Equifax 2003 Annual Report Download - page 55

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS
52 EQUIFAX. INFORMATION THAT EMPOWERS.
As of December 31, 2003, we have a deferred tax asset of
$58.5 million related to accumulated foreign currency translation
loss for foreign locations, excluding Canada. A full valuation
allowance, included in accumulated other comprehensive loss,
has been provided due to uncertainty of future realization of this
deferred tax asset.
At December 31, 2003, we had net operating loss and capital
loss carryforwards of approximately $170.5 million, of which
$106.5 million related to U.S. federal and $64.1 million to foreign
jurisdictions. Of the total net operating loss and capital loss carry-
forwards, $41.6 million has no expiration date, $35.9 million will
expire in 2006, and $93.0 million will begin to expire at various
times beginning in 2012. The U.S. federal loss carryforward may
be subject to certain limitations under Section 382 of the Internal
Revenue Code of 1986, as amended. Additionally, we had foreign
tax credit carryforwards of approximately $19.1 million, of which
$13.8 million will begin to expire in 2005 and the remaining
$5.3 million will be utilized upon repatriation of foreign earnings.
Tax effected net operating loss, capital loss and foreign tax credit
carryforwards of $60.1 million have been fully reserved in the
deferred tax valuation allowance, due to the uncertainty resulting
from a lack of previous foreign taxable income within certain
foreign tax jurisdictions, uncertainty that sufficient capital gains
will be generated and U.S. federal limitations under Section 382.
A valuation allowance is provided when it is more likely than not
that some portion or all of a deferred tax asset will not be realized.
We increased the valuation allowance by $7.4 million in 2003 for
capital loss carryovers and foreign and state net operating loss
carryforwards relating to Spain, Italy and other entities.
9. SHAREHOLDERS’ EQUITY
Rights Plan In 1995, our Board of Directors adopted a Shareholder’s
Rights Plan. Our Rights Plan contains provisions to protect our share-
holders in the event of an unsolicited offer to acquire us, including
offers that do not treat all shareholders equally, the acquisition in the
open market of shares constituting control without offering fair value
to all shareholders, and other coercive, unfair or inadequate takeover
bids and practices that could impair the ability of our Board to repre-
sent shareholders’ interests fully. Pursuant to the Rights Plan, our
Board declared a dividend of one Share Purchase Right for each
outstanding share of our common stock, with distribution to be made
to shareholders of record as of November 24, 1995. The Rights, which
will expire in November 2005, initially will be represented by, and
traded together with, our common stock. The Rights are not currently
exercisable and do not become exercisable unless certain triggering
events occur. Among the triggering events is the acquisition of 20% or
more of our common stock by a person or group of affiliated or associ-
ated persons. Unless previously redeemed, upon the occurrence of
one of the specified triggering events, each Right that is not held by
the 20% or more shareholder will entitle its holder to purchase one
share of common stock or, under certain circumstances, additional
shares of common stock at a discounted price.
Treasury Stock and Employee Benefits Trusts During 2003,
2002, and 2001, we repurchased 4.2 million, 2.9 million, and 2.2 mil-
lion of our own common shares through open market transactions
at an aggregate investment of $95.0 million, $72.5 million, and
$49.5 million, respectively. At its February 2002 meeting, our
Board of Directors authorized an additional $250.0 million in share
repurchases. At December 31, 2003, approximately $127.0 million
remained available for future purchases from prior authorizations
of our Board of Directors.
In 1993, we established the Equifax Inc. Employee Stock Benefits
Trust to fund various employee benefit plans and compensation
programs, and transferred 6.2 million treasury shares to the Trust.
In 1994 and 2000, we transferred 0.6 million and 1.5 million treas-
ury shares, respectively, to two other employee benefits trusts.
Shares held by the trusts are not considered outstanding for earn-
ings per share calculations until released to the employee benefit
plans or programs. During 2003, 2002, and 2001, 860,286 shares,
752,178 shares and 48,593 shares, respectively, were used for
various employee incentive and stock option programs.
Stock Options Our shareholders have approved several stock
option plans which provide that qualified and nonqualified options
may be granted to officers and employees. Our Board of Directors also
has approved a nonqualified stock option plan that cannot be used
to grant shares to directors or executive officers. In addition, options
remain outstanding under two plans from which no new grants may
be made; one of these was approved by shareholders. All plans require
that options be granted at exercise prices not less than market value
on the date of grant. Generally, options vest over periods of up to four
years and are exercisable for ten years from grant date. Certain of
the plans also provide for awards of restricted shares of our common
stock. At December 31, 2003, there were 3.5 million shares available
for future option grants and restricted stock awards.