易速傳真 (EFX) 2016 Q4 法說會逐字稿

Good day, and welcome to the Equifax fourth-quarter 2016 earnings call.

This conference is being recorded.

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

Please go ahead

Thanks, and good morning everyone.

Welcome to today's conference call.

I'm Jeff Dodge, Investor Relations.

With me today are Rick Smith, 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 in the About Equifax tab our website at www.equifax.com.

During this call we will be making certain forward-looking statements to help 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 filings with the SEC, including our 2015 Form 10-K and subsequent filings.

Also we will be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax, and adjusted EBITDA margin, which will be adjusted for certain items that affect the comparability of the underlying operational performance.

For the fourth quarter of 2016, adjusted EPS attributable to Equifax excludes acquisition-related amortization expense, the transaction and integration expenses associated with our acquisition of Veda, the charge for our settlement with the CFPB which was announced earlier this year, and a charge for the realignment of internal resources which is largely concentrated in the International Business segment.

Adjusted EBITDA margin is defined as net income attributable to Equifax adding back income tax expense, interest expense net of interest income, depreciation, amortization, and the impact of certain one-time items including the transaction and integration expenses associated with the acquisition of Veda, the charge for our settlement with the CFPB, and the charge for the realignment of internal resources.

These non-GAAP measures are detailed in reconciliation tables which are included with our earnings release and are also posted on our website.

Please refer to our various investment presentations which are posted in the investor relations section of our website for further details.

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

Thanks Jeff, and good morning everyone.

Thank you for joining us, especially those of here up in the Northeast that have got some inclement weather, appreciate that.

Another very strong broad-based performance in the fourth quarter took place, which I think you'll agree with an outstanding year for Equifax.

The operating DNA of this Company has enabled us to consistently and successfully execute the strategy that we've pursuing now for 11.5 years.

With the momentum the team has created, I feel very good, as does John, about how we're positioned for continued solid growth in 2017.

We'll talk about that in a fair amount of detail in my closing comments.

Our performance for the quarter, for the fourth quarter was outstanding, as the team stepped up and delivered beyond our expectations.

Total revenue for the quarter was $801 million, up 20% on a reported basis, and up 23% on a local currency basis from 2015.

For the quarter FX created a $20 million year-over-year headwind.

The adjusted EBITDA margin was up 200 basis points year on year, up from 34.5% a year ago to 36.5% this year.

Adjusted EPS was $1.42, up 25% from $1.14 last year, and exceeded the upper end of the guidance range we provided to you which was between $1.35 and $1.38.

Given the strong performance in 2016 the Board of Directors approved an 18% increase in our quarterly dividend, which now is $0.39 a quarter.

This is the seventh consecutive double-digit increase in our dividend rate.

As I look back at the full-year of 2016, it too was another record performance and one we're very, very proud of on many fronts, from integrating our acquisition of Veda, which was the largest in our Company's history, to delivering results that exceeded our expectations again on NPI, EGI, Lean, customer Lean, and just overall execution of many programs across the globe.

For the year our total revenue was $3.1 billion, up 18% on a reported basis and up 21% on a local currency basis versus 2015.

For the year FX created a $75 million year-over-year headwind.

Organic constant currency growth was a very strong 12% for 2016.

The adjusted EBITDA margin was 35.8% for the year, up 110 basis points from 34.7% in 2015, and that was well above the guidance we provided you at the beginning of the year.

Adjusted EPS was $5.52, up 23% from $4.50 a year ago, and that was up significantly from the original guidance we give you a year ago which was between $4.95 and $5.05.

Let me go through some of the business unit commentary, and then I'll come back and talk about some of the corporate highlights, and then John will go into the financial details.

I'll also talk about a framework for how we're thinking about 2017 as well.

First with USIS.

They delivered a strong 7% growth in the fourth quarter, ending the year with an impressive 6% revenue growth, which was nicely above our expectations for the year.

Some individual highlights for USIS, in December we executed an enterprise-wide agreement with a world-class Silicon Valley firm to provide a number of products, including our household income estimate which will be used by their customers to select consumer audiences to which they want advertise and promote products.

This is multi-year agreement that will, we expect -- that we will expect it will position us for very well in the digital marketing space in 2017 and beyond.

It's really our first big foray into digital marketing.

We continue to make significant progress with some of our large financial institutions regarding opportunities to access our Cambrian platform.

Our FI customers are seeking greater speed to market, and our Cambrian platform can demonstrably reduce development times from months to days.

Through the co-development relationships, we've created trended data attributes, integrate their customer data and deliver more frequent redevelopment of decisioning solutions.

These opportunities significantly enhance our relationships by deeply embedding Cambrian in our [analyst expertise] into our customers' development and go-to-market strategies.

USIS fraud and identity management solutions continue their string of strong double-digit growth, growing 21% for the year.

While it is and has been a big focus for us and area where we continue to invest in both platforms and capabilities.

We also achieved a significant milestone in the year, launching an online trended data solution for mortgage market with our partner, Fannie Mae.

This solution contributed significantly to USIS revenue growth in 2016 and will make even more contributions to growth in 2017.

While still early, there are some additional very promising opportunities to leverage trended credit data information to improve decisioning in other lending categories.

Automotive is one that we're very excited about, for example.

In 2017 we have launched an EGI focused specifically on trended data solutions.

Our efforts include all of our major data assets, trending data for up to 72 months, and crossing all of our key verticals.

We're also applying machine learning algorithms to assist in development high-value trended data attributes.

This effort will be globally focused on US, Canada, Australia and key countries in Europe and in Latin America.

One last highlight for USIS is our commercial financial network comprised of trade-line data from banking and other financial institutions, similar to the SBFE, as well as communications, utility, wholesale trade, printing, publishing, chemicals, rental and leasing data on approximately 30 million small businesses that provides for a very strong market position and enables us to offer our customers very unique and powerful decision solutions.

Our CFN data is populated in Cambrian, allowing for decision solutions that combine both our commercial and our consumer data.

Onto International.

They delivered 54% local currency growth in the year 2016.

Organic constant currency growth was a strong 12%, driven by double-digit growth in our Latin American and Europe along with inorganic contribution from our acquisition of Veda almost a year ago.

EBITDA margin increased over 200 basis points to 28.3%.

Revenue from International's four largest verticals, FI, SMEs, telecos and government represented almost 84% of organic revenue, grew an impressive 13% 2016.

Decisioning platforms and analytical services and debt management revenue delivered organic growth of very impressive 24% for the year.

The team has done an outstanding job with the integration of Veda into the Equifax family.

As a result we are rapidly approaching a business as usual state for the business.

For the year Veda delivered the financial performance we were expecting and had previously indicated to you.

