Equifax, Inc.

Good day and welcome to the Equifax fourth quarter 2018 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Trevor Burns, Investor Relations. Please go ahead, sir.

Thanks and good morning. Welcome to today's conference call. I'm Trevor Burns, Investor Relations. With me today are Mark Vigor, 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 of our website at www.equifax.com. During this call, we will be making certain forward-looking statements, including first quarter and full year 2019 guidance, to help you understand Equifax and its business environment. These statements involve a number of risk factors, uncertainties, and other factors that could cause actual results that differ materially from our expectations. Certain risk factors inherent in our business are set forth in filings with the SEC, including our 2018 Form 10-K and subsequent filings. Also, we'll be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. For the fourth quarter of 2018, adjusted EPS attributable to Equifax excludes costs associated with the realignment of internal resources and other activities, acquisition-related amortization expense, the income tax effect of stock awards recognized upon vesting or settlement, and foreign currency losses from re-measuring the Argentinian peso, denominated net monetary assets. Adjusted EPS attributable to Equifax also excludes legal and professional fees related to the cybersecurity incident, principally fees relating to our outstanding litigation and government investigations, as well as the incremental project costs designed to enhance technology and data security. This includes projects to implement systems and processes to enhance our technology and data security infrastructure, as well as projects to replace and substantially consolidate our global networks and systems, as well as the cost to manage these projects. These projects that will transform our technology infrastructure and further enhance our data security were incurred throughout 2018 and are expected to occur in 2019 into 2020. Adjusted EBITDA is defined as net income attributable to Equifax, adding back interest expense net of interest income income tax expense, depreciation and amortization, and also as the case for adjusted EPS, excluding costs related to the 2017 cybersecurity incident, costs associated with the realignment of internal resources and other activities, and foreign currency losses from remeasuring the Argentinian peso denominated net monetary assets. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings release and are also posted on our website. In addition to the non-GAAP measures that we post on our website, we are now posting certain supplemental financial information on our investor relations deck on our website to better help you understand our business. In the Form 10-K to be filed later today, we will disclose that future losses from litigation of regulatory investigations associated with the 2017 cybersecurity incident are reasonably possible but not yet estimable at this stage in the proceedings. Now I'd like to turn it over to Mark.

Thanks, Trevor. Good morning, everyone. I'll start the discussion this morning with a few minutes on our fourth quarter results and then move to a discussion on our strategy, technology transformation, and 2019 guidance. So first on the fourth quarter, revenue came in at $835 million, which was up 2% in constant currency. This was inside the range that we had given you a few months ago, but at the low end of that guidance. During the quarter, we experienced a weaker-than-expected U.S. mortgage market as inquiries were down approximately 15%, or about 500 basis points weaker than we expected. Versus the fourth quarter of 2017, the weaker mortgage market impacted overall revenue growth by about 2%, and versus our guidance, by just under $5 million. The mortgage market declines have been challenging to forecast well. Excluding this mortgage market impact, overall revenue growth was about 4%, which we were pleased with. Importantly, USIS revenue grew almost 2%, excluding the impact of the declining U.S. mortgage market. EWS reported growth of a strong 12%, and international local currency revenue growth of 5% was impacted by a soft Australia and Argentinian market and in line with the third quarter. USIS growth of 2%, excluding the mortgage market impact, was another sequential quarterly growth for that business as it continues to return to a growth mode. Adjusted EPS of $1.38 per share includes 4 cents per share due to a lower tax rate than in our October guidance. Adjusting for the incremental tax benefit adjusted EPS of $1.34 per share was about 2 cents above the midpoint of the guidance we provided last October. Total non-recurring and one-time costs in the fourth quarter were $181 million. This includes $114 million of technology and security, $12 million of legal and regulatory, $9 million for consumer support, and $46 million for the cost reduction action we executed late in the quarter. In our investor relations presentation on our website, we've included a chart that details the breakdown of these costs for each quarter of 2018 as well as our guidance for 2019. So now a few more comments on the business units in the fourth quarter. As I mentioned, USIS revenue was down 2% on a reported basis compared to last year, but importantly, USIS was up 2%, excluding the 400 basis point impact of the mortgage market. For us, this is a positive sign of continued improvement and a return to a growth mode for this critical business inside of Equifax. Online was up slightly overall and was up 4%, excluding the mortgage market. This is the second quarter in a row we've seen online growth, excluding the mortgage market impact. Mortgage solutions was