Equifax 2001 Annual Report Download - page 42

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fourth quarter 2001, the Company wrote off
investments totaling $6.9 million (Note 5). The
Company believes that these investments are
appropriately valued at December 31, 2001.
Long-Lived Assets Long-lived assets include
property and equipment, goodwill, purchased
data files and other assets. The Company regu-
larly evaluates whether events and circum-
stances have occurred which indicate that the
carrying amount of long-lived assets may war-
rant revision or may not be recoverable. When
factors indicate that long-lived assets should
be evaluated for possible impairment, the
Company uses an estimate of the future undis-
counted net cash flows of the related business
over the remaining life of the asset in measur-
ing whether the asset is recoverable.
Foreign Currency Translation The functional
currency of the Company’s foreign subsidiaries
are those subsidiaries’ local currencies. The
assets and liabilities of foreign subsidiaries are
translated at the year-end rate of exchange, and
income statement items are translated at the
average rates prevailing during the year. The
resulting translation adjustment is recorded as
a component of shareholders’ equity. Gains
and losses resulting from the translation of
intercompany balances of a long-term invest-
ment nature are also recorded as a component
of shareholders’ equity. Other foreign currency
translation gains and losses, which are not
material, are recorded in the consolidated
statements of income.
Consolidated Statements of Cash Flows
The Company considers cash equivalents to
be short-term cash investments with original
maturities of three months or less.
Cash paid for income taxes and interest from
continuing operations is as follows:
(in millions) 2001 2000 1999
Income taxes, net of
amounts refunded $78.4 $81.7 $93.7
Interest 49.7 56.0 41.6
In 2001, 2000 and 1999, the Company acquired
various businesses that were accounted for as
purchases (Note 3). In conjunction with these
transactions, liabilities were recorded as follows:
(in millions) 2001 2000 1999
Fair value of assets acquired $50.4 $368.2 $24.8
Cash paid for acquisitions 44.4 334.8 22.2
Value of treasury stock
reissued for acquisitions –10.6 –
Liabilities recorded $ 6.0 $ 22.8 $ 2.6
Financial Instruments The Company’s financial
instruments consist primarily of cash and
cash equivalents, accounts and notes receiv-
able, accounts payable, and short-term and
long-term debt. The carrying amounts of
these items, other than long-term debt,
approximate their fair market values due to
their short maturity. As of December 31, 2001,
the fair value of the Company’s long-term
debt (determined primarily by broker quotes)
was $686.7 million compared to its carrying
value of $693.6 million.
Derivative Instruments and Hedging Activities
Effective January 1, 2001, the Company adopted
FASB Statement No. 133, “Accounting for
Derivative Instruments and Hedging Activities”
(SFAS 133). SFAS 133 requires that a company
recognize derivatives as assets or liabilities
on its balance sheet, and also requires that
the gain or loss related to the effective portion
of derivatives designated as cash flow hedges
be recorded as a component of other compre-
hensive income.
At December 31, 2001, the Company has an inter-
est rate swap agreement in effect that fixes the
interest rate for one of its variable rate obligations
through its duration in 2010. This derivative has
been designated as a cash flow hedge, was docu-
mented as fully effective, and at December 31,
2001, was valued as a liability totaling $1.4 mil-
lion. This liability is included with other current
liabilities in the accompanying consolidated
balance sheets, and the related loss was recorded,
net of income tax, as a component of accumulated
other comprehensive loss.