What changed in this filing

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Item 1. Financial Statements

2023-04-20 compared with 2022-10-20 · 107 added, 249 removed, 415 unchanged (46% of the section changed)

2 unchanged sentences

Three Months Ended

September 30,

(In millions, except per share amounts)

21 unchanged sentences

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF INCOME

Nine Months Ended September 30,

(In millions, except per share amounts)

Operating revenue $ 3,924.3 $ 3,670.7

Operating expenses:

Cost of services (exclusive of depreciation and amortization below) 1,638.0 1,455.3

Selling, general and administrative expenses 988.5 981.4

Depreciation and amortization 417.8 348.2

Total operating expenses 3,044.3 2,784.9

Operating income 880.0 885.8

Interest expense ( 128.5 ) ( 107.1 )

Other income, net 36.8 32.3

Consolidated income before income taxes 788.3 811.0

Provision for income taxes ( 197.2 ) ( 185.5 )

Consolidated net income 591.1 625.5

Net income attributable to noncontrolling interests including redeemable noncontrolling interests ( 3.1 ) ( 3.4 )

Net income attributable to Equifax $ 588.0 $ 622.1

Basic earnings per common share:

Net income attributable to Equifax $ 4.81 $ 5.11

Weighted-average shares used in computing basic earnings per share 122.3 121.8

Diluted earnings per common share:

Net income attributable to Equifax $ 4.77 $ 5.04

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

Dividends per common share $ 1.17 $ 1.17

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30,

Shareholders Noncontrolling

Interests Total Equifax

Shareholders Noncontrolling

Interests Total

(In millions)

Net income $ 165.7 $ 1.2 $ 166.9 $ 205.4 $ 1.2 $ 206.6

Other comprehensive income (loss):

Foreign currency translation adjustment ( 181.1 ) ( 0.5 ) ( 181.6 ) ( 100.1 ) ( 1.2 ) ( 101.3 )

Change in unrecognized prior service cost related to our pension and other postretirement benefit plans, net ( 0.7 ) — ( 0.7 ) 1.2 — 1.2

Comprehensive (loss) income $ ( 16.1 ) $ 0.7 $ ( 15.4 ) $ 106.5 $ — $ 106.5

Nine Months Ended September 30,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

Shareholders Noncontrolling

10 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In millions, except par values) September 30, 2022 December 31, 2021

(In millions, except par values) March 31, 2023 December 31, 2022

Current assets:

Cash and cash equivalents $ 232.5 $ 285.2

Trade accounts receivable, net of allowance for doubtful accounts of $ 15.5 and $ 13.9 at September 30, 2022 and December 31, 2021, respectively

Trade accounts receivable, net of allowance for doubtful accounts of $ 20.1 and $ 19.1 at March 31, 2023 and December 31, 2022, respectively

Prepaid expenses 163.7 134.3

34 unchanged sentences

Authorized shares - 300.0 ;

Issued shares - 189.3 at September 30, 2022 and December 31, 2021;

Outstanding shares - 122.4 and 122.1 at September 30, 2022 and December 31, 2021, respectively

Issued shares - 189.3 at March 31, 2023 and December 31, 2022;

Outstanding shares - 122.6 and 122.5 at March 31, 2023 and December 31, 2022, respectively

Paid-in capital 1,631.1 1,594.2

1 unchanged sentence

Accumulated other comprehensive loss ( 461.1 ) ( 473.7 )

Treasury stock, at cost, 66.3 shares and 66.6 shares at September 30, 2022 and December 31, 2021, respectively

Treasury stock, at cost, 66.1 shares and 66.2 shares at March 31, 2023 and December 31, 2022, respectively

( 2,657.0 ) ( 2,650.7 )

Stock held by employee benefit trusts, at cost, 0.6 shares at September 30, 2022 and December 31, 2021

Stock held by employee benefit trusts, at cost, 0.6 shares at March 31, 2023 and December 31, 2022

( 5.9 ) ( 5.9 )

5 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

5 unchanged sentences

Deferred income taxes ( 11.9 ) 40.2

(Gain) loss on fair market value adjustment and gain on sale of equity investment ( 20.2 ) 0.1

Gain on divestiture — ( 0.2 )

Gain on fair market value adjustment of equity investments ( 3.1 ) ( 8.3 )

Changes in assets and liabilities, excluding effects of acquisitions:

2 unchanged sentences

Current and long term liabilities, excluding debt ( 53.7 ) ( 489.3 )

Cash provided by operating activities 431.7 949.5

Cash provided by (used in) operating activities 150.9 ( 198.5 )

Investing activities:

1 unchanged sentence

Acquisitions, net of cash acquired ( 4.3 ) ( 111.7 )

Cash received from divestitures 98.8 1.5

Cash used in investing activities ( 162.6 ) ( 268.2 )

Financing activities:

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

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

Net short-term borrowings ( 160.8 ) 516.8

Borrowings on long-term debt 175.0 —

Treasury stock purchases — ( 69.9 )

Dividends paid to Equifax shareholders ( 47.9 ) ( 47.9 )

