Equifax 2007 Annual Report Download - page 37

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EQUIFAX | 2007 ANNUAL REPORT 35
Income Taxes
Consolidated Provision for Income Taxes Twelve Months Ended December 31, Change
2007 vs. 2006 2006 vs. 2005
(Dollars in millions) 2007 2006 2005 $ % $ %
Consolidated provision for income taxes $151.9 $141.4 $144.2 $10.5 7% $(2.8) (2)%
Effective income tax rate 35.8% 34.0% 36.9% nm nm nm nm
nm - not meaningful
The 2007 increase in our effective income tax rate and the
related provision for income taxes was primarily due to changes
in several tax reserves in 2006, described below, that did not recur
in 2007. This increase was partially offset by a lower foreign and
state tax rate compared to 2006; a favorable second quarter 2007
discrete item related to our foreign tax credit utilization; and discrete
items recorded during fourth quarter 2007, including a $2.9 million
benefi t for refunds related to our 2002 and 2003 U.S. federal income
tax fi lings.
The 2006 decrease in our effective income tax rate and the
related provision for income taxes was due primarily to the reversal
of $9.5 million in income tax reserves related to uncertain tax
positions for which the applicable statute of limitations expired
in the third quarter of 2006 and the $14.1 million non-taxable gain
on the litigation settlement associated with Naviant, Inc. during
the second quarter of 2006, offset by an increase in foreign tax
expense during 2006.
Net Income
Consolidated Net Income Twelve Months Ended December 31, Change
2007 vs. 2006 2006 vs. 2005
(Dollars in millions, except per share amounts) 2007 2006 2005 $ % $ %
Consolidated net income $272.7 $274.5 $246.5 $ (1.8) (1)% $28.0 11%
Diluted earnings per common share $ 2.02 $ 2.12 $ 1.86 $(0.10) (5)% $0.26 14%
Weighted-average shares used in
computing diluted earnings per share 135.1 129.4 132.2 nm nm nm nm
nm - not meaningful
Our 2007 decline in net income was a function of growth in
operating income from our International, North America Personal
Solutions and North America Commercial Solutions segments,
when compared to 2006, and from the acquisition of TALX, more
than offset by increased interest expense and a higher provision
for income taxes. Our 2006 increase in net income was primarily
due to growth in operating income from all four of our operating
segments, as well as the reversal of a $9.5 million tax reserve
related to uncertain tax positions for which the applicable statute
of limitations expired in the third quarter of 2006.
Our 2007 earnings per share was negatively impacted by the
increase in our weighted-average shares outstanding resulting
from our issuance of common stock in connection with the TALX
acquisition, partially offset by the impact of share repurchases
completed after the acquisition in May 2007. Our 2006 earnings
per share were positively impacted by growth in net income and
share repurchases over the course of that year when compared
with 2005.