Equifax 2008 Annual Report Download - page 23

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Our general corporate expenses are costs that are incurred most significant sources of liquidity. Despite the capital mar-
at the corporate level and include those expenses kets turmoil that emerged in September 2008, which had an
impacted by corporate direction, such as shared services, adverse impact on our ability to utilize commercial paper as
administrative, legal, equity compensation costs and a source of funds in the fourth quarter, we continue to have
restructuring expenses. General corporate expenses for access to short-term liquidity through our Senior Credit Facil-
2008, as compared to 2007, increased primarily as a result ity. Conditions have improved and we have returned to utili-
of a $16.8 million restructuring and asset write-down zation of our commercial paper program since year end;
charge during 2008, which consisted of a $10.3 million however, if conditions were to deteriorate, we are able to rely
charge related to headcount reductions, a $4.1 million on our Senior Credit Facility, which does not mature until
charge associated with certain contractual costs and a July 2011. At December 31, 2008, we had $427.0 million
$2.4 million software write-down charge, all related to our available to borrow on our Senior Credit Facility. Based on
business realignment. This increase was partially offset by information available to us, we have no indication that the
reduced incentive costs, litigation and payroll tax. We financial institutions included in our Senior Credit Facility
expect an additional workforce reduction charge of $6 mil- would be unable to fulfill their commitments as of the filing
lion to $8 million in the first quarter of 2009. date of our 2008 Form 10-K. Additionally, our Senior Credit
Facility does not include a provision under which lenders
The 2007 increase in general corporate expense, as com- could refuse to allow us to borrow under this facility in the
pared to 2006, was primarily driven by our acquisition of event of a material adverse change in our financial condition
TALX; higher litigation costs; expansion of corporate capa- as long as we are in compliance with the covenants in the
bilities in key support areas, including marketing; and agreement. We believe that funds generated from expected
expenditures to enhance certain technology processes and results of operations and available cash and cash equiva-
development capabilities to support continued long-term lents will be sufficient to finance our anticipated working cap-
growth and operating efficiency. ital and other cash requirements (such as capital expendi-
tures, interest payments, potential pension funding
LIQUIDITY AND FINANCIAL CONDITION contributions, dividend payments and stock repurchases, if
any) for the foreseeable future.
Management assesses liquidity in terms of our ability to
generate cash to fund operating, investing and financing If the capital and credit markets continue to experience
activities. We continue to generate substantial cash from volatility and the availability of funds remains limited in
operating activities and remain in a strong financial position, 2009, we could incur increased costs associated with issu-
with resources available for reinvestment in existing busi- ing commercial paper and/or other debt instruments. In
nesses, strategic acquisitions and managing our capital addition, it is possible that our ability to access the capital
structure to meet short- and long-term objectives. and credit markets may be limited by these or other factors
at a time when we would like, or need, to do so, which
Sources and Uses of Cash could have an impact on our ability to react to changing
economic and business conditions. See further discussion
Funds generated by operating activities, available cash and of our borrowings and credit facility availability below.
cash equivalents, and our credit facilities continue to be our
Information about our cash flows, by category, is presented in the consolidated statement of cash flows. The following
table summarizes our cash flows for the twelve months ended December 31, 2008, 2007 and 2006:
Net cash provided by (used in): Twelve Months Ended December 31, Change
2008 vs. 2007 2007 vs. 2006
(Dollars in millions) 2008 2007 2006 $ % $ %
Operating activities $ 444.7 $ 449.9 $ 372.1 $ (5.2) (1)% $ 77.8 21%
Investing activities $ (141.6) $ (422.3) $ (86.8) $ 280.7 nm $ (335.5) nm
Financing activities $ (315.7) $ (17.6) $ (255.0) $ (298.1) nm $ 237.4 nm
nm — not meaningful
Operating Activities The 2007 increase in operating cash flow, as compared to
2006, was primarily due to incremental income from our
Cash provided by operations in 2008 of $444.7 million was TALX acquisition, revenue growth in our existing businesses
one percent less than 2007. Although 2008 net income and positive changes in our working capital, partially offset
was flat when compared to 2007, higher depreciation and by increased interest payments.
amortization expense and improved accounts receivable
collections were offset by year to year reductions in operat-
ing liabilities.
2008 ANNUAL REPORT 21