Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

All references to earnings per share data in Management’s Discussion and Analysis, or MD&A, are to diluted earnings per share, or EPS, unless otherwise noted. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised and resulted in additional common shares outstanding.

BUSINESS OVERVIEW

We are a leading global provider of information solutions, employment and income verifications and human resources business process outsourcing services. We leverage some of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights which enable our business customers to grow faster, more efficiently and more profitably, and to inform and empower consumers.

Businesses rely on us for consumer and business credit intelligence, credit portfolio management, fraud detection, decisioning technology, marketing tools, debt management and human resources-related services. We also offer a portfolio of products that enable individual consumers to manage their financial affairs and protect their identity. Our revenue stream is diversified among businesses across a wide range of industries, international geographies and individual consumers.

On February 24, 2016, we completed the acquisition of Veda for cash consideration plus debt assumed of approximately $1.9 billion. We financed the cash portion of the purchase price through a combination of new debt, including the Term Loan, the 364-Day Revolver, and commercial paper. Refer to Note 5 for further information on debt.

Segment and Geographic Information

Segments. The USIS segment, the largest of our four segments, consists of three service lines: Online Information Solutions; Mortgage Solutions; and Financial Marketing Services. Online Information Solutions and Mortgage Solutions revenue is principally transaction-based and is derived from our sales of products such as consumer and commercial credit reporting and scoring, identity management, fraud detection and modeling services. USIS also markets certain decisioning software services, which facilitate and automate a variety of consumer and commercial credit-oriented decisions. Financial Marketing Services revenue is principally project and subscription based and is derived from our sales of batch credit and consumer wealth information such as those that assist clients in acquiring new customers, cross selling to existing customers and managing portfolio risk.

The International segment consists of Europe, Asia Pacific, Latin America and Canada. Following the acquisition of Veda, we have created an Asia Pacific reporting unit which consists mainly of our Australia and New Zealand operations. Canada’s services are similar to our USIS offerings, while Europe, Asia Pacific and Latin America are made up of varying mixes of service lines that are in our USIS reportable segment. In Europe, Asia Pacific and Latin America, we also provide information and technology services to support lenders and other creditors in the collections and recovery management process.

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. Employer Services revenues are 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, employment-based tax credit services and other complementary employment-based transaction services.

Global Consumer Solutions revenue is both transaction and subscription based and is derived from the sale of credit monitoring and identity theft protection products, which we deliver electronically to consumers primarily via the internet in the U.S., Canada, and the U.K. We reach consumers directly and indirectly through partners. We also sell consumer and credit information to resellers who combine our information with other information to provide direct to consumer monitoring, reports and scores.

Geographic Information. We currently have significant operations in the following countries: Argentina, Australia, Canada, Chile, Costa Rica, Ecuador, El Salvador, Honduras, India, Mexico, New Zealand, Paraguay, Peru, Portugal, the Republic of Ireland, Spain, the U.K., Uruguay and the U.S. We also offer Equifax branded credit services in India and Russia through joint ventures, we 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. Of the countries we operate in, 73% of our revenue was generated in the U.S. during the twelve months ended December 31, 2016.

Key Performance Indicators. Management focuses on a variety of key indicators to monitor operating and financial performance. 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, 2016, 2015 and 2014, include the following:

	Key Performance Indicators Twelve Months Ended December 31,
	2016				2015				2014
	(In millions, except per share data)
Operating revenue	$	3,144.9			$	2,663.6			$	2,436.4
Operating revenue change	18		%		9		%		6		%
Operating income	$	817.9			$	693.9			$	638.2
Operating margin	26.0		%		26.1		%		26.2		%
Net income attributable to Equifax	$	488.8			$	429.1			$	367.4
Diluted earnings per share	$	4.04			$	3.55			$	2.97
Cash provided by operating activities	$	795.8			$	742.1			$	616.2
Capital expenditures*	$	(191.5	)		(150.7		)		$	(86.4	)

*Amounts above also include capital expenditures in accounts payable.

Business Environment and Company Outlook

Demand for our services tends to be correlated to general levels of economic activity and to consumer credit activity, both enhanced by our own initiatives to expand our products and markets served, and to small commercial credit and marketing activity. In 2017, in the United States, we expect modest but improving growth in overall economic activity and consumer credit. Mortgage market originations are expected to be down in the double digit range for the year. The economic environments impacting five of our six largest international operations, in the U.K., Australia, Canada, Argentina, and Chile, are expected to strengthen in 2017 relative to 2016. In Spain, economic growth is expected to remain good in 2017, although somewhat slower than in 2016. In addition, at their current levels, weaker foreign exchange rates compared to the prior year, will negatively impact both growth in revenue and profit when reported in U.S. dollars.

Over the long term, we expect that our ongoing investments in new product innovation, business execution, enterprise growth initiatives, technology infrastructure, and continuous process improvement will enable us to deliver long-term multi-year average organic revenue growth ranging between 6% and 8% with additional growth of 1% to 2% derived from strategic acquisitions consistent with our long-term business strategy. We also expect to grow earnings per share at a somewhat faster rate than revenue over time as a result of both operating and financial leverage.

RESULTS OF OPERATIONS —

TWELVE MONTHS ENDED DECEMBER 31, 2016, 2015 AND 2014

Consolidated Financial Results

Operating Revenue

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
Operating Revenue		2016				2015				2014				$				%			$				%
		(In millions)
U.S. Information Solutions		$	1,236.5			$	1,171.3			$	1,079.9			$	65.2			6	%		$	91.4			8	%
International		803.6				568.5				572.2				235.1				41	%		(3.7		)		(1	)%
Workforce Solutions		702.2				577.7				490.1				124.5				22	%		87.6				18	%
Global Consumer Solutions		402.6				346.1				294.2				56.5				16	%		51.9				18	%
Consolidated operating revenue		$	3,144.9			$	2,663.6			$	2,436.4			$	481.3			18	%		$	227.2			9	%

Revenue for 2016 increased by 18% compared to 2015. The growth was driven by broad-based organic growth due to revenue increases in mortgage, government, healthcare, and direct to consumer reseller verticals as well as the Veda acquisition. The effect of foreign exchange rates reduced revenue by $75.2 million or 3% in 2016 compared to 2015.

Revenue for 2015 increased by 9% compared to 2014. This broad-based growth was organic, and was driven by revenue increases in mortgage, direct to consumer reseller, healthcare, government, and auto verticals. The effect of foreign exchange rates reduced revenue by $75.7 million or 3% in 2015 compared to 2014.

Operating Expenses

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
Operating Expenses		2016				2015				2014				$				%			$				%
		(In millions)
Consolidated cost of services		$	1,113.4			$	887.4			$	844.7			$	226.0			25	%		$	42.7			5	%
Consolidated selling, general and administrative expenses		948.2				884.3				751.7				63.9				7	%		132.6				18	%
Consolidated depreciation and amortization expense		265.4				198.0				201.8				67.4				34	%		(3.8		)		(2	)%
Consolidated operating expenses		$	2,327.0			$	1,969.7			$	1,798.2			$	357.3			18	%		$	171.5			10	%

Cost of Services. Cost of services increased $226.0 million in 2016 compared to the prior year. The increase in cost of services, when compared to 2015, was due to the increase in production costs driven by higher revenues including the Veda acquisition, as well as increases in people costs, and to a lesser extent an increase in technology costs. The effect of changes in foreign exchange rates reduced cost of services by $21.4 million.

Cost of services increased $42.7 million in 2015 compared to the prior year. The increase in cost of services, when compared to 2014, was due to the increase in production costs driven by higher revenues, as well as increases in people costs, and to a lesser extent an increase in professional services. The effect of changes in foreign exchange rates reduced cost of services by $25.3 million.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $63.9 million in 2016 as compared to 2015. The increase was due to Veda selling, general and administrative expense and integration and transaction costs and increases in people costs across the business. The increase was offset by a decline in costs related to the

realignment of internal resources. The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $23.7 million.

Selling, general and administrative expenses increased $132.6 million in 2015 as compared to 2014. The increase was principally due to increases in people costs, and to a lesser extent to increases in marketing expenses, professional fees, as well as litigation expenses. The increase was also due to the costs related to the realignment of internal resources of $20.7 million recorded in the first quarter of 2015. The impact of changes in foreign currency exchange rates decreased our selling, general and administrative expenses by $24.6 million.

Depreciation and Amortization. Depreciation and amortization expense for 2016 increased by $67.4 million primarily due to the Veda acquisition.

Depreciation and amortization expense for 2015 were slightly lower compared to 2014, due to foreign currency fluctuations of $4.1 million

Operating Income and Operating Margin

		Twelve Months Ended December 31,												Change
Operating Income and Operating Margin														2016 vs. 2015							2015 vs. 2014
	2016				2015				2014				$				%			$				%
		(In millions)
Consolidated operating revenue		$	3,144.9			$	2,663.6			$	2,436.4			$	481.3			18	%		$	227.2			9	%
Consolidated operating expenses		2,327.0				1,969.7				1,798.2				357.3				18	%		171.5				10	%
Consolidated operating income		$	817.9			$	693.9			$	638.2			$	124.0			18	%		$	55.7			9	%
Consolidated operating margin		26.0		%		26.1		%		26.2		%						(0.1)pts							(0.1	)pts

Total company margin decreased slightly in 2016 versus 2015 due to transaction and integration costs as well as increased amortization of acquired intangibles related to the acquisition of Veda. This was partially offset by a decline in costs related to realignment of internal resources. Margins in our USIS, Workforce Solutions and Global Consumer businesses all increased in 2016, with these increases offset by lower margins in International, principally due to the Veda transaction and integration costs and related amortization of intangibles.

Total company margin decreased slightly in 2015 versus 2014, due to the costs for the realignment of internal resources of $20.7 million and other increases in people costs. Margins increased substantially in both the Workforce Solutions and USIS segments, and partially offset by a decline in the margins of Global Consumer Solutions and lower margins in the International segment principally due to foreign exchange.

Interest Expense and Other Income (Expense), net

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
Consolidated Interest and Other Income (Expense), net		2016				2015				2014				$				%			$				%
		(In millions)
Consolidated interest expense		$	(92.1	)		$	(63.8	)		$	(68.6	)		$	(28.3	)		44	%		$	4.8			(7	)%
Consolidated other income, net		2.4				6.5				4.6				(4.1		)		(63	)%		1.9				(41	)%
Average cost of debt		3.5		%		4.5		%		4.3		%
Total consolidated debt, net, at year end		$	2,672.2			$	1,187.7			$	1,526.1			$	1,484.5			125	%		$	(338.4	)		(22	)%

Interest expense increased in 2016, when compared to 2015, due to an overall increase in our consolidated debt outstanding as of December 31, 2016 to fund the acquisition of Veda in 2016. Our average cost of debt decreased in 2016 compared to the prior year, due to the higher balance of low rate commercial paper outstanding and lower long-term rates related to the issuance of 2.3% and 3.25% Senior Notes.

Interest expense decreased in 2015, when compared to 2014, due to an overall decrease in our consolidated debt outstanding as of December 31, 2015. Our average cost of debt increased slightly in 2015 compared to the prior year, due to the higher ratio of higher interest debt and the low balance of low rate commercial paper outstanding.

The decrease in other income (expense), net, in 2016 is due to 2016 foreign exchange losses related to the Veda acquisition and the 2015 income from the settlement of escrow amounts related to an acquisition from January 2014 which did not recur in 2016. These items were partially offset by the impairment of our cost method investment in Brazil in the second quarter of 2015 which did not recur in 2016.

The increase in other income (expense), net, in 2015 is due to income from the settlement of escrow amounts related to an acquisition from January 2014, and the gain on foreign currency options put in place as an economic hedge of Veda's purchase price. This was partially offset by the impairment of our cost method investment in Brazil in the second quarter of 2015.

Income Taxes

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
Provision for Income Taxes		2016				2015				2014				$				%			$				%
		(In millions)
Consolidated provision for income taxes		$	(233.1	)		$	(201.8	)		$	(200.2	)		$	(31.3	)		16	%		$	(1.6	)		1	%
Effective income tax rate		32.0		%		31.7		%		34.9		%

Overall, our effective tax rate was 32.0% for 2016, up from 31.7% for the same period in 2015. The 2016 rate benefited by 2% due to international related items, specifically higher earnings in lower tax jurisdictions and the rationalization of the structure of foreign subsidiaries. This was offset by other non-recurring permanent items that benefited the 2015 tax rate including the settlement of escrow related to a past acquisition and state law changes, that did not recur in 2016.

Overall, our effective tax rate was 31.7% for 2015, down from 34.9% for the same period in 2014. The 2015 rate benefited by 2% due to international related items specifically the increased recognition of foreign tax credits, and a permanent item associated with the settlement of escrows related to past acquisitions, and 1.4% due to state tax law changes.

Net Income

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
Net Income		2016				2015				2014				$				%			$				%
		(In millions, except per share amounts)
Consolidated operating income		$	817.9			$	693.9			$	638.2			$	124.0			18	%		$	55.7			9	%
Consolidated other expense, net		(89.7		)		(57.3		)		(64.0		)		(32.4		)		57	%		6.7				(10	)%
Consolidated provision for income taxes		(233.1		)		(201.8		)		(200.2		)		(31.3		)		16	%		(1.6		)		1	%
Consolidated net income		495.1				434.8				374.0				60.3				14	%		60.8				16	%
Net income attributable to noncontrolling interests		(6.3		)		(5.7		)		(6.6		)		(0.6		)		11	%		0.9				(14	)%
Net income attributable to Equifax		$	488.8			$	429.1			$	367.4			$	59.7			14	%		$	61.7			17	%
Diluted earnings per share:
Net income attributable to Equifax		$	4.04			$	3.55			$	2.97			$	0.49			14	%		$	0.58			20	%
Weighted-average shares used in computing diluted earnings per share		121.1				120.9				123.5

Consolidated net income increased by $60.3 million, or 14%, in 2016 compared to 2015 due to increased operating income in our USIS and Workforce Solutions businesses. This increase was partially offset by declines due to foreign

exchange rates that impacted the International operating segment, the increase in interest expense, as well as increased corporate expenses as described below.

