Equifax 2002 Annual Report Download - page 31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
was primarily a result of our acquisition of Naviant and acqui-
sition of assets from CBC. Our acquisitions, net of cash acquired,
accounted for $321.2 million of total cash invested in 2002. Capital
expenditures exclusive of acquisitions totaled $55.8 million, which
principally represented development associated with key technol-
ogy platforms in our businesses. We expect to generate free cash
flow in excess of $200.0 million in 2003, with capital expenditures
expected to range from $45.0 to $55.0 million.
In the third quarter of 2002, our $41.0 million note receivable asso-
ciated with the sale of our risk management collections business
in 2000 was completely paid.
In 2001, net cash used in investing activities totaled $106.5 mil-
lion, a decrease of $156.5 million compared to 2000. The decrease
was primarily the result of the fact that we were less acquisitive in
2001, focusing on our spin-off of Certegy. Capital expenditures,
exclusive of acquisitions and investments, amounted to $47.1 mil-
lion in 2001 compared to $71.9 million in 2000. Acquisitions and
investments, net of cash acquired, declined from $346.8 million in
2000 to $68.7 million in 2001, largely due to our acquisition of the
Consumer Information Solutions Group from R.L. Polk & Co. in
May 2000. These amounts were offset by cash proceeds generated
from the sale of businesses and other assets, which amounted to
$12.4 million in 2001 and $157.5 million in 2000, and are princi-
pally associated with the sale of our City Directory business in
2001 and the sale of our risk management collections and vehicle
information businesses in 2000.
FINANCING ACTIVITIES
Net cash provided by financing activities during 2002 totaled
$92.6 million, compared with net cash used in financing activities
during 2001 that totaled $325.5 million, and net cash provided by
financing activities during 2000 that totaled $16.4 million.
In 2002, we received $249.5 million in proceeds from the sale
of $250.0 million aggregate principal amount of our 4.95% senior
unsecured notes, which mature November 1, 2007. During 2002 we
invested $79.8 million to repurchase 2.9 million shares of our common
stock, and received $34.2 million in proceeds from the exercise of
stock options. At December 31, 2001, our remaining authorization for
share repurchases was approximately $45.0 million, and in February
2002, our Board of Directors approved an additional $250.0 million for
share repurchases. We also continued our 90-year history of paying
dividends, which totaled $11.4 million in 2002.
In 2001, we reduced our long-term debt $298.9 million through the
repayment of borrowings under our $465.0 million revolving credit
facility. Debt repayments were funded through operating cash
flows and the cash dividend received from Certegy in conjunction
with the spin-off. During 2001, we invested $42.3 million to repur-
chase 2.2 million shares of our common stock, up from $6.5 million
invested to repurchase shares in 2000, and we received $36.4 mil-
lion in proceeds from the exercise of stock options. Share repur-
chases were temporarily suspended in 2000 to enable us to apply
available cash to the repayment of debt incurred in connection with
our acquisition of the Consumer Information Services Group from
R.L. Polk & Co. in May 2000. In 2001, our payment of dividends
totaled $32.3 million, a decrease of $20.0 million compared to 2000,
due to a reduction of our quarterly dividend after the Certegy
spin-off from $0.093 to $0.02 per share.
We expect to increase the amount outstanding under our
$465.0 million credit facility in 2003 for purposes of retiring the
$200.0 million aggregate principal amount of our outstanding
6.5% senior unsecured notes that mature in June 2003.
CASH AND CASH EQUIVALENTS
Our cash and cash equivalents balance was $30.5 million and
$33.2 million at December 31, 2002 and 2001, respectively.
REVOLVING CREDIT FACILITIES
Our $465.0 million revolving credit facility, which we entered into
with Bank of America, N.A. and certain other lenders on October 4,
2001, provides for a variable interest rate tied to Base Rate, LIBOR
and competitive bid options. The weighted average interest rate of
borrowings outstanding under this facility was approximately
2.6% as of December 31, 2002. The credit facility consists of a
$160.0 million 364-day portion and a $305.0 million multi-year
portion which expire on October 2, 2003 and October 4, 2004,
respectively. The agreement governing this facility contains vari-
ous covenants and restrictions, including, among other things,
limitations on liens, subsidiary debt, mergers, liquidation, asset
dispositions, acquisitions, and maintenance of certain financial
covenants. 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. As of
December 31, 2002, we had $443.2 million of borrowing capacity
available under our $465.0 million revolving credit facility.
One of our Canadian subsidiaries has an unsecured, 364-day
C$100.0 million revolving credit facility that will expire in October
2003. The agreement provides for borrowings tied to Prime, Base
Rate, LIBOR and Canadian Bankers’ Acceptances, and contains
financial covenants related to interest coverage, funded debt to
cash flow, and limitations on subsidiary indebtedness. We have
guaranteed the indebtedness of our Canadian subsidiary under
this facility. As of December 31, 2002, U.S. $34.3 million of
borrowing capacity was available under this credit facility.
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