll go to multi-year.

Two, for 2016, one primary thing going on there, you've got significant headwinds, specifically in the first half of the year in USIS and mortgage.

Mortgage, the biggest quarters were the first and second quarter, and we said before, started to decelerate in the second half.

So that's why I left that model consistent with 2016, Paul.

In fact, I think you'll be at the lower end of that range in 2016, to be very clear with you.

And then as far as the multi-year model load, and I ratcheted that up, I'd rather do that once I have success under our belt and we see just how big this is going to be.

So I think it's a little premature.

But at the right time, once we see the success and the traction, as you know, it goes live in mid-year, and we will be a lot smarter come the end of the year.

And if the model justifies being changed at that time, we will.

Great.

And congratulations on the Social Security Administration contract.

If I could really quickly ask, for the My Online Social Security accounts, how many times a year do you think you'll verify each of those 22 million accounts, on average?

Thanks.

Paul, great question.

I've no idea.

(Laughter)

Okay.

Good question, though, Paul.

Thank you.

Thank you.

Manav Patnaik, Barclays.

Good morning, gentlemen.

Rick, nice to hear, as always, a lot of progress, but it sounds like, at least with all your initiative, you guys have taken that up one notch level there.

And I think you still have your NPI targets at 10%.

I know I've asked you this many times before.

It doesn't sound like you need to motivate people by taking it up, but at what point do you push yourselves even further to take the target out?

Think of it this way.

I did mention that the revitalization of NPI that we launched in late 2014 benefited the 2015 class, one of our strongest classes ever.

And that will bode well for the next three years.

So it's moving in the right direction.

Two, you always have, as you think about the Vitality Index, Manav, you've got big chunks of products that roll off every once in a while.

So making up big chunks of products is harder than it sounds, just to stay at 10%.

But three, maybe most importantly, you've heard us now talk for about two years around EGI.

That's another innovation that is taking large, complicated growth initiatives across multiple geographies and making sure we sustain the kind of growth that we need there.

And that was a, I think, 20% growth I alluded to, in my earnings call.

So look at it totally, and the contribution from NPI and EGI, it is significant.

So I don't feel compelled at this juncture to ratchet up 10%, beyond 10%.

Okay.

And then in terms of the margins, the 25 basis points.

I guess this clearly sounds like an element of conservatism to that.

What are the puts and takes that go through your planning when you still stick with 25, as opposed to maybe 50?

I think you know us well enough by now, we tend to be thoughtful and maybe a little conservative on our guidance.

We guided to 25 basis points for 2015.

Operating margin was up, what?

90.

90 basis points.

I'm guiding for 2016 to be on EBITDA margin up 75 basis points.

I don't want to starve the business.

And you heard John talk about continuing investment in the CapEx level.

It's higher than what we've had historically.

The standardized platforms that bring Cambria global to facilitate faster, more profitable growth.

So Manav, I think it's a Rubik's cube, and I think that combination of really strong organic growth that we've talked to you about, combined with margin expansion of 25 basis points, if we can get this business to do that year in and year out and get to our aspirational goals, as we alluded to, of 40% EBITDA margin, I think that's pretty damned good, and I hope you agree.

Yes.

That's great.

And then one lesson for me.

I know you said it, and your guidance obviously implies it as well, where you don't expect a consumer recession.

But in trying to understand if equity markets operating [at drive] and we do get there, obviously Equifax today is much different than what it was in 2008/-2009.

So any high level comments on which area should hold up and which areas would be hit?

Yes.

Thank you, Manav.

We are not anticipating a global recession at this juncture.

If it does occur, I look say today versus how we're positioned as a company 2007, as been dramatically different.

Lean, as an example, and our ability to operate on global platforms and take global processes and improve them and take costs out and act and react to a recessionary environment is far greater today than it was then.

We were in our infancy stage of understanding globalizing the platform, globalizing the process, and deploying Lean around the world.

So we can rack much faster if we had to in that environment.

Two, just the overall pipeline of products we have is much stronger now.