down double digits as expected, given the decline in the mortgage market, and to a lesser extent, channel shift, with mortgage resellers partially offset by new products we introduced early in 2018. CMS, or credit marketing services, was up about 2%, which is the first time we've seen growth in this segment since the first quarter of 2018. Overall, financial marketing services was down about 1% as IXI saw volume declines. And our commercial and telecom and utilities segments both grew double digits in the quarter. As you can see, absent the substantial impact of the declining mortgage market, we're starting to see growth and recovery in USIS, which we expect to continue in 2019. In terms of our US customers, we're back to selling across the portfolio of our customer base. As we discussed on prior calls, the substantial progress with customers started in mid-2018. And so, given our six to 18-month sales cycle, we should start to see those benefits of being in a commercial mode with our customers during the early part and first half of 2019, with accelerating improvements in the second half of 2019. We continue to believe that our differentiated data assets, coupled with our technology investments, will return USIS to its traditional growth mode, but we remain cautious about the pace of the recovery, given the complexities of a of dealing with new customers and dealing with existing customers on new products. USIS adjusted EBIT margins of 47.5%. We're down from fourth quarter 17, but we're at the highest levels in 2018. I'm sure you saw our announcement a week ago that Sid Singh joined us as President of USIS. Sid joins us from Global Payments where he served as Group President of Integrated Solutions and Vertical Markets. Sid brings a deep understanding of unique data and how to accelerate product development through leveraging data analytics and advanced technology platforms. He is a high-energy growth leader with real depth in technology and an intense focus on customers. Sid joined Global Payments in 2006 and was instrumental in developing the technology and software-led business strategies that helped transform Global Payments into a highly differentiated payments leader. Prior to his work at Global Payments, Sid held senior management positions with HSB and Citibank. We are thrilled to have Sid joining our leadership team. As you saw in the announcement a week ago also, Paulino has agreed to work closely with Sid on his transition and help me with our strategy, M&A, and partnership efforts. Both Paulino and I will work closely with Sid to drive USIS back to growth and to assist in his transition into Equifax. USIS continues to be a personal priority of me and the entire company. Shifting now to workforce solutions, that business had a very strong quarter with revenue up 12%. Verification services was very strong in the quarter with revenue up 15%, driven by strong double-digit growth across healthcare, government, talent solutions, debt management, card and auto. EWS, like USIS, was also impacted by the decline in the overall mortgage market, which negatively impacted their revenue growth by about 400 basis points. Ex-mortgage EWS would have been up a very strong 16%. Employer services also grew in the quarter, up 6%, principally driven by growth in I-9 and onboarding services. The strong verifier growth resulted in a very strong adjusted EBITDA margins of 48.7%, or an expansion in the quarter of 320 basis points. As I've indicated before, Rudy and his entire team are laser-focused on the work number record growth. The team continues to execute on its strategy to identify and acquire new data contributors to expand its data assets. The team added more records in the fourth quarter than any prior quarter over the past five years. Total work number records are now approaching 90 million, and I think as you know from your experience with the company, when we add a new record, it's quickly monetized. We expect this work number growth to continue in 2019. EWS is clearly an extremely attractive franchise business for Equifax with big growth potential in the future. International revenue was down on a reported basis 3%, but up 5% in local currency, which was about consistent with third quarter 18, but weaker than the 8% delivered in the first half of 2018. This slower growth in the second half of 18 continues to be driven by the weak consumer and commercial lending markets in Australia that really started to soften in September and and the ongoing weak economic conditions in Argentina. Our Latin America business grew high single digits in local currency in the fourth quarter despite the continued headwinds in Argentina that began early in 2018. Revenue growth was driven by double-digit constant currency growth in Chile, Ecuador, Paraguay, and Mexico, and high single-digit growth in Argentina and Uruguay. Our Latin America franchises are benefiting from the expansion of Ignite and Interconnect SaaS in 2018, which we rolled out, and strong NPI rollouts in both 2017 and 2018. Our European business grew between mid and high single digits in local currency in the fourth quarter. We continue to see high single-digit local currency growth in our European credit operations, and as we expected, our European debt management business started to return to growth in the fourth quarter. Shifting to Canada, Our business in Canada grew mid-single digits in local currency in the fourth quarter, slightly below our expectation, reflecting the timing of some project-based revenues between quarters. Canada's full-year local currency revenue growth of 8% was broad-based, reflecting a focus on customer innovation and new products. Our Asia-Pacific business grew low single digits in local currency in the fourth quarter, down