First Half of 2010 Shows Major Improvement in Risk Scores for Very Large Businesses, According to Experian's Latest Business Benchmark Report

COSTA MESA, Calif., Aug. 2 /PRNewswire/ -- Experian®, the leading global information services company, today announced the results of its monthly Business Benchmark Report. Findings from the June report show that since the beginning of the year, very large businesses (those with more than 1,000 employees) have shown a 25.9 percent improvement in the average commercial risk score* category, going from 33.0 in January to 41.5 in June. In contrast, nonemployer firms (those with no paid employees) showed a 3.3 percent improvement for the half overall, but saw a dramatic drop in Q2, falling from 61.2 in March to 59.9 in June.

When looking at average days beyond terms (DBT), however, this month's report showed that very large businesses paid their bills 24.2 percent slower than they did at the beginning of the year, going from 6.6 in January to 8.3 DBT in June. Nonemployer firms saw an increase of 12 percent in DBT, going from 5.0 in January to 5.6 DBT in June.

While the increase in DBT indicates slowness in average payment behavior, the likelihood of these segments becoming severely delinquent over the next 12 months (as evidenced by the improvement in risk scores) appears to be lessening.

Other key findings from this month's Business Benchmark Report include the following:

Risk score:

• The average commercial risk score for June was 58.2. When compared with the beginning of the year, this score has improved by 1.6 percent. However, Q2 showed some decline, as the national average score has actually fallen by 1 percent since March when it peaked at 58.6.
• Almost all industry sectors have shown improvement in the risk score category since the end of Q1. The greatest improvements were found in Public Administration (from 60.4 to 61.4 — 1.7 percent), followed closely by Transportation (from 52.1 to 52.9 — 1.6 percent).
• All regions have shown improvement in the risk score category during the first half of 2010. The Northwest and Plains states showed the greatest increase year to date, improving from 55.3 to 60.4 (2.14 percent) and from 57.1 to 61.6 (2.1 percent), respectively. Of the states with the largest metropolitan areas, those that showed the greatest improvements for the half were Michigan; Washington, D.C.; and Illinois — increasing from 58.3 to 59.7 (2.5 percent), from 56.7 to 58.1 (2.5 percent) and from 57.6 to 58.6 (1.9 percent), respectively.

Average days beyond terms (DBT):

• Since the beginning of the year, the national average number of days that businesses paid their bills beyond contracted terms increased by almost 10 percent. In Q2, however, this metric seems to have stabilized.
• Midsize firms (those with 50 to 499 employees) were the only businesses that showed improvement in payment performance since the beginning of the year, seeing positive shifts by as much as 2.7 percent. Although flat overall in the first half, in Q2, smaller businesses (those with 20 to 49 employees) have begun showing significant improvement, decreasing their DBT by 1.8 percent in the quarter.
• All industry groups have shown an increase in DBT since the beginning of the year. Since the start of Q2, however, the Construction, Retail Trade and Utilities sectors have shown improvements by as much as 1.4 percent.
• The Mid-Atlantic States, New England and the Northwest were the only regions to show signs of improvement in their average DBT since the beginning of Q2. New York, Massachusetts, California and Pennsylvania were the only states with the largest metropolitan areas that stayed well below the national average DBT but also showed improvement in their payment performance in Q2.

Percentage of dollars delinquent:

• Businesses of all sizes have remained somewhat stable and saw only slight variations in the average percentage of dollars delinquent and percentage of dollars severely delinquent since the beginning of the year. The only exceptions were seen in very large businesses with more than 1,000 employees and midsize businesses with 100 to 249 employees, which saw significant improvements in percentage of dollars delinquent.
• Since the beginning of the year, nearly all industry groups remained stable in the percentage of dollars delinquent and severely delinquent. Exceptions include the Utilities and Retail Trade sectors, which showed significant improvements in the percentage of dollars delinquent. The Utilities sector also saw a significant improvement in the percentage of severely delinquent dollars.
• California, Massachusetts, New York and Pennsylvania were the only states with the largest metropolitan areas that showed improvement in the average percentage of dollars delinquent since the beginning of the year. In terms of percentage of dollars severely delinquent, Texas, Massachusetts, Pennsylvania and California were the only ones that consistently fell below the national average since the beginning of the year.

To download the full report or to see a visual representation of this data and other information broken down by state in an interactive map, visit http://www.experian.com/business-benchmark-report.

About the Business Benchmark Report

Experian's Business Benchmark Report is a monthly look at how businesses are faring in the United States. Designed to monitor the progress of business recovery, the report looks at four key indicators of business health, including commercial risk score, days beyond payment terms, percentage of dollars delinquent and percentage of dollars severely delinquent.

About Experian's Business Information Services

Experian's Business Information Services partners with organizations to establish and strengthen customer relationships, enabling them to mitigate risk and improve profitability. The company's business database provides comprehensive, third-party-verified information on U.S. companies of all sizes, with the industry's most extensive data on the broad spectrum of small and midsize businesses. By leveraging state-of-the-art technology and superior data compilation techniques, Experian is able to provide market-leading tools that assist clients in processing new applications, managing customer relationships and collecting on delinquent accounts. For more information about Experian's advanced business-to-business products and services, visit http://www.experian.com/b2b.

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 March 31, 2010, was $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 Sao Paulo, Brazil.

For more information, visit http://www.experianplc.com.

Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.

* Based on a scale of 1 to 100, and predicts the likelihood of severe delinquency (slow 91 plus) within the next 12 months

SOURCE Experian