Equifax 2010 Annual Report Download - page 29

Letters of Credit and Guarantees
We will from time to time issue standby letters of credit, performance
bonds or other guarantees in the normal course of business. The
aggregate notional amount of all performance bonds and standby
letters of credit was not material at December 31, 2010, and all have
a remaining maturity of one year or less. Guarantees are issued from
time to time to support the needs of our operating units. The
maximum potential future payments we could be required to make
under the guarantees is not material at December 31, 2010.
Benefit Plans
Prior to December 31, 2009, we had one non-contributory qualified
retirement plan covering most U.S. salaried employees (the Equifax
Inc. Pension Plan, or EIPP), a qualified retirement plan that covered
U.S. salaried employees (the U.S. Retirement Income Plan, or USRIP)
who terminated or retired before January 1, 2005 and a defined
benefit plan for most salaried and hourly employees in Canada
(the Canadian Retirement Income Plan, or CRIP). On December 31,
2009, the plan assets and obligations of the EIPP were merged
with the USRIP. The USRIP remained as the sole U.S. qualified
retirement plan.
At December 31, 2010, the USRIP met or exceeded ERISA’s
minimum funding requirements. In January 2011, we made a
contribution of $10.0 million to the USRIP. During the twelve months
ended December 31, 2010, we made contributions of $50.0 million
to the USRIP. During the twelve months ended December 31, 2009,
we made contributions of $15.0 million to the EIPP. We also
contributed $1.6 and $1.8 million to the CRIP during the twelve
months ended December 31, 2010 and 2009, respectively. The
Equifax Employee Benefits Trust contributed $12.5 million to the EIPP
upon dissolution of the Trust in 2009. In the future, we will make
minimum funding contributions as required and may make discretion-
ary contributions, depending on certain circumstances, including
market conditions and liquidity needs. We believe additional funding
contributions, if any, would not prevent us from continuing to meet
our liquidity needs, which are primarily funded from cash flows gener-
ated by operating activities, available cash and cash equivalents, and
our credit facilities.
For our non-U.S., tax-qualified retirement plans, we fund an amount
sufficient to meet minimum funding requirements but no more than
allowed as a tax deduction pursuant to applicable tax regulations. For
the non-qualified supplementary retirement plans, we fund the
benefits as they are paid to retired participants, but accrue the
associated expense and liabilities in accordance with GAAP.
For additional information about our benefit plans, see Note 10 of the
Notes to Consolidated Financial Statements in this report.
Seasonality
We experience seasonality in certain of our revenue streams.
Revenue generated from The Work Number business unit within the
TALX operating segment is generally higher in the first quarter due
primarily to the provision of Form W-2 preparation services which
occur in the first quarter each year. Revenue from our OCIS and
Mortgage Solutions business units tends to increase in periods of the
year in which our customers have higher volumes of credit granting
decisions, most commonly the second and third calendar quarters.
Effects of Inflation and Changes in Foreign Currency
Exchange Rates
Equifax’s operating results are not materially affected by inflation,
although inflation may result in increases in the Company’s expenses,
which may not be readily recoverable in the price of services offered.
To the extent inflation results in rising interest rates and has other
adverse effects upon the securities markets and upon the value of
financial instruments, it may adversely affect the Company’s financial
position and profitability.
A significant portion of the Company’s business is conducted in
currencies other than the U.S. dollar, and changes in foreign
exchange rates relative to the U.S. dollar can therefore affect the
value of non-U.S. dollar net assets, revenues and expenses.
Potential exposures as a result of these fluctuations in currencies
are closely monitored. We generally do not mitigate the risks associ-
ated with fluctuating exchange rates, although we may from time to
time through forward contracts or other derivative instruments hedge
a portion of our translational foreign currency exposure or exchange
rate risks associated with material transactions which are
denominated in a foreign currency.
RECENT ACCOUNTING PRONOUNCEMENTS
For information about new accounting pronouncements and the
potential impact on our Consolidated Financial Statements, see
Note 1 of the Notes to Consolidated Financial Statements in this
report.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
AND ESTIMATES
The Company’s Consolidated Financial Statements are prepared in
conformity with U.S. GAAP. This requires our management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, revenues and expenses and related disclosures
of contingent assets and liabilities in our Consolidated Financial State-
ments and the Notes to Consolidated Financial Statements. The
following accounting policies involve critical accounting estimates
because they are particularly dependent on estimates and assump-
tions made by management about matters that are uncertain at the
time the accounting estimates are made. In addition, while we have
used our best estimates based on facts and circumstances available
to us at the time, different estimates reasonably could have been
used in the current period, or changes in the accounting estimates
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