Equifax 2011 Annual Report Download - page 17

Operating Expenses
Operating Expenses Twelve Months Ended December 31, Change
2011 vs. 2010 2010 vs. 2009
(Dollars in millions) 2011 2010 2009 $ % $ %
Consolidated cost of services $ 768.5 $ 759.9 $ 718.8 $ 8.6 1% $41.1 6%
Consolidated selling, general and administrative expenses 554.8 507.4 470.2 47.4 9% 37.2 8%
Consolidated depreciation and amortization expense 165.5 162.2 145.2 3.3 2% 17.0 12%
Consolidated operating expenses $1,488.8 $1,429.5 $1,334.2 $59.3 4% $95.3 7%
Cost of Services. The slight increase in cost of services from
continuing operations, when compared to 2010, was due primarily to
the impact of increased salary and benefits expense and contract
services expenses of $31.1 million, and by the impact of changes in
foreign currency exchange rates which increased our cost of services
by $7.2 million, largely offset by decreases related to the deconsoli-
dation of our Brazilian business.
The increase in cost of services from continuing operations in 2010,
when compared to 2009, was due primarily to the impact of
increased salary and incentive 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.
Selling, General and Administrative Expenses. Selling, general and
administrative expense from continuing operations increased
$47.4 million compared to 2010. The increase was primarily due to
increased salary and incentive expense of $33.3 million, higher
advertising expenses of $9.1 million and higher severance costs
offset by decreases in expenses related to the deconsolidation of our
Brazilian business. The impact of changes in foreign currency
exchange rates increased our selling, general and administrative
expense by $5.2 million in 2011.
The increase in selling, 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, incen-
tive 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 businesses acquired in the fourth quarter
of 2009.
Depreciation and Amortization. Depreciation and amortization
expense from continuing operations increased in 2011 as compared
to 2010 due to $6.6 million of incremental depreciation and amortiza-
tion expense related to our fourth quarter 2010 acquisition of Anakam
and our 2011 acquisitions partially offset by the decline in amortiza-
tion of certain purchased intangibles acquired as part of TALX in
2007 which fully amortized at the end of the second quarter of 2011
and the amortization and depreciation decrease resulting from the
deconsolidation of our Brazilian business.
Depreciation and amortization expense from continuing operations in
2010 increased $17.0 million as compared to 2009 primarily due to
our fourth quarter 2009 acquisitions which contributed $9.0 million of
incremental depreciation and amortization expense, as well as the
effect of recent investments in new products and technology
infrastructure.
EQUIFAX 2011 ANNUAL REPORT 15