Equifax 2012 Annual Report Download - page 27

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Equifax 2012 Annual Report
our Senior Credit Facility requires us to maintain a maximum leverage
ratio of not more than 3.5 to 1.0, and limit the amount of subsidiary
debt. Our leverage ratio was 2.08 at December 31, 2012. None of
these covenants are considered restrictive to our operations and, as
of December 31, 2012, we were in compliance with all of our
debt covenants.
We do not have any credit rating triggers that would accelerate the
maturity of a material amount of our outstanding debt; however, our
senior notes, discussed above, contain change in control provisions.
If we experience a change of control or publicly announce our inten-
tion to effect a change of control and the rating on the senior notes is
lowered by Standard & Poor’s, or S&P, and Moody’s Investors
Service, or Moody’s, below an investment grade rating within 60 days
of such change of control or notice thereof, then we will be required
to offer to repurchase the senior notes at a price equal to 101% of
the aggregate principal amount of the senior notes plus accrued and
unpaid interest.
Credit Ratings. Credit ratings reflect an independent agency’s judg-
ment on the likelihood that a borrower will repay a debt obligation at
maturity. The ratings reflect many considerations, such as the nature
of the borrower’s industry and its competitive position, the size of the
company, its liquidity and access to capital and the sensitivity of a
company’s cash flows to changes in the economy. The two largest
rating agencies, S&P and Moody’s, use alphanumeric codes to
designate their ratings. The highest quality rating for long-term credit
obligations is AAA and Aaa for S&P and Moody’s, respectively. A
security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the
assigning rating agency.
Long-term ratings of BBB- and Baa3 or better by S&P and Moody’s,
respectively, reflect ratings on debt obligations that fall within a band
of credit quality considered to be ‘‘investment grade’’. At
December 31, 2012, the long-term ratings for our obligations were
BBB+ and Baa1, which are consistent with the ratings and outlooks
which existed at December 31, 2011. A downgrade in our credit rat-
ing would increase the cost of borrowings under our CP program and
credit facilities, and could limit, or in the case of a significant
downgrade, preclude our ability to issue CP. If our credit ratings were
to decline to lower levels, we could experience increases in the inter-
est cost for any new debt. In addition, the market’s demand for, and
thus our ability to readily issue, new debt could become further
influenced by the economic and credit market environment.
For additional information about our debt, including the terms of our
financing arrangements, basis for variable interest rates and debt
covenants, see Note 6 of the Notes to Consolidated Financial State-
ments in this report.
Equity Transactions
Net cash provided by (used in): Twelve Months Ended December 31, Change
(Dollars in millions) 2012 2011 2010 2012 vs. 2011 2011 vs. 2010
Treasury stock purchases $(85.1) $(142.3) $(167.5) $57.2 $ 25.2
Dividends paid to Equifax shareholders $(86.0) $ (78.1) $ (35.2) $ (7.9) $(42.9)
Dividends paid to noncontrolling interests $ (4.8) $ (5.6) $ (5.1) $ 0.8 $ (0.5)
Proceeds from exercise of stock options $ 68.3 $ 23.7 $ 29.3 $44.6 $ (5.6)
Excess tax benefits from stock-based
compensation plans $ 1.7 $ 1.2 $ 3.5 $ 0.5 $ (2.3)
Sources and uses of cash related to equity during the twelve months
ended December 31, 2012, 2011 and 2010 were as follows:
• Under share repurchase programs authorized by our Board of
Directors, we purchased 1.9 million, 4.2 million, and 5.2 million
common shares on the open market during the twelve months
ended December 31, 2012, 2011 and 2010, respectively, for
$85.1 million, $142.3 million and $167.5 million, respectively, at an
average price per common share of $45.73, $34.19 and $32.28,
respectively. At December 31, 2012, the Company had $227.1
million remaining for stock repurchases under the existing
Board authorization.
• During the twelve months ended December 31, 2012, 2011 and
2010, we paid cash dividends to Equifax shareholders of
$86.0 million, $78.1 million and $35.2 million, respectively, at
$0.72 per share for 2012, $0.64 per share for 2011 and
$0.28 per share for 2010.