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, 2013

Goodwill and Intangible Assets[Abstract]

3. 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. We perform our annual goodwill impairment tests as of September 30.

Our annual goodwill impairment testing was completed during the third quarter of 2013. 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 this Form 10-Q. The estimated fair value for all reporting units exceeded the carrying value of those units as of September 30, 2013. As a result, no goodwill impairment was recorded. Changes in the amount of goodwill for the nine months ended September 30, 2013, are as follows:

	U.S. Consumer						North America		North America
	Information				Workforce		Personal		Commercial
	Solutions		International		Solutions		Solutions		Solutions		Total
	(In millions)
Balance, December 31, 2012	$	947.7	$	369.3	$	934.0	$	1.8	$	37.6	$	2,290.4
Acquisitions		-		-		-		14.5		-		14.5
Adjustments to initial purchase price allocation		87.5		-		-		-		-		87.5
Foreign currency translation		-		(5.8)		-		-		(0.2)		(6.0)
Tax benefits of stock options exercised		-		-		(0.2)		-		-		(0.2)
Businesses sold		(2.7)		(1.4)		(26.1)		-		-		(30.2)
Balance, September 30, 2013	$	1,032.5	$	362.1	$	907.7	$	16.3	$	37.4	$	2,356.0

Indefinite-Lived Intangible Assets. Indefinite-lived intangible assets consist of acquired operating agreements in specific territories representing the estimated acquisition date fair value of certain territory specific rights acquired through the purchase of independent credit reporting agencies in the U.S. and Canada. At the time we acquired these agreements, they were considered 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 2013 annual impairment test completed during the third quarter of 2013 resulted in no impairment of indefinite-lived intangible assets.

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. Our reacquired rights represent the value of rights which we had granted to Computer Sciences Corporation that were reacquired in connection with the acquisition of CSC Credit Services in the fourth quarter of 2012 which are being amortized over the remaining term of the affiliation agreement on a straight-line basis from December 28, 2012 to August 1, 2018. We amortize all of our purchased intangible assets 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 2012 Form 10-K.

Purchased intangible assets at September 30, 2013 and December 31, 2012 consisted of the following:

	September 30, 2013						December 31, 2012
			Accumulated						Accumulated
	Gross		Amortization		Net		Gross		Amortization		Net

Definite-lived intangible assets:	(In millions)
Purchased data files	$	704.7	$	(178.6)	$	526.1	$	795.6	$	(229.2)	$	566.4
Acquired software and technology		36.1		(18.7)		17.4		34.4		(13.5)		20.9
Customer relationships		493.5		(165.1)		328.4		522.1		(164.5)		357.6
Reacquired rights		73.3		(9.7)		63.6		-		-		-
Proprietary database		7.4		(4.9)		2.5		125.0		(115.9)		9.1
Non-compete agreements		20.6		(8.6)		12.0		19.4		(5.5)		13.9
Trade names and other intangible assets		40.0		(23.7)		16.3		41.5		(21.7)		19.8
Total definite-lived intangible assets	$	1,375.6	$	(409.3)	$	966.3	$	1,538.0	$	(550.3)	$	987.7

Amortization expense from continuing operations related to purchased intangible assets was $33.9 million and $21.5 million during the three months ended September 30, 2013 and 2012, respectively. Amortization expense from continuing operations related to purchased intangible assets was $90.4 million and $64.8 million during the nine months ended September 30, 2013 and 2012, respectively.

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 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. To reflect this change, we recorded $9.7 million of amortization expense in the third quarter of 2013, $6.5 million of which related to the first and second quarters of 2013.

- 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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