What changed in this filing

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Item 7. Management’s Discussion and Analysis

2021-02-25 compared with 2020-02-20 · 245 added, 255 removed, 587 unchanged (46% of the section changed)

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We maintain support operations in the Republic of Ireland, Chile, Costa Rica and India.

We also offer Equifax branded credit services in Russia through a joint venture, have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore and the United Arab Emirates, have an investment in a consumer and commercial credit information company in Brazil and have an investment in an identity authentication company in Canada.

We also offer Equifax branded credit services in Russia through a joint venture, have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore and the United Arab Emirates and have an investment in a consumer and commercial credit information company in Brazil.

Recent Events and Company Outlook

As further described above, we operate in the United States, which represented 78% of our revenue in 2020, and internationally in 24 countries.

Our products and services span a wide variety of vertical markets including financial services, mortgage, federal, state and local governments, automotive, telecommunications and many others.

On March 11, 2020, the World Health Organization designated the novel coronavirus disease (“COVID-19”) as a global pandemic.

The impact of COVID-19 and related actions to attempt to control its spread began to impact our consolidated operating results in March 2020.

The impact on the operating results in each country in which we operate differed based on the conditions and the vertical markets we serve in that country.

In the United States, consolidated revenue grew in each calendar quarter of 2020, compared to 2019, reflecting very strong mortgage market related revenue in both USIS and Workforce Solutions, and, to a lesser degree, higher revenue growth in our Workforce Solutions unemployment claims management business.

However, in the U.S., we experienced year-over-year revenue declines in most other vertical markets including commercial, financial services and telecommunications.

Internationally, all countries in which we operate experienced revenue declines, across most vertical markets.

The year-over-year reductions in countries and vertical markets referenced were most pronounced in the second quarter and improved during the third and fourth quarters.

Although some countries continue to show year-over-year declines, performance in the fourth quarter of 2020 has improved from the levels seen in the third quarter and several vertical markets and countries have reported year over year growth as market conditions improve.

We are unable to determine the severity or duration of the impact of the COVID-19 pandemic on Equifax or how the impact on the individual markets in the countries we serve will change with time.

Although consolidated revenue has grown during 2020 when compared to 2019, due to the uncertain effects on the global economy caused by the impact of COVID-19, the impact on our future results of operations related to the COVID-19 pandemic are unclear.

We expect that the global COVID-19 pandemic will continue to impact our business and results of operations.

While the COVID-19 pandemic affects the countries in which we operate, our critical priorities are:

(i) the health and safety of our employees and their families;

(ii) providing support to consumers;

(iii) helping our customers execute their changing business plans by providing innovative solutions combining our unique data assets and leading analytical and technology capabilities;

(iv) executing on our cloud technology, data and security transformation per our previously stated plans.

In the first quarter of 2020, we executed on our business continuity plans and formed a crisis management team to address the challenges related to the ongoing COVID-19 pandemic.

In March and April 2020, our employees worked from home in each country where we operate, with only essential employees in customer support and data center operations working on site at our facilities.

Beginning in May, in jurisdictions where local restrictions implemented to prevent the further spread of the virus were lifted, our employees began to return to their assigned offices, with limits placed on the number of employees on site at one time.

For employees working at our offices and facilities, we have instituted social distancing protocols, increased the level of cleaning and sanitizing in those facilities and undertaken other actions to make these sites safer.

We have also substantially reduced employee travel to only essential business needs.

As part of our business continuity plans, w e are generally following the requirements and protocols published by the U.S.

Centers for Disease Control and the World Health Organization , and s tate and local governments.

If public health authorities dictate further measures to limit further spread of the virus, we may need to reinstate our business continuity plans in certain countries or regions in which we operate.

As of the date of this filing, we do not believe our work from home and return to office protocol have materially adversely impacted our internal controls, financial reporting systems or our operations.

Our data and analytics, product and sales teams are focused on how to refine existing products and services, as well as generate new products and services, to meet the changing needs of our customers in this environment.

Our technology teams continue to execute on our cloud technology, data and security transformation, including the continued migration of our technology to cloud native environments.

To date, the change to our working environment has not caused material disruptions in the execution of these plans.

As a response to the ongoing COVID-19 pandemic, we have implemented plans to manage our costs.

We have significantly limited the addition of new employees and third party contracted services, eliminated all travel except where necessary to meet customer or regulatory needs, and acted to limit discretionary spending.

Recovery of the global economy from the COVID-19 induced recession remains uncertain and may require several years to return to economic levels experienced prior to the pandemic and may affect certain markets or regions we serve differently.

Any future asset impairment charges, increase in allowance for doubtful accounts, or restructuring charges could be more likely and will be dependent on the severity and duration of this crisis.

At December 31, 2020, we had approximately $1.7 billion in cash and $1.1 billion available to borrow under our revolving credit facility that matures in September 2023.

In the second quarter of 2020, we amended our revolving credit facility to increase the maximum leverage ratio through 2021 to provide us with additional financial flexibility.

In light of the evolving health, social, economic and business environment, governmental regulations or mandates, and business disruptions that could occur, the potential impact that COVID-19 could have on our financial condition and operating results remains highly uncertain.

For more information, see “Item 1A.

Risk Factors— Our business has been and will continue to be negatively impacted by the recent COVID-19 outbreak, ” in this Form 10-K.

2017 Cybersecurity Incident

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No evidence was found that the Company’s core consumer, employment and income, or commercial reporting databases were accessed.

We continue to cooperate with law enforcement in connection with the criminal investigation into the actors responsible for the 2017 cybersecurity incident.

On February 10, 2020, the U.S.

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Legal Proceedings” in this Form 10-K.

We recorded expenses, net of insurance recoveries, of $800.9 million in other current liabilities and selling, general, and administrative expenses in our Consolidated Balance Sheets and Statements of (Loss) Income, respectively, as of and for the twelve months ended December 31, 2019, exclusive of our legal and professional services expenses.

We did not record any settlement expenses related to the resolution of these proceedings and investigations for the twelve months ended December 31, 2020.

We recorded expenses, net of insurance recoveries, of $800.9 million in other current liabilities and selling, general, and administrative expenses in our Consolidated Balance Sheets and Statements of Income (Loss), respectively, as of and for the twelve months ended December 31, 2019, exclusive of our legal and professional services expenses and net of insurance recoveries.

The amount accrued represents our best estimate of the liability related to these matters.

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Future Costs.

We are currently executing substantial initiatives in security and consumer support, and a company-wide transformation of our technology infrastructure, which we refer to as our technology transformation, and incurred substantial increased expenses and capital expenditures in 2019 related to these initiatives.

We expect to continue to incur significant expenses and capital expenditures in 2020 related to these initiatives, at similar levels as those incurred in 2019.

We incurred significant legal and professional services expenses related to the lawsuits, claims and government investigations to which we were a party in 2019, and expect to continue to incur these expenses until all matters are fully resolved.

However, we expect that the level of legal and professional service expenses related to these matters will be significantly lower in 2020 due to the settlement of all of the significant matters in the U.S.

We expect to continue to incur additional expenses and capital expenditures in 2021 related to these initiatives, although at reduced levels as those incurred in 2020.

We incurred significant legal and professional services expenses in 2019 related to the lawsuits, claims and government investigations to which we were a party in 2019, and expect to continue to incur these expenses until all matters are fully resolved.

However, as expected, the level of legal and professional service expenses related to these matters was significantly lower in 2020 due to the settlement of all of the significant matters in the U.S.

We will recognize the expenses and capital expenditures referenced herein as they are incurred.

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Segment and Geographic Information

The USIS segment, the largest of our four segments, consists of three service lines:

The USIS segment consists of three service lines:

Online Information Solutions, Mortgage Solutions, and Financial Marketing Services.

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Canada’s services are similar to our USIS offerings.

Asia Pacific, Europe and Latin America are made up of varying mixes of service lines that are generally in our USIS reportable segment.

Asia Pacific, Europe and Latin America are made up of varying mixes of service lines that are generally consistent with those in our USIS reportable segment.

We also provide information and technology services to support lenders and other creditors in the collections and recovery management process.

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We also sell consumer and credit information to resellers who combine our information with other information to provide direct-to-consumer monitoring, reports and scores.

Due to the 2017 cybersecurity incident, we ceased advertising our consumer business in the U.S.

in September 2017.

We resumed advertising our U.S.

paid products in the fourth quarter of 2018.

Geographic Information.

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Argentina, Australia, Canada, Chile, Costa Rica, Ecuador, El Salvador, Honduras, India, Mexico, New Zealand, Paraguay, Peru, Portugal, the Republic of Ireland, Spain, the U.K., Uruguay and the U.S.

Singapore and the United Arab Emirates, have an investment in a consumer and commercial credit information company in Brazil and have an investment in an identity authentication company in Canada.

We also offer Equifax branded credit services in Russia through a joint venture, have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore and the United Arab Emirates and have an investment in a consumer and commercial credit information company in Brazil.

Approximately 78% and 73% our revenue was generated in the U.S.

during both of the twelve months ended December 31, 2019 and 2018, respectively.

during the twelve months ended December 31, 2020 and 2019, respectively.

Key Performance Indicators.

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These performance indicators include measurements of operating revenue, change in operating revenue, operating income, operating margin, net income, diluted earnings per share, cash provided by operating activities and capital expenditures.

Key performance indicators for the twelve months ended December 31, 2019, 2018 and 2017, include the following:

Key performance indicators for the twelve months ended December 31, 2020, 2019 and 2018, which reflect the change in accounting principle related to the change in accounting method for our pension and other benefits plans (see Note 1), include the following:

Key Performance Indicators

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Operating revenue change 18 % 3 % 1 %

Operating (loss) income $ (335.4) $ 448.0 $ 831.7

Operating income (loss) $ 676.6 $ (335.4) $ 448.0

Operating margin 16.4 % (9.6) % 13.1 %

Net (loss) income attributable to Equifax $ (398.8) $ 299.8 $ 587.3

Net income (loss) attributable to Equifax $ 520.1 $ (384.1) $ 310.5

Diluted earnings per share $ 4.24 $ (3.15) $ 2.56

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*Amounts above include accruals for capital expenditures.

Business Environment and Company Outlook

Demand for our services tends to be correlated to general levels of economic activity and to consumer credit activity, small commercial credit and marketing activity.

Demand is also enhanced by our initiatives to expand our products, capabilities, and markets served.

In the United States, we expect 2020 economic activity, as measured by GDP, to be down from 2019.

We expect modest growth in consumer credit, excluding mortgage, over the course of 2020.

mortgage market inquiries are expected to be approximately flat in 2020 versus 2019, with strong growth in inquiries in the first half of 2020, offset by a decline in inquiries in the second half of 2020.

We anticipate 2020 economic activity, as measured by GDP, in Canada to be slightly below 2019.

In Australia, we anticipate 2020 economic activity, as measured by GDP, to be up from 2019.

In the European markets we serve, the U.K., Spain and Portugal, we are expecting 2020 economic activity, as measured by GDP, to be down or slightly below 2019.

In Latin America, our two largest markets are Argentina and Chile.

In Argentina, the market continued to weaken in 2019.

We are expecting continued weakness in 2020 but at lower levels than in 2019.

In Chile, we are expecting economic activity in 2020 to be down slightly compared to 2019.

Additional uncertainty exists in Argentina due to the Argentinean political environment and in the U.K.

due to the impact of Brexit in the U.K.

In 2019 and beyond, we have incurred and will continue to incur increased costs and capital expenditures related to our technology transformation, which includes costs for enhanced data security.

In 2019 and beyond, we had and will continue to have increases in the ongoing run-rate of technology and security spending.

We also expect to continue to incur increased expenses for insurance, finance, compliance activities, and to meet increased legal and regulatory requirements.

The ultimate amount of these increases is expected to be significant.

As a result of the 2017 cybersecurity incident, we were subject to a significant number of proceedings and investigations as described in “Item 3.

Legal Proceedings” in this Form 10-K.

The amount accrued represents our best estimate of the liability related to these matters.

The Company will continue to evaluate information as it becomes known and adjust accruals for new information and further developments in accordance with ASC 450-20-25.

While it is reasonably possible that losses exceeding the amount accrued may be incurred, it is not possible at this time to estimate the additional possible loss in excess of the amount already accrued that might result from adverse judgments, settlements, penalties or other resolution of the proceedings and investigations described in “Item 3.

specified or are uncertain, the uncertainty as to the certification of a class or classes and the size of any certified class, as applicable, and the lack of resolution on significant factual and legal issues.

As such, as of any given date, we could have exposure to losses as to which no liability has been accrued or as to which the accrued liability is inadequate.

The ultimate amount paid on these actions, claims and investigations in excess of the amount already accrued could be material to the Company’s consolidated financial condition, results of operations, or cash flows in future periods.

RESULTS OF OPERATIONS —

TWELVE MONTHS ENDED DECEMBER 31, 2020, 2019 AND 2018

In the fourth quarter of 2020 we voluntarily changed our accounting principle for recognizing actuarial gains and losses and expected returns on plan assets for our defined benefit pension and postretirement benefit plans.

We have applied the change in accounting principle retrospectively to all periods covered in this Report, with the amounts below reflecting this change.

Refer to Note 1 of the Notes to Consolidated Financial Statements in Item 8 of this report for additional information.

Consolidated Financial Results

Operating Revenue

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

2019 2019 vs.

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Revenue for 2020 increased by 18% compared to 2019.

The growth was driven by our Workforce Solutions and USIS segments, primarily due to strong U.S.

mortgage volume as well as growth in our Workforce Solutions unemployment claims business.

This growth was partially offset by declines beginning in the second half of March 2020 across International and Global Consumer Solutions segments due to the economic impact of the COVID-19 pandemic.

The effect of foreign exchange rates reduced revenue by $24.5 million, or 1%, in 2020 compared to 2019.

Revenue for 2019 increased by 3% compared to 2018.

The growth was driven by our Workforce Solutions and USIS segments which was partially offset by declines in International and Global Consumer Solutions.

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Global Consumer Solutions revenue decreased primarily due to decreases in consumer direct revenue in the U.S.

Revenue for 2018 increased by 1% compared to 2017.

The growth was driven by our Workforce Solutions and International segments which was partially offset by declines in USIS and Global Consumer Solutions which were negatively impacted by the 2017 cybersecurity incident.

Workforce Solutions saw strong growth driven by Verification Services.

International had local currency growth across all regions.

The effect of foreign exchange rates reduced revenue by $28.3 million, or 1%, in 2018 compared to 2017.

Operating Expenses

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Cost of services increased $215.7 million in 2020 compared to 2019.

The increase is due to increased royalty and technology costs.

We also incurred increased incremental technology and data security costs of $20.3 million in

These increased technology and security costs predominantly reflect the investments we are making in our technology transformation, which include costs for enhanced data security.

We expect these incremental costs as well as increased ongoing technology and security costs to continue in 2020.

The increase is due to increased royalty and production costs, as well as incremental technology and data security costs related to our ongoing technology transformation.

The effect of changes in foreign exchange rates reduced cost of services by $10.4 million.

Cost of services increased $81.3 million in 2019 compared to 2018.

We incurred increased technology and data security costs of $146.5 million in 2018.

The increase was due to increased royalty and technology costs.

We also incurred increased incremental technology and data security costs of $20.3 million in 2019.

These increased technology and security costs predominantly reflect the investments we are making in our technology transformation, which include costs for enhanced data security.

The remaining increase is due to increased people and royalty costs.

The effect of changes in foreign exchange rates reduced cost of services by $33.2 million.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $776.9 million in 2019 compared to 2018.

The increase in 2019 is primarily due to losses, net of insurance recoveries, of $800.9 million associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident.

Selling, general and administrative expenses decreased $667.7 million in 2020 compared to 2019.

The decrease in 2020 is primarily due to losses, net of insurance recoveries, of $800.9 million associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident that were recorded in 2019 but did not recur in 2020, partially offset by increased people costs and a restructuring charge taken in the fourth quarter of 2020.

The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $10.2 million.

Selling, general and administrative expenses increased $776.9 million in 2019 as compared to 2018.

We incurred increased incremental technology and data security costs of $160.7 million in 2018.

As was the case in cost of services, these increased technology and security costs predominately reflect the investments we are making in our technology transformation, which include costs for enhanced data security.

The remaining changes were driven by increases due to the restructuring charge of $46.1 million, people, the public records litigation settlement of $18.5 million and insurance costs which were partially offset by decreased advertising costs.

The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $24.4 million.

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Depreciation and amortization expense for 2020 and 2019 increased by $59.9 million and $20.7 million, respectively.

The increase is due to amortization of capitalized internal-use software and systems costs and depreciation of production equipment, partially offset by a decrease in amortization of purchased intangibles.

The increase is due to amortization of capitalized internal-use software and systems costs and depreciation of production equipment.

Operating Income and Operating Margin

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December 31, Change

Operating (Loss) Income and Operating Margin 2019 vs.

Operating Income (Loss) and Operating Margin 2020 vs.

2019 2019 vs.

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Consolidated operating expenses 3,450.9 3,843.0 2,964.1 (392.1) (10) % 878.9 30 %

Consolidated operating (loss) income $ (335.4) $ 448.0 $ 831.7 $ (783.4) (175) % $ (383.7) (46) %

Consolidated operating income (loss) $ 676.6 $ (335.4) $ 448.0 $ 1,012.0 302 % $ (783.4) (175) %

Consolidated operating margin 16.4 % (9.6) % 13.1 % 26.0 pts (22.7) pts

Total company operating margin decreased in 2019 versus 2018, primarily due to losses, net of insurance recoveries, of $800.9 million associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident which are reflected in selling, general, and administrative expenses in our Consolidated Statements of (Loss) Income.

