Equifax 2006 Annual Report Download - page 65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EQUIFAX 2006 ANNUAL REPORT 63
Also during 2005, in order to continue to grow our
credit data business, we acquired the credit fi les, contrac-
tual rights to territories (generally states or integration
areas) and customer relationships and related businesses of
two independent credit reporting agencies in the U.S. (also
referred to as “Affi liates”) and one in Canada that house
their consumer information on our system.
The acquisitions in 2005 had a total cash purchase
price of $129.1 million. The purchase of one U.S. Affi liate
was paid for primarily with the issuance of 0.4 million
shares of Equifax treasury stock. The value of the shares
was $14.7 million on the date of issuance and the number
of shares issued was based on the terms of the acquisition
agreement. The results of operations for these acquisitions
have been included in the accompanying Consolidated
Statements of Income from the date of acquisition.
2004 Acquisitions. During 2004, in order to continue to
grow our credit data business, we acquired two Affi liates
located in the U.S. and one Affi liate located in Canada
that house their consumer information on our system.
We acquired these businesses for a total of $17.4 million
in cash. The results of operations for these acquisitions
have been included in the accompanying Consolidated
Statements of Income from the date of acquisition.
Purchase Price Allocation. The following table summarizes
the estimated fair value of the net assets acquired and the
liabilities assumed at the acquisition dates. These allocations
are considered fi nal, except for those related to Austin-Tetra,
which are preliminary estimates that will be fi nalized upon
the determination of certain operating taxes.
(In millions)
2006 2005
Current assets $ 2.0 $ 27.7
Property and equipment 0.3 4.8
Other assets – 2.9
Purchased data fi les (1) – 15.1
Acquired software (1) 0.5 29.0
Customer relationships (1) 7.0 13.0
Other purchased intangible assets 1.6 2.3
Contractual/territorial rights (1) – 17.2
Goodwill (2) 28.2 66.3
Total assets acquired 39.6 178.3
Total liabilities assumed (5.2) (34.5)
Net assets acquired $34.4 $143.8
(1) The useful lives for these purchased intangible assets are consis-
tent with those discussed in Note 1.
(2) All of the goodwill in 2006, and substantially all of it in 2005,
resulting from acquisitions is not tax deductible.
The primary reasons the purchase price of certain of these acquisitions exceeded the fair value of the net assets acquired,
which resulted in the recognition of goodwill, were expanded growth opportunities from new or enhanced product offerings,
cost savings from the elimination of duplicative activities, and the acquisition of intellectual property and workforce that are not
recognized as assets apart from goodwill.
Pro Forma Financial Information. The following unaudited pro forma information represents consolidated results of oper-
ations as if the 2005 acquisitions discussed above had occurred at the beginning of the earliest 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 the earliest year presented. Furthermore, the pro forma information may not be
indicative of future performance.
Twelve Months Ended December 31,
2005 2004
(In millions, except per share data) As Reported Pro Forma As Reported Pro Forma
Operating revenues $ 1,443.4 $1,460.2 $ 1,272.8 $ 1,308.2
Income from continuing operations $ 246.5 $ 248.1 $ 237.3 $ 241.4
Net income $ 246.5 $ 248.1 $ 234.7 $ 238.8
Income from continuing operations per share (basic) $ 1.90 $ 1.91 $ 1.81 $ 1.84
Income from continuing operations per share (diluted) $ 1.86 $ 1.88 $ 1.78 $ 1.81
Net income per share (basic) $ 1.90 $ 1.91 $ 1.79 $ 1.82
Net income per share (diluted) $ 1.86 $ 1.88 $ 1.76 $ 1.79
The impact of the 2006 and 2004 acquisitions would not have signifi cantly changed our Consolidated Statements of
Income if they had occurred at the beginning of the earliest year presented.