Equifax 2004 Annual Report Download - page 38

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
O F F I N A N C I A L C O N D I T I O N A N D R E S U L T S O F O P E R A T I O N S
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CEO฀TRANSITION
On August 18, 2004, Equifax Inc. announced that Thomas
F. Chapman, chairman and chief executive offi cer, informed
the Board of Directors of his decision to retire after a suc-
cessor is elected and the transition completed. The Board
requested that Mr. Chapman remain through 2005 or such
earlier period of time as would be necessary to ensure an
orderly transition. On December 20, 2004, Equifax entered
into a transition retirement agreement with Mr. Chapman
for this purpose.
OTHER
We have an outstanding tax related matter with a Canadian
tax authority. During 2003, we deposited $5.7 million rep-
resenting a portion of one of the reassessment positions.
It is the opinion of our outside legal and tax experts that
we will prevail. See Note 11 in the Notes to Consolidated
Financial Statements.
INFLATION
We do not believe that the rate of infl ation has had a mate-
rial effect on our operating results. However, infl ation could
adversely affect our future operating results if it were to
result in a substantial weakening in economic conditions.
RECENT฀ACCOUNTING฀PRONOUNCEMENTS
In November 2002, the Emerging Issues Task Force
(“EITF”) reached a consensus on Issue No. 00-21,
“Revenue Arrangements with Multiple Deliverables.”
EITF Issue No. 00-21 provides guidance pertaining to
the revenue recognition methodology to apply to revenue
arrangements that involve the delivery or performance
of multiple products, services and/or rights to use assets.
The provisions of EITF Issue No. 00-21 apply to revenue
arrangements entered into in fi scal periods beginning after
June 15, 2003. We adopted EITF Issue No. 00-21 on July 1,
2003 and it did not have a material impact on our fi nancial
position or results of operations.
In December 2003, the Financial Accounting Standards
Board (“FASB”) issued a revision to SFAS No. 132,
“Employer’s Disclosures about Pensions and Other
Postretirement Benefi ts.” The purpose of the revision is to
require additional disclosures about the assets, obligations,
cash fl ows and net periodic benefi t cost of defi ned benefi t
pension plans and other defi ned benefi t postretirement plans.
These additional disclosures include information describing
the types of plan assets, investment strategy, measurements
date(s), plan obligations, cash fl ows and components of
net periodic benefi t cost recognized. As revised, SFAS 132
enhances disclosures by providing more relevant information
about the plan assets available to fi nance benefi t payments,
the obligation to pay benefi ts and an entity’s obligation to
fund the plan. This revised version of SFAS No. 132 is effec-
tive for fi scal years ending after December 15, 2003. We
adopted the revisions to SFAS No. 132 and have included
the additional disclosures in the Notes to our Consolidated
Financial Statements.
In December 2003, the FASB issued its revision to FASB
Interpretation No. 46, “Consolidation of Variable Interest
Entities, (an Interpretation of ARB No. 51).” FIN 46
addresses the consolidation by a reporting entity of variable
interest entities that either do not have suffi cient equity
investment at risk to permit the entity to fi nance its activi-
ties without additional subordinated fi nancial support,
or in which the equity investors lack the characteristics
of a controlling fi nancial interest. Application of FIN 46
is required in fi nancial statements of public entities that
have interests in variable interest entities or potential vari-
able interest entities (also referred to as special-purpose
entities) for periods ending after December 15, 2003. The
FASB subsequently issued FASB Staff Positions (“FSP’s”),
which deferred the effective date for applying the provi-
sions of FIN 46 for interests in certain variable interest
entities or potential variable interest entities created before
February 1, 2003 until the end of the fi rst interim period end-
ing after March 15, 2004. These FSP’s also required certain
disclosures about variable interest entities and potential vari-
able interest entities. We adopted the provisions of FIN 46
in March 2004 and it has not had a material impact on our
fi nancial position or results of operations.
In December 2003, the Staff of the Securities and
Exchange Commission, or SEC, issued Staff Accounting
Bulletin No. 104, or SAB 104, “Revenue Recognition,”
which supersedes SAB 101, “Revenue Recognition in
Financial Statements.” SAB 104’s primary purpose is to
rescind the accounting guidance contained in SAB 101
related to multiple-element revenue arrangements that
was superseded as a result of the issuance of EITF 00-21,
“Accounting for Revenue Arrangements with Multiple
Deliverables.” Additionally, SAB 104 rescinds the SEC’s
related “Revenue Recognition in Financial Statements
Frequently Asked Questions and Answers” issued with SAB
101 that had been codifi ed in SEC Topic 13, “Revenue