from the 10% plus growth seen in the first half of 2018. and consistent with the weakening we began to see in September around consumer lending, particularly mortgage and other consumer credit markets in Australia. While we expect to see continued weakness in Australia credit markets as we move into 2019, we're focused on innovative new customer solutions specifically in our Australian commercial business. Adjusted international EBITDA margins at 32.4% were up nicely in the fourth quarter, reflecting improvements in Europe and Asia-Pacific. I continue to be excited about our international business and the collaborative and innovation growth focus we are seeing from John and our global team. Global consumer solutions revenue declined 12% on a reported and local currency basis in the fourth quarter and was in line with our expectations. As we've discussed throughout 2018, our GCS U.S. consumer direct business saw substantial revenue declines as a result of our suspension of of U.S. consumer advertising in the fall of 2017 after the cybersecurity incident. The U.S. consumer direct business revenue declined almost 25% in the fourth quarter to $27 million and was down over $40 million to $118 million for the full year. Dan and his team began limited direct marketing to U.S. consumers in October, and that continued through the fourth quarter and into 2019. While our marketing investment the fourth quarter was lower than historical levels, We saw subscriber growth at costs that were consistent with our expectations, a very positive sign as we enter 2019. Our GCS partner business, which include ID Watchdog, delivered high single-digit growth in the fourth quarter and double-digit growth for the year. We expect ID Watchdog to continue to grow double digits and continue to see nice growth opportunities in our partner business, both in the U.S. and internationally. Adjusted EBITDA margins in GCS declined to 21.1% in the fourth quarter as expected as we saw the impact of the revenue loss and the impact of beginning to ramp our advertising as we went into the marketplace. We expect margins in GCS to increase in 2019 as we see the benefit of fourth quarter and early 2019 advertising and leverage our growing partner revenue. So before I get into a discussion of 2019, I'd like to take a minute to look back on 2018, which was clearly a challenging year for Equifax by any measure. The 2017 cybersecurity incident had a massive impact on our business on many fronts. And we entered 2018 with a great deal of uncertainty, from changes in key leadership positions, including the CEO role, U.S. customer concerns that we worked on throughout the year, Our competitors clearly took aggressive actions when we were on our heels. You know we're addressing a wide range of legal and regulatory matters, and we're executing on the multi-year security and technology transformation. So looking back, although our path to returning to our traditional growth mode is taking longer than we expected, we've made very strong steps forward in 2018 on our path back to growth and market leadership. I'm very proud of several key accomplishments. First, data security was a primary focus for our team and we made great progress, including instilling a security-first culture across all of Equifax. We have a much stronger data security infrastructure and are committed to continuing to invest to be the industry leader in data security. We launched our multi-year technology investment transformation program that will take our technology to market-leading capabilities and deliver cost savings and speed of products to market. This is a transformational investment, and I'll cover this in more detail in a few minutes. We also made great strides in protecting and empowering consumers, launching new free services like Lock and Alert to lock and freeze consumers' credit files. In our USIS business, we made massive steps towards regaining the trust of our customers and partners and are now positioned to operate in a normal commercial mode. And lastly, we refined our go-forward strategy and execution plans for the next two years that internally and externally we're calling EFX 2020. I'll cover this in more detail shortly. We could not have accomplished these goals without the hard work and dedication of our 11,000 employees around the globe. We clearly have work to do in 2019, but 2018 set us up with a solid foundation for returning Equifax to growth and market leadership. So let me turn to 2019 as well as a few comments looking forward to 2020. Since joining Equifax last April, I've learned a great deal about the company and the state of the business. When I joined, I was clear that I believed the strategy and direction of the company was sound, and I continue to believe that is true. However, there are some critical areas in which we must sharpen our focus to return to and exceed the levels of performance we've delivered in the past. In late 2018, we launched what we are calling EFX 2020 as a framework for our investments and priorities for the future. These strategic initiatives that will make up our EFX 2020 strategy represent a blending of the successful strategy in place when I arrived and these new focus areas. First, Equifax is a data analytics technology company. To be a technology company, we need to deliver market-leading technology and embed that technology as a part of our products. We're convinced that our massive technology transformation to the cloud will differentiate our products by combining unique data assets, analytics, and leading technology, and will allow us to accelerate the speed of our new products to market and the ease which they're consumed by our customers. I'll talk a lot more about this in a minute when I discuss our technology