Total company operating margin decreased in 2018 versus 2017, primarily due to the aforementioned technology and data security spending by the Company after the 2017 cybersecurity incident of $326.2 million reflected in costs of services and selling, general, and administrative expenses in our Consolidated Statements of (Loss) Income.

Total company operating margin increased in 2020 versus 2019, primarily due to increased revenue in 2020 and losses, net of insurance recoveries in 2019, of $800.9 million associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident which are reflected in selling, general, and administrative expenses in our Consolidated Statements of Income (Loss), that did not recur in 2020.

Total company operating margin decreased in 2019 versus 2018, primarily due to the aforementioned losses, net of insurance recoveries, of $800.9 million associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident which are reflected in selling, general, and administrative expenses in our Consolidated Statements of Income (Loss).

Interest Expense and Other Income (Expense), net

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Total consolidated debt, net, at year end $ 4,378.4 $ 3,382.6 $ 2,635.5 $ 995.8 29 % $ 747.1 28 %

Interest expense increased in 2020, when compared to 2019, due to the issuance of $1.0 billion in senior notes in April 2020 and $750.0 million senior notes issued in November 2019.

This increase was partially offset by interest related to outstanding Commercial Paper and Receivables Funding Facility balances in 2019.

Interest expense increased in 2019, when compared to 2018, due to an increase in our overall debt outstanding during the year due to borrowings on our Receivables Facility and under our commercial paper program.

These borrowings were paid down with the proceeds from the issuance of the $750.0 million Senior Notes in November 2019.

Interest expense increased in 2018, when compared to 2017, due to an increase in our overall average cost of debt resulting from the issuance of the 3.60%, Floating Rate and 3.95% Senior Notes in May 2018.

The increase in other income, net in 2020 is primarily due to gains recorded related to the fair value adjustment of our investment in Brazil of $116.6 million due to its initial public offering in the third quarter of 2020, as well as the $32.9 million gain recorded related to a fair value adjustment of the equity investment in India, for which we completed the acquisition of the remaining shareholder interest in the first quarter of 2020.

This was partially offset by the $32.2 million mark-to-market fair value adjustment of pension assets which resulted in a loss during the fourth quarter of 2020.

The increase in other income, net in 2019 is primarily due to higher earnings on certain equity method investments and partially offset by an increased loss related to the foreign exchange impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina becoming a highly inflationary economy for accounting purposes starting in July 2018.

The increase in other income, net in 2018 is primarily due to higher earnings on certain equity method investments, an increase in interest income, and the release of a liability from a past acquisition.

These increases were partially offset by increased pension expense and the foreign exchange impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina becoming a highly inflationary economy for accounting purposes in 2018.

Twelve Months Ended

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Effective income tax rate 23.2 % 8.6 % 14.4 %

Our effective tax rate was 23.2% for 2020, up from 8.6% for the same period in 2019.

Our effective tax rate is higher for the year ended December 31, 2020 compared to 2019 due to the operating loss of the Company in 2019 and permanent tax differences resulting from certain non-deductible amounts related to the accrual for losses associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident.

Our effective tax rate was 8.6% for 2019, down from 14.4% for the same period in 2018.

Our effective tax rate is lower for the year ended December 31, 2019 compared to 2018 due to the operating loss of the Company in 2019 and permanent tax differences resulting from certain non-deductible amounts related to the accrual for losses associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident.

Our effective tax rate was 14.0% for 2018, down from 19.9% for the same period in 2017.

The decrease in our effective income tax rate is due to the decrease in the statutory U.S.

tax rate as a result of the Tax Act enacted in the fourth quarter of 2017 and the increase in the benefit received from the reversal of uncertain tax positions.

These changes were offset by an increase in the impact of equity compensation, an increase in the foreign rate differential impact, and the deferred tax benefit recorded in the fourth quarter of 2017 to reflect the impact of the Tax Act.

Net (Loss) Income

Net Income (Loss)

Twelve Months Ended

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2019 2019 vs.

Net (Loss) Income 2019 2018 2017 $ % $ %

Net Income (Loss) 2020 2019 2018 $ % $ %

(In millions, except per share amounts)

Consolidated operating (loss) income $ (335.4) $ 448.0 $ 831.7 $ (783.4) (175) % $ (383.7) (46) %

Consolidated other expense, net (97.6) (91.7) (85.1) (5.9) 6 % (6.6) 8 %

Consolidated operating income (loss) $ 676.6 $ (335.4) $ 448.0 $ 1,012.0 (302) % $ (783.4) (175) %

Consolidated other income (expense), net 8.6 (78.4) (77.6) 87.0 (111) % (0.8) 1 %

Consolidated (provision for) benefit from income taxes (159.0) 35.7 (53.4) (194.7) (545) % 89.1 (167) %

Consolidated net (loss) income (392.8) 306.3 598.0 (699.1) (228) % (291.7) (49) %

Net (loss) income attributable to noncontrolling interests (6.0) (6.5) (10.7) 0.5 (8) % 4.2 (39) %

Net (loss) income attributable to Equifax $ (398.8) $ 299.8 $ 587.3 $ (698.6) (233) % $ (287.5) (49) %

Consolidated net income (loss) 526.2 (378.1) 317.0 904.3 (239) % (695.1) (219) %

Net income attributable to noncontrolling interests (6.1) (6.0) (6.5) (0.1) 2 % 0.5 (8) %

Net income (loss) attributable to Equifax $ 520.1 $ (384.1) $ 310.5 $ 904.2 (235) % $ (694.6) (224) %

Diluted earnings per share:

Net (loss) income attributable to Equifax $ (3.27) $ 2.47 $ 4.83 $ (5.74) (232) % $ (2.36) (49) %

Net income (loss) attributable to Equifax $ 4.24 $ (3.15) $ 2.56 $ 7.39 (235) % $ (5.71) (223) %

Weighted-average shares used in computing diluted earnings per share 122.8 122.0 121.4

Consolidated net (loss) income decreased by $699.1 million in 2019 compared to 2018 due to decreased operating income primarily driven by losses, net of insurance recoveries, associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident of $800.9 million.

Consolidated net (loss) income decreased by $291.7 million, or 49%, in 2018 compared to 2017 due to decreased operating income primarily driven by the $326.2 million of aforementioned incremental technology and data security costs.

Net income was benefitted by the decrease in the statutory U.S.

tax rate as a result of the Tax Act enacted in the fourth quarter of 2017.

Consolidated net income (loss) increased by $904.3 million in 2020 compared to 2019 due to increased revenue, the 2019 accrual for losses associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident that did not recur in 2020 and an increase in Other Income resulting from the fair value adjustments of the Brazil and India investments.

The current year increase is partially offset by higher tax expense, people costs, royalty costs, technology costs, depreciation of capitalized projects and interest expense.

Consolidated net income (loss) decreased by $695.1 million in 2019 compared to 2018 due to decreased operating income primarily driven by losses, net of insurance recoveries, associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident of $800.9 million.

Segment Financial Results

Information Solutions

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

Information Solutions 2020 vs.

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Operating margin 31.3 % 33.1 % 35.4 % (1.8) pts (2.3) pts

Information Solutions revenue increased 16% in 2020 compared to 2019 due to improvements in our core credit decisioning services and mortgage solutions volumes related to the strength of the U.S.

mortgage market in 2020.

Information Solutions revenue increased 2% in 2019 compared to 2018 due to increases in our core credit decisioning services volumes and revenue from acquisitions, partially offset by $20.0 million in settlements with commercial customers and declines in Mortgage Solutions.

Information Solutions revenue decreased 1% in 2018 compared to 2017 due to declines in our core credit decisioning services and lower project related revenue as well as the negative impact from the 2017 cybersecurity incident.

These declines were partially offset by revenue from a 2018 acquisition, growth in core mortgage, and revenue from mortgage channel partners.

Online Information Solutions.

Revenue for 2020 increased 16% compared to 2019, due to improved core credit decisioning services volumes related to improvements in the U.S.

mortgage market and a $15.0 million settlement with a commercial customer which negatively impacted revenue for 2019.

This is partially offset by a reduction in non-mortgage online revenue due to the economic impact of COVID-19, which began in the latter half of March 2020.

Revenue for 2019 increased 5% compared to 2018, due to increases in core credit decisioning services volumes, revenue from acquisitions and our identity and fraud solutions business.

These increases were partially offset by a $15.0 million settlement with a commercial customer.

Revenue for 2018 decreased 1% compared to 2017, due to declines in our core credit decisioning services and identity and fraud solutions revenue.

These declines were partially offset by growth from a 2018 acquisition and revenue from mortgage, auto, and direct to consumer channel partners.

Mortgage Solutions.

Revenue increased 46% in 2020 compared to 2019 due to increased mortgage market transaction volumes.

Revenue decreased 11% in 2019 compared to 2018, primarily due to channel shift between our Mortgage Solutions and Online Information Solutions businesses, partially offset by an increase in mortgage market transaction volumes.

Revenue increased 3% in 2018 compared to 2017, primarily due to a new product offering.

This growth was partially offset by declines in the mortgage market and our other mortgage product offerings.

