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ofce
Annual Report 2012
Don Robert
Chief Executive Officer
We’ve delivered another
strong financial performance
and continued to lay the
foundations for sustaining
growth into the future.
I want to congratulate the
men and women of Experian
on these achievements
and to thank them for
their boundless energy,
creativity and commitment.

Table of contents

  • Page 1
    ... another strong financial performance and continued to lay the foundations for sustaining growth into the future. I want to congratulate the men and women of Experian on these achievements and to thank them for their boundless energy, creativity and commitment. Don Robert Chief Executive Officer

  • Page 2
    Experian Annual Report 2012 Highlights We delivered good growth across all regions, with organic revenue growth of 23% in Latin America, 8% in the UK and Ireland, 7% in EMEA/Asia Pacific and 6% in North America. We delivered good growth across our four global business lines, with organic revenue ...

  • Page 3
    ...Analytics Marketing Services Interactive Our people, our strength Key performance indicators Risks and uncertainties Governance 51 52 54 66 83 Chairman's introduction Board of directors Corporate governance statement Report on directors' remuneration Directors' report Financial statements 87 Group...

  • Page 4
    ... the year towards Experian's goal of becoming the global leader in digital marketing services. In EMEA/Asia Pacific, for instance, this is now our single largest revenue contributor as marketers look for more cost-effective ways to reach their customers and develop more personalised communications...

  • Page 5
    ... new Business IQ product in North America is also transforming the way we deliver business information to clients and we're now set to introduce it to the UK. lasting legacy for Experian. Paul was always a generous mentor to his team and, in liaison with his family, we are establishing an employee...

  • Page 6
    ... is on providing data and analytical tools across our four core business lines. Credit Services provides information to organisations to help them manage the risks associated with extending credit and preventing fraud. Revenue by region 37% North America Latin America EMEA /Asia Pacific 42% UK and...

  • Page 7
    ... marketing strategies and to build profitable and lasting relationships. 21%* Interactive enables consumers to monitor the accuracy of their credit report online, to check their credit score and protect themselves against identity theft. Business review Revenue by region EMEA /Asia Pacific 42% UK...

  • Page 8
    ... applications Vehicle history Indices Marketing Services Demographic Client proprietary Customer profiles Market research Data Online We aggregate, cleanse, sort and enhance data We apply our analytical models to the data Market insight reports We group consumer profiles into related...

  • Page 9
    ... consumers Mobile We help our clients to: plan, target and execute their marketing campaigns Email We measure the success of clients' campaigns Social Clients benefit from increased return on investment and improved customer engagement Our clients Retail Financial services Media Public sector...

  • Page 10
    8 Experian Annual Report 2012 Business overview How we're getting there Our vision is for Experian's people, data and technology to become a necessary part of every major consumer economy. We are committed to driving long-term shareholder value by focusing on data and analytics, driving profitable...

  • Page 11
    ... the services we provide to consumers. For example, in the UK we are offering greater value to subscribers of credit reference products by bundling vehicle history checks and property valuation reports. We have added new identity protection services including wider web monitoring and protection for...

  • Page 12
    10 Experian Annual Report 2012 Business overview Our four global business lines Credit Services 47% Contribution to Group revenue At the core of Credit Services are the comprehensive databases that Experian builds and manages, that hold the credit application and repayment histories of millions ...

  • Page 13
    ... be working closely with Oi to support its key strategic objectives of expanding its subscriber base, driving higher average customer revenue and creating greater loyalty by targeting the right product bundles to the right consumer groups across Brazil. The Serasa Experian solution will also provide...

  • Page 14
    ...Experian Annual Report 2012 Business overview Our four global business lines Decision Analytics 11% Contribution to Group revenue Decision Analytics unlocks the value of Experian's vast databases of credit and marketing information, as well as clients' data, applying expert consulting, analytical...

  • Page 15
    ... each year from incorrect payment of these tax benefits, which are designed to support people with low incomes or children. Every month, Experian is applying an unrivalled view of consumers to some 65,000 tax credit claimants. Using information such as financial associations, changes of address and...

  • Page 16
    14 Experian Annual Report 2012 Business overview Our four global business lines Marketing Services 21% Contribution to Group revenue Marketing Services provides data and segmentation tools to help organisations increase customer revenue and loyalty and to communicate effectively with consumers ...

  • Page 17
    ...meant changing the way it looked at information; moving from a 'policy view' to a more customer-focused one. Our solution was to develop a 'datamart' where ACE could bring together all of its customer and prospect information within one integrated system, hosted by Experian in Nottingham. Individual...

  • Page 18
    16 Experian Annual Report 2012 Business overview Our four global business lines Interactive 21% Contribution to Group revenue Our Consumer Direct business provides credit monitoring and other information services directly to millions of consumers via the internet. It enables consumers to monitor...

  • Page 19
    ... that its members had access to the right tools for protecting their identity and for quickly managing any issues that might arise. The identity theft monitoring product we offer to AAA members includes daily monitoring of a member's credit report, with email alerts when a key change is detected...

  • Page 20
    18 Experian Annual Report 2012 Business overview Our people, our strength Building a strong culture and effectively managing and deploying the talents of employees on a global basis are essential to the successful execution of Experian's growth strategy. Our objectives are to build a strong and ...

