Equifax (Equifax) Free Cash Flow

: $516 Mil (TTM As of Dec. 2023)

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Equifax's total free cash flow for the months ended in Dec. 2023 was $176 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Dec. 2023 was $516 Mil.

Equifax's Free Cash Flow per Share for the months ended in Dec. 2023 was $1.41. Its free cash flow per share for the trailing twelve months (TTM) ended in Dec. 2023 was $4.15.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Equifax was 287.10% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was -0.90% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Equifax's highest 3-Year average Free Cash Flow per Share Growth Rate was 34.40% per year. The lowest was -17.60% per year. And the median was 7.50% per year.

Equifax Free Cash Flow Historical Data

The historical data trend for Equifax's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Equifax Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Free Cash Flow

-85.80

524.90

865.80

132.60

515.50

Equifax Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Free Cash Flow																169.30	-7.40	99.10	247.40	176.40

Equifax Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Equifax's Free Cash Flow for the fiscal year that ended in Dec. 2023 is calculated as

Free Cash Flow (A: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	1116.8	+	-601.3
	=	516

Equifax's Free Cash Flow for the quarter that ended in Dec. 2023 is calculated as

Free Cash Flow (Q: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	322.1	+	-145.7
	=	176

Free Cash Flow for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $516 Mil.

Equifax (NYSE:EFX) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Dec23, Equifax's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Dec23)	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	4.17809524	/	247.29	+	-0.1248
	=	-10.79 %

Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.

Equifax Free Cash Flow Related Terms

Thank you for viewing the detailed overview of Equifax's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.

Equifax (Equifax) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Equifax Inc (NYSE:EFX) » Definitions » Free Cash Flow

Comparable Companies

Traded in Other Exchanges

EFX:Germany EFX:Germany EFX:Austria

Address

1550 Peachtree Street N.W., Atlanta, GA, USA, 30309

Website

https://www.equifax.com

Along with Experian and TransUnion, Equifax is one of the leading credit bureaus in the United States. Equifax's credit reports provide credit histories on millions of consumers, and the firm's services are critical to lenders' credit decisions. In addition, about a third of the firm's revenue comes from workforce solutions, which provides income verification and employer human resources services. Equifax generates over 20% of its revenue from outside the United States.

Executives

Kelley John J Iii	officer: CVP & CLC	1550 PEACHTREE STREET, NW, ATLANTA GA 30309
Julia A Houston	officer: Chief Transformation Officer	1155 PERIMETER CENTER WEST, ATLANTA GA 30338
Rodolfo O Ploder	officer: Group Executive	C/O EQUIFAX INC., 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Bryson R Koehler	officer: Chief Technology Officer	1550 PEACHTREE STREET NW, ATLANTA GA 30309
Mark W Begor	director, officer: CEO	181 METRO DRIVE, SAN JOSE CA 95110
Melissa D Goodwin	director	C/O WRIGHT EXPRESS CORPORATION, 97 DARLING AVENUE, SOUTH PORTLAND ME 04106
Gamble John W Jr	officer: CVP & CFO	ONE LEXMARK CENTRE DR, 740 WEST NEW CIRCLE RD, LEXINGTON KY 40550
James M Griggs	officer: SVP & Corp Controller	1550 PEACHTREE STREET NW, ATLANTA GA 30309
Carla Chaney	officer: CVP & Chief HR Officer	5302 LAKE VIEW CLUB, DUNWOODY GA 30338
Todd Michael Horvath	officer: EVP, President USIS	EQUIFAX INC, 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Karen Linn Fichuk	director	EQUIFAX INC., 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Lisa M Nelson	officer: President-International	EQUIFAX INC., 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Sid Singh	officer: President - USIS	1550 PEACHTREE STREET NW, ATLANTA GA 30309
Prasanna Dhore	officer: Chief Data & Analytics Officer	10375 PROFESSIONAL CIRCLE, RENO NV 89521
Audrey B Tillman	director	1932 WYNNTON RD, COLUMBUS GA 31999