Financial Marketing Services.

Revenue decreased 1% in 2020 compared to 2019 due the economic impact of COVID-19 on project related revenue.

2019 revenue was negatively impacted by a $5.0 million settlement with a commercial customer.

Revenue remained flat in 2019 compared to 2018 due to an increase in project related revenue, offset by a $5.0 million settlement with a commercial customer.

Revenue decreased 4% in 2018 compared to 2017 due to a reduction in projects delivered.

Information Solutions Operating Margin.

USIS operating margin decreased to 31.3% in 2020 compared to 33.1% in 2019, due to increased royalty, people, technology and depreciation costs, as well as incremental technology and data security costs associated with our ongoing technology transformation, partially offset by the increase in revenue.

USIS operating margin decreased to 33.1% in 2019 compared to 35.4% in 2018, primarily due to increases in royalties, technology, data security and people costs and settlements with commercial customers.

These increases were partially offset by the public records litigation settlement of $18.5 million in 2018 that did not recur in 2019.

USIS operating margin decreased to 35.4% in 2018 compared to 42.7% in 2017, primarily due to the decrease in revenue and increases in incremental technology and data security costs, royalties, and the public records litigation settlement.

Workforce Solutions

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Operating margin 48.7 % 41.0 % 40.2 % 7.7 pts 0.8 pts

Workforce Solutions revenue increased by 15% in 2019 compared to 2018 due to strong growth in Verification Services which was partially offset by decreased revenue in our tax management services and our Affordable Care Act compliance services.

Workforce Solutions revenue increased by 8% in 2018 compared to 2017 due to strong growth in Verification Services, partially offset by decreased revenue in unemployment claims.

Workforce Solutions revenue increased by 51% in 2020 compared to 2019 due to strong growth in both Verification Services and Employer Services.

Verification Services growth was due to strong growth in mortgage related revenue.

Employer Services growth was due to growth in unemployment claims management revenue.

Workforce Solutions revenue increased by 15% in 2019 compared to 2018 due to strong growth in Verification Services.

This was partially offset by decreased revenue in Employer Services, due to reductions in revenue from tax management services and our Affordable Care Act compliance services.

Verification Services.

Revenue increased 58% in 2020 compared to 2019, due to strong growth in the mortgage vertical and continued addition of new records to The Work Number database.

Revenue from the commercial non-mortgage verticals of Verification Services have experienced declines versus 2019 due to the economic impact of COVID-19.

Revenue increased 23% in 2019 compared to 2018, due to strong growth in mortgage, government, financial, healthcare and talent solutions verticals, and continued addition of new records to The Work Number database.

Revenue increased 13% in 2018 compared to 2017, due to strong growth in government, mortgage, talent solutions, and healthcare verticals, and continued addition of new records to The Work Number database.

Employer Services.

Revenue increased 34% in 2020 compared to 2019 due to increases in our unemployment claims management services as U.S.

unemployment claims increased substantially due to the economic impact of COVID-19 on the U.S.

This was partially offset principally by declines in our tax management services and Affordable Care Act compliance services.

Revenue decreased 4% in 2019 compared to 2018 due to declines in our tax management services and Affordable Care Act compliance services.

These declines were partially offset by revenue from acquisitions.

Revenue decreased 1% in 2018 compared to 2017 due to declines in our unemployment claims services, workforce analytics and our other employer services.

These declines were partially offset by growth from our 2018 acquisitions.

Workforce Solutions Operating Margin.

Operating margin increased to 48.7% in 2020 compared to 41.0% in 2019 primarily due to the increase in revenue, partially offset by increases in royalty, people, technology and depreciation costs, as well as incremental technology and data security costs associated with ongoing technology transformation.

Operating margin increased to 41.0% in 2019 compared to 40.2% in 2018 primarily due to the increase in revenue.

Operating margin decreased to 40.2% in 2018 compared to 43.4% in 2017 due to increases in people, incremental technology and data security, and royalty costs.

International

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

2019 2019 vs.

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International revenue decreased by 6% in 2020 as compared to 2019.

Local currency revenue growth for 2019 was 3%, driven by growth in the Latin America and Canada regions.

Local currency revenue decreased 4% in 2020, driven by declines across all geographies due to the negative impacts of COVID-19 on transaction volumes beginning in the second half of March.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $24.4 million, or 2%.

International revenue increased by 4% in 2018 as compared to 2017.

Local currency revenue growth for 2018 was 7%, driven by growth across all regions.

International revenue decreased by 5% in 2019 as compared to 2018.

Local currency revenue growth for 2019 was 3%, driven by growth in the Latin America and Canada regions.

Local currency fluctuations against the U.S.

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Asia Pacific.

Local currency revenue decreased 1% in 2020 as compared to 2019 due to decreases in our consumer and commercial businesses, marketing services and personal solutions related revenue, primarily driven by the economic recession in Australia and New Zealand caused by the COVID-19 pandemic, partly offset by operations in India, an increase in offline transactions within recovery management and stronger online ID Validation.

Local currency fluctuations against the U.S.

dollar did not have a significant impact in 2020.

Reported revenue also decreased 1% in 2020 as compared to 2019.

Local currency revenue decreased 1% in 2019 as compared to 2018 primarily driven by weak consumer and commercial lending markets in Australia resulting in declines in consumer lending and direct-to-consumer related revenue.

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Reported revenue decreased 8% in 2019 as compared to 2018.

Local currency revenue growth was 8% in 2018 primarily due to the Mercury acquisition and growth in our commercial business.

Local currency revenue decreased 8% in 2020 as compared to 2019 due to declines in the U.K.

and Spain consumer and commercial businesses and debt services brought on by the impact of the COVID-19 pandemic on local economies.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $8.8 million, or 3%, in 2018 as compared to 2017.

Reported revenue increased 5% in 2018 as compared to 2017.

dollar positively impacted revenue by $3.0 million, or 1%, for 2020.

Reported revenue decreased 7% in 2020 as compared to 2019.

Local currency revenue was flat in 2019 as compared to 2018 primarily due to growth in credit operations revenue in U.K.

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Reported revenue decreased 4% in 2019 as compared to 2018.

Local currency revenue growth was 1% in 2018 as compared to 2017 primarily due to growth in U.K.

and Spain credit operations revenue and was partially offset by a decline in our debt management services.

Local currency fluctuations against the U.S.

dollar positively impacted revenue by $10.0 million, or 4%, for 2018.

Reported revenue increased 5% in 2018 as compared to 2017.

Latin America.

Local currency revenue increased 9% in 2019 as compared to 2018 driven by core growth primarily in Argentina, Chile and Ecuador.

Local currency revenue decreased 3% in 2020 as compared to 2019 caused by the COVID-19 pandemic, which negatively impacted consumer credit operations in all Latin America countries in which Equifax operates.

Local currency fluctuations against the U.S.

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Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $30.8 million, or 14%, in 2018, most notably due to depreciation in the foreign exchange rate of the Argentine peso.

Reported revenue increased 3% in 2018 as compared to 2017.

Local currency revenue increased 8% in 2019 as compared to 2018 primarily due to broad based revenue growth including growth from acquisitions.

dollar negatively impacted revenue by $35.0 million, or 17%, in 2019, primarily from Argentina and Chile.

Reported revenue decreased 8% in 2019 as compared to 2018.

Local currency revenue decreased 2% in 2020 as compared to 2019 primarily due to declines in consumer and commercial online volumes and offline analytics revenue, driven by the COVID-19 pandemic.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $1.3 million, or 1%, in 2020.

Reported revenue increased 5% in 2019 as compared to 2018.

Local currency revenue increased 8% in 2018 as compared to 2017 primarily due to broad based revenue growth.

Reported revenue decreased 3% in 2020 as compared to 2019.

Local currency revenue increased 8% in 2019 as compared to 2018 primarily due to broad based revenue growth including growth from acquisitions.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $0.1 million in 2018.

dollar negatively impacted revenue by $3.7 million, or 3%, in 2019.

Reported revenue increased 5% in 2019 as compared to 2018.

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Operating margin decreased to 7.7% in 2020 as compared to 10.4% in 2019.

The reduced margin is due to increased production costs and negative impacts from foreign currency exchange rates.

The reduced margin is due to the negative effects of COVID-19 on revenue, as well as an increase in depreciation and incremental technology costs related to the ongoing technology transformation, partially offset by reduced operating costs from discretionary expense control across the regions in 2020.

Operating margin decreased to 10.4% in 2019 as compared to 11.2% in 2018.

The reduced margin is due to an increase in incremental technology and data security, people, and production costs as well as depreciation and amortization.

These increased costs were positively impacted by foreign currency fluctuations during the year.

The reduced margin is due to increased incremental technology and data security costs, production costs and negative impacts from foreign currency exchange rates.

Global Consumer Solutions

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

Global Consumer Solutions 2020 vs.

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Revenue decreased 4% for 2020 in reported and local currency revenue, as compared to 2019.

