Equifax 2007 Annual Report Download - page 28

We face and could continue to face claims for intellectual property
infringement, which could subject us to significant monetary
damages or limit or prohibit us from using some of our technologies,
products and services.
There is a risk of litigation relating to our use or future use of
intellectual property rights of third parties. Third-party infringement
claims and any related litigation against us could subject us to
liability for damages, restrict us from using and providing our
technologies, products or services or operating our business
generally, or require changes to be made to our technologies,
products and services. We are currently a defendant in litigation
brought by Fair Isaac Corporation arising from our development
with TransUnion and Experian of the VantageScore credit scoring
product that is competitive with Fair Isaac’s products, in which
the plaintiff has alleged trademark infringement, among other claims.
Our agreements with key long-term customers may not be renewed.
We have long-standing relationships with a number of our large
customers. There can be no assurance that these relationships
will continue, due to market competition, customer requirements
and customer consolidation through mergers or acquisitions.
Although our largest single customer represents less than 3% of
our total revenue, the loss of a signifi cant number of major customers
could materially adversely affect our business, reputation, fi nancial
condition or operating results.
There may be further consolidation in our end-client markets.
To the extent that our existing clients merge with or are acquired
by other entities who are not our clients or who use fewer of our
services, such as in the fi nancial services sector, we could be
adversely impacted if the surviving entities use fewer of our services
or discontinue use of our services altogether, or if the number of
potential clients is thereby reduced.
Our tax provisions may not be adequate, which would require us
to pay greater than expected taxes.
Although we believe we have made appropriate provisions for taxes
in the various jurisdictions in which we operate on the basis of
current law, due to possible changes of law or challenges from tax
authorities under existing laws it is possible that the provision may
turn out to be insuffi cient and this could materially affect our
fi nancial condition by causing us to incur additional tax expense.
The outcome of litigation or regulatory proceedings in which we
are involved could subject us to significant monetary damages or
restrictions on our ability to do business.
Various legal proceedings arise during the normal course of our
business. These include individual consumer cases, class action
lawsuits, and actions brought by regulators. While we do not
currently believe that the outcome of any such pending or threatened
litigation will have a material adverse effect on our fi nancial
position, litigation is inherently uncertain and adverse developments
or outcomes can result in signifi cant monetary damages, penalties
or injunctive relief against us. Our insurance arrangements may
be insuffi cient to cover an adverse judgment in a large lawsuit.
See Part I, Item 3, “Legal Proceedings” for information on our
material pending litigation.
Risks Relating to Our Industry
Changes in the legislative, regulatory and judicial environments
may adversely affect our ability to collect, manage, aggregate and
use data and may increase our costs of doing so.
The credit reporting, direct marketing and employment verifi cation
industries are subject to substantial government regulation relating
to individual privacy and the collection, distribution and use of
information about individuals. The information and personal data
we collect is subject to a variety of government regulations,
including, but not limited to, those described above under
“Information Security and Government Regulation.” In addition,
public interest in individual privacy rights and the collection,
protection, distribution and use of information about individuals
may result in the adoption of new federal, state, local and foreign
laws and regulations that could include increased compliance
requirements and restrictions on the purchase, sale, maintenance,
handling and sharing of information about consumers for commercial
purposes. This could have a negative impact on our ability to collect
such information provided by consumers voluntarily. Future laws
and regulations with respect to the collection, management and
use of data about individuals, and adverse publicity, judicial
interpretations or potential litigation concerning the commercial
use of such information may result in substantial regulatory
compliance costs, litigation expense or a loss of revenue.
Risks Related to Our Common Stock
We have the ability to issue additional equity securities, which
would lead to dilution of our issued and outstanding common
stock and could contain terms and rights that are superior to those
of our common stock.
The issuance of additional equity securities or securities convertible
into equity securities could result in dilution of the then-existing
shareholders’ equity interests in us. We are authorized to issue,
without shareholder approval, up to 300,000,000 shares of common
stock, of which 133,433,311 shares were outstanding as of
December 31, 2007, including shares held by employee benefi ts
trusts. In addition, our Board of Directors has the authority to issue,
without vote or action of shareholders, up to 10,000,000 shares
of preferred stock in one or more series, and has the ability to fi x
the rights, preferences, privileges and restrictions of any such
series. Any such series of preferred stock could contain dividend
rights, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences or other rights superior
to the rights of holders of our common stock. If we issue convertible
preferred stock, a subsequent conversion may dilute the current
common shareholders’ interest.
26 EQUIFAX | 2007 ANNUAL REPORT