Good day, everyone, and welcome to the Q1 2011 Equifax Earnings Release Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Jeff Dodge. Please go ahead.

Thank you, and good morning, everybody. Welcome to today's conference call. I'm Jeff Dodge, Investor Relations. And with me today are Rick Smith, Chairman and Chief Executive Officer; and Lee Adrean, 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. During this call, we'll 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 our filings with the SEC including our 2010 Form 10-K and subsequent filings. We will refer to a non-GAAP financial measure, adjusted EPS from continuing operations attributable to Equifax, which excludes the acquisition-related amortization expense. This measure is detailed in our non-GAAP reconciliations included with our earnings release and posted on our website. Please refer to the non-GAAP reconciliation in our various investor presentations, which are posted in the Investor Relations section under the About Equifax tab on our website for further details. Now I'd like to turn it over to Rick.

Thanks, Jeff. Good morning, everyone. In the first quarter, we continued to build on the momentum we created in 2010 and we delivered solid financial performance, which was in line with our expectations. We also strengthened our global franchise to better position Equifax for sustainable long-term growth. Each of the business units continue to make good progress on the strategic initiatives, including new product offerings, building and acquiring unique data assets and improving the efficiencies of the operations. For the quarter, total revenue from continuing operations was $472.6 million, up 7% from the first quarter of 2010, very much in line with the outlook we provided in February. Operating margin was 23%, down slightly from a year ago but up sequentially from the fourth quarter. Now I'll will spend some time at the back end of my conversation talking about the margin outlook for the second half of the year. And adjusted EPS from continuing operations was $0.58, up 9% from $0.53 a year ago. But customer demand for our Analytical Solutions continues to increase. During the quarter, 37% of our online transactions included an analytical component of an Equifax model. That compares with 31% in the first quarter of 2010 and 23% in the first quarter of 2008, so we're making great progress in embedding analytics into our business. Our efforts around New Product Innovation continue to make strong contributions to our revenue growth. Revenue from products launched in 2008 to 2010 which, you, by now know is our NPI Vitality Index, was up 4% when compared to a year ago. And this is really a noteworthy accomplishment given that we dropped Settlement Services from the Vitality Index because it was a product launched in 2007, very successful product with strong revenue growth. That's now removed and even with…

Thanks, Rick, and good morning, everyone. This morning, I'll be referring to the financial results from continuing operations, generally presented on a GAAP basis. You should also refer to the Q&A and non-GAAP reconciliations attached to earnings release for additional financial information. Our performance for the first quarter was a reflection of a modest emerging recovery in U.S. credit markets, aided by a continuation of the momentum we developed in 2010 through our new product offerings and other strategic growth initiatives. Compared to the same quarter in 2010, for the first quarter of 2011, consolidated revenue of $472.6 million was up 7% on a reported basis, and up 6% excluding the impact of changes in foreign exchange rates. Operating margin was 23.1% compared to 23.5% for the first quarter in 2010. And excluding the amortization and acquisition intangibles, operating margin for the first quarter was 28.1%, continuing in the same range we have delivered in recent periods. Diluted earnings per share from continuing operations attributable to Equifax was $0.46 per share, up 9% from $0.42 in the first quarter of 2010. Excluding the impact of acquisition-related intangible amortization, adjusted EPS attributable to Equifax is $0.58, up 9.4% from $0.53 a year ago. Moving to the individual business units. U.S. Consumer Information Solutions revenue was $181 million, up 5% from the same quarter in 2010 and in line with our expectations. Online Consumer Information Solutions revenue was $120 million, flat compared to 2010. Our year-over-year online credit Decision volume trends continue to improve. First quarter online volume was up 7% compared to 4% growth in the fourth quarter. A 4% reduction in average revenue per report and some minor changes in non-transaction revenue held revenue flat with the prior year. Mortgage Solutions revenue of $27 million was up 18% compared to…

Great. Thanks, Lee. So a few closing comments before we go to some questions you might have. Reflect back to our February earnings call, I talked about delivering a first half performance with revenue growth in the range of 6% to 8% and operating margins in the range of 23%. I remain very confident in that outlook. For the second quarter, assuming current exchange rates, we expect to be squarely in that range of growth of 6% to 8%. As you also have noticed as you build your models that we anticipate our second quarter tax rate to be consistent with the first quarter, and we look at it on a year-over-year basis, up by about 250 basis points versus 2010. And that's because we had a favorable one-time tax settlement in the second quarter of 2010. We expect EPS from continuing operations then to be between $0.58 and $0.61 a share. We end with my views in operating margin for the second half, underscoring the point I made last call. I fully expect our operating margins in the back half of the year to improve nicely as we begin to benefit from investments in our strategic growth initiatives that we talked to you about including Technology and Analytical Services, Anakam, Brazil, the U.K. and some of the new mortgage products that we're building. And additionally, by the way, I have a clear line of sight to that margin strengthening, I'd just like to see that in the back half of the year. It's not a hope or a prayer, it's a line of sight we have, it's very clear. In addition, we're going to carry a very strong revenue momentum in the second half of the year as many of our growth initiatives start to click. So with that, I'd like to turn it over, operator, if you could, to our participants to answer any questions they might have.

[Operator Instructions] And we'll take our first question from Andrew Jeffrey with SunTrust.

Lee, when you look at the USCIS investments you made in the quarter, can you quantify them for us or normalize the quarterly segment operating margin?

We don't normally breakout margins to individual components like that. I think the acquisition amortization increase is a result of our Anakam acquisition. It is broken out in the 10-Q, which we'll publish later today. It's just a little bit over $1 million, if I recall, but by itself, it's about 0.5% margin impact.

And let me add to that, this is Rick. We have 2 thoughts. If you think about the margin in USCIS. One, I mentioned that we made some nice investments in TALX. If you look at the core non-TALX element of USCIS, the core credit piece, they actually showed very nice year-on-year margin expansion. Secondly, when you look sequentially at USCIS, fourth quarter versus fourth quarter, and then you see a slight downtick. One thing you've got to make sure you remember is the IXI business is cyclical. And it tends to be back-end loaded with a big chunk of it coming in the second half of the year. As a result, we get a nice margin lift in the third and fourth quarter when you look at it sequentially, and you get a margin compression in the first quarter. So that's the noise going on there.

Okay so that's helpful. So, Rick, I appreciate the conviction in the back half margin story. Is it safe to assume that both on a segment and on a consolidated basis that when all is said and done, in 2011, that full year margins will be up versus '10 with the trajectory for further improvement as we go out in time?

Yes. It's absolutely, yes. And as I told all our participants on the February call, that it's my full expectation that we're in the 24% range as we exit the year.

Okay. And then I know one of the dynamics that's kind of shifting in the business as volume comes back is that mix is moving toward bigger issuers with some adverse effect on price per report. Is there anything, if we were to see a real acceleration in volume, if the biggest issuers in this country got more aggressive, for example. Does anything change in the dynamic in that USCIS business? Is there anything we should be worried about in terms of pricing our mix if there were real acceleration in reporting volume?

Well, the good news in there as you allude to and that is that the -- when we structured this team, whenever it was, maybe 18 months ago, 15 months ago, centered on large banks because large banks are going to be winners. And the great news is that strategy is paying off. We're growing at a faster rate in those large accounts. I'm confident, getting to the heart of your question, Andrew, that we can deliver accelerated growth because of that focus on the KCP accounts and still deliver at the segment level and the company level the kind of margins we've talked about.

Okay. And then one last one, if I may. Share buybacks, I noticed you didn't deploy any capital to buy back the stock this quarter. Is that a function of share price or is there some other consideration?

No. The first quarter is typically our lowest cash flow quarter. As a result, we made a small pension contribution, we pay out annual incentives and a couple of other things that happen. So cash flow in the quarter tends to be the lowest of the year with the $30 million of acquisitions that we did in the quarter and the higher dividend. We actually net borrowed even without any share repurchase in the quarter, we still continue to have a strong level of capitalization. I think what you can expect in the next couple of quarters when the cash flow is traditionally stronger that unless we see appropriate acquisitions that utilize that, that we would be in the market buying stock.

