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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

OR

Commission File Number 1-6605

EQUIFAX INC.
(Exact name of registrant as specified in its charter)

404-885-8000
(Registrant’s telephone number, including area code)

None
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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INDEX

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PART I. FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

See Notes to Consolidated Financial Statements.

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EQUIFAX INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2002

1.      BASIS OF PRESENTATION:

The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. This information reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the statement of financial position of the Company as of September 30, 2002, and the results of operations for the three and nine month periods ending September 30, 2002 and 2001 and the cash flows for the nine month periods ending September 30, 2002 and 2001. All adjustments made have been of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain prior year amounts have been reclassified to conform to the current year presentation. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2001.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

2.      NATURE OF OPERATIONS:

The Company principally provides information services to businesses to help them grant credit and market to their customers (see Note 7 for segment information). The primary markets include the financial services, retail, healthcare, telecommunications, utilities, automotive, brokerage and insurance industries, as well as state and federal governments. The Company’s operations are predominantly located within the United States, with foreign operations principally located in Canada, the United Kingdom, and Brazil.

3.      DISCONTINUED OPERATIONS:

During the third quarter of 2002, the Company made the decision to exit its commercial reporting business in Spain, and this business is now held for sale. In accordance with the FASB’s Statement No. 144 (Note 10), the results of the Spain commercial business for 2002 have been classified as discontinued operations. Revenues for this business totaled $1.6 million in the third quarter and $6.3 million in the first nine months and pre-tax losses (after minority interest and before estimated loss on disposal) were $3.4 million in the quarter and $4.7 million year-to-date. The estimated loss on disposal recorded in the third quarter of 2002 totaled $9.0 million after minority interest, or $0.07 per share. Prior year results were not material and have not been reclassified to discontinued operations.

In July 2001, the Company completed the spin-off of its Payment Services business segment (Certegy) through a tax-free dividend of all of its Certegy stock to Equifax shareholders. Shareholders received a dividend of one share of Certegy stock for each two shares of Equifax stock owned. As a result of the spin-off, the Company’s historical financial statements have been restated with Certegy’s 2001 results of operations and cash flows isolated and shown as “discontinued operations.”

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4.         ACQUISITIONS AND DIVESTITURE:

During the first nine months of 2002, the Company acquired seven affiliated credit reporting agencies located in the United States and three agencies in Canada to continue to grow our credit data franchise. In April 2002, in conjunction with a put arrangement with the original owners, the Company completed the purchase of the remaining 20% of its information services company in Brazil, and in June completed the purchase of a small technology development company. In August 2002, to accelerate growth in our marketing services business, the Company purchased Naviant, Inc., a provider of precision marketing services, for approximately $135 million.

These acquisitions were accounted for as purchases, had a total purchase price of $234.0 million, and were acquired for cash of $225.3 million and notes and other obligations payable of $8.7 million. They resulted in $146.9 million of goodwill and $64.7 million of purchased data files. These allocations are preliminary estimates, and will be finalized upon completion of the valuations of intangibles. Results of operations of these acquisitions have been included in the consolidated statements of income from their respective dates of acquisition and were not material.

In November 2002, the Company also purchased the consumer credit files and certain customer contracts from another affiliated credit reporting agency, CBC Companies, Inc. (CBC), for $95 million.

In October 2001, the Company sold its City Directory business, which had been acquired from R.L. Polk & Company in May 2000. The resulting pre-tax loss of $5.8 million ($4.9 million after tax, or $0.03 per share) was recorded in the consolidated statement of income as a charge to “other income (expense), net” in September 2001. For segment reporting purposes, this business is included in Divested Operations.

5.      SHAREHOLDERS’ EQUITY:

Treasury Stock. During the first nine months of 2002, the Company repurchased 2,889,300 of its common shares through open market transactions at an aggregate cost of $71.4 million. As of September 30, 2002, approximately $223 million remained authorized for future share repurchases.