  • Page 21
    ... generation of identity management tools and making a positive difference in people's lives. Business review Find out more about the Heart of Experian and read Viviana's story on Zoom. Protect 'Protect' is about the way we care for personal and commercially sensitive information, safeguarding the...

  • Page 22
    .... You will find details of our Board diversity in the corporate governance statement later in the annual report. The following are some of the initiatives designed to drive sustainable change: Experian Business Network (EBN) This development forum for high potential and diverse emerging talent was...

  • Page 23
    ... senior leadership resources are in place to achieve our strategic objectives. The plans are regularly reviewed by the Board's Nomination and Corporate Governance Committee. For the broader leadership, plans are reviewed twice-yearly by our executive team. The most recent review highlighted...

  • Page 24
    ... businesses in North America and UK and Ireland (now classified as discontinued operations). Remuneration linked KPI - see page 68 12 11 10 09 08 12% 11% 14% 14% 14% ROCE is measured as Benchmark earnings, attributable to Experian shareholders, divided by average capital employed during the year...

  • Page 25
    ... North America and UK and Ireland (now classified as discontinued operations). Business review Number of consumer credit bureaux The consumer credit bureaux, which hold credit application and repayment histories on consumers, are the foundation of our consumer information credit-related activities...

  • Page 26
    ... Annual Report 2012 Business overview Risks and uncertainties Experian has a risk management framework which provides a structured and consistent process for identifying, assessing and responding to risks in relation to our strategy and business objectives including our strategic focus on data...

  • Page 27
    ... and protection of our environment. Related global strategy: • Focus on data and analytics Further information: • Corporate responsibility section - Use and protect data properly Business review Dependence upon third parties to provide data and certain operational services Our business model...

  • Page 28
    ...and services investment identification and selection process. _ Related global strategy: • Optimise capital efficiency • Drive profitable growth Further information: • Business overview section - examples of how businesses are delivering innovative solutions • Group strategy and objectives...

  • Page 29
    ... markets that are highly competitive. The investment in new data sources, people, technology competitor environment continues to be dynamic and products to support our strategic plan. with new entrants that may have scale, integration capability and partner networks. Competitors may develop products...

  • Page 30
    ... Annual Report 2012 Business review Chief Executive's review This was a year of significant achievement for Experian. We delivered another year of strong financial performance and we took a series of strategic steps which will sustain growth into the future. Don Robert Chief Executive Officer...

  • Page 31
    ...in credit information and analytics, digital marketing services and direct-to-consumer services. We have signed an agreement to divest our comparison shopping and North America lead generation businesses, which were non-core to Experian. We expect to complete the transaction within the first half of...

  • Page 32
    30 Experian Annual Report 2012 Business review Chief Executive's review continued Revenue and EBIT by geography Revenue EBIT Growth2 % 2012 US$m 20111 US$m Growth2 % 2012 US$m 20111 US$m Year ended 31 March North America Latin America UK and Ireland EMEA/Asia Pacific Sub total Central Activities...

  • Page 33
    ... new customer segments; • Build large-scale operations in major emerging consumer economies; • Become the global leader in digital marketing services; and • Become the most trusted consumer brand for credit information and identity protection services. During the year we continued to invest in...

  • Page 34
    ... September 2010) and Medical Present Value (acquired June 2011). Decision Analytics "Our investments in recent years are now starting to pay off as the North American economy slowly picks up. We're particularly pleased with our progress in new sectors, such as healthcare payments and automotive...

  • Page 35
    ... 10 11 12 2011 restated to exclude price comparison and lead generation businesses, now classified as discontinued operations. Year ended 31 March Revenue Credit Services Decision Analytics Marketing Services Interactive Total North America EBIT Total North America EBIT margin 2012 US$m 20111...

  • Page 36
    ..., including first-time contributions from the acquisition of the Virid email marketing business and Computec's marketing-related activities. Organic revenue growth was 8%. Ricardo Loureiro Managing Director, Latin America Credit Services Total revenue growth was 28%, at constant exchange rates...

  • Page 37
    ...09 10 11 12 08 09 10 11 12 Year ended 31 March Revenue Credit Services Decision Analytics Marketing Services Total Latin America EBIT Total Latin America EBIT margin 1. Growth at constant exchange rates. 2012 US$m 2011 US$m Total growth1 Organic growth1 % % Financial statements 891 20...

  • Page 38
    ... market acceptance of our bundled product, which combines reports and scores. We also benefited from improved lifetime value, as we continue to focus on delivering more to the customer. Craig Boundy Managing Director, UK and Ireland Credit Services Total revenue growth was 4% at constant exchange...

  • Page 39
    ... activities only. 2011 restated to exclude price comparison businesses, now classified as discontinued operations. Governance Year ended 31 March Revenue Credit Services Decision Analytics Marketing Services Interactive Total continuing activities Discontinuing activities3 Total UK and Ireland...

  • Page 40
    ... Experian Annual Report 2012 Business review EMEA/Asia Pacific review Total revenue from continuing activities in EMEA/Asia Pacific was US$608m, up 17% at constant exchange rates, with organic revenue growth of 7%. The difference in part relates to the move to a majority holding in DP Information...

  • Page 41
    ...invest in our services and infrastructure to ensure we can support our clients' strategies for enhanced growth and cost reduction." Business review Chris Clark Managing Director, EMEA Total revenue growth 19% 17% 13% 2012 revenue by activity1 Credit Services 35% Decision Analytics 21% Marketing...