2 unchanged sentences

Payment of taxes related to settlement of equity awards ( 15.9 ) ( 29.8 )

Purchase of noncontrolling interests — ( 11.2 )

Debt issuance costs ( 0.3 ) —

Cash provided by financing activities 416.5 842.4

Cash (used in) provided by financing activities ( 43.3 ) 444.3

Effect of foreign currency exchange rates on cash and cash equivalents 2.3 ( 1.4 )

4 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three Months Ended September 30, 2022

Equifax Shareholders

Accumulated Other Comprehensive Loss Stock

Held By Employee Benefits Trusts

Outstanding Amount Paid-In

Capital Retained

Earnings Treasury

Stock Noncontrolling

Interests Total

(In millions, except per share amounts)

Balance, June 30, 2022 122.4 $ 236.6 $ 1,563.2 $ 5,078.1 $ ( 414.4 ) $ ( 2,652.6 ) $ ( 5.9 ) $ 16.0 $ 3,821.0

Net income — — — 165.7 — — — 1.2 166.9

Other comprehensive loss — — — — ( 181.8 ) — — ( 0.5 ) ( 182.3 )

Shares issued under stock and benefit plans, net of minimum tax withholdings — — 3.0 — — 1.2 — — 4.2

Cash dividends ($ 0.39 per share)

— — — ( 48.0 ) — — — — ( 48.0 )

Dividends paid to employee benefits trusts — — 0.2 — — — — — 0.2

Stock-based compensation expense — — 13.7 — — — — — 13.7

Dividends paid to noncontrolling interests — — — — — — — ( 0.1 ) ( 0.1 )

Balance, September 30, 2022 122.4 $ 236.6 $ 1,580.1 $ 5,195.8 $ ( 596.2 ) $ ( 2,651.4 ) $ ( 5.9 ) $ 16.6 $ 3,775.6

For the Three Months Ended September 30, 2021

Equifax Shareholders

Accumulated Other Comprehensive Loss Stock

Held By Employee Benefits Trusts

Outstanding Amount Paid-In

Capital Retained

Earnings Treasury

Stock Noncontrolling

Interests Total

(In millions, except per share amounts)

Balance, June 30, 2021 121.8 $ 236.6 $ 1,506.8 $ 4,505.7 $ ( 156.8 ) $ ( 2,625.9 ) $ ( 5.9 ) $ 38.1 $ 3,498.6

Net income — — — 205.4 — — — 1.2 206.6

Other comprehensive loss — — — — ( 98.9 ) — — ( 1.2 ) ( 100.1 )

Shares issued under stock and benefit plans, net of minimum tax withholdings 0.2 — ( 0.3 ) — — ( 4.9 ) — — ( 5.2 )

Cash dividends ($ 0.39 per share)

— — — ( 47.8 ) — — — — ( 47.8 )

Dividends paid to employee benefits trusts — — 0.2 — — — — — 0.2

Stock-based compensation expense — — 10.9 — — — — — 10.9

Purchases of redeemable noncontrolling interests — — — — — — — ( 7.6 ) ( 7.6 )

Redeemable noncontrolling interest adjustment — — — 14.0 — — — ( 14.0 ) —

Dividends paid to noncontrolling interests — — — — — — — ( 0.7 ) ( 0.7 )

Other — — — 0.1 — — — 0.1 0.2

Balance, September 30, 2021 122.0 $ 236.6 $ 1,517.6 $ 4,677.4 $ ( 255.7 ) $ ( 2,630.8 ) $ ( 5.9 ) $ 15.9 $ 3,555.1

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE LOSS

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Equifax Shareholders

9 unchanged sentences

Net income — — — 112.4 — — — 1.1 113.5

Other comprehensive loss — — — — ( 300.8 ) — — ( 0.8 ) ( 301.6 )

Other comprehensive income — — — — 12.6 — — 0.3 12.9

Shares issued under stock and benefit plans, net of minimum tax withholdings 0.1 — ( 3.0 ) — — ( 6.3 ) — — ( 9.3 )

3 unchanged sentences

Stock-based compensation expense — — 39.7 — — — — — 39.7

Dividends paid to noncontrolling interests — — — — — — — ( 2.5 ) ( 2.5 )

Balance, September 30, 2022 122.4 $ 236.6 $ 1,580.1 $ 5,195.8 $ ( 596.2 ) $ ( 2,651.4 ) $ ( 5.9 ) $ 16.6 $ 3,775.6

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

For the Nine Months Ended September 30, 2021

Balance, March 31, 2023 122.6 $ 236.6 $ 1,631.1 $ 5,320.3 $ ( 461.1 ) $ ( 2,657.0 ) $ ( 5.9 ) $ 18.2 $ 4,082.2

For the Three Months Ended March 31, 2022

Equifax Shareholders

9 unchanged sentences

Net income — — — 221.8 — — — 1.0 222.8

Other comprehensive loss — — — — ( 84.3 ) — — ( 0.7 ) ( 85.0 )

