What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-22 compared with 2023-02-23 · 219 added, 218 removed, 493 unchanged (47% of the section changed)

11 unchanged sentences

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

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

Our services are based on comprehensive databases of consumer and business information derived from numerous sources including credit, financial assets, telecommunications and utility payments, employment, income, educational history, criminal justice data, healthcare professional licensure and sanctions, demographic and marketing data.

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

We are a leading provider of e-commerce fraud and charge back protection services in North America as well as information and solutions used in payroll-related and human resource management business process services in the U.S.

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

as well as e-commerce fraud and charge back protection services in North America.

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

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North America (U.S.

and Canada), Asia Pacific (Australia, New Zealand and India), Europe (the United Kingdom (“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 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.

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

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

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

Recent Events and Company Outlook

1 unchanged sentence

Our products and services span a wide variety of vertical markets including financial services, mortgage, talent solutions, federal, state and local governments, automotive, telecommunications, e-commerce 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, identity and fraud, and employee hiring and onboarding activity.

Demand for our services tends to be correlated to general levels of economic activity and to consumer credit and small business commercial credit decisioning and portfolio review, marketing, identity validation and fraud protection activity, employee hiring and onboarding activity, and activity in provisioning support services in the U.S.

by government agencies.

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

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Our plan assumes the U.S.

mortgage market, as measured by originations, is expected to decline by about 30% in 2023 versus 2022.

mortgage market, as measured by credit inquiries, is expected to decline by about 16% in 2024 versus 2023.

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

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

interest rates and therefore mortgage rates.

interest rates which impact mortgage rates available to consumers.

In the international markets in which we operate, in particular in Australia, the U.K.

and Canada, our planning also assumes economic activity, as measured by GDP, to grow in 2024 but at slower rates than in 2023.

The slowdown in economic activity in the U.K.

is expected to be more significant than in Australia or Canada.

Segment and Geographic Information

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Employer Services revenue is derived from our provision of certain human resources business process outsourcing services that include both transaction and subscription based product offerings.

These include services that assist employers 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.

Workforce Solutions has established operations in Canada, Australia and most recently in the U.K.

These services include unemployment claims management, I-9 and onboarding services, Affordable Care Act compliance management, tax credits and incentives and other complementary employment-based transaction services.

Workforce Solutions has established operations in Canada, Australia and the U.K.

The USIS segment consists of three service lines:

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

Online Information Solutions also includes the U.S.

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

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

USIS operates in the United States.

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

Online Information Solutions also includes our U.S.

consumer credit monitoring solutions business.

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

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

Canada’s services are similar to our USIS offerings.

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We currently have operations in the following countries:

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

during both the twelve months ended December 31, 2022 and 2021.

Argentina, Australia, Brazil, Canada, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, India, Ireland, Mexico, New Zealand, Paraguay, Peru, Portugal, 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 Brazil.

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

during the twelve months ended December 31, 2023 and 2022, respectively.

We experience seasonality in certain of our revenue streams.

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Any change in the U.S.

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

Although in recent years activity has been directly related to changes in interest rates, and this trend has been less observed.

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

Key Performance Indicators.

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

Key performance indicators for the twelve months ended December 31, 2022, 2021 and 2020 include the following:

The key performance indicators for the twelve months ended December 31, 2023, 2022 and 2021 were as follows:

Key Performance Indicators

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Capital expenditures* $ (585.8) $ (617.4) $ (490.5)

*Amounts above include accruals for capital expenditures.

*Amounts include accruals for capital expenditures.

RESULTS OF OPERATIONS —

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Consolidated operating revenue $ 5,265.2 $ 5,122.2 $ 4,923.9 $ 143.0 3 % $ 198.3 4 %

Revenue for 2023 increased by 3% compared to 2022, due to revenue growth in International and USIS.

International revenue growth was driven by growth in Latin America primarily from the Boa Vista Serviços S.A.

(" BVS") acquisition, as well as growth in Canada, Europe and Asia Pacific.

USIS revenue growth was primarily due to growth in online revenue, partially offset by declines in Mortgage Solutions.

Workforce Solutions revenue declined slightly, as a decline in Verification Services revenue due to the impact of the decline in mortgage activity was principally offset by growth in Employer Services revenue.

The effect of foreign exchange rates decreased revenue by $51.2 million, or 1%, in 2023 compared to 2022.

Revenue for 2022 increased by 4% compared to 2021.

The increase was primarily due to growth in Workforce Solutions and International, partially offset by a decline in USIS.

The significant decline in U.S.

mortgage originations negatively impacted the growth in Workforce Solutions and caused the decline in USIS revenue.

A significant decline in U.S.

mortgage activity negatively impacted the growth in Workforce Solutions and caused the decline in USIS revenue.

The effect of foreign exchange rates decreased revenue by $94.9 million, or 2%, in 2022 compared to 2021.

Revenue for 2021 increased by 19% compared to 2020.

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

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

Operating Expenses

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Cost of services increased $157.9 million in 2023 compared to 2022.

The increase is due to higher royalty costs, production costs, which include third party cloud usage fees, and people costs.

The increase is primarily due to higher royalty costs, people costs, third party cloud usage fees and software costs, and costs of purchased data and information.

