SecProbe.io

CORRESP
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filename1.htm

  Nuala M. King

  Vice
  President and Corporate Controller

  Equifax
  Inc.

  1550
  Peachtree Street, N.W.

  Atlanta,
  GA 30309

  (404)
  885-8440

  FAX
  (404) 885-8121

  nuala.king@equifax.com

August
10, 2006

Mr.
Larry Spirgel

Assistant Director
U.S. Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 3720
100 F Street, N.E.
Washington, D.C.  20549

  RE:

  Equifax Inc.

  Form 10-K for the fiscal year ended December 31,
  2005

  Filed March 3, 2006

  Form 10-Q for the quarter ended March 31, 2006

  File No. 001-06605

Dear
Mr. Spirgel:

This
letter sets forth our responses to comments received from the staff (the “Staff”)
of the Division of Corporation Finance of the U.S. Securities and Exchange
Commission (the “Commission”) in your letter dated July 13, 2006.

The
number of the responses and headings set forth below correspond to the numbered
comments and headings on the letter from the Staff.

Form 10-K for the fiscal year ended December 31, 2005

Liquidity and Financial Condition, Page 37

1.     We note your presentation of free cash flow
within your discussion of operating activities.
Please revise to:

·      Include a clear description of your
calculation of this measure as well as the necessary reconciliation.

·      Describe in detail why you believe that the
presentation of this measure provides useful information to investors and how
the additional purposes for which you use this measure.

·      Disclose in detail the material limitations
of the measure.  Please refer to Item 10
of Regulation S-K and Question 13 of our Frequently Asked Questions Regarding
the Use of Non-GAAP Financial Measures.

Response:  In our Form 10-K and Form 10-Q filings, we
have provided in Exhibit 99.1 the required Regulation G disclosure,
reconciliation and justification referenced in your comment related to free
cash flow, as noted in the beginning of Management’s Discussion and Analysis of
Financial Condition and Results of Operations (“MD&A”). In our future periodic
reports, however, beginning with our Form 10-Q for the quarter ended June 30,
2006 on page 38, we will provide these disclosures within MD&A, rather than
in an exhibit that is incorporated by reference. Below we have included a copy
of this disclosure from our Form 10-Q for the quarter ended June 30, 2006 to
assist with your review.

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RECONCILATION
OF NON-GAAP FINANCIAL MEASURE TO COMPARABLE GAAP FINANCIAL MEASURE

Reconciliation of cash provided by operating activities
to free cash flow:

  Three Months Ended

  Six Months Ended

  June 30,

  June 30,

  (in millions)

  2006

  2005

  2006

  2005

  Cash provided by
  operating activities

  $

  90.7

  $

  90.5

  $

  156.0

  $

  132.3

  Less capital expenditures

  (15.8

  )

  (12.3

  )

  (26.5

  )

  (22.1

  )

  Free cash flow

  $

  74.9

  $

  78.2

  $

  129.5

  $

  110.2

The free
cash flow financial measure is not prepared in conformity with GAAP and
excludes capital expenditures from cash provided by operating activities.  Free cash flow is not a measurement of
liquidity under GAAP and should not be considered as an alternative to net
income, operating income, cash flow from operating activities, or the change in
cash and cash equivalents on the Consolidated Balance Sheets and may not be
comparable with free cash flow as defined by other companies.

Management
believes free cash flow financial information provides meaningful supplemental
information regarding our performance and liquidity by deducting capital
expenditures from cash provided by operating activities in order to show the
cash generated by us that is available to be used for debt-service payments,
dividends and discretionary investment. Equifax believes that this financial
information is useful to our management and investors in assessing Equifax’s historical
performance and liquidity and when planning, forecasting and analyzing future
periods.

Consolidated Balance Sheets, Page 55

2.     We note your combined presentation of
Goodwill and Indefinite-Lived Intangible Assets.  Please revise to present goodwill as a
separate line item to comply with paragraph 43 of SFAS 142.

Response:  In our future periodic reports, beginning
with our Form 10-Q for the quarter ended June 30, 2006 on page 5, we will
revise the presentation of goodwill and indefinite-lived intangible assets to
report goodwill as a separate line item on our Consolidated Balance Sheets for
all periods presented.

