Equifax 2010 Annual Report Download - page 20

Operating margin decreased for 2009, as compared to 2008, mainly
due to revenue declines described above in our OCIS and Consumer
Financial Marketing Services businesses. Our operating expenses
generally do not decline at the same rate as our revenue due to a
high portion of costs that are fixed rather than variable in the short
term. The overall decline in revenue was partially offset by lower
personnel costs due to headcount reductions, process efficiencies
and lower technology outsourcing costs. The increases in revenue
from our core mortgage and settlement services products also
contributed to the USCIS margin decline as these products have
higher variable costs and lower margins than traditional online
database products.
International
International Twelve Months Ended December 31, Change
2010 vs. 2009 2009 vs. 2008
(Dollars in millions) 2010 2009 2008 $ % $ %
Operating revenue:
Latin America $231.3 $200.4 $219.9 $30.9 15% $(19.5) -9%
Europe 137.6 138.4 175.0 (0.8) -1% (36.6) -21%
Canada Consumer 113.9 99.8 110.8 14.1 14% (11.0) -10%
Total operating revenue $482.8 $438.6 $505.7 $44.2 10% $(67.1) -13%
% of consolidated revenue 26% 26% 28%
Total operating income $119.4 $118.9 $149.9 $ 0.5 0% $(31.0) -21%
Operating margin 24.7% 27.1% 29.6% -2.4 pts -2.5 pts
International revenue increased in 2010, as compared to 2009,
primarily due to strong growth in Latin America and the favorable
impact of changes in foreign exchange rates. Local currency fluctua-
tions against the U.S. dollar favorably impacted our International
revenue by $21.8 million, or 5%. In local currency, International
revenue was up 5% in 2010. For 2009, as compared to 2008,
revenue decreased primarily due to the negative impact of foreign
currency translation and secondarily due to global economic weak-
ness affecting several of our larger international country operations.
Local currency fluctuation against the U.S. dollar negatively impacted
our 2009 International revenue by $47.2 million, or 9%. In local cur-
rency, 2009 revenue was down 4%, as compared to the same period
a year ago.
Latin America. Revenue increased for 2010, as compared to the
prior year by $30.9 million, or 15%, partially due to the favorable
foreign currency impact of $14.3 million, or 7%. In local currency,
revenue increased 8% from 2009. Local currency revenue increased
in most of our Latin American geographies, resulting from broad-
based growth across all product segments, partially offset by a
modest decline in Brazil.
Revenue declined for 2009, as compared to the prior year, due to an
unfavorable foreign currency impact of $18.9 million, or 9%. In local
currency, 2009 revenue was approximately flat when compared to
2008. Local currency revenue declines in Brazil and Chile were offset
by increased revenue in our other Latin American geographies result-
ing from increased volumes for our collection services and
decisioning technology products. The revenue declines in Brazil and
Chile were mainly due to lower volumes related to our online solu-
tions, marketing products and decisioning technologies, resulting
primarily from competitive factors in these geographies.
Europe. The slight decrease in revenue for 2010, as compared
to 2009, was due to an unfavorable foreign currency impact of
$3.2 million, or 3%. In local currency, revenue increased 2%, as
compared to the same period in 2009. The increase was due to
growth in online transactions and a higher volume of subscriptions
in the U.K. as well as higher registries usage in Spain and Portugal
offset by declines in some of our other product segments. The
decline in revenue for 2009, as compared to the prior year, was
partially due to the unfavorable foreign currency impact of
$21.3 million, or 12%. In local currency, revenue declined 9% for
2009, as compared to the same period in 2008. The local currency
declines were due to decreased volume in the U.K. caused by
weakness in the U.K. economy affecting customer demand, which
was partially offset by higher volumes and new customers for our
online services and new collections products in Spain and Portugal.
Canada Consumer. The $14.1 million increase in revenue for 2010,
as compared to the prior year, was primarily due to favorable foreign
currency impact of $10.6 million, or 11%. In local currency, revenue
increased 3% when compared to 2009. The increase in local cur-
rency was due to increased volumes for our technology and analytical
services products primarily due to growth in the customer base for
a new fraud mitigation product. The decline in revenue for 2009, as
compared to the prior year, was partially due to an unfavorable
foreign currency impact of $7.0 million, or 6%. In local currency,
revenue declined 4% for 2009, as compared to 2008. The decline
in local currency was due to lower volumes related to our online solu-
tions and marketing products resulting from weakness in the
economy, partially offset by increased volumes for our analytical and
decisioning technology products.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
EQUIFAX 2010 ANNUAL REPORT
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