Prompt:
Human: Today's call is being recorded.
An archive of the recording will be available later today in the IR Calendar section of the News & Events tab at our IR website, www.
These materials are labeled Q3 2021 Earnings Conference Call.
Certain risk factors that may impact our business are set forth in our filings with the SEC, including our 2020 Form 10-K and subsequent filings.
Also, we'll be referring to certain non-GAAP financial measures, including adjusted earnings per share attributable to Equifax, and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance.
We had a very strong third quarter and first nine months of 2021, a continuation of our strong outperformance last year with record revenue in the quarter of $1.223 billion, which was up over 14% with core non-mortgage market and non-UC ERC claims revenue growth of 20%.
We are executing extremely well against the critical priorities of our EFX2023 strategy, as we highlighted on Slide 4.
Our focus on leveraging the new Equifax cloud for innovation, new products and growth is clearly driving our strong financial results.
Our revenue growth has accelerated from 3% in 2019 as we were recovering from the 2017 cyber event and investing heavily in our EFX cloud transformation to 17% last year.
We are on track to deliver 19% core growth this year at the midpoint of our revised 2021 guidance.
More importantly, our core growth, which excludes the impact of the mortgage market, unemployment claims and ERC-related revenues is expected to accelerate to 21% this year, a powerful figure that reflects the strength of our underlying business model and EFX2023 growth strategy.
Not only is our core growth accelerating above historical levels during 2021 in challenging COVID markets and more recently, in a declining mortgage market, we are also expanding EFX beyond our traditional credit deal routes to a more diverse data analytics and technology company with our investments in the Equifax cloud, new data assets and NPIs, along with reinvesting our outperformance in bolt-on M&A in areas such as talent, government and ID and fraud.
We are quickly pivoting from building the Equifax cloud to leveraging it for innovation, new products that will position the new Equifax for stronger and more diversified growth in the future.
Our EFX2023 growth strategy remains our compass for the future and drives all of our top and bottom line growth initiatives, as we move toward 2022 and beyond.
Turning to Slide 5, Equifax had a very strong quarter.
Revenue at $1.22 billion was up 14.5% with organic constant currency growth of a strong 12%.
The almost 15% topline growth was off a strong 19% growth last year in a much stronger mortgage market.
This was our seventh consecutive quarter of double-digit revenue growth.
More importantly, our core growth was up a strong 20%.
Our U.S. B2B businesses of Workforce Solutions and USIS, which together represent almost 75% of Equifax revenue, again drove our growth, delivering 17% revenue growth despite the 21% decline in the U.S. mortgage market in the quarter.
Non-mortgage revenue was up over 30%.
And organic non-mortgage revenue was up 24%, strengthening sequentially from the 16% and 20% we saw in the first two quarters of the year.
Third quarter Equifax adjusted EBITDA totaled $404 million, up slightly from third quarter last year with margins of 33%.
As expected, margins were down versus 2020 due to the inclusion of cloud technology transformation costs of $45 million in our adjusted results in the quarter, which were excluded last year.
And redundant cloud transformation systems cost of $15 million.
These costs related to cloud tech transformation negatively impacted EBITDA margins by almost 500 basis points.
Adjusted earnings per share of $1.85 a share was down slightly from last year.
Adjusting for the cloud transformation costs of $45 million or $0.27 a share, adjusted earnings per share would have been up a strong 11%.
We continue to make significant progress executing the EFX cloud data and technology transformation.
In the quarter, we completed 4,000 B2B customer migrations, for a total of 15,400 migrations completed so far this year.
In September alone, USIS completed over 900 customer migrations.
Since the beginning of the transformation, we've completed almost 97,000 B2B migrations, 3.5 million consumer migrations, and 1 million data contributor migrations.
We remain on track and confident in our plan.
We continue to expect the North American transformation to be principally complete in early 2022, with the remaining customer migrations broadly completing by the end of next year.
International transformation will follow, being principally completed by the end of 2023, with some customer migrations continuing into 2024.
We're still in the early days of leveraging the cloud, but remain confident that will differentiate us commercially, expand our NPI capabilities, accelerate our topline and expand our margins and the growth in cost savings in 2022 and beyond.
Our NPI performance also continues to accelerate.
In the quarter, we released 30 new products and we still expect our Vitality Index to accelerate from 5% last year to over 8% in 2021.
Given our very strong third quarter performance, we are increasing our full year revenue guidance by approximately 320 basis points or $131 million, at the midpoint of a range between $4.9 billion to $4.921 billion, up 19% from last year, and increasing our full year adjusted earnings per share guidance by $0.22 per share to a midpoint of $7.57 per share, which adjusting for technology transformation cost implies a 23% growth in EPS.
Roughly two-thirds of the 320 basis point increase in our revenue growth framework to 19% is from organic business performance, with the balance from the acquisition of Appriss, Health e(fx) and Teletrack, which we expect to add about $45 million to revenue in the fourth quarter.
In the third quarter, Equifax core revenue growth, the green sections of the bars on Slide 6, grew a very strong 20%, a third consecutive quarter of core growth at or above 20%.
Non-mortgage growth in EWS and USIS and growth in International drove about 900 basis points to core revenue growth, excluding acquisitions and FX, with mortgage outperformance primarily in Workforce Solutions driving about 800 basis points of organic core growth in the quarter.
As we move through '22 and '23, we expect to continue to see strong and balanced core growth, reflecting the benefits of the new EFX Cloud, accelerated NPIs, continued strong non-mortgage growth, both from organic growth and acquisitions, as well as continued strong outperformance from Workforce Solutions.
Turning to Slide 7, Workforce Solutions had another exceptional quarter, delivering revenue of $508 million, which was up 35%.
This is the first quarter Workforce Solutions has delivered over $0.5 billion of revenue in a single quarter, a big milestone.
This was against a very strong 57% growth last year.
Adjusted EBITDA margins were up -- were 54%.
Non-mortgage revenue at Workforce Solutions was up over 48% with organic non-mortgage revenue up 41%.
The strength of Workforce Solutions and uniqueness of their twin income and employment data set was clear again in the third quarter.
Workforce's Verification Services revenue of $403 million was up a strong 34%.
Verification Services mortgage revenue grew 22% in the quarter despite the 21% decline in the mortgage market with the EWS outperformance driven by increased records, penetration and new products.
Importantly, Verification Services non-mortgage revenue was up 55% in the quarter, consistent with the very strong growth we saw last quarter.
Our government vertical, which provides solutions to federal and state governments in support of assistance programs, including food and rental support, grew over 20% in the quarter.
Government remains one of our largest non-mortgage segments with attractive growth potential in the future and represents about one-third of non-mortgage verification revenue.
Our new SSA contract went live this quarter at relatively low start-up volumes, and we expect to see it ramp as we move through 2022.
We expect new products, the addition of Appriss and expanded federal and state social services to fuel growth in our government vertical in the future.
Talent Solutions, which provides income employment verifications as well as other information for the hiring and onboarding processes through our EWS data hub, had another outstanding quarter from customer expansion and NPIs growing over 100%.
Talent Solutions now represents almost 30% of non-mortgage verification revenue.
As you know, over 75 million people change jobs in the U.S. annually with the vast majority having some level of screening as a part of the hiring process.
The addition of Appriss Insights and our new partnership with the National Student Clearinghouse will fuel growth and new products in this important vertical.
The non-mortgage consumer lending business, principally in banking and auto, showed strong growth as well of about 90% in the quarter, both from deepening penetration with lenders and from some recovery in these markets, although auto has been impacted by inventory shortages.
Employer Services revenue of $105 million was up $30 million in the quarter.
This is an important growth engine for Workforce Solutions that also delivers records.
Combined, our unemployment claims and employee retention credit businesses had revenue of about $65 million, up about $14 million from last year.
Employer Services non-UC and ERC businesses had revenue of about $40 million, up 60%, with organic growth of about 35%.
Our I-9, business driven by our new I-9 Anywhere product continue to show very strong growth, up about 80%.
Our, I-9 business is now almost half of Employer Services non-UC and ERC revenue.
