Experian Regulatory News (EXPN)

news release

Half-yearly financial report

17 November 2010 ─ Experian, the global information services company, today issues its half-yearly financial report for the six months ended 30 September 2010.

Highlights

·; A strong performance, with improving trends across all regions.

·; Revenue from continuing activities up 8% at constant exchange rates. Organic revenue growth of 7%. Total Group revenue of US$2.0bn (2009: US$1.9bn).

·; Further margin progression. EBIT margin from continuing activities up 10 basis points to 24.3%.

·; Continuing EBIT up 8% at constant exchange rates. Total EBIT of US$484m, up 10% at actual exchange rates.

·; Profit before tax from continuing operations of US$283m (2009: US$316m). Benchmark profit before tax of US$450m, up 12%.

·; Basic EPS of 25.9 US cents (2009: 24.5 US cents). Benchmark EPS of 32.4 US cents, up 10%.

·; Net debt of US$1,889m in the half. S&P affirmed BBB+ rating and revised outlook to positive in October.

·; 79% conversion of EBIT into operating cash flow in the seasonally weaker half year.

·; First interim dividend of 9.0 US cents per ordinary share, up 29%.

John Peace, Chairman, commented:

"Experian has made excellent progress in the half, creating significant shareholder value through strong financial performance, net share repurchases of US$147m and a 29% dividend increase to 9.0 US cents."

Don Robert, Chief Executive Officer, commented:

"We performed strongly in the first half, delivering our best organic revenue growth outcome in four years. Trends have improved modestly, with generally more favourable conditions across the majority of our markets. Our strategic priority is to maximise the opportunities we have identified globally. We are executing successfully against our growth programme, as is increasingly visible in our performance. For the year as a whole, we expect to deliver similar rates of organic revenue growth to the first half, and we are targeting modest improvement in our EBIT margin."

Contact

Experian

Don Robert Chief Executive Officer +44 (0)20 3042 4215

Paul Brooks Chief Financial Officer

Nadia Ridout-Jamieson Director of Investor Relations

James Russell Public Relations Director

Finsbury

Rollo Head +44 (0)20 7251 3801

Don Hunter

There will be a presentation today at 9.30am (UK time) to analysts and investors at the Bank of America Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ. The presentation can be viewed live on the Experian website at www.experianplc.com and can also be accessed live via a dial-in facility on +44 (0)20 3037 9164. The supporting slides and an indexed replay will be available on the website later in the day.

There will be a conference call today for bond analysts and investors at 3.00pm (UK time). This will be broadcast live on the Experian website at www.experianplc.com, with supporting slides. A replay will be available on the website later in the day.

Experian will update on third quarter trading on 18 January 2011, when it will issue an Interim Management Statement.

See Appendix 2 for definition of non-GAAP measures used throughout this announcement.

Certain financial data have been rounded within this announcement. As a result of this rounding, the totals of data presented may vary slightly from the actual arithmetic totals of such data.

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements. Neither the content of the Company's website, nor the content of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

About Experian 

Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was US$3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil. For more information, visit http://www.experianplc.com.

Chief Executive Officer's Review

Experian performed strongly in the first half. Some of our core markets started to recover and, equally importantly, we are benefiting as we extend our position in emerging markets and deliver against our global growth programme. Total revenue growth from continuing activities was 8% and organic revenue growth was 7% (Q1 6%, Q2 8%). EBIT from continuing activities rose 8%. There was further progression in EBIT margin, up 10 basis points to 24.3%, even though we faced some headwinds in the half. Benchmark EPS grew 10% to 32.4 US cents per ordinary share and we have raised the dividend by 29% to 9.0 US cents per share, in line with our increased dividend payout ratio.

·; All regions showed improving trends. Organic revenue growth was 6% in North America, 22% in Latin America, flat in the UK and Ireland and 4% in EMEA/Asia Pacific.

·; By principal activity, organic revenue growth was 6% at Credit Services, 10% at Marketing Services and 9% at Interactive. Organic revenue declined 1% at Decision Analytics.

First half highlights

In North America, Credit Services returned to growth during the half, ahead of our previous expectations. This reflects some resumption of prospecting and origination activity as lenders slowly extend underwriting programmes, as well as Experian's growing success in penetrating new market segments. We're also benefiting from our actions to reposition Marketing Services, which grew strongly in the half. Meanwhile at Interactive, we delivered further growth, even as we continue to transition to new brands at Consumer Direct, a process that will be assisted by the recent acquisition of Mighty Net. Organic revenue at Consumer Direct was broadly flat, in line with our previous guidance.

