Equifax 2010 Annual Report Download - page 18

2010. The increase in our average interest rate paid was caused by a
reduction in short term, floating rate commercial paper, while longer
term fixed rate debt outstanding remained essentially unchanged.
The decrease in other expense, net, for 2009, as compared to 2008,
was primarily due to lower interest rates on our floating rate debt,
which drove the average cost of our total debt from 5.3% in 2008 to
4.8% in 2009, as well as a reduced level of debt outstanding during
2009. Our average debt balance fell to $1.18 billion in 2009 from
$1.34 billion in 2008. For additional information about our debt agree-
ments, see Note 5 of the Notes to the Consolidated Financial
Statements in this report. Other income, net, for 2009 primarily
includes a $2.2 million mark-to-market adjustment on certain insur-
ance policies, a $1.1 million gain on our repurchase of $7.5 million
principal amount of our ten-year senior notes due 2017 and a
$1.3 million gain related to a litigation settlement. Other income, net
in 2008 includes a $5.5 million gain on our repurchase of $20 million
principal amount of ten-year senior notes due 2017.
Income Taxes
Provision for Income Taxes Twelve Months Ended December 31, Change
2010 vs. 2009 2009 vs. 2008
(Dollars in millions) 2010 2009 2008 $ % $ %
Consolidated provision for income taxes $131.9 $106.6 $119.0 $25.3 24% $(12.4) -10%
Effective income tax rate 35.1% 32.2% 31.8%
Our effective tax rate was 35.1% for 2010, up from 32.2% for the
same period in 2009. The 2010 rate was higher due primarily to the
prior year recognition of a $7.3 million income tax benefit related to
our ability to utilize foreign tax credits beyond 2009, more favorable
discrete items in 2009 related to foreign and state taxes and a 2009
investment loss in subsidiary, partially offset by a permanent federal
deduction realized in 2010. We expect our effective tax rate in 2011
to increase to a range of 36% to 38%.
Our effective income tax rate for 2009 was up slightly compared to
2008. The 2009 rate reflects the recognition of a $7.3 million income
tax benefit in the fourth quarter of 2009 related to our ability to utilize
foreign tax credits beyond 2009. Additionally, we recorded favorable
discrete items in 2009 related to foreign and state taxes and an
investment loss in a subsidiary. With the fourth quarter 2009 adjust-
ments, we have recognized the benefit of foreign tax credit
carryforwards that would have reduced future tax expense. The 2008
rate reflects $14.6 million in income tax benefits that we recorded
related to uncertain tax positions for which the statute of limitations
had expired which resulted in a lower effective income tax rate in
2008 as compared to 2009.
Net Income
Net Income Twelve Months Ended December 31, Change
2010 vs. 2009 2009 vs. 2008
(In millions, except per share amounts) 2010 2009 2008 $ % $ %
Consolidated operating income $ 430.0 $ 381.8 $ 439.0 $ 48.2 13% $(57.2) -13%
Consolidated other expense, net (54.8) (50.8) (65.1) (4.0) 8% 14.3 -22%
Consolidated provision for income taxes (131.9) (106.6) (119.0) (25.3) 24% 12.4 -10%
Consolidated net income from
continuing operations $ 243.3 $ 224.4 $ 254.9 $ 18.9 8% $(30.5) -12%
Discontinued operations, net of tax $ 31.5 $ 16.1 $ 24.1 $ 15.4 94% $ (8.0) -33%
Net income attributable to
noncontrolling interests (8.1) (6.6) (6.2) (1.5) 22% (0.4) 6%
Net income attributable to Equifax $ 266.7 $ 233.9 $ 272.8 $ 32.8 14% $(38.9) -14%
Diluted earnings per common share
Net income from continuing operations
attributable to Equifax $ 1.86 $ 1.70 $ 1.91 $ 0.16 9% $(0.21) -11%
Discontinued operations attributable
to Equifax 0.25 0.13 0.18 $ 0.12 92% $(0.05) -28%
Net income attributable to Equifax $ 2.11 $ 1.83 $ 2.09 $ 0.28 15% $(0.26) -12%
Weighted-average shares used in computing
diluted earnings per share 126.5 127.9 130.4
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
EQUIFAX 2010 ANNUAL REPORT
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