Equifax Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill. Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. As discussed in Note 1, goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment tests as of September 30 each year. As a result of the merger of our Brazilian business in the second quarter of 2011, we performed an interim impairment test on the Latin America reporting unit excluding our Brazilian business which resulted in no impairment. The fair value estimates for our reporting units were determined using a combination of the income and market approaches in accordance with the Company’s methodology. Our annual impairment tests as of September 30, 2013, 2012 and 2011 resulted in no impairment of goodwill.

Changes in the amount of goodwill for the twelve months ended December 31, 2013 and 2012, are as follows:

	U.S. Consumer						North America		North America
	Information				Workforce		Personal		Commercial
(In millions)	Solutions		International		Solutions		Solutions		Solutions		Total
Balance, December 31, 2011	$	638.4	$	348.5	$	935.0	$	1.8	$	37.5	$	1,961.2
Acquisitions		309.3		12.0		-		-		-		321.3
Adjustments to initial purchase price allocation		-		-		(1.0)		-		-		(1.0)
Foreign currency translation		-		8.8		-		-		0.1		8.9
Balance, December 31, 2012		947.7		369.3		934.0		1.8		37.6		2,290.4
Acquisitions		-		40.8		-		14.5		-		55.3
Adjustments to initial purchase price allocation		87.5		(0.1)		-		0.4		-		87.8
Foreign currency translation		-		(7.6)		-		-		(0.4)		(8.0)
Tax benefits of options exercised		-		-		(0.2)		-		-		(0.2)
Businesses sold		(2.7)		(1.4)		(26.1)		-		-		(30.2)
Balance, December 31, 2013	$	1,032.5	$	401.0	$	907.7	$	16.7	$	37.2	$	2,395.1

Indefinite-Lived Intangible Assets. Indefinite-lived intangible assets consist of indefinite-lived reacquired rights representing the value of rights which we had granted to various affiliate credit reporting agencies that were reacquired in the U.S. and Canada. At the time we acquired these agreements, they were considered perpetual in nature under the accounting guidance in place at that time and, therefore, the useful lives are considered indefinite. Indefinite-lived intangible assets are not amortized. We are required to test indefinite-lived intangible assets for impairment annually and whenever events or circumstances indicate that there may be an impairment of the asset value. We perform our annual indefinite-lived intangible asset impairment test as of September 30. Our 2013 annual impairment test completed during the third quarter of 2013 resulted in no impairment of indefinite-lived intangible assets.

	Amount
	(In millions)
Balance, December 31, 2011	$	95.6
Acquisitions	$	158.8
Foreign currency translation		0.1
Balance, December 31, 2012		254.5
Purchase price adjustment		(158.8)
Foreign currency translation		(0.2)
Balance, December 31, 2013	$	95.5

During the third quarter of 2013, we recorded adjustments to the purchased intangible assets and related accumulated amortization previously recorded in connection with our December 28, 2012 acquisition of certain credit services business assets and operations of Computer Sciences Corporation. This correction resulted in the establishment of $73.3 million of finite-lived reacquired rights which will be amortized over 5.6 years, an increase in goodwill of $85.5 million and a reduction of our indefinite-lived intangible assets of $158.8 million.

Purchased Intangible Assets. Purchased intangible assets net, recorded on our Consolidated Balance Sheets at December 31, 2013 and 2012, are as follows:

	December 31, 2013						December 31, 2012
			Accumulated						Accumulated
	Gross		Amortization		Net		Gross		Amortization		Net
Definite-lived intangible assets:	(In millions)
Purchased data files	$	709.5	$	(187.4)	$	522.1	$	795.6	$	(229.2)	$	566.4
Acquired software and technology		38.4		(20.2)		18.2		34.4		(13.5)		20.9
Customer relationships		506.7		(166.5)		340.2		522.1		(164.5)		357.6
Reacquired rights		73.3		(13.1)		60.2		-		-		-
Proprietary database		7.4		(5.0)		2.4		125.0		(115.9)		9.1
Non-compete agreements		20.2		(7.8)		12.4		19.4		(5.5)		13.9
Trade names and other intangible assets		41.7		(24.0)		17.7		41.5		(21.7)		19.8
Total definite-lived intangible assets	$	1,397.2	$	(424.0)	$	973.2	$	1,538.0	$	(550.3)	$	987.7

Amortization expense related to purchased intangible assets was $118.4 million, $86.1 million, and $87.5 million during the twelve months ended December 31, 2013, 2012, and 2011, respectively.

Estimated future amortization expense related to definite-lived purchased intangible assets at December 31, 2013 is as follows:

Years ending December 31,	Amount
	(In millions)
2014	$	111.8
2015		106.9
2016		100.3
2017		90.6
2018		72.9
Thereafter		490.7
	$	973.2

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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