Consolidated net income increased by $60.8 million, or 16%, in 2015 compared to 2014 due to increased operating income in our USIS and Workforce Solutions businesses. This increase was partially offset by declines due to foreign exchange rates that impacted the International operating segment, declines in the Global Consumer Solutions operating segment, as well as increased corporate expenses due significantly to the realignment of our internal resources, and increases in people costs.

Segment Financial Results

U.S. Information Solutions

		Twelve Months Ended December 31,												Change
U.S. Information Solutions														2016 vs. 2015							2015 vs. 2014
	2016				2015				2014				$				%			$				%
		(In millions)
Operating revenue:
Online Information Solutions		$	879.3			$	842.1			$	779.5			$	37.2			4	%		$	62.6			8	%
Mortgage Solutions		142.2				124.1				105.7				18.1				15	%		18.4				17	%
Financial Marketing Services		215.0				205.1				194.7				9.9				5	%		10.4				5	%
Total operating revenue		$	1,236.5			$	1,171.3			$	1,079.9			$	65.2			6	%		$	91.4			8	%
% of consolidated revenue		39		%		44		%		44		%
Total operating income		$	537.0			$	491.2			$	421.0			$	45.8			9	%		$	70.2			17	%
Operating margin		43.4		%		41.9		%		39.0		%						1.5	pts						2.9	pts

U.S. Information Solutions revenue increased 6% in 2016 as compared to the prior year. USIS realized solid growth from our mortgage business, as well as continued revenue growth in the automotive and financial services verticals.

U.S. Information Solutions revenue increased 8% in 2015 as compared to the prior year. USIS realized solid growth from our mortgage business, as well as continued revenue growth in the automotive and financial services verticals.

Online Information Solutions. Revenue for 2016 increased 4% when compared to the prior year, due to higher average revenue per unit and increased volumes to mortgage resellers, auto, and other resellers. Revenue also benefited from growth in identity and fraud solutions.

Revenue for 2015 increased 8% when compared to the prior year, due to higher average revenue per unit and increased volumes to mortgage resellers, auto, and other resellers. Revenue also benefited from growth in identity and fraud solutions.

Mortgage Solutions. Revenue increased 15% in 2016 when compared to prior year, driven by a strong market for refinancing and purchase activity, as well as growth from other mortgage product offerings.

Revenue increased 17% in 2015 when compared to prior year, driven by a strong market for refinancing and purchase activity, as well as growth from other mortgage product offerings.

Financial Marketing Services. Revenue increased 5% in 2016 as compared to 2015. The increases were driven by growth in our credit marketing services due to increased demand from financial services customers.

Revenue increased 5% in 2015 as compared to 2014. The increases were driven by growth in our credit marketing services due to increased demand from financial services customers.

U.S. Information Solutions Operating Margin. USIS operating margin increased to 43.4% in 2016 as compared to 2015 of 41.9%. Margin expansion resulted from strong revenue growth and product mix. USIS operating margin increased to 41.9% in 2015 as compared to 2014 of 39.0%. Margin expansion resulted from strong revenue growth and product mix.

International

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
International		2016				2015				2014				$				%			$				%
		(In millions)
Operating revenue:
Europe		$	253.6			$	237.5			$	234.9			$	16.1			7	%		$	2.6			1	%
Asia Pacific		244.2				9.0				7.5				235.2				nm			1.5				20	%
Latin America		183.9				199.6				192.2				(15.7		)		(8	)%		7.4				4	%
Canada		121.9				122.4				137.6				(0.5		)		—	%		(15.2		)		(11	)%
Total operating revenue		$	803.6			$	568.5			$	572.2			$	235.1			41	%		$	(3.7	)		(1	)%
% of consolidated revenue		26		%		21		%		23		%
Total operating income		$	111.4			$	113.5			$	121.0			$	(2.1	)		(2	)%		$	(7.5	)		(6	)%
Operating margin		13.9		%		20.0		%		21.1		%						(6.1)pts							(1.1)pts

International revenue increased by 41% in 2016 as compared to 2015. Local currency organic revenue growth for 2016, which excludes Veda, was 12%, primarily driven by strong growth in Europe and Latin America. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $69.8 million, or 12%.

International revenue decreased by 1% in 2015 as compared to 2014. Local currency international revenue increased by 12% in 2015 as compared to prior year, as a result of growth across many geographies, including solid growth in Argentina and the U.K., compared to prior year. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $70.5 million, or 13%.

Europe. Local currency revenue growth was 18% in 2016 primarily due to growth in U.K. debt management services and analytical services in both the U.K. and Spain. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $25.9 million, or 11%, for 2016. Reported revenue increased 7% in 2016.

Local currency revenue growth was 12% in 2015 primarily due to increased revenue in the U.K. across most verticals. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $25.8 million, or 10%, for 2015. Reported revenue increased 1% in 2015.

Asia Pacific. Revenue growth of $235.2 million in 2016 was driven by the Veda acquisition.

Latin America. Local currency revenue increased 12% in 2016 driven by core organic growth primarily in Argentina, Chile, and Paraguay. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $39.5 million, or 20%, in 2016, most notably due to depreciation in the foreign exchange rate of the Argentine peso. Reported revenue decreased 8% in 2016.

Local currency revenue increased 17% in 2015 driven by core organic growth primarily in Argentina. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $25.5 million, or 13%, in 2015, most notably due to depreciation in the foreign exchange rate of the Argentine peso and the Chilean peso. Reported revenue increased 4% in 2015.

Canada. Local currency revenue increased 3% in 2016 compared to 2015, primarily due to core organic growth. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $4.4 million, or 4%, in 2016. Reported revenue was flat in 2016.

Local currency revenue increased 3% in 2015 compared to 2014, primarily due to growth within information and analytical services. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $19.2 million, or 14%, in 2015. Reported revenue decreased 11% in 2015.

International Operating Margin. Operating margin decreased to 13.9% in 2016 as compared to 20.0% in 2015. The decline primarily resulted from increased purchased intangibles amortization, integration costs related to the Veda acquisition and a decline in the margin in Latin America. The decline was partially offset by increased margins in Europe and Canada. Operating

margin decreased in 2015 as compared to 2014 due to geographic and product mix, regionalization efforts, and investments in the U.K. The declines in margin were also a result of inflation-driven pressures on margin in Argentina.

Workforce Solutions

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
Workforce Solutions		2016				2015				2014				$				%			$				%
		(In millions)
Operating Revenue:
Verification Services		$	437.3			$	364.4			$	292.6			$	72.9			20	%		$	71.8			25	%
Employer Services		264.9				213.3				197.5				51.6				24	%		15.8				8	%
Total operating revenue		$	702.2			$	577.7			$	490.1			$	124.5			22	%		$	87.6			18	%
% of consolidated revenue		22		%		22		%		20		%
Total operating income		$	295.5			$	218.8			$	160.7			$	76.7			35	%		$	58.1			36	%
Operating margin		42.1		%		37.9		%		32.8		%						4.2	pts						5.1	pts

Workforce Solutions revenue increased by 22% in 2016 as compared to 2015 due to strong growth in the healthcare, mortgage, government, and financial verticals.

Workforce Solutions revenue increased by 18% in 2015 as compared to 2014 due to strong growth in the mortgage, healthcare, government, and financial verticals.

Verification Services. Revenue increased 20% in 2016 compared to prior year, due to strong growth in mortgage, government, financial, pre-employment screening and auto verticals, and continued addition of new records to The Work Number database.

Revenue increased 25% in 2015 compared to prior year, due to strong growth in mortgage, auto, pre-employment screening and government verticals, and continued addition of new records to The Work Number database.

Employer Services. Revenue grew 24% in 2016, as compared to 2015 due to growth in our workforce analytics and other employer services businesses.

Revenue grew 8% in 2015, as compared to 2014. Revenue growth was due to continued higher employment based tax credit activity due to the delayed approval of the Federal Work Opportunity Tax Credit program for 2014, as well as growth in our employer-based compliance solutions and workforce analytics business.

Workforce Solutions Operating Margin. Operating margin increased 420 basis points to 42.1% in 2016 as compared to 37.9% in 2015. Margin expansion in 2016 was driven by strong revenue growth in 2016. Operating margin increased 510 basis points to 37.9% in 2015 as compared to 32.8% in 2014. Margin expansion in 2015 was driven by product mix, as well as strong revenue growth in 2015.

Global Consumer Solutions

		Twelve Months Ended December 31,												Change
Global Consumer Solutions														2016 vs. 2015							2015 vs. 2014
	2016				2015				2014				$				%			$				%
		(In millions)
Total operating revenue		$	402.6			$	346.1			$	294.2			$	56.5			16	%		$	51.9			18	%
% of consolidated revenue		13		%		13		%		12		%
Total operating income		$	112.4			$	95.2			$	93.4			$	17.2			18	%		$	1.8			2	%
Operating margin		27.9		%		27.5		%		31.8		%						0.4	pts						(4.3	)pts

Revenue increased 16% for 2016, as compared to prior year. Local currency revenue grew 18% in 2016, principally due to the growth of direct to consumer reseller revenue, and to a lesser extent, due to consumer direct revenue growth

globally. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $5.4 million, or 2%, for 2016. Operating margin increased in 2016 to 27.9% as compared to 27.5% in the prior year, due to lower marketing expenses partially offset by higher production costs due to reseller product mix and increases in partner implementation costs.

Revenue increased 18% for 2015, as compared to prior year. Local currency revenue grew 19% in 2015, principally due to the growth of direct to consumer reseller revenue, and to a lesser extent, due to consumer direct revenue growth in the U.K. and the U.S. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $5.2 million, or 1%, for 2015. Operating margin decreased in 2015 to 27.5% as compared to 31.8% in prior year, due to higher technology and marketing expenses.

General Corporate Expense

		Twelve Months Ended December 31,												Change
														2016 vs. 2015							2015 vs. 2014
General Corporate Expense		2016				2015				2014				$				%			$				%
		(In millions)
General corporate expense		$	238.4			$	224.8			$	157.9			$	13.6			6	%		$	66.9			42	%

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 increased $13.6 million in 2016 due to Veda transaction and integration costs as well as other increases in people costs, offset by a decline in costs related to the realignment of internal resources.

General corporate expense increased $66.9 million in 2015, of which $20.7 million relates to the realignment of internal resources in the first quarter of 2015, and increases in people costs, and to a lesser extent to increases in professional fees, as well as litigation expenses.

LIQUIDITY AND FINANCIAL CONDITION

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. We continue to generate substantial cash from operating activities and remain in a strong financial position managing our capital structure to meet short- and long-term objectives including reinvestment in existing businesses and strategic acquisitions.

Sources and Uses of Cash

Funds generated by operating activities and our credit facilities continue to be our most significant sources of liquidity. We expect that funds generated from results of operations will be sufficient to finance our anticipated working capital and other cash requirements (such as capital expenditures, interest payments, debt payments, potential pension funding contributions and dividend payments) for the foreseeable future. In the event that credit market conditions were to deteriorate, we would rely more heavily on borrowings from the commercial paper or corporate bond markets; or in the event that credit market conditions were to deteriorate, we would rely more heavily on borrowings from the Revolver, as described below. At December 31, 2016, $589.2 million was available to borrow under our Revolver. Our Revolver does not include a provision under which lenders could refuse to allow us to borrow under this facility in the event of a material adverse change in our financial condition, as long as we are in compliance with the covenants contained in the lending agreement.

We were also a party to the 364-Day Revolver, which is an $800.0 million revolving credit facility. On May 16, 2016,

we repaid all outstanding borrowings of $475 million and terminated the 364-Day Revolver using a portion of the net proceeds

from the issuance of the senior notes discussed below.

Information about our cash flows, by category, is presented in the Consolidated Statements of Cash Flows. The following table summarizes our cash flows for the twelve months ended December 31, 2016, 2015 and 2014:

		Twelve Months Ended December 31,												Change
Net cash provided by (used in):		2016				2015				2014				2016 vs. 2015				2015 vs. 2014
		(In millions)
Operating activities		$	795.8			$	742.1			$	616.2			$	53.7			$	125.9
Investing activities		$	(1,975.9	)		$	(147.8	)		$	(429.3	)		$	(1,828.1	)		$	281.5
Financing activities		$	1,187.5			$	(612.0	)		$	(283.4	)		$	1,799.5			$	(328.6	)

Operating Activities

Cash provided by operating activities for 2016 increased by $53.7 million over the prior year, due to $60.3 million growth in net income, partially offset by an increase in working capital mostly driven by an increase in accounts receivable, lower growth in other liabilities, current and long-term, excluding debt, compared to 2015.

Cash provided by operating activities for 2015 increased by $125.9 million over the prior year, due to $75.6 million growth in net income, adjusted for the Brazil impairment, and improvements in working capital, notably an increase in current liabilities related to current payables, incentives and unearned income.

Fund Transfer Limitations. The ability of certain of our subsidiaries and associated companies to transfer funds to us may be limited, in some cases, by certain restrictions imposed by foreign governments. These restrictions do not, individually or in the aggregate, materially limit our ability to service our indebtedness, meet our current obligations or pay dividends. We currently hold $117.4 million of cash in our foreign subsidiaries.

Investing Activities

		Twelve Months Ended December 31,												Change
Net cash used in:		2016				2015				2014				2016 vs. 2015				2015 vs. 2014
		(In millions)
Capital expenditures*		$	(173.5	)		$	(146.2	)		$	(86.4	)		$	(27.3	)		$	(59.8	)

*Amounts above exclude capital expenditures in accounts payable.

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 in 2016 and 2015 increased from 2015 and 2014, respectively, as we are continuing to invest in new products and technology infrastructure.