Comprehensive Income. Comprehensive income for the three and nine-month periods ending September 30, 2002 and 2001 is as follows:

Accumulated other comprehensive loss at September 30, 2002 and December 31, 2001 consists of the following components:

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6.         COMMITMENTS AND CONTINGENCIES:

Agreement with Computer Sciences Corporation:

The Company has an agreement with Computer Sciences Corporation and certain of its affiliates (CSC) under which CSC-owned credit reporting agencies utilize the Company’s computerized credit database services. CSC retains ownership of its credit files and the revenues generated by its credit reporting activity. The Company receives a processing fee for maintaining the database and for each report supplied. The initial term of the agreement expired in July 1998 and was renewed by CSC for the ten-year period beginning August 1, 1998. The agreement provides CSC with an option to sell its credit reporting businesses to the Company and provides the Company with an option to purchase CSC’s credit reporting businesses if CSC does not elect to renew the agreement or if there is a change in control of CSC while the agreement is in effect. Both options expire in 2013. The option price is determined by appraisal.

Litigation:

A number of lawsuits seeking damages are brought against the Company each year, primarily as a result of reports issued by the Company. A class of plaintiffs was recently certified in a lawsuit, Franklin Clark and Latanjala Denise Miller v. Equifax Inc. and Equifax Credit Information Services, Inc., which alleges that the Company violated the Federal Credit Reporting Act by failing to follow reasonable procedures to assure maximum possible accuracy with respect to the reporting of accounts included in a bankruptcy. The Company is pursuing an appeal of the class certification and at this time it is not possible to predict the outcome of the case, however, the Company does not believe that the claims have merit. The suit was filed in May 2000 and is pending in federal court in South Carolina.

The Company provides for estimated legal fees and settlements relating to pending lawsuits. In the opinion of management, the ultimate resolution of these matters will not have a materially adverse effect on the Company’s financial position, liquidity, or results of operations.

7.      SEGMENT INFORMATION:

The 2002 operating results of Spain’s commercial business have been reclassified to discontinued operations and are not included in Europe’s segment results below. The 2001 operating results for this business have not been reclassified to discontinued operations since they were not material, and are included in Europe’s segment results below (Note 3).

The results of operations of the City Directory business divested October 2001 are classified as Divested Operations. Goodwill amortization in 2001 for all business segments has been reclassified to a separate line to provide for comparability with 2002.

Operating revenue and operating income by segment for the third quarter and first nine months of 2002 and 2001 (restated for the changes discussed above) are as follows:

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Total assets by segment at September 30, 2002, and December 31, 2001, are as follows:

The increase in North America assets resulted primarily from the Naviant acquisition (Note 4). The decline in Latin America assets resulted primarily from declining currency exchange rates in Argentina and Brazil.

8.      EARNINGS PER SHARE (EPS):

The income amount used in the numerator of the Company’s EPS calculations is the same for both basic and diluted EPS. A reconciliation of the average outstanding shares used in the denominator of the calculations is as follows:

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9.         DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES:

Effective January 1, 2001, the Company adopted FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133). SFAS 133 requires that a company recognize derivatives as assets or liabilities on its balance sheet, and also requires that the gain or loss related to the effective portion of derivatives designated as cash flow hedges be recorded as a component of other comprehensive income.

At September 30, 2002, the Company has an interest rate swap agreement in effect that fixes the interest rate for one of its variable rate obligations through its duration in 2010. This derivative has been designated as a cash flow hedge, was documented as fully effective, and at September 30, 2002, was valued as a liability totaling $4.7 million. This liability is included with other current liabilities in the accompanying consolidated balance sheets, and the related loss was recorded, net of income tax, as a component of accumulated other comprehensive loss.

At September 30, 2002, the Company also has interest rate swap agreements in place to float the interest rate on $250 million of its fixed rate senior notes through their maturity date in 2005. These derivatives have been designated as fair value hedges and are fully effective. The value of these swaps was $16.0 million at September 30, 2002, and was recorded as an asset with a corresponding increase in long-term debt.

10.      RECENT ACCOUNTING PRONOUNCEMENTS:

In July 2001, the FASB issued Statement No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). SFAS 142 eliminates the amortization of goodwill and certain other intangible assets and requires that goodwill be evaluated for impairment by applying a fair value-based test at least annually. The Company adopted the standard effective January 1, 2002, and completed its first fair value-based impairment tests in the second quarter of 2002. In doing so, the Company determined that goodwill is not impaired; therefore, no transitional impairment charge was recorded.

