Equifax 2001 Annual Report Download - page 26

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growth was 3%. The strengthening of the
U.S. dollar against foreign currencies during
2000, particularly the British pound and
Spanish peseta, reduced 2000 revenue by
approximately $15 million or 2%.
Operating Income
Operating income in 2001 increased 6% to
$317.8 million on operating margins of 29%.
North America’s operating income growth of
14% and 40 basis point margin improvement
driven by consumer reporting and Consumer
Direct offset margin deterioration in our inter-
national operations, particularly in Europe.
Operating income in 2000 grew 12% to
$299.6 million with operating margins of
29%. Excluding the CIS acquisition, profit
growth was 7%. Operating income growth in
our traditional U.S. credit marketing services
business, Canada’s consumer reporting busi-
ness and improved operating expenses drove
2000 performance.
Other Income (Expense), Net
Other income (expense), net includes interest
income on cash balances of $3.2 million in 2001,
$7.5 million in 2000 and $5.8 million in 1999.
Lower cash balances in foreign operations com-
bined with lower interest rates accounted for
the decline in 2001. Other income (expense),
net in 2001 and 2000 includes losses associated
with the disposition of Divested Operations.
In October 2001, the Company sold its City
Directory business, which generated a pre-tax
loss of $5.8 million. The sale of the risk manage-
ment and vehicle information businesses gen-
erated pre-tax losses of $4.2 million in 2000. In
1999, the Company sold three risk management
offices located in the U.S. that resulted in a pre-tax
gain of $4.1 million.
Interest Expense
Interest expense decreased $8.0 million in 2001
and increased $13.6 million in 2000, as com-
pared with prior years. The decrease in 2001
from 2000 was due to lower average debt out-
standing and lower effective borrowing rates.
The increase in 2000 resulted from higher aver-
age debt outstanding associated with 2000
acquisition activity and 1999 treasury stock
purchases. After adjusting for the $275 mil-
lion debt reduction related to the spin-off of
Certegy, average total debt outstanding was
$775.4 million in 2001, $824.8 million in 2000
and $699.0 million in 1999.
Effective Tax Rates
The effective tax rates from continuing opera-
tions were 42.1%, 43.4% and 40.3% in 2001, 2000
and 1999, respectively. Changes in the levels of
non-deductible goodwill associated with divesti-
tures and in the levels of foreign earnings
accounted for the changes in effective tax rates
between periods. The effective rate in 2002 is
expected to decline to approximately 40%, due
to the elimination of goodwill amortization and
the effects of tax planning strategies.
Segment Results
The following table summarizes the segment
results for each of the three years in the period
ended December 31, 2001. The results of busi-
nesses sold in October 2001 and in the fourth
quarter of 2000 are classified as Divested
Operations. The Company’s previous Consumer
Information Services segment results are now
reported in the North American Information
Services segment.