The decrease in revenue is primarily driven by declines in North America partner revenue, partially offset by increases in event based business, benefits revenue and direct to consumer business due to strong consumer subscription performance in Canada.

Operating margin decreased in 2020 to 10.7% compared to 13.4% in 2019, due to increased customer support and marketing costs, partially offset by lower royalty costs due to lower revenue.

Revenue decreased 3% for 2019 in reported and local currency revenue, as compared to 2018.

The decrease in revenue is primarily due to a decrease in our consumer direct revenue in the U.S.

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Operating margin decreased in 2019 to 13.4% compared to 18.4% in 2018, due to the decreased revenue and an increase in advertising and production costs which were partially offset by decreased people costs.

Revenue decreased 8% for 2018 in reported and local currency revenue, as compared to 2017.

The decrease in revenue is due to a decrease in our consumer direct revenue in the U.S.

as we ceased advertising our consumer paid products in the U.S.

in September 2017 following the 2017 cybersecurity incident and the U.K.

as we were impacted by the Global Data Protection Regulations in the U.K.

These decreases were partially offset by an increase in our partner revenue, which includes revenue from the ID Watchdog acquisition.

We resumed advertising our U.S.

consumer paid products in the fourth quarter of 2018.

Local currency fluctuations against the U.S.

dollar positively impacted revenue by $1.2 million for 2018.

Operating margin decreased in 2018 to 18.4% compared to 26.4% in 2017, due to the decreased revenue and an increase in incremental technology and data security costs which were partially offset by decreased advertising costs.

General Corporate Expense

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Our general corporate expenses are unallocated costs that are incurred at the corporate level and include those expenses impacted by corporate direction, including shared services, technology, administrative, legal, restructuring, and the portion of management incentive compensation determined by total company-wide performance.

General corporate expense increased $789.4 million in 2019.

The increase in 2019 as compared to 2018 is primarily due to losses, net of insurance recoveries, of $800.9 million associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident.

General corporate expense increased $188.8 million in 2018.

We incurred increased incremental technology and data security costs following the announcement of the 2017 cybersecurity incident of $186.7 million in 2018.

This was partially offset by a decrease in legal and investigative fees and the costs to fulfill and support the free credit monitoring service provided to eligible consumers of $75.2 million in 2018.

Further, we benefited from an increase in the recognition of insurance proceeds of $75.0 million to offset these costs in 2018, versus the $50.0 million of insurance proceeds recorded in 2017.

Additionally, we recorded $46.1 million of restructuring charges in 2018 which primarily relate to a reduction of headcount.

The remaining increase is due to people and insurance costs.

General corporate expense decreased $701.3 million in 2020.

The decrease in 2020 as compared to 2019 is due to the legal accruals for losses associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident of $800.9 million that were recorded in 2019 and did not recur in 2020 and lower technology costs, partially offset by increased people costs and a restructuring charge taken in the fourth quarter of 2020.

The restructuring charge in the fourth quarter of 2020 resulted from our continuing efforts to realign our internal resources to support our strategic objectives.

General corporate expense increased $789.4 million in 2019 due to the aforementioned losses associated with the 2017 cybersecurity incident.

LIQUIDITY AND FINANCIAL CONDITION

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Sources and Uses of Cash

Funds generated by operating activities, our Revolver and related commercial paper program and our Receivables Facility, more fully described below, are our most significant sources of liquidity.

Funds generated by operating activities, our Revolver and related commercial paper program, more fully described below, are our most significant sources of liquidity.

In April 2020, we issued $1.0 billion aggregate principal amount of senior notes.

The net proceeds of the sale of the notes were used to repay borrowings under our Receivables Facility and Revolver, while the remaining funds are intended for general corporate purposes.

At December 31, 2020, we had $1.7 billion in cash balances, as well as $1.1 billion available to borrow under our Revolver.

The Company has and expects to make payments to resolve certain legal proceedings and investigations related to the 2017 cybersecurity incident, described more fully in “Item 3.

Legal Proceedings” in this Form 10-K.

In 2019, the Company made payments of $341.5 million principally related to the Consumer Settlement comprised of $180.5 million to the MSAG Group, $100.0 million to the CFPB, $25.2 million to the Consumer Restitution Fund and $10.0 million to the NYDFS.

Through 2020, the Company made payments of $439.3 million for legal settlements related to the 2017 cybersecurity incident.

The remaining $346.7 million to be paid to the Consumer Restitution Fund will be made after a final adjudication affirming the U.S.

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Although we expect this payment and the remaining settlement payments to be made in 2021, we can give no assurance that these payments will occur in 2021 due to pending approvals or appeals.

As a result of the possible payments that could be made in 2020 related to the losses associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident, funds generated by operating activities are not expected to be sufficient to fund working capital and other cash requirements throughout 2020.

Our plan is to finance the payments with existing borrowing capacity, including under our Revolver.

At December 31, 2019, $1.10 billion was available to borrow under our Revolver.

As of December 31, 2019, $221.7 million was available to borrow under our Receivables Facility.

In the event that additional financing is needed, we would finance using the public and private corporate bond markets and/or syndicated loan markets, if available.

As a result of the possible payments that could be made in 2021 related to the losses associated with certain legal proceedings and government investigations related to the 2017 cybersecurity incident and other requirements, funds generated by operating activities may not be sufficient to fund working capital and other cash requirements, including for acquisitions and share repurchases, throughout 2021.

Our plan is to finance the payments with existing cash balances and borrowing capacity, as necessary.

Fund Transfer Limitations.

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The following table summarizes our cash flows for the twelve months ended December 31, 2020, 2019 and 2018:

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

Net cash provided by (used in):

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Operating Activities

Cash provided by operating activities for 2020 increased by $632.4 million compared to 2019.

The increase in cash from operations is due to increased net income in 2020 and additional payments made in 2019 associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident.

Cash provided by operating activities for 2019 decreased by $358.4 million compared to 2018.

The decrease is due to partial payment of the losses associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident as well as having received $110.0 million in insurance proceeds in 2018.

Cash provided by operating activities for 2018 decreased by $143.8 million compared to 2017, due to the decrease in net income, adjusted for depreciation and amortization.

This decrease was partially offset by an improvement in our working capital and the change in deferred income taxes.

Investing Activities

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

Net cash used in:

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Acquisitions, Divestitures and Investments

Twelve Months Ended

December 31, Change

Net cash provided by (used in):

Twelve Months Ended December 31, Change

Net cash used in:

2020 2019 2018 2020 vs.

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2020 Acquisitions and Investments.

During 2020, we acquired the remaining interest in our India joint venture in our International operating segment and completed an additional acquisition in our USIS operating segment.

2019 Acquisitions and Investments.

During 2019, we completed the acquisition of PayNet in our USIS and International operating segments and completed additional acquisitions in our Workforce Solutions segment.

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in the third quarter of 2018 in our USIS segment.

2017 Acquisitions and Investments.

During the fourth quarter of 2017, we acquired 100% of the outstanding stock of Mercury Group of Companies Pty Ltd (“Mercury”), an Australian-owned workforce management company.

During the third quarter of 2017, we completed the acquisition of 100% of the outstanding stock of ID Watchdog, Inc.

For additional information about our acquisitions, see Note 3 of the Notes to Consolidated Financial Statements in this report.

For additional information about our acquisitions, see Note 3 of the Notes to Consolidated Financial Statements in Item 8 of this report.

Financing Activities

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

Net cash provided by (used in):

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(In millions)

Net short-term (repayments) borrowings $ (1.8) $ (959.2) $ 252.4 $ 957.4 $ (1,211.6)

Proceeds from issuance of long-term debt $ 998.3 $ 994.5 $ 100.0 $ 3.8 $ 894.5

Net short-term repayments $ (0.7) $ (1.8) $ (959.2) $ 1.1 $ 957.4

Payments on long-term debt $ (125.0) $ (250.0) $ (100.0) $ 125.0 $ (150.0)

Proceeds from issuance of long-term debt $ 1,123.3 $ 998.3 $ 994.5 $ 125.0 $ 3.8

Borrowing and Repayment Activity.

Net short-term (repayments) borrowings primarily represent repayments or borrowings of outstanding amounts under our commercial paper (“CP”) program.

Net short-term repayments primarily represent repayments or borrowings of outstanding amounts under our commercial paper (“CP”) program.

We primarily borrow under our CP program as needed and as availability allows.

The decrease in net short-term (repayments) borrowings in 2019 and 2018 and the increase in 2017 primarily relates to the net activity of CP notes.

The increase in proceeds from long-term debt in 2019 relates to the issuance of $750.0 million in senior notes in November 2019 and draw downs on our Receivable Facility during the year.

In November 2019, we issued $750.0 million aggregate principal amount of 2.6% Senior Notes due 2024 (the “2024 Notes”) in an underwritten public offering.

Interest on the 2024 Notes accrue at a rate of 2.6% per year and will be payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2020.

The decrease in net short-term repayments in 2020, 2019 and 2018 primarily relates to the net repayments of our CP notes.

