Equifax 2004 Annual Report Download - page 81

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79
16.฀SUBSEQUENT฀EVENTS
On March 15, 2005, we completed the acquisition of APPRO
Systems, Inc. (“APPRO”), a privately-held corporation head-
quartered in Baton Rouge, Louisiana. APPRO is a provider
of automated credit risk management and fi nancial technol-
ogies for consumer, commercial and retail banking lending
operations. We paid a total of approximately $92.0 million in
cash to the stockholders and option holders of APPRO. The
net cash impact to Equifax of the Merger will be approxi-
mately $74.0 million after disposition of certain assets. We
fi nanced the purchase price of the acquisition through avail-
able cash and approximately $72.0 million in borrowings
under our existing trade-receivables backed revolving credit
facility. Credit Bureau of Baton Rouge, Inc. (“CBBR”) is a
5% shareholder of APPRO and receives computerization
services for its credit fi les from Equifax Information Services
LLC, a subsidiary of Equifax, in the ordinary course of
business. Steve Uffman is the founder, Chairman and Chief
Executive Offi cer of APPRO and is the Chief Executive
Offi cer of CBBR. Mr. Uffman will become Group Executive,
Enabling Technologies of Equifax.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
OTHER฀NON-GAAP฀FINANCIAL฀MEASURES
(in millions)
2004
2003 Increase
Reconciliation of revenue to revenue excluding
mortgage-related and eMarketing revenue
Revenue
$1,272.8
$1,210.7 5%
Less mortgage-related and eMarketing revenue
220.0
249.4
Revenue excluding mortgage-related and eMarketing revenue
$
1,052.8
$ 961.3 10%
(in millions)
2004
2003 2002
Reconciliation of cash provided by operating activities for the 12 months
ended December 31, 2004 and 2003, to free cash fl ow for the 12 months
ended December 31, 2004 and 2003
Cash provided by operating activities for the 12 months ended December 31,
$309.0
$293.7 $249.6
Additions to property and equipment for the 12 months ended December 31,
(16.5)
(14.2) (12.5)
Additions to other assets, net, for the 12 months ended December 31,
(31.0)
(38.5) (42.9)
Free cash fl ow for the 12 months ended December 31,
$
261.5
$241.0 $194.2
NOTES฀TO฀OUR฀NON-GAAP฀FINANCIAL฀MEASURES
Revenue excluding Mortgage-related and eMarketing revenue
is a Non-GAAP fi nancial measure and is intended to supple-
ment investors’ understanding of our core business activities,
unaffected by the fl uctuations of the mortgage industry
and the performance of our eMarketing business. Revenue
excluding Mortgage-related and eMarketing revenue is use-
ful to management and investors for comparative purposes.
We calculate free cash fl ow by subtracting capital-related
expenditures from cash provided by operations. Free cash fl ow
is useful to management and the Company’s investors in mea-
suring the cash generated by the Company that is available to
be used for business and strategic initiatives. Free cash fl ow is
not a measurement of liquidity under GAAP and should not
be considered as an alternative to cash fl ows from operating
activities as a measure of liquidity. In addition, our calculation
of free cash fl ow may be different from the calculation used by
other companies and therefore, comparability may be limited.
Equifax believes that income from continuing operations
excluding the effect of the sale of investment, asset impairment
and related charges is a measure that should be presented in
addition to income from continuing operations determined
in accordance with generally accepted accounting principles
(GAAP) and is useful to investors. The following matters
should be considered when evaluating this non-GAAP
fi nancial measure:
• Equifax reviews the operating results of its businesses exclud-
ing the impact of the sale of investment, asset impairment
and related charges because it provides an additional basis
of comparison. We believe that these items are unusual in
nature, and would not be indicative of ongoing results. As
a result, management believes such charges that should be
excluded in order to compare past, current, and future periods.
• Asset impairments principally represent adjustments to the
carrying value of certain assets and do not typically require
cash payment.
• Asset impairment and related charges are typically material
and are considered to be outside the normal operations of a
business. Corporate management is responsible for making
decisions about asset impairment and related charges.
END OF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS