What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-20 compared with 2022-07-21 · 210 added, 139 removed, 283 unchanged (55% of the section changed)

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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 1 of this Form 10-Q.

This section discusses the results of our operations for the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021.

This section discusses the results of our operations for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021.

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

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North America (U.S.

and Canada), Asia Pacific (Australia, New Zealand and India), Europe (the U.K., Spain and Portugal) and Latin America (Argentina, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru and Uruguay).

and Canada), Asia Pacific (Australia, New Zealand and India), Europe (the U.K., Spain and Portugal) and Latin America (Argentina, Chile, Costa Rica, Dominican Republic,

Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru and Uruguay).

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

We also 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.

We have a joint venture in Russia that offers consumer credit services;

however, we determined as of March 31, 2022 to exit our ownership position, wrote the value of the investment to zero and expect no future economic benefit from the joint venture's operations going forward.

We previously had a joint venture in Russia that offered consumer credit services;

however, during the third quarter of 2022, we completed the sale of this equity method investment.

Recent Events and Company Outlook

As further described in our 2021 Form 10-K, we operate in the U.S., which represented 78% of our revenue in 2021, and internationally in more than 20 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.

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.

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

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

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

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Risk Factors— Our business has been and may continue to be negatively impacted by the COVID-19 pandemic,” in our 2021 Form 10-K.

For 2022, our planning assumes economies in which we operate 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.

In the United States, we expect 2022 economic activity, as measured by GDP, to be up from the levels seen in 2021, however not at the same levels of growth experienced in 2021.

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

Our outlook assumes the U.S.

mortgage market, as measured by credit inquiries, will decline by greater than 46 percent on average for the remaining six months of 2022 versus the same period in 2021.

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

mortgage market, as measured by credit inquiries, will decline by greater than 50 percent on average for the remaining three months of 2022 versus the same period in 2021.

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

mortgage market, can be further 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 grow but less than the rates of growth experienced in 2021.

The mortgage refinancing market declined significantly in the third quarter and we expect refinancing activity to remain at very low levels given current mortgage interest rates.

We expect mortgage activity to remain weak in the first quarter of 2023.

In the international markets in which we operate, we expect 2022 economic activity, as measured by GDP, to grow but less than the rates of growth experienced in 2021, and much less in our Latin American markets, particularly Chile and Argentina.

Segment and Geographic Information

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Canada’s services are similar to our USIS offerings.

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

Asia Pacific, Europe and Latin America are made up of varying mixes of service lines that are generally

consistent with those in our USIS reportable segment.

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

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

We also have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore and Russia and have an investment in a consumer and commercial credit information company in Brazil.

We determined as of March 31, 2022 to exit our ownership position in Russia, wrote the value of the investment to zero and expect no future economic benefit from the joint venture's operations going forward.

We previously had a joint venture in Russia that offered consumer credit services;

however, during the third quarter of 2022, we completed the sale of this equity method investment.Approximately 77% and 78% of our revenue was generated in the U.S.

during the three months ended September 30, 2022 and 2021, respectively.

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

during the three months ended June 30, 2022 and 2021, respectively.

Approximately 79% and 78% of our revenue was generated in the U.S.

during the six months ended June 30, 2022 and 2021, respectively.

during the nine months ended September 30, 2022 and 2021, 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 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.

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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.

The key performance indicators for the three and six months ended June 30, 2022 and 2021 were as follows:

The key performance indicators for the three and nine months ended September 30, 2022 and 2021 were as follows:

Key Performance Indicators

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

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• We did not repurchase any shares from public market transactions in 2022.

We repurchased 0.4 million shares of our common stock on the open market for $69.9 million during the first six months of 2021.

At June 30, 2022, $520.2 million was available for future purchases of common stock under our share repurchase authorization.

• We paid out $95.7 million or $0.78 per share in dividends to our shareholders during the first six months of 2022.

RESULTS OF OPERATIONS—THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

We repurchased 0.4 million shares of our common stock on the open market for $69.9 million during the first nine months of 2021.

At September 30, 2022, $520.2 million was available for future purchases of common stock under our share repurchase authorization.

• We paid out $143.3 million or $1.17 per share in dividends to our shareholders during the first nine months of 2022.

RESULTS OF OPERATIONS—THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Consolidated Financial Results

Operating Revenue

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Consolidated Operating Revenue 2022 2021 $ % 2022 2021 $ %

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Consolidated operating revenue $ 1,244.3 $ 1,222.9 $ 21.4 2 % $ 3,924.3 $ 3,670.7 $ 253.6 7 %

Revenue increased by $81.9 million, or 7%, and by $232.2 million, or 9%, for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

Total revenue was negatively impacted by foreign exchange rates, which decreased revenue by $23.0 million, or 2%, and $35.6 million, or 1%, for the second quarter and first six months of 2022, compared to the same periods in 2021.

Revenue in the second quarter and first six months of 2022 increased primarily due to growth in Workforce Solutions and International, partially offset by a decline in the USIS business.

Revenue increased by $21.4 million, or 2%, and by $253.6 million, or 7%, for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

Total revenue was negatively impacted by foreign exchange rates, which decreased revenue by $28.6 million, or 2%, and $64.2 million, or 2%, for the third quarter and first nine months of 2022, compared to the same periods in 2021.

Revenue in the third quarter and first nine months of 2022 increased primarily due to growth in Workforce Solutions and International, partially offset by a decline in the USIS business.

Operating Expenses

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Consolidated Operating Expenses 2022 2021 $ % 2022 2021 $ %

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Consolidated operating expenses $ 1,001.4 $ 949.7 $ 51.7 5 % $ 3,044.3 $ 2,784.9 $ 259.4 9 %

Cost of services increased $59.1 million and $129.3 million in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increases for both periods were primarily due to higher royalty costs, people costs and production costs, which include third party cloud usage fees.

The impact of changes in foreign exchange rates on costs of services led to a decrease of $12.4 million and $19.0 million in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

Selling, general and administrative expenses increased $1.8 million and $33.2 million for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increase in the second quarter was due to increases in sales and marketing related costs, offset by a decrease in people costs related to incentive plans.

The increase in the first six months of 2022 was driven by an increase in sales and marketing related costs.

The impact of changes in foreign currency exchange rates led to a decrease in selling, general and administrative expenses of $6.4 million and $10.0 million for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

Depreciation and amortization expense increased $22.4 million and $45.2 million for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increase was due to the higher amortization of purchased intangible assets related to recent acquisitions and increased amortization of capitalized internal-use software and system costs from technology transformation capital spending incurred previously.

The impact of changes in foreign currency exchange rates led to a decrease in depreciation and amortization expense of $3.0 million and $4.8 million, for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

Cost of services increased $53.5 million and $182.7 million in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases for both periods were primarily due to higher royalty costs, people costs and production costs, which include third party cloud usage fees and software costs.

The impact of changes in foreign exchange rates on costs of services led to a decrease of $15.3 million and $34.2 million in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

Selling, general and administrative expenses decreased $26.2 million and increased $7.1 million for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decrease in the third quarter of 2022 was due to decreases in people costs, primarily related to incentive plans, and professional fees.

The increase in the first nine months of 2022 was primarily driven by an increase in costs as a result of 2021 and 2022 acquisitions.

The impact of changes in foreign currency exchange rates led to a decrease in selling, general and administrative expenses of $7.8 million and $17.8 million for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

Depreciation and amortization expense increased $24.4 million and $69.6 million for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were due to the higher amortization of purchased intangible assets related to recent acquisitions and increased amortization of capitalized internal-use software and system costs from technology transformation capital spending incurred previously.

The impact of changes in foreign currency exchange rates led to a decrease in depreciation and amortization expense of $3.3 million and $8.1 million, for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

Operating Income and Operating Margin

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Consolidated Operating Income 2022 2021 $ % 2022 2021 $ %

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Consolidated operating margin 19.5 % 22.3 % (2.8) pts 22.4 % 24.1 % (1.7) pts

Total company operating margin decreased by 1.7 percentage points and 1.2 percentage points in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

Total company operating margin decreased by 2.8 percentage points and 1.7 percentage points in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The margin decrease was due to the aforementioned increased operating expense and amortization expense that outpaced revenue growth during the period.

Interest Expense and Other Income, net

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Consolidated Interest Expense and Other Income, net 2022 2021 $ % 2022 2021 $ %

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Consolidated interest expense $ (47.1) $ (35.0) $ (12.1) 35 % $ (128.5) $ (107.1) $ (21.4) 20 %

Consolidated other income, net 1.8 6.0 (4.2) nm 12.9 5.1 7.8 nm

Consolidated other income, net 23.9 27.2 (3.3) (12) % 36.8 32.3 4.5 14 %

Average cost of debt 3.2 % 3.2 % 3.0 % 3.3 %

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Interest expense increased by $6.7 million and $9.3 million in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increase for the second quarter and first six months of 2022 was due to higher debt balances in 2022 when compared to the same periods of 2021 due to the purchase of Insights in the fourth quarter of 2021.

Other income, net, decreased by $4.2 million in the second quarter of 2022, as compared to the same period in 2021.

Other income, net, increased by $7.8 million in the first six months of 2022, compared to the same period in 2021.

The decrease for the second quarter of 2022 was due to the fair value adjustment of our investment in Brazil, offset by gains associated with the sale of two equity investments.

The increase for the first six months of 2022 was due to gains associated with the sale of two equity method investments and the fair value adjustment of our investment in Brazil, partially offset by the other-than-temporary impairment recognized in the first quarter of 2022 related to our equity investment in Russia.

Three Months Ended June 30, Change Six Months Ended June 30, Change

Interest expense increased by $12.1 million and $21.4 million in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increase for the third quarter and first nine months of 2022 was due to higher debt balances in 2022 when compared to the same periods of 2021 due to the purchase of Insights in the fourth quarter of 2021 and the issuance of 5.1% Senior Notes in the third quarter of 2022.

Other income, net, decreased by $3.3 million in the third quarter of 2022, as compared to the same period in 2021.

Other income, net, increased by $4.5 million in the first nine months of 2022, compared to the same period in 2021.

The decrease for the third quarter of 2022 was due to the fair value adjustment of our investment in Brazil offset by gains associated with the sale of an equity method investment.

The increase for the first nine months of 2022 was due to gains associated with the sale of equity method investments offset by the fair value adjustment of our investment in Brazil.

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Consolidated Provision for Income Taxes 2022 2021 $ % 2022 2021 $ %

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Effective income tax rate 24.0 % 22.1 % 25.0 % 22.9 %

Our effective income tax rate was 23.9% for the three months ended June 30, 2022, compared to 22.1% for the three months ended June 30, 2021.

Our effective income tax rate was 25.4% for the six months ended June 30, 2022, compared to 23.2% for the six months ended June 30, 2021.

Our effective tax rate was higher for the second quarter and first six months of 2022 as compared to 2021 due to a greater foreign income tax rate differential.

The increase in the foreign rate differential was primarily driven by the adjustment to fully impair our investment in Russia.

Three Months Ended June 30, Change Six Months Ended June 30, Change

Our effective income tax rate was 24.0% for the three months ended September 30, 2022, compared to 22.1% for the three months ended September 30, 2021.

Our effective income tax rate was 25.0% for the nine months ended September 30, 2022, compared to 22.9% for the nine months ended September 30, 2021.

Our effective tax rate was higher for the third quarter and first nine months of 2022 as compared to 2021 due to a greater foreign income tax rate differential.

The increase in the foreign rate differential was primarily driven by higher taxes on foreign earnings.

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Consolidated Net Income 2022 2021 $ % 2022 2021 $ %

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Weighted-average shares used in computing diluted earnings per share 123.3 123.7 123.3 123.5

Consolidated net income decreased by $14.5 million and increased by $5.4 million for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The decrease for the second quarter of 2022 is due to increased interest, other and income tax expenses in 2022 as operating income levels remained similar across both periods.

The increase for the first six months of 2022 is due to increased operating income resulting from increased revenue, partially offset by higher tax expense for the first six months of 2022.

Consolidated net income decreased by $39.7 million and $34.4 million for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decreases for both periods of 2022 are due to lower levels of operating income and higher interest expense in 2022.

Segment Financial Results

Workforce Solutions

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Workforce Solutions 2022 2021 $ % 2022 2021 $ %

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Operating margin 41.3 % 49.4 % (8.1) pts 45.2 % 52.2 % (7.0) pts

Workforce Solutions revenue increased by 21% and 27% in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increases for both periods were due to strong growth in Verification Services driven by growth in non-mortgage verticals and acquisition revenue in both Verification and Employer Services.

Workforce Solutions revenue increased by 9% and 21% in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases for both periods were due to growth in Verification Services driven by growth in non-mortgage verticals and acquisition revenue in both Verification Services and Employer Services.

Verification Services

Revenue increased by 28% and 31% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increase in revenue for both periods was due to strong growth in talent solutions, government, other non-mortgage verticals, and acquisition revenue principally from Insights, offset by a decline in the mortgage vertical due to significantly slower U.S.

Revenue increased by 13% and 25% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increase in revenue for both periods was due to growth in talent solutions, government, and consumer finance verticals, along with acquisition revenue principally from Insights, offset by a decline in the mortgage vertical due to significantly slower U.S.

mortgage origination activity in 2022 due to higher interest rates.

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Employer Services

Revenue decreased by 3% and increased by 15% in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The decrease for the second quarter of 2022 is due to a decrease in unemployment claims management revenue as the number of claims has returned to pre-COVID-19 levels in 2022 after having been significantly higher in 2021 due to the economic impact of COVID-19 on the U.S.

The increase for the first six months of 2022 was due to acquisition revenue and growth in employee services, partially offset by a decrease in unemployment claims revenue.

Revenue decreased by 7% and increased by 7% in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decrease for the third quarter of 2022 is due to lower tax credit revenue and a decrease in unemployment claims management revenue as the number of unemployment claims returned to pre-COVID-19 levels in 2022 after having been significantly higher in 2021 due to the economic impact of COVID-19 on the U.S.

The increase for the first nine months of 2022 was due to acquisition revenue and growth in employee services, partially offset by a decrease in unemployment claims revenue.

Workforce Solutions Operating Margin

Operating margin decreased to 46.2% for the second quarter of 2022 from 53.0% for the second quarter of 2021, and to 46.9% for the first six months of 2022 from 53.7% for the first six months of 2021.

The decreased margin for both periods is due to increased purchased intangible asset amortization costs, royalty costs, people costs and production costs which all grew faster than the increase in revenue.

Three Months Ended June 30, Change Six Months Ended June 30, Change

Operating margin decreased to 41.3% for the third quarter of 2022 from 49.4% for the third quarter of 2021, and to 45.2% for the first nine months of 2022 from 52.2% for the first nine months of 2021.

The decreased margin for both periods is due to increased royalty costs, people costs and production costs, and increased purchased intangible asset amortization, which altogether grew faster than the increase in revenue.

Three Months Ended September 30, Change Nine Months Ended September 30, Change

Information Solutions 2022 2021 $ % 2022 2021 $ %

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Operating margin 20.6 % 29.2 % (8.6) pts 25.2 % 31.0 % (5.8) pts

USIS revenue decreased by 8% and 7% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

USIS revenue decreased by 9% and 7% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decreases in both periods were due to the negative impact of declining mortgage inquiry volumes on both online services and mortgage solutions, partially offset by acquisition-related revenue and growth in non-mortgage online services.

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Online Information Solutions

Revenue decreased by 5% and 4% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The decreases for both periods were due to declining mortgage origination volumes compared to the prior year, partially offset by revenue from acquisitions and continued growth of non-mortgage online services.

Revenue decreased by 6% and 5% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decreases for both periods were due to declining mortgage inquiry volumes compared to the prior year, partially offset by continued growth of non-mortgage online services and revenue from acquisitions.

Mortgage Solutions

Revenue decreased by 25% and 22% in the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

Total mortgage market credit inquiries reported by USIS declined by 33% and 29% in the second quarter and first six months of 2022, respectively, as compared to the prior year.

Revenue decreased by 31% and 25% in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decreases in both periods were due to declining mortgage inquiry volumes, as compared to the prior year.

Financial Marketing Services

Revenue decreased by 5% and 10% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The decreases for the second quarter and first six months of 2022 were driven by lower fraud, risk management and other data services revenue, partially offset by growth in marketing and wealth data sales.

Revenue decreased by 8% and 9% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decreases for both periods were driven by lower fraud, risk management and other data services revenue.

USIS Operating Margin

USIS operating margin decreased to 26.6% for the second quarter of 2022 from 30.0% for the second quarter of 2021 and to 27.3% for the first six months of 2022 from 31.9% for the first six months of 2021.

The margin decrease for both periods is due to the decrease in revenue and increase in depreciation expense related to increased capitalized software development spending and cloud production costs, partially offset by a decrease in royalty costs driven by the overall mortgage market decline.

USIS operating margin decreased to 20.6% for the third quarter of 2022 from 29.2% for the third quarter of 2021 and to 25.2% for the first nine months of 2022 from 31.0% for the first nine months of 2021.

The margin decrease for both periods is due to the decrease in revenue and increase in depreciation expense related to increased capitalized software development spending and cloud production costs.

International

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

International 2022 2021 $ % 2022 2021 $ %

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Operating margin 14.8 % 12.0 % 2.8 pts 13.1 % 11.8 % 1.3 pts

International revenue increased by 3% and 4% in the second quarter and the first six months of 2022, respectively, compared to the same periods in 2021.

On a local currency basis, revenue increased by 11% in the second quarter and first six months of 2022, respectively, driven by growth in all geographies.

International revenue increased by 6% and 5% in the third quarter and the first nine months of 2022, respectively, compared to the same periods in 2021.

On a local currency basis, revenue increased by 17% and 13% in the third quarter and first nine months of 2022, respectively, driven by growth in all geographies.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $23.0 million, or 8%, for the second quarter of 2022, and by $35.6 million, or 7%, for the first six months of 2022.

On a local currency basis, revenue increased by 6% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were driven by our commercial, consumer, identity and fraud, and background check verifications businesses in Australia, in addition to growth in India due to higher consumer volumes.

dollar negatively impacted revenue by $28.6 million, or 11%, for the third quarter of 2022, and by $64.2 million, or 8%, for the first nine months of 2022.

On a local currency basis, revenue increased by 6% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were driven by stronger volumes within our consumer, commercial, and identity and fraud businesses, as well as growth in India due to higher consumer volumes, partially offset by consumer direct business declines in Australia.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $7.2 million, or 8%, and $12.7 million, or 7%, for the second quarter and first six months of 2022, respectively.

Reported revenue decreased by 2% and 1% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

On a local currency basis, revenue increased by 16% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were driven by growth in the debt services business with higher volumes in the public sector, partially offset by a decline in the consumer direct business.

dollar negatively impacted revenue by $6.9 million, or 8%, and $19.7 million, or 7%, for the third quarter and first nine months of 2022, respectively.

Reported revenue decreased by 2% and 1% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

On a local currency basis, revenue increased by 24% and 19% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were driven by growth in the debt services business and core credit decisioning and identity and fraud, partially offset by a decline in the consumer direct business.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $9.2 million, or 12%, and $12.4 million, or 8%, for the second quarter and first six months of 2022, respectively.

Reported revenue increased by 4% and 8% for the second quarter and first six months of 2022, compared to the same periods in 2021.

On a local currency basis, revenue increased by 2% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were driven by higher batch credit volumes, partially offset by declines in consumer services, mortgage related products, and online businesses due to interest rate increases.

dollar negatively impacted revenue by $13.7 million, or 18%, and $26.1 million, or 12%, for the third quarter and first nine months of 2022, respectively.

Reported revenue increased by 6% and 7% for the third quarter and first nine months of 2022, compared to the same periods in 2021.

On a local currency basis, revenue increased by 12% and 5% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods were driven by higher analytical batch credit services, stronger decisioning online volumes and identity and fraud, partially offset by declines in consumer direct services and mortgage related products due to interest rate increases.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $2.0 million, or 3%, and $2.1 million or 2%, for the second quarter and first six months of 2022, respectively.

Reported revenue decreased by 1% and remained flat for the second quarter and first six months of 2022, compared to the same periods in 2021.

dollar negatively impacted revenue by $1.9 million, or 3%, and $4.0 million or 2%, for the third quarter and first nine months of 2022, respectively.

Reported revenue increased by 9% and 3% for the third quarter and first nine months of 2022, compared to the same periods in 2021.

Latin America

On a local currency basis, revenue increased by 28% and 26% for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods reflect local currency growth across most countries driven by price increases mainly in Argentina and Chile, as well as growth due to acquisition revenue.

On a local currency basis, revenue increased by 34% and 29% for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The increases in both periods reflect local currency growth across most countries driven by price increases mainly in Argentina and Chile, stronger online consumer growth, as well as growth due to acquisition revenue.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $4.5 million, or 10%, and $8.4 million, or 10%, for the second quarter and first six months of 2022, respectively, primarily within Argentina and Chile.

Reported revenue increased by 18% and 16% for the second quarter and first six months of 2022, compared to the same periods in 2021.

dollar negatively impacted revenue by $6.0 million, or 13%, and $14.4 million, or 11%, for the third quarter and first nine months of 2022, respectively, primarily within Argentina and Chile.

Reported revenue increased by 21% and 18% for the third quarter and first nine months of 2022, compared to the same periods in 2021.

International Operating Margin

Operating margin decreased to 11.3% for the second quarter of 2022 from 12.1% for the second quarter of 2021 and increased to 12.2% for the first six months of 2022 from 11.6% for the first six months of 2021.

The decreased margin for the second quarter of 2022 is due to higher cloud production costs and depreciation expense related to technology transformation project spending, partially offset by higher revenue.

The increased margin for the first six months of 2022 is due to higher revenue and lower purchased intangible asset amortization costs in Australia, partially offset by higher cloud production costs and depreciation expense related to technology transformation project spending.

Operating margin increased to 14.8% for the third quarter of 2022 from 12.0% for the third quarter of 2021 and increased to 13.1% for the first nine months of 2022 from 11.8% for the first nine months of 2021.

The increased margins for the third quarter and first nine months of 2022, respectively, are due to higher revenue, lower purchased intangible asset amortization costs in Australia, partially offset by higher cloud production costs and depreciation expense related to technology transformation project spending.

General Corporate Expense

Three Months Ended June 30, Change Six Months Ended June 30, Change

Three Months Ended September 30, Change Nine Months Ended September 30, Change

General Corporate Expense 2022 2021 $ % 2022 2021 $ %

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

General corporate expense decreased by $8.9 million and $18.2 million for the second quarter and first six months of 2022, respectively, compared to the same periods in 2021.

The decrease was due to reduced people costs, primarily incentive plans.

General corporate expense decreased by $28.4 million and $46.8 million for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

The decrease was due to reduced people costs, primarily incentive plans, and professional fees.

LIQUIDITY AND FINANCIAL CONDITION

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

At June 30, 2022, we had $223.6 million in cash balances, as well as $788.6 million available to borrow under our Revolver.

At September 30, 2022, we had $241.7 million in cash balances, as well as $1,337.2 million available to borrow under our Revolver.

Sources and Uses of Cash

We believe that our existing cash balance, liquidity available from our CP and Revolver, cash generated from ongoing operations and continued access to public or private debt markets will be sufficient to satisfy cash requirements over the next 12 months and beyond.

While there was no significant change in our cash requirements as of June 30, 2022 compared to December 31, 2021, we have utilized existing CP capacity, together with cash from operating activities, to meet our current obligations.

While there was no significant change in our cash requirements as of September 30, 2022 compared to December 31, 2021, we have utilized existing CP capacity, together with cash from operating activities, to meet our current obligations.

This includes the $345.0 million consumer class action settlement payment that was made in January 2022 related to the U.S.

Consumer MDL Litigation settlement that became effective on January 11, 2022.

In addition, we plan to pay off the $500.0 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 addition, during October 2022, we paid off the $500.0 million Senior Notes due December 2022 with the proceeds from the $750.0 million 5.1% Senior Notes issued in September 2022 and commercial paper borrowings.

Fund Transfer Limitations.

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These restrictions do not, individually or in the aggregate, materially limit our ability to service our indebtedness, meet our current obligations or pay dividends.

As of June 30, 2022, we held $194.4 million of cash in our foreign subsidiaries.

As of September 30, 2022, we held $185.9 million of cash in our foreign subsidiaries.

Information about our cash flows, by category, is presented in the Consolidated Statements of Cash Flows.

The following table summarizes our cash flows for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30, Change

The following table summarizes our cash flows for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30, Change

Net cash provided by (used in):

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Operating Activities

Cash provided by operating activities in the six months ended June 30, 2022 decreased by $474.3 million compared to the prior year period due to the $345.0 million consumer class action settlement payment that was made in January 2022 related to the U.S.

Cash provided by operating activities in the nine months ended September 30, 2022 decreased by $517.8 million compared to the prior year period due to the $345.0 million consumer class action settlement payment that was made in January 2022 related to the U.S.

Consumer MDL Litigation settlement that became effective on January 11, 2022 and an increase in working capital during the year.

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Capital Expenditures

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

Net cash used in:

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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, the licensing of certain software applications, investing in system reliability, security and disaster recovery enhancements, and updating or expanding our office facilities.

Capital expenditures paid in the first six months of 2022 increased by $79.9 million from the same period in 2021.

Capital expenditures paid in the first nine months of 2022 increased by $135.5 million from the same period in 2021.

We are continuing to invest in enhanced technology systems and infrastructure as part of our technology transformation.

Acquisitions, Divestitures and Investments

Six Months Ended June 30, Change

Net cash used in:

Nine Months Ended September 30, Change

Net cash (provided by) used in:

2022 2021 2022 vs.

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Acquisitions, net of cash acquired $ (437.5) $ (1,108.9) $ 671.4

Cash received from divestiture $ 98.1 $ 1.5 $ 96.6

During the first six months of 2022, we acquired Efficient Hire within our Workforce Solutions segment and Data Crédito within our International segment.

During the first six months of 2022, we reported $98.1 million of cash inflows from investing activities associated with cash received from the sale of two investments and the pending sale of another investment.

During the first six months of 2021, we acquired Kount within our USIS segment, HIREtech and i2Verify within our Workforce Solutions segment and a small tuck-in acquisition within our International segment.

Cash received from divestitures $ 98.8 $ 1.5 $ 97.3

During the first nine months of 2022, we acquired Efficient Hire and LawLogix within our Workforce Solutions segment, Midigator within our USIS segment and Data Crédito within our International segment.

During the first nine months of 2022, we reported $98.8 million of cash inflows from investing activities associated with cash received from the sale of multiple equity method investments.

During the first nine months of 2021, we acquired Kount and Teletrack within our USIS segment, and HIREtech, i2Verify and Health e(fx) within our Workforce Solutions segment and a small tuck-in acquisition within our International segment.

In addition, in 2021, we sold a small business within our International segment.

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Borrowings and Credit Facility Availability

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

Net cash provided by (used in):

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(In millions)

Net short-term borrowings $ 386.7 $ (0.6) $ 387.3

Net short-term (repayments) borrowings $ (162.1) $ 499.2 $ (661.3)

Payments on long-term debt $ — $ (1,100.2) $ 1,100.2

Borrowings on long-term debt $ 749.3 $ 1,697.3 $ (948.0)

Credit Facilities Availability

In September 2022, we issued $750.0 million aggregate principal amount of 5.1% five-year Senior Notes due 2027 (the "2027 Notes") in an underwritten public offering.

Interest on the 2027 Notes accrues at a rate of 5.1% per year and is payable semi-annually in arrears on June 15 and December 15 of each year.

The net proceeds of the sale of the 2027 Notes were ultimately used to repay, in October 2022, our then-outstanding $500.0 million 3.30% Senior Notes due December 2022.

The remaining proceeds were used for general corporate purposes, including the repayment of borrowings under our commercial paper program.

We must comply with various non-financial covenants, including certain limitations on mortgages, liens and sale-leaseback transactions, as well as mergers and sales of substantially all of our assets.

The 2027 Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

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

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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.

As of June 30, 2022, there were $0.4 million of letters of credit outstanding, no outstanding borrowings under the Revolver, $700.0 million outstanding under the Term Loan and $711.0 million of outstanding CP notes.

Availability under the Revolver was $788.6 million at June 30, 2022.

At June 30, 2022, 75% of our debt was fixed-rate debt and 25% was effectively variable debt.

As of September 30, 2022, there were $0.4 million of letters of credit outstanding, no outstanding borrowings under the Revolver, $700.0 million outstanding under the Term Loan and $162.4 million of outstanding CP notes.

Availability under the Revolver was $1,337.2 million at September 30, 2022.

At September 30, 2022, 85% of our debt was fixed-rate debt and 15% was variable debt.

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

The interest rates reset periodically, depending on the terms of the respective financing agreements.

At June 30, 2022, the interest rate on our variable-rate debt ranged from 1.25% to 2.94%.

At September 30, 2022, the interest rate on our variable-rate debt ranged from 2.05% to 4.38%.

Borrowing and Repayment Activity

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Net short-term borrowings primarily represent net borrowings or repayments of outstanding amounts under our CP program.

There were no borrowings or payments on long-term debt for the first six months of 2022 or 2021.

Borrowings on long-term debt represent the net proceeds received from the issuance of the $750 million 2027 Notes in the first nine months of 2022.

Debt Covenants.

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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.

As of June 30, 2022, we were in compliance with all of our debt covenants.

As of September 30, 2022, we were in compliance with all of our debt covenants.

We do not have any credit rating triggers that would accelerate the maturity of a material amount of the outstanding debt;

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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.

As of June 30, 2022, our S&P credit rating was BBB with a stable outlook and our Moody’s credit rating was Baa2 with a stable outlook.

As of September 30, 2022, our S&P credit rating was BBB with a stable outlook and our Moody’s credit rating was Baa2 with a stable outlook.

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

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Equity Transactions

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Nine Months Ended September 30, Change

Net cash provided by (used in):

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Purchase of noncontrolling interests $ — $ (11.2) $ 11.2

Sources and uses of cash related to equity during the six months ended June 30, 2022 and 2021 were as follows:

- During the first six months of 2022, we did not repurchase any shares of our common stock on the open market.

During the first six months of 2021, we repurchased $0.4 million shares of our common stock for $69.9 million.

- We maintained our quarterly dividend of $0.39 per share in the second quarter of 2022.

We paid cash dividends to Equifax shareholders of $95.7 million and $95.0 million, or $0.78 per share, during the six months ended June 30, 2022 and 2021, respectively.

- We received cash of $8.7 million and $25.1 million during the first six months of 2022 and 2021, respectively, from the exercise of stock options and the employee stock purchase plan.

At June 30, 2022, the Company had $520.2 million remaining for stock repurchases under the existing authorization from the board of directors.

Sources and uses of cash related to equity during the nine months ended September 30, 2022 and 2021 were as follows:

- During the first nine months of 2022, we did not repurchase any shares of our common stock on the open market.

During the first nine months of 2021, we repurchased $0.4 million shares of our common stock for $69.9 million.

- We maintained our quarterly dividend of $0.39 per share in the third quarter of 2022.

We paid cash dividends to Equifax shareholders of $143.3 million and $142.6 million, or $1.17 per share, during the nine months ended September 30, 2022 and 2021, respectively.

- We received cash of $13.5 million and $33.4 million during the first nine months of 2022 and 2021, respectively, from the exercise of stock options and the employee stock purchase plan.

At September 30, 2022, the Company had $520.2 million remaining for stock repurchases under the existing authorization from the board of directors.

Contractual Obligations, Commercial Commitments and Other Contingencies

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For our non-qualified supplementary retirement plans, we fund the benefits as they are paid to retired participants, but accrue the associated expense and liabilities in accordance with U.S.

During the third quarter of 2022, we settled the liabilities under our Canadian Retirement Income Plan.

For additional information about our benefit plans, see Note 9 of the Notes to Consolidated Financial Statements in our 2021 Form 10-K.

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As such, Argentina was deemed a highly inflationary economy by accounting policymakers.

Beginning in the third quarter of 2018, we have accounted for Argentina as a highly inflationary economy which resulted in the recognition of a $0.1 million foreign currency gain and a $0.1 million foreign currency loss that was recorded in other income, net in our Consolidated Statements of Income during the three months and six months ended June 30, 2022 and June 30, 2021, respectively.

Beginning in the third quarter of 2018, we have accounted for Argentina as a highly inflationary economy which resulted in the recognition of a $0.2 million foreign currency gain and a $0.3 million foreign currency gain that was recorded in other income, net in our Consolidated Statements of Income during the three months and nine months ended September 30, 2022, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

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Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

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 six reporting units comprised of Workforce Solutions (which includes Verification Services and Employer Services), USIS (which includes Online Information Solutions, Mortgage Solutions and Financial Marketing Services), Asia Pacific, Europe, Latin America, and Canada.

The goodwill balance at September 30, 2022, for our six reporting units was as follows:

September 30,

(In millions)

Workforce Solutions $ 2,511.4

Asia Pacific 1,300.9

Latin America 234.3

Total goodwill $ 6,304.3

We performed a qualitative assessment to determine whether further impairment testing was necessary for our Workforce Solutions, USIS, Latin America, 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.

Valuation Techniques

We performed a quantitative assessment for our Asia Pacific reporting unit to determine whether impairment exists from the most recent valuation date due to the size of the cushion and overall uncertainty in the reporting unit 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.

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

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

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

We believe the benchmark companies used for our Asia Pacific reporting unit serves 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 our 2021 Form 10-K and have not significantly changed since the date of our last annual impairment test.

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

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

We use a consistent approach across all reporting units when considering the weight of the income and market approaches for calculating the fair value of each of our reporting units.

This approach relies more heavily on the calculated fair value derived from the income approach with 70% of the value coming from the income approach.

We believe this approach is consistent with that of a market participant in valuing prospective purchase business combinations.

The selection and weighting of the various fair value techniques may result in a higher or lower fair value.

Judgment is applied in determining the weightings that are most representative of fair value.

We have not made any material changes to the valuation methodology we use to assess goodwill impairment since the date of our last annual impairment test.

Growth Assumptions

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 impact of rising interest rates and inflation, will have on our future forecasts, as well as the impact that we expect from planned business initiatives including new product initiatives, client service and retention standards, and cost management programs.

At the end of the forecast period, the long-term growth rate we used to determine the terminal value of our Asia Pacific reporting unit was 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 2023 for our Asia Pacific reporting unit in completing our 2022 impairment testing based on expected continued economic recovery from the negative impact the COVID-19 pandemic had on these regions in previous years and planned business initiatives and prevailing trends exhibited by this reporting unit.

The anticipated revenue growth in this reporting unit, 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

We utilize a weighted average cost of capital, or WACC, in our impairment analysis that makes assumptions about the capital structure that we believe a market participant would make and include a risk premium based on an assessment of risks related to the projected cash flows for the reporting unit.

We believe this approach yields a discount rate that is consistent with an implied rate of return that a market participant would require for an investment in a company having similar risks and business characteristics to the reporting unit being assessed.

To calculate the WACC, the cost of equity and cost of debt are multiplied by the assumed capital structure of the reporting unit as compared to industry trends and relevant benchmark company structures.

The cost of equity was computed using the Capital Asset Pricing Model which considers the risk-free

interest rate, beta, equity risk premium and specific company risk premium related to a particular reporting unit.

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

For the 2022 annual goodwill impairment evaluation, the discount rate used to develop the estimated fair value of the Asia Pacific reporting unit was between 9.5% and 11.0%.

Estimated Fair Value and Sensitivities

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

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

The estimated fair value for our Asia Pacific reporting unit exceeded its related carrying value as of September 30, 2022.

As a result, no goodwill impairment was recorded.

The estimated fair value of the reporting unit is highly sensitive to changes in these projections and assumptions;

therefore, in some instances changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value.

For example, an increase in the discount rate and decline in the projected cumulative cash flow of a reporting unit could cause the fair value of certain reporting units to be below its carrying value.

We perform sensitivity analyses around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values.

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

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

The excess of fair value over carrying value for the Asia Pacific reporting unit was greater than 5% and 10% as of September 30, 2022 and September 30, 2021, respectively.

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.

The excess of fair value for the Asia Pacific reporting unit is lower in 2022 than in 2021 primarily due to higher observed risk free interest rates and the loss of income from our joint venture in Russia which was formerly included in this reporting unit.

The future impact of changes in economic conditions, including rising interest rates and inflation, remains uncertain.

Avoidance of a future impairment will be dependent on continued growth during current economic conditions 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 2023.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7A of our 2021 Form 10-K.

There were no material changes to our market risk exposure during the three and six months ended June 30, 2022.

There were no material changes to our market risk exposure during the three and nine months ended September 30, 2022.

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-Q

Item 2. Management’s Discussion and Analysis