We're in the early days of NPI back then.

EGI did not exist.

Just the ability to grind out organic growth didn't exist then.

And lastly, we have built some -- maybe two other points -- countercyclical products that are bigger now and would do well, think about unemployment claims, as an example, in EWS, that would do well in a recessionary environment.

And we're more global today, especially with the addition of Veda and their platform.

Now if the entire globe hits a recession, that doesn't really help you.

But if it's isolated to a few of the developed markets, the fact that we're a bigger global enterprise may help us, as well.

Thanks a lot, guys.

Sure.

Thank you.

Andrew Steinerman, JPMorgan.

Hello, Rick.

I'd like to ask you about the Veda revenue and EPS assumptions that you highlighted for the 10 months included in Equifax.

On a like-for-like basis, what type of revenue growth does that assume?

And when you're talking about the EPS accretion, are you counting on core synergies?

Yes.

I'll take a crack at it, and John, you jump in.

Think about Veda as a business that fits right into our organic growth model, which is 6% to 8%, and maybe at the upper part of that range versus the lower part of that range.

So nicely in our organic growth target, and not just for 20 16, but year in and year out.

And much like rest of the world, there's an opportunity for tuck-in acquisitions in their geographies that are exciting to us in these early days.

What was the second question?

Core synergies.

It does not include synergies.

We didn't assume any meaningful synergies in 2016.

There really aren't many cost synergies.

In fact, it would be just the opposite.

We're adding cost to Veda to bring things like Cambria and Interconnect and other things to help them link data and grow faster.

You look at the last reported revenue of Veda and then take a look at what we've just indicated, growth rate for 18 months would have to be high single to near 10%.

Okay.

and just one more on that.

Rick, are you counting a lot on comprehensive data being a meaningful impact to the Australian market over the next couple of years when thinking about the Veda acquisition?

The model did not contemplate that, Andrew.

But I tell you what, I walked away from my last visit with the team down there more impressed with the rate at which contributors have been contributing data, positive data, I should say.

So it's not right now in our guidance.

It's not in the model we used to justify buying the company.

But I'm more hopeful and impressed now than I was in early days that it will be a meaningful change down the road.

Thank you.

Sure.

Gary Bisbee, RBC Capital Markets.

Good morning.

You already commented on USIS maybe being the lower end of the long-term targets, but how about the other businesses?

Are any of them in a key position to be above the high end this year, or do we think those targets by segment are good places to be for 2016?

Look, Gary, the ranges are there for a reason.

We think they're pretty solid ranges.

You're going to see nuances in noise quarter to quarter, as you guys know, and maybe even year to year.

But over multiple years, those ranges feel pretty good.

The one business that's really clicking on all cylinders, and probably has more runway to exceed, would be EPS.

Their sandbox is a bigger sandbox and a less mature business, and they've got early days of growth.

So if there's one that you've got to say maybe has more opportunity to outperform, it's that one.

And would that include your commentary about mortgage being much tougher comps, still able to --

Absolutely.

And the other thing I say maybe, too, is so, yes, that's including the mortgage environment I just alluded to down single digits and we'll have to outperform it.

So obviously, if mortgage is stronger than we expect, that benefits EWS, as well as USIS.

But the other business, maybe short term in 2016, I think about having maybe more runway than the long-term model would be would be PSOL, because they've got some pretty good things going on as they redefine their model, as well.

And then a question within International on Latin America, a two-part question, I guess.

It seems like there's a lot weaker economic activity in a bunch of those markets and you face a really tough comp.

How are you thinking about that?

And then specifically, can you comment on how much inflation in Argentina is driving the growth of that segment versus volume or unit sales of your offerings?

Thank you.

I don't think we break that second part out.

But the first part is, and I think I alluded to it in my comments, what's allowing International to continue to grow at the rate they're growing, in spite of difficult economic environments in Latin America and other parts of the world, too, is innovation.

I mentioned that the majority of their -- 66% of their revenue in these large geographies -- are generating Vitality Indexes from new product innovation above 10%.