The effect of changes in foreign exchange rates decreased cost of services by $16.9 million.

Cost of services increased $196.3 million in 2022 compared to 2021.

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

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

The increase is due to higher royalty costs, costs of purchased data and information, third party cloud usage fees, and people costs.

The effect of changes in foreign exchange rates decreased cost of services by $50.5 million.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $56.8 million in 2023 compared to 2022.

The increase in 2022 is primarily driven by companies acquired in 2022 and 2021, with the total increase in expenses partially offset by a decrease in incentive plan costs.

The increase in 2023 is primarily due to an increase in litigation expense, mainly due to a payment to the U.K.

FCA for a penalty associated with resolution of the investigation of a material 2017 cybersecurity incident as well as higher people costs, partially offset by lower discretionary expenses.

The increase in people costs is primarily driven by higher incentive plans, partially offset by lower temporary labor.

The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $16.6 million.

Selling, general and administrative expenses increased $4.3 million in 2022 compared to 2021.

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

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

The increase in 2022 is primarily driven by companies acquired in 2022 and 2021, with the total increase in expenses partially offset by a decrease in incentive plan costs.

The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $25.6 million.

Depreciation and Amortization.

Depreciation and amortization expense for 2022 and 2021 increased by $79.7 million and $89.4 million, respectively.

These increases are due to higher amortization of purchased intangible assets related to recent acquisitions, as well as amortization of capitalized internal-use software and systems 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 $11.6 million and an increase of $10.6 million in 2022 and 2021, respectively.

Depreciation and amortization expense for 2023 increased by $50.7 million.

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

The impact of changes in foreign currency exchange rates led to a decrease in depreciation and amortization expense of $1.5 million.

Depreciation and amortization expense increased by $79.7 million in 2022 compared to 2021.

This increase was due to higher amortization of purchased intangible assets related to recent acquisitions as well as amortization of capitalized internal-use software and systems 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 $11.6 million.

Operating Income and Operating Margin

9 unchanged sentences

Consolidated operating margin 17.7 % 20.6 % 23.1 % (2.9) pts (2.5) pts

Total company operating margin decreased by 2.5 percentage points in 2022 versus 2021.

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

Total company operating margin increased by 6.7 percentage points in 2021 versus 2020, due to higher operating income generated by the increased revenue and decreased incremental technology and data security costs, partially offset by the increased people costs and aforementioned increase in depreciation and amortization expense.

Total company operating margin decreased by 2.9 percentage points in 2023 versus 2022 and by 2.5 percentage points in 2022 versus 2021.

The margin decrease in both periods was due to the aforementioned increased operating expenses and amortization expenses during the periods, partially offset by the higher reported revenue during the periods.

Interest Expense and Other Income (Expense), net

8 unchanged sentences

Total consolidated debt, net, at year end $ 5,711.2 $ 5,787.3 $ 5,294.9 $ (76.1) (1) % $ 492.4 9 %

Interest expense increased in 2023, when compared to 2022, due to higher interest rates attributable to debt agreements entered into during 2022 and 2023, as well as higher weighted average debt balances in 2023 when compared to the same periods of 2022.

Interest expense increased in 2022, when compared to 2021, due to a higher weighted average outstanding amount of debt and higher interest costs attributable to debt agreements entered into during 2022.

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

The decrease in other income (expense), net in 2023 is due to the gains associated with the sale of equity method investments and higher fair value adjustment of our investment in BVS in 2022 that did not recur in 2023.

We also incurred higher pension expense in 2023 as compared to 2022.

For 2023 and 2022, we recorded a $0.1 million loss and $1.4 million gain, respectively, on the mark-to-market adjustment of our pension plan assets.

The increase in other income (expense), net in 2022 is driven by changes in our fair value adjustments of our investments, gains on the sale of multiple equity investments and mark-to-market adjustments for our pension assets.

We recorded a $13.3 million gain on the fair value adjustment of our Brazil investment in 2022, compared to a $64.0 million loss in 2021.

We recorded a $13.3 million gain on the fair value adjustment of our investment in BVS in 2022, compared to a $64.0 million loss in 2021.

During 2022, we recorded a gain of $19.1 million as a result of the sale of multiple equity investments, including the sale of our equity method investment in Russia during the third quarter of 2022.

For 2022 and 2021, we recorded a $1.4 million gain and $20.2 million loss, respectively, on the mark-to-market adjustment of our pension plan assets.

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

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

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

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

Twelve Months Ended

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Effective income tax rate 23.2 % 24.7 % 21.2 %

Our effective tax rate was 24.7% for 2022, up from 21.2% for the same period in 2021.

Our effective tax rate is higher for the year ended December 31, 2022 compared to 2021 due to a higher foreign rate differential, primarily due to the changes in the fair value of our investment in Brazil.

Our effective tax rate was 23.2% for 2023, down from 24.7% for the same period in 2022.

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

Our effective tax rate is lower for the year ended December 31, 2023 compared to 2022 due to the write off of a deferred tax liability related to our original investment in BVS which was no longer necessary given the acquisition of the company in the third quarter of 2023, partially offset by an increase in the foreign rate differential.

Our effective tax rate was 24.7% for 2022, up from 21.2% for the same period in 2021.

Our effective tax rate was higher for the year ended December 31, 2022 compared to 2021 due to a higher foreign rate differential, primarily due to the changes in the fair value of our investment in Brazil.

Twelve Months Ended

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Weighted-average shares used in computing diluted earnings per share 123.9 123.3 123.6

Consolidated net income decreased by $48.3 million in 2022 compared to 2021 due to a decrease in operating income and an increase income tax expense, partially offset by the increase in other income, net.

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

Consolidated net income decreased by $148.5 million in 2023 compared to 2022 due to lower levels of operating income, higher interest expense, and lower levels of other income, net, partially offset by the decrease in income tax expense.

Consolidated net income decreased by $48.3 million in 2022 compared to 2021 due to a decrease in operating income and an increase in income tax expense, partially offset by the increase in other income, net.

Segment Financial Results

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Operating margin 41.9 % 43.3 % 49.2 % (1.4) pts (5.9) pts

Workforce Solutions revenue increased by 14% in 2022 compared to 2021, due to growth in Verification Services driven by growth in non-mortgage verticals, including government, talent, consumer finance and Employer Services verticals, as well as acquisition revenue in both Verification Services and Employer Services.

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

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

Workforce Solutions revenue declined slightly in 2023 compared to 2022, which was due to a decline in Verification Services as declines in mortgage revenue were partially offset by growth in the government and talent verticals.

This decline was principally offset by growth in Employer Services revenue, which was driven by revenue from recently acquired companies and growth in I-9 and onboarding services.

Workforce Solutions revenue increased by 14% in 2022 compared to 2021, due to growth in Verification Services driven by growth in government, talent and consumer finance verticals as well as revenue from acquired companies, partially offset by declines in mortgage revenue.

Employer Services also grew in 2022 compared to 2021, due to revenue from acquired companies and growth in I-9 and onboarding services.

Verification Services.

Revenue increased 16% in 2022 compared to 2021.

The increase in revenue was due to growth in government, talent solutions, and consumer finance verticals, along with growth from the full year impact of the Insights

acquisition, offset by a decline in the mortgage vertical due to significantly slower U.S.

mortgage origination activity in 2022 due to higher interest rates.

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

Revenue decreased 1% in 2023 compared to 2022.

The decrease in revenue was due to declines in the mortgage vertical, partially offset by an increase in the government and talent solutions verticals.

Revenue increased 16% in 2022 compared to 2021.

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

The increase in revenue was due to growth in government, talent solutions and consumer finance verticals, along with growth from the full year impact of Insights, which was acquired in the fourth quarter of 2021, offset by a decline in the mortgage vertical due to significantly slower U.S.

mortgage activity in 2022.

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

Employer Services.

Revenue increased 3% in 2023, compared to 2022 due to revenue from recently acquired companies and I-9 and onboarding services, partially offset by lower tax credit revenue and a decrease in unemployment claims revenue.

Revenue increased 7% in 2022 compared to 2021 due to growth in employee services, partially offset by 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.

Employer Services also benefited from acquisition revenue in 2022.

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

Employer Services also benefited from acquisition revenue in 2021.

Workforce Solutions Operating Margin.

Operating margin decreased to 43.3% in 2022 compared to 49.2% in 2021 due to increased royalty costs, people costs, purchased intangible asset amortization and production costs, which altogether grew faster than the increase in revenue.

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

Operating margin decreased to 41.9% in 2023 compared to 43.3% in 2022 due to an increase in operating expenses.

The increased operating expenses were a result of increased royalty costs, costs of purchased data or information, and amortization of capitalized internal-use software and system costs from technology transformation capital spending, partially offset by a decrease in people costs and discretionary expenses.

Operating margin decreased to 43.3% in 2022 compared to 49.2% in 2021 due to increased royalty costs, people costs, purchased intangible asset amortization and costs of purchased data or information, which altogether grew faster than the increase in revenue.

Information Solutions

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Operating margin 21.2 % 24.3 % 30.9 % (3.1) pts (6.6) pts

Information Solutions revenue increased 4% in 2023 compared to 2022 due to growth in online revenue from non-mortgage online services and revenue from acquisitions, as well as growth in consumer services revenue.

Mortgage Solutions revenue also declined in 2023 compared to 2022.

The decline in Mortgage Solutions and mortgage related online revenue was due to declines in mortgage credit inquiry volumes.

Information Solutions revenue decreased 7% in 2022 compared to 2021 due to the negative impact of declining mortgage inquiry volumes on both online services and Mortgage Solutions, as well as a decline in marketing solutions, partially offset by growth in non-mortgage online services and acquisition-related revenue.

The decline in mortgage related online revenue and mortgage solutions revenue in 2022 is due to declining mortgage credit inquiry volumes caused by declines in mortgage industry originations reflecting higher interest rates during 2022.

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

The decline in mortgage related online revenue and Mortgage Solutions revenue in 2022 was due to declining mortgage credit inquiry volumes.

Online Information Solutions.

Revenue for 2022 decreased 4% compared to 2021, 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.

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

consumer and mortgage online services.

Revenue for 2023 increased 6% compared to 2022, driven by continued growth in online non-mortgage services, revenue from acquisitions, consumer services and commercial risk.