  • Page 42
    40 Experian Annual Report 2012 Business review Financial review Experian has delivered another year of strong financial performance as our global growth programme gains pace and has reported strong revenue growth and good profit and cash flow performance. Group income statement commentary Revenue...

  • Page 43
    ... flow summary Year ended 31 March EBIT from continuing operations Depreciation and amortisation Loss on sale of fixed assets Capital expenditure Sale of property, plant and equipment Decrease in working capital Loss retained in associates Charge in respect of equity incentive plans within Benchmark...

  • Page 44
    ... assets Investment in associates Other segment assets Total segment assets Segment liabilities Operating segments - net assets Central Activities - net assets Capital employed Net present value of put option in respect of Serasa non-controlling interest Net debt Tax Net assets 2012 US$m 2011 US...

  • Page 45
    ... strong credit ratings, within limits set for each organisation; and • Close control of dealing activity with counterparty positions monitored regularly. 2012 EBIT by currency 2012 Borrowings by currency 2011 EBIT by currency 2011 Borrowings by currency Business review US dollar Brazilian...

  • Page 46
    44 Experian Annual Report 2012 Business review Financial review continued Capital risk management Our objectives in managing capital are: • To safeguard the ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders; and • To ...

  • Page 47
    ... Data and information technology costs Depreciation and amortisation Marketing and customer acquisition costs Other operating charges Total operating expenses Operating profit/(loss) Share of losses of associates EBIT from continuing operations Non-benchmark items Profit/(loss) before net finance...

  • Page 48
    46 Experian Annual Report 2012 Business review Financial review continued Revenue and EBIT by business segment 2012 20111 US$m Year ended 31 March Revenue Credit Services Decision Analytics Marketing Services Interactive Total - continuing activities Discontinuing activities3 Total EBIT Credit ...

  • Page 49
    .... 2012 Objectives Link to strategic goals Business review Strategic goal linkage: Become global market leader in credit information and analytics Products and Services Create social and economic benefit through our products, services and capabilities, balancing commercial benefit with consumers...

  • Page 50
    ... in. The Global Employee Deal and regional variations will be communicated from June 2012 onwards. Social Responsibility within the heart of Experian Strategic goal linkage: Become the most trusted consumer brand for credit information services and identity protection Environment Minimise as far...

  • Page 51
    ... Head of Global CR was involved in this development work and it formed one of the six responsibility objectives. Governance Community investment 20121 US$'000s 20111 US$'000s Funds from Experian plc Financial donations from Experian subsidiaries Employee time volunteered2 Gifts in kind Management...

  • Page 52
    50 Experian Annual Report 2012 Business review Corporate responsibility continued Experian's community programme encourages employees to volunteer and this year saw us introduce measures to capture how much pro-bono work is done for charities, as well as the traditional type of support. This will...

  • Page 53
    ...of focus for the Board, namely talent/ succession management, familiarity with the business and executive talent and information technology and data security. Last year, we reported to you that we had complied with the new UK Corporate Governance Code one year early, because the changes it contained...

  • Page 54
    ... Experian, Chris spent 27 years at Bank of America, where his roles included Group Executive Vice President in retail banking. He also served as Chief Operating Officer at Wink Communications, a leading interactive television company at the time. Chris is a member of the Chancellor's Chief Executive...

  • Page 55
    ...He was Group Finance Director of the former GUS plc until it was demerged into Experian plc and Home Retail Group plc at the end of 2006. His executive career was in financial and general management with the former GUS plc, Christie's International plc, County NatWest Limited and Unilever plc. David...

  • Page 56
    ... Board members. • Received details of share dealings and external appointments of Board members. Investor relations • Received an investor relations and media update at each Board meeting. • Reviewed draft analysts' results presentations, when reviewing the Group's full and half-year financial...

  • Page 57
    ...and his time as Group Chief Executive of GUS plc. Sir Alan Rudge - Sir Alan has many years' experience in general management and technology roles. This experience means that he has a broad knowledge of operational issues and, in addition, he has a deep understanding of the Experian business. He also...

  • Page 58
    ... communication with the Company's shareholders, including by the CEO, the CFO and other executive management, and ensuring that members of the Board develop an understanding of the views of the major investors in the Company. Meetings of non-executive directors In addition to their attendance...

  • Page 59
    ... received business reviews, presentations on the UK and Ireland digital strategy and product demonstrations. In March 2012, an overseas Board meeting was held in São Paulo, Brazil. The Board learnt more about the Latin American market, the financial position, prospects and risk management issues in...

  • Page 60
    ...previous years, next year's induction and training for Board members is expected to include site visits, reviews of particular regions and global business lines and presentations from senior executives. Board support The Group Corporate Secretariat, under the leadership of the Company Secretary, is...

  • Page 61
    ...also oversees the management of operational related risks associated with the Group's shared service and data centres as well as global product development and delivery activities. The regional and global operations risk committees review summary risk assessments and internal audit results, evaluate...

  • Page 62
    ... finance report to the Board, which includes a Group financial summary, Group results, forecasts and sales trends, investor relations analysis and detailed business trading summaries. • Detailed monthly performance reviews at a regional level. • Regional and executive risk management committees...

  • Page 63
    ... global risk management policy outlines, for business units, the expectations in relation to escalation of identified risks, control weaknesses or gaps. • Certificates are provided annually by each business and key function leader to confirm compliance with the Group's system of internal control...

  • Page 64
    ... times, including one ad-hoc meeting. Seven members of the Committee are considered by the Board to be independent non-executive directors in accordance with provision B.2.1 of the UK Corporate Governance Code. The Group Human Resources Director and members of the Global Talent team attend certain...

  • Page 65
    ... Director, UK and Ireland; reviewed the fee of the Chairman and the salaries of the CEO, the COO, the Company Secretary and a number of senior executives, taking account of remuneration arrangements throughout Experian; received general and regional market overviews; received a summary of the Group...

  • Page 66
    ...in regular contact with key members of senior management. Activities The key activities of the Audit Committee during the year ended 31 March 2012 included the following: Reviewed the 2011 preliminary and 2012 half-year results announcements and the 2011 annual report and accounts, impairment papers...

  • Page 67
    ... use of separate teams, where appropriate. There is also a policy in place for the employment of former employees of the external auditor. Business review Policy on the provision of non-audit services This policy has not been changed during the year, and remains appropriate for the Group. Provided...

  • Page 68
    ... to support and encourage the executive directors to create shareholder value and ensure that the Group's remuneration policy is aligned with shareholders' interests. Our report sets out how we believe that we achieve this. During the past year the salaries of the executive directors were increased...

  • Page 69
    ... executive directors. More detail of how these were operated during the year ended 31 March 2012, and are intended to be operated in future, is provided later in this report. Summary of annual remuneration earned in 2012 Salary '000s Annual bonus(1) '000s Benefits '000s Total 2012 '000s Don Robert...

  • Page 70
    ... Return on Capital Employed ('ROCE') performance Performance measures directly link to Experian's strategy to drive profitable growth and optimise capital efficiency Aligns with shareholder interests through use of TSR performance criteria and delivery in shares Benefits Defined benefit...

  • Page 71
    ... meetings can be found in the corporate governance statement. Working with advisers In making its decisions, the Committee consults with the Chairman, the Chief Executive Officer and the Group HR Director. Other senior members of Experian's reward function are also invited to attend meetings of the...

  • Page 72
    ... of at least 100% of salary (200% for the CEO). The executive directors and the vast majority of senior management invited to participate have elected to defer their entire annual bonuses for the year ended 31 March 2012. The shareholdings of Don Robert and Chris Callero greatly exceed the...

  • Page 73
    ... pay increases awarded to other employees in the Group. To assess the appropriate salary for a role, benchmark data, sourced from external remuneration consultants, is provided to the Committee. Executive directors' salaries are benchmarked against those of executive directors from the companies...

  • Page 74
    72 Experian Annual Report 2012 Governance Report on directors' remuneration continued The operation of the CIP is described in the following schematic: Annual bonus, where earned, is deferred and invested in Experian shares Invested shares Three year deferral period Invested shares released in ...

  • Page 75
    ... over three years, with the other 25% subject to the achievement of a TSR target. The Committee has selected these two performance measures as they reflect a key strategic objective of Experian (driving profitable growth) and represent the value delivered to shareholders relative to Experian's peers...

  • Page 76
    ... Experian Sharesave Plans All executive directors and employees of the Company, and any participating subsidiaries in which Sharesave or a local equivalent is operated, are eligible to participate if they are employed by the Group at a qualifying date. As an example of these plans, the UK Sharesave...

  • Page 77
    ... the CEO should hold the equivalent of two times his base salary in Experian shares and other executive directors one times their base salary (including invested shares held under the CIP). Don Robert and Chris Callero significantly exceed these guidelines. Policy on external appointments The Board...

  • Page 78
    ... of shareholders. Non-executive directors do not receive any benefits-in-kind with the exception of the Chairman who receives private healthcare and the use of a company car. The fees of the non-executive directors were reviewed with effect from 1 October 2011, taking into account market practice in...

  • Page 79
    ...404 US$4,762 £1,448 US$2,812 Business review In line with the shareholding guidelines for non-executive directors described above the following shares were purchased on 30 June 2011. The value, at date of purchase, shown below is included within the remuneration reported in the above table. No of...

  • Page 80
    78 Experian Annual Report 2012 Governance Report on directors' remuneration continued Share options Details of options granted to directors under the Experian Share Option Plan and the GUS Executive Share Option Schemes are set out in the table below. Number of shares under option at 1 April 2011...

  • Page 81
    ... retention of invested shares and continued employment. 6. Awards made in 2011 were made under the Experian Co-investment Plan to Paul Brooks (at the share price at which invested shares were purchased) and under the Experian North America Co-investment Plan to Chris Callero and Don Robert (based on...

  • Page 82
    ... Annual Report 2012 Governance Report on directors' remuneration continued Performance Share Plan Details of awards made to directors under the PSP are set out in the table below. Experian share price on date of award Plan shares held at 1 April 2011 Plan shares awarded during the year Plan shares...

  • Page 83
    ...are those required by the UK Financial Services Authority Listing Rules. Business review Executive directors' service contracts Governance Don Robert has a service agreement with Experian Services Corporation ('ESC') dated 7 August 2006. This provides that, if his employment is terminated by ESC...