Reflecting the growth in I-9 and the return to growth of Workforce Analytics, we expect Employer Services non-UC and ERC businesses, to deliver total growth of about 40% and organic growth of about 25% in the year.
Reflecting the uniqueness between data, strong verify our revenue and operating leverage resulted an adjusted Workforce Solutions EBITDA margins of 54.3%.
The decline versus last year is driven -- protect, driven by investments in the tech transformation, as well as redundant systems cost, and as well as significant investments in Data Onboarding, Sales and Marketing to continue to drive Workforce Solutions growth.
Rudy Floater and the Workforce Solutions team delivered another outstanding quarter and are positioned to deliver a very strong 2021, 2022 and beyond.
Turning now to USIS, their revenue of $380 million was up slightly from last year.
Total USIS mortgage revenue of $148 million was down 17%, while mortgage credit inquiries were down 21%, slightly better than the down 23% we expected in July.
USIS out-performance versus the overall market was driven by growth in marketing and debt monitoring products.
Importantly, non-mortgage revenue of $240 million grew almost 8% -- sorry, 16% with organic growth of over 9%.
Year-to-date, non-mortgage revenue was up a strong 17%, and organic non-mortgage revenue growth is over 10%.
Banking, insurance, commercial and direct-to-consumer, were all up over 10% in the quarter.
Fraud was up almost 10% organically and up over 75% in total with the inclusion of our Kount acquisition.
Auto was up mid-single digits, despite supply pressures and telco was down just over 5%.
Financial Marketing Services revenue, which is broadly speaking our off-line or batch business, was $55 million in the quarter and up about 20%.
The strong performance was driven by marketing-related which was up over 20%, and ID and fraud revenue, which grew over 15%.
In 2021, marketing-related revenue is expected to represent about 40% of FMS revenue, identity and fraud above 20% and risk decisioning about 35%.
The USIS sales team delivered record wins up over 20% versus last year and 40% sequentially in the quarter.
The new deal pipeline in USIS remains very strong.
During the quarter, USIS acquired Teletrack, a U.S. leader in alternative credit data.
Teletrack is being consolidated with DataX, our specialty finance credit reporting agency that we acquired in 2018, to expand our capabilities in the fast-growing alternative data space, serving unbanked and underbanked U.S. consumers.
The USIS adjusted EBITDA margins were 40% in the quarter, flat sequentially with second quarter.
Similar to second quarter, the decline in margins in the quarter versus last year was due to both costs related to cloud transformation, which include the cost of redundant systems and inclusion of our adjusted results of the technology transformation costs which are being excluded in 2020 and the expansion of our investments in sales and marketing, as well as new products to leverage both the strengthening U.S. market and accelerate new product introductions to drive revenue growth in '22 and beyond.
The revenue of $245 million was up 10% on a local currency basis and up 100 basis points sequentially.
This was the fourth consecutive quarter of growth in our global markets following the COVID pandemic impacts.
Asia Pacific, which is principally our Australia business, performed well in the quarter with revenue of $89 million, up about 7% in local currency.
Australia delivered this growth despite the extended COVID lockdowns in many portions of that country.
Australia consumer revenue continued to recover, up 3% versus last year and about flat sequentially.
Our Commercial businesses combined online and off-line revenue was up 8% in the quarter.
Fraud and identity was up 13%, following 22% growth in the first half.
European revenues of $68 million were up 9% in local currency in the quarter and flat sequentially.
Our European credit reporting business was up about 5% with continued growth in both the U.K. and Spain.
Our European debt management business revenue increased by about 21% in local currency, off the lows we saw last year during the COVID recession.
Canada delivered revenue of $44 million in the quarter, up over 8% in local currency despite a weakening Canadian mortgage market that was down 15%.
Canada experienced strong growth in fintech while supply issues continue to impact our auto business.
Latin American revenues of $45 million grew 16% in the quarter in local currency, which was the third consecutive quarter of growth coming out of COVID.
We continue to see the benefit in LatAm of the strong new product introductions introduced over the past three years.
International adjusted EBITDA margins at 26.7% were down slightly from 27.3% in the second quarter.
The sequential decline was driven by incremental technology costs in Australia and Canada, as they accelerate their cloud transformation programs.
The decline in the quarter was principally due to costs related to the cloud transformation, both the cost of redundant systems and inclusion in our adjusted results of the technology transformation costs, which we excluded last year.
Margins were negatively impacted the quarter by -- also negatively impacted the quarter by our increased investments in sales and marketing and new products.
Global Consumer Solutions revenue of $82 million was down 6% on a reported basis, and 7% on a local currency basis in the quarter, slightly above our expectations.
We saw growth of about 2% in our Global Consumer Direct business, which sells directly to consumers through equifax.com and represents a little over half of GCS revenue.
The decline in GCS revenue in the quarter was again driven by our U.S. lead gen partner business.
We expect the GCS partner business and GCS business overall to return to growth in the fourth quarter.
GCS adjusted EBITDA margins of 23.4% were up sequentially, reflecting lower operating costs.
The decline versus last year was principally driven by revenue declines.
Turning now to Slide 8.
Workforce Solutions continues to power Equifax as clearly our strongest, fastest-growing and most valuable business with strong 35% growth in the quarter, up 57% growth a year ago.
Core revenue growth was 42%, driven by the uniqueness of the twin income and employment data, scale of the twin database and consistent execution by Rudy and his team.
EWS's ability to consistently and substantially outgrow their underlying markets is driven by three factors.
First, growing the work number database.
At the end of the third quarter, TWN reached 125 million active records, an increase of 12% or 13 million records from a year ago and included 97 million unique records.
At 97 million uniques, we now have over 60% of non-farm payroll, which makes our TWN data set more valuable to our customers, with higher hit rates.
We are now receiving records every pay period from 1.9 million companies up from 1 million when we started the year and 27,000 contributors a short two years ago.
The exclusive agreement with a major payroll processor that we announced on our February call went live in the third quarter and contributed to this growth.
Our strong momentum continues, as we signed another large payroll processor last week on an exclusive basis that will come online in the coming months.
We also expect to add further payroll processors in the coming months.
As a reminder, almost 60% of our records are contributed directly by employers to which EWS provides comprehensive Employer Services like UC claims, W-2 Management, I-9, WOTC, ERC, HSA and other HR and Compliance Solutions.
Our acquisitions of HIREtech, i2verify and Health e(fx) this year strengthened our ability to deliver these unique HR services, particularly through relationships with payroll processors and HR software companies.
These partnerships have been built, up over the past decade by the Workforce Solutions team.
The remaining 40% of our records are contributed through partnerships with payroll providers and HR software companies, most of which are exclusive.
We still have substantial room to grow our income and employment database.
And expect to continue to add new data contributors, as well as reach agreements with several additional payroll processors in the fourth quarter, to add their records on an exclusive basis to TWN in 2022.
Beyond the over 50 million non-farm payroll records not yet in the TWN database, we're focused on data records from the 40 million to 50 million gig workers and around 30 million pension recipients in the U.S. marketplace to further broaden the TWN database.
We have plenty of room to grow TWN.
Workforce Solutions' new product pipeline is rapidly expanding as our teams leverage the power of our new Equifax cloud capabilities.
And third, by increasing our penetration in the markets we serve and expanding into new markets.
For example, we continue to increase our penetration in the mortgage market.
At the end of 2020, Workforce Solutions received an inquiry in almost 60% of completed mortgages, up from 55% in 2019.
This 500 basis point increase is a big step forward, but we still have plenty of runways to expand the customers using TWN mortgage.
We're also seeing substantial growth in TWN in other credit markets, including card and auto as these verticals take advantage of the unique lift from TWN income and employment data in the 16% hit rates with our database.
Growing system-to-system integrations is another key lever in driving both increased penetration and increasing the number of pulls per transaction.
During the quarter, about 75% of TWN mortgage transactions were fulfilled system-to-system, up over 2x from 32% in 2019.
And again, we still have plenty of growth potential here.
Workforce Solutions is performing exceptionally well with attractive above market and above Equifax growth rates and margins that we expect to continue in the future.
Slide 9 highlights the core growth performance of our U.S. B2B mortgage businesses, Workforce Solutions and USIS.
Our combined U.S. B2B businesses delivered 3% revenue growth in mortgage in the third quarter, outperforming the mortgage market by 24 basis points with the market down 21%.
This strong performance -- outperformance was again driven by Workforce Solutions with core mortgage growth of 43%, enabled by the multiple drivers that I just discussed.
Slide 10 provides an update on new product innovation, leveraging the Equifax cloud and our differentiated data, a key driver of our current and future growth.
In the quarter, we delivered 30 new products with 150 new products in the market so far this year, which is up 18% from the 96 we delivered in the same time frame last year.
We continue to expect our 2021 Vitality Index defined as a percent of revenue delivered from NPIs launched in the past three years to be over 8%.
In the third quarter, we launched significant new products.
We expect to continue to drive growth in '22 and beyond.
The SSA Payroll Exchange that went live as EWS product that supports verifications of SSI and SSDI social services delivering critical income and employment status based on program requirements.
One View with DataX is a new integrated consumer credit report that redefines how we deliver display and provide insights to our customers.
It also sets the stage for integrating nontraditional credit data in a single view solution for our customers.
Alternative data from DataX, Teletrack, NC+, rental payments and other sources are a critical priority for Equifax, and we expect to continue to drive NPIs in this space in the future.
Digital Identity Trust 2.0 product provides businesses with a comprehensive passive identity verification services that delivers a trust/do not trust recommendation across both physical and digital identity vectors.
This product will leverage Kount data by year-end.
MarketMix Premier Solution enables the ability for FIs to access market share and size of liquidity across geographics.
This provides quick identification of targeted growth markets to deploy spend across branch sales and marketing efforts.
And lastly, the new Equifax Affordability product in Australia uses bank transaction data and sophisticated categorization to provide an Affordability view to customers, while removing friction for the consumer.
We're clearly focused on leveraging our new Equifax cloud capabilities to drive our NPI rollouts and new product revenue in '21 and beyond.
Growing NPI is central to our EFX2023 growth strategy.
As detailed on Slide 11 and 2021, we reinvest our strong outperformance in strategic and accretive bolt-on acquisitions that strengthen our position in existing growth markets and allow us to enter new markets with new capabilities.
Our 2021 acquisitions add $300 million plus synergies to our run rate revenue.
We are focused on executing acquisitions that are accretive to our long-term revenue growth and margins and deliver attractive shareholder returns.
Our priorities for M&A are clear and aligned around, number one, expanding our differentiated data, which is at the core Equifax.
We have scale and unique data sets that we want to expand and leverage with new data elements to drive enhanced decisioning for our customers.
All of our acquisitions deliver new and differentiated data, and more data drive better decisions.
Second, expanding and widening our largest and fastest-growing business, Workforce Solutions, is a priority for our M&A.
The Appriss Insights, HIREtech, Health e(fx) and IQ Verify acquisitions strengthen Workforce and position EWS for future outperformance.
And last, broadening our ID and fraud capabilities in the fast-growing digital and e-commerce space is another M&A priority.
Kount strongly advanced our capabilities in this fast-growing space.
We closed the Appriss acquisition on October 1st and are focused on integration, new solutions and growth.
Appriss Insights and our new partnership with the National Student Clearinghouse are a big step forward in our strategy to build out an, EWS data hub centered off our almost 500 million historical TWN data records, to address the fast-growing talent and government markets.
As detailed on Slide 12, combining our scale TWN data with Appriss Insights criminal and healthcare credentialing and sections data, along with other partner data assets, including the exclusive partnership for college and university data, we entered into in the third quarter with the National Student Clearinghouse, allows Workforce Solutions to deliver the most complete, realtime 360-degree view of the prospective employee or applicant, for government benefits available in the market.
The Talent Solutions and Government verticals offer large and growing markets for our Workforce Solutions business through the EWS Data Hub.
Workforce Solutions government vertical is focused on delivering data and solutions to support federal and state benefit programs as well as law enforcement agencies.
This is a substantial and growing sector that we estimate to have an addressable market of about $2 billion.
Appriss Insights strongly accelerates our ability to penetrate these large and fast growing TWNs.
Insights is anticipated to generate 150 million of run rate revenue during 2021 and to grow on a stand-alone basis at over 15% annually.
We also anticipate building toward approximately $75 million in revenue synergies by 2025, leveraging the EFX Cloud to integrate Appriss Insight's rich people-based risk intelligence data in the AWS data hub to form a new multi-data solutions and through cross-selling efforts.
Acquiring Appriss Insights and partnering with the National Student Clearinghouse provide strong pillars for Workforce Solutions growth and fast-growing markets going forward.
Slide 13 highlights our focus on adding alternative data to our database focused on the 60 million un or underbanked population in the United States.
According to our Federal Reserve study, 6% of U.S. adults do not have a checking, savings or money market account, although two-fifth use some form of alternative financial service.
Moreover, 16% of adults have a bank account, but also use an alternative financial service product generally, at much higher costs.
Providing services that help bring these underserved populations into the financial mainstream is core to our purpose of helping people live their financial best.
And is an important priority for our customers.
Our acquisition of Teletrack in September, which we are combining with our DataX business, creates a leading U.S. specialty consumer reporting agency with data on more than 80 million, in file unbanked and underbanked and credit rebuilding consumers.
Our national consumer telecom and utilities exchange partnership is another unique data set focused on this space that has more than 420 million records and 250 million consumers, helping our customers to expand underwriting to no hit or thin file customers.
We are focused on expanding our unique alternative data from sources, including specialty finance companies, alternative lenders, telco companies, cable and satellite TV providers, municipalities and utilities to drive growth in the fast-growing alternative data markets.
And we'll continue to look for opportunities to strengthen our alternative databases through partnerships and M&A.
As Mark discussed, our 3Q results were very strong and much stronger than we discussed with you in July, with revenue about $50 million higher than the midpoint of the expectation we shared.
For perspective, the strength was driven by our U.S. B2B businesses, principally Workforce Solutions and also USIS.
Workforce Solutions Verification Services was stronger than discussed in July, principally in non-mortgage and talent solutions, card and auto, as well as to a lesser extent in mortgage.
Workforce Solutions employee retention credit and unemployment claims revenue was stronger than we discussed in July.
We expect the strength in ERC to continue in the fourth quarter.
USIS was also somewhat stronger than we discussed in July.
The strength in mortgage relative to our discussion in July was partially a reflection of the mortgage market being down 21% versus the down 23% we discussed in July.
Workforce Solutions' outperformance relative to the mortgage market was also stronger than we expected.
This strong revenue drove upside in adjusted earnings per share relative to the expectations that we shared in July.
Before discussing our increased guidance for 2021 and providing a framework for you to consider for 2022, let's briefly discuss our assumptions for the U.S. mortgage market.
As shown on Slide 14, we are expecting the 21% year-to-year decline in U.S. mortgage credit inquiries that we saw in the third quarter to continue in the fourth quarter with the fourth quarter down about 20%.
This results in 2021 U.S. mortgage market credit inquiries being down just over 7% from 2020, slightly better than the down somewhat under 8% we discussed with you in July.
For 2022, based on trends we are seeing in new purchase and refinance that I will discuss shortly, our 2022 framework assumes the U.S. mortgage market as measured by total credit market inquiries will decline about 15% from 2021.
The 15% decline versus 2021 is most substantial in the first half of 2022, given the significant slowing we have seen in the U.S. mortgage market already in the second half of '21.
Our assumed level of 2022 U.S. mortgage market credit inquiries remains over 10% above the average levels we saw over the 2015 to '19 period.
The left side of Slide 15 provides perspective on the number of homes that would benefit by 75 basis points or more from refinancing their mortgage at current rates.
Despite the substantial refinancing activity that's occurred over the past year and current increases in US treasuries, the number of U.S. mortgages that could benefit from a refinancing remains at a relatively strong level of about 12 million.