Consolidated Statements of Cash Flows, Page 56

3.     Please revise your presentation of accounts
receivable, net to reflect the changes on a gross basis as required by paragraph
11 of SFAS No. 95.

Response:  Our presentation of accounts
receivable, net on our Consolidated Statements of Cash Flows includes bad debt
expense recorded during the period. Historically, the amount of bad debt
expense has not been material to our cash provided by operating activities. Bad
debt expense as a percentage of cash provided by operating activities was 2%,
1%, 1% and 3% for the six months ended June 30, 2006 and the twelve months
ended December 31, 2005, 2004 and 2003, respectively. In our future Form 10-K
filings, however, we will disclose the amount of bad debt expense recorded
during the period in the Notes to our Consolidated Financial Statements and, if
material to cash provided by operating activities for a particular reporting
period, we will provide a separate line item for bad debt expense on our
Consolidated Statements of Cash Flows included in our Form 10-K or Form 10-Q
filings.

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4.
  It is unclear to us why you are presenting
your long-term revolving credit facilities activity on a net basis.  Tell us why you believe this presentation
complies with paragraphs 12-13 of SFAS 95.
It appears from your disclosure on Page 71 that the amounts due under
these facilities are payable in 2009.

Response:  The underlying final maturity
date of our $500.0 million, five-year senior unsecured revolving credit
agreement (the “Credit Facility”) is August 2009.  This facility is structured, however, to
provide borrowings under short-term loans in the form of revolving credit
loans, competitive bid loans, offshore rate loans, dollar competitive bid loans
or offshore currency competitive loans.  We make separate contractual borrowing
requests, which are legally new loans upon each request, for each revolving
credit loan specifying the payment terms.
Pursuant to the Credit Facility, the maximum period of borrowings for
any individual loan cannot exceed six months.
Historically, our borrowings under these revolving credit loans have
been short-term with a maturity of thirty days.

Statement
of Financial Accounting Standards (“SFAS”) No. 95, “Statement of Cash Flows,”
paragraph 13 indicates  “items that
qualify for net reporting because their turnover is quick, their amounts are
large, and their maturities are short are cash receipts and payments pertaining
to…(c) debt, providing that the original maturity of the asset or liability is
three months or less.”  As discussed
above, the contractual maturity of the borrowings under the individual loans we
have entered into is less than three months. Accordingly, we believe it is
appropriate to present borrowings and repayments on a net basis in financing
activities on our Consolidated Statements of Cash Flows.

On
July 24, 2006, this Credit Facility was amended to, among other things, extend
the final maturity date from August 2009 to July 2011. The six month maximum
maturity period for borrowings under the individual loans referenced above did
not change in conjunction with this amendment.

1.  Summary of
Significant Accounting Policies

Revenue Recognition and Deferred Revenue, Page 60

5.     We note your statement that deferred revenue
represents the liability of amounts billed in advance of service
delivery.  Please confirm that you record
the liability when amounts are collected in advance of service delivery, rather
than when billed.  If not, tell us why
you believe it is appropriate to record deferred revenue prior to receiving
cash.  Revise your disclosure as
appropriate.

Response: We generate deferred revenue from sales of subscription-based products and billings
related to “set up services” that do not meet the criteria to be accounted for
as a separate unit of accounting.  Our deferred
revenue represents amounts (1) that have been collected from customers or (2)
where the set up and subscription services are in progress or have been
completed but the invoice for the services has not yet been paid.  For the amounts recorded under the second
category in the preceding sentence, we believe it is appropriate to record
deferred revenue prior to receiving cash as we have valid claims against our
customers for the provision of our services according to the terms of the
respective customer contracts.

In
our future Form 10-K filings, we will provide additional disclosure to clarify
and augment our accounting policy disclosure for deferred revenue both in our
discussion of critical accounting policies in MD&A as well as the
significant accounting policies in the Notes to our Consolidated Financial
Statements.

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Goodwill and Indefinite-Lived Intangible Assets, Page 63

6.     We note that the useful lives of your
contractual/territorial rights are indefinite.
Tell us in detail how these assets meet the criteria for “indefinite-lived”
based on the factors outlined under paragraph 11 of SFAS No. 142.