We continue to see strong momentum in Latin America, with organic revenue growth of 22%. While this was boosted by some exceptional growth in authentication revenue, underlying conditions in Brazil are highly favourable. Unemployment rates are low, the middle class continues to expand and real income is increasing. Expansion in our business has been driven by increased demand for value-added services, further penetration of the small and medium enterprise (SME) channel and we are seeing the first benefits of new product introductions as we build a comprehensive product suite in the region.

Our business in the UK and Ireland stabilised in the half. Across Credit Services and Decision Analytics, our diversification strategy is successfully driving growth across the public sector, telecommunications and utilities verticals. This is helping to offset declines in financial services caused by the subdued UK lending environment. We continue to see improvement across Marketing Services, where we have successfully repositioned into digital services. At Interactive, while there has been some moderation in growth rates, as previously flagged, we continue to improve operating metrics and retention rates.

Within EMEA/Asia Pacific, we have seen strong growth across Asia Pacific, which is on course to deliver revenue in the region of US$150m by the year end. Conditions in most Asian markets have strengthened and we are benefiting from our strategy to roll-out global products, which is driving new business wins across the region. Performance across more developed markets in Europe has been sluggish, reflecting ongoing economic weakness in some markets. Meanwhile, operations in emerging EMEA performed well, and there was good progress in markets such as South Africa, Russia and Turkey.

Strategic progress

As our end-markets recover, our primary strategic goal is to deliver on our global growth programme. We are focused on a discrete set of initiatives which we expect to drive sustained growth in our business, extend our market position and capitalise on our global scale. The programme is being executed within our strategic framework to focus on data and analytics, drive profitable growth and optimise capital efficiency.

We have made good progress against our key initiatives in the first half. We now expect to deliver a contribution to organic revenue growth of over 2% from the global growth programme in the year ending 31 March 2011.

Our global growth programme is centred on innovation, expanding geographically and on penetrating new customer segments.

Innovation

·; Innovation is at the heart of our strategy and is a driving force for growth. In the half, we benefited from new products in business information, automotive and identity protection.

·; We also continue to invest in our core data and analytics. For clients, the external environment is evolving, driving demand for new risk management services, enhanced fraud detection and greater precision in their marketing strategies. For example, we are investing in current account, mortgage and property valuation data, enhanced income estimates and more predictive scores, as well as in powerful new software platforms within Marketing Services and Decision Analytics.

Expanding geographically

·; Our global scale sets us apart competitively and provides growth opportunities unique to Experian. We are rolling out existing Experian products into both existing and new geographies. For example, we have launched ten global marketing products into eight countries over the past 18 months, including France, Germany, South Africa, Hong Kong and Singapore. As a result, Marketing Services now accounts for over one third of EMEA/Asia Pacific revenue.

·; We also continue to expand our credit bureau footprint, most recently with the launch of our India bureau.

New customer segments

·; The addressable market for our data and analytics is expanding as new customer segments adopt sophisticated data and analytics tools. We have a strong track record for growing new channels and, in the half, delivered double-digit organic revenue growth across public sector, telecommunications, utilities, automotive and healthcare payments.

·; We are tailoring products and expanding our presence in the SME sector and extending our direct-to-consumer offerings. New consumer protection products, for example, are performing strongly.

Cash flow and capital strategy

Our capital strategy is aimed at meeting the investment needs of the business, while maintaining a strong investment grade credit rating. As these objectives are met, we will continue to evaluate options for returning surplus cash to shareholders. Net debt in the half increased by US$262m to US$1,889m at 30 September 2010, in the seasonally weaker half for cash flow. The increase is after funding capital expenditure of US$144m, net acquisition expenditure of US$226m, equity dividend payments of US$161m and net share repurchases of US$147m. At 30 September 2010, the net debt to EBITDA gearing ratio was 2.0x, including the current value of the Serasa put option of US$733m. This compares to our target debt range of 1.75-2.0x.

In October, S&P affirmed its BBB+ rating on Experian and revised the outlook to positive. We are on target to complete the previously announced US$350m share buyback programme (of which approximately US$50m relates to employee share incentive plans) in the year ending 31 March 2011. Our debt refinancing plan is on track to complete in the next six months, with a new five-year bank facility being finalised and a further bond issue planned.

Dividend

We have announced a first interim dividend of 9.0 US cents per share, up 29% year-on-year. This is consistent with our plans to have dividend cover based on Benchmark EPS of around 2.5 times on an annual basis. The first interim dividend will be paid on 28 January 2011 to shareholders on the register at the close of business on 31 December 2010. Group financial highlights

Revenue by geography

1 Actual exchange rates

2 Constant exchange rates

3 Discontinuing activities include UK account processing, some UK hosted database activities, UK mortgage software activities and other smaller discontinuing items

See Appendix 1 for analysis of revenue and EBIT by business segment

Summary income statement

1 EBIT growth at constant exchange rates

2 Growth below EBIT is at actual exchange rates

3 2009 excludes US$36m from FARES (which is now classified as a discontinued operation)

4 Central activities comprise costs of central corporate functions

5 Discontinuing activities include UK account processing, some UK hosted database activities, UK mortgage software activities and other smaller discontinuing items

6 EBIT margin is for continuing business only

See Appendix 1 for analysis of revenue and EBIT by business segment

See Appendix 2 for definition of non-GAAP measures

Business review

North America

There was good growth in North America, helped by gradual market recovery and strategic progress against Experian's growth programme. Revenue from continuing activities was US$1,067m, up 6%, with organic revenue also up 6%.

Credit Services

There was some improvement in underlying trends and total and organic revenue was flat for the half (Q1 -3%, Q2 +4%). Consumer information benefited as credit conditions started to ease across the financial services sector. Prospecting and origination revenue declines moderated during the half, while portfolio management revenue continued to grow, albeit more slowly. There were good performances across business information, automotive and healthcare payments, which have benefited from recent investment in new data sources and enhanced data-linking, as well as from demand for new products.

Decision Analytics

Total and organic revenue declined 5%. Good growth in analytics, such as custom models and scoring, as well as in fraud prevention, partially offset continued softness in software sales. While financial services' buying cycles for software products remain sluggish, there was evidence of modest improvement in pipelines as the period progressed.

Marketing Services

Total and organic revenue growth was 12%. All areas performed well, reflecting improved market conditions and the benefit of repositioning into fast-growing digital media channels. There was strong growth across new media activities such as email and contact data, driven by strong volumes and new business wins. There was also good growth in more traditional data segments, which are benefiting from increased focus on sales execution. Growth in these activities reflected improved renewal rates and new business wins.

Interactive

Total and organic revenue growth was 9%. There was very strong growth across all lead generation verticals, including exceptionally strong growth within education. Growth at comparison shopping was driven by co-branded merchant referrals.

At Consumer Direct, revenue was broadly flat year-on-year, in line with previous guidance. There was strong growth in identity protection products (including ProtectMyID), reflecting growth in memberships. The transition to new consumer brands is proceeding to plan and will be assisted by the recent acquisition of Mighty Net. Experian's strategy is to create a portfolio of consumer brands which appeal to a broader base of consumers, expanding the addressable market for Experian products, while increasing the effectiveness of Experian's marketing spend. Recent progress includes the full launch in August of the advertising campaign for freecreditscore.com. Furthermore, following the acquisition of Mighty Net, Experian is currently leveraging key new brands, including CreditReport.com.

For North America, EBIT was US$279m, an increase of 3% in the half. The EBIT margin was 26.1% (2009: 26.8%). Pressure on margins reflected negative operating leverage, the restoration of some compensation benefits and a strong comparative due to a prior-year one-off benefit.

Latin America

Latin America performed strongly during the half, including excellent progress in EBIT. Revenue was US$350m, with growth at constant exchange rates of 22%. Organic revenue growth was also 22%.

Credit Services

At constant exchange rates, total and organic revenue performance was strong, up 22%, helped by a one-off contribution from authentication activity. Underlying momentum was also strong, reflecting expansion in new lending activity and broadening of the range of retail lending products in Brazil. In turn, this is driving demand for increasingly sophisticated credit reference services. Revenue growth also reflected further strength across the small and medium enterprise (SME) channel, which now accounts for approximately one third of Experian Latin America revenue. Growth in this channel is being driven by new customer acquisition, as well as upsell of enhanced features to existing customers.

Decision Analytics and Marketing Services

Decision Analytics and Marketing Services both performed strongly from a low base, with organic revenue growth of 33% and 36% respectively. Revenue growth was in part driven by new customer wins as newly introduced products gain traction in the region.