Home prices have appreciated significantly over the past 18 months, which has provided many homeowners with cash up refinancing opportunities, which in past cycles has led to increased refinancing activity from borrowers.
For perspective, based upon our most recent data in April, mortgage refinancings remain at just under 1 million a month.
As shown on the right side of Slide 15, the pace of existing home purchases continues at historically very high levels.
This strong new purchase market is expected to continue throughout '21 and '22.
Our 2022 assumption for our U.S. mortgage credit inquiries assumes that we see purchase mortgage financings at levels above the levels we saw in 2020, with refinancings declining significantly from the levels we saw in both 2020 and 2021.
Slide 16 provides our guidance for 4Q '21.
We expect revenue in the range of $1.23 billion to $1.25 billion, reflecting revenue growth of about 10% to 11.8%, including a 0.1% benefit from FX.
Acquisitions are expected to positively impact revenue by 5.4%.
We're expecting adjusted earnings per share in 4Q 2021 to be $1.72 to $1.82 per share compared to 4Q 2020 adjusted earnings per share of $2 per share.
In 4Q 2021, technology transformation costs are expected to be around $45 million or $0.27 per share.
Excluding these costs, which were excluded from 4Q 2020 adjusted EPS, 4Q 2021 adjusted earnings per share would be $1.99 to $2.09 per share.
Slide 17 provides the specifics on our 2021 full year guidance.
We are increasing guidance substantially, reflecting our very strong 3Q 2021 performance.
The acquisitions of Appriss, Health e(fx) and Teletrack are expected to add about $45 million of revenue in the quarter.
2021 revenue of between $4.901 billion and $4.921 billion reflects growth of about 18.7% to 19.2% versus 2020, including a 1.4% benefit from FX.
Acquisitions are expected to positively impact revenue by about 3.1%.
AWS is expected to deliver over 38% revenue growth with continued very strong growth in Verification Services.
USIS revenue is expected to be up mid-to-high-single digits, driven by growth in non-mortgage.
Combined, EWS and USIS mortgage revenue is expected to be up over 18% in 2021, about 25 percentage points stronger than the overall market decline of just over 7%.
International revenue is expected to deliver constant currency growth of about 10%.
And GCS revenue is expected to be down mid-single digits in 2021.
GCS revenue is expected to be up over 5% in the fourth quarter.
As a reminder, in 2021, Equifax is including all cloud technology transformation costs and adjusted operating income, adjusted EBITDA and adjusted EPS.
These onetime costs were excluded from adjusted operating income, adjusted EBITDA and adjusted earnings per share in 2017 through 2020.
In 2021, Equifax expects to incur onetime cloud technology transformation costs of approximately $165 million, a reduction of over 50% from the $358 million incurred in 2020.
The inclusion in 2021 of these onetime costs would reduce adjusted earnings per share by about $1.01 per share.
2021 adjusted earnings per share of $7.52 to $7.62 per share, which includes these tech transformation costs, is up 7.8% to 9.3% from 2020.
Excluding the impact of tech transformation cost of $1.01 per share, adjusted earnings per share in 2021 would show growth of about 22% to 24% versus 2020.
2021 is also negatively impacted by redundant system costs of about $80 million relative to 2020.
These redundant system costs are expected to negatively impact adjusted earnings per share by approximately $0.50 per share.
And negatively impact adjusted earnings per share growth by about seven percentage points in 2021.
We remain confident in our cloud transformation plan and the savings in 2022 and beyond that we have discussed previously with you.
Now let's turn to a discussion of an early framework for 2022.
Slide 18 provides the macro assumptions behind our 2022 framework.
Given the continued significant uncertainties in the overall U.S. and global economy, as well as in the U.S. mortgage market, we wanted to provide you with the assumptions we've been using at this stage in developing our framework for 2022.
As I discussed previously, we expect the U.S. mortgage market, our proxy for which is U.S. mortgage credit inquiries, to decline about 15% in 2022 relative to 2021.
Equifax's U.S. B2B mortgage revenue is expected to continue to significantly outperform the overall mortgage market and show growth in 2022 relative to 2021.
Our overall framework is based on a continued U.S. economic recovery that is 2022 GDP growth of about 4% for the full year.
We expect our USIS and Workforce Solutions non-mortgage businesses to outperform their underlying markets.
We expect Workforce Solutions' UC and ERC businesses to decline by almost 30% in 2022.
We also expect that International economies will continue to recover in 2022.
Our International businesses are also expected to outperform their underlying markets.
Slide 19 provides a view of Equifax total and core revenue growth from 2017 through 2022 -- through the 2022 framework.
In 4Q 2021, Equifax core revenue growth is expected to be a strong 17% with core organic revenue growth of about 12%.
Almost two-thirds of that core organic growth is driven by non-mortgage growth across all four BUs.
In 2022, based on the assumptions I just shared, Equifax total revenue is expected to be up about 8%.
We anticipate delivering strong core revenue growth of 14%, reflecting organic growth of 11% -- organic core growth of 11% and a 3% benefit from acquisitions completed in 2021, which will more than offset the significant headwinds from the assumed declines in the U.S. mortgage market and the UC and ERC businesses.
Slide 20 provides a revenue walk detailing the drivers of the 8% revenue growth in 2022 from the midpoint of our 2021 revenue guidance to the midpoint of our 2022 revenue framework, 2022 revenue of $5.3 billion.
The 15% decline in the U.S. mortgage market and the expected declines in the Workforce Solutions unemployment claims and ERC businesses are expected to negatively impact revenue in 2022 by 5.75 percentage points.
Core organic revenue growth is anticipated to be over 11%.
Non-mortgage core organic growth is expected to drive about two-thirds of the growth.
The largest contributor is Workforce Solutions with strong organic growth in talent solutions, government and employee boarding solutions, including I-9.
USIS non-mortgage International and GCS are also expected to drive core growth.
Mortgage revenue outperformance relative to the overall mortgage market is expected to drive the remaining about one-third of the organic core growth.
This is driven by strong outperformance in Workforce Solutions.
The acquisitions completed in 2021 are expected to contribute about three percentage points of growth to 2022.
Slide 21 provides an adjusted earnings per share walk, detailing the drivers of the expected 14% growth from the midpoint of the 2021 guidance of $7.57 per share to the midpoint of our 2022 framework of $8.65 per share.
Revenue growth of 8% at our 2021 EBITDA margins of about 33.8% would deliver 11% growth in adjusted EPS.
In 2022, we expect to deliver EBITDA margin expansion of about 200 basis points.
This margin expansion is expected to drive 9% growth in adjusted EPS.
This margin expansion is expected to be delivered by the actions we have discussed with you throughout 2021.
Our transformation investments will be reduced by about $100 million in 2022 with about half of this reduction or about $50 million being reinvested in new product and other development.
We will begin to see net cloud cost savings in 2022 defined as the savings from improving production costs driven by the decommissioning of our legacy on-prem systems and other improvements in our operations exceeding the cost of running our new cloud-native systems.
Margins will also be enhanced by leverage on corporate and G&A.
Partly offsetting these benefits to EBITDA are cost increases, particularly in salaries and contracted services as the tight labor market drives cost higher, as well as lower EBITDA margins in 2022 from the 2021 acquisitions as we will just be ramping synergies during 2022.
Depreciation and amortization is expected to increase by about $45 million in 2022, which will negatively impact adjusted earnings per share by about 4%.
D&A is increasing in 2022 as we accelerate putting cloud-native systems into production.
The combined increase in interest expense and tax expense in 2022 is expected to negatively impact adjusted earnings per share by about two percentage points.
The increase in interest expense reflects the increased debt from our 2021 acquisitions.
Our estimated tax rate used in this framework of 24.5%, does not assume any changes in the U.S. federal tax rate.
Should that occur, we will let you know the estimated impact on our 2022 results.
As there remains significant uncertainty in underlying market drivers, including the pace of normalization of the U.S. mortgage market and the pace of economic growth worldwide, what we provided today for 2022 is a framework for you to consider.
