Equifax 2002 Annual Report Download - page 55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5.
RESTRUCTURING AND IMPAIRMENT CHARGES
In the fourth quarter of 2001, we recorded restructuring
and impairment charges (discussed below) of $60.4 million
($35.3 million after tax, or $0.25 per share).
Due to changes in market conditions and our technology strategy,
we recorded an impairment charge in the fourth quarter of 2001
of $23.2 million to write down certain technology investments,
including $6.9 million of investments in several third-party
technology companies.
In the fourth quarter of 2001, we initiated a restructuring plan to
align our cost structure with changing market conditions, reduce
expenses and improve efficiencies, particularly in international
operations. The plan included headcount reductions of approxi-
mately 700 employees, primarily located in our international oper-
ations. The restructuring charge for the year ended 2001 totaled
$37.2 million, and consisted of severance costs associated with
headcount reductions and other related costs, including reserves
to reflect our estimated exposure on facilities to be vacated or
consolidated. Charges to the restructuring reserve totaled
$12.1 million in 2002 and $8.8 million in 2001, and the remaining
reserve of $16.3 million at December 31, 2002 is included in other
current liabilities in the accompanying consolidated balance sheet.
During the fourth quarter of 2002, based on revised estimates, we
determined that the severance portion of the reserve was inade-
quate and that the facilities and other portion of the reserve was
excessive and made an adjustment of $1.6 million to each reserve
with no effect to net income. The majority of the remaining sev-
erance and related charges are expected to be paid in 2003, with
charges related to real estate rental obligations being paid over
the next several years. An analysis of activity in the reserve for
2001 and 2002 is as follows (in millions):
Facilities
Severance and Other Total
Original reserve,
fourth quarter, 2001 $12.0 $25.2 $37.2
Less 2001 charges (3.6) (5.2) (8.8)
Balance, December 31, 2001 8.4 20.0 28.4
Less 2002 charges (8.4) (3.7) (12.1)
Adjustment 1.6 (1.6) –
Balance, December 31, 2002 $ 1.6 $14.7 $16.3
6.
LONG-TERM DEBT AND SHORT-TERM BORROWINGS
Long-term debt at December 31, 2002 and 2001 was as follows:
(In millions) 2002 2001
Senior Notes, 6.5%, due 2003, net of
unamortized discount of $0.1 million
in 2002 and $0.2 million in 2001 $199.9 $199.8
Notes, 6.3%, due 2005, net of
unamortized discount of $0.4 million
in 2002 and $0.6 million in 2001 249.6 249.4
Notes, 4.95%, due 2007, net of
unamortized discount of $0.5 million
in 2002 249.5 –
Debentures, 6.9%, due 2028, net of
unamortized discount of $1.3 million
in 2002 and $1.3 million in 2001 148.7 148.7
Borrowings under revolving credit
facilities,weighted average rate
of 2.6% at December 31, 2002 21.8 90.9
Other 22.4 8.7
891.9 697.5
Less current maturities 201.3 3.9
$690.6 $693.6
In October 2002, we issued new 4.95% fixed rate five-year senior
unsecured notes with a face value of $250.0 million. The notes,
which expire in 2007, were sold at a discount of $0.5 million. The
discount, and related issuance costs, will be amortized on a
straight-line basis over the term of the notes. Our $200.0 million
6.5% senior unsecured notes, originally issued in 1993, mature
during June 2003, and therefore appear in the short-term debt and
current maturities category on our December 31, 2002 balance
sheet. The indebtedness evidenced by our 4.95% senior unsecured
notes, our 6.5% senior unsecured notes, our 6.3% notes, and our
6.9% senior unsecured debentures, none of which has been guar-
anteed by any of our subsidiaries, is unsecured, and ranks on parity
in right of payment with all of our other unsecured and unsubor-
dinated indebtedness from time to time outstanding.
In October 2001, we replaced our $750.0 million revolving credit
facility with a new, committed $465.0 million revolving credit facil-
ity with a group of commercial and investment banks. This facility
is comprised of a $160.0 million, 364-day portion and a $305.0 mil-
lion, multi-year portion. The 364-day portion matures October 2,
2003. The multi-year portion expires October 4, 2004. The agree-
ment provides for borrowings tied to Base Rate, LIBOR and com-
petitive bid interest rate options and contains certain financial
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