10-K/APeriod: FY2002

EQUIFAX INC Annual Report (Amendment), Year Ended Dec 31, 2002

Filed April 11, 2003For Securities:EFX

Summary

Equifax Inc. (EFX) filed an amendment to its 2002 Form 10-K on April 11, 2003, primarily to correct a reported goodwill value and adjust the non-affiliate market value date. The financial statements for the year ended December 31, 2002, show a decline in operating revenue from $1,139.0 million in 2001 to $1,109.3 million, alongside a significant decrease in net income from $178.0 million to $122.5 million in the same period. The company has been actively managing its asset base, with substantial acquisitions in 2002 totaling $333.6 million, including the purchase of Naviant, Inc. Significant divestitures, such as the spin-off of Certegy Inc. in 2001, have reshaped the company's operational structure. Despite revenue challenges, the company's core operations in North America remain strong, contributing the largest portion of revenue and operating income. Key financial adjustments include the cessation of goodwill amortization following the adoption of SFAS 142, which impacted prior periods' reported earnings. The company also incurred restructuring and impairment charges in 2001, but these were not repeated in 2002. Investments in property and equipment were reduced in 2002, suggesting a focus on consolidating existing operations. The balance sheet reflects a substantial increase in goodwill, reflecting recent acquisitions. While the company is navigating revenue headwinds, its strategic acquisitions and operational restructuring aim to position it for future growth. Investors should monitor the integration of acquisitions and the performance of its core information services segments.

Key Highlights

  • 1Operating revenue decreased to $1,109.3 million in 2002 from $1,139.0 million in 2001.
  • 2Net income decreased to $178.0 million in 2002 from $228.0 million in 2000, and $122.5 million in 2001.
  • 3Goodwill amortization ceased in 2002 due to the adoption of SFAS 142.
  • 4Total acquisitions in 2002 amounted to $333.6 million, including the purchase of Naviant, Inc.
  • 5The company completed the spin-off of Certegy Inc. in July 2001, which was classified as discontinued operations.
  • 6Significant restructuring and impairment charges of $60.4 million were recorded in 2001, with substantially reduced activity in 2002.
  • 7Long-term debt remained relatively stable, with total long-term debt at $690.6 million in 2002 compared to $693.6 million in 2001, while short-term borrowings increased significantly.

Frequently Asked Questions

The decrease in operating revenue from $1,139.0 million in 2001 to $1,109.3 million in 2002 appears to be influenced by a combination of factors, including the divestiture of certain operations and potential market pressures within its information services segments. The report also notes a shift in segment reporting, with the Spain commercial services business being reclassified as discontinued operations in 2002.

The adoption of SFAS 142, effective January 1, 2002, eliminated the amortization of goodwill. This resulted in no goodwill amortization expense for 2002, whereas $25.4 million was recorded in 2001 and $24.4 million in 2000. This change significantly boosted reported net income and earnings per share for 2002 compared to prior years, when goodwill amortization was a considerable expense.

The 'Discontinued Operations' section reflects the financial results of business segments that Equifax has decided to exit or sell. This includes the spin-off of Certegy Inc. in 2001 and the decision to exit its commercial services business in Spain in 2002. By segregating these activities, investors can better assess the ongoing performance of Equifax's core, continuing businesses.

Equifax has been actively pursuing strategic acquisitions to expand its data franchise and marketing services capabilities. In 2002, the company made significant acquisitions totaling $333.6 million, including the purchase of Naviant, Inc., a precision marketing services provider, and several independent credit reporting agencies. This indicates a strategy focused on inorganic growth and expanding service offerings, particularly in North America.