We hope this early view of our framework for 2022 is helpful and reinforces the power of the new Equifax to deliver 14% growth and 8% total growth at the midpoint of our range of thinking, assuming the mortgage market and UC and ERC declines impact our revenue growth by almost 6%, in 2022.
Stepping back and reviewing the macro trends outlined on Slide 22, these macros have been driving information services for the last decade.
Over the last 24 months, we believe most of the macro factors have substantially accelerated.
And through our 2021 acquisitions of Appriss, Kount and Teletrack and our EFX cloud investments, advantage Equifax to benefit from these macro trends.
We believe we also have unique levers at Equifax to deliver strong future growth, including Workforce Solutions above market and EFX growth and margins and our expanded focus on new data assets like Appriss Insights, the USIS recovery and non-mortgage growth and Kount ID and fraud growth.
The new Equifax Cloud, which is driving our competitiveness NPIs topline and cost savings; and NPI leveraging Equifax cloud and our expanded resources and focus on new products and then, of course, M&A to broaden strength in Equifax.
These attractive market macros along with broad Equifax growth levers and our strong core outperformance in the past few years, give us the confidence in our ability to deliver above-market growth in the future.
Wrapping up on Slide 23, Equifax delivered another strong and broad-based quarter.
We had strong momentum as we move into the fourth quarter to 2022.
We now delivered seven consecutive quarters of strong, above-market, double-digit growth, reflecting the power of the new Equifax business model and our execution against our EFX2023 strategic priorities.
Equifax is on offense.
We remain confident in our outlook for 2021 and raised our full year midpoint revenue growth rate by approximately 300 basis points to 19% growth for the year.
And we also raised our midpoint earnings per share by $0.22 to $7.57 per year.
Workforce Solutions had another outstanding quarter, following our results, delivering 35% revenue growth and 54% EBITDA margins.
EWS is our largest, fastest-growing and most valuable business, and Rudy and his team remain focused on delivering outsized growth.
USIS also delivered a strong quarter with 16% non-mortgage growth and 9% organic non-mortgage growth offsetting the impact of sharp over 20% decline in the mortgage market, Sid saying his USIS team remains competitive and are winning in the marketplace.
International grew for the fourth consecutive quarter with 10% growth in local currency as economies reopen and business activity resumes outside the United States.
We have high expectations for International as we move into 2022.
We spent the past three years building the Equifax Cloud and are now in the early days of leveraging the new and uniquely Equifax Cloud capabilities.
As we move into '22 and beyond, we will increasingly realize the topline cost and cash benefits from these new only Equifax Cloud capabilities.
As I mentioned earlier, our 2021 M&A has added $300 million of run rate revenue to Equifax.
Reinvesting our strong cash flow in accretive and strategic bolt-on M&A is central to our EFX2023 growth strategy.
We're now focused on integrating these acquisitions and executing our synergy and growth plans in order to leverage our new data products and capabilities.
Our early look at a 2022 financial framework calls for 8% revenue growth and adjusted earnings per share growth of 14%, assuming a 15% decline in the mortgage market.
More importantly, the framework includes strong 14% EFX growth -- core EFX growth.
2022 will be a pivotal year for Equifax as we shift toward leveraging the Equifax Cloud for innovation, new products and growth.
And lastly, turning to Slide 24, many of you have been closely following Equifax for many years and know we've been speaking to you about for some time about our plan to have our first Investor Day, which will be our first Investor Day since 2012 and the cyber event.
It's been a long time.
I'm energized to announce that our Investor Day will take place on November 10 at 8:30 AM Eastern Time and will be held virtually.
We've opened up online registration as of today, and the link to do so on Slide 24 is live.
We are very excited to have the opportunity to update you on the progress we have made in making and executing our EFX2023 growth strategy, share with you our long-term financial framework and also our capital allocation plan, speak with you about how we are and will continue to leverage our FX cloud capabilities, including by continuing to accelerate our new product innovations; and provide you with overviews of the state of affairs of our business units related by their respective leaders.
Investor Day will be an important day for our company and stakeholders, and we look forward to speaking with you then.
 Assistant:

Chosen response:
q3 adjusted earnings per share $1.85.
q3 revenue of $1.2 billion, up 14%.
increasing full-year revenue and earnings per share guidance.
adjusted earnings per share attributable to equifax was $1.85 in q3 of 2021, down 3 percent compared to q3 of 2020.
raising our full-year financial guidance, reflecting revenue to a range of $4.901 billion to $4.921 billion.
raising our full-year financial guidance, reflecting adjusted earnings per share to a range of $7.52 to $7.62.


Prompt:
Human: As always, we appreciate your interest.
Brent Wood, our CFO, is also participating on the call.
We refer to certain of these risk factors in our SEC filings.
We hope everyone and their families are well.
They continued performing at a high level amid a challenging unique work environment.
Our fourth quarter and full year results were strong and demonstrate the resiliency of our portfolio and of the industrial market.
Some of the results the team produced include Funds From Operation, came in above guidance up 8.7% compared to fourth quarter last year.
This marks 31 consecutive quarters of higher FFO per share as compared to the prior year quarter, truly a long-term trend.
And for the year, FFO rose 8% to a record $5.38.
This represents an $0.08 per share improvement over our original pre-COVID forecast.
Our quarterly occupancy averaged 96.9% and at quarter end, we were ahead of projections at 98% leased and 97.3% occupied.
Our occupancy is benefiting from a healthy market, with accelerating e-commerce and last mile delivery trends.
Also benefiting the occupancy was a high retention rate of 80% for the year.
Quarterly releasing spreads were strong at 15.4% GAAP, and 7.9% cash.
Our 2020 releasing spreads set an annual record at 21.7% GAAP and 12.3% cash.
This further marks six consecutive years of double-digit rent -- GAAP rent growth.
Finally, same-store NOI rose 2.2% for the quarter and 3.2% for the year.
In summary, during the prolonged, choppy environment, I'm proud of our team's results.
Today, we're responding to strengthen the market and demand for industrial product by both users and investors by focusing on value creation via development and value-add investments.
I'm grateful we ended the year at 98% leased, our highest quarter end on record.
Houston, our largest market at 97.2% leased, with a ten-month average rent collection of over 99%.
Further, Houston represents 13.1% of rents down 80 basis points from fourth quarter 2019 and is further projected to fall into the 12% as a percent of our NOI this year.
Companywide rent collections remain resilient.
For January thus far, we've collected approximately 99% of monthly rents.
There are still some unknowns about how fast and when the economy truly reopens and recovers.
Brent will speak to our budget assumptions, but I'm pleased that in spite of the uncertainty, we finished 2020 at $5.38 per share in FFO and forecast $5.68 for 2021.
As we've stated before, our development starts were pulled by market demand.
Thus, we halted starts for a few quarters last year, then [Indecipherable] again in fourth quarter.
Based on the market strength, we're seeing today, our forecast is for $205 million in development starts for 2021.
And to position us following the pandemic, we acquired several new sites during the fourth quarter with more on our pipeline along with value-added additions.
More details to follow as we close on each of these investments.
And to perhaps free [Phonetic] up the question, none of the development starts, value add investments or land purchases are in Houston.
Finally, our strategic dispositions during the quarter were to sell the last of our four buildings in Santa Barbara completing our market exit along with another Houston asset.
Brent will now review a variety of financial topics including our 2021 guidance.
Our fourth quarter results reflect the resiliency of our team and strong overall performance of our portfolio amid a very challenging year.
FFO per share for the fourth quarter exceeded our guidance range at $1.38 per share, and compared to fourth quarter 2019 of $1.27 represented an increase of 8.7%.
The outperformance continues to be driven by our operating portfolio performing better than anticipated, namely higher occupancy.
From a capital perspective, during the fourth quarter, we issued $17 million of equity at an average price just over $140 per share, and as previously disclosed, we closed on two senior unsecured private placement notes totaling $175 million with a weighted average interest rate of 2.65%.
That activity, combined with our already strong and conservative balance sheet has kept us in a position of financial strength and flexibility.
Our debt to total market capitalization is 19%, debt to EBITDA ratio is 5.2 times and our interest and fixed charge coverage ratio increased over 7.2 times.
Our rent collections have been equally strong.
We have collected 99.6% of our fourth quarter revenue and we have already collected half of the total rent deferred early in the year of $1.7 million.
Bad debt for the fourth quarter of $1.1 million included a single, straight-line rent charge of $677,000 as part of an ongoing process of replacing an existing tenant with a better credit tenant at a much higher rental rate at a California property.
Although the tenant was current on their cash rent, we were required to write off the remaining straight-line rent balance due to the probability of terminating their lease early to accommodate the new tenant.
As we have consistently stated, the depth and duration of the pandemic and its impact on the economy is indeterminable.
However, the degree of potential tenant financial stress and loss of occupancy we had budgeted throughout 2020 never materialized.
As a result, our actual FFO per share for the year of $5.38 exceeded our pre-pandemic guidance issued a year ago.
Looking forward, FFO guidance for the first quarter of 2021 is estimated to be in the range of $1.37 per share to $1.41 per share and $5.63 to $5.73 for the year.
The 2021 FFO per share midpoint represents a 5.6% increase over 2020.
The leasing assumptions that comprise 2021 guidance produced an average occupancy midpoint of 96.4% for the year and a cash [Phonetic] same property increase range of 3.5% to 4.5%.
Other notable assumptions for 2021 guidance include $65 million in acquisitions and $60 million in dispositions, $140 million in common stock issuances, $250 million of unsecured debt, which will be offset by $85 million in debt repayment and $1.8 million in bad debt, which represents a forecasted year-over-year bad debt decrease of 35%.
In summary, we were very pleased with our fourth quarter results.
We will continue to rely on our financial strength, the experience of our team, and the quality and location of our portfolio to carry our momentum into 2021.
Now, Marshall will make some final comments.
In closing, I'm proud of our 2020 results and excited to pursue our 2021 opportunities.
Our Company and our team are working well through the pandemic, as evidenced by a number of Company records set.
And as the economy stabilizes, it's the future that makes me most excited for EastGroup.
Our strategy has worked well in the past few years.
Coming out of this pandemic, we foresee an acceleration in a number of positive trends for our properties and within our markets.
Meanwhile, our bread and butter, traditional tenants remain and will continue needing last mile distribution space in fast growing sunbelt markets.
These, along with the mix of our team, our operating strategy and our markets has us optimistic about our future.
Leland recently passed away, and we will miss his eternal optimism.
And with that, we'll open up the floor for any questions.
 Assistant:

Chosen response:
compname reports q4 ffo per share $1.38.
q4 ffo per share $1.38.
estimated ffo per share attributable to common stockholders for 2021 is estimated to be in the range of $5.63 to $5.73.


Prompt:
Human: Also on the call are other members of the management team.
Materials supporting today's call are available at www.
Actual results could differ materially from current expectations.
Important factors that could cause different results are set forth in our SEC filings.
Please read these carefully.
During the question-and-answer session, please limit yourself to one question and one follow-up.
And before I start commenting on the quarter, I wanted to note the senior leadership changes that we announced last week, Kevin Payne, SCE's President and CEO, plans to retire on December 1, and this is after 35 years with the company.
Kevin's had a profound impact at the utility, most particularly with its customer-centric focus, leading our wildfire risk mitigation efforts and advocating for and advancing the company's clean energy strategy.
While I am going to miss my good friend very much, I am delighted with our deep bench: Steve Powell will succeed Kevin as President and CEO; and Jill Anderson, currently Senior Vice President of Customer Service, will succeed Steve as EVP of Operations.
Promoting Edison talent will ensure a seamless transition, and I believe that Steve and Jill both bring exceptional experience to their new roles.
I know that a number of you have already met Steve and Jill and many of you will have an opportunity to meet them next week at EEI's Financial Conference as well.
Turning to the quarter.
Today, Edison International reported core earnings per share of $1.69 compared to $1.67 a year ago.
This comparison is not meaningful because during the quarter, SCE recorded a true-up for the final decision in track one of its 2021 general rate case, which is retroactive to January 1.
Reflecting the year-to-date performance and our outlook for the remainder of the year, we are narrowing our 2021 earnings per share guidance range to $4.42 to $4.52.
We are also reiterating our longer-term earnings per share growth target of 5% to 7% through 2025.
Maria will discuss our financial performance in detail in her report.
Now starting with past events.
SCE today announced two updates related to the 2017 and 2018 wildfire and mudslide events.
Page three in the slide deck provides an overall summary.
First, SCE revised the best estimate of potential losses to $7.5 billion from $6.2 billion.
As we have mentioned in our continuing communications on this topic, we evaluate the best estimate quarterly.
As part of the ongoing and very complex litigation process, we diligently consider new information that arises to provide all of you with our best estimate.
Based on additional information across a broad set of claim types collected during the quarter, along with an agreement with the CPUC Safety and Enforcement Division, or SED, which I'll talk about in a minute, SCE revised its estimate of the total potential losses.
While the total estimate increased this quarter, SCE continued to make meaningful progress, settling claims and completed approximately $485 million of settlements.
SCE has now settled about 70% of the estimated exposure for the 2017 and 2018 events.
I want to emphasize that we do not need equity above our previously disclosed 2021 financing plan to fund the higher estimated losses.
Maria will address this topic later on the call.
Second, the utility reached an agreement with the SED to resolve its investigations into the 2017 and 2018 wildfire and mudslide events and three other 2017 wildfires.
As we have previously disclosed, the SCD has conducted investigations to assess SCE's compliance with applicable rules and regulations in areas affected by the Thomas, Koenigstein, and Woolsey Fires.
It was possible that CPUC would initiate formal enforcement proceedings to pursue fines and penalties for alleged violations though we were unable to estimate the magnitude or the timing as part of our best estimate.
The recently executed agreement, which is subject to CPUC approval, would resolve that uncertainty.
The agreement has a total value of $550 million, composed of about $110 million fine, $65 million of shareholder-funded safety measures and an agreement by SCE to waive its right to seek cost recovery for $375 million of uninsured claims payments out of the $5.2 billion total in the current best estimate.
In the SCD agreement, SCE did not admit imprudence, negligence or liability with respect to the 2017 and 2018 wildfire and mudslide events and will seek rate recovery of prudently incurred actual losses in excess of available insurance other than for the $375 million waived under the SED agreement.
While SCE disputes a number of the alleged violations reaching an agreement puts one additional uncertainty behind us.
Let me now address the Southern California wildfire season.
SCE continues to make solid progress on the execution of its Wildfire Mitigation Plan or WMP and its PSPS action plan.
SCE has installed over 1,000 miles of covered conductor year-to-date, bringing the total to 2,500 miles since program inception.
Over the past three years, the utility has replaced about 25% of its overhead distribution power lines in high fire risk areas with covered conductor.
SCE has also performed another annual cycle of inspections in high fire risk areas, supplemented with additional inspections targeting dry fuel areas.
This resulted in approximately 195,000 assets, undergoing 360-degree inspections in SCE's high-power risk area.
SCE also continues to be on track to meet most of its goals outlined in our WMP by end of the year.
And the scorecard is shown on page four of the slide deck.
All these ongoing mitigation actions continue to strengthen our confidence in our utilities overall improved risk profile with respect to wildfires.
Turning to page five.
We highlight the metrics we showed you last quarter, which are proof points of how SCE believes it has reduced wildfire risk for its customers.
We have added an additional metric.
Looking back at past wildfire events and considering the utility's current PSPS protocols, we can't quantify the damage that would have been prevented.
Using red flag warning days as a proxy for when the utility would use PSPS today, SCE would have prevented over 90% of the structures damaged or destroyed for fires larger than 1,000 acres associated with its infrastructure.
And we have summarized this on page six.
In total, considering physical mitigation measures such as covered conductor, operational practices such as tree removals, inspections and vegetation management and the use of PSPS.