In April 2020, we issued $400.0 million aggregate principal amount of 2.6% five-year Senior Notes due 2025 (the "2025 Notes") and $600.0 million aggregate principal amount of 3.1% ten-year Senior Notes due 2030 (the "2030 Notes") in an underwritten public offering.

Interest on the 2025 Notes accrues at a rate of 2.6% per year and is payable semi-annually in arrears on June 15 and December 15 of each year.

Interest on the 2030 Notes accrues at a rate of 3.1% per year and is payable semi-annually in arrears on May 15 and November 15 of each year.

The net proceeds of the sale of the notes were used to repay borrowings under our Receivables Facility and Revolver, while the remaining funds are intended for general corporate purposes, which may include the repayment of a portion of the 2021 debt maturities.

In November 2019, we issued $750.0 million aggregate principal amount of 2.6% five-year Senior Notes due 2024 (the “2024 Notes”) in an underwritten public offering.

Interest on the 2024 Notes accrue at a rate of 2.6% per year and will be payable semi-annually in arrears on June 1 and December 1 of each year.

The net proceeds of the sale of the notes were used to repay borrowings under our Receivables Facility and our CP program and for general corporate purposes.

The increase in proceeds from long-term debt in 2018 relates to the issuance of $1.0 billion of senior notes in May 2018.

In May 2018, we issued $300.0 million aggregate principal amount of 3.6% Senior Notes due 2021 (the “2021 Notes”), $400.0 million aggregate principal amount of 3.95% Senior Notes due 2023 (the “2023 Notes”), and $300.0 million aggregate principal amount Floating Rate Notes due 2021 (the “Floating Rate Notes”) in an underwritten public offering.

The net proceeds of the sale of the notes were used to repay borrowings under our Revolver, our prior $800.0 million three-year delayed draw term loan facility (“Term Loan”) and our CP program.

The increase in proceeds from long-term debt in 2017 is due to borrowings on our Revolver.

Payments on long-term debt in 2019 reflect payments on our Receivable Facility using proceeds from the issuance of the senior notes in 2019.

Payments on long-term debt in 2020 and 2019 reflect payments on our Receivable Facility using proceeds from the issuance of the senior notes.

Payments on long-term debt in 2018 reflect $100.0 million of payments on the Revolver using proceeds from the issuance of 3.60%, Floating Rate and 3.95% senior notes in 2018.

Payments on long-term debt in 2017 reflect $272.5 million of payments related to senior notes, as well as $50.0 million of payments on the Term Loan.

Credit Facility Availability.

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The Revolver includes an option to request a maximum of two one-year extensions of the maturity date, any time after the first anniversary of the Revolver closing.

We believe we are currently in compliance with all representations and warranties necessary as a condition for borrowing under the Revolver, but we cannot assure that we will be able to comply with all such conditions to borrowing in the future.

Availability of the Revolver is reduced by the outstanding principal balance of our commercial paper notes and by any letters of credit issued under the facility.

On April 10, 2020, we amended our existing revolving credit facility to increase the maximum leverage ratio to provide additional financial flexibility as described further below.

Our $1.1 billion CP program has been established to allow for borrowing 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 Revolver and the total amount of CP which may be issued is reduced by the amount of any outstanding borrowings under our Revolver.

The CP program is supported by our Revolver and the total amount of CP which may be issued is reduced by the amount of any outstanding borrowings under our Revolver and by any letters of credit issued under the facility.

At December 31, 2020, the Company had no borrowings outstanding of CP, $0.7 million of letters of credit outstanding and no borrowings outstanding under the Revolver.

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At December 31, 2020, the interest rate on our variable-rate debt was 1.1%.

In December 2019, we amended our $225.0 million receivables funding facility (the “Receivables Facility”) to extend the maturity to December 2022.

In the fourth quarter of 2017, Equifax entered into the Receivables Facility which had an original maturity in 2019 and was amended in November 2018 to extend the maturity to November 2020.

Under the Receivables Facility, Equifax and certain of its U.S.

subsidiaries sell the eligible third-party receivables of its U.S.

based business, to Equifax Receivables Funding LLC, a consolidated, wholly-owned, bankruptcy-remote subsidiary that may subsequently transfer, without recourse, an undivided interest in these accounts receivable to investors.

The investors have no recourse to the Company’s other assets except for customary repurchase, warranty and indemnity claims.

Creditors of Equifax do not have recourse to the assets of Equifax Receivables Funding LLC.

In November 2020, we terminated our $225.0 million receivables funding facility (the “Receivables Facility”).

Debt Covenants.

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The outstanding indentures and comparable instruments contain customary covenants including, for example, limits on mortgages, liens and sale/leaseback transactions.

In addition, the Revolver requires us to maintain a maximum leverage ratio of not more than 3.5 to 1.0.

As permitted under the terms of the Revolver, we made the election to increase the covenant to 4.0 to 1.0, effective for four consecutive quarters, beginning in the second quarter of 2019 and continuing through the first quarter of 2020.

On April 10, 2020, we amended our existing revolving credit facility to increase the maximum leverage ratio to provide additional financial flexibility.

The amendment increases the maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA for the preceding four quarters, to (i) 4.5 to 1.0 for fiscal quarters ending on June 30,

2020 through and including September 30, 2021 and (ii) 4.0 to 1.0 for the fiscal quarter ending on December 31, 2021.

The maximum leverage ratio will return to 3.5 to 1.0 beginning with the fiscal quarter ending March 31, 2022 and thereafter.

Beginning January 1, 2021, we may also elect to increase the maximum leverage ratio by 0.5 to 1.0 (not to exceed 4.5 to 1.0) in connection with certain material acquisitions if we satisfy certain requirements.

The amendment also (i) permits cash in excess of $200 million to be netted against debt in the calculation of the leverage ratio through September 30, 2021, subject to certain restrictions and (ii) extends the add-back of certain expenses related to the 2017 cybersecurity incident to the definition of Consolidated EBITDA through December 31, 2021.

None of these covenants are considered restrictive to our operations and, as of December 31, 2020, the Company was in compliance with all of our debt covenants.

The Company does not have any credit rating triggers that would accelerate the maturity of a material amount of the outstanding debt;

however, the 2.3% senior notes due 2021, 3.6% senior notes due 2021, the Floating Rate Notes, 3.3% senior notes due 2022, 3.95% senior notes due 2023, 2.6% senior notes due 2024, 3.25% senior notes due 2026, and 7.0% senior notes due 2037 (together, the “Senior Notes”) contain change in control provisions.

however, our 2.3% senior notes due 2021, 3.6% senior notes due 2021, floating rate notes due 2021, 3.3% senior notes due 2022, 3.95% senior notes due 2023, 2.6% senior notes due 2024, 2.6% senior notes due 2025, 3.25% senior notes due 2026, 3.1% senior notes due 2030 and 7.0% senior notes due 2037 (together, the “Senior Notes”) contain change in control provisions.

If the Company experiences a change of control or publicly announces the Company’s intention to effect a change of control and the rating on the Senior Notes is lowered by Standard & Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”) below an investment grade rating within 60 days of such change of control or notice thereof, then the Company 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.

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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, 2019, the long-term ratings for our obligations were BBB with a negative outlook for S&P and Baa1 with a negative outlook for Moody’s.

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, 2020, the long-term ratings for our obligations were BBB with a negative outlook for S&P and Baa2 with a stable outlook for Moody’s.

A downgrade in our credit rating would increase the cost of borrowings under our CP program and Revolver, and could limit, or in the case of a significant downgrade, preclude our ability to issue CP.

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These ratings are subject to change as events and circumstances change.

For additional information about our debt, including the terms of our financing arrangements, basis for variable interest rates and debt covenants, see Note 5 of the Notes to Consolidated Financial Statements in this report.

Equity Transactions

Twelve Months Ended

December 31, Change

Twelve Months Ended December 31, Change

Net cash provided by (used in):

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(In millions)

Treasury stock purchases $ — $ — $ (77.1) $ — $ 77.1

Dividends paid to Equifax shareholders $ (189.5) $ (188.7) $ (187.9) $ (0.8) $ (0.8)

Dividends paid to noncontrolling interests $ (4.6) $ (6.6) $ (10.3) $ 2.0 $ 3.7

Proceeds from exercise of stock options $ 22.3 $ 11.8 $ 19.2 $ 10.5 $ (7.4)

Proceeds from exercise of stock options and employee stock purchase plan $ 41.7 $ 22.3 $ 11.8 $ 19.4 $ 10.5

Purchase of redeemable noncontrolling interests $ (9.0) $ — $ (30.9) $ (9.0) $ 30.9

Sources and uses of cash related to equity during the twelve months ended December 31, 2020, 2019 and 2018 were as follows:

• We did not repurchase any shares in 2019 and 2018.

Under share repurchase programs authorized by our Board of Directors, we repurchased 0.5 million common shares during the twelve months ended December 31, 2017, for $77.1 million, at an average price per common share of $143.88.

• We did not repurchase any shares from public market transactions in 2020, 2019 or 2018.

As of December 31, 2020, under the existing board authorization, the Company is approved for additional stock repurchases of $590.1 million.