  • Page 84
    82 Experian Annual Report 2012 Governance Report on directors' remuneration continued UK Corporate Governance Code The constitution and operation of the Committee are in accordance with the principles of good governance and the UK Corporate Governance Code published by the UK Financial Reporting ...

  • Page 85
    ... provisions for its directors. Principal activities and business review Experian provides data and analytical tools to organisations in North America, Latin America, UK and Ireland, EMEA and Asia Pacific. Clients use these to manage credit risk, prevent fraud, target marketing offers and automate...

  • Page 86
    ...• The provisions in directors' service contracts relating to a change of control of the Company are described in the report on directors' remuneration. Own shares The existing authority for the Company to purchase its own shares, which expires at the end of this year's annual general meeting, was...

  • Page 87
    .... meetings, publications and intranet sites. More detail on employee engagement, together with information on diversity, succession planning and talent development, can be found in the 'Our people, our strength' section of the annual report. Experian continues to support employee share ownership...

  • Page 88
    86 Experian Annual Report 2012 Governance Directors' report continued Annual general meeting The 2012 annual general meeting of the Company will be held at The Merrion Hotel, Upper Merrion Street, Dublin 2, Ireland at 9.30am on Wednesday 18 July 2012. Shareholders who are unable to attend in ...

  • Page 89
    ... of the UK Corporate Governance Code specified for our review; and • certain elements of the report to shareholders by the Board on directors' remuneration. Financial statements Other matter We have reported separately on the parent company financial statements of Experian plc for the year ended...

  • Page 90
    ... Annual Report 2012 Financial statements Group income statement for the year ended 31 March 2012 Notes 2012 2011 (Re-presented) (Note 3) US$m US$m Revenue Labour costs Data and information technology costs Depreciation and amortisation Marketing and customer acquisition costs Other operating...

  • Page 91
    ... 847 Business review Non-GAAP measures: Reconciliation of profit before tax to Benchmark PBT for the year ended 31 March 2012 Notes 2012 2011 (Re-presented) (Note 3) US$m US$m Profit before tax Exceptional items - within operating profit Exceptional items - within net finance costs Amortisation...

  • Page 92
    90 Experian Annual Report 2012 Financial statements Group balance sheet at 31 March 2012 Notes 2012 US$m 2011 US$m Non-current assets Goodwill Other intangible assets Property, plant and equipment Investments in associates Deferred tax assets Retirement benefit assets Trade and other receivables ...

  • Page 93
    ...: Profit for the financial year Total other comprehensive income Total comprehensive income Transactions with owners: Employee share incentive plans: - value of employee services - proceeds from shares issued on vesting - other exercises of share options and awards - tax credit relating to employee...

  • Page 94
    92 Experian Annual Report 2012 Financial statements Group cash flow statement for the year ended 31 March 2012 Notes 2012 2011 (Re-presented) (Note 3) US$m US$m Cash flows from operating activities Cash generated from operations Interest paid Interest received Dividends received from associates ...

  • Page 95
    ... for companies whose shares are traded on the London Stock Exchange's Regulated Market, the financial statements of the Company are included within the Group annual report and are set out on pages 150 to 158. Those financial statements are prepared under UK accounting standards. Business review...

  • Page 96
    ... year is recognised in the Group income statement within net finance costs, whilst any change in that value attributable to exchange rate movements is recognised directly in other comprehensive income. Associates Associates are entities over which the Group has significant influence but not control...

  • Page 97
    ...protected or otherwise separable trade names acquired as part of a business combination are capitalised at fair value on acquisition and amortised on a straight line basis over three to fourteen years, based on management's expectations to retain trade names within the business. Completed technology...

  • Page 98
    ...bring into use the specific software. These costs are amortised on a straight line basis over three to ten years. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that will generate economic benefits beyond one year, are...

  • Page 99
    ... of amounts previously written off are credited in the Group income statement within other operating charges. (i) Cash and cash equivalents Cash and cash equivalents include cash in hand, term and call deposits held with banks and other short-term highly liquid investments with original maturities...

  • Page 100
    98 Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 5. Significant accounting policies (continued) The Group documents the relationship between hedging instruments and hedged items at the hedge inception, as well as its risk management objective ...

  • Page 101
    ... in the year in which the service is provided. Subscription revenues, and revenues in respect of services to be provided by an indeterminate number of acts over a specified period of time, are recognised on a straight line basis over those periods. Customisation, development and consulting revenues...

  • Page 102
    ... value of plan assets of funded plans less the present value of the related defined benefit obligation at the balance sheet date, together with adjustments for past service costs. The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit...

  • Page 103
    ... monitored for internal management purposes by operating segment. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. The Group tests goodwill for impairment annually or more frequently if events or changes in...

  • Page 104
    ...of the demerger-related equity incentive plans, exceptional items, financing fair value remeasurements, tax and discontinued operations. It includes the Group's share of continuing associates' pre-tax results. Earnings before interest and tax ('EBIT') EBIT is defined as profit before amortisation of...

  • Page 105
    ... risks represent part of the Group's risks in relation to its strategy and business objectives and a full discussion of all such risks is contained within the separate risks and uncertainties section of the annual report. Market risk Foreign exchange risk The Group operates internationally and...

  • Page 106
    ... sheet date are given in note 28. The maturity analysis of financial liabilities is given in note 32. (b) Capital risk management The Group's objectives in managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for...