SCE estimates that it has reduced the probability of losses from catastrophic wildfires by 55% to 65% relative to pre-2018 levels.
This is based on a recent analysis using risk management solutions, industry-leading wildfire model and SCE's data related to actual mitigations deployed and mitigation effectiveness, which enabled us to quantify the risk reduction.
While the risk can never be fully eliminated, the utility does expect to further reduce risk and to decrease the need for PSPS to achieve this risk reduction with continued grid-hardening investments.
As California continues to transition to a clean energy economy, maintaining and even improving system reliability becomes essential, particularly with greater reliance on electricity.
SCE worked closely with the Governor's office, CAISO, the CPUC, customers and many stakeholders to avoid rolling outages this past summer when the state and the entire West once again faced record temperatures.
Major California energy agencies, including the CAISO, California Energy Commission and CPUC have indicated that additional capacity is needed to support summer 2020 -- summer 2022, pardon me, under extreme conditions like the heat, drought and wildfires we have seen repeatedly over the past several years.
To accelerate construction of new capacity, the governor issued an emergency proclamation that requested the CPUC to work with load-serving entities to accelerate construction of energy storage for 2021 and 2022.
To this end, in addition to securing over 230 megawatts of additional capacity from third parties, SCE plans to construct about 535 megawatts of utility-owned storage for this upcoming summer.
This is a material increase in incremental capacity to mitigate the risk of statewide customer outages for summer 2022, caused by extreme weather events and continued drought conditions.
While the governor signed the largest climate package in state history, which included 24 bills and over $15 billion in climate, clean energy and wildfire preparedness funding, there is still an ongoing need for a lot more to be done.
So I would like to highlight a paper that we recently released and it's entitled "Mind the Gap: Policies for California's Countdown to 2030".
This policy paper is Edison International's latest contribution to identify policies and actions needed to help California reduce emissions and decarbonize the economy.
In the paper, we identified state and federal policy recommendations needed for California to meet its 2030 climate target, which is a foundational way point for the state to achieve its goal to the decarbonize its economy by 2045.
While California has made progress in reducing GHG emissions, closing the gap between the current trajectory and its 2030 goal requires a significant acceleration of effort.
It means quadrupling the average 1% annual reduction in GHG emissions achieved by the state since 2006, quadrupling that to 4.1% per year between 2021 and 2030.
That's a tall order, but it's feasible.
It will require market transforming policies and incentives to advance critical areas, such as decarbonizing the power supply, preparing the grid for shifts in usage and increasing demands and electrifying transportation and buildings.
As the only all electric investor-owned utility in California, SCE is well positioned to lead this transition.
We will continue to work in close partnership with policymakers and stakeholders to identify ways to improve funding, planning, standard setting and other approaches to successfully achieve the equitable and affordable transition to a clean energy economy.
To emphasize affordability, our analysis shows that an electric led transition is the most affordable pathway.
Since the greater efficiency of electric motors and appliances will reduce customers' total costs across all energy commodities by 1/3 by 2045.
Edison International is committed to achieving net 0 GHG emissions across Scopes one, two and three by 2045.
And this covers the power SCE delivers to customers as well as Edison International's enterprisewide operations, including supply chain.
This all continues our alignment with the broad policies needed to address climate change and ensure a resilient grid.
We will also continue to engage with state, national and global leaders to advance the clean energy transition, which is why today, I am joining you by phone from COP26 in Glasgow, Scotland, where am representing both Edison and EEI.
And with that, Maria will provide her financial report.
My comments today will cover third quarter 2021 results, our capital expenditure and rate base forecast and updates on other financial topics.
Edison International reported core earnings of $1.69 per share for the third quarter 2021, an increase of $0.02 per share from the same period last year.
As Pedro noted earlier, this year-over-year comparison is not particularly meaningful because SCE recorded a true-up for the final decision in its 2021 general rate case, and that's retroactive back to January 1.
On page seven, you can see SCE's key third quarter earnings per share drivers on the right-hand side.
I will highlight the primary contributors to the variance.
To begin, SCE received a final decision in the 2021 GRC during the third quarter because first and second quarter results were based on 2020 authorized revenue, a true-up was recorded during the quarter for the first six months of 2021.
This true-up is reflected in several line items on the income statement for a net increase in earnings of $0.35.
The components are listed in footnote three.
Higher 2021 revenues contributed $0.55 and including $0.50 related to the 2021 GRC decision, $0.04 for CPUC revenues related to certain tracking accounts and $0.01 at FERC.
O&M had a positive variance of $0.28, mainly due to the establishment of the vegetation management and risk management balancing accounts, partially offset by increased wildfire mitigation costs due to the timing of regulatory deferrals in the third quarter of 2020.
Depreciation had a negative variance of $0.20, primarily driven by a higher asset base and a higher depreciation rate resulting from the 2021 GRC decision.
Income taxes had a negative variance of $0.41.
This includes $0.39 of lower tax benefits related to balancing accounts and the GRC true-up, which are offsetting revenue and have no earnings impact.
At EIX Parents and Other, the loss per share was $0.09 higher than in third quarter 2020.
The primary driver was preferred dividends on the $1.25 billion of preferred equity issued at the parent in March of this year.
Now let's move to SCE's capital expenditure and rate base growth forecast.
As shown on page eight, we have updated our capital forecast primarily to reflect the recently announced utility-owned storage investment.
As Pedro mentioned, SCE filed an advice letter for cost recovery of $1 billion of capital spending to construct about 535 megawatts of utility-owned storage.
SCE is seeking expedited approval of the advice letter to maximize the likelihood of the projects meeting their expected online dates for the incremental capacity needed for summer 2022.
These projects are a prime example of the essential role utilities can play in quickly ensuring California has a safe, reliable and clean electricity supply.
We increased our 2022 capital expenditure forecast by approximately $900 million and lowered the forecast somewhat for 2023 through 2025 because these storage projects accelerate some, but not all of the capacity we previously forecasted in those years.
The net increase in the high end of the capital forecast for 2021 through 2025 is approximately $500 million.
As shown on page nine, we have also updated our rate base forecast to reflect the storage investments I just mentioned.
This is the primary driver of the increase to the 2022 through 2025 rate base forecasts.
For 2021, we also fine-tuned the forecast to reflect adjustments related to wildfire mitigation tracking accounts following the implementation of the 2021 GRC decision and quarter end estimates of the spending related to these accounts.
The results of these updates is a reduction to the 2021 rate base of $300 million.
Overall, these updates result in a projected rate base growth rate of 7% to 9% from 2021 to 2025.
Page 10 provides an update on several major approved and pending applications for recovery of amounts and regulatory assets.
This will result in significant incremental cash flow to SCE over the next few years.
SCE expects to collect over $1.4 billion in rates between now and 2024 related to already approved applications.
About half of that balance will be recovered in 2022.
For the three pending applications shown in the middle of the slide, assuming timely regulatory decisions, SCE expects to collect another $844 million by the end of 2023.
Lastly, we show the remaining expected securitizations of AB 1054 capital expenditures.
The utility recently received a final decision in its second securitization application.
This will allow SCE to securitize $518 million of wildfire mitigation capital expenditures.
SCE expects to complete the securitization in Q4 of this year or Q1 2022.
The securitizations, along with the rate recovery of the other regulatory assets will allow SCE to pay down short-term debt and strengthen our balance sheet and credit metrics.
Turning to page 11.
During the quarter, SCE filed an application to establish its CPUC cost of capital for 2022 through 2024 and reset the cost of capital mechanism.
SCE is requesting an ROE of 10.53% with resets to its cost of debt and preferred financing, which would keep customer rates unchanged.
The utility's alternative request to maintain its ROE at 10.3% and reset the cost of debt and preferred would reduce customer rates by about $50 million in 2022.
When SCE filed the cost of capital request in August, it paused any other filings related to the trigger mechanism.
Last week, SCE was directed by the CPUC to file the information that would have normally been provided in those other filings.
The next step from here is that the commission will issue a scoping memo to outline the issues and procedural schedule.
pages 12 and 13 show our 2021 guidance and the preliminary modeling considerations for 2022.