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the defined benefit component was also closed to new hires on October 1, 2011.

During the twelve months ended December 31, 2020, we made no voluntary contributions to the USRIP or to the CRIP.

During the twelve months ended December 31, 2019, we made no voluntary contributions to the USRIP and made contributions of $0.2 million to the CRIP.

During the twelve months ended December 31, 2018, we made voluntary contributions of $30.0 million to the USRIP and made contributions of $0.4 million to the CRIP.

At December 31, 2020, the USRIP met or exceeded ERISA’s minimum funding requirements.

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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 9 of the Notes to Consolidated Financial Statements in this report.

For the non-qualified supplemental 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 including the change in accounting method adopted in 2020, see Notes 1 and 9 of the Notes to Consolidated Financial Statements in Item 8 of this report.

Effects of Inflation and Changes in Foreign Currency Exchange Rates

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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.

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 Item 8 of this report.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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The following accounting policies involve critical accounting estimates because they are particularly dependent on estimates and assumptions 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 that we used are reasonably likely to occur from period to period, either of which may have a material impact on the presentation of our Consolidated Balance Sheets, Statements of (Loss) Income, and Statements of Comprehensive (Loss) Income.

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 that we used are reasonably likely to occur from period to period, either of which may have a material impact on the presentation of our Consolidated Balance Sheets, Statements of Income (Loss), and Statements of Comprehensive Income (Loss).

We also have other significant accounting policies which involve the use of estimates, judgments and assumptions that are relevant to understanding our results.

For additional information about these policies, see Note 1 of the Notes to Consolidated Financial Statements in this report.

For additional information about these policies, see Note 1 of the Notes to Consolidated Financial Statements in Item 8 of this report.

Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information available at the time.

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If at the outset of an arrangement, we determine that collectibility is not reasonably assured, revenue is deferred until the earlier of when collectibility becomes probable or the receipt of payment from the customer.

If there is uncertainty as to the

customer’s acceptance of the performance obligation, revenue is not recognized until the earlier of receipt of customer acceptance or expiration of the acceptance period.

If there is uncertainty as to the customer’s acceptance of the performance obligation, revenue is not recognized until the earlier of receipt of customer acceptance or expiration of the acceptance period.

We sell certain offerings that contain multiple performance obligations.

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These events or circumstances could include a significant change in the business climate, legal factors, operating performance or trends, competition, or sale or disposition of a significant portion of a reporting unit.

We have seven reporting units comprised of USIS

(which includes Online Information Solutions, Mortgage Solutions and Financial Marketing Services), Asia Pacific, Europe, Latin America, Canada, Global Consumer Solutions (“GCS”), and Equifax Workforce Solutions (which includes Verification Services and Employer Services).

We have seven reporting units comprised of USIS (which includes Online Information Solutions, Mortgage Solutions and Financial Marketing Services), Asia Pacific, Europe, Latin America, Canada, Global Consumer Solutions (“GCS”), and Equifax Workforce Solutions (which includes Verification Services and Employer Services).

The goodwill balance at December 31, 2020, for our seven reporting units was as follows:

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Valuation Techniques

We performed a qualitative assessment to determine whether further impairment testing was necessary for our USIS, Europe, Latin America, Canada, GCS, and Workforce Solutions reporting units.

We performed a qualitative assessment to determine whether further impairment testing was necessary for our USIS, Workforce Solutions, Europe, Canada and GCS reporting units.

In this qualitative assessment, we considered the following items for each of the reporting units:

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As a result of our conclusions, no further testing was required for these reporting units.

We performed a quantitative assessment for our Asia Pacific reporting unit to determine whether impairment exists as the Veda transaction, which comprises the majority of our Asia Pacific reporting unit, was only completed approximately three years ago and due to the size of the cushion for the reporting unit in relation to our other reporting units.

We performed a quantitative assessment for our Asia Pacific and Latin America reporting units to determine whether impairment exists from the most recent valuation dates due to the size of the cushion and lower current year forecasts than the 2020 projections from the most recent valuations in relation to our other reporting units.

In determining the fair value of the reporting unit, we used a combination of the income and market approaches to estimate the reporting unit’s business enterprise value.

Under the income approach, we calculate the fair value of a reporting unit based on estimated future discounted cash flows which require assumptions about short and long-term revenue growth rates, operating margins for each reporting unit, discount rates, foreign currency exchange rates and estimates of capital charges.

The assumptions we use are based on what we believe a hypothetical marketplace participant would use in estimating fair value.

Under the market approach, we estimate the fair value based on market multiples of revenue or earnings before income taxes, depreciation and amortization, for benchmark companies or guideline transactions.

We believe the benchmark companies used for our Asia Pacific reporting unit serve as an appropriate input for calculating a fair value for the reporting unit as those benchmark companies have similar risks, participate in similar markets, provide similar services for their customers and compete with us directly.

We believe the benchmark companies used for our Asia Pacific and Latin America reporting units serve as an appropriate input for calculating a fair value for the reporting unit as those benchmark companies have similar risks, participate in similar markets, provide similar services for their customers and compete with us directly.

The companies we use as benchmarks are principally outlined in our discussion of Competition in Item 1 of this Form 10-K.

Competition for our Asia Pacific reporting unit generally includes global consumer credit reporting companies, such as Experian, which offer a product suite similar to the reporting unit’s credit reporting solutions.

Competition for our Asia Pacific and Latin America reporting units generally includes global consumer credit reporting companies, such as Experian, which offer a product suite similar to the reporting unit's credit reporting solutions.

The values separately derived from each of the income and market approach valuation techniques were used to develop an overall estimate of a reporting unit’s fair value.

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The assumptions for our future cash flows begin with our historical operating performance, the details of which are described in our Management’s Discussion & Analysis of operating performance.

Additionally, we consider the impact that known economic, industry and market trends will have on our future forecasts, as well as the impact that we expect from planned business initiatives including new product initiatives, client service and retention standards, and cost management programs.

At the end of the forecast period, the long-term growth rate we used to determine the terminal value of our Asia Pacific reporting unit was 4.85% based on management’s assessment of the minimum expected terminal growth rate of the reporting unit, as well as broader economic considerations such as GDP, inflation and the maturity of the markets we serve.

We projected revenue growth in 2020 for our Asia Pacific reporting unit in completing our 2019 impairment testing based on planned business initiatives and prevailing trends exhibited by this unit and not based on the assumption of meaningful acceleration in economic growth.

The anticipated revenue growth in this reporting unit, however, is partially offset by assumed increases in expenses for the reporting unit which reflects the additional level of investment needed in order to achieve the planned revenue growth.

Additionally, we consider the impact that known economic, industry and market trends, including the potential impact of the COVID-19 global pandemic, will have on our future forecasts, as well as the impact that we expect from planned business initiatives including new product initiatives, client service and retention standards, and cost management programs.

At the end of the forecast period, the long-term growth rate we used to determine the terminal value of our Asia Pacific and Latin American reporting units were between 3.0% and 5.0% based on management’s assessment of the minimum expected terminal growth rate of the reporting unit, as well as broader economic considerations such as GDP, inflation and the maturity of the markets we serve.

We projected revenue growth in 2021 for our Asia Pacific and Latin America reporting units in completing our 2020 impairment testing based on expected economic recovery from the negative impact the COVID-19 pandemic has had on these regions in 2020, planned business initiatives and prevailing trends exhibited by these units and not based on the assumption of meaningful acceleration in economic growth.

The anticipated revenue growth in these reporting units, however, is partially offset by assumed increases in expenses for the reporting unit which reflects the additional level of investment needed in order to achieve the planned revenue growth and completion of our technology transformation initiatives.

Discount Rate Assumptions

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The cost of debt was computed using a benchmark rate and the Company’s tax rate.

For the 2019 annual goodwill impairment evaluation, the discount rate used to develop the estimated fair value of the Asia Pacific reporting unit was 9.1%.

For the 2020 annual goodwill impairment evaluation, the discount rates used to develop the estimated fair value of the Asia Pacific and Latin America reporting units were between 9.0% and 16.0%.

Estimated Fair Value and Sensitivities

The estimated fair value of the reporting units is derived from the valuation techniques described above, incorporating the related projections and assumptions.

An indication of possible impairment occurs when the estimated fair value of the reporting unit is below the carrying value of its equity.

The estimated fair value for our Asia Pacific reporting unit exceeded the related carrying value as of September 30, 2019.

Impairment occurs when the estimated fair value of the reporting unit is below the carrying value of its equity.

The estimated fair value for our Asia Pacific and Latin America reporting units exceeded their related carrying values as of September 30, 2020.

As a result, no goodwill impairment was recorded.

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Ultimately, future potential changes in these assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value.

Our Asia Pacific reporting unit primarily represents our recently completed acquisition of Veda.

Due to the recency of this acquisition and its overall significance to the reporting unit, Asia Pacific is more sensitive to changes in the assumptions noted above that could result in a fair value that is less than its carrying value.