The Equifax COE Center of Excellence Model has been stood up with a formal operations function, a Lean greenbelt program, integration into our new product innovation process and corporate operating process, including our global finance and human resource systems.

We have also initiated a number of global platform deployments including Fraud, Cambrian, InterConnect on Accelerate Time, and those were the keys for us to generate incremental long-term revenue, as you recall, in that part of the world and we're ahead of schedule.

We've also identified a number of Veda products that represent a potential to take their products to other segments, other geographies around the world, and our product teams are doing that as we speak.

The teams in Australia and New Zealand have collaborated well with their counterparts in the US and International.

As a result, this has been one of the smoothest acquisition integrations we've experienced here at Equifax.

Our debt management business in the UK with the UK government is performing very well.

Revenue for 2016 exceeded the budget.

We have boarded all six of the founding government agencies and have added an additional agency, the Ministry of Justice.

We have signed additional contracts for [analytical work] and development new debt solutions for HMRC, which is the largest entity of the government we're dealing with right now.

Most importantly, the team has exceeded the collection performance expectations that the client and we had established a year ago.

In December our UK operations leveraged the partnership we had with a very good global partner, LexisNexis and have executed in the UK a 10-year multi-million dollar agreement for provisioning data and join in developing [credit] offerings for their customers in the UK.

Latin America continues to broaden its product portfolio, extending its set of solution with socioeconomic information and geographic analysis to enhance customers' marketing decisions in Chili and Peru.

New product innovation in Canada is accelerating and looks very promising for growth opportunities this year and beyond.

In the fourth quarter our Cambrian data and analytics platform was launched, enabling them to develop powerful trended data solutions for our customers across all verticals in Canada.

The Canadian team also won and implemented our first major debt management contract with a very large strategic customer in Canada.

We're off to a fast start as we launch a Workforce Solutions business in Canada.

While the services and strategies will different slightly from our US-based business, we'll be able to leverage the IT investments, the operating platform and processes we've developed, accelerating our time to launch in Canada and solve problems for our good customers we couldn't solve before.

Speaking of Workforce Solutions, what a year they had.

Yet another outstanding performance.

Revenue was up 22% for the year, along with a very, very impressive 310 basis point margin expansion in the adjusted EBITDA margin.

That business continues to reinforce the power of innovation and execution as we develop new solutions for our customers.

Verification Services was very strong growth in 2016, was driven by double-digit growth across virtually all verticals including mortgage, auto, consumer finance, government, card and pre-employment.

At the year end 2016 the work number database approached 300 million records with over 7,100 companies contributing to that database.

We're very excited about Fannie Mae's decision to incorporate our employment and income verification services into their underwriting platform.

While the revenue impact for 2016 was minimal, the opportunities for 2017 and beyond are expected to be significant as it positions Workforce Solutions as the premier provider of important and critical underwriting decision in the area of VOE and VOI.

The auto vertical is a key focus for employment and income verification, and we've made great progress in 2016.

In 2017 we'll further our presence in the industry through a partnership with Fiserv.

As some of you may already know, we recently announced a partnership with Fiserv to integrate our employment and income verification services into their automotive loan origination system.

Fiserv is one of the top providers of loan origination and servicing systems, completing almost 5 million originations in 2016.

Customers will now be able to quickly retrieve income and employment data and approve applications quicker with fewer stipulations and errors.

Employer Services.

They also had an outstanding year in 2016, growing 24% for the year.

Unemployment claims, I-9 and tax management services, which represent almost 80% of Employer Services revenue, grew a very good 7%, particular impressive given the very low unemployment claims environment.

Our Workforce Analytics business, which provides solutions to allow employers to ensure their compliance with the Affordable Care Act, grew substantially in 2016.

John will provide more detail in our ACA-related revenue in 2016 and the expectations we have with the regulatory changes we expect [heavy] financial review that follows.

Onto Global Consumer Solutions.

They grew 16% for the year in reported revenue and 18% growth on local currency revenue -- on a local currency basis.

That was just an outstanding performance.

GCS also delivered a 30.3% adjusted EBITDA margin for the year.

Our direct-to-consumer resellers, which includes (technical difficulties) Credit Karma, LifeLock and a number of others are driving good growth for us.

In the fourth quarter we signed, as you may recall, a multiyear contract extension with Credit Karma representing the most comprehensive and largest in the Company's history.

They will also be using our Cambrian platform (technical difficulties) credit insights for their consumer base and to better target more relevant offers.

As many of you know, LifeLock has been acquired by Symantec who operates on a global scale.

We have a very good relationship with LifeLock and view this positively, as we anticipate even more opportunities for global expansion and revenue growth for GCS.

international revenue for GCS was up a solid 7% for the year.

Finally, we completed development of our new platform for GCS.

We call that Renaissance, and we've talked about that before.

It gives them great flexibility in building and changing product offerings to the market.

That's is now going global for GCS.

Before John goes to his comments on the financial, let me transition back to corporate and talk about a few highlights at the corporate level.

I start with our 2016 class of new product launches.

It was the strongest in the history of our Company.

For the year we launched 53 products, and our NPI revenue was 9.2% over our target for the year.

We feel very good about our ability to continue driving meaningful growth through our innovation process.

Over the past few years we've relaunched NPI.

We've talked to you about this.

We've called it NPI 2.0, and we've really focused on increasing the funnel of ideas and improving our execution and shorting our time to revenue.

I can tell you that NPI 2.0 and the great work that the marketing team has done is working.

As a result, the anticipated year-three revenue for the 2016 launches is expected to be almost five times what we expected three-year revenue to be from our 2014 launches.

That is really impressive.

And the pipeline for our 2017 launches is off to a great start, with an initial portfolio of 106 products in the funnel.

Also our data and analytics platform, Cambrian, has significantly enhanced our product development cycle time and quality and value of our new offerings.

Our technology infrastructure continues to support our growth initiatives with contemporary platforms with global capabilities including fraud.

Consumer Solutions, we just talked about that, Renaissance, Cambrian, and our InterConnect, just to name a few.

Operationally.

Our enterprise growth initiatives exceeded their targets by almost [15%] for the year.

That bodes well for 2017.

And our Lean initiatives exceeded their target by almost 30%.

On the regulatory front you most likely read that we reached a settlement with the CFPB and the CID that issued in connection with our Global Consumer Solutions business.

The settlement requires changes to be made in how we market to interact with our consumers who come to our website at www.equifax.com.

Now that the required changes were implemented more than two years ago, this settlement and our obligations under do not change in any way the opportunities for the financial health of that business.

Additionally, the CFPB has closed their CID investigation of our Workforce Solutions business that we've talked about in the past with you.

Obviously we're glad to have both of these issues behind us.

That's my opening comments.

With that, let me turn it over to John for some financial details.

And then I'll close out the call before we go to Q&A with a look at 2017.

John?

Thanks Rick, and good morning everyone.

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

USIS revenue in 4Q 2016 was $316 million, up 7% when compared to the fourth quarter of 2015.

For the full year revenue of $1.2 billion was up 6%.

This compares favorably to our original expectations for USIS to be at the low end of their 5% to 7% growth.

The adjusted margin for USIS was 51% in 4Q 2016 and 50.2% for calendar year 2016, up 230 and 40 basis points respectively.

This is the first time USIS has delivered full-year adjusted EBITDA margins in excess of 50%, an outstanding performance.

Online Information Solutions revenue was $211 million in 4Q 2016, up 4% year to year, and $879 for the full year, also up 4% when compared to the prior year.

Total mortgage-related revenue was up 41% and 36% in the quarter for USIS and Equifax respectively.

We also saw a mix shift toward the Mortgage Solutions versus online in 4Q versus 3Q.

For calendar year 2016 mortgage-related revenue was up 25% and 24% for USIS and Equifax respectively, and represented just under 18% of total Equifax revenue.

Our 4Q and calendar year 2016 growth compare favorably to the average mortgage bankers application index, which was up 1% in the fourth quarter and 17% for the calendar year.

Mortgage Solution revenue was $36 million in 4Q 2016, up 29% year to year and $142 million for the calendar year, up 15%.

Financial Marketing Services revenue was $69 million in 4Q 2016, up 7% year to year, and up [$215] million for calendar year 2016, up 5% year to year.

Identity and Fraud Solutions also continues to grow strongly, up 15% in 4Q and 21% for calendar year 2016, driven largely by our multi-factor authentication and ID management solutions.

US direct-to-consumer revenue, principally our online revenue with other CRAs, was down almost 30% in the quarter and 20% for calendar year 2016.

The decline in these customers negatively impacted USIS growth by over 2 points in 4Q 2016 and approximately 1.5 points in 2016.

The impact on [OIS] in 4Q 2016 was over 300 basis points, up over 100 basis points from the impact in 3Q 2016.

Workforce Solutions revenue was $174 million in the quarter, up 21% year to year, and $702 million in calendar year 2015 (sic -- see press release "2016"), up 22% year to year.

The Workforce Solutions adjusted EBITDA margin was 45.8% in 4Q 2016 and 48.2% in calendar year 2016, up a very strong 150 basis and 310 basis respectively.

Workforce continued very strong growth in Verification Services, up 24% in the fourth quarter and 20% year to year.

Employer Services also delivered a very strong performance, up 15% in 4Q 2016 and 24% in calendar year 2016.

As Rick indicated, our unemployment, I-9 and tax services products offered independently and through our compliance center offering represent almost 80% of Employer Services revenue, and grew stronger than expected in 4Q, up 16% with organic growth of over 10%, and up 7% for calendar year 2016.

Our ACA solution deliver high single-digit percentage growth in 4Q 2016.

As a reminder, total revenue related to the Affordable Care Act in 2016 was only 2% to 2.5% of Equifax total revenue.

Approximately 75% of that revenue was in workforce analytics, a part of Employer Services, which provides a service to ensure employers are in compliance with the employer mandate of the ACA.

Margins for this product are below the average for Workforce Solutions.

The remaining 25% is in Verification Services where we provide current income validation for people who enroll in the healthcare exchange through a federal or state site.

This was part of the means test, and has margins higher than the Workforce Solutions average.

Our current planning reflects the expected repeal or substantial modification of the ACA, including an expected transition period so that the repeal or modification takes effect in 2018 or later.

As such, we expect our ACA revenue to be about flat in 2017 with 2016.

Combined revenue for USIS and Workforce Solutions, our total US B2B revenue was $490 million in 4Q 2016, representing revenue growth of 11%.

Full-year revenue was $1.9 billion, also up 11%.

International's revenue was $212 million in 4Q 2016, up 49% on a reported basis and up 62% on a local currency basis.

Revenue was $804 million for calendar year 2016, up 41% on a reported basis and up 54% on a local currency basis.

Constant currency organic growth in International was a strong 13% in 4Q 2016, the strongest quarterly organic growth for the year, and 12% for calendar year 2016.

International's adjusted EBITDA margin was 30.3% in 4Q 2016 and 28.3% in calendar year 2016.

By region, Europe's revenue was $64 million in 4Q 2016, up 4% in US dollars and up 21% in local currency.

For calendar year 2016, Europe revenue was $254 million, up 7% in US dollars and up 18% in local currency reflecting the impact of the sharp drop in FX rates in the second half due to Brexit.

Latin America's revenue was $48 million in 4Q 2016, down 4% in US dollars but up 11% in local currency.

Revenue was $184 million for calendar year 2016, down 8% in US dollars again, but up 12% in local currency.

Latin America showed outstanding local currency growth throughout 2016, led by strong growth across Argentina, Chile and Paraguay.

Canada revenue was $31 million, up 4% in US dollars and up 4% in local currency.

Revenue for calendar year 2061 was $122 million, flat in US dollars but up 3% local currency.

Asia Pacific revenue was $71 million in 4Q and $244 million for the year.

As Rick mentioned, for 2016 Veda performed well and ahead of our expectations.

Global Consumer Solutions' revenue was $99 million in 4Q 2016, up 18% on a reported basis and up 20% on a local currency basis.

Revenue in calendar year 2016 was $403 million, up 16% on a reported basis and up 18% on a local currency basis.

Adjusted EBITDA margin was 34.5% in 4Q 2016 and 30.3% for the calendar year.

Our D2C business grew over 35% in 4Q 2016 and was up 60% in calendar year 2016.

Our consumer business, both directly through equifax.com and through indirect white-label applications, grew almost 5% in 2016 despite the tremendous growth of free offerings that drove the growth of our D2C business.

In the fourth quarter general corporate expense was $69 million.

Excluding the integration expenses associated with the Veda acquisition, the CFPB settlement and the realignment charge, general corporate expense was $56 million and in line with the expectation we indicated during our 3Q earnings call.

For calendar year 2016 corporate expense, excluding the Veda integration expense and the other one-time items, was $210 million, up from $198 million, or 7% from 2015 driven by an increase in technology spend as we expand our global technology platforms.

Adjusted EBITDA margins were 36.5% in 4Q 2016 and 35.8% in calendar year 2016, up 200 basis points and 110 basis points respectively.

Our GAAP effective tax rate for the fourth quarter was 31.7%.

This was modestly lower than expected, primarily reflecting a decrease in the tax rate in some foreign jurisdictions.

For the full year our non-GAAP effective tax rate was 31.8%.

Looking forward into 2017, our expectation for the effective tax rate was approximately 32.5%.

For 1Q 2017 our expectations is for the effective tax rate to be slightly above 33%.

Operating cash flow was $260 million in 4Q 2016 and $785 million in calendar year 2016.

Free cash flow equaled to operating cash flow less capital expenditures was very strong in 2016 at $618 million.

We expect free cash to be up again in 2017; however, as in past years 1Q will be weaker than the other quarters due to employee variable compensation payments following our very strong performance in 2016.

Capital spending, which includes our capital expenditures in the period plus commitments we have made that will be paid in 2017, were $53 million in the quarter and $192 million for calendar 2016, just over 6% of revenue.

As we look forward into 2017 we expect capital spending to again be about 6% of revenue, and in the range of our long-term model of 5% to 6% of revenue.

Total debt at year end was $2.67 billion.

We continue to reduce our leverage following the Veda acquisition, which is now down to 2.39 times EBITDA.

Depending on the pace of acquisitions we expect be repurchasing shares again in the second half of 2017.

Now let me turn it back to Rick for a discussion of our 2017 outlook.

For perspective, the outlook 1Q 2017 and 2017 that Rick will discuss is based on foreign exchange rates as of February 1, 2017.

Thanks, John.

As I always do, I'll start with some summary comments for the Corporation and give you some framework thoughts at the [B] level and then we'll go to the operator to questions you may have.

2016 quickly in summary, I think on so many dimensions characterizes what I would say is the best year since I joined the Company 11.5 years ago.

Each of the business units delivered outstanding performance.

They leveraged their key disciplines around new talent acquisition, new product innovation, Lean enterprise growth initiatives, value-based pricing, enterprise channels and working verticals, acquisition integration, all the things that this Company's done I think fairly well for the past 10, 11 years.

These disciplines have been routinely refined and are integral to execution of our overall strategic initiatives.

These disciplines will also make important contributions to what we feel are the beginning of a 2017 and beyond.

During our third-quarter earnings release in October we shared with you our forward reviews on the revenue growth for 2017.

At that time we stated that we remain confident in our ability to deliver revenue growth at the high end of our long-term constant currency financial model, which you have of 7% to 10%.

We also indicated that our outlook was based upon a flat mortgage market.

Since that the time, as you know, since the elections the outlook for the mortgage market has deteriorated significantly.

And while these estimates vary a great deal depending on who you want to talk to, the consensus is for originations to be down double digits in 2017.

Our current outlook is for mortgage origination to be down about 15% in 2017, and flat to slightly down in the first quarter.

In addition our expectation for our ACA revenue in 2017 is flat when compared to 2016, and as John just said, in 2016 ACA was a very nice growth driver for [EWS] and for Equifax.

Combined these two items, ACA and mortgage, versus the discussion back in October represent approximately a 3% headwind to our 2017 growth when compared to those October expectations.

However, with that headwind we still remain very confident that we can offset the mortgage and ACA drag and deliver total constant currency revenue growth in 2017 in the top half of our long-term 7% to 10% range.

We're exiting 2016 with strong momentum across our businesses driven by new product innovation and the expectations for accelerating growth in our non-mortgage segments of USIS, Workforce Solutions and continued very good performance from GCS and International.

So with that preamble, as a result our guidance for 2017 is for total revenue to be between $3.375 billion and $3.425 billion, reflecting constant currency revenue growth of 8% to 9% partially offset by approximately 1% of FX headwind.

Adjusted EPS is expected between $5.96 and $6.10, which is up 8% to 10% year on year, excludes [Federal] $0.02 per share negative impact from FX.

This reflects constant currency earnings per share growth of 9% to 11%.

We also expect adjusted EBITDA margin to expand by at least 100 basis points for the full year, coming off again another 110 basis points expansion in 2016.

Onto the individual business units, I'll give you the framework here.

First, USIS growth.

We expect that to be somewhat below their long-term range of 5% to 7%, reflecting the expected weak mortgage market we've discussed.

EBITDA margins are expected to increase slightly from very strong levels delivered in 2016.

Workforce Solutions is expected to deliver growth at or above the high end of their long-term growth range, which you remember is 9% to 11%.

That is despite, again, the expected weak mortgage market and flat ACA business versus historical growth in the ACA business.

EBITDA margins are also expected to increase from strong levels delivered in 2016.

GCS is expected to continue its growth above its long-term growth range of 6% to 8%, with EBITDA margins remaining above 30%.

International is expected to deliver growth above their long-term model of 8% to 10%, principally driven by another record year of NPI organic growth and the growth from Veda acquisition.

We get approximately two months of incremental benefits in 2017 versus 2016.

EBITDA margins are expected to increase nicely, exceeding 30% in International for 2017.

Quick look at the quarter.

First quarter we expect total revenue between $822 million and $826, reflecting constant currency revenue growth of 14% partially offset by almost 1% of FX headwind.

Adjusted EPS is expected between $1.39 and $1.42 for the quarter, which is up 13% to 15%.

Excluding just under $0.01 per share negative impact from FX this reflects constant currency organic growth of 14% to 16% for first quarter.

One final announcement before I open it up for Q&A.

And that is that we've got an individual amongst us, a very important partner for us, who's after 25 great years with the Company has announced he's going to be retiring at the end of the year.

That's Jeff Dodge.

Most of you on the phone who know Jeff intimately and all of us around this table thanks Jeff for a fabulous 25 years.

Jeff, it's been great work with you for my last 11.5 years.

You've done a hell of a job.

There'll be plenty of time for farewells and fanfare, and celebratory gatherings for those of you who interact with Jeff.

We're also are pleased to announce we have a very smooth and thoughtful transition plan that we've announced here internally.

And that is that Doug Brandberg, who is with us here this morning.

Doug will be transitioning into the role.

It'll be a smooth process where they've be working already for a couple of months.

Doug will shadow work with Jeff and with John Gamble for the entire year.

Come a year from now, first part of now 2018, he'll be ready to take over.

Doug is a seasoned financial executive.

He has been with us for a number of years.

He was a CFO for us in our [PSI] business, CFO at our USIS business.

He's been a CFO for 20 years.

He's a CFA charter holder.

He's been with First Data, Bell South, AT&T.

Holds an undergraduate degree from Virginia and a MBA from Georgia Tech.

I'm convinced this will be a very smooth transition for us.

With that, thank you Jeff for your 25 years and we'll have, again, plenty of time to celebrate.

And Doug, welcome aboard.

With that, operator, we'll turn it over for any questions that the guys on the phone might have.

(Operator Instructions)

Gary Bisbee, RBC.

Hi.

Good morning, and congratulations on another strong quarter.

I appreciate all the color on mortgage.

I guess, can you give a little more color on what the drag is at Workforce Solutions business?

I guess as part of that, the growth you're projecting continues to be incredibly strong.

What are some of the areas that are -- must either be accelerating or just really driving strong growth to offset what should be much weaker mortgage volumes over the course of the year.

Thank you.

Yes, thanks, Gary.

I'll take a crack at that.

This is Rick and, John, jump in with any clarifying comments.

Overall as a Company I think we discussed 3 points of headwind from mortgage, and a little bit more headwind when in you add in ACA for Workforce Solutions.

We don't break out the exact headwind for EWS versus USIS, but you've got enough data I think you can break that down and come up with a pretty good estimate.

But mortgage ESA's a very important part of Verification Services, and hence a very important part of all EWS.

The components that give us confidence in our ability to offset are the same things we've been doing for 11 years.

I gave you some color, Gary.

Our pipeline, our success of NPI last year was unbelievably strong.

Again, we expect the revenue in the third year to be 5 times what our revenue was in 2014.

So that's unbelievable.

And two, we just went through a very comprehensive review, where Trey Loughran and his team, marketing team, looking at the pipeline of products for 2017, and 106, the breadth, the depth, quality of those products in the pipeline are unbelievable.

We will not going to launch all 106, but the number of products we are going a launch, have confidence in launching again in 2017, which will (inaudible) revenue, are fabulous.

Number two, the enterprise growth initiative process that we've been at now for whatever it's been, seven years or so, had a record year, I said that in my comments, in 2016, which positions us very well for 2017.

So it's all the core things that we've been, the team has been delivering for our customers now for 7 to 10 years.

EWS's performance in the fourth quarter, as you know, it was outstanding.

So again, north of 20% growth.

We're not really seeing a slowdown in performance.

All you're seeing, as Rick mentioned, is you'll see an impact from mortgage next year.

And then some of the growth that was contributed in 2016 from ACA, we just won't see repeat.

The rest of the businesses are growing very, very well.

Gary, one point of color might be that another contributor to incremental growth in 2017 is going to be slightly improving economies in some very good places which we operate.

The US will be modestly better, in our opinion.

UK will be modestly better for the full year.

Spain will be modestly better.

I mentioned this before, Argentina, we are confident Argentina will have a, from a GDP perspective, a much better year in 2017 versus 2016.

So we're getting global, some modest global economic help.

And 80%-plus of global revenue is non-mortgage-related.

We're between 14% and 17% mortgage exposed.

So when economies tend to grow, that tends to help our core business.

Great, thanks.

One quick follow-up.

You mentioned this digital marketing opportunity in a Silicon Valley company.

Could you help us understand what exactly that opportunity is?

What you're providing, and should we think of this as more of a one-off or the beginning of what you see as an incremental new opportunity?

(Multiple speakers) It's a world-class company.

I'm not going to disclose the name.

You can think about digital marketing companies in Silicon Valley we've partnered with.

It's a great revenue generator for us this year.

More importantly than that, it is giving us a market credibility in a digital space by working with and building products and selling solutions for a world-class digital marketing company.

I'll leave it at that, but think of it as an entree into a new space for us.

Okay.

Thank you very much.

David Togut, Evercore ISI.

Good morning, and thanks for everything over the years, Jeff.

Jeff, say thank you.

You're welcome.

You're welcome.

Thank you.

Rick, I appreciate your calling out the expected headwind from mortgage for 2017, putting some numbers around it.

Noted that you grew 25% in mortgage in the fourth quarter despite the MBIA being up only 1%.

So in the 3% headwind you're calling out, are you sort of baking in a very significant impact from mortgage in line with the MBIA outlook, or are you incorporating some continued expectation that you will significantly outgrow the mortgage market as you have in the past?

Great question, David.

The commentary on the guidance for mortgage market to be down 15%, and that creates 3 points of headwinds for us, our expectation as you noted there, is to continue to innovate, gain share for new products and grow at a much faster than the market will, or in this case, decline at a much slower rate than the market's declining.

Got it.

Then just as a follow-up, if you could talk about some of the other big drivers of consumer credit reporting demand for 2017?

For example auto, credit card, what is your outlook for those?

If you think about the enterprise channel that we use, we take all of our products in the US, EWS products and credit products.

We are expecting automotive to be, as a market, relatively flat with 2016.

We expect credit card issuance to be up, we expect mortgage to be down.

Then when you look at other markets, home equity lending to be up.

By the way, on the mortgage side it's a tale of two stories.

Refinancing will be extremely negative next year, I forget the exact number, but home sales are expected to be up.

Then when you think about businesses in that environment, you think about EWS.

Even though automotive as a marketplace we expect to be flat, we expect significant growth in EWS because we are lightly penetrated.

We talked about the Fiserv partnership, which gives us the platform to (inaudible) distribute our products to them.

You've got improving markets in some cases, stable markets in others and declining in others.

In aggregate that's why you get the full [cash negated] for USIS, but also continued strong growth in EWS because their market penetration opportunity is still significant.

Understood, thanks.

Nice to see the 18% dividend increase.

Thank you.

Brett Huff, Stephens.

Good morning, and thanks for taking my question.

Two quick ones.

One of the things that I think folks always try and contemplate with your guidance is how conservative is it, how comfortable do you feel with it, is often you'll sort of raise that guidance through the year.

Given that you sort of accommodated this 3% headwind that you originally didn't, can you comment on how much comfort you have with that achievability or conservatism in that guidance?

Yes.

Brett, this is Rick.

We always take obviously as most companies do, the framework of guidance extremely seriously.

We provide (inaudible) vision into it from John and I and many others from the Company.

When we go into a period like this or a quarterly basis give updated guidance, we deal with all the facts we possibly have at our fingertips.

We give guidance, barring any unforeseen macro changes that we could expect positive or negative.

We give guidance that we think will -- Bill and I think (inaudible).

We take it seriously.

It's stretching the point that if we tell you we're going to deliver $3.375 billion to $3.424 billion minimum, we're going to that number.

I wouldn't call it conservative, I'd just call it, it's balanced and it's based upon all the facts we have at this time.

Okay, thanks.

Then you talked a little bit about qualitatively some of the new products that you've been working on, including TDX, or the new project, something like that.

You've said they're going to be good in 2017.

Is there any qualitative measure that you can start putting around those for us?

We just get a lot of questions from investors on that.

Le me give you a response and John can jump in.

The qualitative framework, if I were talking to investors about our ability to continue to grow with these headwinds and so on and so forth, is again, the product class of 53 launches last year is the strongest class we've had ever.

Expected revenue 5 times 2014.

Combine that with EGI continuing to outperform, and that bodes well for 2017 at the enterprise (inaudible), Brett.

And lastly, we have a pipeline of 106 new products in the funnel for this year.

So those are all the qualitative things I've talked about that we're doing and have been doing for quite some time on innovation.

