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Item 7. Management’s Discussion and Analysis

2022-02-24 compared with 2021-02-25 · 300 added, 377 removed, 455 unchanged (60% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Equifax Inc.

MD&A is provided as a supplement to and should be read in conjunction with our consolidated financial statements and the accompanying Notes to Financial Statements in Item 8 of this Form 10-K.

This section discusses the results of our operations for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019.

All percentages have been calculated using unrounded amounts for each of the periods presented.

As used herein, the terms Equifax, the Company, we, our and us refer to Equifax Inc., a Georgia corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Equifax Inc.

All references to earnings per share data in Management’s Discussion and Analysis, or MD&A, are to diluted earnings per share, or EPS, unless otherwise noted.

All references to earnings per share data in MD&A are to diluted earnings per share, or EPS, unless otherwise noted.

Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised and resulted in additional common shares outstanding.

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is a global data, analytics and technology company.

We provide information solutions and human resources business process outsourcing services for businesses, governments and consumers.

We have a large and diversified group of clients, including financial institutions, corporations, governments and individuals.

Our services are based on comprehensive databases of consumer and business information derived from numerous sources including credit, financial assets, telecommunications and utility payments, employment, income, demographic and marketing data.

We use advanced statistical techniques, machine learning and proprietary software tools to analyze available data to create customized insights, decision-making solutions and processing services for our clients.

We also provide information, technology and services to support debt collections and recovery management.

Additionally, we are a leading provider of payroll-related and human resource management business process outsourcing services in the United States of America, or U.S.

We provide information solutions for businesses, governments and consumers, and we provide human resources business process automation and outsourcing services for employers.

We have a large and diversified group of clients, including financial institutions, corporations, government agencies and individuals.

We use advanced statistical techniques, machine learning and proprietary software tools to analyze available data to create customized insights, decision-making and process automation solutions and processing services for our clients.

We are a leading provider of information and solutions used in payroll-related and human resource management business process services in the U.S.

For consumers, we provide products and services to help people understand, manage and protect their personal information and make more informed financial decisions.

Additionally, we also provide information, technology and services to support debt collections and recovery management.

We currently operate in four global regions:

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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 and have an investment in a consumer and commercial credit information company in Brazil.

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 and Singapore 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.

As further described above, we operate in the U.S., which represented 78% of our revenue in 2021, and internationally in 23 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.

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

During 2020 and 2021, we followed applicable requirements and protocols published by the U.S.

Centers for Disease Control, the World Health Organization, and federal, state and local governments.

We have relied on our business continuity plans at various times, which has periodically resulted in a portion of our employee population working remotely, depending on their role.

To date, the change to our working environment has not caused material disruptions in the execution of our strategic plans and has not impacted our internal controls, financial reporting systems or operations.

The impact of COVID-19 pandemic remains uncertain and may affect certain markets or regions we serve differently.

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 and employee hiring and onboarding activity.

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

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

During 2020, overall revenue grew reflecting strong U.S.

mortgage market demand in 2020 compared to 2019 and growth across our Workforce Solutions business.

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 with the impact of the pandemic experienced most severely by our International business.

In 2021, as efforts to minimize the spread of COVID-19 have been more successful and access to vaccinations has increased, our consolidated revenue grew when compared to 2020, reflecting recovering country economies, growth from Equifax initiatives and, to a lesser extent, revenue from acquired companies.

A more thorough discussion of our business unit results are included under the heading “Segment Financial Results” in the Management’s Discussion and Analysis of Financial Condition and Results of Operation section of this Form 10-K.

For 2022, our planning assumes economies in which we operate to continue to show growth relative to 2021.

In the U.S., 2022 economic activity, as measured by GDP, is expected to grow but not at the same rate of growth experienced in 2021.

We expect modest growth in consumer credit, excluding mortgage, over the course of 2022.

Our plan assumes the U.S.

mortgage market as measured by credit inquiries is expected to decline by greater than 20 percent in 2022 versus 2021.

mortgage market, particularly the mortgage refinance portion of the U.S.

mortgage market, can be significantly impacted by U.S.

interest rates and therefore mortgage rates.

In the International markets in which we operate, we expect 2022 economic activity, as measured by GDP, to improve but less than the rates of growth experienced in 2021.

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

In 2017, we experienced a cybersecurity incident following a criminal attack on our systems that involved the theft of certain personally identifiable information of U.S., Canadian and U.K.

Criminals exploited a software vulnerability in a U.S.

website application to gain unauthorized access to our network.

In March 2017, the U.S.

Department of Homeland Security distributed a notice concerning the software vulnerability.

We undertook efforts to identify and remediate vulnerable systems;

however, the vulnerability in the website application that was exploited was not identified by our security processes.

We discovered unusual network activity in late-July 2017 and upon discovery promptly investigated the activity.

Once the activity was identified as potential unauthorized access, we acted to stop the intrusion and engaged a leading, independent cybersecurity firm to conduct a forensic investigation to determine the scope of the unauthorized access, including the specific information impacted.

Based on our forensic investigation, the unauthorized access occurred from mid-May 2017 through July 2017.

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

On February 10, 2020, the U.S.

Department of Justice announced that four members of the Chinese People’s Liberation Army were indicted on criminal charges for their involvement in the 2017 cybersecurity incident.

Product Liability.

As a result of the 2017 cybersecurity incident, we offered TrustedID ® Premier, a credit file monitoring and identity theft protection product, for free to all eligible U.S.

consumers who signed up through January 31, 2018.

In late 2018, the Company extended the free credit monitoring services for an additional twelve months for eligible consumers impacted by the 2017 cybersecurity incident by providing them the opportunity to enroll in Experian ® IDNotify™ at no cost.

We also provided free credit reports and scores, credit monitoring and identity theft protection for twenty four months to impacted consumers in Canada and the U.K.

We have recorded the expenses necessary to provide this service to those who signed up.

The remaining product liability balance at December 31, 2020 and 2019 was not material to the Consolidated Financial Statements.

Litigation, Claims and Government Investigations.

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

Legal Proceedings” in this Form 10-K.

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.

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.

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 2018, 2019 and 2020 related to these initiatives.

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.

Insurance Coverage.

At the time of the 2017 cybersecurity incident, we had $125.0 million of cybersecurity insurance coverage, above a $7.5 million deductible, to limit our exposure to losses such as those related to this incident.

Since the announcement of the 2017 cybersecurity incident in September 2017, we have received the maximum reimbursement under the insurance policy of $125.0 million.

We also maintained a directors and officers insurance policy of which we have recorded our estimated maximum recoveries as of December 31, 2020.

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

Segment and Geographic Information

The USIS segment consists of three service lines:

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

Online Information Solutions and Mortgage Solutions revenue is principally transaction-based and is derived from our sales of products such as consumer and commercial credit reporting and scoring, identity management, fraud detection and modeling services.

USIS also markets certain decisioning software services which facilitate and automate a variety of consumer and commercial credit-oriented decisions.

Financial Marketing Services revenue is principally project and subscription based and is derived from our sales of batch credit and consumer wealth information such as those that assist clients in acquiring new customers, cross-selling to existing customers and managing portfolio risk.

In the fourth quarter of 2021, we integrated our Global Consumer Solutions business into our USIS, Workforce Solutions and International operating segments.

consumer credit monitoring solutions businesses have been moved into the Online Information Solutions business of USIS with the U.S.

consumer identity theft protection business moved to the Employer Services business of Workforce Solutions.

All international consumer credit monitoring solutions businesses in Canada and Europe have been moved into the respective country operations within the International operating segment.

These changes in operating segments align with how we manage our business as of the fourth quarter of 2021.

Segment financial results and related discussion and analysis have been restated retrospectively to reflect these changes.

The Workforce Solutions segment consists of the Verification Services and Employer Services business lines.

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These services include unemployment claims management, employment-based tax credit services and other complementary employment-based transaction services.

The USIS segment consists of three service lines:

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

USIS also markets certain decisioning software services which facilitate and automate a variety of consumer and commercial credit-oriented decisions.

Online Information Solutions also includes the U.S.

consumer credit monitoring solutions business previously part of the Global Consumer Services segment.

The International segment consists of Asia Pacific, Europe, Latin America and Canada.

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

Global Consumer Solutions revenue is both transaction and subscription based and is derived from the sale of credit monitoring and identity theft protection products, which we deliver electronically to consumers primarily via the internet in the U.S., Canada, and the U.K.

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.

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.

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

Approximately

78% and 77% of our revenue was generated in the U.S.

during the twelve months ended December 31, 2021 and 2020, respectively.

We experience seasonality in certain of our revenue streams.

Revenue generated by the online consumer information services component of our USIS operating segment is typically the lowest during the first quarter, when consumer lending activity is at a seasonal low.

Revenue generated from the Employer Services business unit within the Workforce Solutions operating segment is generally higher in the first quarter due primarily to the provision of Form W-2 and 1095-C services that occur in the first quarter each year.

Revenue generated from our financial wealth asset products and data management services in our Financial Marketing Services business is generally higher in the fourth quarter each year due to the significant portion of our annual renewals and deliveries which occur then.

Mortgage related revenue is generally higher in the second and third quarters of the year due to the increase in consumer home purchasing during the summer in the U.S.

Any change in the U.S.

mortgage market could have a corresponding impact on revenue and operating profit for our business, primarily within the Workforce Solutions and USIS operating segments.

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, 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 for the twelve months ended December 31, 2021, 2020 and 2019 include the following:

Key Performance Indicators

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TWELVE MONTHS ENDED DECEMBER 31, 2021, 2020 AND 2019

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

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(In millions)

Information Solutions $ 1,482.5 $ 1,277.4 $ 1,247.3 $ 205.1 16 % $ 30.1 2 %

Workforce Solutions $ 2,035.4 $ 1,461.7 $ 971.1 $ 573.7 39 % $ 490.6 51 %

Information Solutions 1,786.7 1,711.2 1,531.2 75.5 4 % 180.0 12 %

International 1,101.8 954.6 1,005.3 147.2 15 % (50.7) (5) %

Global Consumer Solutions 345.0 359.9 371.8 (14.9) (4) % (11.9) (3) %

Consolidated operating revenue $ 4,923.9 $ 4,127.5 $ 3,507.6 $ 796.4 19 % $ 619.9 18 %

Revenue for 2021 increased by 19% compared to 2020.

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.

The growth was driven by increases in our Workforce Solutions segment, across mortgage and non-mortgage related revenue, growth in our International segment and growth in non-

mortgage related revenue in the USIS segment.

The effect of foreign exchange rates increased revenue by $50.4 million, or 1%, in 2021 compared to 2020.

Revenue for 2020 increased by 18% compared to 2019.

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

Workforce Solutions saw strong growth driven by Verification Services.

USIS growth was primarily driven by increases in core credit decisioning volumes and revenue from acquisitions.

International had local currency growth across Latin America and Canada.

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

mortgage volume benefiting both Workforce Solutions and USIS, as well as in Workforce Solutions growth across non-mortgage related businesses including our unemployment claims business.

This growth was partially offset by declines beginning in the second half of March 2020 across the International segment 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.

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

Operating Expenses

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Cost of services increased $243.5 million in 2021 compared to 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.

The increase is due to increased royalty costs, production costs, which include third party cloud usage fees, and people costs, partially offset by a decrease in incremental technology and data security costs related to our ongoing technology transformation.

The effect of changes in foreign exchange rates increased cost of services by $27.5 million.

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

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 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.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $2.1 million in 2021 compared to 2020.

The slight increase in 2021 is due to an increase in people costs, offset by a decrease in incremental technology and data security costs related to our ongoing technology transformation.

The impact of changes in foreign currency exchange rates increased our selling, general and administrative expenses by $9.7 million.

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

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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.

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.

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

Depreciation and Amortization.

Depreciation and amortization expense for 2021 and 2020 increased by $89.4 million and $59.9 million, respectively.

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

The increase is due to amortization of capitalized internal-use software and systems costs, as well as higher amortization of purchased intangible assets related to recent acquisitions.

Operating Income and Operating Margin

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Consolidated operating margin 23.1 % 16.4 % (9.6) % 6.7 pts 26.0 pts

Total company operating margin increased by 6.7 percentage points in 2021 versus 2020.

The margin increase is due to higher operating income generated by the increased revenue and decreased incremental technology and data security costs, partially offset by the increased people costs and aforementioned increase in depreciation and amortization expense.

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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Consolidated interest expense $ (145.6) $ (141.6) $ (111.7) $ (4.0) 3 % $ (29.9) 27 %

Consolidated other income, net 150.2 33.3 25.9 116.9 351 % 7.4 29 %

Consolidated other (expense) income, net (43.2) 150.2 33.3 (193.4) (129) % 116.9 351 %

Average cost of debt 3.2 % 3.5 % 3.8 %

Total consolidated debt, net, at year end $ 5,294.9 $ 4,378.4 $ 3,382.6 $ 916.5 21 % $ 995.8 29 %

Interest expense increased in 2021, when compared to 2020, due to a higher weighted average outstanding amount of debt in 2021 when compared to 2020, offset by a slightly lower cost of debt.

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.

The decrease in other income, net in 2021 is driven by the changes in our fair value adjustments of our investments and mark-to-market adjustments for our pension assets.

We recorded a $64.0 million loss on the fair value adjustment of our Brazil investment in 2021, compared to a $149.5 million gain on the fair value adjustment of our Brazil and India investments in 2020.

For 2021 and 2020, we recorded a $20.2 million and $32.2 million loss, respectively, on the mark-to-market adjustment of our pension plan assets.

These impacts were partially offset by positive impacts of foreign currency exchange in 2021.

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.

Twelve Months Ended

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Effective income tax rate 21.2 % 23.2 % 8.6 %

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 21.2% for 2021, down from 23.2% for the same period in 2020.

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 is lower for the year ended December 31, 2021 compared to 2020 due to a lower foreign rate differential due to the changes in the fair value of our investment in Brazil.

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

Our effective tax rate was 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.

Net Income (Loss)

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Weighted-average shares used in computing diluted earnings per share 123.6 122.8 122.0

Consolidated net income increased by $222.3 million in 2021 compared to 2020 due to increased operating income, partially offset by the decrease in other income, net and increase in income tax expense.

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

Workforce Solutions

Twelve Months Ended

December 31, Change

2020 2020 vs.

Workforce Solutions 2021 2020 2019 $ % $ %

(In millions)

Operating Revenue:

Verification Services $ 1,608.9 $ 1,103.2 $ 700.1 $ 505.7 46 % $ 403.1 58 %

Employer Services 426.5 358.5 271.0 68.0 19 % 87.5 32 %

Total operating revenue $ 2,035.4 $ 1,461.7 $ 971.1 $ 573.7 39 % $ 490.6 51 %

% of consolidated revenue 42 % 35 % 28 %

Total operating income $ 1,000.7 $ 703.9 $ 391.3 $ 296.8 42 % $ 312.6 80 %

Operating margin 49.2 % 48.2 % 40.3 % 1.0 pts 7.9 pts

Workforce Solutions revenue increased by 39% in 2021 compared to 2020, due to strong growth in Verification Services driven by growth in mortgage, talent solutions, government and other verticals.

Employer Services revenue also increased due to acquisition related growth and employee services, partially offset by a decline in our unemployment claims business.

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.

Verification Services.

Revenue increased 46% in 2021 compared to 2020.

Verification Services revenue experienced growth in the mortgage, talent solutions and government verticals as well as from the acquisition of Appriss Insights, which took place in the fourth quarter of 2021.

Verification Services benefited across all verticals from the continued growth of employment and income records in The Work Number database.

Revenue increased 58% in 2020 compared to 2019, due to strong growth in the mortgage vertical.

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

Verification Services benefited across all verticals from the continued growth of employment and income records in The Work Number database.

Employer Services.

Revenue increased 19% in 2021, compared to 2020 due to growth in employee services, partially offset by a decrease in unemployment claims revenue as the number of claims has greatly reduced in 2021 after having been significantly higher in 2020 due to the economic impact of COVID-19 on the U.S.

Employer Services also benefited from acquisition revenue in 2021.

Revenue increased 32% 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.

Workforce Solutions Operating Margin.

Operating margin increased to 49.2% in 2021 compared to 48.2% in 2020 primarily due to the increase in revenue, partially offset by increases in royalty, production and people costs.

Operating margin increased to 48.2% in 2020 compared to 40.3% 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 our ongoing technology transformation.

Information Solutions

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Operating margin 30.9 % 30.1 % 32.3 % 0.8 pts (2.2) pts

Information Solutions revenue increased 4% in 2021 compared to 2020 due to overall improvements in our core credit decisioning services, acquisition-related revenue and financial marketing services, partially offset by decreases in Mortgage Solutions.

Information Solutions revenue increased 12% 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.

Online Information Solutions.

Revenue for 2021 increased 4% compared to 2020, due to continued growth in non-mortgage online services and revenue related to acquisitions, partially offset by a decrease in U.S.

consumer and mortgage online services.

Revenue for 2020 increased 10% 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.

mortgage market.

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, and a decline in our U.S.

consumer online services.

Mortgage Solutions.

Revenue decreased 5% in 2021 compared to 2020, due to decreased mortgage origination transaction volumes as compared to the prior year.

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.

Financial Marketing Services.

Revenue increased 15% in 2021 compared to 2020, due to increased marketing activities by customers as the U.S.

economy continues its recovery from the economic impact of COVID-19.

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.

Information Solutions Operating Margin.

USIS operating margin increased to 30.9% in 2021 compared to 30.1% in 2020, due to increased revenue and lower selling, general and administrative expenses, partially offset by increased depreciation expense, royalty costs and production costs.

USIS operating margin decreased to 30.1% in 2020 compared to 32.3% 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.

Workforce Solutions

Twelve Months Ended

December 31, Change

2019 2019 vs.

Workforce Solutions 2020 2019 2018 $ % $ %

(In millions)

Operating Revenue:

Verification Services $ 1,103.2 $ 700.1 $ 567.0 $ 403.1 58 % $ 133.1 23 %

Employer Services 334.7 249.6 259.8 85.1 34 % (10.2) (4) %

Total operating revenue $ 1,437.9 $ 949.7 $ 826.8 $ 488.2 51 % $ 122.9 15 %

% of consolidated revenue 35 % 27 % 24 %

Total operating income $ 700.7 $ 389.7 $ 332.7 $ 311.0 80 % $ 57.0 17 %

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

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.

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.

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.

International

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Operating margin 12.9 % 7.9 % 10.9 % 5.0 pts (3.0) pts

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

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.

International revenue increased by 15% in 2021 as compared to 2020.

Local currency revenue increased 10% in 2021, driven by increases in all geographies as local economies continue to recover from negative impacts of COVID-19 despite the impact of measures to limit its spread in many regions during the year.

Local currency fluctuations against the U.S.

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

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.

dollar positively impacted revenue by $50.4 million, or 5%.

International revenue decreased by 5% in 2020 compared to 2019.

Local currency revenue decreased 3% 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.

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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 revenue increased 11% in 2021 as compared to 2020 driven by growth in our commercial, consumer, background check verifications and identity and fraud businesses in Australia, partially offset by recovery management offline projects from 2020 that did not recur in 2021.

Additionally, the increase in revenue for 2021 is also attributable to organic growth in India due to higher consumer volumes related to economic recovery from the impacts of COVID-19.

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.

dollar positively impacted revenue by $27.7 million, or 9%.

Reported revenue increased 20% in 2021 as compared to 2020.

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 growth in India, an increase in offline transactions within recovery management and stronger online ID validation.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $21.5 million, or 7%, in 2019.

dollar did not have a significant impact in 2020.

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

Local currency revenue increased 6% in 2021 as compared to 2020, driven by growth in the consumer vertical for the U.K.

due to improving economic conditions, as well as growth in the debt management vertical driven by higher volumes within both the private and public sector.

Local currency fluctuations against the U.S.

dollar positively impacted revenue by $18.4 million, or 6%, for 2021.

Reported revenue increased 12% in 2021 as compared to 2020.

Local currency revenue decreased 7% in 2020 as compared to 2019 due to declines in the U.K.

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Reported revenue decreased 6% 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.

and Spain offset by a decline in our debt management services.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $12.9 million, or 4%, for 2019.

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

Latin America.

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 revenue increased 15% in 2021 as compared to 2020 reflecting growth broadly across the region as it experiences recovery from the impacts of COVID-19.

Local currency growth rates were strongest in our Argentina, Central America, Mexico and Peru, with growth also in Chile and other countries.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $24.1 million, or 13%, in 2020, primarily from Argentina and Chile.

Reported revenue decreased 16% in 2020 as compared to 2019.

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

dollar negatively impacted revenue by $8.4 million, or 5%, in 2021, primarily from Argentina.

Reported revenue increased 10% in 2021 as compared to 2020.

Local currency fluctuations against the U.S.

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Reported revenue decreased 16% in 2020 as compared to 2019.

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 revenue increased 12% in 2021 as compared to 2020 primarily due to growth in the consumer, commercial, identity and fraud, and analytics businesses, mainly within the mortgage and fintech verticals, as Canada recovers from the negative impacts of COVID-19 despite continued lockdown measures during the year in several Canadian provinces.

Local currency fluctuations against the U.S.

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

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.

dollar positively impacted revenue by $12.7 million, or 6%, in 2021.

Reported revenue increased 18% in 2021 as compared to 2020.

Local currency revenue increased 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.

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International Operating Margin.

Operating margin increased to 12.9% in 2021 as compared to 7.9% in 2020.

The increase in margin is due to increased revenue, lower purchased intangible asset amortization costs and discretionary expense control, partially offset by increased people costs, royalty costs, production costs and depreciation of capitalized internal-use software and systems costs.

Operating margin decreased to 7.9% in 2020 as compared to 10.9% in 2019.

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 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

Global Consumer Solutions 2020 vs.

2019 2019 vs.

2020 2019 2018 $ % $ %

(In millions)

Total operating revenue $ 345.0 $ 359.9 $ 371.8 $ (14.9) (4) % $ (11.9) (3) %

% of consolidated revenue 8 % 10 % 11 %

Total operating income $ 37.0 $ 48.4 $ 68.6 $ (11.4) (24) % $ (20.2) (29) %

Operating margin 10.7 % 13.4 % 18.4 % (2.7) pts (5.0) pts

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.

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

in September 2017 following the 2017 cybersecurity incident.

We resumed advertising our U.S.

consumer paid products in the fourth quarter of 2018.

These decreases were partially offset by an increase in our partner revenue.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue in Canada and the U.K.

by $1.6 million for 2019.

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.

General Corporate Expense

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General corporate expense decreased $61.9 million in 2021.

The decrease in 2021 as compared to 2020 is due to a decrease in incremental technology and data security costs associated with our technology transformation, partially offset by increased people costs and amortization expense.

General corporate expense decreased $711.9 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

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities.

We continue to generate substantial cash from operating activities, remain in a strong financial position, and manage our capital structure to meet short- and long-term objectives including reinvestment in existing businesses and strategic acquisitions.

We continue to generate substantial cash from operating activities, remain in a strong financial position and manage our capital structure to meet short- and long-term objectives including reinvestment in existing businesses and completing strategic acquisitions.

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

At December 31, 2021, we had $224.7 million in cash balances, as well as $1,177.4 million available to borrow under our Revolver.

Sources and Uses of Cash

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.

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.

Consumer MDL Litigation Settlement or dismissal of the pending appeals.

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 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.

Our financing activities in 2021, more fully described below, were designed to create additional liquidity through the increase in the size of our Revolver and related CP program.

While we had lower cash balances in 2021 versus 2020, we intend to use this additional capacity, together with cash from operating activities, to meet our current obligations, including the $345 million consumer class action settlement payment.

We plan to pay off the $500 million Senior Notes due December 2022 with a combination of operating cash flow, available capacity under our Revolver and related CP program, or borrowings in the public or private debt markets.

In December 2019, the Compensation Committee of our Board of Directors approved the termination of the Canadian Retirement Income Plan (“CRIP”), the defined benefit pension plan offered to certain employees in Canada, as more fully described in Note 9 of the Notes to Consolidated Financial Statements in Item 8 of this report.

As of December 31, 2021, the difference in the fair value of plan assets and the projected benefit obligation was a deficit of $17 million.

We anticipate that the deficit will be funded from current cash holdings when the liabilities are settled in late 2022.

Fund Transfer Limitations.

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Operating Activities

Cash provided by operating activities for 2021 increased by $388.6 million compared to 2020 due to increased net income.

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.

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

Investing Activities

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Our capital expenditures are used for developing, enhancing and deploying new and existing software in support of our expanding product set, replacing or adding equipment, updating systems for regulatory compliance, licensing of standard software applications, investing in system reliability, security and disaster recovery enhancements, and updating or expanding our office facilities.

Capital expenditures increased in 2020 and 2019 from 2019 and 2018, respectively, due to our ongoing technology transformation.

Capital expenditures increased in 2021 and 2020 from 2020 and 2019, respectively, as we are continuing to invest in enhanced technology systems and infrastructure as part of our technology transformation.

Acquisitions, Divestitures and Investments

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Cash received from sale of asset $ 4.9 $ — $ — $ 4.9 $ —

Cash received from divestitures $ 1.5 $ — $ — $ 1.5 $ —

Investment in unconsolidated affiliates, net $ — $ (10.0) $ (25.0) $ 10.0 $ 15.0

2021 Acquisitions and Investments.

During 2021, we acquired Appriss Insights, HIREtech, i2Verify and Health e(fx) within the Workforce Solutions operating segment.

We acquired Kount and Teletrack within the USIS operating segment.

We acquired AccountScore, as well as the remaining noncontrolling interest of businesses within our International segment.

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.

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

2018 Acquisitions and Investments.

During 2018, we completed acquisitions in our Workforce Solutions and International segments as well as DataX Ltd.

in the third quarter of 2018 in our USIS segment.

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

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(In millions)

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

Net short-term borrowings (repayments) $ 323.4 $ (0.7) $ (1.8) $ 324.1 $ 1.1

Payments on long-term debt $ (1,100.2) $ (125.0) $ (250.0) $ (975.2) $ 125.0

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Borrowing and Repayment Activity.

Net short-term repayments 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 CP program.

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

Increase in short-term borrowings in 2021 is due to net short-term borrowings of our CP notes.

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

In August 2021, we issued $1.0 billion aggregate principal amount of 2.35% ten-year Senior Notes due 2031 (the “2031 Notes”) in an underwritten public offering.

Interest on the 2031 Notes accrues at a rate of 2.35% per year and is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2022.

The net proceeds of the sale of the 2031 Notes were used to repay the $300.0 million 3.6% Senior Notes due 2021 and $300.0 million Floating Rate Notes due 2021.

The remaining proceeds were used for general corporate purposes, including the repayment of borrowings under our CP program and the funding of acquisitions, including the Company’s $1.825 billion acquisition of Appriss Insights.

In addition, we also entered into a new $700.0 million delayed draw term loan facility during August 2021.

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.

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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.

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

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.

Interest on the 2024 Notes accrues at a rate of 2.6% per year and is 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.

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.

Payments on long-term debt in 2021 reflect payments on the 2.3% Senior Notes, 3.6% Senior Notes and Floating Rate Notes that were due in 2021 using proceeds from the issuance of Senior Notes and the new term loan.

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.

Credit Facility Availability.

In September 2018, the Company entered into the $1.1 billion five-year unsecured revolving credit facility with a group of financial institutions, which will mature in September 2023 (the “Revolver”).

The Revolver replaced the Company’s previous $900.0 million unsecured revolving credit facility that was scheduled to mature in November 2020.

Borrowings under the Revolver may be used for general corporate purposes, including working capital, capital expenditures, acquisitions and share repurchase programs.

The Revolver has an accordion feature that allows us to request an increase in the total commitment to $1.6 billion.

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.

In August 2021, the Company refinanced the existing unsecured revolving credit facility of $1.1 billion set to expire September 2023, and entered into a new $1.5 billion five-year unsecured revolving credit facility (the “Revolver”) and a new $700.0 million delayed draw term loan (“Term Loan”), collectively known as the “Senior Credit Facilities,” both which mature in August 2026.

Borrowings under the Senior Credit Facilities may be used for working capital, for capital expenditures, to refinance existing debt, to finance acquisitions and for other general corporate purposes.

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

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 for 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.

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

In the third quarter of 2021, we increased the size of our CP program from $1.1 billion to $1.5 billion, consistent with the increase in our Revolver.

Our $1.5 billion CP program has been established to allow for borrowing through the private placement of CP with maturities ranging from overnight to 397 days.

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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.

At December 31, 2020, a total of $1.10 billion was available under the Revolver.

As of December 31, 2021, there were $321.9 million of outstanding CP notes, $0.7 million of letters of credit outstanding, no outstanding borrowings under the Revolver and $700.0 million outstanding under the Term Loan.

Availability under the Revolver was $1,177.4 million at December 31, 2021.

At December 31, 2021, approximately 81% of our debt was fixed rate and 19% was variable rate.

Our variable-rate debt consists of the Floating Rate Notes.

Our variable-rate debt consists of CP and term loan borrowings.

The interest rate resets periodically, based on the terms of the respective financing arrangement.

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

At December 31, 2021, the interest rate on our variable-rate debt ranged from 0.24% to 1.38%.

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

Debt Covenants.

A downgrade in credit ratings 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.

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

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.

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

Our outstanding indentures and comparable instruments also contain customary covenants including, for example, limits on mortgages, liens, sale/leaseback transactions, mergers and sales of assets.

In August 2021, we entered into our new Senior Credit Facilities as noted above in anticipation of the Appriss Insights acquisition.

The Senior Credit Facilities include a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA for the preceding four quarters, of (i) 3.75 to 1.0 initially, (ii) 4.25 to 1.0 for the first fiscal quarter ending

after the consummation of the Company’s acquisition of Appriss Insights on October 1, 2021 (the “Appriss Closing Date”), until the fourth fiscal quarter ending after the Appriss Closing Date, (iii) 4.0 to 1.0 for the fifth fiscal quarter ending after the Appriss Closing Date until the sixth fiscal quarter ending after the Appriss Closing Date and (iv) 3.75 to 1.0 for the seventh fiscal quarter ending after the Appriss Closing Date and through the remaining term of the Revolver.

We may also elect to increase the maximum leverage ratio by 0.5 to 1.0 (subject to a maximum leverage ratio of 4.75 to 1.0) in connection with certain material acquisitions if we satisfy certain requirements.

The Senior Credit Facilities also permit cash in excess of $175 million to be netted against debt in the calculation of the leverage ratio, subject to certain restrictions.

None of these covenants are considered restrictive to our operations.

As of December 31, 2021, 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, 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.

however, our 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, 2.35% senior notes due 2031 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, 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.

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, 2021, the long-term ratings for our obligations were BBB with a stable 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, Revolver and Term Loan, and could limit, or in the case of a significant downgrade, preclude our ability to issue CP.

If our credit ratings were to decline to lower levels, we could experience increases in the interest cost for any new debt.

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(In millions)

Treasury stock purchases $ (69.9) $ — $ — $ (69.9) $ —

Dividends paid to Equifax shareholders $ (190.0) $ (189.5) $ (188.7) $ (0.5) $ (0.8)

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Sources and uses of cash related to equity during the twelve months ended December 31, 2021, 2020 and 2019 were as follows:

• We repurchased 0.4 million of common shares from public market transactions in 2021.

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

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Contractual Obligations and Commercial Commitments

The following table summarizes our significant contractual obligations and commitments as of December 31, 2020.

The table excludes commitments that are contingent based on events or factors uncertain at this time.

Some of the excluded commitments are discussed below the footnotes to the table.

Payments due by

Total Less than 1 year 1 to 3 years 3 to 5 years Thereafter

(In millions)

Debt (including capitalized lease obligation) (1)

$ 4,402.2 $ 1,101.1 $ 901.1 $ 1,150.0 $ 1,250.0

Operating leases (2)

116.7 26.3 46.4 24.8 19.2

The company's material cash requirements include the following contractual and other obligations.

Our plan is to use existing cash balances and funds generated by operating activities to fund our obligations and commitments.

If our cash requirements exceed our existing cash balances and funds generated by operations, we will finance future cash requirements with existing borrowing capacity, as necessary.

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.

The following sections provide details of material cash requirements from known contractual and other obligations as of December 31, 2021.

As of December 31, 2021, we had outstanding variable and fixed rate notes with varying maturities for an aggregate principal amount of $5.0 billion, with $502.9 million payable within the next 12 months, as detailed further in Note 5 of the Notes to Consolidated Financial Statements in Item 8 of this report.

Future interest payments associated with the outstanding variable and fixed rate notes totals $933.5 million, with $149.9 million payable within the next twelve months.

We also issue unsecured short-term promissory notes through our revolving credit facility and CP program, which is set to expire in August 2026.

As of December 31, 2021, we had nothing outstanding under our unsecured revolving credit facility and $321.9 million outstanding under our CP program.

Data Processing, Outsourcing Agreements and Other Purchase Obligations

343.8 136.9 137.4 61.8 7.7

Other long-term liabilities (4) (5)

164.8 12.5 27.4 22.1 102.8

Interest payments (6)

789.5 129.5 206.1 145.9 308.0

$ 5,817.0 $ 1,406.3 $ 1,318.4 $ 1,404.6 $ 1,687.7

(1) The amounts are gross of unamortized discounts totaling $23.8 million at December 31, 2020.

Total debt on our Consolidated Balance Sheets is net of the unamortized discounts and fair value adjustments.

There were no fair value adjustments to our debt at December 31, 2020.

(2) Our operating lease obligations principally involve office space and equipment.

(3) These agreements primarily represent our minimum contractual obligations for services that we outsource associated with our computer data processing operations and related functions, and certain administrative functions.

We utilize several outsourcing partners for services that we outsource associated with our computer data processing operations and related functions, cloud provider services and certain administrative functions.

These agreements expire between 2022 and 2027.

(4) These long-term liabilities primarily relate to obligations associated with certain pension, postretirement and other compensation-related plans, some of which are discounted in accordance with U.S.

generally accepted accounting principles, or GAAP.

We made certain assumptions about the timing of such future payments.

In the table above, we have not included amounts related to future pension plan obligations, as such required funding amounts beyond 2020 have not been deemed necessary due to our current expectations regarding future plan asset performance.

(5) This table excludes $27.1 million of unrecognized tax benefits, including interest and penalties, as we cannot make a reasonably reliable estimate of the period of cash settlement with the respective taxing authorities.

(6) For future interest payments on variable-rate debt, which bears a rate equal to three-month LIBOR on the interest determination date plus 0.87% per annum, we used the variable rate in effect at December 31, 2020 to calculate these payments.

Our outstanding variable rate debt at December 31, 2020 consisted of the Floating Rate Notes.

The variable rate at December 31, 2020 was 1.1%.

Future interest payments may be different depending on future borrowing activity and interest rates.

As of December 31, 2021 the estimated aggregate minimum contractual obligation remaining under these agreements is approximately $902.4 million, with $260.6 million payable within the next twelve months.

Pension, Post-Retirement and Deferred Compensation Obligations

As detailed further in Note 9 of the Notes to Consolidated Financial Statements in Item 8 of this report, we have several pension, post-retirement benefit and deferred compensation plans.

and Canadian Retirement Plans are frozen and are supported by plan assets to fund future payments.

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

Future payments to participants are expected to be made from the existing plan assets.

We have three supplemental retirement plans for certain key employees which are unfunded.

As of December 31, 2021, the total gross obligation for the pension and post retirement plans was $731.9 million, with $110.5 million of benefits expected to be paid within the next twelve months.

We maintain deferred compensation plans for certain management employees and the Board of Directors to defer the receipt of compensation until a later date based on the terms of the plan.

As of December 31, 2021, the total obligation for the deferred compensation plans was $46.1 million, with $7.4 million expected to be paid within the next twelve months

Payments to Resolve Certain Legal Proceedings and Investigations

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.

Through 2021, the Company has made payments of $443.6 million for legal settlements related to the 2017 cybersecurity incident, with $345.0 million remaining to be paid to the Consumer Restitution Fund as of December 31, 2021.

On January 11, 2022, the

Consumer Settlement became effective, and on January 24, 2022, we deposited the remaining amount of $345.0 million into the Consumer Settlement Fund.

As detailed further in Note 12 of the Notes to Consolidated Financial Statements in Item 8 of this report, our lease arrangements principally involve office space.

As of December 31, 2021, our total fixed lease payment obligations were $119.1 million, with $29.5 million payable within the next twelve months.

Other Planned Uses of Capital

We will continue to invest in sales, marketing, new product development, security and our technology, as well as continue to make strategic acquisitions that align with our business strategy.

Additions to property and equipment will continue in order to support growth in our technology transformation and new product development, although we expect spending related to capital expenditures for the next twelve months to be down slightly from current levels.

Off-Balance Sheet Transactions

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This plan also covers retirees as well as certain terminated but vested individuals not yet in retirement status.

We also sponsor a retirement plan with both defined benefit and defined contribution components that cover most salaried and hourly employees in Canada, the Canadian Retirement Income Plan (“CRIP”);

We also sponsor a retirement plan with both defined benefit and defined contribution components that cover most salaried and hourly employees in Canada, the CRIP;

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, 2021, we made no voluntary contributions to the USRIP and made contributions of $2.8 million to the CRIP.

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

At December 31, 2021, the USRIP met or exceeded ERISA’s minimum funding requirements.

In the future, we will make minimum funding contributions as required and may make discretionary contributions, depending on certain circumstances, including market conditions and liquidity needs.

We believe additional funding contributions, if any, would not prevent us from continuing to meet our liquidity needs, which are primarily funded from cash flows generated by operating activities, available cash and cash equivalents, and our credit facilities.

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.

We anticipate the settlement of our CRIP liabilities during 2022 and have taken steps to adopt a more conservative asset allocation to decrease equity exposure and increase cash.

We believe additional funding contributions would not prevent us from continuing to meet our liquidity needs, which are primarily funded from cash flows generated by operating activities, available cash and cash equivalents, and our credit facilities.

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 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.

For additional information about our benefit plans, 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

Equifax’s operating results are not materially affected by inflation, although inflation may result in increases in the Company’s expenses, which may not be readily recoverable in the price of services offered.

To the extent inflation results in rising interest rates and has other adverse effects upon the securities markets and upon the value of financial instruments, it may adversely affect the Company’s financial position and profitability.

Inflation in the countries in which we operate may result in increases in the Company’s expenses, which may not be readily recoverable in the price of services offered.

To the extent inflation results in rising U.S.

interest rates and has other adverse effects upon the U.S.

securities markets and upon the value of financial instruments, it may adversely affect the Company’s financial position and profitability.

Increases in U.S.

interest rates may also negatively impact the U.S.

mortgage market, which may adversely affect the Company’s revenue, financial position and profitability.

A portion of the Company’s business is conducted in currencies other than the U.S.

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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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s Consolidated Financial Statements are prepared in conformity with U.S.

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Revenue from subscription-based contracts having an unlimited volume is recognized ratably during the contract term.

Multi-year subscription contracts are analyzed to determine the full contract transaction price over the term of the contract and the subsequent price is ratably recognized over the full term of the contract.

Multi-year subscription contracts are analyzed to determine the

full contract transaction price over the term of the contract and the subsequent price is ratably recognized over the full term of the contract.

Revenue is recorded net of sales taxes.

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We generally expect to recognize our deferred revenue as revenue within twelve months of being recorded based on the terms of the contracts.

Goodwill and Indefinite-Lived Intangible Assets

We review goodwill and indefinite lived intangible assets for impairment annually (as of September 30) and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

We review goodwill for impairment annually (as of September 30) and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

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).

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

We have six reporting units:

Workforce Solutions, USIS, Asia Pacific, Europe, Latin America and Canada.

In the fourth quarter of 2021, we integrated our Global Consumer Solutions business into our USIS, Workforce Solutions and International operating segments.

consumer credit monitoring solutions businesses were moved to USIS with the U.S.

consumer identity theft protection business moved to Workforce Solutions.

All international consumer credit marketing solutions businesses have been moved into the Canada and Europe reporting units based on the geographical location of customers.

These changes in reporting units align with how we plan to manage our business going forward.

To reflect this new organizational structure, we have reallocated goodwill from the legacy Global Consumer Solutions reporting unit to the USIS, Workforce Solutions, Canada and Europe reporting units based on relative fair value.

A change in reporting units requires that goodwill be tested for impairment.

During 2021, we performed a goodwill impairment test prior to and following the reallocation of goodwill, which resulted in no impairment for all reporting units.

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

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

macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events.

In addition, for each of these reporting units, the most recent fair value determination resulted in an amount that significantly exceeded the carrying amount of the reporting units.

Based on these assessments, we determined the likelihood that a current fair value determination would be less than the current carrying amount of the reporting unit is not more likely than not.

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

The goodwill balance at December 31, 2021, for our six reporting units was as follows:

December 31, 2021

(In millions)

Workforce Solutions $ 2,365.4

Information Solutions 1,900.1

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Latin America 214.4

Global Consumer Solutions 190.5

Workforce Solutions 1,010.7

Total goodwill $ 6,258.1

Valuation Techniques

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:

macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events.

In addition, for each of these reporting units, the most recent fair value determination resulted in an amount that significantly exceeded the carrying amount of the reporting units.

Based on these assessments, we determined the likelihood that a current fair value determination would be less than the current carrying amount of the reporting unit is not more likely than not.

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

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 overall uncertainty in these reporting units due to the negative impacts of COVID-19.

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.

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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, if available.

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.

The companies we use as benchmarks are principally outlined in our discussion of Competition in Item 1 of this Form 10-K and have not significantly changed since the date of our last annual impairment test.

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.

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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, 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.

Additionally, we consider the impact that known economic, industry and market trends, including the impact and anticipated recovery related to 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 4.0% 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.

We projected revenue growth in 2022 for our Asia Pacific and Latin America reporting units in completing our 2021 impairment testing based on expected economic recovery from the negative impact the COVID-19 pandemic has had on these regions in 2021 and planned business initiatives and prevailing trends exhibited by these reporting units.

The anticipated revenue growth in these reporting units, however, is partially offset by assumed increases in expenses and capital expenditures 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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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.

The excess of fair value over carrying value for the Asia Pacific reporting unit was greater than 10%

and the excess fair value over carrying value for the Latin America reporting unit was greater than 50% as of September 30, 2021.

Given the relatively smaller 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 twelve months ended December 31, 2021 in comparison to the estimates used in the 2021 goodwill impairment testing, the COVID-19 pandemic has had a substantial negative impact on our results.

Avoidance of a future impairment will be dependent on continued economic recovery from the negative impact caused by COVID-19 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 2022.

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Settlement of uncertain tax positions may require use of our cash.

At December 31, 2020, $27.1 million was recorded for uncertain tax benefits, including interest and penalties, of which it is reasonably possible that up to $6.8 million of our unrecognized tax benefit may change within the next twelve months.

At December 31, 2021, $34.5 million was recorded for unrecognized tax benefits, including interest and penalties, of which it is reasonably possible that up to $7.1 million of our unrecognized tax benefit may change within the next twelve months.

Effect if actual results differ from assumptions — Although management believes that the judgments and estimates discussed herein are reasonable, actual results could differ, and we may be exposed to increases or decreases in income tax expense that could be material.

Pension and Other Postretirement Plans

We consider accounting for our U.S.

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.

The updated mortality tables and projection scale, partially offset the decrease in the discount rates in 2019, the net of which resulted in the increase in the projected benefit obligation as of December 31, 2019.

During 2018, we adopted the new MP-2018 mortality improvement projection scale in determining the liability for the U.S.

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.

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 offset by the actual return on assets, in each case as it relates to our U.S.

pension plan.

Our Canadian plan is not significant and the impact of changes in assumptions for that plan is not material.

We determine our discount rates primarily based on high-quality, fixed-income investments and yield-to-maturity analyses specific to our estimated future benefit payments available as of the measurement date.

Discount rates are reset annually on the measurement date to reflect current market conditions.

To determine the discount rate for our U.S.

pension and postretirement benefit plans, we use a bond matching approach to select specific bonds that would satisfy our projected benefit payments.

We believe the bond matching approach reflects the process we would employ to settle our pension and postretirement benefit obligations.

For our Canadian plans we use a third-party yield curve to develop our discount rates.

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.

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.

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.

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)

Purchase Accounting for Acquisitions

We account for acquisitions under Accounting Standards Codification 805, Business Combinations.

In general, the acquisition method of accounting requires companies to record assets acquired and liabilities assumed at their respective fair market values at the date of acquisition.

We primarily estimate fair value of identified intangible assets using discounted cash flow analyses based on market participant based inputs.

Any amount of the purchase price paid that is in excess of the estimated fair values of net assets acquired is recorded in the line item Goodwill in our Consolidated Balance Sheets.

Transaction costs, as well as costs to reorganize acquired companies, are expensed as incurred in our Consolidated Statements of Income.

Judgments and uncertainties — We consider accounting for business combinations critical because management's judgment is used to determine the estimated fair values assigned to assets acquired and liabilities assumed and amortization periods for intangible assets which can materially affect our results of operations.

Effect if actual results differ from assumptions — Although management believes that the judgments and estimates discussed herein are reasonable, actual results could differ and we may be exposed to an impairment charge if we are unable to recover the value of the recorded net assets.

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