And our next question will come from George Mihalos with Bank of America.

Just want to delve in a couple of things. As it relates to the Work Number, you mentioned getting impacted a little bit by mortgage. But you also have exposure there to government, and I'm just kind of wondering how that line of business has done within the Work Number and how you feel about that going forward given potential cutbacks in entitlement programs and things like that?

Yes, the nice things about the Work Number, we diversified the revenue stream to so many different verticals, government being one, collection is being another. We have good growth in the government. We expect that growth to continue. In fact, government was strong double-digit growth in the first quarter. Collections were strong. Pre-employment screening was strong. So it's not any one segment, and the whole goal is to continue to take the Work Number by the way in different verticals. I mentioned in my comments that one of our KCP banks has integrated the Work Number now into their decisioning platforms for home loan and cards. That's a huge win for us and big diversification. So I don't look at any one specific vertical and say, how is it going to drive our growth? There's a balanced portfolio in the Work Number and I feel good about that.

George, one other thing to note on the Work Number is that we are still at a point where we are penetrating the market for employer records. Our active records on file were up almost 6% year-over-year. Our total records on file was up 10%. So, even if you see some ups and downs in individual segments, but even if the total were flat in terms of end-market demand, by increasing our record count, we can grow revenue. Then we find additional penetration opportunities, and that's the strength of the Work Number business model.

Got you. And then also on the -- as it relates to the OCIS, you kind of had a phenomena here that we also saw in the last quarter, accelerating report volume but the revenue is kind of staying flat just because of the revenue per report, how that mix sort of breaks out. When do you start to think we'll see more accelerated OCIS growth? Is that something we'll start to get over the back half of the year on the revenue side?

Yes, the expectations would be some sometime in the back half of the year. We might see some revenue growth there.

Okay, great. Then last question for me, just on the PSol margins, should we still be kind of thinking going forward in the mid-20s?

Yes.

Yes. The fluctuation as you, as Trey and his team invest in advertising. But in aggregate, yes, you should be thinking it in the 20s.

We'll now take a question from Carter Malloy with Stephens Inc.

The first question is just your comments in guidance. You guys typically approach guidance with a very conservative angle, and I was surprised to see the amount of upside implied, both top and bottom line, relative to the Street. So can you just talk about the -- did you exit the quarter that much stronger of run rates versus when you entered it? Just your general confidence with the business at this point?

No, it is just that all the things that the teams have been building to execute their strategies over the past couple of years is really starting to click, and it's just my confidence in our ability to execute. Some exciting things that on the horizon, Carter, which we didn't have maybe 3 to 6 months ago, we talked about Keystone. Keystone now is live. We talked about NCTUE+ and building at that capability throughout 2010. That's now live. We talked about bringing the Work Number into large card portfolios. We've just had a number of really neat things that the team is executing on that gives me confidence, not only in the second quarter but at the back half of this year, will be good on a revenue perspective and a margin perspective.

Okay. And then on the Telco and utility positive, is that a close exchange or are you guys going to be able to sell that to your external Telco and utility customers?

It's a kind of a give-to-get model. So it is close but we're working with the Board of the Exchange to look at areas we might be able to take that to outside of telecommunications, that in no way impedes or competes with the Telcos but adds value to other verticals. So it will be both.

Okay. And then on Keystone, obviously very exciting to see you guys integrating all the different data assets you have. Can you just talk about how meaningful you expect that to be and how long it takes to become meaningful?

Well, it's going to be a core in the next -- if you're thinking USCIS, it's going to be the cornerstone of the NPI growth for USCIS for years to come.

Okay. And then lastly, you guys talked about running some TV ads for PSol. What are Trey and his team doing differently this time? I know you guys had a run at TV a few years back that didn't sort of produce the metrics you were looking for. So what's the approach, different this time and how much incremental growth you think you're going to drive?