Other comprehensive income (loss) — — — — 77.7 — — ( 0.3 ) 77.4

Shares issued under stock and benefit plans, net of minimum tax withholdings 0.2 — ( 10.2 ) — — ( 14.0 ) — — ( 24.2 )

Treasury stock purchased under share repurchase program ( 0.4 ) — — — — ( 69.9 ) — — ( 69.9 )

Cash dividends ($ 0.39 per share)

— — — ( 47.9 ) — — — — ( 47.9 )

Dividends paid to employee benefits trusts — — 0.7 — — — — — 0.7

Stock-based compensation expense — — 22.3 — — — — — 22.3

Purchases of redeemable noncontrolling interests — — — — — — — ( 7.6 ) ( 7.6 )

Redeemable noncontrolling interest adjustment — — — 13.2 — — — ( 13.2 ) —

Dividends paid to noncontrolling interests — — — — — — — ( 0.5 ) ( 0.5 )

Purchases of noncontrolling interests — — ( 1.8 ) — — — — ( 1.8 ) ( 3.6 )

Other — — ( 0.2 ) — — — — 0.4 0.2

Balance, September 30, 2021 122.0 $ 236.6 $ 1,517.6 $ 4,677.4 $ ( 255.7 ) $ ( 2,630.8 ) $ ( 5.9 ) $ 15.9 $ 3,555.1

Balance, March 31, 2022 122.3 $ 236.6 $ 1,548.8 $ 4,925.5 $ ( 217.7 ) $ ( 2,653.2 ) $ ( 5.9 ) $ 17.0 $ 3,851.1

Accumulated Other Comprehensive Loss consists of the following components:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(In millions)

Foreign currency translation $ ( 456.7 ) $ ( 469.3 )

Unrecognized prior service cost related to our pension and other postretirement benefit plans, net of accumulated tax of $ 1.0 and $ 0.4 at September 30, 2022 and December 31, 2021, respectively

Unrecognized prior service cost related to our pension and other postretirement benefit plans, net of accumulated tax of $ 1.1 and $ 1.2 at March 31, 2023 and December 31, 2022, respectively

( 3.4 ) ( 3.4 )

Cash flow hedging transactions, net of accumulated tax of $ 0.6 at September 30, 2022 and December 31, 2021

Cash flow hedging transactions, net of accumulated tax of $ 0.6 at March 31, 2023 and December 31, 2022

( 1.0 ) ( 1.0 )

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2022

March 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

Nature of Operations.

We collect, organize and manage various types of financial, demographic, employment, criminal history and marketing information.

We collect, organize and manage various types of financial, demographic, employment, criminal justice data and marketing information.

Our products and services enable businesses to make credit and service decisions, manage their portfolio risk, automate or outsource certain payroll-related, tax and human resources business processes, and develop marketing strategies concerning consumers and commercial enterprises.

1 unchanged sentence

We also enable consumers to manage and protect their financial health through a portfolio of products offered directly to consumers.

As of September 30, 2022, we operated in the following countries:

As of March 31, 2023, we operated in the following countries:

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

15 unchanged sentences

A reconciliation of the weighted-average outstanding shares used in the two calculations is as follows:

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

2022 2021 2022 2021

Three Months Ended March 31,

(In millions)

3 unchanged sentences

Weighted-average shares outstanding (diluted) 123.5 123.5

For the three and nine months ended September 30, 2022 and 2021, stock options that were anti-dilutive were no t material.

For the three months ended March 31, 2023 and 2022, stock options that were anti-dilutive were not material.

Financial Instruments.

2 unchanged sentences

The fair value of our fixed-rate debt is determined using Level 2 inputs such as quoted market prices for publicly traded instruments, and for non-publicly traded instruments, through valuation techniques depending on the specific characteristics of the debt instrument, taking into account credit risk.

As of September 30, 2022 and December 31, 2021, the fair value of our long-term debt, including the current portion, was $ 5.3 billion and $ 5.2 billion compared to its carrying value of $ 5.8 billion and $ 5.0 billion, respectively.

As of March 31, 2023 and December 31, 2022, the fair value of our long-term debt, including the current portion, was $ 4.9 billion and $ 4.8 billion compared to its carrying value of $ 5.3 billion, respectively.

Fair Value Measurements.

2 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis.

We completed multiple acquisitions during the nine months ended September 30, 2022 and the year ended December 31, 2021.

The values of certain assets acquired were recorded at fair value using Level 3 inputs.

We completed one acquisition during the three months ended March 31, 2023 and multiple acquisitions during the year ended December 31, 2022.

The values of net assets acquired were recorded at fair value using Level 3 inputs.

The majority of the related current assets acquired and liabilities assumed were recorded at their carrying values as of the date of acquisition, as their carrying values approximated their fair values due to their short-term nature.

11 unchanged sentences

Increases to the allowance for doubtful accounts are recorded as bad debt expense, which are included in selling, general and administrative expenses on the accompanying Consolidated Statements of Income.

Below is a rollforward of our allowance for doubtful accounts for the three and nine months ended September 30, 2022 and 2021, respectively.

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

2022 2021 2022 2021

Below is a rollforward of our allowance for doubtful accounts for the three months ended March 31, 2023 and 2022, respectively.

