Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



Index to Financial Statements
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	61
Report of Independent Registered Public Accounting Firm	62
Consolidated Statements of Income for each of the three years in the period ended December 31, 2017	63
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2017	64
Consolidated Balance Sheets at December 31, 2017 and 2016	65
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2017	66
Consolidated Statements of Shareholders’ Equity and Other Comprehensive Income for each of the three years in the period ended December 31, 2017	67
Notes to Consolidated Financial Statements	69

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Equifax Inc.

Opinion on Internal Control over Financial Reporting

We have audited Equifax Inc.’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“2013 framework”) (the COSO criteria). In our opinion, Equifax Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, cash flows, and shareholders’ equity and other comprehensive income for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements") and our report dated March 1, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Atlanta, Georgia

March 1, 2018

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Equifax Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Equifax Inc. (the Company) as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, cash flows, and shareholders’ equity and other comprehensive income for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risk of material misstatements of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Atlanta, Georgia

March 1, 2018

CONSOLIDATED STATEMENTS OF INCOME



	Twelve Months Ended December 31,
	2017			2016			2015
(In millions, except per share amounts)
Operating revenue	$	3,362.2		$	3,144.9		$	2,663.6
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)	1,210.7			1,113.4			887.4
Selling, general and administrative expenses	1,039.1			948.2			884.3
Depreciation and amortization	287.8			265.4			198.0
Total operating expenses	2,537.6			2,327.0			1,969.7
Operating income	824.6			817.9			693.9
Interest expense	(92.8		)	(92.1		)	(63.8		)
Other income, net	14.8			2.4			6.5
Consolidated income before income taxes	746.6			728.2			636.6
Provision for income taxes	(148.6		)	(233.1		)	(201.8		)
Consolidated net income	598.0			495.1			434.8
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests	(10.7		)	(6.3		)	(5.7		)
Net income attributable to Equifax	$	587.3		$	488.8		$	429.1
Basic earnings per common share:
Net income attributable to Equifax	$	4.89		$	4.10		$	3.61
Weighted-average shares used in computing basic earnings per share	120.1			119.3			118.7
Diluted earnings per common share:
Net income attributable to Equifax	$	4.83		$	4.04		$	3.55
Weighted-average shares used in computing diluted earnings per share	121.5			121.1			120.9
Dividends per common share	$	1.56		$	1.32		$	1.16

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Twelve Months Ended December 31,
	2017								2016									2015
	Equifax Shareholders			Noncontrolling Interests		Total			Equifax Shareholders			Noncontrolling Interests			Total			Equifax Shareholders			Noncontrolling Interests			Total
	(In millions)
Net income	$	587.3		$	10.7	$	598.0		$	488.8		$	6.3		$	495.1		$	429.1		$	5.7		$	434.8
Other comprehensive income (loss):
Foreign currency translation adjustment	158.7			3.3		162.0			(24.6		)	(3.0		)	(27.6		)	(67.1		)	(7.1		)	(74.2		)
Change in unrecognized prior service cost and actuarial gains (losses) related to our pension and other postretirement benefit plans, net	8.4			—		8.4			(20.1		)	—			(20.1		)	17.5			—			17.5
Change in cumulative gain (loss) from cash flow hedging transactions, net	(0.2		)	—		(0.2		)	0.6			—			0.6			0.2			—			0.2
Comprehensive income (loss)	$	754.2		$	14.0	$	768.2		$	444.7		$	3.3		$	448.0		$	379.7		$	(1.4	)	$	378.3

See Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEETS



	December 31,
	2017			2016
(In millions, except par values)
ASSETS
Current assets:
Cash and cash equivalents	$	336.4		$	129.3
Trade accounts receivable, net of allowance for doubtful accounts of $9.1 and $7.8 at December 31, 2017 and 2016, respectively	444.8			433.3
Prepaid expenses	94.3			60.2
Other current assets	122.9			50.1
Total current assets	998.4			672.9
Property and equipment:
Capitalized internal-use software and system costs	427.9			307.0
Data processing equipment and furniture	306.6			273.2
Land, buildings and improvements	212.5			203.8
Total property and equipment	947.0			784.0
Less accumulated depreciation and amortization	(380.0		)	(317.1		)
Total property and equipment, net	567.0			466.9

Goodwill	4,184.0			3,974.3
Indefinite-lived intangible assets	95.0			94.8
Purchased intangible assets, net	1,247.0			1,323.8
Other assets, net	142.0			131.3
Total assets	$	7,233.4		$	6,664.0
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt	$	965.3		$	585.4
Accounts payable	110.3			81.0
Accrued expenses	160.9			149.3
Accrued salaries and bonuses	119.4			158.8
Deferred revenue	108.4			110.7
Other current liabilities	209.2			174.4
Total current liabilities	1,673.5			1,259.6
Long-term debt	1,739.0			2,086.8
Deferred income tax liabilities, net	305.1			325.4
Long-term pension and other postretirement benefit liabilities	175.8			184.4
Other long-term liabilities	101.0			86.5
Total liabilities	3,994.4			3,942.7
Commitments and Contingencies (see Note 6)
Equifax shareholders' equity:
Preferred stock, $0.01 par value: Authorized shares - 10.0; Issued shares - none	—			—
Common stock, $1.25 par value: Authorized shares - 300.0; Issued shares - 189.3 at December 31, 2017 and 2016; Outstanding shares - 120.1 and 119.9 at December 31, 2017 and 2016, respectively	236.6			236.6
Paid-in capital	1,332.7			1,313.3
Retained earnings	4,600.6			4,153.2
Accumulated other comprehensive loss	(412.0		)	(528.9		)
Treasury stock, at cost, 68.6 shares and 68.8 shares at December 31, 2017 and 2016, respectively	(2,577.6		)	(2,505.6		)
Stock held by employee benefits trusts, at cost, 0.6 shares at December 31, 2017 and 2016	(5.9		)	(5.9		)
Total Equifax shareholders' equity	3,174.4			2,662.7
Noncontrolling interests including redeemable noncontrolling interests	64.6			58.6
Total shareholders' equity	3,239.0			2,721.3
Total liabilities and equity	$	7,233.4		$	6,664.0

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Twelve Months Ended December 31,
	2017			2016			2015
(In millions)
Operating activities:
Consolidated net income	$	598.0		$	495.1		$	434.8
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Impairment of cost method investment	—			—			14.8
Depreciation and amortization	290.9			268.7			200.0
Stock-based compensation expense	38.3			37.1			38.4
Excess tax benefits from stock-based compensation plans	—			(35.9		)	(30.0		)
Deferred income taxes	(44.1		)	(13.0		)	(28.7		)
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable, net	(1.3		)	(55.7		)	(26.9		)
Other assets, current and long-term	(120.1		)	0.3			15.9
Current and long-term liabilities, excluding debt	54.3			126.4			150.8
Cash provided by operating activities	816.0			823.0			769.1
Investing activities:
Capital expenditures	(218.2		)	(173.5		)	(146.2		)
Acquisitions, net of cash acquired	(139.9		)	(1,791.6		)	(4.4		)
Cash received from sale of asset	8.6			—			—
Cash received from divestitures	—			—			2.9
Economic hedges	—			(10.8		)	—
Investment in unconsolidated affiliates, net	—			—			(0.1		)
Cash used in investing activities	(349.5		)	(1,975.9		)	(147.8		)
Financing activities:
Net short-term borrowings (repayments)	252.4			73.0			(331.0		)
Payments on long-term debt	(322.5		)	(350.0		)	—
Proceeds from issuance of long-term debt	100.0			1,574.7			—
Treasury stock purchases	(77.1		)	—			(196.3		)
Dividends paid to Equifax shareholders	(187.4		)	(157.6		)	(137.8		)
Dividends paid to noncontrolling interests	(8.4		)	(5.8		)	(6.4		)
Proceeds from exercise of stock options	19.2			31.5			34.4
Payment of taxes related to settlement of equity awards	(33.5		)	(27.2		)	(27.0		)
Excess tax benefits from stock-based compensation plans	—			35.9			30.0
Payment of contingent consideration	(3.5		)	(4.4		)	—
Purchase of redeemable noncontrolling interests	(2.6		)	(3.6		)	—
Debt issuance costs	(0.3		)	(6.2		)	(4.9		)
Cash (used in) provided by financing activities	(263.7		)	1,160.3			(639.0		)
Effect of foreign currency exchange rates on cash and cash equivalents	4.3			28.6			(17.3		)
Increase (decrease) in cash and cash equivalents	207.1			36.0			(35.0		)
Cash and cash equivalents, beginning of period	129.3			93.3			128.3
Cash and cash equivalents, end of period	$	336.4		$	129.3		$	93.3

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND OTHER COMPREHENSIVE INCOME



	Equifax Shareholders
	Common Stock				Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Stock Held By Employee Benefits Trusts			Noncontrolling Interests			Total Shareholders’ Equity
	Shares Outstanding		Amount
	(In millions, except per share values)
Balance, December 31, 2014	119.4		$	236.6	$	1,201.7		$	3,554.8		$	(435.4	)	$	(2,351.7	)	$	(5.9	)	$	34.5		$	2,234.6

Net income	—		—		—			429.1			—			—			—			5.7			434.8
Other comprehensive loss	—		—		—			—			(49.4		)	—			—			(7.1		)	(56.5		)
Shares issued under stock and benefit plans, net of minimum tax withholdings	1.4		—		(21.8		)	—			—			29.6			—			—			7.8
Treasury stock purchased under share repurchase program ($76.55 per share)	(2.1	)	—		—			—			—			(207.8		)	—			—			(207.8		)
Cash dividends ($1.16 per share)	—		—		—			(138.4		)	—			—			—			—			(138.4		)
Dividends paid to employee benefits trusts	—		—		0.6			—			—			—			—			—			0.6
Stock-based compensation expense	—		—		38.4			—			—			—			—			—			38.4
Tax effects of stock-based compensation plans	—		—		30.0			—			—			—			—			—			30.0
Contributions from noncontrolling interests	—		—		—			—			—			—			—			1.5			1.5
Redeemable noncontrolling interest adjustment	—		—		—			(11.1		)	—			—			—			11.1			—
Dividends paid to noncontrolling interests	—		—		—			—			—			—			—			(6.4		)	(6.4		)
Purchase of noncontrolling interests	—		—		0.1			—			—			—			—			0.2			0.3
Other*	—		—		11.5			—			—			—			—			—			11.5
Balance, December 31, 2015	118.7		236.6		1,260.5			3,834.4			(484.8		)	(2,529.9		)	(5.9		)	39.5			2,350.4

Net income	—		—		—			488.8			—			—			—			6.3			495.1
Other comprehensive loss	—		—		—			—			(44.1		)	—			—			(3.0		)	(47.1		)
Shares issued under stock and benefit plans, net of minimum tax withholdings	1.2		—		(19.4		)	—			—			24.3			—			—			4.9
Cash dividends ($1.32 per share)	—		—		—			(158.4		)	—			—			—			—			(158.4		)
Dividends paid to employee benefits trusts	—		—		0.8			—			—			—			—			—			0.8
Stock-based compensation expense	—		—		37.1			—			—			—			—			—			37.1
Tax effects of stock-based compensation plans	—		—		35.9			—			—			—			—			—			35.9
Redeemable noncontrolling interest adjustment	—		—		—			(11.6		)	—			—			—			11.6			—
Dividends paid to noncontrolling interests	—		—		—			—			—			—			—			(5.8		)	(5.8		)
Purchase of noncontrolling interests	—		—		(1.6		)	—			—			—			—			3.3			1.7
Other	—		—		—			—			—			—			—			6.7			6.7
Balance, December 31, 2016	119.9		236.6		1,313.3			4,153.2			(528.9		)	(2,505.6		)	(5.9		)	58.6			2,721.3

Net income	—		—		—			587.3			—			—			—			10.7			598.0
Other comprehensive income	—		—		—			—			166.9			—			—			3.3			170.2
Shares issued under stock and benefit plans, net of minimum tax withholdings	0.7		—		(18.8		)	—			—			5.1			—			—			(13.7		)
Impact of Tax Cuts and Jobs Act of 2017	—		—		—			50.0			(50.0		)	—			—			—			—
Treasury stock purchased under share repurchase program ($143.88 per share)**	(0.5	)	—		—			—			—			(77.1		)	—			—			(77.1		)
Cash dividends ($1.56 per share)	—		—		—			(188.3		)	—			—			—			—			(188.3		)
Dividends paid to employee benefits trusts	—		—		0.9			—			—			—			—			—			0.9
Stock-based compensation expense	—		—		38.3			—			—			—			—			—			38.3
Redeemable noncontrolling interest adjustment	—		—		—			(1.5		)	—			—			—			1.5			—
Dividends paid to noncontrolling interests	—		—		—			—			—			—			—			(8.4		)	(8.4		)
Purchases of redeemable noncontrolling interests	—		—		(1.0		)	—			—			—			—			(1.6		)	(2.6		)
Other	—		—		—			(0.1		)	—			—			—			0.5			0.4
Balance, December 31, 2017	120.1		$	236.6	$	1,332.7		$	4,600.6		$	(412.0	)	$	(2,577.6	)	$	(5.9	)	$	64.6		$	3,239.0


*	At December 31, 2015, the paid-in capital includes the $11.5 million holdback related to the accelerated share repurchase program discussed in Note 1. At December 31, 2015, the paid-in capital reflects the $11.5 million settlement of the accelerated share repurchase program discussed in Note 1.


**	At December 31, 2017, $590.1 million was authorized for future repurchases of our common stock.

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND OTHER COMPREHENSIVE INCOME

Accumulated Other Comprehensive Loss consists of the following components:



	December 31,
	2017			2016			2015
	(In millions)
Foreign currency translation	$	(103.3	)	$	(262.0	)	$	(237.4	)
Unrecognized actuarial losses and prior service cost related to our pension and other postretirement benefit plans, net of accumulated tax of $95.6, $150.6 and $138.2 in 2017, 2016 and 2015, respectively	(257.5		)	(265.9		)	(245.8		)
Cash flow hedging transactions, net of tax of $0.7, $0.9 and $1.0 in 2017, 2016 and 2015, respectively	(1.2		)	(1.0		)	(1.6		)
Impact of Tax Cuts and Jobs Act of 2017	(50.0		)	—			—
Accumulated other comprehensive loss	$	(412.0	)	$	(528.9	)	$	(484.8	)

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

Nature of Operations. We collect, organize and manage various types of financial, demographic, employment and marketing information. Our products and services enable businesses to make credit and service decisions, manage their portfolio risk, automate or outsource certain payroll-related, tax and human resources business processes, and develop marketing strategies concerning consumers and commercial enterprises. We serve customers across a wide range of industries, including the financial services, mortgage, retail, telecommunications, utilities, automotive, brokerage, healthcare and insurance industries, as well as government agencies. We also enable consumers to manage and protect their financial health through a portfolio of products offered directly to consumers. As of December 31, 2017, we operated in the following countries: Argentina, Australia, Canada, Chile, Costa Rica, Ecuador, El Salvador, Honduras, India, Ireland, Mexico, New Zealand, Paraguay, Peru, Portugal, Spain, the United Kingdom, or U.K., Uruguay, and the United States of America, or U.S. 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, Singapore and Dubai, and have an investment in a consumer and commercial credit information company in Brazil.

We develop, maintain and enhance secured proprietary information databases through the compilation of consumer specific data, including credit, income, employment, asset, liquidity, net worth and spending activity, and business data, including credit and business demographics, that we obtain from a variety of sources, such as credit granting institutions, and income and tax information primarily from large to mid-sized companies in the U.S. We process this information utilizing our proprietary information management systems. We also provide information, technology and services to support debt collections and recovery management.

Basis of Consolidation. Our Consolidated Financial Statements and the accompanying notes, which are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, include Equifax and all its subsidiaries. We consolidate all majority-owned and controlled subsidiaries as well as variable interest entities in which we are the primary beneficiary. Other parties’ interests in consolidated entities are reported as noncontrolling interests. We use the equity method of accounting for investments in which we are able to exercise significant influence and use the cost method for all other investments. All intercompany transactions and balances are eliminated.

Our Consolidated Financial Statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the periods presented therein.

Segments. We manage our business and report our financial results through the following four reportable segments, which are our operating segments:


•	U.S. Information Solutions, or USIS


•	International


•	Workforce Solutions


•	Global Consumer Solutions

USIS is our largest reportable segment, with 37% of total operating revenue for 2017. Our most significant foreign operations are located in Australia, the U.K. and Canada.

Use of Estimates. The preparation of our Consolidated Financial Statements requires us to make estimates and assumptions in accordance with GAAP. Accordingly, we make these estimates and assumptions after exercising judgment. We believe that the estimates and assumptions inherent in our Consolidated Financial Statements are reasonable, based upon information available to us at the time they are made including the consideration of events that have occurred up until the point these Consolidated Financial Statements have been filed. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition and Deferred Revenue. 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 relates 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 portion 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. For certain customer contracts, the total arrangement fee is allocated to the undelivered elements. 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred revenue consists of amounts billed in excess of revenue recognized on sales of our information services 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.

Cost of Services. Cost of services consist primarily of (1) data acquisition and royalty fees; (2) customer service costs, which include: personnel costs to collect, maintain and update our proprietary databases, to develop and maintain software application platforms and to provide consumer and customer call center support; (3) hardware and software expense associated with transaction processing systems; (4) telecommunication and computer network expense; and (5) occupancy costs associated with facilities where these functions are performed by Equifax employees.

Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of personnel-related costs, restructuring costs, corporate costs, fees for professional and consulting services, advertising costs, and other costs of administration.

Advertising. Advertising costs, which are expensed as incurred, totaled $54.6 million, $63.6 million and $65.1 million during 2017, 2016 and 2015, respectively.

Stock-Based Compensation. We recognize the cost of stock-based payment transactions in the financial statements over the period services are rendered according to the fair value of the stock-based awards issued. All of our stock-based awards, which are stock options and nonvested stock, are classified as equity instruments.

Income Taxes. We account for income taxes under the liability method. We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and income tax bases of assets and liabilities. We assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred tax assets. We record a valuation allowance, as necessary, to reduce our deferred tax assets to the amount of future tax benefit that we estimate is more likely than not to be realized.

We record tax benefits for positions that we believe are more likely than not of being sustained under audit examinations. We assess the potential outcome of such examinations to determine the adequacy of our income tax accruals. We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes on our Consolidated Statements of Income. We adjust our income tax provision during the period in which we determine that the actual results of the examinations may differ from our estimates or when statutory terms expire. Changes in tax laws and rates are reflected in our income tax provision in the period in which they occur.

Earnings Per Share. Our basic earnings per share, or EPS, is calculated as net income divided by the weighted-average number of common shares outstanding during the reporting period. 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. The net income amounts used in both our basic and diluted EPS calculations are the same. A reconciliation of the weighted-average outstanding shares used in the two calculations is as follows:



	Twelve Months Ended December 31,
	2017	2016	2015
	(In millions)
Weighted-average shares outstanding (basic)	120.1	119.3	118.7
Effect of dilutive securities:
Stock options and restricted stock units	1.4	1.8	2.2
Weighted-average shares outstanding (diluted)	121.5	121.1	120.9

For the twelve months ended December 31, 2017, 2016 and 2015, 0.3 million, 0.1 million and 0.1 million stock options, respectively, were anti-dilutive and therefore excluded from this calculation.

Accelerated Share Repurchase Program. On October 24, 2014, we entered into an accelerated share repurchase (“ASR”) program to repurchase shares of our common stock under our approved share repurchase program. Under the ASR program, the number of shares to be repurchased is based generally on the daily volume weighted average price of our common stock during the term of the ASR program. On October 24, 2014, we paid $115 million in exchange for an initial delivery of 1.4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

million shares to us, subject to a 10%, or $11.5 million, holdback. The maximum number of shares to be received or delivered under the contracts was 3.2 million.

The ASR program was accounted for as an initial treasury stock transaction and a forward stock purchase contract. The initial repurchase of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share on the effective date of the agreement. The forward stock purchase contracts are classified as equity instruments under ASC 815-40 for “Contracts in Entity's Own Equity,” and were deemed to have a fair value of zero at the effective date. On February 4, 2015, we settled the ASR and received approximately 0.02 million shares.

Cash Equivalents. We consider all highly-liquid investments with an original maturity of three months or less to be cash equivalents.

Trade Accounts Receivable and Allowance for Doubtful Accounts. We do not recognize interest income on our trade accounts receivable. Additionally, we generally do not require collateral from our customers related to our trade accounts receivable. Accounts receivable are stated at cost.

The allowance for doubtful accounts for estimated losses on trade accounts receivable is based on historical write-off experience, an analysis of the aging of outstanding receivables, customer payment patterns and the establishment of specific reserves for customers in an adverse financial condition. We reassess the adequacy of the allowance for doubtful accounts each reporting period. Increases to the allowance for doubtful accounts are recorded as bad debt expense, which are included in selling, general and administrative expenses on the accompanying Consolidated Statements of Income. Bad debt expense was $5.0 million, $2.2 million and $4.3 million during the twelve months ended December 31, 2017, 2016, and 2015, respectively.

Other Current Assets. Other current assets on our Consolidated Balance Sheets include certain current tax receivable accounts. As of December 31, 2017 and 2016 these assets were approximately $54.2 million and $10.9 million, respectively. Other current assets also includes an insurance receivable for costs incurred to date related to the cybersecurity incident that are reimbursable and probable of recovery under our insurance coverage. As of December 31, 2017, the Company has recorded a receivable of $35.0 million. For additional information, see Note 6. Other current assets also include amounts in specifically designated accounts that hold the funds that are due to customers from our debt collection and recovery management services. As of December 31, 2017 and 2016 these assets were approximately $21.4 million and $28.0 million, respectively, with fully offsetting balances in other current liabilities. These amounts are restricted as to their current use, and will be released according to the specific customer agreements. Other current assets also include foreign currency options, receivables related to life insurance policies covering certain officers of the Company, as well as deferred charges.

Long-Lived Assets. Property and equipment are stated at cost less accumulated depreciation and amortization. The cost of additions is capitalized. Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives, which are generally three to ten years for data processing equipment and capitalized internal-use software and systems costs. Leasehold improvements are depreciated over the shorter of their estimated useful lives or lease terms that are reasonably assured. Buildings are depreciated over a forty-year period. Other fixed assets are depreciated over three to seven years. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized and included in income from operations on the Consolidated Statements of Income, with the classification of any gain or loss dependent on the characteristics of the asset sold or retired.

Certain internal-use software and system development costs are capitalized. Accordingly, the specifically identified costs incurred to develop or obtain software, which is intended for internal use, are not capitalized until the determination is made as to the availability of a technically feasible solution to solve the predefined user and operating performance requirements as established during the preliminary stage of an internal-use software development project. Costs incurred during a software development project’s preliminary stage and post-implementation stage are expensed as incurred. Application development activities that are eligible for capitalization include software design and configuration, development of interfaces, coding, testing, and installation. Capitalized internal-use software and systems costs are subsequently amortized on a straight-line basis over a three- to ten-year period after project completion and when the related software or system is ready for its intended use.

Depreciation and amortization expense related to property and equipment was $115.6 million, $88.9 million and $75.7 million during the twelve months ended December 31, 2017, 2016, and 2015, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Industrial Revenue Bonds. Pursuant to the terms of certain industrial revenue bonds, we have transferred title to certain of our fixed assets with total costs of $156.4 million and $117.0 million as of December 31, 2017 and 2016, 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 in the Company’s Consolidated Balance Sheets as all risks and rewards remain with the Company.

Impairment of Long-Lived Assets. We monitor the status of our long-lived assets in order to determine if conditions exist or events and circumstances indicate that an asset group may be impaired in that its carrying amount may not be recoverable. Significant factors that are considered that could be indicative of impairment include: changes in business strategy, market conditions or the manner in which an asset group is used; underperformance relative to historical or expected future operating results; and negative industry or economic trends. If potential indicators of impairment exist, we estimate recoverability based on the asset group’s ability to generate cash flows greater than the carrying value of the asset group. We estimate the undiscounted future cash flows arising from the use and eventual disposition of the related long-lived asset group. If the carrying value of the long-lived asset group exceeds the estimated future undiscounted cash flows, an impairment loss is recorded based on the amount by which the asset group’s carrying amount exceeds its fair value. We utilize estimates of discounted future cash flows to determine the asset group’s fair value. We did not record any impairment losses of long-lived assets in any of the periods presented.

Goodwill and Indefinite-Lived Intangible Assets. Goodwill represents the cost in excess of the fair value of the net assets of acquired businesses. Goodwill is not amortized. We are required to test goodwill for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment test as of September 30 each year.

Under ASC 350, we have an option to perform a “qualitative” assessment of our reporting units to determine whether further impairment testing is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. For reporting units that we determine meet these criteria, we perform a qualitative assessment. In this qualitative assessment, we consider 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, we assess whether the most recent fair value determination results in an amount that exceeds the carrying amount of the reporting units. Based on these assessments, we determine whether 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. If it is determined it is not more likely than not, no further testing is required. If further testing is required, we continue with the quantitative impairment test.

In analyzing goodwill for potential impairment in the quantitative impairment test, we use a combination of the income and market approaches to estimate the reporting unit’s fair value. Under the income approach, we calculate the fair value of a reporting unit based on estimated future discounted cash flows. The assumptions we use are based on what we believe a hypothetical marketplace participant would use in estimating fair value. Under the market approach, we estimate the fair value based on market multiples of revenue or earnings before interest, income taxes, depreciation and amortization for benchmark companies. If the fair value of a reporting unit exceeds its carrying value, then no further testing is required. However, if a reporting unit’s fair value were to be less than its carrying value, we would then determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the reporting unit’s goodwill exceeded its implied value.

Indefinite-lived reacquired rights represent the value of rights which we had granted to various affiliate credit reporting agencies that were reacquired in the U.S. and Canada. A portion of our reacquired rights are perpetual in nature and, therefore, the useful lives are considered indefinite in accordance with the accounting guidance in place at the time of the acquisitions. Indefinite-lived intangible assets are not amortized. We are required to test indefinite-lived intangible assets for impairment annually and whenever events and circumstances indicate that there may be an impairment of the asset value. Our annual impairment test date is September 30. We perform the impairment test for our indefinite-lived intangible assets by first assessing qualitative factors to determine whether it is necessary to perform a quantitative impairment test. If the qualitative assessment indicates that we need to perform a quantitative impairment test, we compare the asset’s fair value to its carrying value. We estimate the fair value based on projected discounted future cash flows. An impairment charge is recognized if the asset’s estimated fair value is less than its carrying value.

We completed our annual impairment testing for goodwill and indefinite-lived intangible assets during the twelve months ended December 31, 2017, 2016 and 2015, and we determined that there was no impairment in any of these years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Purchased Intangible Assets. Purchased intangible assets represent the estimated fair value of acquired intangible assets used in our business. Purchased data files represent the estimated fair value of consumer credit files acquired primarily through the purchase of independent credit reporting agencies in the U.S. and Canada. We expense the cost of modifying and updating credit files in the period such costs are incurred. We amortize purchased data files, which primarily consist of acquired credit files, on a straight-line basis. All of our other purchased intangible assets are also amortized on a straight-line basis.



Asset		Useful Life
		(In years)
Purchased data files		2 to 15
Acquired software and technology		1 to 10
Non-compete agreements		1 to 5
Proprietary database		6 to 10
Customer relationships		2 to 25
Trade names		1 to 15

Additionally, included in intangible assets are reacquired rights that represent the value of rights which we had granted to Computer Sciences Corporation that were reacquired in connection with the acquisition of CSC Credit Services in the fourth quarter of 2012 based on the accounting guidance in place at that time. These reacquired rights are being amortized over the remaining term of the affiliation agreement on a straight-line basis until August 1, 2018.

Other Assets. Other assets on our Consolidated Balance Sheets primarily represents our equity investment in unconsolidated affiliates, our cost method investment in Boa Vista Servicos (“BVS”), assets related to life insurance policies covering certain officers of the Company, and employee benefit trust assets.

