Equifax 2009 Annual Report Download - page 30

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
Off-Balance Sheet Transactions from continuing to meet our liquidity needs, which are primarily
We do not engage in off-balance sheet financing activities. funded from cash flows generated by operating activities, available
cash and cash equivalents, and our credit facilities.
Pursuant to the terms of the industrial revenue bonds, we trans-
ferred title to certain of our fixed assets with costs of $35.7 million For our non-U.S., tax-qualified retirement plans, we fund an amount
and $28.4 million, as of December 31, 2009 and 2008, respectively, sufficient to meet minimum funding requirements but no more than
to a local governmental authority in the U.S. to receive a property allowed as a tax deduction pursuant to applicable tax regulations.
tax abatement related to economic development. The title to these For the non-qualified supplementary retirement plans, we fund the
assets will revert back to us upon retirement or cancellation of the benefits as they are paid to retired participants, but accrue the
applicable bonds. These fixed assets are still recognized in the associated expense and liabilities in accordance with GAAP.
Company’s Consolidated Balance Sheets as all risks and rewards
remain with the Company. For additional information about our benefit plans, see Note 9 of the
Notes to Consolidated Financial Statements in this report.
Letters of Credit and Guarantees
We will from time to time issue standby letters of credit, perform- Seasonality
ance bonds or other guarantees in the normal course of business. We experience seasonality in certain of our revenue streams. Reve-
The aggregate notional amount of all performance bonds and nue generated from The Work Number business unit within the
standby letters of credit was not material at December 31, 2009, TALX operating segment is generally higher in the first quarter due
and all have a remaining maturity of one year or less. Guarantees primarily to the provision of Form W-2 preparation services which
are issued from time to time to support the needs of our operating occur in the first quarter each year. Revenue from our OCIS and
units. The maximum potential future payments we could be required Mortgage Solutions business units tends to increase in periods of
to make under the guarantees is not material at December 31, the year in which our customers have higher volumes of credit
2009. granting decisions, most commonly the second and third calendar
quarters.
Benefit Plans
Prior to December 31, 2009, we had one non-contributory qualified Effects of Inflation and Changes
retirement plan covering most U.S. salaried employees (the in Foreign Currency Exchange Rates
Equifax Inc. Pension Plan, or EIPP), a qualified retirement plan that Equifax’s operating results are not materially affected by inflation,
covered U.S. salaried employees (the U.S. Retirement Income Plan, although inflation may result in increases in the Company’s
or USRIP) who terminated or retired before January 1, 2005 and a expenses, which may not be readily recoverable in the price of ser-
defined benefit plan for most salaried and hourly employees in vices offered. To the extent inflation results in rising interest rates
Canada (the Canadian Retirement Income Plan, or CRIP). On and has other adverse effects upon the securities markets and upon
December 31, 2009, the plan assets and obligations of the EIPP the value of financial instruments, it may adversely affect the Com-
were merged with the USRIP. The USRIP remained as the sole U.S. pany’s financial position and profitability.
qualified retirement plan.
A significant portion of the Company’s business is conducted in
At December 31, 2009, the USRIP met or exceeded ERISA’s mini- currencies other than the U.S. dollar, and changes in foreign
mum funding requirements. In January 2010, we made a contribu- exchange rates relative to the U.S. dollar can therefore affect the
tion of $20.0 million to the USRIP. During the twelve months ended value of non-U.S. dollar net assets, revenues and expenses. Poten-
December 31, 2009 and 2007, we made contributions of $15.0 mil- tial exposures as a result of these fluctuations in currencies are
lion and $12.0 million, respectively, to the EIPP. We also contributed closely monitored. We generally do not mitigate the risks associated
$1.8 million to the CRIP during the twelve months ended Decem- with fluctuating exchange rates, although we may from time to time
ber 31, 2009. The Equifax Employee Benefits Trust contributed through forward contracts or other derivative instruments hedge a
$12.5 million to the EIPP upon dissolution of the Trust in 2009. In portion of our translational foreign currency exposure or exchange
the future, we will make minimum funding contributions as required rate risks associated with material transactions which are denomi-
and may make discretionary contributions, depending on certain cir- nated in a foreign currency.
cumstances, including market conditions and liquidity needs. We
believe additional funding contributions, if any, would not prevent us
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