Three Months Ended March 31,

(In millions)

6 unchanged sentences

Other current assets also include amounts in specifically designated accounts that hold the funds that are due to customers from our debt collection and recovery management services.

As of September 30, 2022, these assets were $ 24.9 million, with a corresponding balance in other current liabilities.

As of March 31, 2023, these assets were $ 26.4 million, with a corresponding balance in other current liabilities.

These amounts are restricted as to their current use and will be released according to the specific customer agreements.

Other Assets.

Other assets on our Consolidated Balance Sheets primarily represent our investments in unconsolidated affiliates, the Company’s operating lease right-of-use assets, employee benefit trust assets, long-term deferred tax assets and assets related to life insurance policies covering certain officers of the Company.

Other assets on our Consolidated Balance Sheets primarily represent our investments in unconsolidated affiliates, the Company’s operating lease right-of-use assets, employee benefit trust assets, assets related to life insurance policies covering certain officers of the Company and long-term deferred tax assets.

Equity Investment.

We record our equity investment in Brazil within Other Assets at fair value, using observable Level 1 inputs.

The carrying value of the investment has been adjusted to $ 58.0 million as of September 30, 2022 based on

quoted market prices, resulting in an unrealized gain of $ 5.7 million and unrealized loss of $ 0.7 million for the three and nine months ended September 30, 2022.

The carrying value of the investment was $ 124.9 million as of September 30, 2021, resulting in an unrealized gain of $ 17.3 million and unrealized loss of $ 0.1 million for the three and nine months ended September 30, 2021.

The carrying value of the investment has been adjusted to $ 77.3 million as of March 31, 2023 based on quoted market prices, resulting in an unrealized gain of $ 3.1 million for the three months ended March 31, 2023.

The carrying value of

the investment was $ 95.0 million as of March 31, 2022, resulting in an unrealized gain of $ 27.8 million for the three months ended March 31, 2022.

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

2 unchanged sentences

Other Current Liabilities.

Other current liabilities on our Consolidated Balance Sheets consist of the current portion of our operating lease liabilities and various accrued liabilities such as costs related to the 2017 cybersecurity incident as described more fully in Note 6, interest expense and accrued employee benefits.

Other current liabilities on our Consolidated Balance Sheets consist of the current portion of our operating lease liabilities and various accrued liabilities such as interest expense, income taxes, accrued employee benefits, and insurance expense.

Other current liabilities also include the offset to other current assets related to amounts in specifically designated accounts that hold the funds that are due to customers from our debt collection and recovery management services.

As of September 30, 2022, these funds were $ 24.9 million.

As of March 31, 2023, these funds were $ 26.4 million.

These amounts are restricted as to their current use and will be released according to the specific customer agreements.

Benefit Plans.

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

Recent Accounting Pronouncements.

Change in Accounting Principle.

In October 2021, the FASB issued ASU No.

1 unchanged sentence

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The update provides clarifying guidance to reduce diversity in practice stating that contract assets, contract liabilities and deferred revenue acquired in business combinations should be measured in accordance with Accounting Standards Topic 606, rather than the fair value principles of Accounting Standards Topic 805.

ASU 2021-08 is effective for all public business entities for annual periods beginning after December 15, 2022, although early adoption is permitted.

ASU 2021-08 is effective for all public business entities for annual periods beginning after December 15, 2022.

This guidance must be applied on a prospective basis.

The adoption of this guidance is not expected to have a material impact on our financial position, results of operations or cash flows.

As of January 1, 2023, we have adopted this standard as it relates to our current year business combinations.

The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements.

In March 2020, the FASB issued ASU No.

2 unchanged sentences

ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

In December 2022, the FASB issued ASU No.

2022-06 "Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848." The update extends the sunset date from ASU No.

2020-04 from December 31, 2022, to December 31, 2024.

After this date, entities will no longer be permitted to apply the relief in Topic 848.

We are still evaluating the impact, but do not expect the adoption of the standard to have a material impact on our Consolidated Financial Statements.

1 unchanged sentence

Based on the information that management reviews internally for evaluating operating segment performance and nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors, we disaggregate revenue as follows:

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

Three Months Ended March 31, Change

Consolidated Operating Revenue 2023 2022 $ %

(In millions) (In millions)

(In millions)

Verification Services $ 455.8 $ 513.3 $ ( 57.5 ) ( 11 ) %

12 unchanged sentences

Remaining Performance Obligation – We have elected to disclose only the remaining performance obligations for those contracts with an expected duration of greater than one year and do not disclose the value of remaining performance obligations for contracts in which we recognize revenue at the amount to which we have the right to invoice.

We expect to recognize as revenue the following amounts related to our remaining performance obligations as of September 30, 2022, inclusive of foreign exchange impact:

We expect to recognize as revenue the following amounts related to our remaining performance obligations as of March 31, 2023, inclusive of foreign exchange impact:

Performance Obligation Amount

7 unchanged sentences

2023 Acquisitions and Investments.

In the first quarter of 2022, the Company acquired 100 % of Efficient Hire, a provider of cloud recruiting, onboarding and human resources management solutions, within the Workforce Solutions operating segment, and Data Crédito, a consumer credit reporting agency in the Dominican Republic, within the International operating segment.

These acquisitions expand the Company's data assets and product offerings and broaden our geographic footprint.

In the third quarter of 2022, the Company acquired 100 % of LawLogix, a leading provider of cloud-based I-9 software and immigration case management software, within the Workforce Solutions operating segment, and Midigator, a provider of post-transaction fraud mitigation solutions, within the U.S.

Information Solutions ("USIS") business segment.

The Company will account for these acquisitions in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition.

The purchase price allocations for the LawLogix and Midigator acquisitions are not yet finalized and open areas relate to measurement of intangible assets, income taxes and working capital, as well as the assignment of goodwill recognized in the transactions.

For the acquisitions that occurred during the third quarter of 2022, management estimated the allocation of purchased intangible assets and goodwill based on the analysis of previous acquisitions within the Workforce Solutions and USIS operating segments.

Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.

In the first quarter of 2023, the Company acquired a company in Canada, within the International operating segment.

2022 Acquisitions and Investments.

In the first quarter of 2021, the Company acquired 100 % of Kount, a provider of fraud prevention and digital identity solutions, for $ 640 million within the USIS business unit.

Additionally, in the first quarter of 2021, the Company acquired 100 % of HIREtech and i2Verify within the Workforce Solutions business unit, as well as a small acquisition and purchase of the remaining noncontrolling interest of a business within our International business unit.

In the third quarter of 2021, the Company acquired 100 % of Health e(fx) and Teletrack within the Workforce Solutions and USIS business units, respectively, as well as the purchase of the remaining noncontrolling interest of a business within our International business unit.

Additionally, the Company acquired 100 % of Appriss Insights on October 1, 2021, for cash consideration of approximately $ 1.825 billion, within the Workforce Solutions business unit.

GOODWILL AND INTANGIBLE ASSETS

2 unchanged sentences

We perform our annual goodwill impairment tests as of September 30.

Our annual goodwill impairment testing was completed during the third quarter of 2022.

The estimated fair value for all reporting units exceeded the carrying value for those units as of September 30, 2022.

As a result, no goodwill impairment was recorded.

Changes in the amount of goodwill for the nine months ended September 30, 2022, are as follows:

Changes in the amount of goodwill for the three months ended March 31, 2023, are as follows:

Workforce Solutions U.S.

4 unchanged sentences

Foreign currency translation — — 5.5 5.5

Divestitures — — ( 24.6 ) ( 24.6 )

Balance, September 30, 2022 $ 2,511.4 $ 2,011.8 $ 1,781.1 $ 6,304.3

Balance, March 31, 2023 $ 2,520.7 $ 2,007.1 $ 1,868.5 $ 6,396.3

Indefinite-Lived Intangible Assets.

3 unchanged sentences

We are required to test indefinite-lived intangible assets for impairment annually and whenever events or circumstances indicate that there may be an impairment of the asset value.

We perform our annual indefinite-lived intangible asset impairment test as of September 30.

Our indefinite-lived intangible asset carrying amounts did not change materially during the nine months ended September 30, 2022.

We perform our annual indefinite-lived intangible asset impairment test as of September 30, at which point the estimated fair value of our indefinite-lived intangibles exceeded the carrying value.

Our indefinite-lived intangible asset carrying amounts did not change materially during the three months ended March 31, 2023.

Purchased Intangible Assets.

Purchased intangible assets represent the estimated acquisition date fair value of acquired intangible assets used in our business.

Purchased data files represent the estimated acquisition date fair value of consumer information files acquired primarily through various acquisitions primarily in the U.S., Australia and Canada.

Purchased data files represent the estimated fair value of consumer and commercial data files acquired through our acquisitions of various companies, including a fraud and identity solutions provider and independent credit reporting agencies in the U.S., Australia and Canada.

We expense the cost of modifying and updating credit files in the period such costs are incurred.

We amortize all of our purchased

intangible assets on a straight-line basis.

We amortize all of our purchased intangible assets on a straight-line basis.

For additional information about the useful lives related to our purchased intangible assets, see Note 1 of the Notes to Consolidated Financial Statements in our 2022 Form 10-K.

Purchased intangible assets at September 30, 2022 and December 31, 2021 consisted of the following:

September 30, 2022 December 31, 2021

Purchased intangible assets at March 31, 2023 and December 31, 2022 consisted of the following:

March 31, 2023 December 31, 2022

Gross Accumulated

10 unchanged sentences

Total definite-lived intangible assets $ 2,931.6 $ ( 1,171.7 ) $ 1,759.9 $ 2,937.1 $ ( 1,118.6 ) $ 1,818.5

Amortization expense related to purchased intangible assets was $ 59.1 million and $ 40.1 million during the three months ended September 30, 2022 and 2021, respectively.

Amortization expense related to purchased intangible assets was $ 174.4 million and $ 119.6 million during the nine months ended September 30, 2022 and 2021, respectively.