For Latin America, EBIT was US$115m, up 36% at constant exchange rates. The EBIT margin expanded by 350 basis points to 32.9%. Margin improvement principally reflected strong positive operating leverage.

UK and Ireland

The UK and Ireland region stabilised during the first half. Revenue from continuing activities was US$349m, which was in line with the prior year at constant exchange rates. Organic revenue was also flat.

Credit Services

Total revenue at constant exchange rates and organic revenue declined by 4%. There was continued softness in the financial services segment, reflecting ongoing weakness in UK lending supply. This was partially offset by growth across the public sector, telecommunications and utilities verticals, driven by rising demand for authentication, fraud prevention, customer management and collections services. There was further investment during the period in these new market segments, focused on sales team expansion and enhanced customer propositions.

Decision Analytics

Total revenue at constant exchange rates and organic revenue declined 5%. There was good growth in analytics in the half, plus some improved trends in transaction volumes as the period progressed, driven by increased account management and collections activity. While software revenue declined, there were early signs of recovery and of pipeline strengthening. This reflects investment by some clients in platform upgrades for the purposes of customer management. Software investment in new customer acquisition activity remains subdued.

Marketing Services

Marketing Services returned to growth in the half, with a 3% increase in both total revenue at constant exchange rates and organic revenue. Growth has been driven by higher volumes and retention rates across existing customers, as well as new business wins. During the period, significant focus has been placed on maximising emerging opportunities in digital direct marketing. This includes investment in analytics and new product innovation, and strengthened synergy with other parts of Experian, as well as investment in sales capability.

Interactive

Interactive performed well, with total revenue growth at constant exchange rates and organic revenue growth of 13%. Growth was driven by increased membership revenue for retail credit products (CreditExpert) and higher transactional score sales.

For the UK and Ireland, EBIT from continuing activities was US$99m (2009: US$102m). The EBIT margin expanded by 10 basis points to 28.4%, reflecting a positive shift in Marketing Services, which offset negative operating leverage elsewhere.

EMEA/Asia Pacific

There was further progress across the EMEA/Asia Pacific region. Revenue from continuing activities was US$227m, up 13% at constant exchange rates. Organic revenue growth was 4%. The acquisition contribution related principally to United MailSolutions in Germany (acquired October 2009) and A-Care Systems in Japan (acquired December 2009).

Total revenue and organic revenue declined 2%. Conditions across developed European markets remained weak, with financial services clients focused primarily on customer management and collections. Offsetting this were strong performances across emerging markets, including China and South Africa.

Decision Analytics

There was good traction at Decision Analytics, with both total revenue at constant exchange rates and organic revenue up 6%. This reflected strength across origination, fraud prevention and consultancy, particularly across developing markets. Performance benefited from increased client demand, as well as investment by Experian in enhanced sales and delivery capability.

Marketing Services

Total revenue at constant exchange rates increased 42%, whilst organic revenue growth was 13%. The difference related principally to acquisition contributions in Germany and Japan. Growth primarily reflected strength across Asia Pacific, as recent product launches gained momentum, with new client wins in Australia, China, Japan and Singapore.

For EMEA/Asia Pacific, EBIT from continuing activities was US$16m, down 13% at constant exchange rates. The EBIT margin was 7.0% (2009: 9.3%). The decline reflected investment in developing markets, such as India, as well as adverse business mix.

Other items

Comparative financial information

The results of FARES are now classified as discontinued in accordance with the definition of discontinued operations set out in IFRS 5 'Non-current assets held for sale and discontinued operations'. Further details of this are set out in note 2 to the unaudited condensed Group half-yearly financial statements.

Balance sheet

Net assets amounted to US$2,483m (2009: US$2,225m), equivalent to US$2.48 per share (2009: US$2.20).

Cash flow and net debt

Experian has generated good cash flow in the half with operating cash flow of US$380m (2009: US$394m) and a cash flow conversion of 79% (2009: 89%). Cash flow conversion is defined as operating cash flow expressed as a percentage of EBIT from continuing operations.

Free cash flow in the half was US$278m (2009: US$331m). The net cash outflow in the half of US$118m arose from increased acquisition spend of US$238m (2009: US$9m) and equity dividends of US$161m (2009: US$135m). Other financing related cash flows include US$147m (2009: US$55m) in respect of net share purchases, including the buyback programme. The cash outflow in respect of net share purchases is analysed in note 17(e) to the unaudited condensed Group half-yearly financial statements.

