Equifax 2000 Annual Report Download - page 42

"8.COMMITMENTS AND CONTINGENCIES
Leases The Company’s operating leases involve
principally office space and office equipment.
Rental expense relating to these leases was
$41,287,000 in 2000, $40,232,000 in 1999, and
$36,493,000 in 1998.
Future minimum payment obligations for non-
cancelable operating leases exceeding one
year are as follows as of December 31, 2000:
(In thousands) Amount
2001 $ 34,038
2002 25,185
2003 18,936
2004 15,590
2005 13,982
Thereafter 100,865
$208,596
Agreement with Computer Sciences
Corporation The Company has an agreement
with Computer Sciences Corporation and certain
of its affiliates (CSC) under which CSC-owned
credit reporting agencies utilize the Company’s
computerized credit database services. CSC
retains ownership of its credit files and the rev-
enues generated by its credit reporting activity.
The Company receives a processing fee for main-
taining the database and for each report sup-
plied. The initial term of the agreement expired
in July 1998 and was renewable at the option of
CSC for successive ten-year periods. CSC has
renewed the agreement for the ten-year period
beginning August 1, 1998. The agreement pro-
vides CSC with an option to sell its credit report-
ing businesses to the Company and provides the
Company with an option to purchase CSC’s
credit reporting businesses if CSC does not elect
to renew the agreement or if there is a change in
control of CSC while the agreement is in effect.
Both options expire in 2013. The option price is
determined by appraisal.
On November 25, 1997, CSC exercised an
option, also contained in the agreement, to
sell its collection businesses to the Company
at a purchase price of approximately $38 mil-
lion. Subsequent to November 25, 1997, the
Company determined that the fair value of the
business being sold (based on its estimated
discounted cash flows) was less than the con-
tractual purchase price because a major con-
tract expiring in 1998 would not be renewed.
Accordingly, in the fourth quarter of 1997,
the Company recorded a $25,000,000 charge
($14,950,000 after tax, or $.10 per share) to
reflect a valuation loss on this acquisition, with
a corresponding $25,000,000 liability included
in other current liabilities. This transaction was
finalized in the second quarter of 1998, and the
$25,000,000 liability was reclassified to reduce
the amount of goodwill recorded with the
acquisition. In October 1998, this business
was sold for approximately the carrying
amount of its net assets.
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