Impairment of Cost Method Investment. We monitor the status of our cost method investment in order to determine if conditions exist or events and circumstances indicate that it may be impaired in that its carrying amount may exceed the fair value of the investment. Significant factors that are considered that could be indicative of an impairment include: changes in business strategy, market conditions, underperformance relative to historical or expected future operating results; and negative industry or economic trends. If potential indicators of impairment exist, we estimate the fair value of the investment using a combination of a discounted cash flow analysis and an evaluation of EBITDA and transaction multiples for comparable companies. If the carrying value of the investment exceeds the estimated fair value, an impairment loss is recorded based on the amount by which the investment’s carrying amount exceeds its fair value. There were no indicators of impairment for 2016 or 2017. We recorded an impairment of our cost method investment in 2015. See Note 2 for further discussion.

Other Current Liabilities. Other current liabilities on our Consolidated Balance Sheets consist of the offset to other current assets related to amounts in specifically designated accounts that hold the funds that are due to customers from our debt collection and recovery management services. These funds were approximately $21.4 million and $28.0 million as of December 31, 2017 and 2016, respectively. These amounts are restricted as to their current use and will be released according to the specific customer agreements. Other current liabilities also include various accrued expenses such as costs related to the cybersecurity incident as described more fully in Note 6, interest expense, accrued employee benefits, accrued taxes, accrued payroll, and accrued legal expenses.

Benefit Plans. We sponsor various pension and defined contribution plans. We also maintain certain healthcare and life insurance benefit plans for eligible retired U.S. employees. Benefits under the pension and other postretirement benefit plans are generally based on age at retirement and years of service and for some pension plans, benefits are also based on the employee’s annual earnings. The net periodic cost of our pension and other postretirement plans is determined using several actuarial assumptions, the most significant of which are the discount rate and the expected return on plan assets. 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. 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. Our Consolidated Balance Sheets reflect the funded status of the pension and other postretirement plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency Translation. The functional currency of each of our foreign operating subsidiaries is that subsidiary’s local currency. We translate the assets and liabilities of foreign subsidiaries at the year-end rate of exchange and revenue and expenses at the monthly average rates during the year. We record the resulting translation adjustment in other comprehensive loss, included in accumulated other comprehensive loss, a component of shareholders’ equity. We also record gains and losses resulting from the translation of intercompany balances of a long-term investment nature in foreign currency translation in other comprehensive loss and accumulated other comprehensive loss. In the years ended December 31, 2017 and 2016, we recorded $0.5 million and $8.8 million of foreign currency transaction losses, respectively. In the year ended December 31, 2015, we recorded $2.0 million of foreign currency transaction gains.

Financial Instruments. Our financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, accounts payable and short and long-term debt. The carrying amounts of these items, other than long-term debt, approximate their fair market values due to the short-term nature of these instruments. The fair value of our fixed-rate debt is determined using Level 2 inputs such as quoted market prices for publicly traded instruments, and for non-publicly traded instruments through valuation techniques depending on the specific characteristics of the debt instrument, taking into account credit risk. As of December 31, 2017 and 2016, the fair value of our long-term debt, including the current portion, based on observable inputs was $2.1 billion and $2.4 billion, respectively, compared to its carrying value of $2.1 billion and $2.4 billion, respectively.

Derivatives and Hedging Activities. Although derivative financial instruments are not utilized for speculative purposes or as the Company’s primary risk management tool, derivatives have been used as a risk management tool to hedge the Company’s exposure to changes in interest rates and foreign exchange rates. We have used interest rate swaps and interest rate lock agreements to manage interest rate risk associated with our fixed and floating-rate borrowings. Forward contracts on various foreign currencies have been used to manage the foreign currency exchange rate risk of certain firm commitments denominated in foreign currencies. We recognize all derivatives on the balance sheet at fair value. Derivative valuations reflect the value of the instrument including the value associated with any material counterparty risk.

Economic Hedges. In December 2015, in anticipation of the acquisition of Veda Group Limited ("Veda"), we purchased foreign currency options to buy Australian dollars with a weighted average strike price of $0.7225 and a notional value of 1.0 billion Australian dollars. These foreign currency options ("options") were designed to act as economic hedges for the pending Veda acquisition and were marked to market. The options had an expiry date of February 18, 2016. We recorded a mark-to-market gain on the options of $4.7 million for the year ended December 31, 2015, which was recorded in other income (expense), net. In January 2016, we purchased additional options for a notional amount of 1.0 billion Australian dollars, with a weighted average strike price of $0.7091, with expiry dates of February 11, 2016 and February 16, 2016. We settled all of the options on the respective settlement dates in February 2016. We recognized a net loss of $15.4 million related to the options in the first quarter of 2016, which was recorded in other income (expense), net.

Cash Flow Hedges. Changes in the fair value of highly effective derivatives designated as cash flow hedges are initially recorded in accumulated other comprehensive income and are reclassified into the line item in the Consolidated Statements of Income in which the hedged item is recorded in the same period the hedged item impacts earnings. Any ineffective portion is recorded in current period earnings. We did not have any unsettled cash flow hedges outstanding as of December 31, 2017, December 31, 2016 or December 31, 2015.

Fair Value Measurements. Fair value is determined based on the assumptions marketplace participants use in pricing the asset or liability. We use a three level fair value hierarchy to prioritize the inputs used in valuation techniques between observable inputs that reflect quoted prices in active markets, inputs other than quoted prices with observable market data and unobservable data (e.g., a company’s own data).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents assets and liabilities measured at fair value on a recurring basis:



					Fair Value Measurements at Reporting Date Using:
Description		Fair Value at December 31, 2017			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
		(In millions)
Assets and Liabilities:
Deferred Compensation Plan Assets	(1)	$	35.5		$	35.5	$	—		$	—
Deferred Compensation Plan Liability	(1)	(35.5		)	—		(35.5		)	—
Total assets and liabilities		$	—		$	35.5	$	(35.5	)	$	—


(1)	We maintain deferred compensation plans that allow for certain management employees to defer the receipt of compensation (such as salary, incentive compensation and commissions) until a later date based on the terms of the plans. The liability representing benefits accrued for plan participants is valued at the quoted market prices of the participants’ investment elections. The asset consists of mutual funds reflective of the participants investment selections and is valued at daily quoted market prices.

(1)

We maintain deferred compensation plans that allow for certain management employees to defer the receipt of compensation (such as salary, incentive compensation and commissions) until a later date based on the terms of the plans. The liability representing benefits accrued for plan participants is valued at the quoted market prices of the participants’ investment elections. The asset consists of mutual funds reflective of the participants investment selections and is valued at daily quoted market prices.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. As disclosed in Note 3, we completed various acquisitions during the years ended December 31, 2017 and 2016. The values of net assets acquired and the resulting goodwill were recorded at fair value using Level 3 inputs. The majority of the related current assets acquired and liabilities assumed were recorded at their carrying values as of the date of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and definite-lived intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for the expected cash flows and discount rates in the present value calculations. The fair value of the equity method investment assets acquired were internally estimated based on the market approach. Under the market approach, we estimated fair value based on market multiples of comparable companies.

Variable Interest Entities. We hold interests in certain entities, including credit data, information solutions and debt collections and recovery management ventures, that are considered variable interest entities, or VIEs. These variable interests relate to ownership interests that require financial support for these entities. Our investments related to these VIEs totaled $13.8 million at December 31, 2017, representing our maximum exposure to loss, with the exception of the guarantees referenced in Note 6. We are not the primary beneficiary and are not required to consolidate any of these VIEs, with the exception of a debt collections and recovery management venture, for which we meet the consolidation criteria under ASC 810. In regards to that consolidated VIE, we have a 75% equity ownership interest and control of the activities that most significantly impact the VIE's economic performance. The assets and liabilities of the VIE for which we are the primary beneficiary were not significant to the Company’s consolidated financial statements, and no gain or loss was recognized because of its consolidation.

In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity's economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity's future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity's design, including: the entity's capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment.

Certain of our VIEs have redeemable noncontrolling interests that are subject to classification outside of permanent equity on the Company's Consolidated Balance Sheet. The redeemable noncontrolling interests are reflected using the redemption method as of the balance sheet date. Redeemable noncontrolling interest adjustments to the redemption values are

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reflected in retained earnings. The adjustment of redemption value at the period end that reflects a redemption value in excess of fair value is included as an adjustment to net income attributable to Equifax stockholders for the purposes of the calculation of earnings per share. None of the current period adjustments reflect a redemption in excess of fair value. Additionally, due to the immaterial balance of the redeemable noncontrolling interest, we have elected to maintain the noncontrolling interest in permanent equity, rather than temporary equity, within our Consolidated Balance Sheet.

Change in Accounting Principle. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09 "Compensation - Stock Compensation (Topic 718)." This standard requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. The new guidance requires the related payments to taxing authorities to be retrospectively presented as a cash outflow from financing activities. As a result, we reclassified $27.2 million and $27.0 million of cash outflows from operating activities for the years ended 2016 and 2015, respectively, to a cash outflow from financing activities. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The adoption of this guidance resulted in the recognition of $26.7 million and $0.22 per diluted common share, of tax benefits in our Consolidated Statement of Income for the year ended December 31, 2017. We also prospectively applied the provisions of the new guidance related to the presentation of windfall tax benefits as cash flows from operating activities which resulted in classifying $26.7 million of cash flows from financing activities to operating activities for the year ended December 31, 2017. We have elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized each period.

In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)." The guidance provides companies the option to eliminate the stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017. The guidance is effective for annual periods beginning after December 31, 2018, with early adoption permitted for reporting periods for which financial statements have not been issued and can be applied retrospectively. As such, we have adopted this guidance as of December 31, 2017 resulting in the reclassification of $50.0 million from accumulated other comprehensive income to retained earnings related to the change in tax rate, as proscribed in the guidance.

Recent Accounting Pronouncements. Derivatives and Hedging. In August 2017, the FASB issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities (Topic 815).” The amendments in ASU 2017-12 provide targeted improvements to the accounting for hedging activities to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The adoption of ASU 2017-12 will become effective for annual periods beginning after December 15, 2018, although early adoption is permitted. This guidance must be applied on a prospective basis. We do not expect the adoption of this ASU will have a material impact on our financial position, results of operations or cash flows.

Stock Compensation. In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting." The amendments in ASU 2017-09 require entities to apply modification accounting in Topic 718 only when changes to the terms or conditions of a share-based payment award result in changes to fair value, vesting conditions or the classification of the award as equity or liability. The adoption of ASU 2017-09 will become effective for annual periods beginning after December 15, 2017. Based on historical modifications we do not believe the adoption of this guidance will have a material impact on our financial position, results of operations or cash flows.

Pension Costs. In March 2017, the FASB issued ASU 2017-07 "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715)." This new guidance changes how employers that sponsor defined benefit pension plans and other postretirement plans present the net periodic benefit cost in the income statement. An employer is required to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment also allows only the service cost component to be eligible for capitalization, when applicable. This new guidance will be effective for the Company for the first reporting period beginning after December 15, 2017, with early adoption permitted in the first quarter of 2017. The amendment will be applied retrospectively for the presentation requirements and prospectively for the capitalization of the service cost component requirements. We do not expect the adoption of this guidance to have a material impact on our financial position, results of operations or cash flows.

Goodwill. In January 2017, the FASB issued ASU 2017-04 "Simplifying the Test for Goodwill Impairment (Topic 350)." This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted. This guidance must be applied on a prospective basis. We do not expect the adoption of this guidance to have a material impact on our financial position, results of operations or cash flows.

Definition of a business. In January 2017, the FASB issued ASU 2017-01 "Clarifying the Definition of a Business (Topic 805)." This standard provides criteria to determine when an asset acquired or group of assets acquired is not a business. When substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This reduces the number of transactions that need to be further evaluated. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017 with early adoption permitted. We are currently evaluating the impact of the adoption of this guidance on our financial position, results of operations and cash flows.

Statement of Cash Flows. In August 2016, the FASB issued ASU 2016-15 "Classification of Certain Cash Receipts and Cash Payments (Topic 230)." This standard provides guidance for eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The guidance is effective in 2018 with early adoption permitted. The Company elected to early adopt this accounting standard which did not have a material impact on its Consolidated Financial Statements.

Equity method investments. In March 2016, the FASB issued ASU 2016-07 "Investments - Equity Method and Joint Ventures (Topic 323)." This standard eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for the equity method. The guidance requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The guidance is effective in 2017 with early adoption permitted. The guidance did not have a material impact on our Consolidated Financial Statements.

Leases. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” This standard requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. The guidance becomes effective for fiscal years and interim reporting periods beginning after December 15, 2018 with early adoption permitted and will require recognizing and measuring leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is evaluating the potential effects of the adoption of this standard on its Consolidated Financial Statements.

Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the FASB issued ASU 2016-01 "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The guidance will require equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) to be measured at fair value with changes in fair

value recognized in net income. The amendments in this update will also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, eliminate the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet and require these entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. This guidance also changes the presentation and disclosure requirements for financial instruments as well as clarifying the guidance related to valuation allowance assessments when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The guidance becomes effective for fiscal years and interim reporting periods beginning after December 15, 2018 with early adoption permitted for financial statements of fiscal years and interim periods that have not been issued. The guidance will impact our cost method investment in BVS, more fully described in Note 2, which we have concluded does not have a readily determinable fair value. This investment will be adjusted through net income prospectively, upon adoption of the new guidance, for any observable price changes for an identical or similar investment of the same issuer or for any impairments.

Revenue Recognition. In May 2014, the FASB issued ASU No. 2014-9, "Revenue from Contracts with Customers." ASU 2014-9 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-9 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

recognized from costs incurred to obtain or fulfill a contract. ASU 2014-9 was originally effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2016 and early adoption was not permitted. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-9.

Based on our assessment, we will adopt the standard using the modified retrospective method in the first quarter of fiscal 2018. The new standard will impact our contracts that have a known quantity over a defined term with price increases or decreases over the contract life. Under the current standard, the revenue related to these contracts are limited by billings in a period. Under the new standard the total contract value will be recognized ratably over the defined term or by using a transactional standalone selling price resulting in the creation of a contract asset or contract liability as transactions are delivered. Based upon analysis performed, we have determined that the revenue recognition aspects of the new standard will not materially affect our consolidated revenue, consolidated net earnings, financial position, or cash flows based on the application of the guidance to our contracts with customers. Additionally, the new guidance specifies that all incremental costs of obtaining a contract and the direct costs of fulfilling a contract with customers should be deferred and recognized over the contract period or expected customer life. Based on our assessment, there will not be a significant change in our cost capitalization practices resulting from the application of the guidance. Finally, we have assessed the additional disclosure requirements related to the new standard and note that there will be changes in the presentation of our revenue recognition disclosures beginning in the first quarter of 2018. These changes include the presentation of disaggregated revenue, discussion of revenue recognition policies, the disclosure of contract asset and contract liability accounts as well as disclosures around the remaining performance obligations for those contracts impacted by the new standard.

