Equifax 2003 Annual Report Download - page 63

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS
60 EQUIFAX. INFORMATION THAT EMPOWERS.
our voting stock or the occurrence of certain other specified related
events. Also in the event of a “ change in control,“ our performance
share plan provides that all shares designated for future distribu-
tion will become fully vested and payable, subject to the achieve-
ment of certain levels of growth in earnings per share and certain
other criteria. At December 31, 2003, the maximum contingent
liability under the agreements and plans was approximately
$24.2 million.
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 performance
bonds and standby letters of credit is less than $5.0 million and
all have a maturity of less than one year. Guarantees are issued
from time to time to support the needs of operating 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 guaranteed the operating lease
payments of a partnership affiliated with RMA to a lender of the
partnership pursuant to a term loan. The operating lease, which
expires December 11, 2011, has a remaining balance of $9.6 mil-
lion based on the undiscounted value of remaining lease payments
at December 31, 2003. Our obligations under such guarantee 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 We are a defendant in a class action lawsuit filed during
April 2001 in the U.S. District Court of South Carolina captioned
Franklin Clark and Latanjala Denise M iller v. Equifax Inc. and
Equifax Credit Information Services, Inc. This action alleged that we
violated the Fair Credit Reporting Act (“ FCRA”) by failing to follow
reasonable procedures to assure maximum possible accuracy with
respect to the reporting of accounts included in a bankruptcy. All
parties have now reached a settlement of all claims that requires us
to revise the manner in which we report such accounts and to pay
fees to plaintiffs’ attorneys of up to $5,000,000. In January 2004,
the Court approved the settlement, but the amount of attorneys’
fees to be awarded remains to be determined.
In November 2001, the landlord of our former headquarters facility
brought an action, 1600 Peachtree, L.L.C. v. Equifax Inc., against
us in the Superior Court of Fulton County, Georgia, which asserts
claims related to our guaranty obligations under our lease termina-
tion agreement. This lawsuit seeks damages, of approximately
$28.0 million, substantially all of which represents future rent con-
tingencies, and punitive damages. On motions for summary judg-
ment, the Court ruled against our discharge defense and against
plaintiff’s fraud claim. Both parties are appealing these rulings.
We intend to vigorously pursue this appeal and to continue to
contest in the Superior Court the damages claimed by the plaintiff.
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 our results of operations or financial position, either individ-
ually 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.
12.RELATED PARTY TRANSACTIONS
We maintain lending, foreign exchange, debt underwriting, cash
management, trust, investment management, derivative counter-
party, and shareholder services relationships with SunTrust Banks,
Inc. (“SunTrust”) whom we consider a related party due to (a)
Phillip Humann, a member of our board of directors, currently is the
Chairman, President, and Chief Executive Officer of SunTrust, and
(b) William Dahlberg and Larry Prince, members of our board of
directors, are also directors of SunTrust. We paid $2.4 million and
$3.3 million to SunTrust for these services in 2003 and 2002, respec-
tively. We also provide credit management services to SunTrust, as
a customer, from whom we received $2.9 million and $2.5 million,
respectively, during the years 2003 and 2002, and had $0.2 million
and $0.1 million of corresponding outstanding receivables with, as
of December 31, 2003 and 2002, respectively. The relationships are
described more fully below:
• The revolving credit agreement is composed of a $305.0 million
multi-year portion which expires on October 4, 2004 and a $160.0
million 364-day portion which expires on September 30, 2004.
Total borrowings outstanding under the 364-day and multi-year
portion of this facility were $21.8 million at December 31, 2002
and $137.1 million at December 31, 2003.
• As of December 31, 2002 and December 31, 2003, SunTrust
provided Equifax Inc. a $100.0 million committed portion of our
$465.0 million U.S. revolving credit agreement. SunTrust’s total
commitment of $100.0 million at December 31, 2002 and
December 31, 2003 was allocated 65.6% ($65.6 million) to
the multi-year portion and 34.4% ($34.4 million) to the 364-day
portion. Total borrowings outstanding under SunTrust’s 364-day