Acquisitions, Divestitures and Investments

		Twelve Months Ended December 31,												Change
Net cash provided by (used in):		2016				2015				2014				2016 vs. 2015				2015 vs. 2014
		(In millions)
Acquisitions, net of cash acquired		$	(1,791.6	)		$	(4.4	)		$	(341.0	)		$	(1,787.2	)		$	336.6
Cash paid to settle economic hedges		$	(10.8	)		$	—			$	—			$	(10.8	)		$	—
Cash received from divestitures		$	—			$	2.9			$	0.6			$	(2.9	)		$	2.3
Investment in unconsolidated affiliates, net		$	—			$	(0.1	)		$	(2.5	)		$	0.1			$	2.4

2016 Acquisitions and Investments. During the first quarter of 2016, the Company completed the acquisition of 100% of the ordinary voting shares of Veda for cash consideration of approximately $1.7 billion. During the first quarter of 2016, we settled all of the foreign currency options related to the Veda acquisition on the respective settlement dates for a net cash

payment of $10.8 million. During the third quarter of 2016, the Company completed the acquisition of Barnett and Computersoft. Refer to Note 3 for more information on these acquisitions.

2015 Acquisitions and Investments. During the first quarter of 2015, we acquired a 75% equity interest investment in a debt collections and recovery management venture in the U.K., as more fully described in Note 1. During the third quarter of 2015, we received $2.9 million proceeds from the escrow related to a past disposition. We did not make significant investments in unconsolidated affiliates during 2015.

2014 Acquisitions and Investments. During the first quarter of 2014, we acquired TDX, included as part of our International operating segment, and Forseva, included as part of our USIS operating segment.

We invested $2.5 million in our joint venture in India during 2014.

During the first quarter of 2013, we divested two non-strategic business lines, Equifax Settlement Services which was part of our Mortgage business within the USIS operating segment and Talent Management Services which was part of our Employer Services business within our Workforce Solutions operating segment, for a total of $47.5 million. $3.5 million of the proceeds of the sale of Talent Management Services was placed into an escrow account to be released to us at a later date. During 2014, we received $0.6 million of the proceeds from the escrow.

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

Financing Activities

		Twelve Months Ended December 31,												Change
Net cash provided by (used in):		2016				2015				2014				2016 vs. 2015				2015 vs. 2014
		(In millions)
Net short-term borrowings (repayments)		$	73.0			$	(331.0	)		$	379.9			$	404.0			$	(710.9	)
Proceeds from issuance of long-term debt		$	1,574.7			$	—			$	—			$	1,574.7			$	—
Payments on long-term debt		$	(350.0	)		$	—			$	(290.0	)		$	(350.0	)		$	290.0
Payment of contingent consideration		$	(4.4	)		$	—			$	—			$	(4.4	)		$	—
Debt issuance costs		$	(6.2	)		$	(4.9	)		$	—			$	(1.3	)		$	(4.9	)

Credit Facility Availability. Our principal unsecured revolving credit facility with a group of banks, which we refer to as the Revolver, permits us to borrow up to $900.0 million through November 2020. The Revolver may be used for general corporate purposes. Availability of the Revolver for borrowings is reduced by the outstanding face amount of any letters of credit issued under the facility and, pursuant to our existing Board of Directors authorization, by the outstanding principal amount of our commercial paper (CP) notes.

Our $900.0 million 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, pursuant to our existing Board of Directors authorization, the total amount of CP which may be issued is reduced by the amount of any outstanding borrowings under our Revolver.

At December 31, 2016, the Company had $310.3 million of CP and $0.5 million of letters of credit outstanding, and there were no borrowings outstanding under the Revolver. At December 31, 2016, a total of $589.2 million was available under the Revolver.

At December 31, 2016, approximately 72% of our debt was fixed rate and 28% was effectively variable rate. Our variable-rate debt consists of our issued commercial paper, which bears short-term interest rates based on the CP market for investment grade issuers. The interest rates reset periodically, depending on the terms of the respective financing arrangements. At December 31, 2016, interest rates on our variable-rate debt ranged from 1.0% to 1.9%.

Borrowing and Repayment Activity. Net short-term borrowings (repayments) primarily represent borrowings or repayments of outstanding amounts under our CP program. We primarily borrow under our CP program, as needed and availability allows.

The increase in net short-term borrowings (repayments) primarily relates to the net activity of CP notes in 2016, as well as the draw down on the 364-Day Revolver during the first quarter of 2016 and the pay off of the Veda assumed debt in the first quarter and the 364-Day Revolver during the second quarter of 2016. The decrease in net short-term borrowings (repayments) in 2015 primarily relates to the net activity of CP notes in 2015, and reflects the increase in cash flow from operations as well as no material acquisitions entered into during the year.

On May 12, 2016, we issued $500.0 million principal amount of 2.3%, five-year senior notes and $275.0 million principal amount of 3.25%, ten-year senior notes in an underwritten public offering. Interest is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2016. The net proceeds of the sale of the notes were used to repay borrowings under our 364-Day Revolver and a portion of the borrowings under our commercial paper program incurred to finance the acquisition of Veda. 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 senior notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

Payments on long-term debt in 2016 reflect $350 million of payments on our Term Loan Facility. Borrowings on long-term debt reflect an $800 million draw down in the first quarter of 2016 on our Term Loan Facility and the issuance of $500.0 million of senior notes due 2021 and $275.0 million of senior notes due 2026 during the second quarter of 2016, as discussed above.

The decrease in payments on long-term debt in 2015 reflects the 2014 pay-off of our $15.0 million 7.34% Notes and $275.0 million 4.45% Senior Notes with borrowings under our CP program.

The debt issuance costs in 2016 and 2015 reflect the debt issuance costs paid in connection with the new Senior Credit Facilities entered into in May 2016 and November 2015, respectively.

Debt Covenants. The outstanding indentures and comparable instruments contain customary covenants including, for example, limits on secured debt and sale/leaseback transactions. In addition, the Senior Credit Facilities require us to maintain a maximum leverage ratio of not more than 3.5 to 1.0. As permitted under the terms of the Senior Credit Facilities, we made the election to increase the covenant to 4.0 to 1.0, effective for four consecutive quarters, beginning with the first quarter of 2016 and continuing through the fourth quarter of 2016. None of these covenants are considered restrictive to our operations and, as of December 31, 2016, the Company was in compliance with all of our debt covenants.

The Company does not have any credit rating triggers that would accelerate the maturity of a material amount of the outstanding debt; however, the 6.3% Senior Notes due 2017, 2.3% Senior Notes due 2021, 3.3% Senior Notes due 2022, 3.25% Senior Notes due 2026 and 7.0% Senior Notes due 2037 (together, the “Senior Notes”) contain change in control provisions. If the Company experiences a change of control or publicly announces the Company's intention to effect a change of control and the rating on the senior notes is lowered by Standard & Poor’s, or S&P, and Moody’s Investors Service, or 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. Credit ratings reflect an independent agency’s judgment on the likelihood that a borrower will repay a debt obligation at maturity. The ratings reflect many considerations, such as the nature of the borrower’s industry and its competitive position, the size of the company, its liquidity and access to capital and the sensitivity of a company’s cash flows to changes in the economy. The two largest rating agencies, S&P and Moody’s, use alphanumeric codes to designate their ratings. The highest quality rating for long-term credit obligations is AAA and Aaa for S&P and Moody’s, respectively. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

Long-term ratings of BBB- and Baa3 or better by S&P and Moody’s, respectively, reflect ratings on debt obligations that fall within a band of credit quality considered to be “investment grade”. At December 31, 2016, the long-term ratings for our obligations were BBB+ and Baa1, which are consistent with the ratings and outlooks which existed at December 31, 2015. A downgrade in our credit rating would increase the cost of borrowings under our CP program and credit facilities, 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. In addition, the market’s demand for, and thus our ability to readily issue, new debt could become further affected by the economic and credit market environment.

For additional information about our debt, including the terms of our financing arrangements, basis for variable interest rates and debt covenants, see Note 5 of the Notes to Consolidated Financial Statements in this report.

Equity Transactions

		Twelve Months Ended December 31,												Change
Net cash provided by (used in):		2016				2015				2014				2016 vs. 2015				2015 vs. 2014
		(In millions)
Treasury stock purchases		$	—			$	(196.3	)		$	(301.6	)		$	196.3			$	105.3
Dividends paid to Equifax shareholders		$	(157.6	)		$	(137.8	)		$	(121.2	)		$	(19.8	)		$	(16.6	)
Dividends paid to noncontrolling interests		$	(5.8	)		$	(6.4	)		$	(7.9	)		$	0.6			$	1.5
Proceeds from exercise of stock options		$	31.5			$	34.4			$	39.7			$	(2.9	)		$	(5.3	)
Excess tax benefits from stock-based compensation plans		$	35.9			$	30.0			$	17.7			$	5.9			$	12.3
Purchase of redeemable noncontrolling interests		$	(3.6	)		$	—			$	—			$	(3.6	)		$	—

Sources and uses of cash related to equity during the twelve months ended December 31, 2016, 2015 and 2014 were as follows:

•

Under share repurchase programs authorized by our Board of Directors, we repurchased 2.1 million and 3.9 million common shares during the twelve months ended December 31, 2015 and 2014, respectively, for $196.3 million and $301.6 million, respectively, at an average price per common share of $94.97 and $76.55, respectively. We did not repurchase any shares in 2016. As of December 31, 2016, under the existing board authorization, the Company is approved for additional stock repurchases valued at $667.2 million.

•	During the twelve months ended December 31, 2016, 2015 and 2014, we paid cash dividends to Equifax shareholders of $157.6 million, $137.8 million and $121.2 million, respectively, at $1.32 per share for 2016, $1.16 per share for 2015 and $1.00 per share for 2014.

Contractual Obligations and Commercial Commitments

The following table summarizes our significant contractual obligations and commitments as of December 31, 2016. The table excludes commitments that are contingent based on events or factors uncertain at this time. Some of the excluded commitments are discussed below the footnotes to the table.

	Payments due by
	Total				Less than 1 year				1 to 3 years				3 to 5 years				Thereafter
	(In millions)
Debt (1)	$	2,685.4			$	585.4			$	450.0			$	500.0			$	1,150.0
Operating leases (2)	162.7				29.5				42.2				31.9				59.1
Data processing, outsourcing agreements and other purchase obligations (3)	137.6				74.6				27.9				13.6				21.5
Other long-term liabilities (4) (6)	122.6				8.6				13.9				16.0				84.1
Interest payments (5)	725.8				88.8				133.7				120.4				382.9
	$	3,834.1			$	786.9			$	667.7			$	681.9			$	1,697.6

(1)	The amounts are gross of unamortized discounts totaling $13.2 million at December 31, 2016. Total debt on our Consolidated Balance Sheets is net of the unamortized discounts and fair value adjustments. There were no fair value adjustments to our debt at December 31, 2016.

(2)	Our operating lease obligations principally involve office space and equipment, which include the ground lease associated with our headquarters building that expires in 2048.

(3)	These agreements primarily represent our minimum contractual obligations for services that we outsource associated with our computer data processing operations and related functions, and certain administrative functions. These agreements expire between 2017 and 2021.

(4)

These long-term liabilities primarily relate to obligations associated with certain pension, postretirement and other compensation-related plans, some of which are discounted in accordance with U.S. generally accepted accounting principles, or GAAP. We made certain assumptions about the timing of such future payments. In the table above, we have not included amounts related to future pension plan obligations, as such required funding amounts beyond 2017

have not been deemed necessary due to our current expectations regarding future plan asset performance.

(5)

For future interest payments on variable-rate debt, which are generally based on a specified margin plus a base rate (LIBOR) or on CP rates for investment grade issuers, we used the variable rate in effect at December 31, 2016 to calculate these payments. Our variable rate debt at December 31, 2016, consisted of CP. Future interest payments related to our Senior Credit Facilities and our CP program are based on the borrowings outstanding at December 31, 2016 through their respective maturity dates, assuming such borrowings are outstanding until that time. The variable portion of the rate at December 31, 2016 ranged from 1.0% to 1.9% for all of our variable-rate debt. Future interest payments may be different depending on future borrowing activity and interest rates.

(6)	This table excludes $36.0 million of unrecognized tax benefits, including interest and penalties, as we cannot make a reasonably reliable estimate of the period of cash settlement with the respective taxing authorities.

Off-Balance Sheet Transactions

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

Pursuant to the terms of certain industrial revenue bonds, we have transferred title to certain of our fixed assets with total costs of $117.0 million and $108.5 million, as of December 31, 2016 and 2015, respectively, to a local governmental authority in the U.S. to receive a property tax abatement related to economic development. The title to these assets will revert back to us upon retirement or cancellation of the applicable bonds. These fixed assets are still recognized on the Company’s Consolidated Balance Sheets as all risks and rewards remain with the Company.

Letters of Credit and Guarantees

We will from time to time issue standby letters of credit, performance bonds or other guarantees in the normal course of business. The aggregate notional amount of all performance bonds and standby letters of credit was not material at December 31, 2016, and all have a remaining maturity of one year or less. Guarantees are issued from time to time to support the needs of our operating units. The maximum potential future payments we could be required to make under the guarantees is not material at December 31, 2016.

Benefit Plans

We sponsor a qualified defined benefit retirement plan (the U.S. Retirement Income Plan, or USRIP) that covers approximately 15% of current U.S. 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 frozen to new participation at December 31, 2008. This plan also covers many retirees as well as certain terminated but vested individuals not yet in retirement status. We also sponsor a defined benefit plan that covers most salaried and hourly employees in Canada (the Canadian Retirement Income Plan, or CRIP). The CRIP was frozen to new participants entering the plan on or after October 1, 2011.

At December 31, 2016, the USRIP met or exceeded ERISA’s minimum funding requirements. During the twelve months ended December 31, 2016 and 2015, we did not make any contributions to the USRIP. We contributed $0.8 million and $0.2 million to the CRIP during the twelve months ended December 31, 2016 and 2015, respectively. In the future, we will make minimum funding contributions as required and may make discretionary contributions, depending on certain circumstances, including market conditions and liquidity needs. We believe additional funding contributions, if any, would not prevent us from continuing to meet our liquidity needs, which are primarily funded from cash flows generated by operating activities, available cash and cash equivalents, and our credit facilities.

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

For additional information about our benefit plans, see Note 10 of the Notes to Consolidated Financial Statements in this report.