Okay.

Just one last question.

Anything in the guidance from the change in the stock-based comp accounting rules?

Yes, so we've assumed that we're going to remove that from our non-GAAP reporting.

We'll just exclude that.

Since it'll very difficult for us to forecast the impact in any given quarter, our current thinking is we'll exclude that.

To the extent becomes there becomes a trend in either direction that makes us have to revisit that decision, we certainly can.

But our guidance assumes it'll be excluded.

Okay.

So it's an apples to apples to 2016?

Absolutely, yes.

Okay.

Thank you, guys.

Thank you.

Ramsey El-Assal, Jefferies.

Thanks, guys.

Your ability to offset these mortgage headwinds speaks to some resiliency in the model, obviously.

Can you speak to the degree to which changes in your mix or diversification over the past few years have changed your overall sort of macro cyclical sensitivity?

I think that's been an ongoing trend, but does this represent some kind of inflection point in that direction?

That's a good question.

Yes, I think, Ramsey, the change really started strategically and then tactically from an execution perspective 10 years ago, when we made the decision to pivot from being solely dependent on credit-based data assets and largely a US geographic exposure to a unique data assets, now an insights Company with more geographic focus than just the US.

Secondarily when you add the technology platforms we invested in and the unique data assets, our ability to build products and innovate in ways that we had never done before allows you to navigate changes in the macroeconomic environments that we couldn't do before.

As you know, that process takes time.

We launched, with the acquisition of TALX and then NPI back in 2007, and we gained momentum.

Then we had the recession, and you come out the recession with this great robust [processing] capability.

And we continued adding data assets, and it's done nothing but mature and mature and mature, get better every year.

It sounds like the NPI 2.0 we launched, when was it, a couple of years ago to reinvent and reinvigorate innovation, that's (inaudible).

That makes a lot of sense.

I mean, given -- it sounds like your guidance, obviously, your 2017 guidance would've been 3% higher without mortgage and ACA.

It doesn't really sound like you had to put any emergency plans into effect.

It seems like a lot of this stuff was in the pipeline already.

Is the implication that your long-term guidance is getting to be a little bit too conservative for those factors?

I don't know.

I think about 118-year-old Company growing like we've been growing, top line, bottom line, and NPI and EBITDA margin.

That doesn't strike me as being conservative; I think it's something we're very proud of.

But your point, there are no emergency plans that are being pulled off the shelf.

It's just that when you reflect back upon the quality of the solutions that we developed last year in NPI, and you have the hindsight of two or four more months of visibility, they're just stronger than we expected then.

Got it.

Thanks so much.

To be specific in our long-term model, no we're not envisioning changing our long-term model.

Okay, thanks a lot.

Andre Benjamin, Goldman Sachs.

Thanks, good morning.

I know you guys have talked a bit about the use trended data potentially going to other loan categories besides mortgages.

I was just wondering, any color you can give on how those conversations are going about the trade-off between costs and the incremental lift to some of those categories?

And how are you thinking about making it more cost effective for, say, lower dollar value categories like credit cards?

Yes, I think we're making great progress.

I think I mentioned that in my prepared comments, that Cambrian gives us great ability to use all of our data assets in ways we never could before.

This will be a year where we're going to take all of our data assets that are unique to our Company, put them in Cambrian, turn them up to 72 months in some cases.

The actual application of value will be determined on the ROI that the customer gets.

I mentioned that one market that seems to be very hopeful early on globally is automotive.

Obviously you know what we're doing mortgage.

Automotive would be another.

We have talked routinely about, you need to get to the point of no longer talking at 5,000 foot level as an industry about the value of trended data.

You've got to look at what type of data are you trending, how long are you trending it, what vertical are you looking at, what geography and vertical and what sub-vertical within vertical?

So is it automotive in Peru?

Subprime?

What's the list you get there?

Then hence if there's value, you can determine the price.

We've made great progress there, and we'll continue to make great progress, I'm confident, throughout the year.

When we earnings calls update, we'll continue to give you some visibility as to what the next success is beyond Fannie Mae.

Then just one follow-up.

On Personal Solutions, I know you said you expect the growth there to remain above your long-term trend.

It's definitely been the case for the last couple of years.

Any color you can provide on how you expect the growth for the direct versus indirect channel?

Yes, obviously the indirect channel has been and will be a greater revenue contributor, but we expect growth out of both and we expect growth globally, not just in the US.

I think one of the things you can't underestimate is the multi-year journey that, that business has been on to build, launch and now globally, we affectionately call it Renaissance.

It's our platform.

The ability that gives you on the direct side to build, modify, launch, create products much fast than we ever could do before, create a user interface that's much more friendly than we could do in the past as well.

So that will be a great enabler for growth for those guys.

Thank you.

Thank you.

Tim McHugh, William Blair.

Yes, thanks.

Can you elaborate on the trends you're seeing in Europe?

The growth continues to be incredibly strong.

I know you talked about the TDX contract, but I imagine it's more than that.

Can you talk a little bit more about what's driving the strength there and connect -- continue in 2017?

Yes, I think strategically, Tim, it's the same there as anywhere else in the world.

What you're seeing is the byproduct of EGI and NPI.

So the core processes we use to grow around the world apply to Europe.

In addition to those core processes, yes, you do have the investor contract, the TDX contract.

And as you know, TDX is not just in UK.

TDX is now part of our debt management strategy globally, but there is revenue being generated beyond just the investor, or government contract in the UK.

Beyond that, as I mentioned in my comments, you're seeing a modestly improving economic environment, even with Brexit in the UK.

You're seeing really good performance by our team, and you're seeing that for years now, and they're great.

They continue to do a really good job on executing core growth around NPI and EGI.

So it's broad-based.

Okay, thanks.

Then International margin seems to be a big part of kind of the margin story, as we think about -- or at least above average expansion for 2017.

Is that just leverage on growth?

Is it savings from some of the realignments you've done there?

The implication of Cambrian?

I guess what is it that's driving a little faster expansion now as we go into 2017?

Great question.

One, the framework.

The commitment we've given to you, our investors and ourselves is to continue to drive EBITDA margin up to that 40% range.

For us to get to 40%, everyone's got to carry their own weight, including International.

International by default is less efficient in the way they operate than a USIS or a EWS just because there's so many geographies.

You continue to see us do a couple of things.

Restructure, reposition their business to take inefficiencies out, and we've done a lot of that.

And then we've announced a slight restructuring on this earnings call to do that.

Number two, for years now we've been at the standardization of technology platforms around globe, where you can transfer platforms from US, or one part of the world to another part of the world, take off that, drive efficiency.

So those are the two main things we have done.

Third is you do acquisitions.

Over time those acquisitions become more efficient, better run and that'll adds incremental margins.

