Equifax 2012 Annual Report Download - page 26

24 Equifax 2012 Annual Report
During 2010, we resolved a contingent earn-out associated with a
2008 acquisition included in our Workforce Solutions segment. The
earn-out of $6 million was measured on the completion of 2009
revenue targets and was accrued at December 31, 2009.
On April 23, 2010, we sold our APPRO product line for approximately
$72 million. On July 1, 2010, we sold the assets of our Direct Market-
ing Services division (‘‘DMS’’) for approximately $117 million. Both of
these were previously reported in our U.S. Consumer Information
Solutions segment. We have presented the APPRO and DMS opera-
tions as discontinued operations for all periods presented. The
discontinued operations are further described in Note 3 of the Notes
to the Consolidated Financial Statements in this report.
For additional information about our acquisitions, see Note 4 of the
Notes to Consolidated Financial Statements in this report.
Financing Activities
Net cash provided by (used in): Twelve Months Ended December 31, Change
(Dollars in millions) 2012 2011 2010 2012 vs. 2011 2011 vs. 2010
Net short-term borrowings (repayments) $234.1 $ 24.4 $(134.0) $209.7 $158.4
Net borrowings (repayments) under long-term
revolving credit facilities $— $ — $ (5.0) $— $ 5.0
Payments on long-term debt $ (15.2) $(16.7) $ (20.8) $ 1.5 $ 4.1
Proceeds from issuance of long-term debt $499.2 $— $ — $499.2 $—
Credit Facility Availability. Our principal unsecured revolving credit
facility with a group of banks, which we refer to as the Senior Credit
Facility, permits us to borrow up to $750.0 million through
December 2017. The Senior Credit Facility may be used for general
corporate purposes. Availability of the Senior Credit Facility for bor-
rowings is reduced by the outstanding face amount of any letters of
credit issued under the facility and, pursuant to our existing Board of
Directors authorization, by the outstanding principal amount of our
commercial paper (CP) notes.
Our $750.0 million CP program has been established to allow for bor-
rowing through the private placement of CP with maturities ranging
from overnight to 397 days. We may use the proceeds of CP for
general corporate purposes. The CP program is supported by our
Senior Credit Facility and, pursuant to our existing Board of Directors
authorization, the total amount of CP which may be issued is reduced
by the amount of any outstanding borrowings under our Senior
Credit Facility.
We had a 364-day revolving credit agreement with a Canadian bank
(our Canadian Credit Facility) which permitted us to borrow up to
C$10.0 million (denominated in Canadian dollars). The Canadian
Credit Facility was scheduled to terminate in June 2011. We
cancelled this agreement at the end of the first quarter 2011 and
there were no outstanding borrowings under this agreement at the
time of cancellation.
At December 31, 2012, there were no borrowings outstanding under
our Senior Credit Facility and $265.0 million outstanding under our
CP program. At December 31, 2012, a total of $483.6 million was
available under our Senior Credit Facility.
At December 31, 2012, approximately 68% of our debt was fixed
rate and 32% was effectively variable rate. Our variable-rate debt,
consisting of 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), generally bearing interest based on a
specified margin plus a base rate (LIBOR), and of our issued com-
mercial paper, which bears short-term interest rates based on the CP
market for investment grade issuers. The interest rates reset periodi-
cally, depending on the terms of the respective financing
arrangements. At December 31, 2012, interest rates on our variable-
rate debt ranged from 0.4% to 2.1%.
Borrowing and Repayment Activity. Net short-term borrowings
(repayments) primarily represent activity under our CP program, as
well as activity under our Canadian short-term revolving credit agree-
ment. Net (repayments) borrowings under long-term revolving credit
facilities relates to activity on our Senior Credit Facility. We primarily
borrow under our CP program, when available.
The increase in net short-term borrowings (repayments) primarily
reflects the outstanding borrowings of $265.0 million of CP notes as
of December 31, 2012, that was used to partially finance the acquisi-
tion of CSC Credit Services. The change in net short-term borrowings
(repayments) in 2011 primarily reflects the outstanding borrowings of
CP notes at December 31, 2011 as compared to a net repayment of
$134.0 million of CP notes during 2010 as we decreased our use of
CP to fund our capital needs.
On December 17, 2012, we received proceeds of $499.2 million from
the issuance of ten-year senior notes with a stated interest rate of
3.30% in an underwritten public offering. Interest is payable semi-
annually in arrears on December 15 and June 15 of each year. We
used the net proceeds of the sale of the notes to finance the acquisi-
tion of CSC Credit Services in December 2012.
Debt Covenants. Our outstanding indentures and comparable
instruments contain customary covenants including, for example,
limits on secured debt and sale/leaseback transactions. In addition,
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued