Equifax 2006 Annual Report Download - page 64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
62 EQUIFAX 2006 ANNUAL REPORT
SFAS 123R requires that benefi ts of tax deductions in excess of recognized compensation cost be reported as a fi nanc-
ing cash fl ow, rather than as an operating cash fl ow as required under prior accounting standards. This requirement
reduced operating cash fl ows and increased fi nancing cash fl ows by $5.0 million during the twelve months ended
December 31, 2006.
Prior to January 1, 2006, we accounted for stock-based compensation under APB 25 and related interpretations, as per-
mitted by SFAS 123 and SFAS No. 148, “Accounting for Stock-Based Compensation – Transitional Disclosure.” Accordingly,
by our use of the intrinsic value method to account for stock-based employee compensation, we did not recognize compensa-
tion cost in connection with our stock option plans during the twelve months ended December 31, 2005 and 2004. If we had
elected to recognize compensation cost for our stock option plans during the twelve months ended December 31, 2005 and
2004 based on the grant date fair value as prescribed by SFAS 123, net income and EPS would have been reduced to the pro
forma amounts indicated in the table below:
Twelve Months Ended December 31,
(In millions, except per share amounts) 2005 2004
Net income, as reported $246.5 $234.7
Add: Total stock-based employee compensation expense,
net of related tax effect, included in reported net income 5.2 1.5
Deduct: Total stock-based employee compensation expense determined under fair
value-based method for all awards, net of related tax effects (7.2) (6.4)
Pro forma net income $244.5 $229.8
Earnings per share:
Basic – as reported $ 1.90 $ 1.79
Basic – pro forma $ 1.88 $ 1.75
Diluted – as reported $ 1.86 $ 1.76
Diluted – pro forma $ 1.85 $ 1.72
3.
ACQUISITIONS
2006 Acquisition. On October 6, 2006, we acquired Austin
Consolidated Holdings, Inc., known as Austin-Tetra, for
$34.4 million in cash. Austin-Tetra is a provider of business-
to-business data management and enhancement services to
the commercial market. They provide companies and gov-
ernment agencies with information to help them better
understand existing customers, target new customers, and
effectively manage their vendors. This acquisition is part of
our long-term growth strategy, complementing our commer-
cial information business. We financed this acquisition
through borrowings under our long-term revolving credit
facility. The results of operations for this acquisition have
been included in the accompanying Consolidated Statement
of Income from the date of acquisition. This acquisition
was included in our North America Information Services
operating segment.
2005 Acquisitions. To broaden and further strengthen our
enabling technologies capabilities in our North America
Information Services business, we acquired APPRO
Systems, Inc. (“APPRO”) on March 15, 2005. APPRO pro-
vides automated credit risk management and fi nancial
technologies for consumer, commercial and retail banking
lending operations. We paid a total of $91.5 million in cash
to the stockholders and option holders of APPRO. The net
cash impact to us of the acquisition was $74.9 million after
disposition of certain assets. We fi nanced this acquisition
through available cash and $72.0 million in borrowings
under our existing trade receivables-backed revolving
credit facility.
To enhance our Marketing Services business and add
to our enabling technology capabilities, on August 29,
2005, we acquired BeNow, Inc. (“BeNow”), a provider of
leading-edge solutions to multichannel marketers. BeNow
combines database management and analytics to support
customer marketing campaigns and optimize market
opportunities in particular industries. We paid a total of
$17.5 million in cash to the stockholders of BeNow. The
net cash impact to us of the acquisition was $16.7 million.
We fi nanced this acquisition through available cash and
$5.9 million in short-term borrowings.