What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-22 · 178 added, 190 removed, 522 unchanged (41% of the section changed)

13 unchanged sentences

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

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

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

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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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.

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

Recent Events and Company Outlook

5 unchanged sentences

For 2025, our planning assumes that U.S.

economic activity, as measured by GDP, is expected to grow but at a slower rate of growth than experienced in 2023.

Our plan assumes the U.S.

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

economic activity, as measured by GDP, is expected to grow at a similar rate as experienced in 2024.

We expect U.S.

mortgage credit activity in 2025 to be below the levels of activity seen in 2024.

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

1 unchanged sentence

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.

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 2025 at similar rates as experienced in 2024.

Segment and Geographic Information

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

Verification Services revenue is transaction-based and is derived primarily from employment and income verification, as well as criminal justice data.

Verification Services revenue is transaction-based and is derived primarily from employment and income verification, as well as criminal justice data and educational background data.

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 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.

Workforce Solutions revenue is predominantly in the U.S., and they have also established operations in Canada, Australia and the U.K.

The USIS segment consists of three service lines:

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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.

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

Canada’s services are similar to our USIS offerings.

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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.

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

Approximately 76% and 77% of our revenue was generated in the U.S.

2 unchanged sentences

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

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

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

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

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Consolidated operating revenue $ 5,681.1 $ 5,265.2 $ 5,122.2 $ 415.9 8 % $ 143.0 3 %

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.

Revenue for 2024 increased 8% compared to 2023 due to revenue growth in USIS, International and Workforce Solutions.

USIS revenue growth is primarily due to growth in mortgage related online services.

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

("BVS") acquisition, completed in the third quarter of 2023, as well as local currency growth in Latin America, Europe and Canada.

Workforce Solutions revenue growth is primarily due to growth in Verification Services, partially offset by declines in Employer Services.

The effect of foreign exchange rates decreased revenue by $105.5 million, or 2%, in 2024 compared to 2023.

Revenue for 2023 increased 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 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.

1 unchanged sentence

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.

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.

Operating Expenses

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Cost of services increased $183.6 million in 2024 compared to 2023.

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 increase is primarily due to higher royalty and revenue share costs, costs of purchased data and information, and costs from BVS, which was acquired in the third quarter of 2023.

The effect of changes in foreign exchange rates decreased cost of services by $28.1 million.

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

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

The increase is primarily due to higher royalty and revenue share 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.

1 unchanged sentence

Selling, general and administrative expenses increased $64.8 million in 2024 compared to 2023.

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 increase is primarily due to increased people costs and costs from BVS, which was acquired in the third quarter of 2023, partially offset by a decrease in professional fees.

The increased people costs, excluding the impact of costs from BVS, is primarily due to higher incentive plan costs.

The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $39.2 million.

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 plan costs, 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.

Depreciation and Amortization.

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.

Depreciation and amortization expense for 2024 increased $59.0 million.

The increase is primarily due to increased amortization of capitalized internal-use software costs resulting from technology transformation capital spending incurred previously, as well as higher amortization of purchased intangible assets related to the BVS acquisition.

The impact of changes in foreign currency exchange rates led to a decrease in depreciation and amortization expense of $2.9 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.

Depreciation and amortization expense increased $50.7 million in 2023 compared to 2022.

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.

10 unchanged sentences

Consolidated operating margin 18.3 % 17.7 % 20.6 % 0.6 pts (2.9) pts

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

Total company operating margin increased by 0.6 percentage points in 2024 versus 2023 and decreased by 2.9 percentage points in 2023 versus 2022.

The margin increase in 2024 is due to the aforementioned higher reported revenue, partially offset by increased operating expenses and depreciation and amortization expenses during the period.

The margin decrease in 2023 was due to increased operating expenses and amortization expenses during the periods, partially offset by the higher reported revenue during the periods.

Interest Expense and Other (Expense) Income, net

Twelve Months Ended

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2023 2023 vs.

Consolidated Interest and Other Income (Expense), net 2023 2022 2021 $ % $ %

Consolidated Interest and Other (Expense) Income, net

2024 2023 2022 $ % $ %

(In millions)

Consolidated interest expense $ (229.1) $ (241.4) $ (183.0) $ 12.3 (5) % $ (58.4) 32 %

Consolidated other income (expense), net 25.7 56.7 (43.2) (31.0) (55) % 99.9 (231) %

Consolidated other (expense) income, net

(2.5) 25.7 56.7 (28.2) (110) % (31.0) (55) %

Average cost of debt 4.1 % 4.2 % 3.2 %

Total consolidated debt, net, at year end $ 5,010.5 $ 5,711.2 $ 5,787.3 $ (700.7) (12) % $ (76.1) (1) %

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.