transformation in more detail. Number two, being an industry leader in data security. This is and will remain central to our culture and our commitment. We've made massive progress in the past 18 months, but we still have more work to do. We are committed to being an industry leader on security. Number three, creating a culture of customer centricity. We've talked on prior calls about how important this is to me, and this is how I operate as a business leader. And this starts by getting our people closer to customers, adding more feet on the street, a renewed focus on new verticals like FinTech. embedding our data scientists and Ignite technology with our customers on their sites, collaborating with customers in our DNA labs to build products that they need, and embracing partners as Strength Equifax has and one that we are going to expand. All of these efforts are focused on accelerating innovation and growth jointly with our customers' partners to drive new products and to drive growth. This is an area which we are doubling down on. Number four. Being a market leader in data analytics through leveraging unique data assets in the application of artificial intelligence, machine learning, and advanced visualization on the leading edge of delivery platforms is critical to our future. To be a market leader, we must collaborate with customers and partners broadly, and we must prioritize investment through the acquisition of new unique data sources. We have differentiated data assets like NC Plus and Twin, but we will continue to invest heavily in new data sets organically, and through M&A, like with our DataX acquisition last summer, and through partnerships. This is a critical priority. Number five, improve the consumer experience by providing value-added services through consumer-centric digital and voice consumer support. We're building leading-edge services, and we will be rolling them out beginning in 2019 that will enhance our customer experience. Number six, bringing innovative new products to market in collaboration with our customers Leveraging our global data assets has always been a strength of Equifax. We are refocusing on our speed to market and leveraging products across our global footprint. These six initiatives are all focused on driving revenue and profitable growth for our customers and our shareholders and returning Equifax to a growth mode and market leadership. To succeed on each of these initiatives, we are also refocused on our execution and delivery. Say do. That's how I operate. making and meeting commitments. This was an Equifax strength and it will be again. Shifting to the technology transformation we started in 2018, it's critical to the delivery of all of our strategic imperatives and will provide us with substantial product delivery and cost advantages. Our EFX 2020 technology program is the largest investment program in Equifax history and has the complete focus of the entire leadership team. This is not a technology project. This is a technology and business-led transformation of Equifax. During the second half of 2018, we provided guidance that our security and technology investment plan would continue not only in 2018, but through 2019 and 2020. We also told you that we'd provide you a framework around our security and technology plan early in 2019, and we're going to do that today. In 2018, we spent $307 million and expect Equifax 2020 spending to continue during 19 and 20. We plan to spend $300 million this year in 2019. In 2020, spend will be below our 2019 runway. Including incremental capital spending between 2018 and 2020, we will invest an incremental $1.25 billion to modernize our global technology and security infrastructure. We're convinced this will differentiate Equifax and move us back into a market-leading position. There's three basic principles that underpin our Equifax 2020 technology strategy that we're executing. First, cloud first and cloud native. This effort is focused on moving our legacy mainframe server technology to the public cloud using native services provided by the public cloud providers to the greatest extent possible. This includes our network and transportation. From a security perspective, we will implement generally in virtual private clouds or private instances on the public cloud infrastructure. Second, we're going to build on application services principles. This isn't a new concept, but it's critical if we are to successfully execute a cloud-first and native technology strategy. In concept, this means building services or components that can be easily assembled or interconnected using standard APIs. Again, this is not new. but it takes a tremendous amount of discipline to execute it. Number three, a relentless focus on rationalization. As we build out our company for the future, it's critical that we remain focused on decommissioning our legacy data centers, applications, data platforms, and servers. This will ensure we reach the robust security posture and long-term operational cost improvements we're committed to. Number four and most important is great talent. You've heard me talk and us talk about our new technology team led by Bryson Keller. Bryson has upgraded over 50% of his leadership team in the last six months with top talent from market-leading technology organizations. We're building the right team to execute this critical transformation. We have five major tracks to our technology transformation. These tracks, underpinned by detailed resource plans and timelines, are expected to be executed between 2019 and 2020. In the investor relations deck that we posted to our IR website this morning, there are diagrams for these tracks. Here's a summary. First, we will implement a common data fabric for data ingestion, governance, enrichment, and management. The data fabric replaces our multiple current purpose-built data ingestion, cleansing, and matching processes and systems, and the data exchanges themselves. For example, ACRO, our U.S. credit exchange, and the work numbers. Our data fabric is being built on the Google Cloud Platform in a virtual private cloud environment using Google's native tooling. By executing in this way, we can take advantage of Google's vast scale and more importantly, the leading edge tools that are proven at scale and speed and that Google uses themselves. Our new data fabric will conceptually be one repository as opposed to the many siloed databases that we have today. This single data fabric will deliver seamless real-time integration and data access across our many unique data sources. As I indicated, our data fabric is already in place at Google Cloud. And in the first half of 2019, we'll be rolling that out. We'll have our US Acro credit exchange and twin EWS exchange running in parallel with our current systems and available for multi-data insights in the first half of 2019. Several of our other U.S. and EWS exchanges, including NCTUE, IXI, DataX, and Unemployment Claims, as well as Ignite, will migrate to the common data cloud fabric by the end of 2019. We'll begin decommissioning existing exchanges that we have migrated to the data fabric in early 2020. We'll continue this migration of our U.S. and global exchanges to the data fabric throughout 2020. Second, We will rebuild or migrate our customer applications using standard application and cloud-native services and operate them on the public cloud. Fortunately, this track is one Equifax started a number of years ago in 2016 with the initiation of Interconnect SaaS product, which is a set of application services that offers a global data gateway decisioning using SparkLogic, SparklingLogic, and an API framework. This continued with the launch of our application, which is a market-leading analytical application that allows customers to easily Equifax third-party in their own attributes and data for analytics and modeling. Over the past year, Equifax has worked to migrate these applications to a virtual private cloud utilizing cloud-native services. We're also making great progress in integrating Ignite and Interconnect app services to allow customers to seamlessly promote attributes and models defined in Ignite, including those driven by machine learning, into production on InterConnect. We're working to make this broadly available by the end of the first quarter of 2019. In the fourth quarter, we completed implementation of Ignite Direct and InterConnect in a virtual private cloud in Europe and Latin America. Deployments of Ignite Direct with InterConnect in the US, Canada, and Asia Pacific are to be completed in the first quarter of 2019. Ignite Marketplace was deployed for all regions in 2018 and is expected to be cloud-native by the latter part of 2019. This same process will be followed to build new applications or migrate existing applications going forward. Third, we will migrate customers from legacy decisioning systems, interface systems, and Ignite instances to interconnect SAS and Ignite in the cloud. Globally, Equifax has over 4,000 customers operating on an Equifax decisioning or analytical system. Over 2019 and 2020, we expect to migrate the vast majority of these customers to standard interconnect SaaS and Ignite Cloud applications. In USIS, we expect to migrate 60% of our customers by the end of 2019, with the vast majority of customers migrating by the end of 2020. Similar plans are in place for each region around the globe. Fourth, we will migrate our global consumer systems and customer and consumer support systems using standard application services and cloud-native services and operate them on the public cloud. Fortunately, this is also a track that we started several years ago. Our new consumer system that will include digital consumer support called Renaissance is in the process of being migrated to a virtual private cloud environment utilizing cloud-native services. We launched Renaissance in Canada in the fourth quarter and will launch in the U.S. in mid-2019. Separately, we're deploying Salesforce and Genesis for customer and consumer support worldwide. We expect significant deployment of all these systems to be ongoing throughout 2019. Last, we'll move corporate and some of our business support applications to SaaS services and public cloud. For example, Equifax will be moving its email and collaboration to Google Gmail during the early part of 2019. Oracle Financial Systems will operate on AWS in the second quarter, and our sales management applications will be moved to the Salesforce cloud between 2019 and 2020. I hope this gives you a sense of the pace and urgency of our technology transformation, as well as the measurable and real progress we are already making as we deliver new cloud-based technology to our customers. As I referenced earlier, diagrams of these tracks are provided on our investor relations deck on our website. During 2019, we plan to have our new technology leader, Bryson Keller, provide more details to you around our Equifax 2020 technology plan. And John will provide some more details on the cost estimates to execute this plan in his portion of the presentation this morning. All of these actions are being executed consistent with our commitment to be a leader in data analytics and technology. We're convinced this is a transformational investment for Equifax. And I want to make it clear one more time, this is not a technology refresh. We're changing the way we operate, the way we go to market, and the way we serve our customers through technology. We've made strong steps forward in the