Well, stay tuned, because it comes out, I think, in May, what is it? It comes out next week. And it's really trying to take a crack at what the consumers' view of managing their credit, managing their identity and simplifying that. It's a cute ad. It's an impactful ad, and we're convinced it's going to hit the hearts and the heads of our consumers in a right way and help trigger more growth.

We'll now take a question from David Togut with Evercore Partners.

Do you expect a 4% decline in revenue per unit in online CIS to persist?

I'm not sure if it's 4%, but I do expect, I expect us to continue to drive accelerated growth at the large banks. And so for a period of time, it is going to be some out of balance, which will be rate of revenue growth and the rate of volume growth. I'm not sure if it's 2%, 4%, but you'll see some pressure there continuing.

David, one thing I would add is if you go back over the last couple of years. In 2009, our average revenue per unit was actually up 5% or 6% for the year. In 2010, it was flat. And we've started this year down 4%. I think what you're seeing, to some degree, is fluctuation around a moderate long-term trend as this mix of our customers shifts as we go through the economic cycle. So to me, the 4% is no more, doesn't change my long-term view about very modest long-term rate of decline, than the 5% or 6% increase of 2009 changes, that point of view.

And when you're servicing the large banks, is your cost to serve less than it is to serve small banks?

Certainly, the sales cost is probably slightly less. Although obviously, the large bank is more sophisticated. We have more expert resources, but we probably more than make up for that with scale, the scale of the relationship.

I think if you think it through, the incremental margin is significant, and it's significant for a small account, it's significant for a large account.

Okay. And then just finally, Rick, you highlighted significant investments in Brazil to boost your market share. What were the market share trends for your Brazilian business, both on consumer credit and business credit, in the first quarter?

I don't have that off the top of my head. In general terms, David, the Brazilian business wasn't performing at the level of expectation I had for the past 18 months or so, on both the consumer side and the commercial side. So we hired a new leader, we invested significantly on getting back on the offense, on getting more SME clients. On the commercial side, as an example, getting more consumer data and all the metrics as I mentioned in my comments are heading in the right direction.

We'll now move to a question from Bill Warmington with Raymond James. William Warmington - Raymond James & Associates, Inc.: A question for you on pre-screen activity. It looks like that had another strong quarter. I wanted to ask if you're seeing a change in the mindset of the U.S. banks as it relates to marketing activity?

Yes, I think we are. We're seeing the banks wanting to get back in the market and obviously start to grow. That's why you saw the pre-screen rise. Banks know that long term, they need to grow their portfolios now that they've got the underwriting under control. And as always, we hope that eventually will lead to an increase in the online over time as well, which we've yet to see. William Warmington - Raymond James & Associates, Inc.: Are you noticing that they're becoming more aggressive towards doing these programs? It sounded like initially, they were very-- they were trying it, but they were just dipping their toe in the water, so to speak, very high...

They are more focused and they're more aggressive, and absolutely.

And then it looked like the Mortgage Solutions saw some pretty strong growth despite a pretty weak residential mortgage origination market. Just want to know if you could comment on what was driving that?

Yes, we're uniquely positioned in the mortgage market, as you're probably aware. We have a full suite of offerings, which puts us in good shape from the front end of verifying employment, verifying income, deploying a credit file, to doing ESS. So as a result of that, we will continue to, we expect to continue to outgrow the mortgage index as we have for a number of years.

And, Bill, if I can add to that, one of the things in our U.S. mortgage reporting is the benefit of some of our new product innovation initiatives. Our capital markets offering was up nicely. Our undisclosed debt monitoring product, which is a new product, was up nicely. So our pure volumes weren't up as much as our revenue because we're seeing the benefits of expanding our service offering. William Warmington - Raymond James & Associates, Inc.: Got you. And then final question was, if you could comment on how the acquisition market is looking right now. How your own pipeline is looking and if you feel that there are any segments that you need to fill in at this point?

The focus really, Bill, is on the midsize acquisitions, and that pipeline is extremely strong. It's strong in all the business units around the world. It's probably as balanced and as deep, as far as list of opportunities, as we've had since I've been here. We'll always be thoughtful and strategic in that nature and acquire the ones that make the most sense.

