Equifax 2003 Annual Report Download - page 51

48 EQUIFAX. INFORMATION THAT EMPOWERS.
During 2002, in order to facilitate continued growth of the credit data
franchise business, we acquired the credit files, contractual right to
territories and customer relationships and related businesses of
eight additional Affiliates located in the United States and three
Affiliates located in Canada, that house their consumer information
on our system. The consumer credit files, contractual right to territo-
ries (generally states of integration areas), and customer relation-
ships of the largest of these Affiliates, CBC Companies, Inc., were
acquired in November 2002 for $95.0 million.
In April 2002, in conjunction with a put arrangement with the
original owners, we completed the purchase of the remaining
20% minority interest in our Brazilian operation making us the
sole owners, and in June 2002 completed the purchase of a small
technology development company.
In August 2002, to accelerate growth in our marketing services
business, we purchased Naviant, Inc., a provider of precision
marketing services, for approximately $135.0 million. At the closing
of the Naviant, Inc. acquisition, the sellers deposited $10.0 million
of the transaction consideration into escrow. The escrow fund will
be held for 24 months following the closing date of August 15,
2002. The escrow arrangement provides for payment to us in the
event any indemnified loss arises and is settled during the period.
At the end of the 24 months, all escrow funds will be returned to
the sellers with holdback for any unresolved claims. Various claims
have been paid out of the escrow to us. In October 2002, we acquired
outstanding shares and increased our ownership to 79.4% from
60% of our consumer information Spanish subsidiary.
The above acquisitions were accounted for as purchases and had a
total purchase price of $333.6 million. They were acquired for cash of
$328.4 million and notes payable of $5.2 million. The following table
summarizes the estimated fair value of the net assets acquired and
the liabilities assumed at the acquisition dates.
(In millions)
Current Assets $ 17.6
Property and Equipment 3.1
Other Assets 59.0
Purchased Data Files 88.8
Goodwill 175.7
Total Acquired Assets 344.2
Total Liabilities 10.6
Net Assets Acquired $333.6
The following unaudited pro forma information presents consoli-
dated results of operations as if the above discussed acquisitions
had occurred at the beginning of each year presented. The pro forma
amounts may not necessarily be indicative of the operating revenues
and results of operations had the acquisitions actually taken place at
the beginning of each year presented. Furthermore, the pro forma
information may not be indicative of future performance.
(In millions, except
per share amounts) 2003 2002
As Reported Pro Forma As Reported Pro Forma
Revenues $1,225.4 $1,228.6 $1,109.3 $1,157.9
Income from
continuing
operations 178.5 178.0 191.3 182.0
Income from
continuing
operations
per share
(basic) 1.33 1.32 1.41 1.34
Income from
continuing
operations per
share (diluted) 1.31 1.30 1.38 1.31
In 2001, we acquired the credit files, customer contracts and related
businesses of five Affiliates located in the United States and 13
Affiliates in Canada, as well as an information services business in
Uruguay. These acquisitions were accounted for as purchases and
had a purchase price of $48.9 million. They were acquired for cash
of $44.4 million and notes payable of $4.5 million. They resulted in
$20.5 million of goodwill and $27.2 million of purchased data files.
Their results of operations have been included in the “Consolidated
Statements of Income” from their respective dates of acquisition
and were not material.
Goodwill related to acquisitions was allocated to our reporting
units as follows:
(In millions, except
per share amounts) 2003 2002 2001
Information Services $12.7 $43.4 $13.2
Marketing Services 6.9 102.1 –
Europe –2.6 –
Latin America –27.6 7.3
Total $19.6 $175.7 $20.5
5. DIVESTITURES
In October 2001, we sold our City Directory business, which had
been acquired from R.L. Polk & Co. in May 2000. The resulting pre-
tax loss of $5.8 million ($4.9 million after tax, or $0.035 per share)
was recorded in our “ Consolidated Statements of Income” as a
charge to other income in September 2001.
NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS