Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS AND INVESTMENTS

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ACQUISITIONS AND INVESTMENTS
 12 Months Ended
Dec. 31, 2017
Business Combinations [Abstract]  
ACQUISITIONS AND INVESTMENTS
ACQUISITIONS AND INVESTMENTS
 
2017 Acquisitions and Investments. On August 10, 2017, the Company completed the acquisition of 100% of the outstanding stock of ID Watchdog, Inc., an identity theft protection and resolution company providing solutions to the employee benefits marketplace. On November 15, 2017, the Company completed the acquisition of 100% of the outstanding stock of Mercury Group of Companies Pty Ltd ("Mercury"), an Australian-owned workforce management company. The primary areas of the purchase price that are not yet finalized are related to income taxes and working capital. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.
    
2016 Acquisitions and Investments. On February 24, 2016, the Company completed the acquisition of 100% of the ordinary voting shares of Veda for cash consideration of approximately $1.7 billion (2.4 billion Australian dollars) and debt assumed of approximately $189.5 million (261.9 million Australian dollars). The acquisition provides a strong platform for Equifax to offer data and analytic services and further broaden the Company's geographic footprint. Veda stockholders received 2.825 Australian dollars in cash for each share of Veda common stock they owned. The Company financed the transaction with $1.7 billion of debt, consisting of commercial paper, an $800.0 million 364-Day revolving credit facility (the "364-Day Revolver"), and an $800.0 million three-year delayed draw term loan facility (the "Term Loan"). Refer to Note 5 for further discussion on debt. On August 23, 2016, the Company completed the acquisition of 100% of the assets and certain liabilities of unemployment tax and claims management specialists Barnett & Associates ("Barnett"), as well as the verifications business, Computersoft, LLC ("Computersoft"). We have completed the allocation of the Veda, Barnett and Computersoft purchase prices.

Purchase Price Allocation.  The following table summarizes the estimated fair value of the net assets acquired and the liabilities assumed at the acquisition dates during 2017 and 2016.
 
December 31,
 
2017
 
2016
 
(In millions)
Cash
$
4.3

 
$
23.7

Accounts receivable and other current assets
3.2

 
39.6

Other assets
0.4

 
42.0

Identifiable intangible assets (1)
51.0

 
681.0

Goodwill (2)
92.4

 
1,456.3

Total assets acquired
151.3

 
2,242.6

Debt(3)
—

 
(189.5
)
Other current liabilities
(5.1
)
 
(40.2
)
Other liabilities
(10.9
)
 
(178.1
)
Non-controlling interest
—

 
(11.7
)
Net assets acquired
$
135.3

 
$
1,823.1

 
(1)
Identifiable intangible assets are further disaggregated in the following table.
(2)
The goodwill related to ID Watchdog, Inc. and Mercury is included in the GCS and International operating segments, respectively, and is not deductible for tax purposes. The goodwill related to Veda is included in the International operating segment and is not deductible for tax purposes. The goodwill related to the Barnett and Computersoft acquisition is included in the Workforce Solutions operating segment and is deductible for tax purposes.
(3)
The Veda debt of $191 million was paid in full on March 10, 2016.

The primary reasons the purchase price 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 and geographies, cost savings from the elimination of duplicative activities, and the acquisition of an assembled workforce that are not recognized as assets apart from goodwill.
 
 
December 31,
 
 
2017
 
2016
Intangible asset category
 
Fair value
 
Weighted-average useful life
 
Fair value
 
Weighted-average useful life
 
 
(in millions)
 
(in years)
 
(in millions)
 
(in years)
Customer relationships
 
$
42.7

 
10.2
 
$
171.3

 
14.9
Acquired software and technology
 
6.5

 
6.5
 
106.3

 
4.2
Purchased data files
 
—

 
n/a
 
387.5

 
14.8
Non-compete agreements
 
—

 
n/a
 
5.4

 
2.1
Trade names and other intangible assets
 
1.8

 
2.9
 
10.5

 
1.0
Total acquired intangibles
 
$
51.0

 
9.5
 
$
681.0

 
12.9

 
Pro Forma Financial Information. The following table presents unaudited consolidated pro forma information as if our acquisition of Veda had occurred at the beginning of the earliest period presented. The pro forma amounts may not be necessarily indicative of the operating revenues and results of operations had the acquisition actually taken place at the beginning of the earliest period presented. Furthermore, the pro forma information may not be indicative of future performance.

 
Twelve months ended December 31,
 
2016
 
2015
 
As Reported
 
Pro Forma
 
As Reported
 
Pro Forma
 
(In millions, except per share data)
Operating revenues
$
3,144.9

 
$
3,180.9

 
$
2,663.6

 
$
2,929.0

Net income attributable to Equifax
$
488.8

 
$
488.1

 
$
429.1

 
$
429.9

Net income per share (basic)
$
4.10

 
$
4.09

 
$
3.61

 
$
3.62

Net income per share (diluted)
$
4.04

 
$
4.03

 
$
3.55

 
$
3.56



The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact. These adjustments include, but are not limited to, the application of our accounting policies and depreciation and amortization related to fair value adjustments and intangible assets.