A reconciliation of third quarter and first nine months 2001 reported earnings with pro forma earnings excluding goodwill amortization is shown on the table below (in millions, except per share amounts):

In January 2002, the Company adopted FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The statement supersedes FASB Statement No. 121 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”, but retains the fundamental provisions of that statement related to the recognition and measurement of the impairment of long-lived assets to be held and used while expanding the measurement requirements of long-lived assets to be disposed of by sale to include discontinued operations. The Statement also supersedes Accounting Principles Board Opinion No. 30 (APB 30), for the disposal of a segment of business, extending the reporting of a discontinued operation to a “component of an entity.” Further, the Statement requires operating losses from a “component of an entity” to be recognized in the period(s) in which they occur rather than at the measurement date as had been required under APB 30.

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In June 2002, the FASB issued Statement No. 146 “Accounting for Costs Associated with Exit or Disposal Activities.” This statement nullifies Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” This statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred rather than the date of an entity’s commitment to an exit plan. The Company is required to implement Statement No. 146 on January 1, 2003, and does not believe this statement will have a significant impact on its financial position or results of operations.

11.      LONG-TERM DEBT:

In June 2003, $200 million of the Company’s senior notes will mature and have been reclassified from long-term debt to short-term debt and current maturities of long-term debt. In October 2002, the Company successfully completed the issuance of $250 million of five-year senior notes with a coupon of 4.95%. The proceeds from these notes were used to pay down the Company’s revolving credit facility and for general corporate purposes, including the November 2002 purchase of CBC (Note 4). In turn, the revolving credit facility will then be used to retire the $200 million in senior notes maturing June 2003.

12      RESTRUCTURING:

In the fourth quarter of 2001, the Company recorded restructuring charges totaling $37.2 million associated with headcount reductions and facilities to be vacated or consolidated. Charges to the reserve totaled $8.8 million in 2001 and $10.7 million in 2002 through September 30. The remaining reserve of $17.7 million is included in other current liabilities in the accompanying consolidated balance sheets. An analysis of 2002 activity in the reserve through September 30 is as follows (in millions):

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Results of Operations – (third quarter and first nine months of 2002 compared to third quarter and first nine months of 2001)

Overview

For an understanding of the significant factors that influenced the Company’s results, the following discussion should be read in conjunction with the consolidated financial statements and related notes.

As a leading source of consumer and commercial information, Equifax provides consumer credit information, information management, marketing services, commercial information, and direct-to-consumer products which facilitate a wide range of credit and business decisions. Equifax serves customers across a wide range of industries, including the financial services, retail, healthcare, telecommunications, utilities, automotive, brokerage, and insurance industries, as well as state and federal governments. The Company also enables consumers to manage and protect their financial affairs through a portfolio of products offered directly to individuals.

In July 2001, the Company spun off its Payment Services industry segment (Certegy) (Note 3) and, in October 2001, the Company sold its City Directory business. The results of Certegy are reflected as discontinued operations in the accompanying financial statements, and the results of the City Directory business are reflected in “Divested Operations” for segment reporting. In the third quarter of 2002, the Company decided to exit its commercial reporting business in Spain, which is now held for sale (Note 3). Spain’s commercial business results are classified as discontinued operations in 2002. Discontinued after tax losses totaled $10.8 million in the third quarter and $11.5 million for the first nine months of 2002, or $0.08 per share in each period, and include a $9.0 million ($0.07 per share) estimated loss on disposal. Its 2001 results were not material and have not been reclassified to discontinued operations.

Management believes the Equifax Core Business results for 2001, which exclude the results of Certegy and City Directory and goodwill amortization (Note 10), are more useful in analyzing the underlying business by providing a consistent comparison of the Company’s 2002 operating performance versus 2001. The 2001 Spain commercial business results have not been excluded from the 2001 Core Business results since they were not material.

Financial highlights from continuing operations in the third quarter include:

The following table summarizes Equifax’s As Reported results from continuing operations and Core Business results for the three and nine-month periods ended September 30, 2002 and 2001 (in millions, except per share amounts):

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A reconciliation of Equifax’s third quarter and first nine months As Reported earnings per share to Core Business earnings per share is as follows:

The following discussion of revenue, operating income and segment results is on a Core Business basis (as previously described). The discussion of other income (expense), net, interest expense, and effective tax rates is on an As Reported basis.

Revenue

The Company generated revenues of $816.7 million year-to-date and $289.7 million in the third quarter. Revenues increased six percent in the quarter and declined one percent year-to-date, with both periods impacted by the Naviant acquisition in August 2002 (Note 4) and foreign currency exchange rates. Excluding the effects of Naviant and foreign currencies, revenue increased three percent in the quarter and declined one percent for the first nine months. Naviant revenues were $10.7 million in the quarter and first nine months. Foreign currencies negatively impacted revenues $12.3 million (1.5 percent) in the first nine months and $2.9 million (one percent) in the quarter.

Operating Income

Operating income increased three percent in the first nine months and two percent in the quarter to $256.6 million and $89.7 million, respectively. North America operations delivered 11 percent profit growth in the quarter (eight percent excluding the Naviant acquisition) bringing its year-to-date growth to six percent. North America’s profit growth was driven by a 13 percent revenue increase in the quarter. Europe’s margin improved in the quarter and has tripled year-to-date over 2001. Overall profit growth in both periods has been negatively impacted by Argentina’s economic collapse.

Segment Results (Note 7)

North America

North America generates over 80 percent of the Company’s revenue and over 90 percent of the Company’s profit before corporate expense. This segment’s revenue increased 13 percent in the quarter and four percent year-to-date. The Naviant acquisition (included in Direct Marketing) positively impacted revenue growth five percentage points in the quarter and two percentage points year-to-date. North America revenue consists of the components shown in the table below (in millions):

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U.S. Credit Information Services revenue was up seven percent in the quarter and one percent year-to-date, due primarily to volume growth of nine percent in the quarter and three percent year-to-date. Third quarter volume growth was driven by mortgage refinancing and mid-market share gains, principally in financial services. Average prices were up one percent in the quarter influenced by business mix on higher mortgage activity and down one percent year-to-date. Mortgage Services revenue grew 55 percent in the quarter and 21 percent year-to-date, driven by the decline in interest rates during the quarter. Canadian revenues were flat in the quarter and up two percent in the first nine months in local currency.

The Company’s marketing businesses generated revenues of $72.3 million in the quarter and $194.6 million year-to-date. Excluding the effect of the Naviant acquisition, marketing revenues declined three percent in the quarter and four percent year-to-date. Credit Marketing’s revenue grew three percent in both periods. The Direct Marketing business continues to be negatively impacted by the slowdown in advertising, mailing, and promotions as revenues declined 15 percent in both periods excluding the Naviant acquisition.

Consumer Direct revenues doubled in the quarter to $11 million. First nine months revenue was up 73 percent to $27.5 million exceeding 2001 full year revenues of $22 million. The Company expects this revenue growth trend to continue into 2003.

North America delivered profit of $95.7 million in the quarter and $264.6 million in the first nine months. Operating income grew $9.3 million (11 percent) in the quarter and $15.0 million (six percent) year-to-date, with the increases in both periods driven by revenue growth in Consumer Direct, Mortgage Services, and U.S. Credit Information Services, as well as the Naviant acquisition.

North America includes U.S. Credit Information Services, Mortgage Services, Canadian Operations, Credit Marketing Services, Direct Marketing Services (including Naviant), and Consumer Direct.

Europe

Europe continued to improve its profit and margins through expense reductions and operating efficiencies including the exit of Spain’s commercial business. For the quarter, operating income was $0.9 million with margins of three percent compared to $0.7 million operating income with two percent margins in prior year. For the first nine months, profit contribution has tripled to $8.4 million from $2.8 million in 2001 and margins have improved 600 basis points to nine percent compared to three percent in 2001.

Operating expenses have been reduced $15.0 million or 17 percent year-to-date more than offsetting a nine percent decline in revenue. Revenues were down in both periods due to economic conditions.

During the third quarter of 2002, the Company made the decision to exit its commercial reporting business in Spain due to local market conditions, and this business is now held for sale (Note 3). For 2002, the results of the Spain commercial business have been classified as discontinued operations. Prior year results were not material and have not been reclassified.

Operations are in the United Kingdom, Spain, Portugal and Italy.

Latin America

Latin America generated revenues of $18.3 million in the quarter compared to $27.0 million in 2001. Revenues in the first nine months were $58.9 million versus $81.2 million last year. In local currency, Brazil’s revenue grew four percent in the quarter and was up three percent year-to-date. Excluding the impact of exchange rate fluctuations, this segment’s revenues were down 13 percent in the quarter and 11 percent year-to-date driven by Argentina’s economic collapse.