Seasonality

We experience seasonality in certain of our revenue streams. Revenue generated by the online consumer information services component of our USIS operating segment is typically the lowest during the first quarter, when consumer lending activity is at a seasonal low. Revenue generated from the Employer Services business unit within the Workforce Solutions operating segment is generally higher in the first quarter due primarily to the provision of Form W-2 preparation services which 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 in the fourth quarter of each year.

Effects of Inflation and Changes in Foreign Currency Exchange Rates

Equifax’s operating results are not materially affected by inflation, although inflation may result in increases in the Company’s expenses, which may not be readily recoverable in the price of services offered. To the extent inflation results in rising interest rates and has other adverse effects upon the securities markets and upon the value of financial instruments, it may adversely affect the Company’s financial position and profitability.

A portion of the Company’s business is conducted in currencies other than the U.S. dollar, and changes in foreign exchange rates relative to the U.S. dollar can therefore affect the value of non-U.S. dollar net assets, revenues and expenses. Potential exposures as a result of these fluctuations in currencies are closely monitored. We generally do not mitigate the risks associated with fluctuating exchange rates, although we may from time to time through forward contracts or other derivative instruments hedge a portion of our translational foreign currency exposure or exchange rate risks associated with material transactions which are denominated in a foreign currency.

RECENT ACCOUNTING PRONOUNCEMENTS

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 this report.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles, or GAAP. This requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in our Consolidated Financial Statements and the Notes to Consolidated Financial Statements. The following accounting policies involve critical accounting estimates because they are particularly dependent on estimates and assumptions made by management about matters that are uncertain at the time the accounting estimates are made. In addition, while we have used our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have been used in the current period, or changes in the accounting estimates that we used are reasonably likely to occur from period to period, either of which may have a material impact on the presentation of our Consolidated Balance Sheets and Statements of Income. We also have other significant accounting policies which involve the use of estimates, judgments and assumptions that are relevant to understanding our results. For additional information about these policies, see Note 1 of the Notes to Consolidated Financial Statements in this report. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information available at the time. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, collectibility of arrangement consideration is reasonably assured, the arrangement fees are fixed or determinable and delivery of the product or service has been completed. A significant portion of our revenue is derived from the provision of information services to our customers on a transaction basis, in which case revenue is recognized, assuming all other revenue recognition criteria are met, when the services are provided. A smaller portion of our revenues relate to subscription-based contracts under which a customer pays a

preset fee for a predetermined or unlimited number of transactions or services provided during the subscription period, generally one year. Revenue related to subscription-based contracts having a preset number of transactions is recognized as the services are provided, using an effective transaction rate as the actual transactions are completed. Any remaining revenue related to unfulfilled units is not recognized until the end of the related contract’s subscription period. Revenue related to subscription-based contracts having an unlimited volume is recognized ratably during the contract term. Revenue is recorded net of sales taxes.

If at the outset of an arrangement, we determine that collectibility is not reasonably assured, revenue is deferred until the earlier of when collectibility becomes probable or the receipt of payment. If there is uncertainty as to the customer’s acceptance of our deliverables, revenue is not recognized until the earlier of receipt of customer acceptance or expiration of the acceptance period. If at the outset of an arrangement, we determine that the arrangement fee is not fixed or determinable, revenue is deferred until the arrangement fee becomes fixed or determinable, assuming all other revenue recognition criteria have been met.

The determination of certain of our tax management services revenue requires the use of estimates, principally related to transaction volumes in instances where these volumes are reported to us by our clients on a monthly basis in arrears. In these instances, we estimate transaction volumes based on average actual volumes reported in the past. Differences between our estimates and actual final volumes reported are recorded in the period in which actual volumes are reported. We have not experienced significant variances between our estimates and actual reported volumes in the past. We monitor actual volumes to ensure that we will continue to make reasonable estimates in the future. If we determine that we are unable to make reasonable future estimates, revenue may be deferred until actual customer data is obtained. Also within our Workforce Solutions operating segment, the fees for certain of our tax credits and incentives revenue are based on a percentage of the credit delivered to our clients. Revenue for these arrangements is recognized based on the achievement of milestones, upon calculation of the credit, or when the credit is utilized by our client, depending on the provisions of the client contract.

We have certain offerings that are sold as multiple element arrangements. The multiple elements may include consumer or commercial information, file updates for certain solutions, services provided by our decisioning technologies personnel, training services, statistical models and other services. To account for each of these elements separately, the delivered elements must have stand-alone value to our customer. If we are unable to unbundle the arrangement into separate units of accounting, we apply one of the accounting policies described above. This may lead to the arrangement consideration being recognized as the final contract element is delivered to our customer or ratably over the contract.

Many of our multiple element arrangements involve the delivery of services generated by a combination of services provided by one or more of our operating segments. No individual information service impacts the value or usage of other information services included in an arrangement and each service can be sold alone or, in most cases, purchased from another vendor without affecting the quality of use or value to the customer of the other information services included in the arrangement. Some of our products require the development of interfaces or platforms by our decisioning technologies personnel that allow our customers to interact with our proprietary information databases. These development services do not meet the requirement for having stand-alone value, thus any related development fees are deferred when billed and are recognized over the expected period that the customer will benefit from the related decisioning technologies service. Revenue from the provision of statistical models is recognized as the service is provided and accepted, assuming all other revenue recognition criteria are met. The direct costs of set up of a customer are capitalized and amortized as a cost of service during the term of the related customer contract.

We have some multiple element arrangements that include software. We recognize the elements for which we have established vendor specific objective evidence at fair value upon delivery, in accordance with the applicable guidance.

We record revenue on a net basis for those sales in which we have in substance acted as an agent or broker in the transaction.

The debt collections and recovery management revenue is calculated as a percentage of debt collected on behalf of the customer and, as such, is primarily recognized when the cash is collected assuming all other revenue recognition criteria are met.

Deferred revenue consists of amounts billed and collected in excess of revenue recognized on sales relating generally to the deferral of subscription fees and arrangement consideration from elements not meeting the criteria for having stand-alone value discussed above. Deferred revenues are subsequently recognized as revenue in accordance with our revenue recognition policies.

Judgments and uncertainties — Each element of a multiple element arrangement must be considered separately to ensure that appropriate accounting is performed for these deliverables. These considerations include assessing the price at which the element is sold compared to its relative fair value; concluding when the element will be delivered; evaluating collectibility; and determining whether any contingencies exist in the related customer contract that impact the prices paid to us for the services.

In addition, as stated above, the determination of certain of our marketing information services and tax management services revenue requires the use of estimates, principally related to transaction volumes in instances where these volumes are reported to us by our clients on a monthly basis in arrears. In these instances, we estimate transaction volumes based on average actual volumes reported in the past. Differences between our estimates and actual final volumes reported are recorded in the period in which actual volumes are reported.

Effects if actual results differ from assumptions — We have not experienced significant variances between our estimates of marketing information services and tax management services revenues reported to us by our customers and actual reported volumes in the past. We monitor actual volumes to ensure that we will continue to make reasonable estimates in the future. If we determine that we are unable to make reasonable future estimates, revenue may be deferred until actual customer data is obtained. However, if actual results are not consistent with our estimates and assumptions, or if our customer arrangements become more complex or include more bundled offerings in the future, we may be required to recognize revenue differently in the future to account for these changes. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to recognize revenue.

