Equifax 2002 Annual Report Download - page 63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Guarantees We will from time to time issue standby letters
of credit, performance bonds or other guarantees in the normal
course of business. The aggregate notional amount of all per-
formance bonds and standby of all letters of credit is less than
$15.0 million and all have a maturity of less than one year. Guar-
antees are issued from time to time to support the needs of oper-
ating units. The only outstanding guarantee that is not reflected
as a liability on our balance sheet was extended in connection
with the sale of our risk management collections business to RMA
Holdings, LLC (“RMA”) in October 2000, at which time we guaran-
teed the operating lease payments of a partnership affiliated with
RMA to a lender of the partnership pursuant to a term loan. The
term loan, which had $7.9 million outstanding as of December 31,
2002, expires December 1, 2011. Our obligations under such guar-
antee are not secured. We believe the likelihood of demand for
payment under these instruments is minimal and expect no material
losses to occur in connection with these instruments.
Subsidiary Dividends and Fund Transfers The ability of certain
of our subsidiaries and associated companies to transfer funds to
us is limited 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.
Litigation A number of lawsuits seeking damages are brought
against us each year, primarily as a result of reports issued by us. In
2002, a class of plaintiffs was recently certified in a lawsuit,
Franklin Clark and Latanjala Denise Miller v. Equifax Inc. and
Equifax Credit Information Services, Inc., which alleges that we
violated the Fair Credit Reporting Act by failing to follow reason-
able procedures to assure maximum possible accuracy with respect
to the reporting of accounts included in a bankruptcy. All parties
have reached an agreement to settle all claims, and the court has
preliminarily approved the settlement. The suit was filed in April
2000 and is pending in federal court in South Carolina. We do not
believe the final settlement will be material to our operations or
financial condition.
In addition, in 1600 Peachtree, L.L.C. v. Equifax Inc. the Plaintiff
alleges breach of a guaranty agreement relating to our prior head-
quarters building, and seeks damages of approximately $43.0 mil-
lion, substantially all of which represents future rent contingencies.
We contend that the guaranty is void and intend to vigorously
defend the matter. A related lawsuit based on the same facts,
SouthTrust Bank f/k/a SouthTrust Bank National Association
v. Equifax Inc., has been dismissed for lack of standing.
We are involved in other lawsuits, claims and proceedings as
is normal in the ordinary course of our business. Any possible
adverse outcome arising from these matters is not expected to
have a material impact on or resulted operations or financial
position, either individually or in the aggregate. However, our
evaluation of the likely impact of these pending lawsuits could
change in the future.
We provide for estimated legal fees and settlements relating to
pending lawsuits. In our opinion, the ultimate resolution of these
matters will not have a materially adverse effect on our financial
position, liquidity, or results of operations.
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