Equifax 2010 Annual Report Download - page 16

RESULTS OF OPERATIONS —
TWELVE MONTHS ENDED DECEMBER 31, 2010, 2009 AND 2008
Consolidated Financial Results
Operating Revenue
Operating Revenue Twelve Months Ended December 31, Change
2010 vs. 2009 2009 vs. 2008
(Dollars in millions) 2010 2009 2008 $ % $ %
U.S. Consumer Information Solutions $ 743.0 $ 712.2 $ 768.7 $ 30.8 4% $(56.5) -7%
International 482.8 438.6 505.7 44.2 10% (67.1) -13%
TALX 395.6 346.4 305.1 49.2 14% 41.3 14%
North America Personal Solutions 157.6 149.0 162.6 8.6 6% (13.6) -8%
North America Commercial Solutions 80.5 69.8 71.5 10.7 15% (1.7) -2%
Consolidated operating revenue $1,859.5 $1,716.0 $1,813.6 $143.5 8% $(97.6) -5%
Revenue from continuing operations increased by 8% compared to
2009. The favorable effect of foreign exchange rates increased
revenue by $24.1 million, or 1.4%, in 2010 compared to the prior
year period. Revenue grew over the prior year in each of our operat-
ing segments, primarily driven by strong execution of key strategic
initiatives as well as growth contributed by 2009 acquisitions in
USCIS and TALX. For additional information about revenue fluctua-
tions and operating income by segment, see ‘‘Segment Financial
Results’’ below.
The decrease in revenue from continuing operations for 2009, as
compared to 2008, was primarily due to continued global economic
weakness, which significantly impacted demand for our U.S.
Consumer Information Solutions, International and North America
Personal Solutions business units when compared to 2008, as well
as the unfavorable effects of foreign exchange rates. Foreign currency
negatively impacted 2009 revenue by $48.9 million, or 3%. This
decrease was partially offset by strength in our TALX segment and
Mortgage Solutions business within U.S. Consumer Information
Solutions.
Operating Expenses
Operating Expenses Twelve Months Ended December 31, Change
2010 vs. 2009 2009 vs. 2008
(Dollars in millions) 2010 2009 2008 $ % $ %
Consolidated cost of services $ 759.9 $ 718.8 $ 741.8 $41.1 6% $(23.0) -3%
Consolidated selling, general and administrative expenses 507.4 470.2 490.6 37.2 8% (20.4) -4%
Consolidated depreciation and amortization expense 162.2 145.2 142.2 17.0 12% 3.0 2%
Consolidated operating expenses $1,429.5 $1,334.2 $1,374.6 $95.3 7% $(40.4) -3%
Cost of Services. The increase in cost of services from continuing
operations, when compared to 2009, was due primarily to the impact
of increased salary and incentives expense of $6.3 million; the impact
of changes in foreign currency exchange rates which increased our
cost of services by $11.4 million; and the impact of our fourth quarter
2009 acquisitions of IXI Corporation and Rapid Reporting Verification
Company.
The decrease in cost of services from continuing operations for 2009,
as compared to the prior year, was primarily due to the impact of
foreign currency translation. The impact of foreign currency transla-
tion decreased our cost of services by $19.2 million during 2009. The
remaining decrease was due to lower technology outsourcing costs
resulting from a renegotiated contract with a large service provider
and lower personnel costs resulting from our third quarter 2008 and
2009 headcount reductions. This decrease was partially offset by
increased production costs related to growth in demand for our
settlement services products within our Mortgage Solutions business
and increased postretirement employee benefit costs. We reclassified
$13.2 million of selling, general and administrative expense during the
twelve months ended December 31, 2008 to cost of services to
conform to the current period presentation.
Selling, General and Administrative Expenses. The increase in sell-
ing, general and administrative expenses from continuing operations
of $37.2 million in 2010 when compared to 2009, was due to
changes in foreign exchange rates, which increased 2010 expense
by $5.2 million, and increased salary, incentive and benefits expenses
of $32.3 million, offset by $24.8 million in restructuring charges that
were incurred during 2009 that did not recur in 2010. The remaining
increase was primarily due to the impact of the inclusion of busi-
nesses acquired in the fourth quarter of 2009.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
EQUIFAX 2010 ANNUAL REPORT
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