Operating income was $5.1 million in the quarter and $14.7 million year-to-date, compared to $8.5 million and $24.3 million in the comparable prior periods. The profit declines in both periods were driven by Argentina. Despite the economic challenges, Latin America delivered operating margins of 28 percent in the quarter and 25 percent in the first nine months.

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Operations are principally in Brazil, Argentina and Chile.

Other

Other consists solely of a subcontract related to the Company’s lottery subsidiary. All previously deferred revenue related to this subcontract has now been recognized, and no further revenue or operating income is expected to occur in this segment.

Other Income (Expense), Net

Other income (expense), net improved $5.9 million in the third quarter and $6.3 million year-to-date due primarily to the $5.8 million loss on the sale of City Directory recorded in the third quarter of 2001.

Interest Expense

Interest expense decreased $1.9 million in the third quarter and $6.5 million for the first nine months compared to 2001. These declines were due primarily to lower effective borrowing rates.

Effective Tax Rates

The effective tax rates from continuing operations declined from 43.5 percent to 39.0 percent in the third quarter and from 42.0 percent to 39.3 percent for the first nine months, as compared to the prior year. The declines in 2002 were due to: the elimination of goodwill amortization beginning January 1, 2002, as required by SFAS 142; the tax basis of goodwill related to the loss on sale of City Directory recorded in the third quarter of 2001; as well as the implementation of state tax planning strategies.

Financial Condition

Cash provided by operating activities for the first nine months of 2002 totaled $150.0 million compared with $165.0 million in 2001. Free cash flow (operating cash flow less capital expenditures) totaled $114.6 million in the first nine months of 2002 compared to $127.7 million in 2001. Operating cash flows funded dividend payments and capital expenditures, exclusive of acquisitions.

Capital expenditures exclusive of acquisitions during the first nine months of 2002 totaled $35.4 million, and are expected to total approximately $50 million for the full year. During the first nine months, the Company repurchased 2.9 million shares of treasury stock at a total cost of $71.4 million (Note 5). At September 30, 2002, approximately $223 million remained authorized for future repurchases. Other significant 2002 transactions included $218.1 million for acquisitions (Note 4).

The acquisitions and stock repurchases during the first nine months of 2002 were financed primarily with excess cash from operations, a net $122.7 million in debt additions, $31.6 million in proceeds from stock option exercises, and $41.0 million in proceeds collected on a seller note related to a prior year divested business. There have been no significant changes in the Company’s contractual obligations since December 31, 2001. In June 2003, $200 million of the Company’s senior notes will mature and have been reclassified from long-term debt to short-term debt and current maturities of long-term debt. In October 2002, the Company successfully completed the issuance of $250 million of five-year senior notes with a coupon of 4.95%. The proceeds from these notes were used to pay down the Company’s revolving credit facility and for general corporate purposes, including the November 2002 purchase of CBC’s consumer credit files and certain customer contracts (Note 4). In turn, the revolving credit facility will then be used to retire the $200 million in senior notes maturing June 2003.

At September 30, 2002, approximately $231 million was available to the Company under its $465 million revolving credit facility. Should CSC exercise its option to sell its credit reporting business to the Company, as discussed in Note 6, additional sources of financing would be required. The Company believes it can arrange alternative sources of financing to fund this potential purchase, including public debt and/or equity markets and additional lines of bank credit.

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Off Balance Sheet Arrangement

Under the terms of its headquarters building operating lease, which commenced in 1999, the Company has guaranteed a portion of the residual value of the building at the end of the lease in 2010. The maximum exposure under the guarantee is approximately $23 million.

Critical Accounting Policies and Estimates

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect: the reported amounts of assets and liabilities at the date of the financial statements; the disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. Management regularly evaluates its estimates and assumptions. These estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances, and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company’s significant accounting policies are described in the Note 1 of Notes to Consolidated Financial Statements in the Company’s annual report on Form 10-K for the year ended December 31, 2001. Management believes that the following accounting policies involve a higher degree of complexity and warrant specific description:

Valuation of Goodwill

In July 2001, the FASB issued Statement No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). SFAS 142 eliminates the amortization of goodwill and certain other intangible assets and requires that goodwill be evaluated for impairment by applying a fair value-based test at least annually. In the second quarter of 2002, the Company completed its first fair value based impairment tests and determined that goodwill was not impaired. An interim goodwill impairment test will be completed if an event occurs or circumstances change between annual tests that could result in an impairment. The significant factors that are considered that could trigger an impairment review include: underperformance relative to historical or expected future operating results for a reporting unit; and changes in business strategy, market conditions or economic trends. In evaluating goodwill for possible impairment, management determines the fair value of each reporting unit and compares that to the reporting unit’s net book value. Fair value is determined using discounted cash flow models and valuation techniques based on multiples of earnings and revenues. If fair value is less than net book value, a valuation will be performed to determine the amount of the impairment charge. While the Company believes that its estimates of fair value are reasonable, different assumptions regarding these calculations could materially affect these evaluations.

Valuation of Other Long-Lived Assets

The Company regularly evaluates whether events or circumstances have occurred which indicate that the carrying amounts of other long-lived assets (principally purchased data files, systems development and other deferred costs, and investments in unconsolidated subsidiaries) may be impaired or not recoverable. The significant factors that are considered that could trigger an impairment review include: changes in business strategy, market conditions, or the manner of use of an asset; underperformance relative to historical or expected future operating results; and negative industry or economic trends. In evaluating an asset for possible impairment, management estimates that asset’s future undiscounted cash flows to measure whether the asset is recoverable. If it is determined that the asset is not recoverable, the Company measures the impairment based on the projected discounted cash flows of the asset over its remaining life. While the Company believes that its estimates of future cash flows are reasonable, different assumptions regarding such cash flows could materially affect these evaluations.

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Deferred Tax Assets

The Company estimates levels of future taxable income and utilizes prudent and feasible tax planning strategies in establishing and maintaining deferred tax assets. If the Company is unable to realize all or part of its deferred tax assets in the future, the Company’s effective tax rate could increase.

Forward-Looking Information

Statements in this Management’s Discussion and Analysis and other portions of this Form 10-Q that relate to Equifax’s future plans, objectives, expectations, performance, events and the like are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These statements are based on a number of assumptions that are inherently subject to significant uncertainties. Many of the uncertainties are beyond Equifax’s control. Factors that could cause actual results to differ from those expressed or implied by forward-looking statements include, but are not limited to customer demand for our services, the availability and reliability of external data sources, changes in government regulation, and competition as further discussed under the heading “Certain Factors Affecting Forward Looking Statements” included in Part I in the Company’s annual report on Form 10-K for the year ended December 31, 2001.

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The Company is exposed to market risk, primarily from changes in foreign currency exchange rates and changes in interest rates.

In the normal course of business, the financial position and results of operations of the Company’s foreign subsidiaries can be impacted by changes in foreign currency exchange rates. The Company’s position is to not hedge translational foreign currency exchange risks. However, the Company does hedge certain transactional foreign currency exchange risks, and at September 30, 2002, the exchange risk associated with the Company’s intercompany advances related to funding its investment in Italy were hedged by having a portion of the borrowings under its revolving credit facility denominated in that foreign currency.

The Company manages its exposure to changes in interest rates by (1) maintaining an appropriate weighted average debt maturity and (2) controlling the mix of fixed and variable rate debt, in part by using interest rate swap agreements. The Company’s earnings can be affected by the impact that changes in interest rates have on its variable-rate obligations. At September 30, 2002, approximately $547 million (61%) of the Company’s short-term and long-term debt was in variable-rate facilities. At this level, if market interest rates increased 1%, interest expense would increase approximately $5.5 million per year (pre-tax).

An evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act) was carried out under the supervision and with the participation of the Company’s management, including the chief executive and chief financial officers, within the 90 days preceding the filing of this Quarterly Report on Form 10-Q. Based on that evaluation, the chief executive and chief financial officers have concluded that the Company’s disclosure controls and procedures were effective as of the date of that evaluation.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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PART II. OTHER INFORMATION

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized officers.

CERTIFICATIONS

I, Thomas F. Chapman, Chief Executive Officer of Equifax Inc. (the “registrant”) certify that:

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I. Philip J. Mazzilli, Chief Financial Officer of Equifax Inc. (the “registrant”) certify that:

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INDEX TO EXHIBITS

The following documents are being filed with this Report.