fourth quarter and we'll continue our efforts in 2019 and 2020 as we complete elements of our multi-year plan on a monthly basis going forward. As we discussed on the last call and to align with our strategic goals, we need to make some structural changes within Equifax. Focused on driving more of our resources and decision-making closer to our customers and further optimizing our resource structure. As you may recall, in August, we realigned our resources and decision-making to move our organization closer to market-facing business unit teams and away from headquarters. This was an important element of how I operate, of having our teams closer and more focused with our customers. In the fourth quarter, we completed a plan to optimize our G&A and headquarters costs, In connection with these activities, we took a one-time charge in the fourth quarter of $46 million. While these actions are expected to improve our margins, we plan to reinvest some of the cost savings into more DNA resources and more sales resources to drive growth. We're also moving to embed more of our commercial and DNA resources in our customers' locations to further drive engagement, service, and growth. Net full-year run rate savings from this fourth quarter action are expected to exceed $50 million. I'm energized about the steps we're taking to move our organization closer to customers and markets. Shifting to new product innovation, this remains a key priority and a real Equifax strength. We have an active pipeline of new product introductions with over 100 new products at various stages in the funnel, and we launched 61 new products last year. consistent with the number we launched in 2017 and 2016. And as we talked on prior calls, protecting the resources and technology resources around NPI was critical to us in 2018. NPI and new product growth is a real strength and focus of Equifax. I talked about the growth potential of workforce solutions being in the second inning, a reference to the amount of runway they have in front of them to grow their database as well as provide innovative new solutions. Recently, Workforce Solutions identified two new use cases for their work number. The first uses our data with consumer consent to allow for enhanced identity matching. Identity matching has become an increasingly challenging issue for most of our customers, and having a unique data asset like the work number is improving our customers' processes and workflow and allowing consumers to more easily obtain the services and benefits they need. The second new use case, also using our verification data, helps FinTech customers and the online digital lending customers provide a frictionless and superior consumer lending experience by providing better lending decisions in a streamlined and automated manner. As our FinTech and online lending customers look to expand lending to near and subprime customers, while controlling for risk, our new work number database provides meaningful data to make better decisions benefiting both consumers and our customers. So now let me shift gears and take a look at 2019 guidance. For 2019, we expect total revenue to be between $3.425 billion and $3.525 billion, reflecting constant currency revenue growth of 2% to 5%. This assumes the U.S. mortgage market will decline about 5% in 2019, or about a 1% headwind to our revenue growth. FX will negatively impact revenue-adjusted EPS by just over 100 basis points. USIS revenue expected to be up slightly in 2019, including the approximately 150 basis point negative impact from the U.S. mortgage market decline. First half growth will be more negatively impacted by the mortgage decline from a comparison standpoint. EWS revenue growth will strengthen from 2018, with growth approaching 10%. Verification services we expect to deliver very strong growth, and employer services flat to up slightly. International revenue growth will grow about 5 percent, first-half growth being impacted by continued weakness in Australia lending markets and the Argentinian economy. We are expecting to return to high single-digit growth in the second half of 2019. And lastly, GCS revenue will be flat in 2019. First-half revenue will decline year over year, but we expect to return to growth in the second half of 2019 based on the new efforts that we have in marketing inside of that business. For 2019, we expect adjusted EPS to be between 560 and 580 per share, reflecting constant currency improvement of about 1.75% to down 1.75%. We expect to see expanded business unit EBITDA margins of about 50 basis points, led by nice revenue growth and margin growth in workforce to drive increased operating profit in EBITDA dollars from the business units. Offsetting our increased margins are really three principal factors. Number one, higher corporate costs of about $25 million, principally in security and related technology investments. Second, increased interest expense of about $5 million, reflecting a refinancing executed midway through 2018. And third, a slightly higher tax rate of 24% in 2019. John will provide more details in our guidance, EFX 2020 investment plans for 2019 and 2020, as well as the significant market factors impacting the first half of 2019. Wrapping up, Equifax has made strong progress in 2018 in regaining the trust of our customers and partners. We've moved back to a growth mode with our customers. And we completed the first phase of our three-year ESX 2020 transformation plan. We're confident we're moving in the right direction, but we know we still have a lot of work to do. We're investing at record levels to make Equifax a market leader in data, analytics, technology, and security. We're excited about our future and the opportunities ahead. With that, let me turn it over to John.