Goodwill and Indefinite-Lived Intangible Assets

We review goodwill and indefinite lived intangible assets for impairment annually (as of September 30) and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. 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 eight reporting units comprised of U.S. Information Solutions (which includes part of Online Information Solutions, Mortgage Solutions and Financial Marketing Services), Asia Pacific, Europe, Latin America, Canada, Global Consumer Solutions, Verification Services, and Employer Services.

The goodwill balance at December 31, 2016, for our eight reporting units was as follows:

	December 31,
	2016
	(In millions)
Asia Pacific	1,402.4
U.S. Information Solutions	1,071.3
Europe	150.2
Latin America	228.9
Canada	33.1
Global Consumer Solutions	136.3
Verification Services	772.9
Employer Services	179.2
Total goodwill	$	3,974.3

Qualitative Assessments

We performed a qualitative assessment to determine whether further impairment testing was necessary for all of our 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 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 all of our reporting units.

Loss Contingencies

We are subject to various proceedings, lawsuits and claims arising in the normal course of our business. 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.

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. If the likelihood of an adverse outcome from any claim or legal proceeding is probable and the amount can be reasonably estimated, we record a liability on our Consolidated Balance Sheets for the estimated amount. If the likelihood of an adverse outcome is reasonably possible, but not probable, we provide disclosures related to the potential loss contingency. Our assumptions related to loss contingencies are inherently subjective.

Effect if actual results differ from assumptions — We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to determine loss contingencies. However, if facts and circumstances change in the future that change our belief regarding assumptions used to determine our estimates, we may be exposed to a loss that could be material.

Income Taxes

We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. We assess the likelihood that our deferred tax assets will be recovered from future taxable income or other tax planning strategies. To the extent that we believe that recovery is not likely, we must establish a valuation allowance to reduce the deferred tax assets to the amount we estimate will be recoverable.

Our income tax provisions are based on assumptions and calculations which will be subject to examination by various tax authorities. We record tax benefits for positions in which we believe are more likely than not of being sustained under such examinations. We assess the potential outcome of such examinations to determine the adequacy of our income tax accruals.

Judgments and uncertainties — We consider accounting for income taxes critical because management is required to make significant judgments in determining our provision for income taxes, our deferred tax assets and liabilities, and our future taxable income for purposes of assessing our ability to realize any future benefit from our deferred tax assets. These judgments and estimates are affected by our expectations of future taxable income, mix of earnings among different taxing jurisdictions, and timing of the reversal of deferred tax assets and liabilities.

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. These adjustments to our unrecognized tax benefits may affect our income tax expense. Settlement of uncertain tax positions may require use of our cash. At December 31, 2016, $36.0 million was recorded for uncertain tax benefits, including interest and penalties, of which it is reasonably possible that up to $7.1 million of our unrecognized tax benefit may change within the next twelve months.

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

Pension and Other Postretirement Plans

We consider accounting for our U.S. and Canadian pension and other postretirement plans critical because management is required to make significant subjective judgments about a number of actuarial assumptions, which include discount rates, expected return on plan assets, interest cost and mortality and retirement rates. Actuarial valuations are used in determining our benefit obligation and net periodic benefit cost.

During 2016, we adopted the new MP-2016 mortality scale in determining the liability for the U.S. pension plan. This updated scale partially offset the decrease in the discount rate in 2016, the net of which resulted in the increase in the projected benefit obligation as of December 31, 2016.

During 2015 we adopted the new generational projection scale with MP-2015 in determining the liability for the U.S. pension plan. This updated scale, along with the change in the discount rate, contributed to the decrease in the projected benefit obligation as of December 31, 2015.

During 2014, we adopted the new RP-2014 mortality tables and generational projection scale with MP-2014 in determining the liability for the U.S. pension plan. This new table, along with the change in the discount rate, contributed to the increase in the projected benefit obligation as of December 31, 2014.

Judgments and uncertainties — We believe that the most significant assumptions related to our net periodic benefit cost are (1) the discount rate and (2) the expected return on plan assets, in each case as it relates to our U.S. pension plan. Our Canadian plan is not significant, and the impact of changes in assumptions for that plan is not material.

We determine our discount rates primarily based on high-quality, fixed-income investments and yield-to-maturity analysis specific to our estimated future benefit payments available as of the measurement date. Discount rates are updated annually on the measurement date to reflect current market conditions. We use a third-party yield curve to develop our discount rates. The yield curve provides discount rates related to a dedicated high-quality bond portfolio whose cash flows extend beyond the current period, from which we choose a rate matched to the expected benefit payments required for each plan.

The expected rate of return on plan assets is based on both our historical returns and forecasted future investment returns by asset class, as provided by our external investment advisor. In 2016, the U.S. pension plan investment gains of 6.8% were below the expected return of 7.25% for the third time in eight years. The expected return for the USRIP for 2017 is at 7.25%. The CRIP earned 7.6% in 2016 which was above its expected return of 6.0% for the sixth time in eight years. The expected return for the CRIP for 2017 is at 6.0%. The CRIP has a lower expected return due to a higher asset allocation to fixed income securities. Our weighted-average expected rate of return for both plans for 2017 is 7.14% which is consistent with the 2016 expected rate.

Annual differences, if any, between the expected and actual returns on plan assets are included in unrecognized net actuarial gain or loss, a component of other comprehensive income. In calculating the annual amortization of the unrecognized net actuarial gain or loss, we use a market-related value of assets that smooths actual investment gains and losses on plan assets over a period up to five years. The resulting unrecognized net actuarial gain or loss amount is recognized in net periodic pension expense over the average remaining life expectancy of the participant group since almost all participants are inactive. The market-related value of our assets was $541.2 million at December 31, 2016. We do not expect our 2017 net periodic benefit cost, which includes the effect of the market-related value of assets, to be materially different than our 2016 cost. See Note 10 of the Notes to the Consolidated Financial Statements for details on changes in the pension benefit obligation and the fair value of plan assets.

Effect if actual results differ from assumptions — We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that are used in our actuarial valuations. Adjusting our weighted-average expected long-term rate of return (7.14% at December 31, 2016) by 50 basis points would change our estimated pension expense in 2016 by approximately $2.7 million. Adjusting our weighted-average discount rate (4.23% at December 31, 2016) by 50 basis points would change our estimated pension expense in 2016 by approximately $0.8 million. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to changes in pension expense that could be material.

Purchase Accounting for Acquisitions

We account for acquisitions under Accounting Standards Codification 805, Business Combinations, which changed the application of the acquisition method of accounting in a business combination and also modified the way assets acquired and liabilities assumed are recognized on a prospective basis. In general, the acquisition method of accounting requires companies to record assets acquired and liabilities assumed at their respective fair market values at the date of acquisition. We primarily estimate fair value of identified intangible assets using discounted cash flow analyses based on market participant based inputs. Any amount of the purchase price paid that is in excess of the estimated fair values of net assets acquired is recorded in the line item Goodwill in our Consolidated Balance Sheets. Transaction costs, as well as costs to reorganize acquired companies, are expensed as incurred in our Consolidated Statements of Income.

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

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