Response: Our principal competitors in the credit reporting industry consist of
two, well-capitalized national credit reporting agencies (“CRAs”), as well as a
small number of regional CRAs which typically have affiliation agreements with
one of the three national CRAs.  We originally
established our presence as a national provider of credit information services
by signing affiliation agreements with regional CRAs.  These affiliation agreements provided the
regional CRA with the contractual right to utilize the Equifax trade name when
selling the credit information of individuals residing within their defined
geographic area (the “territory”).  In
addition, each affiliate had the right to sell the credit information of each
participating Equifax affiliate to its own customers in their territory.  The affiliation agreements required that the
owner of the credit file be paid the majority of the fee charged when their
credit information was sold.  Thus, when
we sold the credit information owned by our affiliates, we recorded a
commission for the sale and paid the difference to the affiliate.

By
acquiring our affiliate regional CRAs, we acquired the credit files, the fair
value of which is separately identified and is amortized over a 15 year expected
useful life, and the right to operate in the territories within which our
affiliates had previously operated using the Equifax trade name.  The contractual/territorial right intangible
assets represent the estimated fair value of our right to operate as a CRA in
territories where we would otherwise not have been able to operate given the
affiliate arrangements.

We
have considered the criteria in paragraph 11 of SFAS No. 142, “Goodwill and Other
Intangible Assets” (“SFAS 142”), in determining that our
contractual/territorial right intangible assets have an indefinite life.  Due to the unique nature of the industry we
serve and the expectation that the right to operate in the acquired territories
will generate cash flows for the foreseeable future, we have determined that our
contractual/territorial rights have the attributes of an indefinite life, as
discussed below.

We
have operated as a CRA for over 100 years.
During that time, we have seen a substantial increase in demand for
credit reporting services principally driven by the market for consumer lending
services.  We currently do not anticipate
any significant changes in consumer lending activity that would suggest the demand
for credit information of individuals residing in the acquired territories has
a finite life.  Furthermore, we believe
the current and future population of credit eligible consumers within the acquired
territories will enable us to generate cash flows from the territories for the
foreseeable future.

There
are no regulatory or other legal provisions that would otherwise limit our
ability to utilize our contractual/territorial rights.  However, we believe the regulatory
environment is a significant barrier to entry into the credit reporting
industry (e.g. the Fair Credit Reporting Act and Gramm-Leach-Bliley Act
compliance requirements) and is evidence as to the limited number of providers
of credit reporting services.  We also
believe there are economic factors that limit new entrants into the market for
credit reporting services.  The cost of
building a technology infrastructure to support a national credit reporting
database, developing competitive products and services, and establishing a
brand that is recognizable with users of credit information services are
significant barriers to entry that no new entrant has been able to overcome to
challenge the three national CRAs.

We
believe that our contractual/territorial rights have an indefinite life because
there are no legal, regulatory, contractual, competitive, economic, or other
factors that limit the useful life of the intangible asset.  We will continue to monitor changes in
circumstances to ensure that the life continues to be

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indefinite,
or if determined to be finite, that we adhere to the requirements of SFAS 142
paragraph 16 to account for that change.

Financial Instruments, Page 65

7.     We note that you utilized a broker to assist
in the determination of the fair value of your financial instruments.  While you are not required to make reference
to this broker, when you do you should also disclose the name of the expert and
include the consents of the expert.  If
you decide to delete your reference to the broker, you should revise to provide
disclosures that explain the method and assumptions used by management to
determine the valuation.

Response:  In our future Form 10-K filings, we will
delete the reference to the broker and revise our disclosure to describe the
method and assumptions we utilize to determine the valuation of our financial
instruments.

Additionally,
Equifax Inc. (the “Company”) acknowledges the following:

·      The Company is responsible for the adequacy
and accuracy of the disclosure in the filings;

·      Staff comments or changes to disclosure in
response to Staff comments do not foreclose the Commission from taking any
action with respect to the filings; and

·      The Company may not assert Staff comments as a
defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

Please
contact the undersigned at (404) 885-8440 if you have any additional questions
regarding our responses to your inquiries as discussed above.

Sincerely,

  /s/ Nuala M. King

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