Equifax 2012 Annual Report Download - page 57

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Equifax 2012 Annual Report
If these change in control agreements had been triggered as of
December 31, 2012, payments of approximately $48.1 million would
have been made (excluding tax gross-up amounts of $26.6 million).
Under the Company’s existing director and employee stock benefit
plans, a change in control generally would result in the immediate
vesting of all outstanding stock options and satisfaction of the restric-
tions on any outstanding nonvested stock awards.
Guarantees. We will from time to time issue standby letters of credit,
performance bonds or other guarantees in the normal course of busi-
ness. The aggregate notional amount of all performance bonds and
standby letters of credit is not material at December 31, 2012, and all
have a remaining maturity of one year or less. The maximum potential
future payments we could be required to make under the guarantees
is not material at December 31, 2012.
General Indemnifications. We are the lessee under many real estate
leases. It is common in these commercial lease transactions for us,
as the lessee, to agree to indemnify the lessor and other related
third parties for tort, environmental and other liabilities that arise out
of or relate to our use or occupancy of the leased premises. This type
of indemnity would typically make us responsible to indemnified par-
ties for liabilities arising out of the conduct of, among others,
contractors, licensees and invitees at or in connection with the use or
occupancy of the leased premises. This indemnity often extends to
related liabilities arising from the negligence of the indemnified parties,
but usually excludes any liabilities caused by either their sole or gross
negligence and their willful misconduct.
Certain of our credit agreements include provisions which require us
to make payments to preserve an expected economic return to the
lenders if that economic return is diminished due to certain changes
in law or regulations. In certain of these credit agreements, we also
bear the risk of certain changes in tax laws that would subject pay-
ments to non-U.S. lenders to withholding taxes.
In conjunction with certain transactions, such as sales or purchases
of operating assets or services in the ordinary course of business, or
the disposition of certain assets or businesses, we sometimes
provide routine indemnifications, the terms of which range in duration
and sometimes are not limited.
The Company has entered into indemnification agreements with its
directors and executive officers. Under these agreements, the
Company has agreed to indemnify such individuals to the fullest
extent permitted by law against liabilities that arise by reason of their
status as directors or officers and to advance expenses incurred by
such individuals in connection with the related legal proceedings. The
Company maintains directors and officers liability insurance coverage
to reduce its exposure to such obligations.
We cannot reasonably estimate our potential future payments under
the indemnities and related provisions described above because we
cannot predict when and under what circumstances these provisions
may be triggered. We have no accrual related to indemnifications on
our Consolidated Balance Sheets at December 31, 2012 and 2011.
Subsidiary Dividend and Fund Transfer Limitations. The ability of
some 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 cur-
rent obligations or pay dividends.
Contingencies. We are involved in legal proceedings, claims and
litigation arising in the ordinary course of business. We periodically
assess our exposure related to these matters based on the informa-
tion which is available. We have recorded accruals in our
Consolidated Financial Statements for those matters in which it is
probable that we have incurred a loss and the amount of the loss, or
range of loss, can be reasonably estimated.
We also accrue for unpaid legal fees for services performed to date.
Although the final outcome of these other matters cannot be
predicted with certainty, any possible adverse outcome arising from
these matters is not expected to have a material impact on our
Consolidated Financial Statements, either individually or in the
aggregate. However, our evaluation of the likely impact of these mat-
ters may change in the future.
Tax Matters. In 2003, the Canada Revenue Agency, or CRA, issued
Notices of Reassessment, asserting that Acrofax, Inc., a wholly-
owned Canadian subsidiary of Equifax, was liable for additional tax
for the 1995 through 2000 tax years, related to certain intercompany
capital contributions and loans. Subsequently in 2003, we made a
statutorily-required deposit for a portion of the claim. On May 31,
2011, we settled this CRA claim for $1.1 million (1.1 million in
Canadian dollars) and received a net refund of the deposit and
accrued interest in the amount of $9.9 million (9.7 million in
Canadian dollars).