They're well on the way.

I think we've guided long-term model for International to be mid-30%s.

You're seeing a nice step-up in 2016.

You'll see another nice step-up in 2017.

Okay, thank you.

Toni Kaplan, Morgan Stanley.

Congratulations on the strong quarter, guys.

Jeff, congratulations on your pending retirement.

Rick, I think you mentioned you expect margins will expand at least 100 basis points in 2017, which is obviously well in excess of the 25 basis point annual target you've talked about in the past.

As we think about our models in 2018 and beyond, I'm wondering if 25 basis points is still sort of the right number?

And then I have a follow-up.

Yes, again our goal is, it's a Rubik's Cube, as you know.

It's managed level of investment to give us the growth rate that we want, and our customers desire, and build products that we need build to satisfy their problems with maximizing margin.

The model we have is 7% to 10% growth, 11% to 14% -- over multiple years, 11% to 14% EPS growth, and at least 25% margins expansion.

We have a goal of getting to 40% margin.

You're going to see years like you saw last year where you get 110%.

You're going to see years like you're going to see this year where we're guiding to over 100 basis points again.

You'll see years where we're guiding by 25 basis points.

Just think long-term model, growth on revenue, growth on EPS, and getting to that 40% margin

Got it.

That makes sense.

And as a follow-up, I wanted to ask about Global Consumer Solutions' margins, which were up obviously very nicely compared to the fourth quarter of 2015.

Is there anything to call out there that was sort of one-time high-margin revenue, or anything else that might be driving that?

No, I'd say fourth quarter the investment in marketing was a little lower than normal.

So, you're seeing margins a little higher than you would normally see.

And then, as you remember earlier in the year, they had quite a bit expense to board a new major customer, LifeLock, and that was pretty much completed by the time you got to the fourth quarter.

So you put those two things together and their margins looked a little better.

That's why we indicated we expect next year's margins to be slightly over 30%, because on average that's where they played out this year.

We would expect the same type of thing to play out in 2017.

Makes sense.

Thanks a lot guys, congratulations.

Manav Patnaik, Barclays.

Thank you.

Good morning, gentlemen.

Rick, you said a lot of great things in the call, and then you left the worse for last announcing Jeff's retirement (laughter).

Congratulations, and thank you, Jeff.

Hopefully we still have some more time with you.

My first question is just in the offset to the 3% headwind that you are seeing, I understand it's obviously a clear testament to your NPI initiative, VGI and so forth.

But in terms of the components of that offset, was there -- did you have to pivot into different products and areas that maybe work better in a rising rate environment, is that how we should think of it?

Or was it something that you already had in your armory and you're using it now?

Yes, it's more of the latter.

Pivoting on product innovation is -- it's not like a speedboat where you can quickly change.

There's a pipeline that's been developed for quite some time.

Really what happened, Manav, is we gave guidance, or framework, I shouldn't call it guidance, in October, and now with the value of time looking back in February, the number products that we've launched that already are out there being used are at a run rate far higher than we had thought we could achieve at that point in time.

So it's really more of the latter rather than pivot to say, let's launch five products that do well in a high interest rate environment.

Got it.

Then in Workforce I think you said you guys are launching in Canada.

I guess what I'm trying to understand is how we should think about the timeline on how that plays out?

Yes, I think be patient with us.

We have the ability to make multiple investments for long-term benefit of our shareholders and our customers.

I think of International work in Canada, UK, Australia, some places in Latin America as being a longer-term investment versus a 2017.

Teams are working really hard.

You can see, and have seen, when you peel back some margin and look at EWS as an example.

We invested nicely in the fourth quarter, we'll continue to invest in 2017 on scaling up capabilities for International work number.

We do have, by the way, we do have businesses like EWS and still hit, we've committed to you, have a low- to mid-50%s EBITDA margin for EWS.

Think about that revenue being generated, International work numbers being cut 2018, 2019 time frame.

In terms of your concerns about Jeff, don't worry.

He'll be here through year end.

He's going to do a farewell tour.

You'll have an opportunity to see him again, don't worry.

I take it's not going to be a revenue generator.

Last question for me was just around M&A pipeline.

You've obviously got your leverage down, you're pretty close to getting to your official target.

How should we think about what's in the cards there, especially maybe you talked about Brazil getting better.

Does that increase your attractiveness there?

Yes, thank you.

Goal number one was to make sure that the Asian, (inaudible) known as Veda, was integrated properly, that we're giving the resources they need long term to grow, as I mentioned in my prepared comments.

That has gone extremely well.

That's actually being behind us now.

So at this juncture we're delevering, as you mentioned before.

We've got a clear strategy, we've got a solid pipeline, we've got a balance sheet to do acquisitions.

And you should expect us to think about getting back in the market of M&A.

Cool.

Thanks a lot, guys.

Thank you.

Andrew Jeffrey, SunTrust.

Hey, good morning.

Thanks for squeezing me in here.

Very thorough job, as usual, Rick.

The comments on Veda in particular are pretty encouraging.

I'm wondering if you could frame up a little bit what the internal growth rate is there and how much that might be contributing to the 2017 organic growth as that business anniversaries?

Well, I think when we bought the company, we bought them because it was a great franchise, throws off great cash, gives us a geographical expansion in an area we like a lot.

The growth rate, as we find out, was about the rate of International's -- of Equifax's growth rate.

So if you think about the organic growth of Equifax, think of Veda being in that same range that we're targeting for our Company.

Okay, so neutral to the consolidated Company outlook?

Yes.

I assume that some of the efforts Cambrian, UGI, et cetera, are poised at some point to accelerate that growth?

Yes, we're ahead of schedule in deploying those platforms.

As you know, it takes some time to get traction, to get the customers.

One is to get the technology in place, two is to get the adoption of the customers.

The hope would be to be, over multiple years in the future, that those are enablers for different areas of growth, which facilitate potentially even faster growth.

Okay, and to the extent looking forward and thinking about this remarkable ability to offset a 3 PPT headwind.

If we think to kind of worst-case scenarios if ACA is a 2 to 2.5 point headwind in 2018, can we think about momentum from NPI the class of 2016, the class -- well, maybe not 2017 quite yet, but those things potentially offsetting that in the framework of your long-term growth targets?

Yes, that's our goal.

Our goal is to deliver over multiple years that 7% to 10% top-line growth.

That's organic growth, that's M&A, and stay committed to that.

Innovation, as you know, Andrew, is a big part of who we are.

We've done that for 10 years, and we'll start thinking today, and we'll know more, you will know more and I'll know more, as we go throughout the year, what does a repeal and replace really mean/

And will there be means testing?

Will there be a corporate mandate?

What's that going to look like?

And our goal to make sure we're innovating as fast as we can today to navigate headwinds, as we just did in 2017, any new headwinds that may come up in 2018.