COST METHOD INVESTMENT

We hold a 15% equity interest in BVS, which is the second largest consumer and commercial credit information company in Brazil. This investment is recorded in other assets, net, on the Consolidated Balance Sheets and is accounted for using the cost method. As of December 31, 2012, our investment in BVS was valued at 130 million Brazilian Reais, which was the same as the initial fair value. The initial fair value was determined by a third-party using income, market and transaction approaches. During 2016, BVS issued new shares through which our ownership interest was diluted by approximately 1%. This dilution did not result in an impairment of our investment.

During the second quarter of 2015, we received updated management financial projections, which, along with continued weakness in the Brazilian consumer and small commercial credit markets were considered indicators of impairment. Management of Equifax prepared an analysis to estimate the fair value of our investment at June 30, 2015 and estimated that value to be 44 million Brazilian Reais ($14.1 million). As a result, we decreased the carrying value of our investment and recorded a loss at that time of 46 million Brazilian Reais ($14.8 million) which is included in other income (expense), net, in the Consolidated Statements of Income. Additionally, the carrying value has decreased by $37.0 million related to the foreign exchange impact since 2011, which is included in the foreign currency translation adjustments in accumulated other comprehensive income. As of December 31, 2017, our investment in BVS, recorded at 44 million Brazilian Reais ($13.5 million), approximated the fair value.

ACQUISITIONS AND INVESTMENTS

2017 Acquisitions and Investments. On August 10, 2017, the Company completed the acquisition of 100% of the outstanding stock of ID Watchdog, Inc., an identity theft protection and resolution company providing solutions to the employee benefits marketplace. On November 15, 2017, the Company completed the acquisition of 100% of the outstanding stock of Mercury Group of Companies Pty Ltd ("Mercury"), an Australian-owned workforce management company. The primary areas of the purchase price that are not yet finalized are related to income taxes and working capital. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.

2016 Acquisitions and Investments. On February 24, 2016, the Company completed the acquisition of 100% of the ordinary voting shares of Veda for cash consideration of approximately $1.7 billion (2.4 billion Australian dollars) and debt assumed of approximately $189.5 million (261.9 million Australian dollars). The acquisition provides a strong platform for Equifax to offer data and analytic services and further broaden the Company's geographic footprint. Veda stockholders received 2.825 Australian dollars in cash for each share of Veda common stock they owned. The Company financed the transaction with $1.7 billion of debt, consisting of commercial paper, an $800.0 million 364-Day revolving credit facility (the "364-Day Revolver"), and an $800.0 million three-year delayed draw term loan facility (the "Term Loan"). Refer to Note 5 for further discussion on debt. On August 23, 2016, the Company completed the acquisition of 100% of the assets and certain

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

liabilities of unemployment tax and claims management specialists Barnett & Associates ("Barnett"), as well as the verifications business, Computersoft, LLC ("Computersoft"). We have completed the allocation of the Veda, Barnett and Computersoft purchase prices.

Purchase Price Allocation. The following table summarizes the estimated fair value of the net assets acquired and the liabilities assumed at the acquisition dates during 2017 and 2016.



	December 31,
	2017			2016
	(In millions)
Cash	$	4.3		$	23.7
Accounts receivable and other current assets	3.2			39.6
Other assets	0.4			42.0
Identifiable intangible assets (1)	51.0			681.0
Goodwill (2)	92.4			1,456.3
Total assets acquired	151.3			2,242.6
Debt(3)	—			(189.5		)
Other current liabilities	(5.1		)	(40.2		)
Other liabilities	(10.9		)	(178.1		)
Non-controlling interest	—			(11.7		)
Net assets acquired	$	135.3		$	1,823.1


(1)	Identifiable intangible assets are further disaggregated in the following table.


(2)	The goodwill related to ID Watchdog, Inc. and Mercury is included in the GCS and International operating segments, respectively, and is not deductible for tax purposes. The goodwill related to Veda is included in the International operating segment and is not deductible for tax purposes. The goodwill related to the Barnett and Computersoft acquisition is included in the Workforce Solutions operating segment and is deductible for tax purposes.

(2)

The goodwill related to ID Watchdog, Inc. and Mercury is included in the GCS and International operating segments, respectively, and is not deductible for tax purposes. The goodwill related to Veda is included in the International operating segment and is not deductible for tax purposes. The goodwill related to the Barnett and Computersoft acquisition is included in the Workforce Solutions operating segment and is deductible for tax purposes.


(3)	The Veda debt of $191 million was paid in full on March 10, 2016.

The primary reasons the purchase price of these acquisitions exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, were expanded growth opportunities from new or enhanced product offerings and geographies, cost savings from the elimination of duplicative activities, and the acquisition of an assembled workforce that are not recognized as assets apart from goodwill.



	December 31,
	2017			2016
Intangible asset category	Fair value		Weighted-average useful life	Fair value		Weighted-average useful life
	(in millions)		(in years)	(in millions)		(in years)
Customer relationships	$	42.7	10.2	$	171.3	14.9
Acquired software and technology	6.5		6.5	106.3		4.2
Purchased data files	—		n/a	387.5		14.8
Non-compete agreements	—		n/a	5.4		2.1
Trade names and other intangible assets	1.8		2.9	10.5		1.0
Total acquired intangibles	$	51.0	9.5	$	681.0	12.9

Pro Forma Financial Information. The following table presents unaudited consolidated pro forma information as if our acquisition of Veda had occurred at the beginning of the earliest period presented. The pro forma amounts may not be necessarily indicative of the operating revenues and results of operations had the acquisition actually taken place at the beginning of the earliest period presented. Furthermore, the pro forma information may not be indicative of future performance.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



	Twelve months ended December 31,
	2016				2015
	As Reported		Pro Forma		As Reported		Pro Forma
	(In millions, except per share data)
Operating revenues	$	3,144.9	$	3,180.9	$	2,663.6	$	2,929.0
Net income attributable to Equifax	$	488.8	$	488.1	$	429.1	$	429.9
Net income per share (basic)	$	4.10	$	4.09	$	3.61	$	3.62
Net income per share (diluted)	$	4.04	$	4.03	$	3.55	$	3.56

The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact. These adjustments include, but are not limited to, the application of our accounting policies and depreciation and amortization related to fair value adjustments and intangible assets.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill. Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. As discussed in Note 1, goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment tests as of September 30 each year. The fair value estimates for our reporting units were determined using a combination of the income and market approaches in accordance with the Company’s methodology. Our annual impairment tests as of September 30, 2017, 2016 and 2015 resulted in no impairment of goodwill.

In the fourth quarter of 2017, we acquired Mercury, for which the acquired goodwill has been allocated to the Asia Pacific reporting unit within the International operating segment. In the third quarter of 2017, we acquired ID Watchdog, Inc., for which the acquired goodwill has been allocated to the Global Consumer Solutions reporting unit and operating segment.

In the first quarter of 2016, we acquired Veda, which operates primarily in Australia and New Zealand. We have included Veda's operations within a newly-created Asia Pacific reporting unit within the International operating segment. Additionally, we moved the TDX Australia and India operations that were included in our Europe reporting unit to the Asia Pacific reporting unit to align with how we manage our business. Our financial results for the year ended December 31, 2015, reflect our new organizational structure. Lastly in 2016, we have renamed our Personal Solutions operating segment Global Consumer Solutions.

To reflect this new organizational structure, we reallocated goodwill from the Europe reporting unit to the Asia Pacific reporting unit based on the relative fair values of the respective portions of Europe. A change in reporting units requires that goodwill be tested for impairment. During 2016, we performed goodwill impairment tests prior to and following the reallocation of goodwill, which resulted in no impairment.

In the third quarter of 2016, we acquired Barnett and Computersoft for which the acquired goodwill has been allocated between the Verification Services and Employer Services reporting units within the Workforce Solutions operating segment.

In 2015, the personal solutions business in the United Kingdom was consolidated into the North America Global Consumer Solutions operating segment, which was reorganized into the Global Consumer Solutions operating segment. Additionally in 2015, the direct to consumer reseller businesses in the U.S., Canada, and the United Kingdom were also consolidated into the Global Consumer Solutions operating segment. These changes were driven by an enterprise wide strategy to maximize the penetration of our products and services in our targeted markets. We determined that market focus and operating efficiency could be further improved by reorganizing and consolidating the United States, Canada and the United Kingdom Global Consumer Solutions and direct to consumer reseller operating activities into one segment, Global Consumer Solutions.

To reflect this new organizational structure, we reallocated goodwill from the USIS, Canada, and Europe reporting units to the Global Consumer Solutions reporting unit based on the relative fair values of the respective portions of USIS, Canada, and Europe. A change in reporting units requires that goodwill be tested for impairment. During 2015, we performed

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

goodwill impairment tests prior to and following the reallocation of goodwill for USIS, Canada, Europe and Global Consumer Solutions, which resulted in no impairment.

Changes in the amount of goodwill for the twelve months ended December 31, 2017 and 2016, are as follows:



	U.S. Information Solutions		International			Workforce Solutions			Global Consumer Solutions			Total
	(In millions)
Balance, December 31, 2015	$	1,071.3	$	441.5		$	907.6		$	150.6		$	2,571.0
Acquisitions	—		1,411.6			44.7			—			1,456.3
Adjustments to initial purchase price allocation	—		(6.2		)	(0.2		)	—			(6.4		)
Foreign currency translation	—		(32.3		)	—			(14.3		)	(46.6		)
Balance, December 31, 2016	1,071.3		1,814.6			952.1			136.3			3,974.3
Acquisitions	—		43.9			—			48.5			92.4
Adjustments to initial purchase price allocation	—		1.0			—			—			1.0
Foreign currency translation	—		109.9			—			6.4			116.3
Balance, December 31, 2017	$	1,071.3	$	1,969.4		$	952.1		$	191.2		$	4,184.0

Indefinite-Lived Intangible Assets. Indefinite-lived intangible assets consist of indefinite-lived reacquired rights representing the value of rights which we had granted to various affiliate credit reporting agencies that were reacquired in the U.S. and Canada. At the time we acquired these agreements, they were considered perpetual in nature under the accounting guidance in place at that time and, therefore, the useful lives are considered indefinite. Indefinite-lived intangible assets are not amortized. We are required to test indefinite-lived intangible assets for impairment annually and whenever events or circumstances indicate that there may be an impairment of the asset value. We perform our annual indefinite-lived intangible asset impairment test as of September 30. Our 2017 annual impairment test completed during the third quarter of 2017 resulted in no impairment of indefinite-lived intangible assets.



	Amount
	(In millions)
Balance, December 31, 2015	$	94.7
Foreign currency translation	0.1
Balance, December 31, 2016	94.8
Foreign currency translation	0.2
Balance, December 31, 2017	$	95.0

Purchased Intangible Assets. Purchased intangible assets, net, recorded on our Consolidated Balance Sheets at December 31, 2017 and 2016, are as follows:



	December 31, 2017							December 31, 2016
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Definite-lived intangible assets:	(In millions)
Purchased data files	$	955.7	$	(262.2	)	$	693.5	$	1,012.7	$	(276.0	)	$	736.7
Acquired software and technology	142.3		(66.6		)	75.7		131.5		(36.1		)	95.4
Customer relationships	772.4		(326.7		)	445.7		712.7		(273.0		)	439.7
Reacquired rights	73.3		(65.6		)	7.7		73.3		(52.5		)	20.8
Proprietary database	22.1		(8.7		)	13.4		21.5		(6.7		)	14.8
Non-compete agreements	14.1		(12.7		)	1.4		26.8		(22.2		)	4.6
Trade names and other intangible assets	20.2		(10.6		)	9.6		54.1		(42.3		)	11.8
Total definite-lived intangible assets	$	2,000.1	$	(753.1	)	$	1,247.0	$	2,032.6	$	(708.8	)	$	1,323.8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amortization expense related to purchased intangible assets was $172.2 million, $176.5 million, and $122.3 million during the twelve months ended December 31, 2017, 2016, and 2015, respectively.

Estimated future amortization expense related to definite-lived purchased intangible assets at December 31, 2017 is as follows:



Years ending December 31,	Amount
	(In millions)
2018	$	149.7
2019	130.1
2020	123.6
2021	105.9
2022	99.9
Thereafter	637.8
	$	1,247.0

DEBT

Debt outstanding at December 31, 2017 and 2016 was as follows:



	December 31,
	2017			2016
	(In millions)

Commercial paper ("CP")	$	562.6		$	310.3
Revolver	100.0			—
Notes, 6.30%, due July 2017	—			272.5
Term loan, due Nov 2018	400.0			450.0
Notes, 2.30%, due June 2021	500.0			500.0
Notes, 3.30%, due Dec 2022	500.0			500.0
Notes, 3.25%, due June 2026	275.0			275.0
Debentures, 6.90%, due July 2028	125.0			125.0
Notes, 7.00%, due July 2037	250.0			250.0
Other	2.7			2.6
Total debt	2,715.3			2,685.4
Less short-term debt and current maturities	(965.3		)	(585.4		)
Less unamortized discounts and debt issuance costs	(11.0		)	(13.2		)
Total long-term debt, net of discount	$	1,739.0		$	2,086.8

Scheduled future maturities of debt at December 31, 2017, are as follows:



Years ending December 31,	Amount
	(In millions)
2018	$	965.3
2019	—
2020	100.0
2021	500.0
2022	500.0
Thereafter	650.0
Total debt	$	2,715.3

Senior Credit Facilities. We are party to a $900.0 million five-year unsecured revolving credit facility (the "Revolver") and the previously described Term Loan (the Revolver and Term Loan collectively, the "Senior Credit Facilities"), with a group of financial institutions. The Revolver also has an accordion feature that allows us to request an increase in the total commitment to $1.2 billion. Borrowings may be used for general corporate purposes, including working capital, capital expenditures, acquisitions and share repurchase programs. The Revolver and the Term Loan are scheduled to expire on November 21, 2020 and November 21, 2018, respectively. The Revolver includes an option to request a maximum of two one-year extensions of the maturity date. Availability of the Senior Credit Facility for borrowings is reduced by the outstanding principal balance of our commercial paper notes and by any letters of credit issued under the facility. As of December 31, 2017, there were $100 million in outstanding borrowings on our Revolver.

We were also a party to an $800.0 million 364-Day revolving credit facility. On May 16, 2016 we repaid all outstanding borrowings of $475.0 million and terminated the 364-Day Revolver using a portion of the net proceeds from the issuance of the senior notes discussed below.

Under the Senior Credit Facilities, the Company must comply with various financial and non-financial covenants. The financial covenants require the Company to maintain a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA (as set forth in the Senior Credit Facilities) for the preceding four quarters, of not more than 3.5 to 1.0. The Company may, subject to the terms of the Senior Credit Facilities, increase the covenant by 0.5 (i.e. to 4.0 to 1.0) for a four consecutive fiscal quarter period following a material acquisition. 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. Compliance with this financial covenant is tested quarterly. The non-financial covenants include limitations on liens, subsidiary debt, mergers, liquidations, asset dispositions and acquisitions. As of December 31, 2017, we were in compliance with our covenants under the Senior Credit Facilities. Our borrowings under these facilities, which have not been guaranteed by any of our subsidiaries, are unsecured and will rank on parity in right of payment with all of our other unsecured and unsubordinated indebtedness from time to time outstanding.

At December 31, 2017, interest was payable on borrowings under the Senior Credit Facilities at the base rate or London Interbank Offered Rate, or LIBOR, plus a specified margin. The specified margin and the annual unused fee, which we pay on the unused portion of the Revolver, are subject to adjustment based on our debt ratings. As of December 31, 2017, we had $15.5 million of letters of credit outstanding under our Senior Credit Facility. As of December 31, 2017, $221.9 million was available for borrowings under the Senior Credit Facilities and there were $100.0 million in outstanding borrowings under the Revolver.

Commercial Paper Program. The Company's $900.0 million CP program has been established through the private placement of CP notes from time to time, in which borrowings bear interest at either a variable rate (based on LIBOR or other benchmarks) or a fixed rate, with the applicable rate and margin. Maturities of CP can range from overnight to 397 days. Because the CP program is backstopped by the Revolver, the amount of CP which may be issued under the program is reduced by the outstanding face amount of any letters of credit issued under the facility and, pursuant to our existing Board of Directors authorization, by the outstanding borrowings under our Senior Credit Facility. At December 31, 2017, there were $562.6 million CP notes outstanding, all with maturities of less than 90 days.

Receivables Funding Facility. In the fourth quarter of 2017, Equifax entered into a $225.0 million, 2-year receivables funding facility (the "Receivables Facility"), which matures in 2019. Under the Receivables Facility, Equifax and certain of its U.S. subsidiaries sell the eligible third-party receivables of its U.S. based business, to Equifax Receivables Funding LLC, a consolidated, wholly-owned, bankruptcy-remote subsidiary that may subsequently transfer, without recourse, an undivided interest in these accounts receivable to investors. The investors have no recourse to the Company’s other assets except for customary repurchase, warranty and indemnity claims. Creditors of Equifax do not have recourse to the assets of Equifax Receivables Funding LLC. The Receivables Facility contains standard representations, warranties and covenants made by Equifax and its U.S. subsidiaries in connection with the sale of the receivables, and any repurchase, warranty or indemnity obligations of the U.S. subsidiaries in connection with the sale of the receivables (but no obligations of Equifax Receivables Funding LLC) are guaranteed by Equifax.

There were no borrowings under the Receivables Facility at December 31, 2017. The Receivables Facility was supported by $204.3 million of accounts receivable as collateral at December 31, 2017 which, as a retained interest, is included in accounts receivable, net in our Consolidated Balance Sheets.

The outstanding amount the Company is allowed to maintain under the Receivables Facility, with a maximum of $225 million, may fluctuate based on the availability of eligible receivables and is directly affected by business volumes and credit

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

risks, including receivables payment quality measures such as default and dilution ratios. If default or dilution ratios increase one percent, the allowable outstanding amount under the Receivables Facility would not materially change.

Interest is payable on borrowings under the Receivables Facility at the base rate or LIBOR plus a specified margin. The specified margin and the monthly unused fee, which we pay on the unused portion of the Receivables Facility, are subject to adjustment based on our debt ratings. The costs of the Receivables Facility are included in interest expense and were not material in 2017.

2.3% and 3.25% Senior Notes. 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.

6.3% and 7.0% Senior Notes. On June 28, 2007, we issued $300.0 million principal amount of 6.3%, ten-year senior notes and $250.0 million principal amount of 7.0%, thirty-year senior notes in underwritten public offerings. Interest is payable semi-annually in arrears on January 1 and July 1 of each year. The net proceeds of the financing were used to repay short-term indebtedness, a substantial portion of which was incurred in connection with our acquisition of TALX. We must comply with various non-financial covenants, including certain limitations on liens, additional debt and mortgages, mergers, asset dispositions and sale-leaseback arrangements. The senior notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness. On July 3, 2017 we repaid our July 2017 Senior Notes using the proceeds of commercial paper.

3.3% Senior Notes. On December 17, 2012, we issued $500.0 million principal amount of 3.3%, ten-year senior notes in an underwritten public offering. Interest is payable semi-annually in arrears on December 15 and June 15 of each year. The net proceeds of the sale of the notes were used to partially finance the acquisition of CSC Credit Services in December 2012. We must comply with various non-financial covenants, including certain limitations on liens, additional debt and mortgages, mergers, asset dispositions and sale-leaseback arrangements. The senior notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

6.9% Debentures. We have $125.0 million of debentures outstanding with a maturity date of 2028. The debentures are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness.

Cash paid for interest was $96.9 million, $85.0 million and $61.6 million during the twelve months ended December 31, 2017, 2016 and 2015, respectively.

COMMITMENTS AND CONTINGENCIES

Cybersecurity Incident. In fiscal 2017, we experienced a cybersecurity incident following a criminal attack on our systems that involved the theft of certain personally identifiable information of U.S., Canadian and U.K. consumers. Criminals exploited a U.S. website application vulnerability to gain unauthorized access to our network. Based on our forensic investigation, the unauthorized access occurred from mid-May through July 2017. The information accessed primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. In addition, credit card numbers for approximately 209,000 U.S. and Canadian consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers, were accessed. The investigation determined that personal information of approximately 19,000 Canadian consumers was impacted and approximately 860,000 potentially affected U.K. consumers were contacted regarding access to personal information.

As a result of an ongoing analysis of data stolen in the 2017 cybersecurity incident, the Company recently announced that it has identified approximately 2.4 million U.S. consumers whose name and partial driver's license information were stolen, but who were not in the affected population of approximately 145.5 million consumers previously identified by the Company in 2017. The Company is in the process of notifying these additional consumers.

Upon discovery of the unauthorized access, we acted immediately to stop the intrusion and promptly engaged a leading, independent cybersecurity firm to conduct a comprehensive forensic investigation to determine the scope of the intrusion, including the specific data potentially impacted. The forensic investigation of the consumers potentially impacted by

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the cybersecurity incident was completed in the fourth quarter of 2017. We also reported the criminal access to law enforcement and continue to cooperate with law enforcement in connection with the criminal investigation into the actors responsible for the cybersecurity incident.

Expenses Incurred. Through December 31, 2017, the Company recorded $113.3 million of pretax expenses related to the cybersecurity incident. We have included $14.2 million of these expenses in Cost of services and $99.1 million in Selling, general and administrative expenses in the accompanying Consolidated Statements of Income for the year ended December 31, 2017. Expenses include costs to investigate and remediate the cybersecurity incident and legal and other professional services related thereto, all of which were expensed as incurred.

Product Liability. Additionally, as a result of the cybersecurity incident, we offered free credit file monitoring and identity theft protection to all U.S. consumers. We have recorded the expenses necessary to provide this service to those who signed up. We have recorded $50.7 million through December 31, 2017 included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Income.

Litigation, Claims and Government Investigations. As a result of the cybersecurity incident, we are subject to a significant number of proceedings and investigations. Following the 2017 cybersecurity incident, hundreds of class actions were filed by consumers against us in federal, state and Canadian courts relating to the cybersecurity incident. The plaintiffs in these cases, who purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by Equifax in connection with the cybersecurity incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief and other related relief. In addition, certain class actions have been filed by financial institutions who allege their businesses have been placed at risk due to the cybersecurity incident and generally assert various common law claims such as claims for negligence and breach of contract, as well as, in some cases, statutory claims. The financial institutions class actions seek compensatory damages and other related relief. Furthermore, a lawsuit has been filed by the City of Chicago with respect to the cybersecurity incident alleging violations of state laws and local ordinances governing protection of personal data, consumer fraud and breach notice requirements and business practices. Beginning on December 6, 2017 and pursuant to multiple subsequent orders, the U.S. Judicial Panel on Multidistrict Litigation ordered the consolidation and transfer for pre-trial proceedings with respect to the U.S. cases pending in federal court discussed above to the Northern District of Georgia as the single U.S. District Court for centralized proceedings. Based on this order, consolidated pre-trial hearings with respect to U.S. consumer and financial institution federal class actions related to the cybersecurity incident have begun in the Northern District of Georgia. In addition to these federal court proceedings, four putative class actions arising from the cybersecurity incident have been filed in the Fulton County Superior Court in Georgia. We have also appeared or notified the appropriate parties of representation in the Canadian class actions, but such actions are all at the preliminary stages. In addition, a civil enforcement action has been filed by the Attorney General of Massachusetts and a lawsuit has been filed by the City of San Francisco, each of which are in the initial pre-trial stages. We dispute the allegations in the complaints described above and intend to defend against such claims.

In addition, we continue to cooperate with federal, state, city and foreign governmental agencies and officials investigating or otherwise seeking information and/or documents, including through Civil Investigative Demands, regarding the cybersecurity incident and related matters, including 49 state Attorneys General offices, as well as the District of Columbia, the Federal Trade Commission, the Consumer Finance Protection Bureau, the U.S. Securities and Exchange Commission (“SEC”), the U.S. Department of Justice, the New York Department of Financial Services, the New York Department of State - Division of Consumer Protection, other U.S. state regulators, including state banking regulators, the Financial Industry Regulatory Authority, certain Congressional committees of both the U.S. Senate and House of Representatives, the United Kingdom’s Financial Conduct Authority (“FCA”), the Information Commissioner’s Office in the United Kingdom and the Office of the Privacy Commissioner of Canada. Although we are actively cooperating with these investigations and inquiries, an adverse outcome to any such investigations and inquiries could subject us to fines or other obligations, which may have an adverse effect on how we operate our business or our results of operations. In addition, we continue to cooperate with the SEC and the U.S. Attorney’s Office for the Northern District of Georgia regarding investigations into the trading activities by certain of our employees in relation to the cybersecurity incident.

TransUnion Litigation. On November 27, 2017, Trans Union LLC and TransUnion Interactive, Inc. (collectively, “TransUnion”) filed a lawsuit in the U.S. District Court for the Northern District of Illinois against Equifax Information Services LLC, Equifax Inc., and Equifax Consumer Services LLC f/k/a Equifax Consumer Services, Inc. In its lawsuit, TransUnion asserts claims for declaratory relief, breach of contract, and anticipatory repudiation of contract based on our Reciprocal Data Supply Agreement (the “Agreement”), which sets forth the pricing terms for credit monitoring supplied by the parties to each other. TransUnion seeks a declaration regarding its contractual rights under the Agreement and monetary damages. On January 26, 2018, we moved to dismiss TransUnion’s claims, and discovery in the case has been stayed until a ruling on that motion is issued. We dispute the allegations by TransUnion and intend to defend against its claims.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities Class Action Litigation. A consolidated putative class action lawsuit alleging violations of the federal securities laws in connection with statements regarding our cybersecurity systems and controls is pending against us and certain of our current and former officers and directors in the Northern District of Georgia. The complaints seek certification of a class of all persons who purchased or otherwise acquired Equifax securities during a set period of time and unspecified monetary damages, costs and attorneys’ fees. We dispute the allegations in these complaints and intend to defend against the claims.

Shareholder Derivative Litigation. Four putative shareholder derivative lawsuits have been commenced in the Northern District of Georgia naming certain of our current and former officers and directors as defendants and naming us as a nominal defendant. Among other things, the complaints allege claims for breaches of fiduciary duties, unjust enrichment, corporate waste, and insider selling by certain defendants. Three of the complaints also allege claims for violations of certain federal securities laws. The Complaints seek unspecified damages on behalf of the Company, plus certain equitable relief. Certain plaintiffs have filed motions seeking consolidation of the actions and appointment as lead plaintiffs. We have appointed a committee of independent directors empowered to evaluate and respond in our best interests to the claims and related litigation demands.

While we believe it is reasonably possible that we will incur losses associated with these proceedings and investigations, it is not possible to estimate the amount of loss or range of possible loss that might result from adverse judgments, settlements, penalties or other resolution of such proceedings and investigations based on the early stage of these proceedings and investigations, that alleged damages have not been specified, the uncertainty as to the certification of a class or classes and the size of any certified class, as applicable, and the lack of resolution on significant factual and legal issues. The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. The Company believes that the ultimate amount paid on these actions, claims and investigations could be material to the Company’s consolidated financial condition, results of operations, or cash flows in future periods.

Additional lawsuits and claims related to the 2017 cybersecurity incident may be asserted by or on behalf of consumers, customers, shareholders or others seeking damages or other related relief and additional inquiries from governmental agencies may be received or investigations by governmental agencies commenced.

Future Costs. We expect to incur significant legal and other professional services expenses associated with the cybersecurity incident in future periods. We will recognize these expenses as services are received. Costs related to the cybersecurity incident that will be incurred in future periods will also include increased expenses and capital investments for IT and security. We expect to incur increased expenses for insurance, finance, compliance activities, and to meet increased legal and regulatory requirements. We will also incur increased costs to provide free services to consumers including increased customer support costs.

Insurance Coverage. We maintain $125 million of cybersecurity insurance coverage, above a $7.5 million deductible, to limit our exposure to losses such as those related to the cybersecurity incident. As of December 31, 2017, the Company has recorded a receivable of $35.0 million and received payments of $15 million for costs incurred to date that are reimbursable and probable of recovery under our insurance coverage.

At December 31, 2017, accrued liabilities and insurance receivable related to the cybersecurity incident consisted of the following:



	Accrued Liabilities			Insurance Receivable
	(In millions)
(Expenses incurred) insurance receivable recorded	$	(164.0	)	$	50.0
Payments made (received)	88.4			(15.0		)
Balance at December 31, 2017	$	(75.6	)	$	35.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leases. Our operating leases principally involve office space and office equipment. Rental expense for operating leases, which is recognized on a straight-line basis over the lease term, was $34.5 million, $29.1 million and $24.2 million for the twelve months ended December 31, 2017, 2016 and 2015, respectively. Our headquarters building ground lease has purchase options exercisable beginning in 2019, renewal options exercisable in 2048 and escalation clauses that began in 2009. Expected future minimum payment obligations for non-cancelable operating leases exceeding one year are as follows as of December 31, 2017:



Years ending December 31,	Amount
	(In millions)
2018	$	27.3
2019	19.9
2020	19.0
2021	15.5
2022	13.1
Thereafter	55.2
	$	150.0

We have no material sublease agreements and as a result, expected sublease income is not reflected as a reduction in the total minimum rental obligations under operating leases in the table above.

Data Processing, Outsourcing Services and Other Agreements. We have separate agreements with IBM, Tata Consultancy Services, Fidelity Information Services, and others to outsource portions of our computer data processing operations, applications development, business continuity and recovery services, help desk service and desktop support functions, operation of our voice and data networks, maintenance and related functions and to provide certain other administrative and operational services. The agreements expire between 2018 and 2022. The estimated aggregate minimum contractual obligation remaining under these agreements is approximately $125 million as of December 31, 2017, with no future year’s minimum contractual obligation expected to exceed approximately $85 million. Annual payment obligations in regard to these agreements vary due to factors such as the volume of data processed; changes in our servicing needs as a result of new product offerings, acquisitions or divestitures; the introduction of significant new technologies; foreign currency; or the general rate of inflation. In certain circumstances (e.g., a change in control or for our convenience), we may terminate these data processing and outsourcing agreements, and, in doing so, certain of these agreements require us to pay significant termination fees.

Under our agreement with IBM (which covers our operations in North America and Europe), we have outsourced certain of our mainframe and midrange operations, help desk service and desktop support functions, and the operation of our voice and data networks. The scope of services provided by IBM, and the term of our agreement with respect to such services, varies by geography and location. The estimated future minimum contractual obligation under the revised North America (US and Canada) and Europe (UK and Spain) agreements is approximately $48 million for the remaining term, with no individual year's minimum expected to exceed approximately $24 million. We may terminate certain portions of this agreement without penalty in the event that IBM is in material breach of the terms of the agreement. During 2017, 2016 and 2015, we paid approximately $40 million, $45 million and $50 million, respectively, for these services.

Change in Control Agreements. We have entered into change in control severance agreements with certain key executives. The agreements provide for, among other things, certain payments and benefits in the event of a qualifying termination of employment (i.e., termination of employment by the executive for “good reason” or termination of employment by the Company without “cause,” each as defined in the agreements) following a change in control of the Company. In the event of a qualifying termination, the executive will become entitled to continuation of group health, dental, vision, life, disability, 401(k) and similar benefits for two or three years, depending on the eligibility, as well as a lump sum severance payment, all of which differs by executive.

The change in control agreements have a three-year term and automatically renew for another three years unless we elect not to renew the agreements. Change in control events potentially triggering benefits under the agreements would occur, subject to certain exceptions, if (1) any person acquires 20% or more of our voting stock; (2) upon a merger or other business combination, our shareholders receive less than two-thirds of the common stock and combined voting power of the new company; (3) we sell or otherwise dispose of all or substantially all of our assets; or (4) we liquidate or dissolve.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

If these change in control agreements had been triggered as of December 31, 2017, payments of approximately $45.9 million would have been made (excluding tax gross-up amounts of $10.3 million). Under the Company’s existing director and employee stock benefit plans, a change in control generally would result in the immediate vesting of all outstanding stock options and satisfaction of the restrictions on any outstanding nonvested stock awards. With respect to unvested performance based share awards dependent upon the Company’s three-year relative total shareholder return, if at least one calendar year of performance during the performance period has been completed prior to the change in control event, the awards will be paid out based on the Company’s performance at that time; otherwise the payout of shares will be at 100% of the target award. For awards granted in 2017, the vesting described above occurs only if the awards are not assumed or continued in the change in control transaction or if the executive incurs a qualifying termination in connection with the change in control.

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 is not material at December 31, 2017 and all have a remaining maturity of one year or less. We may issue other guarantees in the ordinary course of business. The maximum potential future payments we could be required to make under the guarantees is not material at December 31, 2017. We have agreed to guarantee the liabilities and performance obligations (some of which have limitations) of a certain debt collections and recovery management VIE under its commercial agreements. We cannot reasonably estimate our potential future payments under the guarantees and related provisions described above because we cannot predict when and under what circumstances these provisions may be triggered. We had no accruals related to guarantees on our Consolidated Balance Sheets at December 31, 2017.

General Indemnifications. We are the lessee under many real estate leases. It is common in these commercial lease transactions for us, as the lessee, to agree to indemnify the lessor and other related third parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at or in connection with the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence and their willful misconduct.

Certain of our credit agreements include provisions which require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these credit agreements, we also bear the risk of certain changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes.

In conjunction with certain transactions, such as sales or purchases of operating assets or services in the ordinary course of business, or the disposition of certain assets or businesses, we sometimes provide routine indemnifications, the terms of which range in duration and sometimes are not limited.

The Company has entered into indemnification agreements with its directors and executive officers. Under these agreements, the Company has agreed to indemnify such individuals to the fullest extent permitted by law against liabilities that arise by reason of their status as directors or officers and to advance expenses incurred by such individuals in connection with the related legal proceedings. The Company maintains directors and officers liability insurance coverage to reduce its exposure to such obligations.

We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict when and under what circumstances these provisions may be triggered. We have no accrual related to indemnifications on our Consolidated Balance Sheets at December 31, 2017 and 2016.

Subsidiary Dividend and Fund Transfer Limitations. The ability of some of our subsidiaries and associated companies to transfer funds to us is limited, in some cases, by certain restrictions imposed by foreign governments, which do not, individually or in the aggregate, materially limit our ability to service our indebtedness, meet our current obligations or pay dividends.

Contingencies. We are involved in legal proceedings, claims and litigation arising in the ordinary course of business. We periodically assess our exposure related to these matters based on the information which is available. We have recorded accruals in our Consolidated Financial Statements for those matters in which it is probable that we have incurred a loss and the amount of the loss, or range of loss, can be reasonably estimated.

Although the final outcome of these matters cannot be predicted with certainty, any possible adverse outcome arising from these matters is not expected to have a material impact on our Consolidated Financial Statements, either individually or in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the aggregate. However, our evaluation of the likely impact of these matters may change in the future. We accrue for unpaid legal fees for services performed to date.

INCOME TAXES

The provision for income taxes consisted of the following:



	Twelve Months Ended December 31,
	2017			2016			2015
	(In millions)
Current:
Federal	$	107.8		$	154.8		$	159.0
State	13.2			24.3			14.7
Foreign	71.7			67.0			56.8
	192.7			246.1			230.5
Deferred:
Federal	(19.2		)	16.5			(7.5		)
State	1.3			2.8			(9.3		)
Foreign	(26.2		)	(32.3		)	(11.9		)
	(44.1		)	(13.0		)	(28.7		)
Provision for income taxes	$	148.6		$	233.1		$	201.8

Domestic and foreign income before income taxes was as follows:



	Twelve Months Ended December 31,
	2017		2016			2015
	(In millions)
U.S.	$	711.1	$	739.6		$	607.6
Foreign	35.5		(11.4		)	29.0
	$	746.6	$	728.2		$	636.6

The provision for income taxes reconciles with the U.S. federal statutory rate, as follows:



	Twelve Months Ended December 31,
	2017			2016			2015
	(In millions)
Federal statutory rate	35.0		%	35.0		%	35.0		%

Provision computed at federal statutory rate	$	261.3		$	254.9		$	222.8
State and local taxes, net of federal tax benefit	13.3			17.2			5.2
Foreign	(41.9		)	(40.3		)	(21.8		)
Tax Cuts and Jobs Act of 2017	(48.3		)	—			—
Equity compensation	(26.7		)	—			—
Tax reserves	2.5			11.9			0.9
Other	(11.6		)	(10.6		)	(5.3		)
Provision for income taxes	$	148.6		$	233.1		$	201.8

Effective income tax rate	19.9		%	32.0		%	31.7		%

We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

income tax bases of assets and liabilities. For additional information about our income tax policy, see Note 1 of the Notes to Consolidated Financial Statements.

Components of the deferred income tax assets and liabilities at December 31, 2017 and 2016, were as follows:



	December 31,
	2017			2016
	(In millions)
Deferred income tax assets:
Net operating and capital loss carryforwards	$	279.9		$	213.2
Goodwill and intangible assets	129.3			113.8
Employee compensation programs	33.1			51.6
Foreign tax credits	17.6			56.9
Employee pension benefits	40.8			70.6
Reserves and accrued expenses	23.8			18.5
Research and development costs	26.7			13.7
Other	8.7			21.0
Gross deferred income tax assets	559.9			559.3
Valuation allowance	(401.8		)	(307.3		)
Total deferred income tax assets, net	158.1			252.0

Deferred income tax liabilities:
Goodwill and intangible assets	(387.6		)	(507.0		)
Undistributed earnings of foreign subsidiaries	(7.6		)	(30.1		)
Depreciation	(41.5		)	(22.1		)
Other	(20.6		)	(13.5		)
Total deferred income tax liability	(457.3		)	(572.7		)
Net deferred income tax liability	$	(299.2	)	$	(320.7	)

Our deferred income tax assets and deferred income tax liabilities at December 31, 2017 and 2016, are included in the accompanying Consolidated Balance Sheets as follows:



	December 31,
	2017			2016
	(In millions)
Long-term deferred income tax assets, included in other assets	$	5.9		$	4.7
Long-term deferred income tax liabilities	(305.1		)	(325.4		)
Net deferred income tax liability	$	(299.2	)	$	(320.7	)

We record deferred income taxes on the temporary differences of our foreign subsidiaries and branches, except for the temporary differences related to undistributed earnings of subsidiaries which we consider indefinitely invested. As of December 31, 2017, we have indefinitely invested $85.7 million attributable to pre-2004 undistributed earnings of our Canadian and Chilean subsidiaries. If the pre-2004 earnings were not considered indefinitely invested, $6.4 million of deferred withholding tax liability would have been provided. Further we are permanently invested with respect to the original investment in foreign subsidiaries. Therefore, we have not provided the deferred tax assets on the outside basis of these subsidiaries as we have no intent to sell or divest of these subsidiaries. Cumulative undistributed earnings were subject to a transition tax as a result of the Tax Act which we estimated to be zero. However, the Company has provided for local country withholding taxes related to these earnings.

At December 31, 2017, we had U.S. federal and state net operating loss carryforwards of $69.8 million which will expire at various times between 2018 and 2037. We also had foreign net operating loss carryforwards totaling $947.2 million of which $11.0 million will expire between 2018 and 2037 and the remaining $936.2 million will carryforward indefinitely.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign capital loss carryforwards of $16.7 million may be carried forward indefinitely, and state capital loss carryforwards of $2.5 million will expire in 2018. We had foreign tax credit carryforwards of $17.6 million which will expire in the years 2025 through 2026. Additionally, we had U.S. and foreign research and development credit carryforwards of $26.7 million. The U.S. credits expire between 2018 through 2029 and the foreign credits have an indefinite expiration period. The deferred tax asset related to the net operating loss, capital loss carryforwards, foreign tax credit carryforwards, and research and development credit is $324.2 million of which $270.9 million has been fully reserved in the deferred tax valuation allowance.

Cash paid for income taxes, net of amounts refunded, was $215.7 million, $173.4 million and $202.9 million during the twelve months ended December 31, 2017, 2016 and 2015, respectively.

We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes on our Consolidated Statements of Income.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	2017			2016
	(In millions)
Beginning balance (January 1)	$	32.5		$	21.6
Increases related to prior year tax positions	0.6			4.1
Decreases related to prior year tax positions	(5.6		)	(1.0		)
Increases related to current year tax positions	13.1			12.8
Decreases related to settlements	(0.3		)	(1.0		)
Expiration of the statute of limitations for the assessment of taxes	(5.8		)	(3.9		)
Currency translation adjustment	0.5			(0.1		)
Ending balance (December 31)	$	35.0		$	32.5

We recorded liabilities of $38.0 million and $36.0 million for unrecognized tax benefits as of December 31, 2017 and 2016, respectively, which included interest and penalties of $3.0 million and $3.5 million, respectively. As of December 31, 2017 and 2016, the total amount of unrecognized benefits that, if recognized, would have affected the effective tax rate was $35.7 million and $33.3 million, respectively, which included interest and penalties of $2.6 million and $2.8 million, respectively. During 2017 and 2016 interest and penalties of $1.4 million and $1.1 million respectively were accrued.

Equifax and its subsidiaries are subject to U.S. federal, state and international income taxes. We are generally no longer subject to federal, state or international income tax examinations by tax authorities for years before 2013. Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that Equifax’s gross unrecognized tax benefit balance may change within the next twelve months by a range of zero to $18.3 million.

The Tax Cuts and Jobs Act of 2017 (“Tax Act”), as signed by the President of the United States on December 22, 2017, significantly revises U.S. tax law. The legislation will positively impact the Company’s ongoing effective tax rate due to the reduction of the U.S. federal corporate tax rate from 35% to 21%. The Tax Act makes major changes to the U.S. international tax system. Under previous law, foreign earnings were subject to U.S. tax when repatriated to the U.S. Under the Tax Act, foreign earnings are generally exempt from U.S. tax. Additionally, there is a one-time deemed repatriation tax on undistributed foreign earnings and profits (the “transition tax”). The Tax Act imposes other U.S. taxes on “global intangible low taxed income” and “base erosion anti-abuse transactions.” Other significant changes include limitations on the deductibility of interest expense and executive compensation, and repeal of the deduction for domestic production activities. As a result of the current interpretation and estimated impact of the Tax Act, the Company recorded adjustments totaling a net tax benefit of $48.3 million in the fourth quarter of 2017 to provisionally account for the estimated impact.

Our preliminary estimate of the tax rate change resulted in a remeasurement of our net deferred tax liabilities of $85.1 million and a corresponding deferred income tax benefit in 2017. Our federal income tax expense for periods beginning in 2018 will be based on the new rate.

As a result of the changes the Tax Act makes to the taxation of foreign earnings, we recorded a valuation allowance related to the foreign tax credit carryover in the amount of $17.6 million. Based on our initial estimates, the Company recorded zero transition tax related to the Tax Act. However, the Company recognized additional tax expense of $16.4 million due to the inability to claim foreign tax credits in the current year.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As permitted by Staff Accounting Bulletin No. 118, provisional amounts estimated based on information available as of December 31, 2017 have been made for the adjustments to deferred tax assets and liabilities, state taxes, equity compensation, the calculation of the transition tax, the valuation allowance related to the foreign tax credit carryover and the 2017 dividends. These amounts are subject to change as we obtain information necessary to complete the calculations and clarifications to the U.S. tax code as they occur. We will recognize any changes to the provisional amounts as we refine our estimates and our interpretations of the application of the 2017 Tax Act.

The Company has not yet made a policy election with respect to its treatment of potential global intangible low-taxed income (“GILTI”). Companies can either account for taxes on GILTI as incurred or recognize deferred taxes when basis differences exist that are expected to affect the amount of the GILTI inclusion upon reversal. The Company is still in the process of analyzing the provisions of the Act associated with GILTI and the expected impact of GILTI on the Company in the future.

STOCK-BASED COMPENSATION

We have one active share-based award plan, the amended and restated 2008 Omnibus Incentive Plan. This plan was originally approved by our shareholders in 2008 and was amended and restated with shareholder approval in May 2013 to, among other things, increase the reserve for awards under the plan by 11 million shares. The plan provides our directors, officers and certain key employees with stock options, restricted stock units and performance share awards. The plan is described below. We expect to issue common shares held as either treasury stock or new issue shares upon the exercise of stock options or once shares vest pursuant to restricted stock units or performance share awards. Total stock-based compensation expense in our Consolidated Statements of Income during the twelve months ended December 31, 2017, 2016 and 2015, was as follows:



	Twelve Months Ended December 31,
	2017		2016		2015
	(In millions)
Cost of services	$	7.2	$	4.5	$	5.0
Selling, general and administrative expenses	31.1		32.6		33.4
Stock-based compensation expense, before income taxes	$	38.3	$	37.1	$	38.4

The total income tax benefit recognized for stock-based compensation expense was $13.7 million, $13.3 million and $13.7 million for the twelve months ended December 31, 2017, 2016 and 2015, respectively.

In conjunction with the adoption of ASU 2016-09, windfall tax benefits are to be presented as cash flows from operating activities on a prospective basis. As a result, we classified $26.7 million as cash flows from operating activities for the year ended December 31, 2017. Previous guidance required benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow. This requirement reduced operating cash flows and increased financing cash flows by $35.9 million and $30.0 million for the twelve months ended December 31, 2016 and 2015, respectively.

Stock Options. The 2008 Omnibus Incentive Plan provides that qualified and nonqualified stock options may be granted to officers and other employees. In conjunction with our acquisition of TALX, we assumed options outstanding under the legacy TALX stock option plan, which was approved by TALX shareholders. The 2008 Omnibus Incentive Plan requires that stock options be granted at exercise prices not less than market value on the date of grant. Generally, stock options are subject to graded vesting for periods of up to three years based on service, with 33% vesting for each year of completed service, and expire ten years from the grant date.

We use the binomial model to calculate the fair value of stock options granted on or after January 1, 2006. The binomial model incorporates assumptions regarding anticipated employee exercise behavior, expected stock price volatility, dividend yield and risk-free interest rate. Anticipated employee exercise behavior and expected post-vesting cancellations over the contractual term used in the binomial model were primarily based on historical exercise patterns. These historical exercise patterns indicated there was not significantly different exercise behavior between employee groups. For our expected stock price volatility assumption, we weighted historical volatility and implied volatility. We used daily observations for historical volatility, while our implied volatility assumption was based on actively traded options related to our common stock. The expected term is derived from the binomial model, based on assumptions incorporated into the binomial model as described above.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value for stock options granted during the twelve months ended December 31, 2017, 2016 and 2015, was estimated at the date of grant, using the binomial model with the following weighted-average assumptions:



	Twelve Months Ended December 31,
	2017			2016			2015
Dividend yield	1.9		%	1.2		%	1.2		%
Expected volatility	22.8		%	19.4		%	21.2		%
Risk-free interest rate	1.1		%	1.2		%	1.3		%
Expected term (in years)	4.8			4.8			4.8
Weighted-average fair value of stock options granted	$	22.20		$	20.62		$	16.75

The following table summarizes changes in outstanding stock options during the twelve months ended December 31, 2017, as well as stock options that are vested and expected to vest and stock options exercisable at December 31, 2017:



	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In millions)
Outstanding at December 31, 2016	1,228		$	66.81
Granted (all at market price)	401		$	114.66
Exercised	(398	)	$	48.23
Forfeited and canceled	(47	)	$	103.13
Outstanding at December 31, 2017	1,184		$	87.64	6.6	$	40.0
Vested and expected to vest at December 31, 2017	1,140		$	86.64	6.6	$	39.5
Exercisable at December 31, 2017	636		$	62.62	4.9	$	35.9

The aggregate intrinsic value amounts in the table above represent the difference between the closing price of Equifax’s common stock on December 31, 2017 and the exercise price, multiplied by the number of in-the-money stock options as of the same date. This represents the value that would have been received by the stock option holders if they had all exercised their stock options on December 31, 2017. In future periods, this amount will change depending on fluctuations in Equifax’s stock price. The total intrinsic value of stock options exercised during the twelve months ended December 31, 2017, 2016 and 2015, was $31.4 million, $64.8 million and $52.3 million, respectively. At December 31, 2017, our total unrecognized compensation cost related to stock options was $4.3 million with a weighted-average recognition period of 1.5 years.

The following table summarizes changes in outstanding options and the related weighted-average exercise price per share for the twelve months ended December 31, 2016 and 2015:



	December 31,
	2016				2015
	Shares		Weighted- Average Price		Shares		Weighted- Average Price
	(In thousands)				(In thousands)
Outstanding at the beginning of the year	1,866		$	49.54	2,579		$	42.54
Granted (all at market price)	181		$	131.41	189		$	97.21
Exercised	(779	)	$	40.61	(888	)	$	38.74
Forfeited and canceled	(40	)	$	72.06	(14	)	$	58.24
Outstanding at the end of the year	1,228		$	66.81	1,866		$	49.54
Exercisable at end of year	856		$	48.43	1,411		$	39.90

Other Stock Awards. Our 2008 Omnibus Incentive Plan also provides for awards of restricted stock units and performance shares or units that are settled in shares of our common stock that can be granted to executive officers, employees

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and directors. Such stock awards are generally subject to cliff vesting over a period between one to three years based on service and may also have vesting conditions based on meeting specified performance goals.

The fair value of these stock awards is based on the fair market value of our common stock on the date of grant. However, stock awards granted prior to February 16, 2017 did not accrue or pay dividends during the vesting period, so the fair value on the date of grant for the pre-2017 awards was reduced by the present value of the expected dividends over the requisite service period (discounted using the appropriate risk-free interest rate). Stock awards granted during 2017 do include the right to dividends or dividend equivalents, which are accrued and payable only if and when the underlying stock vests and is payable.

Pursuant to our 2008 Omnibus Incentive Plan, certain executive officers have been granted performance shares in which the number of shares earned is dependent upon the Company’s three-year total shareholder return relative to the three-year total shareholder return of the companies in the S&P 500 stock index, as comprised on the grant date, subject to adjustment, and have also been granted performance shares in which the number of shares earned is dependent upon the Company's three-year cumulative adjusted earnings per share. The number of shares which could potentially be issued under these performance share awards ranges from zero to 200% of the target award. The grants outstanding subject to market performance as of December 31, 2017 would result in 278,644 shares outstanding at 100% of target and 557,288 at 200% of target at the end of the vesting period. Compensation expense for shares earned based on the Company's three-year total shareholder return is recognized on a straight-line basis over the measurement period and is based upon the fair market value of the shares estimated to be earned at the date of grant using a Monte-Carlo simulation. Compensation expense for shares earned based on the Company's three-year cumulative adjusted earnings per share is recognized on a straight-line basis over the measurement period based on the grant date fair value of our common stock and the number of awards expected to vest at each reporting date.

The following table summarizes changes in these other stock awards during the twelve months ended December 31, 2017, 2016 and 2015 and the related weighted-average grant date fair value:



	Shares		Weighted-Average Grant Date Fair Value
	(In thousands)
Nonvested at December 31, 2014	1,700		$	57.52
Granted	472		$	79.26
Vested	(698	)	$	39.21
Forfeited	(43	)	$	59.05
Nonvested at December 31, 2015	1,431		$	72.64
Granted	460		$	84.07
Vested	(645	)	$	55.28
Forfeited	(59	)	$	73.54
Nonvested at December 31, 2016	1,187		$	87.54
Granted	498		$	89.45
Vested	(632	)	$	56.53
Forfeited	(42	)	$	104.24
Nonvested at December 31, 2017	1,011		$	109.48

The total fair value of stock awards that vested during the twelve months ended December 31, 2017, 2016 and 2015, was $79.4 million, $71.7 million and $65.0 million, respectively, based on the weighted-average fair value on the vesting date, and $45.0 million, $38.8 million and $31.3 million, respectively, based on the weighted-average fair value on the date of grant. At December 31, 2017, our total unrecognized compensation cost related to these nonvested stock awards was $32.1 million with a weighted-average recognition period of 2.0 years.

SHAREHOLDER RIGHTS PLAN

The Company's Board of Directors terminated the previously adopted shareholder rights plan (sometimes referred to as a ‘poison pill’) effective February 19, 2015.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BENEFIT PLANS

We have defined benefit pension plans and defined contribution plans. We also maintain certain healthcare and life insurance benefit plans for eligible retired employees. The measurement date for our defined benefit pension plans and other postretirement benefit plans is December 31 of each year.

Pension Benefits. Pension benefits are provided through U.S. and Canadian defined benefit pension plans and two supplemental executive defined benefit pension plans.

U.S. and Canadian Retirement 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), also frozen to new hires on October 1, 2011.

During 2017, we adopted the new MP-2017 mortality scale in determining the liability for the U.S. pension plan. This updated scale partially offset the decrease in the discount rate in 2017, the net of which resulted in the increase in the projected benefit obligation as of December 31, 2017.

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 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.

On September 14, 2011, the Compensation Committee of the Board of Directors approved a redesign of our retirement plans for our currently active Canadian employees, effective January 1, 2013, and for our new hires hired on or after October 1, 2011. The changes to our retirement plan froze the Canadian Retirement Income Plan, or CRIP, a registered defined benefit pension plan, for employees who did not meet retirement-eligibility status under the CRIP as of December 31, 2012 (“Non-Grandfathered” participants). Under the plan amendment, the service credit for Non-Grandfathered participants froze, but these participants will continue to receive credit for salary increases and vesting service. Additionally, Non-Grandfathered employees and certain other employees not eligible to participate in the CRIP (i.e., new hires on or after October 1, 2011) are eligible to participate in the enhanced defined contribution component of the CRIP.

During the twelve months ended December 31, 2017, we did not make any contributions to the USRIP and made contributions of $1.5 million to the CRIP. During the twelve months ended December 31, 2016, we did not make any contributions to the USRIP and made contributions of $0.8 million to the CRIP. At December 31, 2017, the USRIP met or exceeded ERISA’s minimum funding requirements.

The annual report produced by our consulting actuaries specifies the funding requirements for our plans, based on projected benefits for plan participants, historical investment results on plan assets, current discount rates for liabilities, assumptions for future demographic developments and recent changes in statutory requirements. We may elect to make additional discretionary contributions to our plans in excess of minimum funding requirements, subject to statutory limitations.

Supplemental Retirement Plans. We maintain two supplemental executive retirement programs for certain key employees. The plans, which are unfunded, provide supplemental retirement payments, based on salary and years of service.

Other Benefits. We maintain certain healthcare and life insurance benefit plans for eligible retired employees. Substantially all of our U.S. employees may become eligible for the retiree healthcare benefits if they reach retirement age while working for us and satisfy certain years of service requirements. The retiree life insurance program covers employees who retired on or before December 31, 2003. We accrue the cost of providing healthcare benefits over the active service period of the employee.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Obligations and Funded Status. A reconciliation of the projected benefit obligations, plan assets and funded status of the plans is as follows:



	Pension Benefits						Other Benefits
	2017			2016			2017			2016
	(In millions)
Change in projected benefit obligation
Benefit obligation at January 1,	$	693.6		$	662.7		$	22.5		$	19.6
Service cost	4.0			3.6			0.4			0.3
Interest cost	28.5			31.3			0.9			0.8
Plan participants' contributions	—			—			0.5			0.6
Actuarial loss (gain)	45.5			36.4			2.5			4.2
Foreign currency exchange rate changes	3.1			1.4			0.1			0.2
Benefits paid	(43.1		)	(41.8		)	(2.7		)	(3.2		)
Projected benefit obligation at December 31,	731.6			693.6			24.2			22.5
Change in plan assets
Fair value of plan assets at January 1,	515.3			518.9			16.6			18.9
Actual return on plan assets	81.2			31.7			2.9			1.2
Employer contributions	5.9			5.2			2.2			2.6
Plan participants' contributions	—			—			0.5			0.6
Foreign currency exchange rate changes	1.8			1.3			—			—
Other disbursements	—			—			(2.4		)	(3.5		)
Benefits paid	(43.1		)	(41.8		)	(2.7		)	(3.2		)
Fair value of plan assets at December 31,	561.1			515.3			17.1			16.6
Funded status of plan	$	(170.5	)	$	(178.3	)	$	(7.1	)	$	(5.9	)

The accumulated benefit obligation for the USRIP, CRIP and Supplemental Retirement Plans was $722.3 million at December 31, 2017. The accumulated benefit obligation for the USRIP, CRIP and Supplemental Retirement Plans was $685.3 million at December 31, 2016.