  • Page 107
    ... shareholders, return capital to shareholders, issue or purchase shares or sell assets to reduce net debt. As part of its internal reporting processes the Group monitors capital employed by operating segment. For this purpose, capital employed is defined as net assets excluding the net present value...

  • Page 108
    ... information is available. Experian is organised into, and managed on a worldwide basis over, the following five operating segments, based on geographic areas, supported by its central Group functions North America; Latin America; UK and Ireland; Europe, Middle East and Africa ('EMEA'); and Asia...

  • Page 109
    ... provided to the chief operating decision maker, and reportable under IFRS 8, is set out in section (b) below. (b) IFRS 8 disclosures - financial information (i) Income statement Continuing operations2 Year ended 31 March 2012 North America US$m Latin America US$m UK & Ireland US$m EMEA/ Asia...

  • Page 110
    108 Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 9. Segment information (continued) (ii) Balance sheet At 31 March 2012 North America US$m Latin America US$m UK & Ireland US$m EMEA/ Asia Pacific US$m Segment assets and liabilities US$m Central ...

  • Page 111
    ... amortisation Capital expenditure 2011 (Re-presented) (Note 3) US$m US$m 2012 Depreciation1 2011 (Re-presented) (Note 3) US$m US$m 2012 Amortisation1 2011 (Re-presented) (Note 3) US$m US$m 2012 North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities...

  • Page 112
    ...-related equity incentive plans as the underlying data is maintained only to provide an allocation by operating segment. 3. A loss before tax of US$9m (2011: profit of US$142m) arose in respect of discontinued operations. Further information on such operations which comprise the Group's comparison...

  • Page 113
    ... US$m US$m 2012 (a) Labour costs - continuing operations Wages and salaries Social security costs Share-based payments (note 33) Pension costs/(income) - defined benefit plans (note 34) Pension costs - defined contribution plans Employee benefit costs Other labour costs Business review 1,222 194...

  • Page 114
    ... number of employees (including executive directors) - continuing operations 2012 Full time Part time Full time equivalent 2011 (Re-presented) (Note 3) Full time Part time Full time equivalent North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities...

  • Page 115
    ...2011 (Re-presented) (Note 3) US$m US$m 2012 (b) Total adjustments made to derive Benchmark PBT Amortisation of acquisition intangibles Acquisition expenses Adjustment to the fair value of contingent consideration Charges in respect of the demerger-related equity incentive plans Financing fair value...

  • Page 116
    114 Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 14. Net finance costs (a) Net finance costs included in Profit before tax Interest income: Bank deposits and short-term investments Expected return on pension plan assets Interest income before ...

  • Page 117
    ...56 Business review (b) Tax reconciliations 2011 (Re-presented) (Note 3) US$m US$m 2012 (i) Reconciliation of the Group tax (credit)/charge Profit before tax Profit before tax multiplied by the standard rate of UK corporation tax of 26% (2011: 28%) Effects of: Adjustments in respect of prior years...

  • Page 118
    ...continue to be influenced by the profile of profits earned in the different countries in which the Group's businesses operate and could be affected by changes in tax law. In the UK, the main rate of corporation tax was reduced from 28% to 26% with effect from 1 April 2011 and to 24% with effect from...

  • Page 119
    ...nil (2011: profit of US$73m) in respect of FARES. The results of the comparison shopping and lead generation businesses were: 2012 US$m 2011 US$m Revenue Labour costs Data and information technology costs Depreciation and amortisation Marketing and customer acquisition costs Other operating charges...

  • Page 120
    ... FARES in the year ended 31 March 2011 were disclosed within net cash flows used in investing activities from continuing operations in the Group cash flow statement. This amount includes dividends of US$26m received after the date of the exercise by FAC of its buy-out option and is stated after the...

  • Page 121
    ... in place in October 2006, shareholders in the Company can elect to receive their dividends from a UK source (the 'IAS election'). Shareholders who held 50,000 or fewer Experian shares (i) on the date of admission of the Company's shares to listing on the London Stock Exchange or (ii) in the case of...

  • Page 122
    ... Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 20. Goodwill (a) Movements in goodwill 2012 US$m 2011 US$m At 1 April Differences on exchange Additions through business combinations (note 41) Adjustments to contingent consideration on prior year...

  • Page 123
    ... assets Customer and advertiser relationships US$m Other acquisition intangibles US$m Total acquisition intangibles US$m Databases Internal use software US$m Internally generated software US$m Total US$m US$m Cost At 1 April 2011 Differences on exchange Additions through business combinations...

  • Page 124
    ...Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 22. Property, plant and equipment Freehold properties US$m Short leasehold properties US$m Plant and equipment US$m Total US$m Cost At 1 April 2011 Differences on exchange Additions through business...

  • Page 125
    123 Business overview 23. Investments in associates 2012 US$m 2011 US$m Cost At 1 April Differences on exchange Additions through business combinations (note 41) Share of (loss)/profit after tax (including a profit of US$5m in 2011 in respect of FARES) Dividends received (including US$2m in 2011 ...

  • Page 126
    124 Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 25. Trade and other receivables (continued) (b) Trade and other receivables by denomination of currency Current 2012 US$m Non-current 2012 US$m Current 2011 US$m Non-current 2011 US$m US dollar ...