Revenue for 2022 decreased 4% compared to 2021, due to declining mortgage inquiry volumes compared to the prior year, partially offset by growth of non-mortgage online services and revenue from acquisitions.

Mortgage Solutions.

Revenue decreased 27% and 5% in 2022 and 2021, respectively, due to declining mortgage inquiry volumes, as compared to the prior year.

Revenue decreased 18% in 2023 compared to 2022, due to significantly lower mortgage credit inquiry volumes in 2023 compared to the prior year.

Revenue decreased 27% in 2022 compared to 2021, due to declining mortgage inquiry volumes, as compared to the prior year.

Financial Marketing Services.

Revenue increased 3% in 2023 compared to 2022, driven by growth in both credit marketing services, as well as risk and data services.

Revenue decreased 9% in 2022 compared to 2021, driven by lower fraud, risk management and other data services revenue.

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

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

Information Solutions Operating Margin.

USIS operating margin decreased to 24.3% in 2022 compared to 30.9% in 2021, due to the decrease in revenue and increases in depreciation expense related to increased capitalized software development spending and cloud production costs, partially offset by lower production costs.

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

USIS operating margin decreased to 21.2% in 2023 compared to 24.3% in 2022, due to an increase in operating expenses, partially offset by the increase in revenue.

The increase in operating expenses is due to increased incentive and salary expenses, royalty expenses, third party cloud usage fees and software costs, and amortization expenses.

USIS operating margin decreased to 24.3% in 2022 compared to 30.9% in 2021, due to the decrease in revenue and increases in depreciation expense related to increased capitalized software development spending and third party cloud usage fees and software costs, partially offset by lower costs of purchased data or information.

International

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International revenue increased by 8% in 2023 as compared to 2022.

Local currency revenue increased 12% in 2022, driven by increases in Latin America, Europe, Canada and Asia Pacific.

Local currency revenue increased 12% in 2023, driven by revenue growth in Latin America from the BVS acquisition and growth in Argentina, as well as growth in our credit reporting business across all geographies.

Local currency fluctuations against the U.S.

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International revenue increased by 3% in 2022 as compared to 2021.

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

Local currency revenue increased 12% in 2022, driven by increases in Latin America, Europe, Canada and Asia Pacific.

Local currency fluctuations against the U.S.

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

dollar negatively impacted revenue by $94.8 million, or 9%.

Asia Pacific.

Local currency revenue increased 6% in 2022 as compared to 2021 driven by stronger volumes within consumer, commercial and identity and fraud, as well as growth in India due to higher consumer volumes, partially offset by a consumer direct business decline in Australia.

Local currency revenue increased 4% in 2023 as compared to 2022, driven by growth in Australia due to growth in commercial, identity and fraud, and credit reporting businesses.

India revenue also grew due to growth in the credit reporting business primarily due to higher online volumes.

Local currency fluctuations against the U.S.

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Reported revenue decreased 1% in 2023 as compared to 2022.

Local currency revenue increased 11% in 2021 as compared to 2020 driven by growth in our commercial, consumer, background check verifications and identity and fraud businesses in Australia, partially offset by declines in recovery management.

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

Local currency revenue increased 6% in 2022 as compared to 2021, driven by stronger volumes within Australia due to growth in credit reporting, commercial and identity and fraud, partially offset by consumer direct.

India revenue also grew due to higher credit reporting volumes.

Local currency fluctuations against the U.S.

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

dollar negatively impacted revenue by $29.2 million, or 8%.

Reported revenue decreased 2% in 2022 as compared to 2021.

Local currency revenue was flat in 2023 as compared to 2022, driven by growth in credit reporting businesses in Europe, offset by lower debt placements within our debt services business.

Local currency fluctuations against the U.S.

dollar positively impacted revenue by $4.2 million, or 2%, for 2023.

Reported revenue increased 2% in 2023 as compared to 2022.

Local currency revenue increased 14% in 2022 as compared to 2021, driven by growth in the debt services business and core credit decisioning, identity and fraud, partially offset by a decline in the consumer direct business.

Local currency revenue increased 14% in 2022 as compared to 2021, driven principally by growth in the debt services business.

The European credit reporting business grew slightly as growth in core credit decisioning and identity and fraud were partially offset by a decline in the consumer direct business.

Local currency fluctuations against the U.S.

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Reported revenue increased 2% in 2022 as compared to 2021.

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

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

Latin America.

Local currency revenue increased 56% in 2023 as compared to 2022 reflecting revenue from the BVS acquisition and local currency growth in Argentina and across Central America, primarily related to growth in revenue from an acquired company in the Dominican Republic.

Local currency fluctuations against the U.S.

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

dollar negatively impacted revenue by $31.8 million, or 15%, in 2023, primarily from Argentina.

Reported revenue increased 41% in 2023 as compared to 2022.

Latin America.

Local currency revenue increased 29% in 2022 as compared to 2021 reflecting 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.

2 unchanged sentences

Reported revenue increased 18% in 2022 as compared to 2021.

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

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

Local currency fluctuations against the U.S.

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

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

Local currency revenue increased 6% in 2022 as compared to 2021 primarily driven by strong identity and fraud revenue and higher analytical batch credit services and decisioning online volumes, partially offset by declines in consumer direct services volumes and mortgage related products due to interest rate increases.

Local currency revenue increased 4% in 2023 as compared to 2022.

Revenue in 2023 reflected increases in the consumer credit reporting business, as well as commercial and identity and fraud revenue .

Local currency fluctuations against the U.S.

1 unchanged sentence

Reported revenue increased 1% in 2023 as compared to 2022.

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

Local currency revenue increased 6% in 2022 as compared to 2021 primarily driven by strong identity and fraud revenue and higher commercial online volumes, partially offset by declines in the consumer credit reporting business due to direct services volumes and mortgage related products due to interest rate increases.

Local currency fluctuations against the U.S.

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

dollar negatively impacted revenue by $8.0 million, or 4%, in 2022.

Reported revenue increased 2% in 2022 as compared to 2021.

International Operating Margin.

Operating margin was 13.7% in 2023 compared to 12.9% in 2022.

The increase in mar gin is mainly due to increased revenue, partially offset by increased salary and incentive costs, increased costs of purchased data or information, higher cloud production costs, increased depreciation expense related to technology transformation project spending and higher amortization of purchased intangible assets related to recent acquisitions.

Operating margin was 12.9% in both 2022 and 2021.

The 2022 margin is driven by higher revenue, lower purchased intangible asset amortization costs, and lower incentives, partially offset by higher cloud production costs and depreciation expense related to technology transformation project spending.

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

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

The 2022 margin was driven by higher revenue, lower purchased intangible asset amortization costs, and lower incentives, partially offset by higher third party cloud usage fees and software costs, fees paid to third parties, and depreciation expense related to technology transformation project spending.

General Corporate Expense

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General corporate expense $ 568.5 $ 499.1 $ 556.4 $ 69.4 14 % $ (57.3) (10) %

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

General corporate expense decreased $57.3 million in 2022.

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

General corporate expense increased $69.4 million in 2023.

The increase in 2023 as compared to 2022 is due to payment of a penalty associated with resolution of the investigation of a material 2017 cybersecurity incident by the U.K.

FCA, as well as increased people costs, primarily incentive plans and restructuring charges.

General corporate expense decreased $57.3 million in 2022 as compared to 2021.

The decrease in 2022 as compared to 2021 is due to reduced people costs, primarily incentive plans and professional fees.

General corporate expense decreased $61.9 million in 2021.

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

LIQUIDITY AND FINANCIAL CONDITION

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

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

At December 31, 2022, we had $285.2 million in cash balances, as well as $932.8 million available to borrow under our Revolver.

Funds generated by operating activities, our $1.5 billion five-year unsecured revolving credit facility (the "Revolver") and related commercial paper (“CP”) program, more fully described below, are our most significant sources of liquidity.

At December 31, 2023, we had $216.8 million in cash and cash equivalents, as well as $1,303.6 million available to borrow under our Revolver.

Sources and Uses of Cash

Our financing activities in 2022, more fully described below, were designed to create additional liquidity through the issuance of senior notes and the pay down of our CP program to increase future borrowing capacity which was used to fund 2022 acquisitions.

We had higher cash balances in 2022 versus 2021 and we intend to use this additional capacity, together with cash from operating activities, to meet our current obligations.

This included 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, 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.

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

As such, during the third quarter of 2022, we settled the liabilities under the CRIP.

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 December 31, 2023 compared to December 31, 2022, we have utilized existing CP and Revolver capacity, together with cash from operating activities, to meet our current obligations.

During the first quarter of 2023, we borrowed $175.0 million on our Revolver to pay down CP.

We subsequently repaid the Revolver in full during the second quarter of 2023.

Fund Transfer Limitations.

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Operating Activities

Cash provided by operating activities for 2023 increased by $359.7 million compared to 2022 primarily 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 that did not recur in 2023.

Cash provided by operating activities for 2022 decreased by $577.7 million compared to 2021 due to decreased net income and 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.

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

Investing Activities

Capital Expenditures

Twelve Months Ended December 31, Change

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*Amounts above are total cash outflows for capital expenditures.

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

Capital expenditures increased in 2022 and 2021 from 2021 and 2020, respectively, as we are continuing to invest in enhanced technology systems and infrastructure as part of our technology transformation.

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 decreased in 2023 from 2022 due to lower capitalized software costs and lower spending on technology infrastructure as compared to 2022 as we get closer to completion of our technology transformation.

Capital expenditures increased in 2022 from 2021 as we continued to invest in enhanced technology systems and infrastructure as part of our technology transformation in 2022.

Acquisitions, Divestitures and Investments

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Cash received from divestitures $ 6.9 $ 98.8 $ 1.5 $ (91.9) $ 97.3

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

2023 Acquisitions and Investments.

During 2023, we acquired The Food Industry Credit Bureau and BVS within the International operating segment.

During 2023, we sold an equity investment.

2022 Acquisitions and Investments.

During 2022, we acquired Efficient Hire and LawLogix within the Workforce Solutions operating segment.

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

2020 Acquisitions and Investments.

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

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

Financing Activities

Borrowings and Credit Facility Availability

Twelve Months Ended December 31, Change

Net cash provided by (used in):

Net cash (used in) provided by:

2023 2022 2021 2023 vs.

