Appendices

1. Revenue and EBIT by business segment

		2009		2008		Total growth1		Organic growth1
	Six months ended 30 September	US$m		US$m		%		%
	Revenue
	Credit Services	802		854		3		1
	Decision Analytics	211		260		(8	)	(8	)
	Marketing Services	341		400		(7	)	(7	)
	Interactive	503		459		12		12
	Total – continuing activities	1,857		1,973		1		1
	Discontinuing activities2	17		44		n/a
	Total	1,874		2,017		-
	EBIT
	Credit Services – direct business	271		267		9
	FARES	36		23		57
	Total Credit Services	307		290		13
	Decision Analytics	57		81		(18	)
	Marketing Services	32		35		-
	Interactive	111		101		11
	Central Activities	(25	)	(27	)	n/a
	Total – continuing activities	482		480		7
	Discontinuing activities2	(4	)	(4	)	n/a
	Total	478		476		7
	EBIT margin3
	Credit Services – direct business	33.8%		31.3%
	Decision Analytics	27.0%		31.2%
	Marketing Services	9.4%		8.8%
	Interactive	22.1%		22.0%
	Total EBIT margin	24.0%		23.2%

1	Growth at constant exchange rates
2	Discontinuing activities include UK account processing and other smaller discontinuing activities
3	EBIT margin is for continuing direct business only, excluding FARES

2. Use of non-GAAP financial information

Experian has identified certain measures that it believes will assist understanding of the performance of the business. As the 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. The following are the key non-GAAP measures identified by Experian:

Benchmark profit before tax (‘Benchmark PBT’): Benchmark PBT is defined as profit before amortisation of acquisition intangibles, goodwill impairments, charges in respect of the demerger-related equity incentive plans, exceptional items, financing fair value remeasurements, tax and discontinued operations. It includes the Group’s share of associates’ pre-tax profit.

Earnings before interest and tax (‘EBIT’): EBIT is defined as profit before amortisation of acquisition intangibles, goodwill impairments, charges in respect of the demerger-related equity incentive plans, exceptional items, net financing costs, tax and discontinued operations. It includes the Group’s share of associates’ pre-tax profit.

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

Benchmark earnings per share (‘Benchmark EPS’): Benchmark EPS represents Benchmark PBT less attributable tax and minority interests divided by the weighted average number of shares in issue, and is disclosed to indicate the underlying profitability of the Group.

Exceptional items: The separate reporting of non-recurring exceptional items gives an indication of Experian’s underlying performance. Exceptional items are those arising from the profit or loss on disposal of businesses, closure costs of material business units or costs of significant restructuring programmes. All other restructuring costs have been charged against EBIT in the segments in which they are incurred.

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 (Non-current assets held for sale and discontinued operations). Under IFRS 5, a discontinued operation is 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 2009 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 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.

Direct business: Direct business refers to Experian’s business exclusive of the financial results of associates (including FARES).

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.

Operating cash flow and free cash flow: Operating cash flow is calculated as cash generated from operations adjusted for outflows in respect of the purchase of property, plant and equipment and other intangible assets and adding dividends from associates but excluding any cash inflows and outflows in respect of exceptional items. It is defined as EBIT less changes in working capital, add depreciation/amortisation, less capital expenditure, less profit retained in associates. Free cash flow is derived after further excluding net interest and tax paid together with dividends paid to minority shareholders.

Net debt: Net debt is calculated as total debt less cash and cash equivalents and other highly liquid bank deposits with maturities greater than three months. Total debt includes loans and borrowings (and the fair value of derivatives hedging loans and borrowings), overdrafts and obligations under finance leases. Accrued interest is excluded from net debt.

3. Reconciliation of revenue and EBIT by geography

		2009						2008
		Continuing activities		Discontinuing activities1		Total		Continuing activities		Discontinuing activities1		Total
	Six months ended 30 September	US$m		US$m		US$m		US$m		US$m		US$m
	Revenue
	North America	1,010		7		1,017		1,025		12		1,037
	Latin America	255		-		255		263		-		263
	UK and Ireland	387		10		397		473		32		505
	EMEA/Asia Pacific	205		-		205		212		-		212
	Total revenue	1,857		17		1,874		1,973		44		2,017
	EBIT
	North America – direct business	271		(4	)	267		277		(5	)	272
	FARES	36		-		36		23		-		23
	Total North America	307		(4	)	303		300		(5	)	295
	Latin America	75		-		75		68		-		68
	UK and Ireland	106		-		106		122		1		123
	EMEA/Asia Pacific	19		-		19		17		-		17
	Central Activities	(25	)	-		(25	)	(27	)	-		(27	)
	Total EBIT	482		(4	)	478		480		(4	)	476

1	Discontinuing activities include UK account processing and other smaller discontinuing activities

4. Reconciliation of EBIT to Operating profit for continuing operations

	Six months ended 30 September	2009 US$m		2008 US$m
	EBIT from continuing operations	478		476
	Net interest	(41	)	(60	)
	Benchmark PBT	437		416
	Exceptional items	(46	)	(33	)
	Amortisation of acquisition intangibles	(64	)	(70	)
	Charges for demerger-related equity incentive plans	(15	)	(21	)
	Financing fair value remeasurements	40		27
	Tax expense on share of profit of associates	(1	)	(1	)
	Profit before tax	351		318
	Share of post-tax profits of associates	(36	)	(20	)
	Net financing costs	1		33
	Operating profit	316		331

5. Group cash flow summary

	Six months ended 30 September	2009 US$m		1008 US$m
	EBIT from continuing operations	478		476
	Depreciation and amortisation	131		141
	Capital expenditure	(135	)	(146	)
	Sale of property, plant and equipment	25		4
	Change in working capital	(84	)	(93	)
	Profit retained in associate	(10	)	(1	)
	Charge in respect of equity incentive plans within Benchmark PBT	16		15
	Operating cash flow1	421		396
	Net interest paid	(35	)	(76	)
	Tax paid	(16	)	(40	)
	Dividends paid to minority shareholders	(26	)	(10	)
	Free cash flow	344		270
	Net cash outflow from exceptional items	(32	)	(46	)
	Acquisitions and disposals	(26	)	(52	)
	Purchase of investments	(1	)	(28	)
	Equity dividends paid	(135	)	(121	)
	Net cash flow	150		23
	Foreign exchange movements	19		(22	)
	Other financing related cash flows	(161	)	43
	Movement in cash and cash equivalents - continuing operations	8		44
	Movement in cash and cash equivalents - discontinued operations	-		(23	)
	Movement in cash and cash equivalents	8		21

1	A reconciliation of cash generated from operations as reported in the Group cash flow statement to operating cash flow as reported above is given in note 19 to the unaudited condensed Group half-yearly financial statements
	Cash conversion is defined as operating cash flow expressed as a percentage of EBIT from continuing operations

6. Reconciliation of depreciation and amortisation

	Six months ended 30 September	2009 US$m		2008 US$m
	As reported in the notes to the Group cash flow statement	195		213
	Less: amortisation of acquisition intangibles	(64	)	(70	)
	Less: exceptional asset write-off	-		(2	)
	As reported above	131		141

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