  • Page 127
    ...and the book value stated above. (b) Analysis by external credit rating 2012 US$m 2011 US$m A rated B rated Counterparty holding of more than US$2m Counterparty holding of less than US$2m 144 80 224 30 254 327 60 387 21 408 Business review The above analysis does not include bank deposits of US...

  • Page 128
    ... of the loans and borrowings and their fair values. Other than finance lease obligations, the borrowings are unsecured. (b) Analysis by contractual repricing dates 2012 US$m 2011 US$m Less than one year One to two years Two to three years Over five years 13 671 70 1,438 2,192 8 576 1,343 1,927...

  • Page 129
    ...36 6 42 Governance The accounting policies for available for sale financial assets have been applied to the above items. Other trade investments held at 31 March 2011 were acquired during that year in connection with a business disposal and realised during the year ended 31 March 2012 (see note 13...

  • Page 130
    ...net present value of the put option in respect of the Serasa non-controlling interest is reported within current liabilities, rather than noncurrent liabilities, at 31 March 2012 as the put may be exercised from June 2012. The change in value during the year ended 31 March 2012 comprised a financing...

  • Page 131
    ... 1 year US$m 1 to 2 years US$m 2 to 3 years US$m 3 to 4 years US$m 4 to 5 years US$m Over 5 years US$m Total US$m Business review 16 12 12 1 to 2 years US$m 9 9 2 to 3 years US$m 6 6 3 to 4 years US$m 2 2 4 to 5 years US$m 1 1 Over 5 years US$m 46 281 (279) 2 48 Total US$m At 31 March 2011...

  • Page 132
    130 Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 32. Maturity profile of financial liabilities - contractual undiscounted cash flows At 31 March 2012 Loans and borrowings Net settled derivative financial instruments (note 31(c)) Gross settled ...

  • Page 133
    ... America Executive Stock Option Plan, a former GUS share option plan, and these options had a maximum term of six years from the date of grant. (ii) Movement in number of options and weighted average exercise price Number 2012 million Price 2012 £ Number 2011 million Price 2011 £ Business review...

  • Page 134
    ... (at grant date) Benchmark profit - 100% Cumulative operating cash flow - 100% n/a Maximum term Expected departures (at grant date) 3 years 5% 3 years 15% (ii) Performance conditions and other details Experian Co-Investment Plan The grant date for the Experian Co-Investment Plan is the start...

  • Page 135
    ... date and are not revised for actual performance. (iv) Movement in and analysis of number of share awards outstanding 2012 million 2011 million At 1 April Grant of awards Forfeiture of awards Vesting of awards At 31 March Analysis by plan: Experian Co-Investment Plan Experian Performance Share Plan...

  • Page 136
    ...part of the report on directors' remuneration. (iii) Post-retirement healthcare arrangements The Group operates plans which provide post-retirement healthcare benefits to certain retired employees and their dependant relatives. The principal plan relates to former employees in the UK and, under this...

  • Page 137
    ...past service costs Interest on plans' liabilities Actuarial losses/(gains) on liabilities Contributions paid by employees Benefits paid At 31 March 2012 US$m 2011 US$m 858 (3) 9 46 7 4 (41) 880 2012 US$m 910 48 10 (29) 50 (97) 4 (38) 858 2011 US$m Business review Analysis of the present value of...

  • Page 138
    ... the year ended 31 March 2011, the UK Government changed to the use of the Consumer Prices Index (the 'CPI') rather than the Retail Prices Index as the inflation measure for determining the minimum pension increases to be applied to statutory index-linked features of retirement benefits. As a result...

  • Page 139
    ...valuations, updated by Towers Watson Limited to take account of the requirements of IAS 19. The assumptions for discount rate, salary increases and mortality, used to calculate the present value of the defined benefit obligations, all have a significant effect on the accounting valuation. Changes to...

  • Page 140
    138 Experian Annual Report 2012 Financial statements Notes to the Group financial statements continued 34. Retirement benefit assets and obligations (continued) (ix) Assets of the Group's defined benefit plans at fair value 2012 US$m 2012 % 2011 US$m 2011 % Equities Fixed interest securities ...

  • Page 141
    ... depreciation US$m Intangibles Share incentive plans US$m Tax losses Other temporary differences US$m Total US$m US$m US$m At 1 April 2011 Differences on exchange Tax credit/(charge) in the Group income statement Business combinations (note 41) Tax recognised directly in equity on transactions...

  • Page 142
    140 Experian Annual Report 2012 Financial statements Notes to the Group ...year of US$41m (2011: US$45m). (iv) UK deferred tax balances In the UK, the main rate of corporation tax has been reduced to 24% with effect from 1 April 2012. Deferred tax balances held in the UK have therefore been provided...

  • Page 143
    ... - Business review 13 124 (10) 56 46 (8) 132 124 36. Provisions 2012 Restructuring costs US$m Other liabilities US$m Total US$m Restructuring costs US$m 2011 Other liabilities US$m Total US$m At 1 April Differences on exchange Business combinations (note 41) Amount charged in the year Utilised...

  • Page 144
    ...changes in total equity. Further details relating to the share capital at the balance sheet dates, together with details of ordinary shares issued during the year and since 31 March 2012, are contained in note N to the parent company financial statements. The share premium account of US$1,471m (2011...

  • Page 145
    ... of GUS plc and the nominal value of the share capital of the Company before the share offer in October 2006 and subsequent share issues. Movements on the hedging reserve and the position at the balance sheet date reflect hedging transactions which are not charged or credited to the Group income...