Right, okay.

Thank you very much.

Thank you.

Kevin McVeigh, Deutsche Bank.

Thank you very much, and congratulations.

I wonder, with the new administration being so pro-growth, as you think about growth opportunities, obviously ACA being a potential headwind, are there other areas that could be sources of growth as the government tries to enhance the economy beyond traditional GDP?

Is there any sensitivity beyond we've been in this less than optimal GDP environment?

To the extent we do get 3%, how does that impact the longer-term organic growth targets?

Kevin, three thoughts.

Obviously strength in the overall economy is good for us.

Our customers will grow at a faster rate, that helps us do more.

Number two, corporate tax reform, if corporate tax reform is passed in a comprehensive manner, the ability for the Company to generate more earnings and take some of those earnings, invest back in [inevitably] to grow, which will help us grow, that's beneficial to us.

Number three is if there's a meaningful change in the regulatory landscape that helps our customers be able to attract more customers, underwrite more products and expand.

Those are three areas that all help us.

Specific to us with corporate tax reform, we're likely on the good side of the ledger, positive.

We haven't been specific about how much, and we'll have to wait to see what it looks like.

But generally speaking, it would be a positive for Equifax.

Super.

Than a quick follow-up.

Great boost to the dividend, the 18% boost.

How do we think about that relative to buybacks?

And then I know you mentioned buybacks potentially in the back half of the year.

Is that already incorporated in the guidance, or would that be a potential source of upside?

Again, as our leverage comes down, we'll execute buybacks based on the pace of our acquisitions.

So to the extent we're extremely successful in acquisitions, you'll see a lower level of buyback.

But yes, we've already assumed a level of repurchases in the second half of 2017 in our guidance.

Kevin, you may recall, I can't remember how many years ago it was but it's been a while, we committed to a dividend policy that would 25%, 35% of our adjusted net income we'd give back every year in the form of a dividend.

That is (inaudible).

Super helpful.

Again, great job.

Thank you.

Thank you.

George Mihalos, Cowen.

Great.

Congrats on another nice quarter, guys.

And Jeff, congrats on your retirement, although it sounds like we'll have a fair amount of time to bug you, which is good (laughter).

Rick and John, I'm going to try and ask this question a bit of another way, but if we sort of look at 20% of your business between ACA and mortgage being down effectively double digit, that means the other 80% to get to that 8% to 9% constant currency growth for the whole Company, that's up almost in the mid-teens.

I'm just wondering if you might be able to rank order what are some of those drivers, whether it be verticals or geographies that really stand out to you to give that strong growth?

Let me see if I can deconstruct what your view is, which is a good view, and say that it is in the teens.

You also have, don't forget, two months of Veda benefit in 2017 you didn't have in 2016.

So that's part of the contributor.

Then the core of what you're saying is true.

You have very high, once again, very high organic non-mortgage, non-ACA growth, and there's no magic there.

George, that is the same thing we've been doing since [PGI] and EGI.

It's really is broad-based.

If I went through, and I think I did, I can't remember, as an example I think I gave EWS, the number of verticals that are growing double digit.

I can do the same thing in International.

I can pick different countries, and different verticals in different countries.

I can take different verticals in the USIS and show you how they're growing.

It's so broad-based.

It's not one vertical, it's not two verticals.

It's not one product or two product.

It's a combination of all those things coming together.

As Rick mentioned in his script, right, you're seeing continued very strong double-digit growth out of EWS, and then out of International, and GCS growing above their long-term model.

So the areas of growth are really concentrated there.

USIS, still performing well relative to mortgage, but the growth is concentrated in those businesses that Rick talked about.

Okay, great.

If I could sneak one more in.

The financial marketing line, that was up nicely.

I think it was up almost 7% in the quarter.

Should we be viewing that as a sign of your customers, your banks wanting to get more aggressive on the lending front?

Yes, traditionally that's been the case that they've pre-screen, the precursor to underwriting, which that puts you online stuff.

So we're not explicitly baked that into any guidance, George.

We expect, though, if that is in our pre-screen that will eventually lead to more lending, which is good for us.

Thanks, guys.

Andrew Steinerman, JPMorgan.

Hi, it's Andrew, Rick.

I just want to make sure I understand the 3% headwind.

That 3% is only from mortgage, right?

And when you say the ACA being flat rev, that's in addition to the 3% headwind.

And then on the offset, are you saying that the increased revenue activity fully offsets those headwinds, or mostly offsets those headwinds?

And are you counting on activity from banks in higher interest rate environments in addition to higher NPI?

Yes, good point.

So the answer to your first question is ACA was not directly counted in that 3%.

The 3% is the mortgage headwind alone.

Again, we're saying (inaudible) what you do, you can do the math, was the growth driver in the past goes from being a growth driver to flat.

That is a headwind for us.

The rest has got offset, and we got offset.

Think about the guidance we gave you as being offset by things we're already doing.

So it's a combination of NPI and EGI.

Okay, thank you.

Thank you.

One of the things, maybe before -- hopefully you guys are still on the phone, is that, Jeff, if I could.

Two points have came up in a few (inaudible) we would address.

One was around the OIS revenue when compared it to others up 4% versus some of you expected that to be larger.

Point of clarification, where it estimated that some of your (inaudible), that is burdened by 2 points, was it 2 points?

3 points of headwind from what we call our direct-to-consumer business.

Remember, when we created GCS, we took most of our consumer and gave it to GCS.

We left behind some reports marked to TU and to Experian.

That has been declining.

That declined even faster in the fourth quarter.

You've heard Experian announced they had a big breach last year in the fourth quarter; that didn't repeat.

So that's 3 points of headwind this year versus [less headwind] in the first three quarters of the year.

The other question that was raised is the sequential margin change in EWS.

I think I'll just quickly talk about that.

That's driven by really two things.

You've got some seasonality in a couple products in the mix.

We're still (inaudible) in the high margin offerings in the [USIS] that you may have seen in the third quarter.

Secondly, as I mentioned and John mentioned, we're investing nicely in standing up the International work number.

Those are two small points that are sequentially working the margin (inaudible) to explain that.

That business is a still well on its way to get that 50% to or mid-50%s margin.

I just wanted to clarify that point.

Jeff, you want sing a song or something like that (laughter) farewell?

I'm going to thank everybody for their interest and their time in Equifax.

I've had of fun on the job.

You all have been a big part of that.

We'll get to meet again in the coming months, also wanted to thank Rick and John for giving me the latitude and the support to do a job I've enjoyed.

Once again, I want to thank everybody.

And with that, Operator, we'll terminate the call.

Thank you.

That will conclude today's conference call.

Thank you for your participation, ladies and gentlemen.

You may now disconnect.