Equifax 2011 Annual Report Download - page 29

Contractual Obligations and Commercial Commitments
The following table summarizes our significant contractual obligations and commitments as of December 31, 2011. 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)
$ 999.2 $ 46.6 $305.1 $ — $ 647.5
Operating leases
(2)
92.2 18.6 24.8 13.9 34.9
Data processing, outsourcing agreements and other
purchase obligations
(3)
153.3 77.6 69.6 3.8 2.3
Other long-term liabilities
(4)(6)
102.4 6.0 12.8 9.6 74.0
Interest payments
(5)
685.7 52.8 102.3 86.6 444.0
$2,032.8 $201.6 $514.6 $113.9 $1,202.7
(1) The amounts are gross of unamortized discounts totaling $1.8 million and fair value adjustments of $15.8 million at December 31, 2011.
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 2018.
(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 2011 have not been deemed necessary due to our current expectations regarding
future plan asset performance.
(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, 2011 to calculate these payments. Our variable
rate debt at December 31, 2011, 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, 2011 through their
respective maturity dates, assuming such borrowings are outstanding until that time. The variable portion of the rate at December 31,
2011 ranged from 0.48% to 2.5% for all of our variable-rate debt. Future interest payments may be different depending on future borrow-
ing activity and interest rates.
(6) This table excludes $25.1 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
August 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, 2011, the price
would have been in the range of approximately $650 million to
$750 million. This estimate is based solely on our internal analysis of
the value of the business (based on limited information available to
us), current 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
conditions, 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
$65.3 million and $47.9 million, as of December 31, 2011 and 2010,
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 on the
Company’s Consolidated Balance Sheets as all risks and rewards
remain with the Company.
EQUIFAX 2011 ANNUAL REPORT 27