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(In millions)

Net short-term borrowings (repayments) $ 242.2 $ 323.4 $ (0.7) $ (81.2) $ 324.1

Net short-term (payments) borrowings $ (371.2) $ 242.2 $ 323.4 $ (613.4) $ (81.2)

Payments on long-term debt $ (579.3) $ (500.0) $ (1,100.2) $ (79.3) $ 600.2

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

The decrease in short-term borrowings in 2022 is due to lower net short-term borrowings on our CP notes during the year as compared to 2021.

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

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

The decrease in net short-term borrowings in 2023 is due to higher repayments on short-term borrowings on our CP notes during the year as compared to 2022.

The decrease in short-term borrowings in 2022 is due to lower net short-term borrowings of our CP notes during the year as compared to 2021.

Borrowings on long-term debt represent $175.0 million of borrowings on our Revolver during the first quarter of 2023 and the issuance of $700.0 million of 5.1% Senior Notes in the second quarter of 2023.

In May 2023, we issued $700.0 million aggregate principal amount of 5.1% five-year Senior Notes due 2028 (the "2028 Notes") in an underwritten public offering.

Interest on the 2028 Notes accrues at a rate of 5.1% per year and is payable

semi-annually in arrears on June 1 and December 1 of each year.

The net proceeds of the sale of the 2028 Notes were ultimately used to repay our then-outstanding $400.0 million 3.95% Senior Notes due June 2023 at maturity.

The remaining proceeds were used for general corporate purposes, including the repayment of borrowings under our CP 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 2028 Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

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 net proceeds of the sale of the 2027 Notes were ultimately used to repay 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 CP program.

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

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

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

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 the $300.0 million 3.6% Senior Notes due 2021 and $300.0 million Floating Rate Notes due 2021.

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

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

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

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

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

Payments on long-term debt in 2022 reflect the October 2022 repayment of 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.

Repayments on long-term debt represent $175.0 million of repayments on our Revolver and repayment of our $400.0 million 3.95% Senior Notes during the second quarter of 2023.

Repayments on long-term debt in 2022 reflect the October 2022 repayment of 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.

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

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

Credit Facility Availability.

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

Credit Facilities Availability.

We have access to a $1.5 billion five-year unsecured revolving credit facility (the Revolver) and a $700.0 million delayed draw term loan ("Term Loan"), collectively known as the “Senior Credit Facilities,” both of which mature in August 2026.

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

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

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

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

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

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.

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

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

As of December 31, 2022, there were $566.8 million of outstanding CP notes, $0.4 million of letters of credit outstanding, no outstanding borrowings under the Revolver and $700.0 million outstanding under the Term Loan.

As of December 31, 2023, there were $0.4 million of letters of credit outstanding, no outstanding borrowings under the Revolver, $695.6 million outstanding under the Term Loan and $196.0 million of outstanding CP notes.

Availability under the Revolver was $1,303.6 million at December 31, 2023.

At December 31, 2022, approximately 78% of our debt was fixed rate and 22% was variable rate.

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

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

At December 31, 2023, approximately 84% of our debt was fixed-rate debt and 16% was variable-rate 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 December 31, 2023, the interest rate on our variable-rate debt ranged from 5.45% to 6.71%.

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

Debt Covenants.

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

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

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

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

The Senior Credit Facilities include a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA for the preceding four quarters, of (i) 3.75 to 1.0 initially, (ii) 4.25 to 1.0 for the first fiscal quarter ending after the consummation of the Appriss Insights acquisition on October 1, 2021, through the third quarter of 2022, (iii) 4.0 to 1.0 for the fourth quarter of 2022 through the first quarter of 2023 and (iv) 3.75 to 1.0 for the second quarter of 2023 through the remaining term of the Revolver.

In March 2023, we amended the Senior Credit Facilities, resulting in a modification of our required maximum leverage ratio, among other changes.

As amended, the Senior Credit Facilities require a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA, of (i) 4.25 to 1.0 commencing with the fourth quarter of 2022 through the fourth quarter of 2023 and (ii) 3.75 to 1.0 commencing with the first quarter of 2024 and for each fiscal quarter ending thereafter through the remaining term of the Senior Credit Facilities.

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

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

None of these covenants are considered restrictive to our operations.

As of December 31, 2023, 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;

however, our 3.95% senior notes due 2023, 2.6% senior notes due 2024, 2.6% senior notes due 2025, 3.25% senior notes due 2026, 5.1% senior notes due 2027, 3.1% senior notes due 2030, 2.35% senior notes due 2031 and 7.0% senior notes due 2037 (together, the “Senior Notes”) contain change in control provisions.

If we experience a change of control or publicly announces our 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 we will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes plus accrued and unpaid interest.

however, our 2.6% senior notes due 2024, 2.6% senior notes due 2025, 3.25% senior notes due 2026, 5.1% senior notes due 2027, 5.1% senior notes due 2028, 3.1% senior notes due 2030, 2.35% senior notes due 2031 and 7.0% senior notes due 2037 (collectively, the “Senior Notes”) contain change in control provisions.

If the Company experiences a change of control or publicly announces an 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.

Credit Ratings.