We'll now take a question from Jamie Brandwood with UBS.

Just wondering if I could start by asking about the USCIS growth trends. Can you just start by letting us know in terms of the Q1 growth of roughly just under 5% year-on-year, compared to the Q4 growth of closer to 12% year-on-year. Has practically all of that slowed down, down to the much lower levels of mortgage application activity and the annualization?

No, I can do the math on the mortgage in a second. But remember, what I just said to someone earlier is, the IXI business has a, it's back-end loaded. So they have a very strong fourth quarter compared to a much lower first quarter. That's normal in their cycle. So as I eyeball this very quickly, that's a big piece of it.

But that wouldn't have much of an impact on the year-on-year trend, would it? I mean, if it was weak in Q1 last year as well?

Yes, I thought you said sequentially fourth quarter versus first quarter.

But looking at the year-on-year trend, as I say, I think in the fourth quarter you were up almost 12% or actually slightly over 12% in the USCIS and that was just under 5% in Q1 year-on-year. I was just wondering if that..

Again, that's driven by a very strong fourth quarter in IXI in 2010 versus a slow first quarter, which is normal. The Mortgage business quarter-on-quarter sequentially is relatively flat.

I mean, in terms of your overall commentary of the USCIS growth in the mid-single digits, I think, you've said for Q2. What are you baking in for mortgage application activity in Q2? Are you assuming something similar to Q1? A reasonably big level of year-on-year decline or...

No, no. The assumption is that the second quarter index will look much like -- in the second quarter will look much like the first quarter did.

Okay. All right. And then, thinking about your PSol business, Personal Solutions. What relationship, if any, does Equifax have with Infineon, who I guess to some extent are a competitor in that space?

Yes, they are a competitor. That's the relationship.

You don't have any kind of relationship to them as a customer of yours in terms of requirements on your data or use of your data, so to speak?

Not that I can think of but if we do, it's synonymous. I can't think of any, they're a competitor right now.

Okay. Fair enough. And then very lastly, your U.K. business, you mentioned that was a contributor to your 9% growth, constant currency growth in Europe. And I guess, therefore, that means that the U.K. accelerated in Q1 versus Q4, which we're not hearing for many U.K. businesses at the moment. What was driving the acceleration in your U.K. activities?

Your point is accurate that we are seeing accelerated growth. We've seen that now for a few quarters, which is great. It has to do with the all-new energized leadership team over there and a lot of new NPI.

Next, we'll hear from Shlomo Rosenbaum with Stifel, Nicolaus. Shlomo Rosenbaum - Stifel, Nicolaus & Co., Inc.: Rick, could you just go over some of the puts and takes of the TALX growth expectation for 2Q? Is a lot of it just a tougher comp for year-over-year because of the Mortgage business?

Yes, the outlook for the second quarter, really, that's why I mentioned for the year, is I expect continued strong growth in the core Work Number, the traditional instant verification Work Number that we have. And that we're going to spend time to diversify the direct 4506T product but with the other core Equifax products and take it to new verticals. So the Mortgage business has slowed dramatically and the Work Number has been able to offset that through diversification. 4506T was a one-trick pony. It's a great product, and I'm confident with bundling it and diversifying it we'll get that back to growth as well. So, long way of saying the mortgage headwind is squarely in the face of 4506T and far less so in the core Work Number.

Shlomo, let me add on the tax side, Tax and Talent Management, that is a tough compare to last year. So we do expect upper single digits growth on the Work Number side of our TALX business but tax will probably be down in Q2. And that's the reason for flattish to very slight growth for TALX as a whole, is that really more the tough compare on the tax side. Shlomo Rosenbaum - Stifel, Nicolaus & Co., Inc.: And we, after 6 quarters of basically flat ARDSO, you saw a spike this quarter. Can you just talk a little bit about what's behind that?

Yes, DSO. 4 to 6 days, I think it was.