If it weren't for that -- and they're also a benefactor of EGI, obviously, as well -- but if it weren't for those innovative approaches through products and EGI, they would not be performing like they're performing.

Great.

And just one last clean up one.

I know it's early, but do you have a sense for what we might expect amortization and depreciation from Veda to be?

Thank you.

It's early.

And obviously, as the transaction closes, these numbers will be updated.

But acquisition amortization, right now we're assuming is somewhere in the neighborhood of $95 million.

Thank you.

Thank you.

Jeff Mueller, Baird.

Thank you.

This is Nick Nikitas on for Jeff.

Switching back to Veda, and maybe talking more about some revenue and potential synergies.

You mentioned TDX is seeing some positive signs in Australia.

Do you see that as an opportunity to leverage Veda's presence throughout the region or any potential avenues you see to drive additional growth into the future?

We've got a small team down south in Australia and New Zealand that represents the debt management analytics platforms.

So yes, having access to a much larger sales organization with people, longer standing relationships will help our debt management growth.

But beyond that, one, we're getting a business that's great organic growth opportunities.

I alluded the fact there's inorganic opportunities.

And then the others are bringing things like the Work Number to Australia, bringing Cambrian to Australia, bringing Interconnect to Australia, bringing our global fraud platform to Australia.

You can't underestimate -- the relationship these guys have in Australia and New Zealand and the market presence they have with all major verticals is significant.

And they build out, much like Equifax has, in Australia and New Zealand, a very wide array of unique data assets.

And if we can bring our know-how to bear there, to build products, that is a great growth driver.

And then as someone, I think it was Andrew, asked a second ago, eventually, when comprehensive, as he referred to it, or positive data, as many refer to it, when that becomes mainstream, guess what?

We know how to manage positive data and build platforms around positive data really well.

And that, in years to come, is another growth driver for us.

Okay.

Great.

Thank you.

And just within the UK, was TDX a sizable contribution to 4Q, or is that still thinking about 2016, more of a strong contributor there, and if we're looking at growth rates, a similar low double-digit European growth rate is possible?

We saw very nice growth rates in the core UK business.

TDX continued to provide growth, but we saw very nice growth rates in the core UK business, as well.

And just to make sure everyone understands my answer, the $95 million for Veda acquisition amortization is an annualized number.

It's not the 2016 number, it's an annualized number.

Great.

Thank you for that.

Okay.

Andrew Jeffrey, SunTrust.

Thank you.

Good morning.

Rick, it's interesting the way the PSOL business has evolved generally, and direct-to-consumer particularly, and obviously, Credit Karma was a big win.

Can you frame up perhaps the additional opportunities in DTC?

Is Credit Karma probably the biggest single opportunity you see out there, recognizing that the market is changing pretty quickly and you have some new entrants?

Or are there other large potential targets, too, that could be callouts, the way Credit Karma was?

Okay.

Good question.

No doubt that Credit Karma in the US marketplace for the reseller side of the indirect channel, as we call it, is a uniquely large piece of business.

Might there be a larger US piece in that?

Might be.

I don't see it as probable.

The LifeLock is going to be a very good add to us, expanding what PSOL does.

And also, think about, there are two other things that are important.

Taking that same concept of Credit Karma to other geographies, which we operate, taking it to Australia, taking it to Canada, taking it to UK.

And also, you've got Dann Adams now.

And one of the beauties, Andrew, of moving leaders around in different businesses is they have a different perspective than their predecessor.

Dann's looking at this business now, saying, can I look at the breach market differently?

He's looking at saying, how do I combine some of the assets that we have from EWS, where he was for five and a half years, into the global PSOL channel.

It's not just the large indirect resellers that give me hope for long-term growth in PSOL, it's the four levers we talk about, plus taking other data assets into PSOL.

Okay.

And I'll ask you the same question around Workforce Solutions.

It seems like every year, there's another wrinkle, another innovation, another customer.

Has this been an exceptional period, given developments like ACA, where you'd say, this was just a remarkable time, or are we looking at the pace of change and opportunity set that is structurally bigger than you might've thought it was two or three years ago?

