Equifax 2003 Annual Report Download - page 32

M ANAGEM ENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EQUIFAX. INFORMATION THAT EMPOWERS. 29
FORWARD-LOOKING STATEM ENTS
As used herein, the terms “Equifax,” “we,” “our,” and “ us” refer to
Equifax Inc., a Georgia corporation, and its consolidated subsidiaries
as a combined entity, except where it is clear that the terms mean
only Equifax Inc.
This Annual Report contains forward-looking statements within the
“safe harbor” provisions of the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933, and Section
21E of the Securities Exchange Act of 1934. In addition, certain
statements included in our future filings with the Securities and
Exchange Commission (the “SEC” ), in press releases, and in oral and
written statements made by us or with our approval, that are not
statements of historical fact, are forward-looking statements. Words
such as “may,” “could,” “should,” “ would,” “believe,” “expect,”
“anticipate,” “ estimate,” “ intend,” “seeks,” “plan,” “project,”
“continue,” “predict,” and other words or expressions of similar
meaning are intended to identify forward-looking statements,
although not all forward-looking statements contain these identify-
ing words. These forward-looking statements are found at various
places throughout this report and in the documents incorporated
herein by reference. These statements are based on our current
expectations about future events or results and information that is
currently available to us, involve assumptions, risks and uncertain-
ties, and speak only as of the date on which such statements are
made. We disclaim any intention or obligation to update or revise
any forward-looking statements, whether as a result of new informa-
tion, future events, or otherwise. Our actual results may differ
materially from the results discussed in such forward-looking state-
ments. Factors that may cause such a difference, include, but are
not limited to: declines in the rate of growth, or absolute declines, in
consumer spending and consumer debt in our market areas; changes
in the marketing techniques of credit card issuers; increased pricing
pressures; changes in or failure to comply with U.S. and international
legislation or governmental regulations, including the Fair Credit
Reporting Act and Gramm-Leach-Bliley Act; successful integration of
acquisitions; exchange rate fluctuations and other risks associated
with investments and operations in foreign countries; increased
domestic or international competition; our ability to successfully
develop and market new products and services, successful incorpo-
ration of new technology and adaptation to technological change
and equity markets, including market disruptions and significant
interest rate fluctuations, which may impede our access to, or
increase the cost of, external financing; increased competitive
pressures both domestically and internationally; and international
conflict, including terrorist acts and other risks and unforeseen
factors, including those described in this Annual Report and the
documents that we file from time to time with the SEC, including
but not limited to, our Annual Report on Form 10-K for the year
ended December 31, 2003.
QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT M ARKET RISK
In the normal course of our business, we are exposed to market risk,
primarily from changes in foreign currency exchange rates and
changes in interest rates, that could impact our results of operations
and financial position. We manage our exposure to these market
risks through our regular operating and financing activities, and
when deemed appropriate, through the use of derivative financial
instruments, such as interest rate swaps, to hedge certain of these
exposures. We use derivative financial instruments as risk manage-
ment tools and not for speculative or trading purposes.
FOREIGN CURRENCY EXCHANGE RATE RISK
A substantial majority of our revenue, expense, and capital expen-
diture activities are transacted in U.S. dollars. However, we do
transact business in other currencies, primarily the British pound,
the euro, the Canadian dollar, and the Brazilian real. For most of
these foreign currencies, we are a net recipient, and therefore,
benefit from a weaker U.S. dollar and are adversely affected by
a stronger U.S. dollar relative to the foreign currencies in which
we transact significant amounts of business.
We are required to translate, or express in U.S. dollars, the assets
and liabilities of our foreign subsidiaries that are denominated or
measured in foreign currencies at the applicable year-end rate of
exchange on our consolidated balance sheet, and income state-
ment items of our foreign subsidiaries at the average rates prevail-
ing during the year. We record the resulting translation adjustment,
and gains and losses resulting from the translation of intercompany
balances of a long-term investment nature, as components of our
shareholders’ equity. Other immaterial foreign currency transaction
gains and losses are recorded in our consolidated statements of
income. We do not, as a matter of policy, hedge translational
foreign currency exposure. We will, however, hedge foreign cur-
rency exchange rate risks associated with material transactions
that are denominated in a foreign currency.
At December 31, 2003, we have hedged our foreign currency
exchange rate risks associated with the acquisition of our Italian
businesses in the fourth quarter of 2000, by borrowing under our
$465.0 million revolving credit facility in euros. At December 31,
2003, the foreign currency exchange rate risks associated with
loans which funded the acquisition of our Italian businesses
during the fourth quarter of 2000 were hedged by borrowing the
euro equivalent of $14.1 million under our $465.0 million revolving
credit facility.