Yes, I don't think there's anything truly systematic. It's obviously something we're watching closely. We actually saw some very strong collections at the beginning of April that if we kind of normalized is probably up 2.5 days rather than 4 days but still something that we're just staying very close to and engaging our sales teams with our larger clients and just making sure that we maintain the gains that we actually had during the very weak economy. Shlomo Rosenbaum - Stifel, Nicolaus & Co., Inc.: Okay. And then there was a big sequential decline in corporate costs. I know it's up a little bit year-over-year but can you just compare sequentially what was there last quarter that's not there this quarter in the corporate costs?

Yes, there is a little bit of a seasonal pattern to our corporate costs. As you noted, last year had the same very low first quarter and then higher in subsequent quarters. If I look at the sequential from Q -- the fourth quarter of last year to the first quarter, one is equity compensation costs. We have 2 times during the year where we make equity grants, and there's a certain one-time hit from those equity grants for anyone who is retirement eligible. So you get a pop in expense in the quarters where we do equity grants. Those are the second and fourth quarters. So you have a couple of million dollar fall off there. We ended the year strong, which affected our management incentive expense in the fourth quarter and starting out the year at a more normalized level. Our professional fees are a little lower, just the timing of certain projects that we're undertaking. So there are a number of things like that, that caused there to be a fairly significant step down from Q4 to Q1 this year, just as we had last year. And the second quarter, we'll step back, step up just like last year did. Shlomo Rosenbaum - Stifel, Nicolaus & Co., Inc.: Okay. So the seasonality is 2Q and 4Q is what we should expect?

I would say the first quarter tends to be light. The pattern for Q's 2, 3 and 4 is a little bit less predictable. But Q2 and 4 definitely have an added expense due to equity compensation.

And we'll take a question from Julio Quinteros with Goldman Sachs.

It's Vincent sitting in for Julio. I apologize because I jumped on the call late. I might have missed some of the earlier commentaries. But I think on the margin side, you're still coming into approaching 24% exiting the year. So I want to focus on the revenue side in this back half of 2011. First of all, are you expecting, or is there any room, for revenue growth acceleration to maybe toward the top end of the 6% to 8% range? And then secondly, if you were going to see some modest revenue acceleration, which area should we expect it? Is it the CIS or is it more the international kind of Latin America area, where you, I think you cited some of the investments that you expect to push for additional market share in the back half of the year?

Yes, sure. A couple of points. One, just to clarify the margin. It's not committed that we will get the margins to 24% or higher in the back half of the year. So I just want to make that clarification. Number 2, we've talked about an environment of revenue growth of 6% to 8%. I'm still committed to that. And I also, in my commentary earlier said, we're going to carry good momentum going into the back half of the year on both margin and revenue. We don't give guidance that far out. But I think that gives you enough right there, 6% to 8% is kind of model that we see for the year on carrying strong momentum into the back half of the year.

And we'll take our final question from Dan Perlin with RBC Capital Markets.

So, I guess, the last couple of questions I have are this: if we adjust for the amortization on USCIS margins this quarter, margins are flat roughly year-on-year, maybe down 10 basis points? And so that's going to be with us for the remainder of the year. So I would just want to make sure, Rick, when you provide this level of conviction for back half margins that it's consistent that USCIS margins will be up, as well as international margins, as well as TALX margins. And not just kind of throttling back on international investments?

No, absolutely. To be very clear, the margin guidance I gave you was the entire company. First of all, it's 24%. Being specific to your question on USCIS, which is the cash cow for this company, I clearly expect accelerated and expanded margin growth in the second half of the year for USCIS as well.

And that means year-on-year growth, not just acceleration from the margin we just had?

Correct.

Okay. It's semantics, but it's important to me. And then the last quarter organic growth was just very strong. I didn't hear you guys actually give the organic growth this quarter. If you did, I apologize. If you can just give it again.

We did not give that out.

No. Acquisition added 0.5%. Everything else was organic.

So acquisitions were 0.5% and currency added how much, I'm sorry?

Yes, FX was about 1%.

Okay. So 1.5% netted? Okay. That's all I've got.

Thanks, everybody, for participating, and we'll be around today if you've got any additional questions. At this point, we'll terminate the call.

Thank you, sir. That does conclude today's teleconference. We do thank you all for your participation.