  • Page 146
    ... Adjustments for: Group tax (credit)/charge Share of post-tax losses of associates Net finance costs Operating profit Loss on disposals of fixed assets (Gain)/loss on disposal of businesses Depreciation and amortisation Charge in respect of equity incentive plans Decrease in working capital (note 40...

  • Page 147
    ...'s global leadership in credit information. the acquisition of the whole of the issued share capital of Medical Present Value, Inc ('Medical Present Value') on 1 July 2011 for a consideration of US$192m. This acquisition broadens Experian's presence in the healthcare payments sector in North America...

  • Page 148
    ... owned from 1 April 2011, as their accounting policies and period end dates did not accord with those of the Group prior to their acquisition. There have been no material gains, losses, error corrections or other adjustments recognised in the year ended 31 March 2012 that relate to acquisitions in...

  • Page 149
    ... under non-cancellable operating lease agreements with varying terms, escalation clauses and renewal rights and the net charge for the year was US$69m (2011: US$59m). 44. Capital commitments 2012 US$m 2011 US$m Capital expenditure for which contracts have been placed: Property, plant and equipment...

  • Page 150
    ...the year ended 31 March 2012. Analysis of the remuneration of key management personnel: 2012 US$m 2011 US$m Salaries and short-term employee benefits Retirement benefits Share-based payments 12 1 18 31 12 1 14 27 Key management personnel comprises the board of directors and their remuneration is...

  • Page 151
    ...' report to the members of Experian plc We have audited the parent company financial statements of Experian plc for the year ended 31 March 2012 which comprise the parent company profit and loss account, the parent company balance sheet and the related notes. The financial reporting framework...

  • Page 152
    150 Experian Annual Report 2012 Financial statements Parent company profit and loss account for the year ended 31 March 2012 Notes 2012 US$m 2011 US$m Staff costs Depreciation Other operating charges Operating loss Interest receivable and similar income Interest payable and similar charges Loss ...

  • Page 153
    ...Investments - shares in Group undertakings Current assets Debtors - amounts falling due within one year Cash at bank and in hand Current liabilities Creditors - amounts falling due within one year Net current assets Net assets Capital and reserves Called up share capital Share premium account Profit...

  • Page 154
    152 Experian Annual Report 2012 Financial statements Notes to the parent company financial statements for the year ended 31 March 2012 A. Corporate information Experian plc (the 'Company') is incorporated and registered in Jersey as a public company limited by shares and is resident in Ireland. ...

  • Page 155
    ...the year in which they arise. Business review Governance D. Staff costs 2012 US$m 2011 US$m Directors' fees Wages and salaries Social security costs Other pension costs 2.2 1.2 0.1 0.1 3.6 2.1 1.0 0.1 0.1 Financial statements 3.3 Executive directors of the Company are employed by other Group...

  • Page 156
    154 Experian Annual Report 2012 Financial statements Notes to the parent company financial statements continued E. Other operating charges (i) Nature of charges Other operating charges principally comprise charges from other Group undertakings in respect of services provided to the Company during ...

  • Page 157
    ... Finance Holdings Limited Experian Group Services Limited Experian Holdings Ireland Limited Experian Ireland Investments Limited Holding company Finance company Administrative services Holding company Finance company Governance L. Debtors - amounts falling due within one year 2012 US$m 2011...

  • Page 158
    ... up share capital and share premium account Number of shares Year ended 31 March 2012 million Called up share capital US$m Share premium account US$m At 1 April 2011 Shares issued under employee share incentive plans At 31 March 2012 1,027.1 1.9 1,029.0 Number of shares 78.8 0.1 78.9 Called up...

  • Page 159
    ... balance on the profit and loss account comprises charges and credits taken directly to the profit and loss account in respect of employee share incentive plans and other net profits retained by the Company after the payment of dividends. The balance on the own shares reserve represents the cost of...

  • Page 160
    158 Experian Annual Report 2012 Financial statements Notes to the parent company financial statements continued Q. Commitments The Company has an annual operating lease commitment and related annual cost of US$0.6m (2011: US$0.5m) in respect of the corporate headquarters in Dublin and this ...

  • Page 161
    ... UK CGT purposes in the following ratio: 58.235% to Experian plc shares and 41.765% to Home Retail Group plc shares (based on the closing prices of the respective shares on their first day of trading after their admission to the Official List of the London Stock Exchange on 11 October 2006). For GUS...

  • Page 162
    ... programme is not listed on a stock exchange in the USA and trades in the over-the-counter market on the OTCQX platform under the symbol EXPGY. Each ADR represents one Experian plc ordinary share. Further information can be obtained by contacting: Shareholder Relations Bank of New York Mellon PO Box...

  • Page 163
    ... FSC certified environmental print technology, together with vegetable-based inks and a single-site production facility that required no transport between processes. The report is printed on an environmentally responsible paper that uses 50% certified de-inked post consumer waste and 50% certified...

  • Page 164
    Corporate headquarters Experian plc Newenham House Northern Cross Malahide Road Dublin 17 Ireland Corporate office Experian Cardinal Place 80 Victoria Street London SW1E 5JL United Kingdom Operational headquarters Experian Landmark House Experian Way NG2 Business Park Nottingham NG80 1ZZ United ...