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NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS
42 EQUIFAX. INFORMATION THAT EMPOWERS.
Goodw ill Prior to 2002, goodwill was amortized on a straight-line
basis predominately over periods from twenty to forty years. In
2001, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 142,
“Goodwill and Other Intangible Assets.” SFAS 142 eliminates the
amortization of goodwill and certain other intangible assets and
requires that reporting unit goodwill be evaluated for impairment
by applying a fair value-based test. We adopted the requirements
of SFAS 142 as of June 30, 2001, for all acquisitions subsequent
to that date, and as of January 1, 2002, for all acquisitions prior to
June 30, 2001. During 2002, we completed our initial fair value-based
impairment tests and in doing so, we determined that goodwill
was not impaired; therefore no transitional impairment charge
was recorded. SFAS 142 further requires that reporting unit good-
will be re-evaluated and tested for impairment at least on an
annual basis. Accordingly, during 2003 we updated our impair-
ment evaluation and determined that reporting unit goodwill
remained unimpaired.
Amortization expense was $25.4 million in 2001. As of December 31,
2003 and 2002, accumulated amortization balances were $87.7 mil-
lion and $88.2 million, respectively.
A summary of the changes in the net carrying amount of goodwill by reporting unit for the years ended December 31, 2003 and 2002
is as follows:
Reporting Units
Information Marketing European Latin America
(In millions) Services Services Operations Operations Total
Balance as of January 1, 2002 $141.9 $164.3 $ 90.3 $120.0 $516.5
Acquisitions 43.4 102.1 2.6 27.6 175.7
Adjustments to prior year’s
purchase price allocation – 0.6 0.6 – 1.2
Reclassifications – 0.7 – 1.5 2.2
Discontinued operations – – (10.3) – (10.3)
Foreign currency translation 0.4 – 10.9 (46.1) (34.7)
Balance as of December 31, 2002 $185.7 $267.7 $ 94.1 $103.0 $650.5*
Acquisitions 12.7 6.9 – – 19.6
Adjustment to prior year’s
purchase price allocation 1.0 10.1 – – 11.1
Reclassifications (0.3) 1.5 0.3 – 1.5
Foreign currency translation 7.3 – 12.9 21.4 41.6
Balance at December 31, 2003 $206.4 $286.2 $107.3 $124.5* $724.3*
* Does not total due to rounding.
With the completion of the purchase price allocation for our 2002
acquisition of Naviant, we recorded a $10.1 million increase to
goodwill due to a reallocation of the purchase price which was
primarily caused by a reduction in acquired tax benefits. In our
Spain commercial operations in 2002 we recognized an estimated
$10.3 million loss related to the goodwill residing in this business
component when we classified it as “held for sale.” The foreign
currency translation amount relates to the impact of foreign cur-
rency adjustments in accordance with SFAS No. 52, “Foreign
Currency Translation.”