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.

Interest expense decreased in 2024, when compared to 2023, due to lower overall debt balances and a lower weighted average cost of debt when compared to 2023.

The decrease in other (expense) income, net in 2024 is primarily due to the gain on fair market value adjustment of our investment in BVS due to our acquisition of BVS in the third quarter of 2023 that did not recur in the same period of 2024, as well as a gain on the sale of an investment in 2023 that did not recur in 2024.

We also incurred higher pension expense in 2024 as compared to 2023.

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 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.

For 2024 and 2023, we recorded losses of $11.6 million and $0.1 million, respectively, on the mark-to-market adjustment of our pension and postretirement benefit plans.

The decrease in other (expense) income, net in 2023 was due to the gains associated with the sale of equity method investments and higher fair market 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 and postretirement benefit plans.

Twelve Months Ended

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Effective income tax rate 25.1 % 23.2 % 24.7 %

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

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 25.1% for 2024, up from 23.2% for the same period in 2023.

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.

Our effective tax rate is higher for the year ended December 31, 2024 compared to 2023 primarily due to a decrease in tax credits and an increase in tax on foreign earnings in 2024 compared to 2023.

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, 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.

Twelve Months Ended

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Consolidated operating income $ 1,042.1 $ 933.6 $ 1,056.0 $ 108.5 12 % $ (122.4) (12) %

Consolidated interest and other income (expense), net (215.7) (126.3) (188.8) (89.4) 71 % 62.5 (33) %

Consolidated interest and other (expense) income, net

(231.6) (215.7) (126.3) (15.9) 7 % (89.4) 71 %

Consolidated provision for income taxes (203.2) (166.2) (229.5) (37.0) 22 % 63.3 (28) %

Consolidated net income 607.3 551.7 700.2 55.6 10 % (148.5) (21) %

Net income attributable to noncontrolling interests (6.4) (4.0) (4.3) (2.4) 60 % 0.3 (7) %

Net income attributable to noncontrolling interests including redeemable noncontrolling interests

(3.2) (6.4) (4.0) 3.2 (50) % (2.4) 60 %

Net income attributable to Equifax $ 604.1 $ 545.3 $ 696.2 $ 58.8 11 % $ (150.9) (22) %

2 unchanged sentences

Weighted-average shares used in computing diluted earnings per share 124.9 123.9 123.3

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.

Consolidated net income increased $55.6 million in 2024 compared to 2023 due to higher levels of operating income and lower interest expense, partially offset by higher income tax expense and lower levels of other income, net.

Consolidated net income decreased $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.

Segment Financial Results

12 unchanged sentences

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

Workforce Solutions revenue increased 5% in 2024 compared to 2023, which was due to an increase in non-mortgage verticals within Verification Services, partially offset by declines in Employer Services and Verification Services mortgage revenue.

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 10% in 2024 compared to 2023.

The increase in revenue is primarily due to growth in the government and talent solutions verticals, partially offset by declines in the mortgage vertical.

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.

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 decreased 12% in 2024, compared to 2023 primarily due to lower Employee Retention Credit ("ERC") revenue and declines in I-9 and onboarding services.

The ERC revenue decrease is driven by the wind down of this U.S.

Federal government program, accelerated by the IRS pausing new ERC claims processing during the third quarter of 2023.

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.

Workforce Solutions Operating Margin.

Operating margin increased to 43.3% in 2024 compared to 41.9% in 2023 due to the aforementioned increase in revenue.

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

12 unchanged sentences

Operating margin 21.4 % 21.2 % 24.3 % 0.2 pts (3.1) pts

Information Solutions revenue increased 10% in 2024 compared to 2023 due to growth in Online Information Solutions due to an increase in mortgage related and consumer solutions online services, as well as growth in Mortgage Solutions and Financial Marketing Services.

Growth in mortgage related online services and Mortgage Solutions is due to both product pricing, as well as new products.

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.

1 unchanged sentence

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 was due to declining mortgage credit inquiry volumes.

Online Information Solutions.

Revenue for 2024 increased 9% compared to 2023, driven by higher mortgage related online services due to product pricing and new products, as well as continued growth of consumer solutions revenue.

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 increased 31% in 2024 compared to 2023 due to both product pricing and new products.

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 5% in 2024 compared to 2023 driven by growth in credit 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.

Information Solutions Operating Margin.

USIS operating margin increased to 21.4% in 2024 compared to 21.2% in 2023 due to the aforementioned increase in revenue.

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.

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

International

4 unchanged sentences

Operating revenue:

Asia Pacific $ 345.3 $ 348.4 $ 356.0 $ (3.1) (1) % $ (7.6) (2) %

Europe 333.2 327.8 319.9 5.4 2 % 7.9 2 %

Latin America $ 384.9 $ 290.9 $ 206.8 $ 94.0 32 % $ 84.1 41 %

Europe 369.2 333.2 327.8 36.0 11 % 5.4 2 %

Asia Pacific 335.4 345.3 348.4 (9.9) (3) % (3.1) (1) %

Canada 264.8 259.6 256.1 5.2 2 % 3.5 1 %

3 unchanged sentences

Operating margin 13.4 % 13.7 % 12.9 % (0.3) pts 0.8 pts

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

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.

International revenue increased 10% in 2024 as compared to 2023.

Local currency revenue increased 19% in 2024, driven by growth in Latin America from the BVS acquisition, completed in the third quarter of 2023, as well as local currency growth in Latin America, Europe and Canada.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $105.5 million, or 9%.

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

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

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

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $51.2 million, or 4%.

Asia Pacific.

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.

Latin America.

Local currency revenue increased 69% in 2024 as compared to 2023.

The increase is primarily due to revenue from the BVS acquisition, which occurred in the third quarter of 2023, as well as local currency growth in Argentina.

Revenue from the BVS acquisition was $159.3 million in 2024, compared to $64.8 million in 2023.

Local currency fluctuations against the U.S.

dollar negatively impacted revenue by $15.7 million, or 5%.

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

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.

dollar negatively impacted revenue by $107.1 million, or 37%, in 2024, primarily from Argentina.

Reported revenue increased 32% in 2024 as compared to 2023.

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 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.

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.

Local currency revenue increased 8% in 2024 as compared to 2023, primarily due to growth in the debt services and credit reporting businesses.

Local currency fluctuations against the U.S.

1 unchanged sentence

Reported revenue increased 11% in 2024 as compared to 2023.

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 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 negatively impacted revenue by $37.4 million, or 12%, for 2022.

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

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

Latin America.

Asia Pacific.

Local currency revenue decreased 2% in 2024 as compared to 2023, primarily driven by Australia due to declines in the commercial and direct to consumer businesses in the first half of the year.

Local currency fluctuations against the U.S.

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.

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.

dollar negatively impacted revenue by $2.4 million, or 1%.

Reported revenue decreased 3% in 2024 as compared to 2023.

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.

dollar negatively impacted revenue by $20.3 million, or 11%, in 2022, primarily from Argentina and Chile.

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

dollar negatively impacted revenue by $15.7 million, or 5%.

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

Local currency revenue increased 4% in 2024 as compared to 2023.

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

Revenue growth in 2024 is driven by growth in the direct to consumer and commercial businesses.

Local currency fluctuations against the U.S.

1 unchanged sentence

Reported revenue increased 2% in 2024 as compared to 2023.

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 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.

3 unchanged sentences

Operating margin was 13.4% in 2024 compared to 13.7% in 2023.

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 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.

The decrease in margin is mainly due to higher amortization costs, principally due to higher amortization of purchased intangible assets related to the BVS acquisition and amortization of capitalized internal-use software and system costs from technology transformation capital spending incurred previously.

Operating margin was 13.7% in 2023 and 12.9% in 2022.

The increase in margin was 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.

General Corporate Expense

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General corporate expense increased $28.3 million in 2024.

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.

The increase in 2024 as compared to 2023 is primarily due to an increase in people costs, which is primarily due to higher incentive plan costs, and an accrual for a settlement associated with the resolution of a matter with the CFPB.

General corporate expense increased $69.4 million in 2023 as compared to 2022.

The increase in 2023 as compared to 2022 was 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.

LIQUIDITY AND FINANCIAL CONDITION

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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.