It's the latter.

And it's by far the latter.

I can see a day where this business is so dramatically bigger than it is today, not just in the US, but global.

And Andrew, we're going to wake up in the next number of years and it's going to be in a couple more geographies that are really important to us.

I talked about trended data.

We are just now in early days of trended data.

We're building the capabilities for trended data.

So I would be remiss if I didn't say the leadership that was there was outstanding.

They did a hell of a job.

But I am sure -- and Dann has done a hell of a job out, as you know and you've seen the financials.

But we will continue that progress and take this business to the next level.

And it's not far-fetched to see, at some juncture, EWS being bigger than our core117-year-old credit business at margins equal to, if not higher, than USIS.

So that's how we think about that.

If regulation continues to extend, the opportunities to expand the compliance business, so it's not just in verifier, it's in employer, as well.

It's both sides of the business.

Great point.

Okay.

That's pretty ambitious and pretty exciting.

So thank you.

Thank you.

Andre Benjamin, Goldman Sachs.

Thank you.

I think most of my questions have been answered.

I guess on the back of the question that was just asked about the EWS, it's clear that there is a lot of demand for these solutions globally.

In the US, is there any place that you can call out as a major area of focus beyond, I think most of us clearly get the case in autos, mortgage, and government, but there are very obvious large areas that you should be going after that you're not today?

No.

I think that we've got our toes into everything.

It's all relative.

Are we -- I hate to use a baseball analogy, but I will again -- are we in the bottom half of the first inning or the top half of the ninth inning?

In most cases, we're very early stages.

Credit card is important to us.

Insurance is important to us.

Pre screening is important to us.

So thinking about anywhere where having an affirmation that someone is employed and the confirmation of how much someone makes across almost every vertical, there's a need for that.

So we are into, I think, virtually all of them, Andrew, but just some we're very, very early days where penetration has got years togo.

And on PSOL -- I apologize if you covered this before I jumped on -- but I know you took up the growth rate longer term, and was there anything in particular about the reorg that should drive a material change in the strategy?

Or is it really just getting everyone on the same page, seeing the same numbers, and having unified goals?

Good, good, good question.

It's the latter.

Structure does not necessarily always facilitate faster growth or impact growth can be slower.

It just intellectually make sense to have one team manage every aspect of the strategy for a consumer, regardless of how the consumer buys that product, directly from us or through a partner of ours.

So that's why we did that.

I don't think that in itself changes the growth profile.

It's executing against the four-pronged strategy we laid out last year that gives us confidence that the growth of PSOL multi-year model is slightly higher than the past.

Thank you.

Brett Huff, Stephens.

Good morning, Rick, John and Jeff, and congrats on a nice job.

Thank you.

Two questions.

One, focusing on the EWS.

You talked about the geographic expansion opportunity.

The way I understand that business works, you need a database of numbers in order to really start having a product to sell.

And you mentioned you had teams on the ground in several geographies.

Are they there constructing that database, and how long does it get take to get to a scalable product in those geos?

And then I have one follow-up.

It's going to take a while.

When I think about the multi-year model we communicated earlier, Brett, it does not contemplate International.

I would never do that.

It's going to take a while to build a database.

But we're good at it.

We know how to do it.

We've got funds invested into it.

We've got people invested into it.

We've got customers we know very well that want it.

We've got the technology, we've got the platforms.

We know how to do it.

But it's going to take a while to get it done.

This isn't something you look at over a five-year period of time and say, got it, versus revenue fourth quarter 2016.

Okay.

That's helpful.

And then just a bigger question.

I'm trying to tick off all what I think are the major growth opportunities.

But wondered if you could rank them in terms of your excitement?

I guess the categories are trended data, Cambrian, the NPI/EGI, and maybe talking about Work Number going international.

Maybe there's another one or two I'm missing.

As you think about the three-year opportunity in those, which ones are -- how do you rank them?

We're so at and we've done for so long is NPI and EGI.

So that's something that as an investor or analyst that's thinking about us should have a high level confidence in continuing at the rate it's continued, if not higher.

Two, you alluded to the core of EWS, which we talked about quite a bit this morning, continuing to grow.

International EWS, obviously, is one.

Cambrian, you can't underestimate Cambrian.

Cambrian will not only allow us to link different data assets together, but build products than we could ever build before, but we can build them faster, so time to revenue will be faster with Cambrian.

Obviously, small tuck-in acquisitions that we're so good at, hopefully, we seem to be really good at, so we know how to do it.

That will be a vehicle for profitable growth going forward.

The cool thing is, I think you'd agree, is it's not just one, two, or three things we're counting on for growth.

The foundation has been built by our teams, that have got so many levers that pull, that gives you a pretty good confidence.

That's great.

Thank you very much.

Shlomo Rosenbaum, Stifel.

Good morning.

John, can you verify for me, as I do my calculation on organic constant currency growth implied for 2016 revenue, it seems to me that the range is 7% to 10%, with the midpoint around 8.5%.

Is that correct?

Yes, that's what we get, too.

You're good, Shlomo.

Okay.

And then, Rick, how concerned are you about the Australian economy and their ties to China and an impact for Veda, or are you really excited about all the opportunities to bring value over there and that's going to overwhelm the concerns that you might have from an economic perspective over there?

Good question.

We spent a lot of time trying to understand and deconstruct the economic drivers of the Australian economy, dependency on exports to China.

We engaged some of, I think, the best economic minds on a global basis, as well as a local basis in Australia to think about that and have walked away with a couple of thoughts, Shlomo.

One is for 2016, unless there is an implosion that no one has ever contemplated in China, they have diversified their markets and their economy as such that, in fact, the consensus even today is a stronger GDP in Australia than 2015.

The second thought I have is, they're going to have a recession eventually.

You can't define odds.

I think they're the second longest running economy in the history of modern time in the world, the time they had their last recession.

They're going to have one eventually.

But third, when we make an investment like this, we don't make an investment for a quarter, for a year, or for a two-year period of time.

This is a part of the world that we want to be in.

We have a great partner down there now with Veda, and they give us a lens into so many more geographies down there, beyond just Australia and New Zealand.

It's a generational bet, not just a quarter or a year bet.

Shlomo, just a reminder, what we actually guided to on organic constant currency growth is high end of the 6% to 8% range.

For the Company.

For the Company.

So that's -- it's within that range you indicated, but the guidance was high end of the 6% to 8%.

Okay.

Thank you very much.

Thank you, Shlomo.

Bill Warmington, Wells Fargo.

Good morning, everyone.

So on the direct-to-consumer business, you've talked in the past about your four-pronged strategy, indirect, international, Equifax.com, the freemium market.

And you've had some success there, especially on the direct-to-consumer resellers, Credit Karma and LifeLock.

So I wanted to ask, how sensitive, or economically sensitive, is this business?

And then if it is economically sensitive, how strong are the trends towards credit literacy and other demands in terms of ID theft protection and other drivers on the secular side that could potentially offset it?

That's an interesting question.

I've not done a statistical correlation analysis between the GDP and the PSOL business.

If I gave you an answer, it would be wrong.

But I think about drivers that most likely help an individual wanting to buy a PSOL product or products.

It's am I employed, am I experiencing some wage instability, if not inflation, am I in the market for something.

Those are tied together.

The health of an (Indiscernible) industry, if I'm employed, home purchase, and so on and so forth.

So I'm not sure how to answer that, other than I have not done a strong correlation analysis between what economic drivers and sensitivities drive PSOL up or down.

Okay.

Thank you.

Thank you, Bill.

And we have no further questions in queue at this time.

I would now like to turn the conference back over to our moderator for any additional or closing remarks.

I'd like to thank everybody for their time and their interest in Equifax.

And with that, we'll conclude the call.

Thank you, everybody.

This does conclude today's conference call.

Thank you all for your participation.

You may now disconnect.