Equifax 2006 Annual Report Download - page 68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
66 EQUIFAX 2006 ANNUAL REPORT
The Amended Credit Agreement also includes an
“accordion” feature that will allow us to request an increase
of up to $500.0 million in the maximum borrowing com-
mitment, which cannot exceed $1.0 billion. Each member
of the lending group may elect to participate or not partici-
pate in any request we make to increase the maximum
borrowing commitment. In addition, any increase in the
borrowing commitment pursuant to this accordion feature
is subject to certain terms and conditions, including the
absence of an event of default. The increased borrowing
commitment may be used for general corporate purposes.
We are permitted and intend to request an increase in the
borrowing limit under the accordion feature of this credit
facility effective upon the completion of our acquisition of
TALX Corporation. See Note 15 for additional information
about this acquisition.
Under our Amended Credit Agreement, we must comply
with various fi nancial and non-fi nancial covenants. The
fi nancial covenants require us to maintain a maximum lever-
age ratio, defi ned as consolidated funded debt divided by
consolidated EBITDA (as set forth in the Amended Credit
Agreement) for the preceding four quarters, of not more
than 3.5 to 1.0. Compliance with this fi nancial covenant is
tested quarterly. The non-fi nancial covenants include limita-
tions on liens, cross defaults, subsidiary debt, mergers,
liquidations, asset dispositions and acquisitions. As of
December 31, 2006, we were in compliance with our cove-
nants under the Amended Credit Agreement.
Our borrowings under this facility, which have not been
guaranteed by any of our subsidiaries, are unsecured and
will rank on parity in right of payment with all of our other
unsecured and unsubordinated indebtedness from time to
time outstanding. This facility restricts our ability to pay
cash dividends on our capital stock or repurchase capital
stock if the total amount of such payments in any fi scal year
would exceed 20 percent of our consolidated total assets,
measured as of the end of the preceding fi scal year.
At December 31, 2006, interest was payable on bor-
rowings under the existing credit facility at the base rate
or London Interbank Offered Rate (“LIBOR”) plus a spec-
ifi ed margin or competitive bid option as selected by us
from time to time. The annual facility fee, which we pay
regardless of borrowings, and interest rate are subject to
adjustment based on our debt ratings. As of December 31,
2006, $475.0 million was available for borrowings and
there were outstanding borrowings of $25.0 million under
this facility, which is included in long-term debt on our
Consolidated Balance Sheet.
While the underlying fi nal maturity date of this facility
is July 2011, it is structured to provide borrowings under
short-term loans. Since these borrowings have a contrac-
tual maturity of thirty days, the borrowings and repayments
are presented on a net basis within the fi nancing activities
portion of our Consolidated Statements of Cash Flows as
net (repayments) borrowings under long-term revolving
credit facilities.
Trade Receivables-Backed Revolving Credit Facility. We are
party to a trade receivables-backed, revolving credit facility
under which a wholly-owned subsidiary of Equifax may
borrow up to $125.0 million, subject to borrowing base
availability and other terms and conditions, for general cor-
porate purposes. The amended credit facility is scheduled to
expire on November 29, 2007, with the option to extend the
term for an additional period of up to one year if specifi ed
conditions are satisfi ed. Borrowings bear interest at com-
mercial paper rates, LIBOR or Base Rate plus a specifi ed
margin. We pay a commitment fee based on an annual rate
of 15.0 basis points on any unused portion of this facility.
Outstanding debt under the facility is consolidated on
our Balance Sheets for fi nancial reporting purposes. Based
on the calculation of the borrowing base applicable at
December 31, 2006, $19.4 million was available for borrow-
ing and $80.0 million was outstanding under this facility,
which is included in short-term debt and current maturities
on our Consolidated Balance Sheet.
At December 31, 2006 and 2005, $137.1 million and
$126.2 million of net accounts receivable, respectively, had
been transferred to our wholly-owned subsidiary and are
included in accounts receivable in our Consolidated
Balance Sheets.
Canadian Credit Facility. We are a party to a credit agree-
ment with a Canadian fi nancial institution that provides for
a C$25.0 million (denominated in Canadian dollars), 364-
day revolving credit agreement which was scheduled to expire
on September 30, 2006. During the third quarter of 2006,
however, we renewed this facility through September 30,
2007. We pay a commitment fee based on an annual rate of
10.0 basis points on any unused portion of this facility. During
the twelve months ended December 31, 2006 and 2005,
there was no activity under this facility. At December 31,
2006 and 2005, there were no outstanding borrowings
under this facility.