Equifax 2003 Annual Report Download - page 64

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS
EQUIFAX. INFORMATION THAT EMPOWERS. 61
and multi-year portions of this facility were $4.7 million at
December 31, 2002 and $29.5 million at December 31, 2003.
• Additionally, SunTrust extends financing in the form of an amor-
tizing term loan to a leveraged real estate limited partnership
which owns Equifax’s Atlanta data center located in Alpharetta,
Georgia. Equifax Inc. is the primary operating lease tenant in
the data center. An unrelated bank leasing company is the equity
owner of this partnership. Although this term loan is considered
to be non-recourse financing to Equifax Inc., SunTrust is depend-
ent on the operating lease payments made by Equifax Inc. to the
partnership to service interest expense and amortize principal on
the term loan’s debt. The term loan is fully amortized in 2012. As
of December 31, 2002 and December 31, 2003, $26.6 million and
$24.3 million, respectively, were outstanding under the term loan.
• SunTrust also provides the $29.0 million synthetic lease facility
related to our Atlanta corporate headquarters building. As of
December 31, 2002 and December 31, 2003, the amount of this
facility was $29.0 million.
• SunTrust provides investment management services for
Equifax Inc.’s U.S. defined benefits plan (USRIP) through two
of its subsidiaries, Trusco Capital and the Lighthouse Group.
As of December 31, 2002 and December 31, 2003, a total of
$30.2 million and $37.6 million, respectively, of USRIP assets
were managed by these two subsidiaries of SunTrust.
• During 2002 and 2003, SunTrust was the counterparty on
$90.0 million, notional value, of interest rate swaps with
Equifax Inc.
Bank of America, N.A. (“B of A”), through its various subsidiaries,
provides Equifax Inc. and our subsidiaries cash management, foreign
exchange, lending, and debt underwriting services. We consider B of
A a related party because Jacquelyn Ward, a member of our board
of directors, is also a director of B of A. We paid $0.8 million and
$2.0 million, to B of A for these services in 2003 and 2002, respec-
tively. We also provide credit management services to B of A, as a
customer, from whom we received $15.3 million and $11.2 million,
respectively, during the years 2003 and 2002, and had $1.7 million
and $1.6 million of corresponding outstanding receivables with, as
of December 31, 2003 and 2002, respectively. The relationships
are described more fully below:
• As of December 31, 2002 and December 31, 2003, B of A served
as the Administrative Agent on Equifax Inc.’s $465.0 million
revolving credit agreement, and provided Equifax Inc. a $100.0
million committed portion of that facility. B of A’s total commit-
ment 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 B of A’s 364-day and multi-year
portions of this facility were $4.7 million at December 31, 2002
and $29.5 million at December 31, 2003.
• B of A also extends an uncommitted $25.0 million working
capital line of credit to Equifax Inc. The facility is cancelable at
the discretion of either party. The uncommitted working capital
line, at December 31, 2002 and December 31, 2003, had out-
standing balances of $3.4 million and $5.4 million, respectively.
• During December 31, 2002 and December 31, 2003, B of A was
the counterparty on $124.0 million, notional value, of interest
rate swaps with Equifax Inc.
We have maintained a cross-services arrangement with Intersec-
tions, Inc. (“Intersections”), whom we consider a related party
because our Chief Financial Officer, Don Heroman, is a member of
Intersections board of directors. We provide to, and purchase from,
Intersections, consumer direct services (primarily identity theft
protection products) and credit management services (primarily
credit files and portfolio reviews). Fees received from Intersections
for services delivered and sold were $6.8 million and $4.6 million,
respectively for the years 2003 and 2002. Fees paid for services
purchased from Intersections, were $4.3 million and $0.1 million,
respectively, for the years 2003 and 2002. We had $1.2 million and
$1.4 million in outstanding accounts receivable from Intersections,
respectively, at December 31, 2003 and 2002. We had no outstand-
ing accounts payable due to Intersections at December 31, 2003
or 2002.
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for 2003 and 2002 are as follows
(in millions, except per share amounts):
2003 First Second Third Fourth
Operating revenue $301.6 $317.0 $309.8 $297.0
Operating income $ 80.7 $ 85.3 $ 88.9 $ 57.2*
Income from continuing
operations $ 45.1 $ 49.3 $ 52.8 $ 31.3*
Net income $ 43.8 $ 41.9 $ 51.2 $ 28.0*
Per Common Share (Basic):
Income from continuing
operations $ 0.33 $ 0.36 $ 0.39 $ 0.24
Net income $ 0.32 $ 0.31 $ 0.38 $ 0.21
Per Common Share (Diluted):
Income from continuing
operations $ 0.33 $ 0.36 $ 0.39 $ 0.23
Net income $ 0.32 $ 0.31 $ 0.38 $ 0.21
*Includes $30.6 million, $19.3 million net of tax, in asset impairment and
restructuring charges (see Note 6).