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Dividends paid to Equifax shareholders $ (191.8) $ (191.1) $ (190.0) $ (0.7) $ (1.1)

Dividends paid to noncontrolling interests $ (3.1) $ (6.5) $ (4.6) $ 3.4 $ (1.9)

Distributions paid to noncontrolling interests $ (45.6) $ (3.1) $ (6.5) $ (42.5) $ 3.4

Proceeds from exercise of stock options and employee stock purchase plan $ 32.3 $ 16.9 $ 46.8 $ 15.4 $ (29.9)

Purchase of redeemable noncontrolling interests $ (0.4) $ (11.2) $ (9.0) $ 10.8 $ (2.2)

Sources and uses of cash related to equity during the twelve months ended December 31, 2023, 2022 and 2021 were as follows:

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

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

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

• We did not repurchase any shares on the open market in 2023 or in 2022.

We repurchased 0.4 million of common shares on the open market in 2021.

As of December 31, 2023, under the existing board authorization, the Company is approved for additional stock repurchases of $520.2 million.

• During the twelve months ended December 31, 2023, 2022 and 2021, we paid cash dividends to Equifax shareholders of $191.8 million, $191.1 million and $190.0 million, respectively, at $1.56 per share for 2023, 2022 and 2021.

• During the twelve months ended December 31, 2023, we paid distributions to noncontrolling interests of $45.6 million.

During the twelve months ended December 31, 2022 and 2021, we paid dividends to noncontrolling interests of $3.1 million and $6.5 million, respectively.

• We received cash of $32.3 million, $16.9 million, and $46.8 million during the first twelve months ended December 31, 2023, 2022 and 2021, respectively, from the exercise of stock options and purchases under the employee stock purchase plan.

We anticipate continuing the payment of quarterly cash dividends.

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There can be no assurance that the Company will continue to pay quarterly cash dividends at current levels or at all.

Contractual Obligations and Commercial Commitments

Contractual Obligations, Commercial Commitments and Other Contingencies

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

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The following sections provide details of material cash requirements from known contractual and other obligations as of December 31, 2023.

As of December 31, 2022, we had outstanding variable and fixed rate notes with varying maturities for an aggregate principal amount of $5.3 billion, with $400.4 million payable within the next twelve months, as detailed further in Note 5 of the Notes to Consolidated Financial Statements in Item 8 of this report.

As of December 31, 2023, we had outstanding variable and fixed rate debt with varying maturities for an aggregate principal amount of $5.7 billion, with $963.4 million payable within the next twelve months, as detailed further in Note 5 of the Notes to Consolidated Financial Statements in Item 8 of this report.

Future interest payments associated with the outstanding variable and fixed rate notes totals $1,103.5 million, with $237.9 million payable within the next twelve months.

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

As of December 31, 2022, we had no amount outstanding under our unsecured revolving credit facility and $566.8 million outstanding under our CP program.

We also issue unsecured promissory notes through our Revolver and CP program, with the Revolver set to expire in August 2026.

As of December 31, 2023, we had no amount outstanding under our Revolver and $196.0 million outstanding under our CP program.

Data Processing, Outsourcing Agreements and Other Purchase Obligations

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These agreements expire between 2024 and 2029.

As of December 31, 2022 the estimated aggregate minimum contractual obligation remaining under these agreements is approximately $948.3 million, with $361.0 million payable within the next twelve months.

As of December 31, 2023 the estimated aggregate minimum contractual obligation remaining under these agreements is approximately $1.4 billion, with $405.5 million payable within the next twelve months.

Pension, Post-Retirement and Deferred Compensation Obligations

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Legal Proceedings” in this Form 10-K.

Through 2022, the Company has made payments of $788.6 million for legal settlements related to the 2017 cybersecurity incident.

On January 11, 2022, the Consumer Settlement became effective, and on January 24, 2022, we deposited the $345.0 million remaining to be paid to the Consumer Restitution Fund.

Through 2023, the Company has made payments of $802.2 million for legal settlements related to a material cybersecurity incident in 2017.

January 11, 2022, the Consumer Settlement became effective, and on January 24, 2022, we deposited the $345.0 million remaining to be paid to the Consumer Restitution Fund.

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

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

We received a notice with the FCA's findings on October 13, 2023, and paid a penalty of $13.5 million to resolve the matter.

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

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

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

Off-Balance Sheet Transactions

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

Off-Balance Sheet Arrangements

We do not engage in off-balance sheet financing activities.

Pursuant to the terms of certain industrial revenue bonds, we previously transferred title to certain of our fixed assets with total costs of $156.4 million as of December 31, 2021 to a local governmental authority in the U.S.

to receive a property tax abatement related to economic development.

As of December 31, 2022, the title to these assets had reverted back to us upon the retirement of the applicable bonds.

These fixed assets are recognized in the Company’s Consolidated Balance Sheets as all risks and rewards remain with the Company.

Letters of Credit and Guarantees

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salaried employees who were hired on or before June 30, 2007, the last date on which an individual could be hired and enter the plan before the USRIP was closed to new participation at December 31, 2008.

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

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

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

During the twelve months ended December 31, 2022, we made no voluntary contributions to the USRIP and made contributions of $15.5 million to the CRIP.

