Equifax 2010 Annual Report Download - page 23

Our general corporate expenses are costs that are incurred at the
corporate level and include those expenses impacted by corporate
direction, such as shared services, administrative, legal, equity
compensation costs and restructuring expenses. General corporate
expenses decreased for 2010, as compared to 2009, primarily as a
result of $24.8 million of restructuring charges recorded in 2009 that
did not recur in 2010. This was partially offset by increased salary,
benefit and incentive costs, upgrades in shared corporate technol-
ogy, and acquisition-related expenses.
General corporate expenses decreased slightly for 2009, as
compared to 2008, primarily as a result of reduced incentive costs,
lower legal and professional fees and reduced occupancy costs. This
was partially offset by $8.0 million of additional restructuring charges
recorded during 2009, as well as increased insurance costs. Total
2009 restructuring charges of $24.8 million related primarily to head-
count reductions.
LIQUIDITY AND FINANCIAL CONDITION
Management assesses liquidity in terms of our ability to generate
cash to fund operating, investing and financing activities. We continue
to generate substantial cash from operating activities and remain in a
strong financial position, with resources available for reinvestment in
existing businesses, strategic acquisitions and managing our capital
structure to meet short- and long-term objectives.
Sources and Uses of Cash
Funds generated by operating activities and our credit facilities
continue to be our most significant sources of liquidity. We believe
that funds generated from expected results of operations will be
sufficient to finance our anticipated working capital and other cash
requirements (such as capital expenditures, interest payments,
potential pension funding contributions, dividend payments and
stock repurchases, if any) for the foreseeable future. Since the
beginning of 2009, credit market conditions have improved and we
have primarily shifted our short-term borrowings to our commercial
paper program. In the event that credit market conditions were to
deteriorate, we would rely more heavily on borrowings as needed
under our Senior Credit Facility described below. At December 31,
2010, $848.3 million was available to borrow under our Senior Credit
Facility. Our Senior Credit Facility does not include a provision under
which lenders could refuse to allow us to borrow under this facility in
the event of a material adverse change in our financial condition, as
long as we are in compliance with the covenants contained in the
lending agreement.
On February 18, 2011, we extended the maturity date and reduced
the borrowing limits of our existing unsecured revolving credit facility
dated as of July 24, 2006, as amended (the Senior Credit Facility)
with a group of lenders by entering into a Second Amended and
Restated Credit Agreement dated as of February 18, 2011 (the
‘‘Amended Agreement’’). The Senior Credit Facility had been
scheduled to expire on July 24, 2011, and provided $850 million of
borrowing capacity. The Amended Agreement provides for a maturity
date of February 18, 2015. We elected to reduce the size of the facil-
ity to $500 million in line with our liquidity needs and reflecting credit
market conditions, including higher upfront fees and fees for unused
borrowing availability. The Amended Agreement also provides an
accordion feature that allows us to request an increase in the total
commitment amount to $750 million should we so choose. We
added certain of our subsidiaries in Canada and Luxembourg as co-
borrowers in addition to the Company and our U.K. subsidiary to
provide additional flexibility as to the place of borrowing.
The Amended Agreement revises certain other terms of the existing
credit agreement, including pricing, to reflect current market condi-
tions. The pricing grid for the Senior Credit Facility, which is based on
our applicable credit ratings at the time of any borrowing, was
increased. Based on our current credit ratings, the unused facility fee
as of the closing date increased from 8 to 20 basis points, and the
margin for base rate or LIBOR rate loans and letters of credit as of
the closing date increased from 32 to 150 basis points. The
Amended Agreement did not change the existing financial covenant
which requires us to maintain, on a rolling four quarter basis, a
maximum leverage ratio (the ratio of consolidated total funded debt to
consolidated EBITDA as defined in the Amended Agreement) not to
exceed 3.5 to 1.0. On February 18, 2011, we correspondingly
reduced the size of our commercial paper program (the CP Program),
which is supported by the Senior Credit Facility, from $850 million to
$500 million.
Fund Transfer Limitations. The ability of certain of our subsidiaries
and associated companies to transfer funds to us is limited, in some
cases, by certain restrictions imposed by foreign governments; these
restrictions do not, individually or in the aggregate, materially limit our
ability to service our indebtedness, meet our current obligations or
pay dividends.
EQUIFAX 2010 ANNUAL REPORT 21
21