Estimated future amortization expense related to definite-lived purchased intangible assets at September 30, 2022 is as follows:

Amortization expense related to purchased intangible assets was $ 60.7 million and $ 57.3 million during the three months ended March 31, 2023 and 2022, respectively.

Estimated future amortization expense related to definite-lived purchased intangible assets at March 31, 2023 is as follows:

Years ending December 31, Amount

1 unchanged sentence

Thereafter 721.9

Debt outstanding at September 30, 2022 and December 31, 2021 was as follows:

September 30, 2022 December 31, 2021

Debt outstanding at March 31, 2023 and December 31, 2022 was as follows:

March 31, 2023 December 31, 2022

(In millions)

Commercial paper $ 406.2 $ 566.8

Notes, 3.3 %, due December 2022

Notes, 3.95 %, due June 2023

2 unchanged sentences

Notes, 3.25 %, due June 2026

Revolver 175.0 —

Term loan, due August 2026 700.0 700.0

17 unchanged sentences

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

2.35 % Senior 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.

The net proceeds of the sale of the 2031 Notes were used to repay our then-outstanding $ 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 commercial paper program and the funding of acquisitions, including our acquisition of Appriss Insights in the fourth quarter of 2021.

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 2031 Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

Senior Credit Facilities.

In August 2021, we refinanced our 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 of which mature in August 2026.

In March 2023, we amended our Senior Credit Facilities agreement to adjust our debt covenant requirements and incorporate the Secure Overnight Financing Rate (SOFR) into our agreement, among other changes.

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.

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.

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 Revolver.

As of September 30, 2022, there were $ 162.4 million of outstanding commercial paper notes, $ 0.4 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 $ 1,337.2 million at September 30, 2022.

As of March 31, 2023, there were $ 406.2 million of outstanding commercial paper notes, $ 0.4 million of letters of credit outstanding, $ 175.0 million outstanding borrowings under the Revolver and $ 700.0 million outstanding under the Term Loan.

Availability under the Revolver was $ 918.4 million at March 31, 2023.

Commercial Paper Program.

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Because the CP is backstopped by our Revolver, the amount of CP which may be issued under the program is reduced by the outstanding face amount of any letters of credit issued and by the outstanding borrowings under our Revolver.

At September 30, 2022, there were $ 162.4 million of outstanding CP notes.

At March 31, 2023, there were $ 406.2 million of outstanding CP notes.

We have disclosed the net short-term borrowing activity for the quarter ended March 31, 2023 in the Consolidated Statements of Cash Flows.

The amount disclosed includes CP borrowings of $ 97.0 million and payments of $ 108.8 million with a maturity date greater than 90 days and less than 365 days for the three months ended March 31, 2023.

For additional information about our debt agreements, see Note 5 of the Notes to Consolidated Financial Statements in our 2022 Form 10-K.

COMMITMENTS AND CONTINGENCIES

Litigation, Claims and Government Investigations Related to the 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.

Following the 2017 cybersecurity incident, hundreds of class actions and other lawsuits were filed against us typically alleging harm from the incident and seeking various remedies, including monetary and injunctive relief.

We were also subject to investigations and inquiries by federal, state and foreign governmental agencies and officials regarding the 2017 cybersecurity incident and related matters.

Most of these lawsuits and government investigations have concluded or been resolved, including pursuant to the settlement agreements described below and in prior filings, while others remain ongoing.

The Company’s participation in these settlements does not constitute an admission by the Company of any fault or liability, and the Company does not admit fault or liability.

In 2019, we recorded expenses, net of insurance recoveries, of $ 800.9 million in other current liabilities in our Consolidated Balance Sheets, exclusive of our legal and professional services expenses.

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

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

While it is reasonably possible that losses exceeding the amount accrued may be incurred, it is not possible at this time to estimate the additional possible loss in excess of the amount already accrued that might result from adverse judgments, settlements, penalties or other resolution of the proceedings and investigations described below based on a number of factors, such as the various stages of these proceedings and investigations, including matters on appeal, that alleged damages have not been specified or are uncertain, the uncertainty as to the certification of a class or classes and the size of any certified class, as applicable, and the lack of resolution on significant factual and legal issues.

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

Consumer Settlement.

On July 19, 2019 and July 22, 2019, we entered into multiple agreements that resolve the U.S.

consolidated consumer class action cases, captioned In re:

Equifax, Inc.

Customer Data Security Breach Litigation, MDL No.

2800 (the “U.S.

Consumer MDL Litigation”), and the investigations of the FTC, the CFPB, the Attorneys General of 48 states, the District of Columbia and Puerto Rico and the NYDFS (collectively, the “Consumer Settlement”).

The Consumer Settlement became effective on January 11, 2022.

Under the terms of the Consumer Settlement, the Company contributed $ 380.5 million to a non-reversionary settlement fund (the “Consumer Restitution Fund”) to provide restitution for U.S.

consumers identified by the Company whose personal information was compromised as a result of the 2017 cybersecurity incident as well as to pay reasonable attorneys’ fees and reasonable costs and expenses for the plaintiffs’ counsel in the U.S.

Consumer MDL Litigation (not to exceed $ 80.5 million), settlement administration costs and notice costs.

The Company has agreed to contribute up to an additional $ 125.0 million to the Consumer Restitution Fund to cover certain unreimbursed costs and expenditures incurred by affected U.S.

consumers in the event the $ 380.5 million in the Consumer Restitution Fund is exhausted.

The Company also agreed to various business practice commitments related to consumer assistance and its information security program, including conducting third party assessments of its information security program.

Other Matters .

We face other lawsuits and government investigations related to the 2017 cybersecurity incident that have not yet been concluded or resolved.

These ongoing matters may result in judgments, fines or penalties, settlements or other relief.

We dispute the allegations in the remaining lawsuits and intend to defend against such claims.

Set forth below are descriptions of these matters.

Canadian Class Actions .

In 2017, we experienced a cybersecurity incident following a criminal attack on our systems that involved the theft of personal information of consumers.

Five putative Canadian class actions, four of which are on behalf of a national class of approximately 19,000 Canadian consumers, are pending against us in Ontario, British Columbia and Alberta.

Each of the proposed Canadian class actions asserts a number of common law and statutory claims seeking monetary damages and other related relief in connection with the 2017 cybersecurity incident.

In addition to seeking class certification on behalf of Canadian

consumers whose personal information was allegedly impacted by the 2017 cybersecurity incident, in some cases, plaintiffs also seek class certification on behalf of a larger group of Canadian consumers who had contracts for subscription products with Equifax around the time of the incident or earlier and were not impacted by the incident.

In addition to seeking class certification on behalf of Canadian consumers whose personal information was allegedly impacted by the 2017 cybersecurity incident, in some cases, plaintiffs also seek class certification on behalf of a larger group of Canadian consumers who had contracts for subscription products with Equifax around the time of the incident or earlier and were not impacted by the incident.

On December 13, 2019, the court in Ontario granted certification of a nationwide class that includes all impacted Canadians as well as Canadians who had subscription products with Equifax between March 7, 2017 and July 30, 2017 who were not impacted by the incident.

We appealed one of the claims on which a class was certified and on June 9, 2021, our appeal was granted by the Ontario Divisional Court.

The plaintiff has since filed a notice of further appeal with the Ontario Court of Appeal, which was argued before the Court of Appeal in June 2022.

The plaintiff filed a notice of further appeal with the Ontario Court of Appeal, and on November 25, 2022, the Ontario Court of Appeal dismissed the plaintiff’s appeal and upheld the Divisional Court’s ruling in our favor.

On January 24, 2023, the plaintiff appealed this decision to the Supreme Court of Canada.

All remaining purported class actions are at preliminary stages or stayed.

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The U.K.’s Financial Conduct Authority (“FCA”) opened an enforcement investigation against our U.K.

subsidiary, Equifax Limited, in October 2017.

subsidiary, Equifax Limited, in October 2017 in connection with the 2017 cybersecurity incident.

The investigation by the FCA has involved a number of information requirements and interviews.

We continue to respond to the information requirements and are cooperating with the investigation.

Although we continue to cooperate in the Canadian class action proceedings and the FCA investigation, an adverse outcome to any such proceedings and investigation could subject us to fines or other obligations, which could have a material adverse effect on our financial condition, results of operations, or cash flows in future periods.

We have responded to the information requirements and continue to cooperate with the investigation.

We have been advised by the FCA that it intends to send us a notice with the FCA's findings and proposed penalty, which we anticipate will result in the initiation of settlement discussions.

At this time, we are unable to predict the outcome of this FCA investigation, including whether the investigation will result in any settlement, action or proceeding against us.

Data Processing, Outsourcing Services and Other Agreements

We have separate agreements with Google, Amazon Web Services, IBM, Tata Consultancy Services and others to outsource portions of our network and security infrastructure, computer data processing operations, applications development, business continuity and recovery services, help desk service and desktop support functions, operation of our voice, data and cloud computing networks, maintenance and related functions and to provide certain other administrative and operational services.

We have separate agreements with Google, Amazon Web Services, UST Global, Kyndryl and others to outsource portions of our network and security infrastructure, computer data processing operations, applications development, business continuity and recovery services, help desk service and desktop support functions, operation of our voice and data networks, maintenance and related functions and to provide certain other administrative and operational services.

The agreements expire between 2023 and 2028.

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We may issue standby letters of credit and performance and surety bonds in the normal course of business.

The aggregate notional amounts of all performance and surety bonds and standby letters of credit was not material at September 30, 2022 and generally have a remaining maturity of one year or less.

The aggregate notional amounts of all performance and surety bonds and standby letters of credit was not material at March 31, 2023 and generally have a remaining maturity of one year or less.

We may issue other guarantees in the ordinary course of business.

The maximum potential future payments we could be required to make under the guarantees in the ordinary course of business was not material at September 30, 2022.

The maximum potential future payments we could be required to make under the guarantees in the ordinary course of business was not material at March 31, 2023.

We have agreed to guarantee the liabilities and performance obligations (some of which have limitations) of a certain debt collections and recovery management subsidiary under its commercial agreements.

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federal, state and international income taxes.

We are generally no longer subject to federal, state, or international income tax examinations by tax authorities for years before 2018 with a few exceptions.

We are generally no longer subject to federal, state, or international income tax examinations by tax authorities for years before 2018.

Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that our gross unrecognized tax benefit balance may change within the next twelve months by a range of $ 0 to $ 4.5 million.

Effective Tax Rate

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.

Our effective income tax rate was 25.4 % for the three months ended March 31, 2023, compared to 26.7 % for the three months ended March 31, 2022.

Our effective tax rate was lower during the first quarter of 2023 as compared to 2022 primarily due to an unfavorable impact of a state law change that was reflected in the prior year.

Inflation Reduction Act

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ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss by component, after tax, for the nine months ended September 30, 2022, are as follows:

Changes in accumulated other comprehensive loss by component, after tax, for the three months ended March 31, 2023, are as follows:

currency Pension and other

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Balance, December 31, 2022 $ ( 469.3 ) $ ( 3.4 ) $ ( 1.0 ) $ ( 473.7 )

Other comprehensive loss before reclassifications ( 312.9 ) — — ( 312.9 )

Amounts reclassified from accumulated other comprehensive loss 13.6 ( 1.5 ) — 12.1

Net current-period other comprehensive income (loss) ( 299.3 ) ( 1.5 ) — ( 300.8 )

Balance, September 30, 2022 $ ( 591.8 ) $ ( 3.4 ) $ ( 1.0 ) $ ( 596.2 )

Changes in accumulated other comprehensive loss related to noncontrolling interests were not material as of September 30, 2022.

Other comprehensive income 12.6 — — 12.6

Balance, March 31, 2023 $ ( 456.7 ) $ ( 3.4 ) $ ( 1.0 ) $ ( 461.1 )

Changes in accumulated other comprehensive loss related to noncontrolling interests were not material as of March 31, 2023.

RESTRUCTURING CHARGES

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This charge was recorded to general corporate expense and resulted from our continuing efforts to realign our internal resources to support the Company’s strategic objectives and primarily relate to a reduction in headcount.

As of September 30, 2022, $ 6.4 million of the fourth quarter 2021 restructuring charge has been paid, with the remaining future payments expected to be completed later in 2022.

As of March 31, 2023, $ 12.8 million of the fourth quarter 2022 restructuring charge has been paid, with the remaining future payments expected to be completed later in 2023.

SEGMENT INFORMATION

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The accounting policies of the reportable segments are the same as those described in our summary of significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in our 2022 Form 10-K.

We evaluate the performance of these reportable segments based on their operating revenues, operating income and operating margins, excluding any unusual or infrequent items, if any.

We evaluate the performance of these reportable segments based on their operating revenue, operating income and operating margins, excluding any unusual or infrequent items, if any.

The measurement criteria for segment profit or loss and segment assets are substantially the same for each reportable segment.

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Workforce Solutions.

This segment includes employment, income, criminal history and social security number verification services as well as complementary payroll-based transaction services, employment tax management services and identity theft protection products offered directly to consumers and through employers.

This segment provides services enabling customers to verify income, employment, educational history, criminal justice data, healthcare professional licensure and sanctions of people in the U.S.

(Verification Services), as well as providing our employer customers with services that assist them in complying with and automating certain payroll-related and human resource management processes throughout the entire cycle of the employment relationship, including unemployment cost management, employee screening, employee onboarding, tax credits and incentives, I-9 management and compliance, immigration case management, tax form management services and Affordable Care Act management services.

Information Solutions.

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International.

This segment includes information services products, which includes consumer and commercial services (such as credit and financial information, credit scoring and credit modeling services), credit and other marketing products and services.

In Asia Pacific, Europe, Canada and Latin America we also provide information, technology and services to support debt collections and recovery management.

products and services.

In Asia Pacific, Europe, Latin America and Canada, we also provide information, technology and services to support debt collections and recovery management.

In Europe and Canada, we also provide credit monitoring products to resellers or directly to consumers.

Operating revenue and operating income by operating segment during the three and nine months ended September 30, 2022 and 2021 are as follows:

Three Months Ended Nine Months Ended

(In millions) September 30, September 30,

Operating revenue and operating income by operating segment during the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended

(In millions) March 31,

Operating revenue:

2022 2021 2022 2021

Workforce Solutions $ 596.3 $ 649.0

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Total operating revenue $ 1,302.0 $ 1,363.2

Three Months Ended Nine Months Ended

(In millions) September 30, September 30,

Three Months Ended

(In millions) March 31,

Operating income:

2022 2021 2022 2021

Workforce Solutions $ 248.7 $ 308.4

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Total operating income $ 205.4 $ 332.4

Total assets by operating segment at September 30, 2022 and December 31, 2021 are as follows:

September 30, December 31,

Total assets by operating segment at March 31, 2023 and December 31, 2022 are as follows:

March 31, December 31,

(In millions) 2023 2022

6 unchanged sentences

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 1. Financial Statements