As Pedro mentioned earlier, we are narrowing the 2021 earnings per share guidance range to $4.42 to $4.52.
Turning to page 14.
We see an average need of up to $250 million of equity content annually through 2025.
The specific annual amounts will depend on the level of spending within our capital plan for that year.
The significant new investment of $1 billion of utility-owned storage considerably accelerates the timing of the capital investment program and increases the overall opportunity as noted earlier.
To fund this growth, which is well above the high end of the capital spending range previously disclosed for next year, we anticipate accelerating the issuance of equity content securities from the 2023 through 2025 period into 2022.
The 2022 equity need will be in the range of $300 million to $400 million, and we will provide more specifics on the financing plan when we provide 2022 earnings per share guidance on the fourth quarter 2021 earnings call.
Additionally, let me reiterate Pedro's comment that the SED agreement and update to the best estimate of potential losses associated with the 2017 and 2018 wildfire and mudslide events do not require equity above the levels previously announced in our 2021 financing plan.
Consistent with our prior disclosure, we plan to issue securities with up to $1 billion of equity content to support investment-grade rating.
In closing, I want to underscore the important role that SCE plays in ensuring safety and resiliency.
This can be seen in the ongoing investment in risk-reducing wildfire mitigation as well as utility-owned storage to enhance near-term reliability.
These investments are indicative of the longer-term opportunity associated with meeting customer needs and clean energy objectives and gives us confidence in reiterating our long-term earnings per share growth rate of 5% to 7% for 2021 through 2025.
That concludes my remarks.
 Assistant:

Chosen response:
q3 2021 core earnings were $644 million, or $1.69 per share.
narrows 2021 earnings per share guidance to $4.42-4.52.


Prompt:
Human: Our second quarter results show the continued strength of our business.
We continue to be able to safely and efficiently operate our properties under new operating condition.
Paul will provide more details on collections, but across our organization, we have seen payment patterns consistent with last year.
We have put in place a rent deferral program for residents facing hardship due to the impact of COVID-19, approximately 500 residents are enrolled in this program.
We saw strong demand on the MH side of the business, with a 4.6% increase in rental revenue.
In the quarter, we saw a decrease in residents moving out of our communities.
We increased new home sales volume by 14% and the average purchase price increased by 10%.
Our MH properties are currently 95% occupied.
Our residents are homeowners who have generally paid cash for their home.
This capital commitment to our communities is an important differentiator in difficult times.
Our overall occupancy consist of less than 6% renters.
Moving to our RV business, we have had an acquisition strategy over the years of buying RV resorts that are heavily focused on annual and seasonal revenue streams.
80% of our RV revenue is longer term in nature and 20% comes from our transient customers.
In the second quarter, our properties were impacted by local shelter in place orders, which call for reduced or eliminated travel activity inside of jurisdiction.
Our RV annual customer generally has developed roots with the community.
For the second quarter, the annual revenue which historically accounts for approximately 70% of our total revenue, grew by 4.7%.
In the more -- in the quarter, we were primarily close to transient traffic until the beginning of June.
We followed shelter in place orders and reduced activity to protect our employees and customers from potential risks associated with transient traffic.
We saw a significant increase in reservation activity and revenue in the month of June.
The demand is high for customers to travel in a controlled environment.
They have continued to react to the evolving climate in an impressive manner.
The team has successfully adapted to new regulatory protocols and changes in the operating environment, with the primary focus on the safety and well-being of our employees, residents, and guests.
For the second quarter, we reported $0.47 normalized FFO per share.
We have added these expenses back in our calculation of NFFO.
Our core MH rent growth of 4.6%, consists of approximately 4.1% rate growth and 50 basis points related to occupancy gains.
We have increased occupancy at 103 sites since December, with an increase in owners of 156 while renters decreased by 53.
Core RV resort based rental income from annuals increased 4.7% for the second quarter and 6.1% year-to-date, compared to the same period last year.
The driver of rent growth from annuals in the quarter was rate with occupancy essentially flat compared to the prior period.
Year-to-date core resorts -- year-to-date core resort base rent from seasonals increased 3.7% compared to 2019.
Core base rent from transient decreased 47.7% in the quarter, as a result of the closures Marguerite mentioned in her remarks.
Membership dues revenue increased 3% compared to the prior year.
During the quarter, we sold approximately 5,800 [Phonetic] Thousand Trails Camping Pass memberships.
This represents a 12% decrease for the quarter, which we attribute to the impact of COVID-19.
We experienced significant recovery in sales volume in June, which showed an increase of 43% over June 2019.
The net contribution from membership upgrade sales in the quarter was flat compared to last year.
Sales volumes increased almost 12%, while the mix of product sold changed resulting in a lower average sales price.
Core utility and other income was about $400,000 lower than second quarter 2019.
Increases in pass-through and utility income, primarily resulting from pass-throughs of real estate tax increases that were effective in late 2019 were offset by reduced revenue resulting from our suspension of late fees as well as fees related to transient RV state.
Core property operating expenses were flat compared to second quarter 2019.
The footnote disclosure included in our supplemental financial information package states that our core income from property operations includes approximately $1 million of non-recurring COVID-19 related expenses.
Excluding these expenses, we realized a 90 basis point decline in core property operating expenses in the quarter compared to last year.
In summary, second quarter core property operating revenues increased 60 basis points and core property operating expenses increased 10 basis points resulting in an increase in core NOI before property management of 1%.
Core NOI before property management, excluding COVID-19 related expenses increased 1.8%.
Income from property operations generated by our non-core portfolio, which includes our marina assets was $3 million in the quarter.
Revenues from annual customers, at the marinas and other properties in the non-core portfolio generated more than 90% of total non-core revenues in the quarter and year-to-date period.
Property management and corporate G&A expenses were $25.4 million for the second quarter of 2020 and $51.3 million for the year-to-date period.
Other income and expenses, generated net contribution of $1.7 million for the quarter.
Ancillary retail and restaurant operations were impacted by COVID-19 and generated approximately $1.2 million less NOI during the quarter than last year.
In addition, our joint venture income was approximately $2.4 million lower because of the refinancing distribution we recognized in 2019.
Interest and related loan cost amortization expense of $26.2 million for the quarter and $53.2 million for the year-to-date period.
All of our MH, RV and marina locations are open, though some have limited access to certain amenities pursuant to state and local guidelines.
Our rent deferral program was in place from April through June.
Through that program, we assisted 540 residents with the deferral of approximately $0.5 million of rent.
We also provided assistance in the form of rent credits to annual customers at certain of our RV resorts, were openings were delayed because of shelter in place orders.
Those credits will be applied to future charges and total approximately $900,000.
We have also continued suspension of late fees in the month of July.
Since the outset of the COVID-19 pandemic, we have not experienced meaningful negative impact to our rate of rent collection.
For the second quarter, our overall collection rate for our MH, RV and TT properties was 99%, consistent with the second quarter of 2019.
Our month-to-date collections in July are consistent with the collections at this time in April, May and June, 2020.
Now some comments on debt markets in our balance sheet.
Market conditions have stabilized somewhat since our April call.
Current secured financing terms available for MH and RV assets range from 55% to 75% LTV, with rates from 2.75% to 3.5% for 10 year money.
We continue to see lenders place high value on sponsor strength and ELS continues to be highly regarded.
High quality age qualified MH assets will command preferred terms from participating lenders.
Our cash balance after funding our July dividend is more than $50 million.
We have available capacity of $350 million from our unsecured line of credit, we have approximately $141 million of capacity under our ATM program, and we have no scheduled debt maturities for the next 12 months.
We continue to place high importance on balance sheet flexibility and we believe we have multiple sources of capital available to us.
Our interest coverage ratio was 4.9 times and our debt to adjusted EBITDAre is 5 times.
The weighted average maturity of our outstanding secured debt is 12.5 years.
 Assistant:

Chosen response:
q2 adjusted ffo per share $0.47.
approved about 540 resident applications for deferral of rent due to covid related financial hardship in quarter.