The excess of fair value over carrying value for the Asia Pacific reporting unit as of September 30, 2019 was 14%.

Due to the lower cushions when compared to other reporting units, Asia Pacific and Latin America are more sensitive to changes in the assumptions noted above that could result in a fair value that is less than its carrying value.

The excess of fair value over carrying value for the Asia Pacific reporting unit was less than 5% and the excess fair value over carrying value for the Latin America reporting unit was between 15% and 20% as of September 30, 2020.

Given the small excess of fair value over carrying value for the Asia Pacific reporting unit, we believe that it is at risk of a possible future goodwill impairment.

Although we experienced growth in this reporting unit for the three months ended December 31, 2020 in comparison to the estimates used in the 2020 goodwill impairment testing, the COVID-19 pandemic has had a substantial negative impact on our results over the last nine months of 2020.

Avoidance of a future impairment will be dependent on continued economic recovery from the negative impact caused by COVID-19 in 2020 and our ability to execute on initiatives to grow revenue and manage expenses prudently.

We will continue to monitor the performance of this reporting unit to ensure no interim indications of possible impairment have occurred before our next annual goodwill impairment assessment in September 2021.

Loss Contingencies

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Legal Proceedings” in this Form 10-K.

exclusive of our legal and professional services expenses.

We recorded expenses, net of insurance recoveries, of $800.9 million in other current liabilities and selling, general, and administrative expenses in our Consolidated Statements of Income (Loss) for the twelve months ended December 31, 2019, exclusive of our legal and professional services expenses.

The amount accrued represents our best estimate of the liability related to these matters.

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Legal Proceedings” in this Form 10-K based on a number of factors, such as the various stages of these proceedings and investigations, including matters on appeal, that alleged damages have not been specified or are uncertain, the uncertainty as to the certification of a class or classes and the size of any certified class, as applicable, and the lack of resolution on significant factual and legal issues.

Legal Proceedings” in this Form 10-K.

Judgments and uncertainties — We periodically review claims and legal proceedings and assess whether we have potential financial exposure based on consultation with internal and outside legal counsel and other advisors.

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We consider accounting for our U.S.

and Canadian pension and other postretirement plans critical because management is required to make significant subjective judgments about a number of actuarial assumptions, which include discount rates, expected return on plan assets, interest cost and mortality and retirement rates.

and Canadian pension and other postretirement plans critical because management is required to make significant judgments about a number of actuarial assumptions, which include discount rates, expected return on plan assets, interest cost and mortality and retirement rates.

Actuarial valuations are used in determining our benefit obligation and net periodic benefit cost.

In the fourth quarter of 2020, we voluntarily changed our method of accounting for recognizing actuarial gains and losses and expected return on plan assets for our defined benefit pension and other postretirement benefit plans.

Under the accounting method change, remeasurement of projected benefit obligation and plan assets are immediately recognized in earnings through net periodic benefit cost within Other Income (Expense) on the Consolidated Statements of Income (Loss), with pension and postretirement plans to be remeasured annually in the fourth quarter or on an interim basis as triggering events require remeasurement.

Refer to Note 1 of the Consolidated Financial Statements in Item 8 of this report for further discussion.

During 2020, we adopted the new MP-2020 mortality improvement scale in determining liability for the U.S.

The updated projection scale contributed to a slight decrease in the projected benefit obligation, partially offsetting the decrease in the discount rates in 2020, the net of which resulted in the increase of the projected benefit obligation as of December 31, 2020.

During 2019, we adopted the new Pri-2012 mortality tables and MP-2019 mortality improvement projection scale in determining the liability for the U.S.

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This updated scale, along with the change in the discount rates, contributed to a decrease in the projected benefit obligation as of December 31, 2018.

During 2017, we adopted the new MP-2017 mortality improvement projection scale in determining the liability for the U.S.

This updated scale partially offset the decrease in the discount rates in 2017, the net of which resulted in the increase in the projected benefit obligation as of December 31, 2017.

Judgments and uncertainties — We believe that the most significant assumptions related to our net periodic benefit cost are (1) the discount rate and (2) the expected return on plan assets, in each case as it relates to our U.S.

pension plan.

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The yield curve provides discount rates related to a dedicated high-quality bond portfolio whose cash flows extend beyond the current period, from which we choose a rate matched to the expected benefit payments required for each plan.

In 2019, the Compensation Committee of the Board of Directors approved the termination of the plan.

The CRIP will be frozen effective December 31, 2020 at which date all active members accruing defined benefits shall cease such accruals.

Taking into consideration the factors noted above, our weighted-average discount rate used to determine benefit obligations was 2.56% at December 31, 2020.

The weighted average expected return on plan assets for 2020 was 6.46%.

The weighted average expected return on plan assets for 2021 is 4.65%.

The expected return on plan assets was based on the Company's review of the asset allocation of the portfolio among various asset classes and represents an estimate of future experience for trust asset returns, reflects current and expected future market conditions along with recent changes to the asset allocations.

The rate is net of investment and administrative expenses paid from the trust.

In 2019, the Compensation Committee of the Board of Directors approved the termination of the Canadian pension plan.

The Canadian plan was frozen effective December 31, 2020 at which date we ceased accruing benefits for all active members.

The obligation is expected to be settled in 2022 with lump sum distributions and an annuity purchase.

The expected rate of return on plan assets is based on both our historical returns and forecasted future investment returns by asset class, as provided by our external investment advisor.

In 2019, our U.S.

pension plan investment earned 21.4%, which was above the expected return of 6.7%.

The expected return for the USRIP for 2020 is 6.5% following asset allocation changes that resulted in higher allocation to fixed income securities.

The CRIP investment earned 12.7% in 2019 versus the expected return of 6.0%.

The expected return for the CRIP for 2020 is 6.0%.

Our weighted-average expected rate of return for both plans for 2019 is 6.46% which is consistent with the 2019 expected rate.

Annual differences, if any, between the expected and actual returns on plan assets are included in unrecognized net actuarial gain or loss, a component of other comprehensive income.

In calculating the annual amortization of the unrecognized net actuarial gain or loss, we use a market-related value of assets that smooths actual investment gains and losses on plan assets over a period up to five years.

The resulting unrecognized net actuarial gain or loss amount is recognized in net periodic pension expense over the average remaining life expectancy of the participant group since almost all participants are inactive.

The market-related value of our assets was $563.7 million at December 31, 2019.

We do not expect our 2020 net periodic benefit cost, which includes the effect of the market-related value of assets, to be materially different than our 2019 cost.

See Note 9 of the Notes to the Consolidated Financial Statements for details on changes in the pension benefit obligation and the fair value of plan assets.

Under the new method of accounting for our pension and postretirement benefit plans, the market-related value of our assets will be equal to our fair value of plan assets and are remeasured in the fourth quarter with gains and losses recognized through the Consolidated Statements of Income.

We do not expect our 2021 net periodic benefit income, which includes the effect of the market-related value of assets, to be materially different from our 2020 net periodic benefit income.

See Note 9 of the Notes to the Consolidated Financial Statements in Item 8 of this report for details on changes in the pension benefit obligation and the fair value of plan assets.

Effect if actual results differ from assumptions — We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that are used in our actuarial valuations.

Adjusting our weighted-average expected long-term rate of return (6.46% at December 31, 2019) by 50 basis points would change our estimated pension expense in 2019 by approximately $2.8 million.

Adjusting our weighted-average discount rate (4.39% at December 31, 2019) by 50 basis points would change our estimated pension expense in 2019 by approximately $1.1 million.

However, if actual results are not consistent with our estimates or assumptions, we may be exposed to changes in pension expense, pension liability or unrecognized prior service cost and actuarial gains (losses) that could be material.

The effects of a hypothetical change in discount rate may be nonlinear and asymmetrical for future years as the discount rate changes.

Holding all other assumptions constant, an increase or decrease of 25 basis points in the December 31, 2020 discount rate assumption would have the following estimated effects on 2020 pension and other postretirement benefit plan obligations, which would be reflected in the 2020 mark-to-market expense (benefit), and 2021 expected pension and other postretirement benefit plan expense.

25 Basis Point Decrease 25 Basis Point Increase

(In millions)

2021 pension and other postretirement benefit (benefit) expense $ (1.3) $ 1.2

2020 pension and other postretirement benefit plan obligations and mark-to-market expense (benefit) $ 20.6 $ (21.7)

Holding all other assumptions constant, an increase or decrease of 25 basis points in our December 31, 2020 expected return on plan assets would have the following estimated effects on 2021 expected pension and other postretirement benefit plan expense.

25 Basis Point Decrease 25 Basis Point Increase

(In millions)

2021 pension and other postretirement benefit expense (benefit) $ 1.6 $ (1.6)

In addition, holding all other assumptions constant, an increase or decrease of 100 basis points in actual versus expected return on plan assets would have the following estimated effects on our 2021 mark-to-market expense (benefit).

100 Basis Point Decrease 100 Basis Point Increase

(In millions)

2021 pension and other postretirement benefit mark-to-market expense (benefit) $ 6.4 $ (6.4)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis