Equifax Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2011

4. GOODWILL AND INTANGIBLE ASSETS

Goodwill. Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. 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 reduce the fair value of a reporting unit below its carrying value. As a result of the merger of our Brazilian business during the second quarter, we performed an interim impairment test on the Latin America reporting unit excluding our Brazilian business. The interim test resulted in no impairment of goodwill. We perform our annual goodwill impairment tests as of September 30.

Our annual goodwill impairment testing was completed during the third quarter of 2011. The fair value estimates for our reporting units were determined using a combination of the income and market approaches in accordance with our methodology as discussed in the “Application of Critical Accounting Policies” section in the Form 10-Q. The estimated fair value for all reporting units exceeded the carrying value of these units as of September 30, 2011. As a result, no goodwill impairment was recorded. Changes in the amount of goodwill for the nine months ended September 30, 2011, are as follows:

	U.S. Consumer									North America		North America
	Information									Personal		Commercial
	Solutions			International			TALX			Solutions		Solutions			Total
	(In millions)
Balance, December 31, 2010	$	628.5		$	346.9		$	899.9		$	1.8	$	37.6		$	1,914.7
Acquisitions		10.1			30.9			26.8			-		-			67.8
Adjustments to initial purchase price allocation		(0.7	)		(0.1	)		-			-		-			(0.8	)
Foreign currency translation		-			5.8			-			-		(0.2	)		5.6
Tax benefits of stock options exercised		-			-			(0.2	)		-		-			(0.2	)
Business sold		-			(33.2	)		-			-		-			(33.2	)
Balance, September 30, 2011	$	637.9		$	350.3		$	926.5		$	1.8	$	37.4		$	1,953.9

Indefinite-Lived Intangible Assets. Indefinite-lived intangible assets consist of contractual/territorial rights representing the estimated acquisition date fair value of rights to operate in certain territories acquired through the purchase of independent credit reporting agencies in the U.S. and Canada. Our contractual/territorial rights are perpetual in nature 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 2011 annual impairment test completed during the third quarter of 2011 resulted in no impairment of indefinite-lived intangible assets. Our contractual/territorial rights carrying amounts did not change materially during the nine months ended September 30, 2011.

Purchased Intangible Assets. Purchased intangible assets represent the estimated acquisition date fair value of acquired intangible assets used in our business. Purchased data files represent the estimated acquisition date fair value of consumer credit files acquired primarily through the purchase of independent credit reporting agencies in the U.S. and Canada. We expense the cost of modifying and updating credit files in the period such costs are incurred. We amortize purchased data files, which primarily consist of acquired consumer credit files, on a straight-line basis. Primarily all of our other purchased intangible assets are also amortized on a straight-line basis. For additional information about the useful lives related to our purchased intangible assets, see Note 1 of the Notes to Consolidated Financial Statements in our 2010 Form 10-K.

Purchased intangible assets at September 30, 2011 and December 31, 2010 consisted of the following:

	September 30, 2011							December 31, 2010
			Accumulated							Accumulated
	Gross		Amortization			Net		Gross		Amortization			Net
Definite-lived intangible assets:	(In millions)
Purchased data files	$	315.4	$	(234.8	)	$	80.6	$	339.2	$	(240.7	)	$	98.5
Acquired software and technology		64.2		(39.3	)		24.9		55.0		(33.3	)		21.7
Customer relationships		518.0		(121.8	)		396.2		489.2		(97.1	)		392.1
Proprietary database		125.0		(90.3	)		34.7		125.0		(74.4	)		50.6
Non-compete agreements		9.1		(3.0	)		6.1		7.2		(1.4	)		5.8
Trade names and other intangible assets		40.5		(15.6	)		24.9		37.4		(12.2	)		25.2
Total definite-lived intangible assets	$	1,072.2	$	(504.8	)	$	567.4	$	1,053.0	$	(459.1	)	$	593.9

Amortization expense from continuing operations related to purchased intangible assets was $21.9 million and $22.3 million during the three months ended September 30, 2011 and 2010, respectively. Amortization expense from continuing operations related to purchased intangible assets was $67.9 million and $66.8 million during the nine months ended September 30, 2011 and 2010, respectively.

- 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.

+ References + Details