Equifax 2006 Annual Report Download - page 39

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EQUIFAX 2006 ANNUAL REPORT 37
Long-Term Revolving Credit Facilities. Net (repayments)
borrowings under long-term revolving credit facilities dur-
ing the twelve months ended December 31, 2006, 2005
and 2004 were ($40.0) million, $65.0 million, and
($138.0) million, respectively. This activity relates to our
$500.0 million senior unsecured revolving credit agree-
ment (“Existing Credit Agreement”). On July 24, 2006, we
amended and restated the Existing Credit Agreement.
Under the Amended and Restated Credit Agreement (the
“Amended Credit Agreement”), among other provisions,
the term was extended from August 20, 2009 to July 24,
2011, the applicable margin for borrowings and the
annual facility fee were lowered, the maximum leverage
ratio (as defi ned in the Amended Credit Agreement) was
increased from 3.0 to 1 to 3.5 to 1, and a minimum inter-
est coverage ratio was deleted. The Amended Credit
Agreement may be used for working capital and other
general corporate purposes.
The Amended Credit Agreement also includes an “accor-
dion” feature that will allow us to request an increase of up to
$500.0 million in the maximum borrowing commitment,
which cannot exceed $1.0 billion. Each member of the lend-
ing group may elect to participate or not participate in any
request we make to increase the maximum borrowing com-
mitment. In addition, any increase in the borrowing com-
mitment pursuant to this accordion feature is subject to
certain terms and conditions, including the absence of an
event of default. The increased borrowing commitment may
be used for general corporate purposes. We are permitted
and intend to request an increase in the borrowing limit
under the accordion feature of this credit facility effective
upon the completion of our acquisition of TALX.
At December 31, 2006, interest was payable on bor-
rowings under the Amended Credit Agreement at the base
rate or London Interbank Offered Rate (“LIBOR”) plus a
specifi ed margin or competitive bid option as selected by
us from time to time. The annual facility fee and interest
rate are subject to adjustment based on our debt ratings.
As of December 31, 2006, $475.0 million was available for
borrowings and there were outstanding borrowings of
$25.0 million under this facility, which is included in
long-term debt on our Consolidated Balance Sheet.
Canadian Credit Facility. We are a party to a credit agree-
ment with a Canadian fi nancial institution that provides for a
C$25.0 million (denominated in Canadian dollars), 364-day
revolving credit agreement which was scheduled to expire
on September 30, 2006. During the third quarter of 2006,
however, we renewed this facility through September 30,
2007. At December 31, 2006, there were no outstanding
borrowings under this facility.
Payments on Long-Term Debt. There were no material
payments on long-term debt during the twelve months
ended December 31, 2006 and 2004, respectively. During
the twelve months ended December 31, 2005, we redeemed
the $250.0 million principal amount relating to our 6.3%
senior unsecured notes by utilizing borrowings under cer-
tain revolving credit facilities.
Other. At December 31, 2006, 79% of our debt was fi xed-
rate debt and 21% was variable-rate debt. Our variable-
rate debt consists of the previously mentioned revolving
credit facilities and generally bears interest based on a
specifi ed margin plus a base rate, LIBOR or commercial
paper rate. The interest rates reset periodically, depending
on the terms of the respective fi nancing arrangements. At
December 31, 2006, interest rates on substantially all of
our variable-rate debt ranged from 5.6% to 5.7%. We were
in compliance with all of our fi nancial and non-fi nancial
debt covenants at December 31, 2006. We do not antici-
pate any covenant compliance issues if our acquisition of
TALX is consummated as presently structured.
On February 15, 2007, Standard & Poor’s Corporation
downgraded our senior unsecured long-term fi xed debt
rating from A- to BBB+ in reaction to our public announce-
ment of the agreement to acquire TALX Corporation and
an additional $400 million share repurchase program, due
to its belief that the acquisition refl ects a somewhat more
aggressive fi nancial policy and more leveraged fi nancial pro-
fi le. S&P’s rating outlook remained stable. On February 16,
2007, Moody’s Investors Service changed our rating outlook
to stable from positive but maintained its Baa1 rating on
our senior unsecured long-term fi xed debt.
For additional information about our debt, including
the terms of our fi nancing arrangements, basis for variable
interest rates and debt covenants, see Note 5 of the Notes to
Consolidated Financial Statements.
Equity Transactions
Sources and uses of cash related to equity during the twelve
months ended December 31, 2006, 2005 and 2004 were
as follows:
Share Repurchase Program. Under the stock repurchase
program authorized by our Board of Directors, we pur-
chased 6.0 million, 4.2 million and 5.4 million common
shares on the open market during the twelve months ended
December 31, 2006, 2005 and 2004, respectively, for
$212.7 million, $144.0 million and $138.0 million, respec-
tively, at an average price per common share of $35.64,
$34.45, and $25.57, respectively. At December 31, 2006,
the amount available for future share repurchases under
this program was $132.6 million. In February 2007, our
Board of Directors amended the plan to authorize an addi-
tional repurchase of $650.0 million of our common stock;
$400 million of such repurchase authorization is contin-
gent on the closing of our previously described pending
acquisition of TALX.