While there was no significant changes in our cash requirements as of December 31, 2024 compared to December 31, 2023, we have utilized existing CP capacity, together with cash from operating activities, to meet our current obligations.

As further described in our Financing Activities section below, during 2024 we issued $650.0 million of 4.8% Senior Notes, and we used the proceeds for general corporate purposes, including the repayment of borrowings under our then-outstanding delayed draw term loan prior to the August 2026 maturity.

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.

Cash provided by operating activities for 2024 increased $207.7 million compared to 2023 primarily due to changes in our working capital position and increased net income.

Cash provided by operating activities for 2023 increased $359.7 million compared to 2022 due primarily 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.

Investing Activities

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Our capital expenditures are used for developing, enhancing and deploying new and existing software in support of our expanding product set, replacing or adding equipment, updating systems for regulatory compliance, 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.

Capital expenditures decreased in 2024 and 2023 from 2023 and 2022, respectively, due to lower capitalized software costs and lower spending on technology infrastructure as compared to the prior year periods as we near completion of our technology transformation.

Acquisitions, Divestitures and Investments

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Acquisitions, net of cash acquired $ — $ (283.8) $ (433.8) $ 283.8 $ 150.0

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

Cash received from divestitures $ — $ 6.9 $ 98.8 $ (6.9) $ (91.9)

2024 Acquisitions and Investments.

During 2024, we did not complete any acquisitions.

2023 Acquisitions and Investments.

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

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During 2022, we sold multiple equity investments.

2021 Acquisitions and Investments.

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

We acquired Kount and Teletrack within the USIS operating segment.

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

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

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Twelve Months Ended December 31, Change

Net cash (used in) provided by:

Net cash provided by (used in):

2024 2023 2022 2024 vs.

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(In millions)

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

Net short-term borrowings (payments) $ 91.2 $ (371.2) $ 242.2 $ 462.4 $ (613.4)

Payments on long-term debt $ (1,445.6) $ (579.3) $ (500.0) $ (866.3) $ (79.3)

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Borrowing and Repayment Activity.

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

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

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

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

The increase in net short-term borrowings in 2024 is due to lower repayments on our CP notes, partially offset by lower borrowings on our CP notes during the year as compared to 2023.

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.

Proceeds from issuance of long-term debt in 2024 represent the issuance of $650.0 million of 4.8% Senior Notes in the third quarter of 2024.

Proceeds from issuance of long-term debt in 2023 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.

Proceeds from issuance of long-term debt in 2022 represent the issuance of $750.0 million of 5.1% Senior Notes in the third quarter of 2022.

In August 2024, we issued $650.0 million in aggregate principal amount of 4.8% five-year Senior Notes due 2029 (the "2029 Notes") in an underwritten public offering.

Interest on the 2029 Notes accrues at a rate of 4.8% 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 2029 Notes were ultimately used for general corporate purposes, including the repayment of borrowings under our then-outstanding delayed draw term loan (the "Term Loan") prior to the August 2026 maturity.

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 2029 Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

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.

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.

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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.

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

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

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

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.

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.

Payments on long-term debt in 2024 represent repayment of our $750.0 million 2.60% Senior Notes during the fourth quarter of 2024 with cash on hand and commercial paper borrowings and $695.6 million of payments on our then-outstanding Term Loan during the third quarter of 2024.

Payments on long-term debt in 2023 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.

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.

Credit Facility Availability.

We have access to a $1.5 billion five-year unsecured revolving credit facility (the Revolver), which matures in August 2027.

Borrowings under the Revolver 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.

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.

In May 2024, we exercised our first option to extend the maturity date by one year, from August 2026 to August 2027, and amended the Revolver agreement to replace a discontinued reference rate for Canadian Dollar-denominated commitments.

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.

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.

We may use the proceeds of CP for general corporate purposes.

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

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.

The CP program is supported by our Revolver and the total amount of CP that 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, 2024, there were $1.4 million of letters of credit outstanding, no outstanding borrowings under the Revolver, and $286.5 million of outstanding CP notes.

Availability under the Revolver was $1,212.1 million at December 31, 2024.

At December 31, 2024, approximately 94% of our debt was fixed-rate debt and 6% was variable-rate debt.

Our variable-rate debt consists of our outstanding Term Loan and CP.

Our variable-rate debt consists of outstanding amounts under our CP program.

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

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Debt Covenants.

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 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.

A downgrade in our credit ratings would increase the cost of borrowings under our CP program and our Revolver, 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.

The Revolver requires a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA, of 3.75 to 1.0.

We may also elect to increase the maximum leverage ratio by 0.5 to 1.0 (subject to a maximum leverage ratio of 4.25 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.

The Revolver also permits cash in excess of $175 million to be netted against debt in the calculation of the leverage ratio, subject to certain restrictions.

As of December 31, 2024, we were in compliance with all of our debt covenants.

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A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

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

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

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

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(In millions)

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

Dividends paid to Equifax shareholders $ (193.2) $ (191.8) $ (191.1) $ (1.4) $ (0.7)

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Sources and uses of cash related to equity during the twelve months ended December 31, 2024, 2023 and 2022 were as follows:

• 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.

• We did not repurchase any shares on the open market in 2024, 2023 or 2022.

As of December 31, 2024, under the existing board authorization, the Company is approved for additional stock repurchases of $520.2 million.

• During the twelve months ended December 31, 2024, 2023 and 2022, we paid cash dividends to Equifax shareholders of $193.2 million, $191.8 million and $191.1 million, respectively, at $1.56 per share for 2024, 2023 and 2022.

• During the twelve months ended December 31, 2024, we paid dividends to noncontrolling interests of $4.6 million.

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.

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

• We received cash of $78.2 million, $32.3 million, and $16.9 million during the first twelve months ended December 31, 2024, 2023 and 2022, respectively, from the exercise of stock options and purchases under the employee stock purchase plan.

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

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

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

The following sections provide details of material cash requirements from known contractual and other obligations as of December 31, 2024.

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Data Processing, Outsourcing Agreements and Other Purchase Obligations

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

We utilize several outsourcing partners for services that we outsource associated with 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.

These agreements expire between 2025 and 2030.

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Retirement Plan is frozen and is supported by plan assets to fund future payments.

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

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

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Payments to Resolve Certain Legal Proceedings and Investigations

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

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

Legal Proceedings” in this Form 10-K.

Through 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.

Through 2024, the Company

has made payments of $802.2 million for legal settlements related to a material cybersecurity incident in 2017.

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.

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

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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 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.

Additions to property and equipment will continue in order to support growth in new product development and the completion of 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

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This plan 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”), until it was settled in 2022.

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.

During the twelve months ended December 31, 2024 and 2023, we made no voluntary contributions to the USRIP.

At December 31, 2024, the USRIP met or exceeded ERISA’s minimum funding requirements.

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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.

For our non-U.S.

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

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

securities markets and upon the value of financial instruments, it may adversely affect the

Company’s financial position and profitability.

Increases in U.S.

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

Multi-year subscription contracts are analyzed to determine the

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

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

Revenue is recorded net of sales taxes.

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

Goodwill 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.

Goodwill is tested for impairment annually (as of December 1) 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.

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.

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.

The goodwill balance at December 31, 2024, for our six reporting units was as follows:

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Valuation Techniques

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 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.

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

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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.

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 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.

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

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.

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.

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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.

The estimated fair value of the Asia Pacific 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.

The estimated fair value for all of our Asia Pacific reporting unit exceeded its related carrying value as of December 1, 2024.

As a result, no goodwill impairment was recorded.

Growth Assumptions

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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 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%.

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

For the 2024 annual goodwill impairment evaluation, the discount rate used to develop the estimated fair value of the Asia Pacific reporting unit was consistent with the discount rate used in 2023 and ranged between 10.0% and 11.5%.

Estimated Fair Value and Sensitivities

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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 10% as of September 30, 2023 and December 1, 2023.

The excess of fair value over carrying value for the Asia Pacific reporting unit was greater than 10% as of December 1, 2024.

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.

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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 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.

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.

Legal Proceedings” in this Form 10-K.

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

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We also use our judgment to determine whether it is more likely than not that we will sustain positions that we have taken on tax returns and, if so, the amount of benefit to initially recognize within our financial statements.

We review our uncertain tax positions and adjust our unrecognized tax benefits in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law.

We review our uncertain tax positions and adjust our unrecognized tax benefits in light of changes in facts and circumstances, such as changes

in tax law, interactions with taxing authorities and developments in case law.

These adjustments to our unrecognized tax benefits may affect our income tax expense.

11 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-K

Item 7. Management’s Discussion and Analysis