Equifax 2007 Annual Report Download - page 42

40 EQUIFAX | 2007 ANNUAL REPORT
Sources and Uses of Cash
Our principal sources of funds are cash provided by operating activities and various fi nancing programs, including our revolving credit
facility and commercial paper program. We believe that these sources will be suffi cient to meet our projected cash requirements, including
working capital requirements, capital expenditures, scheduled debt payments, interest payments, benefi t plan contributions, income tax
obligations, dividends to our shareholders, share repurchases and any acquisitions, for the next twelve months and the foreseeable future
thereafter. Information about our cash fl ows, by category, is presented in the consolidated statement of cash fl ows.
Twelve Months Ended December 31, Change
Net cash provided by (used in): 2007 vs. 2006 2006 vs. 2005
(Dollars in millions) 2007 2006 2005 $ % $ %
Operating activities $ 449.9 $ 372.1 $ 337.8 $ 77.8 21% $ 34.3 10%
Investing activities $(422.3) $ (86.8) $(157.9) $(335.5) nm $ 71.1 nm
Financing activities $ (17.6) $(255.0) $(193.5) $ 237.4 nm $(61.5) nm
nm - not meaningful
The 2007 increase in operating cash fl ow was primarily due to
incremental income from our TALX acquisition, revenue growth in
our existing businesses, and positive changes in our working capital,
partially offset by increased interest payments. The 2006 increase
was primarily due to the $28.0 million increase in net income.
Fund Transfer Limitations. The ability of certain of our subsidiaries
and associated companies to transfer funds to us is limited, in some
cases, by certain restrictions imposed by foreign governments,
which do not, individually or in the aggregate, materially limit our
ability to service our indebtedness, meet our current obligations
or pay dividends.
Capital Expenditures
Net cash used in: Twelve Months Ended December 31, Change
(Dollars in millions) 2007 2006 2005 2007 vs. 2006 2006 vs. 2005
Capital expenditures $118.5 $52.0 $46.2 $66.5 $5.8
Our capital expenditures are used for developing, enhancing and
deploying new and existing software in support of our expanding
product set, replacing or adding equipment, updating systems for
regulatory compliance, the licensing of software applications and
investing in system reliability, security and disaster recovery
enhancements. During 2007, our capital expenditures increased due
to the purchase of the facility which houses our Atlanta, Georgia
data center. We expect capital expenditures in 2008 to be within a
range of $125.0 million to $150.0 million.
Acquisitions
Net cash used in: Twelve Months Ended December 31, Change
(Dollars in millions) 2007 2006 2005 2007 vs. 2006 2006 vs. 2005
Acquisitions, net of cash acquired $300.0 $34.4 $121.8 $265.6 $(87.4)
TALX Acquisition. On May 15, 2007, we acquired all the
outstanding shares of TALX. Under the terms of the transaction,
we issued 20.6 million shares of Equifax treasury stock and
1.9 million fully-vested options to purchase Equifax common
stock, and paid approximately $288.1 million in cash, net of cash
acquired. We also assumed TALX’s outstanding debt, which had
a fair value totaling $177.6 million at May 15, 2007. We fi nanced
the cash portion of the acquisition and $96.6 million outstanding
on the TALX revolving credit facility at the date of acquisition
initially with borrowings under our $850.0 million senior unsecured
credit facility, which we refer to as the Senior Credit Facility, and
subsequently refi nanced this debt in the second quarter of 2007 with
ten- and thirty-year notes. Subsequent to the date of the acquisition,
we paid $4.1 million to the former owners of a company purchased
by TALX pursuant to an earn-out agreement.
Acquisition of Credit Reporting Business. On October 19, 2007,
in order to continue to grow our credit data business, our Peruvian
subsidiary purchased 100% of the stock of a credit reporting
business located in Peru for cash consideration of approximately
$8.0 million.
Austin-Tetra Acquisition. On October 6, 2006, we acquired
Austin Consolidated Holdings, Inc., known as Austin-Tetra, for
$34.4 million in cash. Austin-Tetra is a provider of business-to-
business data management and enhancement services to the
commercial market.
2005 Acquisitions. In March 2005, we acquired APPRO Systems,
Inc. to broaden and further strengthen our enabling technologies
capabilities in our USCIS business. Additionally, in August 2005,