Equifax Inc. (NYSE:EFX) Q1 2019 Earnings Conference Call Transcript
May 10, 2019 • 08:30 am ET
Included with this supplemental information is historical actual and 2019 forecast US mortgage market inquiries.
Now I'd like to turn it over to Mark.
Mark W. Begor
Thanks, Trevor, and good morning everyone. As you can see from our press release this morning, this has been a busy quarter for us, particularly during the past few weeks and days. We're pleased with our start to 2019 with strong progress on our strategic priorities and our financial results were within the guidance we provided in February. While we are continuing to return USIS to a growth mode, we're executing well against our EFX 2020 initiatives.
Before I get into a discussion of our first quarter financial results and the business units, let me spend a few minutes discussing the $690 million charge we took this quarter related to outstanding litigation and potential fines related to the 2017 cybersecurity incident. We delayed our earnings discussion until this morning because we've made significant progress on our legal and regulatory settlements in the past few weeks.
As you know, we've been in active discussions for months related to the 2017 cybersecurity incident and those discussions accelerated in the past month. Importantly, the $690 million accrual we booked includes our estimate of probable losses associated with our global settlement discussions with certain federal and state regulators, as well as the federal class action cases. We recently reached confidential settlement terms in the consumer federal class action cases that, upon approval by the court, will resolve and dismiss the claims asserted in the consumer cases.
The proposed global settlement provides for the establishment of a single consumer redress fund, which was our goal and certain other non-monetary terms. As we've discussed previously, we believe that consumers are better served through a single consumer fund and a global settlement of the federal and state government investigations, together with the consumer class action litigation. We expect to complete definitive settlement agreements with the parties in the coming weeks. While this charge represents our current estimate to resolve many of the significant issues facing the Company, we expect to incur additional losses associated with the other claims and litigation related to the 2017 incident. We will continue to work with all parties to bring these matters to closure as soon as possible, while balancing the needs of our Company, employees, customers, and shareholders.
As you know, we prepared ourselves financially for the settlement by strengthening our balance sheet, including us suspending our stock buyback and freezing our dividend in 2017. This settlement will not have an impact on our internal investment plans, new product introductions, our $1.25 billion EFX 2020 technology and security program or our plans to grow and expand Equifax with acquisitions. This is a positive step forward for Equifax as we work to put the 2017 cybersecurity event behind us.
Let me now move to our financial results. We're pleased with our start to the year, as our first quarter financial results were consistent with the guidance we gave