Equifax 2011 Annual Report Download - page 24

General Corporate Expense
General Corporate Expense Twelve Months Ended December 31, Change
2011 vs. 2010 2010 vs. 2009
(Dollars in millions) 2011 2010 2009 $ % $ %
General corporate expense $116.9 $115.4 $121.3 $1.5 1% $(5.9) -5%
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 increased by $1.5 million in 2011, compared to 2010,
primarily due to higher salary and incentive costs partially offset by
lower technology costs and professional fees.
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 technology, and acquisition-related expenses.
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 expect
that funds generated from 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 and dividend payments) for the foreseeable
future. In the event that credit market conditions were to deteriorate,
we would rely more heavily on borrowings from the Senior Credit
Facility as described below. During the first quarter, we extended the
maturity date of our Senior Credit Facility from July 2011 to
February 2015 and reduced the borrowing limits from $850.0 million
to $500.0 million. At December 31, 2011, $468.6 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 mate-
rial adverse change in our financial condition, as long as we are in
compliance with the covenants contained in the lending agreement.
Information about our cash flows, by category, is presented in the Consolidated Statements of Cash Flows. The following table summarizes
our cash flows for the twelve months ended December 31, 2011, 2010 and 2009:
Net cash provided by (used in): Twelve Months Ended December 31, Change
(Dollars in millions) 2011 2010 2009 2011 vs. 2010 2010 vs. 2009
Operating activities $ 408.7 $ 352.6 $ 418.4 $ 56.1 $ (65.8)
Investing activities $(204.1) $ 1.0 $(270.1) $(205.1) $ 271.1
Financing activities $(195.9) $(335.3) $(108.3) $ 139.4 $(227.0)
Operating Activities
Cash provided by operating activities for 2011 increased by
$56.1 million over the prior year. Cash provided from net income,
adjusted for the impact of divestitures, increased by $20.3 million.
The remaining increase in cash from operations was primarily driven
by changes in net working capital and other balance sheet changes,
most notably from a $10.0 million decrease in pension contributions
in 2011 and other lesser changes in liabilities, partially offset by an
increase in accounts receivable due to revenue growth.
The decrease in operating cash flow for 2010 was primarily driven by
$35.0 million of additional pension contributions; a $16.4 million net
impact on use of funds as accounts receivable, which had been
reduced in 2009, grew in 2010 as revenue grew; and $42.0 million in
taxes paid on the sale of DMS and the APPRO product line. These,
and other lesser changes in assets and liabilities, more than offset
increased net income and the contribution from higher depreciation
and amortization.
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. We currently hold $106.0 million of cash in our foreign
subsidiaries.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
EQUIFAX 2011 ANNUAL REPORT
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