At 30 September 2010, net debt was US$1,889m (31 March 2010: US$1,627m) with undrawn committed borrowing facilities of US$1,730m (31 March 2010: US$1,932m). These committed bank facilities run to July 2012 and the £334m 5.625% Eurobonds 2013 are due for redemption at par in December 2013. The net interest expense was US$34m (2009: US$41m), after a credit of US$3m (2009: charge of US$2m) in respect of the differential between the expected return on pension assets and the interest expense on pension liabilities.

In December 2010, the Group will receive gross proceeds of US$314m on the completion of the disposal of the interest in FARES. This amount represents the fair value of the Group's investment in FARES. At 30 September 2010 this investment is reported as an available for sale financial asset in the Group balance sheet at US$326m, including US$12m of dividends due to be received prior to completion.

Exceptional items - continuing operations

Expenditure of US$10m arose in the period in connection with the Group's strategic programme of cost efficiency measures. Of this, US$6m related to redundancy, US$1m related to offshoring activities, infrastructure consolidations and other restructuring activities and US$3m related to asset write-offs.

The loss on disposal of businesses in the six months ended 30 September 2010 principally related to the completion of a number of small disposals of businesses whose assets and liabilities were classified as held for sale at 31 March 2010.

Other non-GAAP measures - continuing operations

Other non-GAAP measures include a charge of US$61m (2009: credit of US$40m) in respect of financing fair value remeasurements, within which there is a charge of US$37m (2009: US$8m) in respect of the movement in the fair value of the Serasa put option.

Tax

The Group's effective rate of tax for the six months ended 30 September 2010 was 24.7% (2009: 20.3%).

The Group's effective rate of tax for the six months ended 30 September 2010 based on Benchmark PBT was 21.8% (2009: 20.2%). This rate is defined as the total tax expense, adjusted for the tax impact of non-Benchmark items. The Group's cash tax rate for continuing operations (based on tax paid in the period and Benchmark PBT for continuing operations) was 9.6% (2009: 0.5%).

Earnings per share

In the six months ended 30 September 2010, basic earnings per share were 25.9 US cents (2009: 24.5 US cents), including earnings per share of 6.7 US cents (2009: 1.3 US cents) in respect of discontinued operations. Benchmark earnings per share were 32.4 US cents (2009: 29.5 US cents), an increase of 10%.

At 30 September 2010, Experian had some 1,027m ordinary shares in issue, of which 25m shares were held by employee trusts and in treasury. Accordingly, the number of shares to be used for the purposes of calculating basic earnings per share from 30 September 2010 is 1,002m. Any issues and purchases of shares after 30 September 2010 will result in an amendment to this figure.

Foreign exchange

The principal exchange rates used to translate revenue and EBIT in the period are:

The effect of these exchange rate changes on the results for the period is to increase reported revenue by US$21m and EBIT by US$10m.

The principal exchange rates used to translate assets and liabilities at the period end are:

Retirement benefit obligations

There is a net retirement benefit obligation at 30 September 2010 of US$71m (2009: US$129m). This consists of a deficit in the funded plans of US$18m (2009: US$72m) and other pension obligations of US$53m (2009: US$57m). Further details of the movement in the obligation during the period and the actuarial assumptions used are included in note 16 to the unaudited condensed Group half-yearly financial statements.

Seasonality

Some activities at Experian exhibit seasonality. Credit Services activities in Latin America are weighted towards the first half of the year, reflecting the timing of the holiday season in Brazil. Marketing Services activities in North America and in the UK and Ireland are seasonally weighted towards the second half of the year, reflecting some exposure to the retail sector. PriceGrabber, which is mainly reported within North America Interactive, is seasonally weighted towards the third quarter as online shopping volumes traditionally increase towards the Christmas period.

Risks and uncertainties

The risks and uncertainties affecting Experian are unchanged from those for the year ended 31 March 2010 which were explained in detail on page 34 to 37 of the annual report and financial statements for the year ended 31 March 2010. Such risks are either specific to Experian's business model, such as information security, or more general, such as the impact of competition.

The explanations given in the annual report and financial statements highlighted the following principal risk areas for Experian:

·; Loss or inappropriate usage of data

·; Dependence upon third parties to provide data and certain operational services

·; Exposure to legislation or regulatory reforms

·; Regulatory compliance

·; Interruptions in business processes or systems

·; Dependence on recruitment and retention of highly skilled personnel

In addition, other risk areas were highlighted in the annual report and financial statements as follows:

·; Exposure to material adverse litigation

·; Exposure to country and regional risk (political, financial, economic, social), particularly in North America and United Kingdom

·; Exposure to consolidation among clients and markets

·; Acquisitions may not meet expectations

·; Exposure to the unpredictability of financial markets (foreign exchange, interest rate and other financial risks)

·; Exposure to increasing competition

·; Loss or infringement of intellectual property rights

·; Data centre security breaches

Appendices

1. Revenue and EBIT by business segment

1 Growth at constant exchange rates

2 Discontinuing activities include UK account processing, some UK hosted database activities, UK mortgage software activities and other smaller discontinuing items

3 EBIT margin is for continuing activities only

4 The FARES associate is excluded from the above results as it is now classified as a discontinued operation

2. Use of non-GAAP financial information

Experian has identified certain measures that it believes will assist understanding of the performance of the Group. As these measures are not defined under IFRS, they may not be directly comparable with other companies' adjusted measures. The non-GAAP measures are not intended to be a substitute for, or superior to, any IFRS measures of performance, but management has included them as these are considered to be important comparables and key measures used within the business for assessing performance. Such non-GAAP measures that are included within the unaudited condensed Group half-yearly financial statements are detailed in note 5 to those financial statements. Further non-GAAP measures and reconciliations of those measures are set out below.

Earnings before interest, tax, depreciation and amortisation ('EBITDA'): EBITDA is defined as profit before amortisation of acquisition intangibles, acquisition expenses, goodwill impairments, charges in respect of the demerger-related equity incentive plans, exceptional items, net finance costs, tax, depreciation and other amortisation. It includes the Group's share of continuing associates' pre-tax result.

Discontinuing activities: Experian defines discontinuing activities as businesses sold, closed or identified for closure during a financial year. These are treated as discontinuing activities for both revenue and EBIT purposes. Prior periods, where shown, are restated to disclose separately the results of discontinuing activities. This financial measure differs from the definition of discontinued operations set out in IFRS 5, which defines a discontinued operation as a component of an entity that has either been disposed of, or is classified as held for sale, and is: (i) a separate major line of business or geographical area of operations; (ii) part of a single plan to dispose of a major line of business or geographical area of operations; or (iii) a subsidiary acquired exclusively with a view to resale.

Continuing activities: Businesses trading at 30 September 2010 that have not been disclosed as discontinuing activities are treated as continuing activities.

Total growth: This is the year-on-year change in the performance of Experian's activities. Total growth at constant exchange rates removes the translational foreign exchange effects arising on the consolidation of Experian's activities.

Organic growth: This is the year-on-year change in continuing activities revenue, at constant transactional and translation exchange rates, excluding acquisitions (other than affiliate credit bureaux) until the first anniversary date of consolidation.

Constant exchange rates: In order to illustrate its organic performance, Experian discusses its results in terms of constant exchange rate growth, unless otherwise stated. This represents growth calculated as if the exchange rates used to determine the results had remained unchanged from those used in the previous year.

Free cash flow: Free cash flow is derived from operating cash flow by excluding net interest and tax paid together with dividends paid to non-controlling interests.

3. Income statement analysis - continuing operations

1 These include charges for exceptional items of US$32m (2009: US$46m) and other non-GAAP measures of US$135m (2009: US$39m), full details of which are included in note 9 to the financial statements

2 Operating expenses will be analysed by nature in the Group's statutory financial statements for the year ending 31 March 2011

4. Group cash flow summary

1 A reconciliation of cash generated from operations as reported in the Group cash flow statement on page 24 to operating cash flow as reported above is given in note 17 to the unaudited condensed Group half-yearly financial statements

5. Reconciliation of depreciation and amortisation

Unaudited condensed Group half-yearly financial statements

Group income statement

for the six months ended 30 September 2010

Unaudited condensed Group half-yearly financial statements

Group statement of comprehensive income

for the six months ended 30 September 2010

Non-GAAP measures - reconciliation of profit before tax to Benchmark PBT

for the six months ended 30 September 2010

Unaudited condensed Group half-yearly financial statements

Group balance sheet

at 30 September 2010

Unaudited condensed Group half-yearly financial statements

Group statement of changes in total equity

for the six months ended 30 September 2010

for the six months ended 30 September 2009

Unaudited condensed Group half-yearly financial statements

Group statement of changes in total equity

for the year ended 31 March 2010