Equifax 2010 Annual Report Download - page 28

Contractual Obligations and Commercial Commitments
The following table summarizes our significant contractual obligations and commitments as of December 31, 2010. The table excludes com-
mitments that are contingent based on events or factors uncertain at this time. Some of the excluded commitments are discussed below the
footnotes to the table.
Payments due by
(In millions) Total Less than 1 year 1 to 3 years 3 to 5 years Thereafter
Debt (including capitalized lease obligation)
(1)
$ 990.2 $ 19.9 $ 32.8 $290.0 $ 647.5
Operating leases
(2)
95.3 17.9 26.3 13.1 38.0
Data processing, outsourcing agreements and other
purchase obligations
(3)
236.8 88.5 129.8 9.9 8.6
Other long-term liabilities
(4)(6)
98.1 7.3 13.2 8.8 68.8
Interest payments
(5)
761.3 54.0 104.2 93.2 509.9
$2,181.7 $187.6 $306.3 $415.0 $1,272.8
(1) The amounts are gross of unamortized discounts totaling $2.1 million and fair value adjustments of $11.5 million at December 31, 2010.
Total debt on our Consolidated Balance Sheets is net of the unamortized discounts and fair value adjustments.
(2) Our operating lease obligations principally involve office space and equipment, which include the ground lease associated with our
headquarters building that expires in 2048.
(3) These agreements primarily represent our minimum contractual obligations for services that we outsource associated with our
computer data processing operations and related functions, and certain administrative functions. These agreements expire between
2011 and 2014.
(4) These long-term liabilities primarily relate to obligations associated with certain pension, postretirement and other compensation-related
plans, some of which are discounted in accordance with U.S. generally accepted accounting principles, or GAAP. We made certain
assumptions about the timing of such future payments. In the table above, we have not included amounts related to future pension plan
obligations, as such required funding amounts beyond 2010 have not been deemed necessary due to our current expectations regard-
ing future plan asset performance. During January 2011, we made a $10.0 million discretionary contribution to fund our U.S. Retirement
Income Plan.
(5) For future interest payments on variable-rate debt, which are generally based on a specified margin plus a base rate (LIBOR) or on CP
rates for investment grade issuers, we used the variable rate in effect at December 31, 2010 to calculate these payments. Our variable
rate debt at December 31, 2010, consisted of CP, borrowings under our credit facilities and our five-year senior notes due 2014 (against
which we have executed interest rate swaps to convert interest expense from fixed rates to floating rates). Future interest payments
related to our Senior Credit Facility and our CP program are based on the borrowings outstanding at December 31, 2010 through their
respective maturity dates, assuming such borrowings are outstanding until that time. The variable portion of the rate at December 31,
2010 was 2.1% for all of our variable-rate debt. Future interest payments may be different depending on future borrowing activity and
interest rates.
(6) This table excludes $27.9 million of unrecognized tax benefits, including interest and penalties, as we cannot make a reasonably reliable
estimate of the period of cash settlement with the respective taxing authorities.
A potential significant future use of cash would be the payment to
Computer Sciences Corporation, or CSC, if it were to exercise its
option to sell its credit reporting business to us at any time prior to
2013. The option exercise price would be determined by agreement
or by an appraisal process and would be due in cash within 180 days
after the exercise of the option. We estimate that if the option had
been exercised at December 31, 2010, the price range would have
been approximately $625 million to $700 million. This estimate is
based solely on our internal analysis of the value of the business, cur-
rent market conditions and other factors, all of which are subject to
constant change. Therefore, the actual option exercise price could be
materially higher or lower than our estimate. Our agreement with
CSC, which expires on July 31, 2018, also provides us with an option
to purchase its credit reporting business if it does not elect to renew
the agreement or if there is a change in control of CSC while the
agreement is in effect. If CSC were to exercise its option, or if we
were able to and decided to exercise our option, then we would have
to obtain additional sources of funding. We believe that this funding
would be available from sources such as additional bank lines of
credit and the capital markets for debt and/or equity financing.
However, the availability and terms of any such capital financing
would be subject to a number of factors, including credit market
conditions, the state of the equity markets, general economic condi-
tions, our credit ratings and our financial performance and condition.
Off-Balance Sheet Transactions
We do not engage in off-balance sheet financing activities.
Pursuant to the terms of certain industrial revenue bonds, we
transferred title to certain of our fixed assets with costs of $47.9 mil-
lion and $35.7 million, as of December 31, 2010 and 2009,
respectively, to a local governmental authority in the U.S. to receive a
property tax abatement related to economic development. The title to
these assets will revert back to us upon retirement or cancellation of
the applicable bonds. These fixed assets are still recognized in the
Company’s Consolidated Balance Sheets as all risks and rewards
remain with the Company.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
EQUIFAX 2010 ANNUAL REPORT
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