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

During the twelve months ended December 31, 2023, we made no voluntary contributions to the USRIP.

During the twelve months ended December 31, 2022, we made no voluntary contributions to the USRIP and made contributions of $15.5 million to the CRIP.

At December 31, 2023, the USRIP met or exceeded ERISA’s minimum funding requirements.

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

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

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

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

During the third quarter of 2022, we settled the liabilities under the CRIP.

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tax-qualified retirement plans, we fund an amount sufficient to meet minimum funding requirements but no more than allowed as a tax deduction pursuant to applicable tax regulations.

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

For 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.

For additional information about our benefit plans, see Notes 1 and 9 of the Notes to Consolidated Financial Statements in Item 8 of this report.

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For information about new accounting pronouncements and the potential impact on our Consolidated Financial Statements, see Note 1 of the Notes to Consolidated Financial Statements in Item 8 of this report.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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Revenue Recognition

In accordance with ASC 606, “Revenue from Contracts with Customers,” we recognize revenue when a performance obligation has been satisfied by transferring a promised good or service to a customer and the customer obtains control of the good or service.

In accordance with Accounting Standards Codification ("ASC") 606, “Revenue from Contracts with Customers,” we recognize revenue when a performance obligation has been satisfied by transferring a promised good or service to a customer and the customer obtains control of the good or service.

In order to recognize revenue, we note that the two parties must have an agreement that creates enforceable rights, the performance obligations must be distinct and the transaction price can be determined.

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

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

Multi-year subscription contracts are analyzed to determine the

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

Revenue is recorded net of sales taxes.

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

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.

Goodwill is tested for impairment annually and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

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:

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

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.

During the fourth quarter of 2023, the Company voluntarily changed its goodwill and indefinite-lived intangible asset annual impairment test date from September 30 to December 1.

This voluntary change is preferable under the circumstances as it results in better alignment with the Company’s strategic business planning and budgeting process.

The voluntary change in accounting principle related to the annual test date did not delay, accelerate or avoid an impairment charge.

Retrospective application of this accounting change to prior periods is impracticable as the Company is unable to objectively determine, without the use of hindsight, the significant assumptions and estimates that would be used in those earlier periods.

Accordingly, the change will be applied prospectively.

We conducted our goodwill and indefinite-lived intangible asset impairment testing as of September 30, 2023 and December 1, 2023 and did not identify any impairment charges.

We have six reporting units, comprised of Workforce Solutions, USIS, Asia Pacific, Latin America, Europe and Canada.

The goodwill balance at December 31, 2023, for our six reporting units was as follows:

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Workforce Solutions $ 2,520.2

Information Solutions 2,004.8

Asia Pacific 1,377.9

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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 the COVID-19 pandemic on the region.

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.

We performed a quantitative assessment for each of our reporting units to determine whether impairment exists.

In determining the fair value of the reporting units, we used the market approach, when available and appropriate, or a combination of the income and market approaches to estimate each reporting unit’s business enterprise value.

We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation.

If multiple valuation methodologies are used, the results are weighted appropriately.

We engaged a third party specialist to assist in developing these estimates and valuation approaches.

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 Item 1 of this Form 10-K and have not significantly changed since the date of our last annual impairment test.

Competition for our Asia Pacific 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.

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

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

The companies we use as benchmarks are principally outlined in our discussion of Competition in Item 1 of this Form 10-K and have not significantly changed since our last annual impairment test performed on September 30, 2023.

Valuation multiples were selected based on a financial benchmarking analysis that compared the reporting unit’s operating result with the comparable companies’ information.

In addition to these financial considerations, qualitative factors such as variations in growth opportunities and overall risk among the benchmark companies were considered in the ultimate selection of the multiple.

The estimated fair value of the reporting units are 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.

The estimated fair value for all of our reporting units exceeded its related carrying value as of September 30, 2023 and as of December 1, 2023.

As a result, no goodwill impairment was recorded.

Given the lower historical cushion of concluded fair value in excess of carrying value for our Asia Pacific reporting unit, we used a combination of the income and market approaches to estimate our Asia Pacific reporting unit’s business enterprise value.

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

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.

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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.

The following commentary relates to the Asia Pacific reporting unit, for which we determined the fair value of the reporting unit utilizing a combination of the income and market approaches.

Growth Assumptions

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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.

We projected revenue growth in 2024 for our Asia Pacific reporting unit in completing our 2023 impairment testing based on 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.

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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.

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%.

For the 2023 annual goodwill impairment evaluation, the discount rate used to develop the estimated fair value of the Asia Pacific reporting unit was higher than the discount rate used in 2022 and ranged between 10.0% and 11.5%.

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;

The estimated fair value of the Asia Pacific 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.

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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.

The excess of fair value over carrying value for the Asia Pacific reporting unit was greater than 10% as of September 30, 2023 and December 1, 2023.

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.

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 operating margin and manage expenses prudently.

Loss Contingencies

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We determine whether to disclose and/or accrue for loss contingencies based on our assessment of whether the potential loss is estimable, probable, reasonably possible or remote.

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

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

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

Legal Proceedings” in this Form 10-K.

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

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

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.

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

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

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

What changed 10-K

Item 7. Management’s Discussion and Analysis