Equifax 2009 Annual Report Download - page 24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
LIQUIDITY AND FINANCIAL CONDITION potential pension funding contributions, dividend payments and
Management assesses liquidity in terms of our ability to generate stock repurchases, if any) for the foreseeable future. Since the
cash to fund operating, investing and financing activities. We con- beginning of 2009, credit market conditions have improved and we
tinue to generate substantial cash from operating activities and have primarily shifted our short-term borrowings to our commercial
remain in a strong financial position, with resources available for paper program. In the event that credit market conditions were to
reinvestment in existing businesses, strategic acquisitions and man- deteriorate, we would rely more heavily on borrowings as needed
aging our capital structure to meet short- and long-term objectives. under our Senior Credit Facility described below. At December 31,
2009, $707.5 million was available to borrow under our Senior
Credit Facility. Our Senior Credit Facility does not include a provision
Sources and Uses of Cash
under which lenders could refuse to allow us to borrow under this
Funds generated by operating activities and our credit facilities con-
facility in the event of a material adverse change in our financial
tinue to be our most significant sources of liquidity. We believe that
condition, as long as we are in compliance with the covenants con-
funds generated from expected results of operations will be suffi-
tained in the lending agreement.
cient to finance our anticipated working capital and other cash
requirements (such as capital expenditures, interest payments,
Information about our cash flows, by category, is presented in the consolidated statement of cash flows. The following table summarizes
our cash flows for the twelve months ended December 31, 2009, 2008 and 2007:
Net cash provided by (used in): Twelve Months Ended December 31, Change
2009 vs. 2008 2008 vs. 2007
(Dollars in millions) 2009 2008 2007 $% $ %
Operating activities $ 418.4 $ 448.1 $ 453.5 $ (29.7) (7)% $ (5.4) (1)%
Investing activities $ (270.1) $ (141.6) $ (422.3) $ (128.5) nm $ 280.7 nm
Financing activities $ (108.3) $ (319.1) $ (21.2) $ 210.8 nm $ (297.9) nm
nm — not meaningful
Operating Activities when compared to 2007, higher depreciation and amortization
The decrease in operating cash flow for 2009 was primarily driven expense and improved accounts receivable collections were offset
by $38.5 million of lower consolidated net income described above by year to year reductions in operating liabilities.
and $29.3 million of pension contributions in 2009 with no similar
payments made in 2008. These items were partially offset by year Fund Transfer Limitations. The ability of certain of our subsidiaries
to year increases in operating liabilities as reduced levels of accruals and associated companies to transfer funds to us is limited, in
in 2008 did not recur. some cases, by certain restrictions imposed by foreign govern-
ments; these restrictions do not, individually or in the aggregate,
Cash provided by operations in 2008 of $448.1 million was 1% less materially limit our ability to service our indebtedness, meet our cur-
than in 2007. Although 2008 consolidated net income was flat rent obligations or pay dividends.
Investing Activities
Net cash used in: Twelve Months Ended December 31, Change
(Dollars in millions) 2009 2008 2007 2009 vs. 2008 2008 vs. 2007
Capital expenditures $ 70.7 $ 110.5 $ 118.5 $ (39.8) $ (8.0)
Our capital expenditures are used for developing, enhancing and 2012, and improvements made to this facility. Capital expenditures
deploying new and existing software in support of our expanding in 2008 continued to be higher than the periods prior to 2007 due
product set, replacing or adding equipment, updating systems for to additional improvements to our data center. Capital expenditures
regulatory compliance, the licensing of software applications and in 2009 were less than 2008, as data center infrastructure improve-
investing in system reliability, security and disaster recovery ments were substantially completed in 2008. We expect capital
enhancements. During 2007, our capital expenditures included the expenditures in 2010 to be in the range of $75 million to $100 mil-
purchase of our data center facility in Atlanta, Georgia, for cash lion, as we continue to invest for growth.
consideration of approximately $30 million, as well as the assump-
tion of the prior owner’s $12.5 million mortgage obligation due in
22 EQUIFAX 2009 ANNUAL REPORT
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