Equifax 2012 Annual Report Download - page 23

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Equifax 2012 Annual Report
North America Personal Solutions
North America Personal Solutions Twelve Months Ended December 31, Change
2012 vs. 2011 2011 vs. 2010
(Dollars in millions) 2012 2011 2010 $% $%
Total operating revenue $204.5 $180.7 $157.6 $23.8 13% $23.1 15%
% of consolidated revenue 10% 9% 9%
Total operating income $ 61.6 $ 54.1 $ 44.6 $ 7.5 14% $ 9.5 21%
Operating margin 30.1% 29.9% 28.3% 0.2 pts 1.6 pts
The increase in revenue in 2012, as compared to 2011, was primarily
due to increased direct to consumer, Equifax-branded subscription
service revenue which was up 16% in 2012. The increase was driven
by higher average revenue per subscriber due to new product offer-
ings and better market segmentation and, to a lesser extent, by
higher subscription sales resulting in higher average subscriber
counts. Operating margin increased slightly in 2012, as compared to
2011, primarily due to higher revenue partially offset by an increase
in marketing.
Revenue increased 15% in 2011 as compared to the prior year
primarily due to increased direct to consumer, Equifax-branded
subscription service revenue. Equifax-branded subscription revenue
was up 17% from the prior year, driven by both higher subscription
sales and higher average revenue per subscriber due to new product
offerings and better market segmentation. Revenue from wholesalers,
which benefited from more favorable pricing, and from Canada also
contributed to growth, while data breach services and transaction-
based services each declined modestly. The operating margin
increase in 2011, as compared to 2010, was primarily due to the
increased revenue along with a shift in product mix to higher
margin products.
North America Commercial Solutions
North America Commercial Solutions Twelve Months Ended December 31, Change
2012 vs. 2011 2011 vs. 2010
(Dollars in millions) 2012 2011 2010 $% $%
Total operating revenue $89.9 $89.3 $80.5 $ 0.6 1% $8.8 11%
% of consolidated revenue 4% 5% 4%
Total operating income $19.8 $23.6 $19.5 $(3.8) -16% $4.1 21%
Operating margin 22.0% 26.5% 24.2% -4.5 pts 2.3 pts
Revenue increased 1% in 2012 both in reported currency and local
currency as compared to 2011. Transaction-based revenue serving
credit risk needs of our customers, which represents approximately
60% of our revenue, grew 5% in 2012 as compared to the prior year.
This growth was offset by a 5% decline in project-oriented revenue
as customers delayed or canceled certain small business marketing
programs given the uncertain environment for small businesses.
Operating margin decreased in 2012 due to marginal revenue growth
combined with a 7% increase in operating expenses as the business
continues to invest in its longer term strategy despite the current
slowdown in demand for marketing services.
2011 revenue increased $8.8 million, or 11%, as compared to 2010.
In local currency, revenue increased 10% compared 2010 primarily
due to increases in U.S. risk and marketing service revenue and
revenue from our data management products. The favorable impact
of changes in the U.S. — Canadian foreign exchange rate impacted
revenue by $1.0 million, or 1%, as compared to the prior year.
Operating margin also increased for 2011, as compared 2010, due to
strong revenue growth and the margin leverage which results from a
partially fixed cost business.
General Corporate Expense
General Corporate Expense Twelve Months Ended December 31, Change
2012 vs. 2011 2011 vs. 2010
(Dollars in millions) 2012 2011 2010 $% $%
General corporate expense $185.8 $116.9 $115.4 $68.9 59% $1.5 1%
Our general corporate expenses are costs that are incurred at the
corporate level and include those expenses impacted by corporate
direction, such as shared services, administrative, legal, equity
compensation costs and restructuring expenses. General corporate
expenses increased by $68.9 million in 2012, compared to 2011,
primarily due to the $38.7 million pension settlement recorded in
2012 along with higher salary and incentive costs, spending to sup-
port corporate growth and infrastructure initiatives, and costs