Equifax 2004 Annual Report Download - page 76

74
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
12.฀SALE฀OF฀INVESTMENT฀IN฀INTERSECTIONS฀INC.
On May 5, 2004, Equifax, through its wholly owned sub-
sidiary CD Holdings, Inc., completed the sale of 3,755,792
shares of common stock it owned in Intersections Inc., a
provider of identity theft protection and credit manage-
ment services, in an underwritten public offering of com-
mon stock for net proceeds of $59.4 million. Immediately
prior to the public offering, CD Holdings converted a
$20.0 million senior secured convertible note issued to it
by Intersections in November 2001 into 3,755,792 shares
of Intersections common stock, or approximately 26.9%
of Intersections’ outstanding stock. The book value of our
investment in Intersections was $22.3 million, including
accrued interest of $2.3 million. In the second quarter of
2004, we recorded, net of income taxes of $13.8 million,
a net gain of $23.0 million or $0.17 per diluted share.
13.฀RELATED฀PARTY฀TRANSACTIONS
We maintain lending, foreign exchange, debt underwriting,
cash management, trust, investment management, acquisi-
tion valuation, derivative counterparty and shareholder ser-
vices relationships with SunTrust Banks, Inc. (“SunTrust”)
whom we consider a related party due to (a) L. Phillip
Humann, a member of our Board of Directors, currently is
the Chairman, President, and Chief Executive Offi cer of
SunTrust, and (b) Larry L. Prince, member of our Board
of directors, is a director of SunTrust. We paid SunTrust
$2.8 million, $2.4 million and $3.3 million respectively dur-
ing the years 2004, 2003 and 2002 for these services. We
also provide credit management services to SunTrust, as a
customer, from whom we received $4.3 million, $2.9 mil-
lion and $2.5 million, respectively during the years 2004,
2003 and 2002, and had $0.3 million and $0.2 million
of corresponding outstanding receivables with, as of at
December 31, 2004 and 2003, respectively. Our relation-
ships with SunTrust are described more fully below:
• On August 20, 2004, Equifax Inc. entered into a new
fi ve-year $500.0 million senior unsecured revolving credit
agreement with a group of banks. This facility replaced a
prior $465.0 million revolving credit agreement which was
composed of a $305.0 million multi-year portion, scheduled
to expire on October 4, 2004, and a $160.0 million 364-day
portion, which would have expired on September 30, 2004.
As of December 31, 2004, no borrowings were outstand-
ing under the new $500.0 million credit facility. Borrowings
outstanding under the prior $465.0 revolving credit facility
totaled $137.1 million at December 31, 2003.
• SunTrust Bank (“SunTrust”), a subsidiary of SunTrust
Banks, Inc., is the Administrative Agent for the aforemen-
tioned new $500.0 million revolving credit agreement and
also provides a $92.5 million committed portion of that facil-
ity. SunTrust Robinson Humphrey, a division of SunTrust
Capital Markets, Inc., served as Joint Lead Arranger
of the new facility. SunTrust Capital Markets, Inc. is a
subsidiary of SunTrust Banks, Inc. As of December 31,
2003, SunTrust provided us a $100.0 committed portion
of the prior $465.0 million U.S. revolving credit agree-
ment. SunTrust’s total commitment of $100.0 million at
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 and multi-year portions of this facility
were $29.5 million at December 31, 2003.
• SunTrust extends fi nancing in the form of an amortiz-
ing term loan to a leveraged real estate limited partner-
ship which owns our Atlanta data center located in
Alpharetta, Georgia. We are the primary operating lease
tenant in the data center. An unrelated bank leasing com-
pany is the equity owner of this partnership. Although
this term loan is considered to be non-recourse fi nanc-
ing to Equifax, SunTrust is dependent on the operating
lease payments made by Equifax 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, 2004 and December 31, 2003, $21.5 million
and $24.3 million, respectively, were outstanding under
the term loan.
• SunTrust provides the $29.0 million synthetic lease facility
related to our Atlanta corporate headquarters building.
As of December 31, 2004 and December 31, 2003, the
amount of this facility was $29.0 million.
• SunTrust provides investment management services for
our USRIP through two of its subsidiaries, Trusco Capital
and the Lighthouse Group. As of December 31, 2004
and December 31, 2003, a total of $48.4 million and
$37.6 million, respectively, of USRIP assets were man-
aged by these two subsidiaries of SunTrust.
• During 2004 and 2003, SunTrust was the counterparty on
$90.0 million, notional value, of interest rate swaps with
Equifax Inc.