Equifax 2006 Annual Report Download - page 36

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
34 EQUIFAX 2006 ANNUAL REPORT
North America
Information Services
For the twelve months ended December 31, 2005,
Information Services revenue was $806.3 million, an
increase of $99.2 million, or 14% when compared to the same
period in 2004. A portion of this increase was due to $38.0
million in regulatory recovery fees related to the FACT Act
for the year ended December 31, 2005. Fluctuations in the
Canadian dollar against the U.S. dollar favorably impacted
our Information Services revenue by $7.6 million.
U.S. Consumer and Commercial Services revenue for the
twelve months ended December 31, 2005 totaled $610.4 mil-
lion, an increase of $77.8 million, or 15%, when compared to
the same period in 2004. This increase was primarily due to
higher sales to our specialty and fi nancial services customers,
regulatory recovery fee revenue of $35.1 million related to the
FACT Act for the year ended December 31, 2005, the acquisi-
tion of APPRO Systems, Inc. (“APPRO”) and other affi liates
that occurred during 2005, and increased revenue from
products sold in our commercial services unit. In our U.S.
Consumer Information business, online transaction volume
was approximately 610 million, up 8% year-over-year.
Mortgage Solutions revenue for the twelve months ended
December 31, 2005 totaled $85.1 million, an increase of
$9.6 million, or 13%, as compared to the same period a year
ago. This increase was mostly due to new customers,
increased market share, an affi liate acquisition as well as reg-
ulatory recovery fee revenue of $2.9 million related to the
FACT Act in 2005. These increases were partially offset by
less favorable mortgage marketing conditions.
Canadian revenue for the twelve months ended
December 31, 2005, totaled $110.8 million, an increase of
$11.8 million, or 12%, when compared to the same period
in 2004, primarily due to favorable currency impact and
higher sales volume. Local currency fl uctuation against the
U.S. dollar favorably impacted our Canadian revenue by
$7.6 million, or 8%.
Information Services operating income was $345.5 mil-
lion, an increase of $46.0 million, or 15%, from the same
period a year ago. Information Services operating margin
was 42.8% for the twelve months ended December 31, 2005,
versus 42.4% for the same period in 2004. The increase in
operating income was mainly the result of higher sales vol-
ume in all businesses and positive margins related to the
FACT Act in 2005. While our total FACT Act-related expen-
ditures have been greater than the corresponding revenue
since January 1, 2004, certain costs related to establishing
systems to comply with the FACT Act were capitalized and
are being depreciated over their respective useful lives.
Marketing Services
Marketing Services revenue for the twelve months ended
December 31, 2005 totaled $253.7 million, an increase of
$17.6 million, or 7%, when compared to the same period in
2004. Credit Marketing Services revenue for the twelve
months ended December 31, 2005 totaled $150.7 million, an
increase of $11.2 million, or 8%, when compared to the same
period in 2004. The increase in Credit Marketing Services
revenue was primarily due to higher volume from mainly
fi nancial institutions for certain of our products that target
new customers, as well as greater revenue from other exist-
ing and new customers. Direct Marketing Services revenue
for the twelve months ended December 31, 2005 totaled
$103.0, an increase of $6.4 million, or 7%, as compared to
the same period in 2004. This increase was mainly due to
higher volume from existing customers and revenue from
new customers and products, as well as the acquisition of
BeNow in August 2005.
Total Marketing Services operating income for the twelve
months ended December 31, 2005 was $85.2 million, an
increase of $13.2 million, or 18%, resulting primarily from
higher revenue, reduced production-related expenses for our
traditional mail products and a $2.4 million asset impairment
charge taken during 2004. Marketing Services operating
margin was 33.5% for the twelve months ended December 31,
2005, versus 31.5% for the same period in 2004.
Personal Solutions
Personal Solutions revenue for the twelve months ended
December 31, 2005 totaled $114.7 million, an increase of
$18.6 million, or 19%, compared to the same period in 2004.
This change was primarily due to increased volume and new
products, including CreditWatch, ScoreWatch and 3-in-1
Credit Report Monitoring. Operating income for the twelve
months ended December 31, 2005 decreased $4.1 million, to
$13.5 million, compared to $17.6 million for the same period
in 2004. This decrease was mainly due to an increase in
advertising and other promotional campaigns. Personal
Solutions operating margin was 11.8% for the twelve
months ended December 31, 2005, versus 18.3% for
the same period in 2004.
Europe
Europe revenue was fl at at $142.0 million for the twelve
months ended December 31, 2005 and 2004. This was pri-
marily due to a decline in credit applications and market-
ing mailings in the U.K., and offset by a rise in our Personal
Solutions business, new product sales and increases in our
account management scores. Local currency fl uctuation
against the U.S. dollar unfavorably impacted our Europe