Experian 2008 Annual Report Download - page 94

92 Experian Annual Report 2008
9. Exceptional and other non-GAAP measures
2008 2007
US$m US$m
Exceptional items
Restructuring costs 60 –
Charge on early vesting and modification of share awards at demerger of Experian and
Home Retail Group – 23
Other costs incurred relating to the demerger of Experian and Home Retail Group 6 126
Closure of UK Account Processing (2) 26
Loss on disposal of businesses 2 2
Gain arising in associate on the partial disposal of its subsidiary (3) (15)
Total exceptional items 63 162
Other non-GAAP measures
Amortisation of acquisition intangibles 121 76
Goodwill adjustment 2 14
Charges in respect of the demerger-related equity incentive plans 49 24
Financing fair value remeasurements (note 10) 29 35
Total other non-GAAP measures 201 149
Exceptional items and other non-GAAP measures are in respect of continuing operations.
Exceptional items
In January 2008, the Group announced that it was launching a programme of significant cost-efficiency measures. Identified
efficiencies include offshoring of development activity, restructuring of core credit and marketing activities and infrastructure
consolidation. Following the identification of additional opportunities this programme is expected to deliver annualised cost
savings of approximately US$110m, of which an estimated US$50m is expected to be realised in the year ending 31 March 2009.
One-off restructuring costs associated with achieving these cost savings will be in the region of US$140m, the majority of
which will be cash costs. Costs of US$60m have been recognised in the year in connection with this programme with a related
cash outflow of US$18m. Of this charge, US$36m related to redundancy costs, US$12m related to asset write offs and US$12m
related to other restructuring and infrastructure consolidation costs.
Other costs relating to the demerger of Experian and Home Retail Group comprise legal and professional fees in respect of
the transaction, together with costs in connection with the cessation of the corporate functions of GUS plc.
In April 2006, Experian announced the phased withdrawal from large scale credit card and loan account processing in the UK.
The anticipated cost of withdrawal of US$26m was charged in the year ended 31 March 2007, and was made up of a cost in cash of
US$28m less the benefit of a US$2m pension curtailment credit. During the year ended 31 March 2008, an exceptional credit has
arisen in this connection following the successful transfer of certain employees and obligations of this business to a third party.
The loss on disposal of businesses in the year ended 31 March 2008 primarily related to the sale of Loyalty Solutions in
Germany and that in the year ended 31 March 2007 primarily related to the sale of a minority stake in Experian’s South African
business.
In the year ended 31 March 2007, First American Real Estate Solutions LLC (‘FARES’) recognised a gain of US$77m on the
partial disposal of its Real Estate Solutions division as part of the consideration for the acquisition of 82% of CoreLogic
Solutions, Inc. The Group recognised US$15m, its 20% share of the gain. A deferred tax charge of US$6m was included in
the FARES result for that year in respect of this gain. A further gain of US$3m has arisen in the year ended 31 March 2008 in
respect of a number of less significant disposals by FARES.
Cash outflows in respect of exceptional items of US$45m (2007: US$98m) comprise total exceptional items of US$63m (2007:
US$162m) adjusted for working capital movements of US$9m (2007: US$46m), asset write offs of US$12m (2007: US$3m),
share based payment add backs of US$nil (2007: US$30m) and gains in associates of US$3m (2007: US$15m).
Notes to the Group financial statements continued