At December 31, 2017, the USRIP and Supplemental Retirement Plans had projected benefit obligations and accumulated benefit obligations in excess of those plans’ respective assets. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for these plans in the aggregate were $675.2 million, $673.1 million and $510.9 million, respectively, at December 31, 2017. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the CRIP were $56.4 million, $49.2 million and $50.2 million, respectively, at December 31, 2017.

At December 31, 2016, the USRIP and Supplemental Retirement Plans had projected benefit obligations and accumulated benefit obligations in excess of those plans’ respective assets. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for these plans in the aggregate were $643.4 million, $641.6 million and $468.3 million, respectively, at December 31, 2016. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the CRIP were $50.2 million, $43.7 million and $47.0 million, respectively, at December 31, 2016.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table represents the net amounts recognized, or the funded status of our pension and other postretirement benefit plans, in our Consolidated Balance Sheets at December 31, 2017 and 2016:



	Pension Benefits						Other Benefits
	2017			2016			2017			2016
	(In millions)
Amounts recognized in the statements of financial position consist of:
Noncurrent assets	$	—		$	—		$	—		$	—
Current liabilities	(5.4		)	(4.2		)	(0.2		)	(0.2		)
Long-term liabilities	(165.1		)	(174.1		)	(6.9		)	(5.7		)
Net amount recognized	$	(170.5	)	$	(178.3	)	$	(7.1	)	$	(5.9	)

Included in accumulated other comprehensive loss at December 31, 2017 and 2016, were the following amounts that have not yet been recognized in net periodic pension cost:



	Pension Benefits				Other Benefits
	2017		2016		2017			2016
	(In millions)
Prior service cost, net of accumulated taxes of $2.0 and $3.4 in 2017 and 2016, respectively, for pension benefits and $(0.5) and $(1.2) in 2017 and 2016, respectively, for other benefits	$	6.3	$	5.6	$	(1.8	)	$	(2.1	)
Net actuarial loss, net of accumulated taxes of $91.0 and $143.5 in 2017 and 2016, respectively, for pension benefits and $3.1 and $5.0 in 2017 and 2016, respectively, for other benefits	243.2		254.1		9.8			8.3
Impact of Tax Cuts and Jobs Act of 2017	48.7		—		1.3			—
Accumulated other comprehensive loss	$	298.2	$	259.7	$	9.3		$	6.2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following shows amounts recognized in other comprehensive income (loss) during the twelve months ended December 31, 2017 and 2016:

Changes in plan assets and benefit obligations recognized in other comprehensive income:



	Pension Benefits						Other Benefits
	2017			2016			2017			2016
	(In millions)
Amounts arising during the period:
Net actuarial loss (gain), net of taxes of $0.0 and $15.9 in 2017 and 2016, respectively, for pension benefits and $0.1 and $1.6 in 2017 and 2016, respectively, for other benefits	$	2.5		$	26.0		$	0.9		$	2.7
Foreign currency exchange rate gain, net of taxes of $(1.2) in 2017 and $0.1 in 2016, respectively, for pension benefits and $0.0 in 2017 and 2016, respectively, for other benefits	(0.4		)	0.1			1.1			0.1

Amounts recognized in net periodic benefit cost during the period:
Recognized actuarial loss, net of taxes of $(3.7) and $(5.1) in 2017 and 2016, respectively, for pension benefits and $(0.3) in 2017 and 2016, respectively, for other benefits	(11.8		)	(8.5		)	(1.0		)	(0.5		)
Amortization of prior service cost, net of taxes of $(0.1) and $(0.3) 2017 and 2016, for pension benefits and $0.2 in 2017 and $0.4 in 2016 for other benefits	(0.5		)	(0.5		)	0.8			0.7
Total recognized in other comprehensive income	$	(10.2	)	$	17.1		$	1.8		$	3.0

Components of Net Periodic Benefit Cost



	Pension Benefits									Other Benefits
	2017			2016			2015			2017			2016			2015
	(In millions)
Service cost	$	4.0		$	3.6		$	4.2		$	0.4		$	0.3		$	0.3
Interest cost	28.5			31.3			30.4			0.9			0.8			0.7
Expected return on plan assets	(37.4		)	(37.6		)	(39.6		)	(1.2		)	(1.4		)	(1.5		)
Amortization of prior service cost	0.6			0.8			0.9			(1.0		)	(1.1		)	(1.2		)
Recognized actuarial loss (gain)	15.5			13.6			15.8			1.3			0.8			0.6
Total net periodic benefit cost (income)	$	11.2		$	11.7		$	11.7		$	0.4		$	(0.6	)	$	(1.1	)

The following represents the amount of prior service cost and actuarial loss included in accumulated other comprehensive loss that is expected to be recognized in net periodic benefit cost during the twelve months ending December 31, 2018:



	Pension Benefits		Other Benefits
	(In millions)
Actuarial loss, net of taxes of $4.7 for pension benefits and $0.3 for other benefits	$	14.9	$	1.1
Prior service cost, net of taxes of $0.1 for pension benefits and $(0.2) for other benefits	$	0.4	$	(0.8	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Weighted-Average Assumptions



Weighted-average assumptions used to determine benefit obligations at December 31,		Pension Benefits						Other Benefits
	2017			2016			2017			2016
Discount rate		3.73	%		4.23	%		3.60	%		3.98	%
Rate of compensation increase		4.88	%		4.80	%		N/A			N/A



Weighted-average assumptions used to determine net periodic benefit cost at December 31,		Pension Benefits									Other Benefits
	2017			2016			2015			2017			2016			2015
Discount rate		4.23	%		4.86	%		4.26	%		3.98	%		4.39	%		4.05	%
Expected return on plan assets		7.14	%		7.14	%		7.44	%		7.25	%		7.25	%		7.50	%
Rate of compensation increase		4.88	%		4.80	%		4.71	%		N/A			N/A			N/A

Discount Rates. We determine our discount rates primarily based on high-quality, fixed-income investments and yield-to-maturity analyses specific to our estimated future benefit payments available as of the measurement date. Discount rates are reset 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.

Expected Return on Plan Assets. 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 2017, our U.S. pension plan investment gain of 17.9% was above the expected return of 7.25% for the sixth time in nine years. The expected return for the USRIP for 2018 is 7.25%. The CRIP earned 7.8% in 2017 which was above its expected return of 6.0% for the seventh time in nine years. The expected return for the CRIP for 2018 is 6.0%. The CRIP has a lower expected return due to a higher asset allocation to fixed income securities.

The calculation of the net periodic benefit cost for the USRIP and CRIP utilizes a market-related value of assets. The market-related value of assets recognizes the difference between actual returns and expected returns over five years at a rate of 20% per year.

Healthcare Costs. For the U.S. plan, an initial 6.7% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2018 for pre-Medicare coverage. The rate was assumed to decrease gradually to an ultimate rate of 5.0% by 2023. An initial 7.0% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2017 for post-Medicare coverage. For the Canadian plan, an initial 5.5% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2018. The rate was assumed to decrease gradually to an ultimate rate of 5.0% by 2019. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plan. A one-percentage point change in assumed healthcare cost trend rates at December 31, 2017 would have had the following effects:



	1-Percentage Point Increase		1-Percentage Point Decrease
	(In millions)
Effect on total service and interest cost components	$	0.1	$	(0.1	)
Effect on accumulated postretirement benefit obligation	$	1.5	$	(1.4	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We estimate that the future benefits payable for our retirement and postretirement plans are as follows at December 31, 2017:



Years ending December 31,	U.S. Defined Benefit Plans		Non-U.S. Defined Benefit Plans		Other Benefit Plans
	(In millions)
2018	$	42.6	$	1.9	$	1.8
2019	$	43.6	$	2.0	$	1.8
2020	$	43.2	$	2.0	$	1.9
2021	$	43.1	$	2.1	$	1.9
2022	$	42.8	$	2.2	$	1.9
Next five fiscal years to December 31, 2027	$	204.9	$	12.2	$	9.5

Fair Value of Plan Assets. The fair value of the pension assets at December 31, 2017 and 2016, are as follows:



				Fair Value Measurements at Reporting Date Using:
		Fair Value at December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(In millions)
Large-Cap Equity	(1)	$	125.5	$	125.5	$	—	$	—
Small- and Mid-Cap Equity	(1)	39.0		39.0		—		—
International Equity	(1) (2)	105.1		13.2		91.9		—
Fixed Income	(2)	204.0		—		204.0		—
Private Equity	(3)	24.1		—		—		24.1
Hedge Funds	(4)	35.0		—		—		35.0
Real Assets	(5)	18.7		—		—		18.7
Cash	(1)	9.7		9.7		—		—
Total		$	561.1	$	187.4	$	295.9	$	77.8



				Fair Value Measurements at Reporting Date Using:
		Fair Value at December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(In millions)
Large-Cap Equity	(1)	$	128.1	$	128.1	$	—	$	—
Small- and Mid-Cap Equity	(1)	31.4		31.4		—		—
International Equity	(1) (2)	80.8		15.6		65.2		—
Fixed Income	(2)	174.2		—		174.2		—
Private Equity	(3)	33.5		—		—		33.5
Hedge Funds	(4)	33.7		—		—		33.7
Real Assets	(5)	19.3		—		—		19.3
Cash	(1)	14.3		14.3		—		—
Total		$	515.3	$	189.4	$	239.4	$	86.5


(1)	Fair value is based on observable market prices for the assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(2)	For the portion of this asset class categorized as Level 2, fair value is determined using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.

(3)

Private equity investments are initially valued at cost. Fund managers periodically review the valuations utilizing subsequent company-specific transactions or deterioration in the company’s financial performance to determine if fair value adjustments are necessary. Private equity investments are typically viewed as long term, less liquid investments with return of capital coming via cash distributions from the sale of underlying fund assets. The Plan intends to hold these investments through each fund’s normal life cycle and wind down period. As of December 31, 2017 and 2016, we had $10.7 million and $12.3 million of remaining commitments related to these private equity investments.


(4)	Fair value is reported by the fund manager based on observable market prices for actively traded assets within the funds, as well as financial models, comparable financial transactions or other factors relevant to the specific asset for assets with no observable market. These investments are redeemable quarterly with a range of 30 – 90 days notice.


(5)	The fair value of Real Assets are reported by the fund manager based on a combination of the following valuation approaches: current replacement cost less deterioration and obsolescence, a discounted cash flow model of income streams, and comparable market sales. As of December 31, 2017 and 2016, we had $0.5 million of remaining commitments related to the real asset investments.

The following table shows a reconciliation of the beginning and ending balances for assets valued using significant unobservable inputs for the years ended December 31, 2017 and 2016:



	Private Equity			Hedge Funds			Real Assets
	(In millions)
Balance at December 31, 2015	$	41.9		$	54.0		$	17.4
Return on plan assets:
Unrealized	0.2			0.5			0.7
Realized	1.0			—			0.1
Purchases	1.7			—			2.0
Sales	(11.3		)	(20.8		)	(0.9		)
Balance at December 31, 2016	$	33.5		$	33.7		$	19.3
Return on plan assets:
Unrealized	$	(1.8	)	$	1.8		$	0.1
Realized	1.0			—			(0.1		)
Purchases	1.0			—			0.5
Sales	(9.6		)	(0.5		)	(1.1		)
Balance at December 31, 2017	$	24.1		$	35.0		$	18.7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the postretirement assets at December 31, 2017 and 2016, are as follows:



				Fair Value Measurements at Reporting Date Using:
Description		Fair Value at December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(In millions)
Large-Cap Equity	(1)	$	4.2	$	4.2	$	—	$	—
Small- and Mid-Cap Equity	(1)	1.3		1.3		—		—
International Equity	(1) (2)	2.7		0.5		2.2		—
Fixed Income	(2)	6.0		—		6.0		—
Private Equity	(3)	0.8		—		—		0.8
Hedge Funds	(4)	1.2		—		—		1.2
Real Assets	(5)	0.6		—		—		0.6
Cash	(1)	0.3		0.3		—		—
Total		$	17.1	$	6.3	$	8.2	$	2.6



				Fair Value Measurements at Reporting Date Using:
Description		Fair Value at December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(In millions)
Large-Cap Equity	(1)	$	4.5	$	4.5	$	—	$	—
Small- and Mid-Cap Equity	(1)	1.1		1.1		—		—
International Equity	(1) (2)	2.0		0.5		1.5		—
Fixed Income	(2)	5.4		—		5.4		—
Private Equity	(3)	1.2		—		—		1.2
Hedge Funds	(4)	1.2		—		—		1.2
Real Assets	(5)	0.7		—		—		0.7
Cash	(1)	0.5		0.5		—		—
Total		$	16.6	$	6.6	$	6.9	$	3.1


(1)	Fair value is based on observable market prices for the assets.


(2)	For the portion of this asset class categorized as Level 2, fair value is determined using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.

(3)


(4)	Fair value is reported by the fund manager based on observable market prices for actively traded assets within the funds, as well as financial models, comparable financial transactions or other factors relevant to the specific asset for assets with no observable market. These investments are redeemable quarterly with a range of 30 – 90 days notice.


(5)	The fair value of Real Assets are reported by the fund manager based on a combination of the following valuation approaches: current replacement cost less deterioration and obsolescence, a discounted cash flow model of income streams and comparable market sales.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Gross realized and unrealized gains and losses, purchases and sales for Level 3 postretirement assets were not material for the twelve months ended December 31, 2017.

USRIP, or the Plan, Investment and Asset Allocation Strategies. The primary goal of the asset allocation strategy of the Plan is to produce a total investment return which will satisfy future annual cash benefit payments to participants and minimize future contributions from the Company. Additionally, this strategy will diversify the plan assets to minimize nonsystemic risk and provide reasonable assurance that no single security or class of security will have a disproportionate impact on the Plan. Investment managers are required to abide by the provisions of ERISA. Standards of performance for each manager include an expected return versus an assigned benchmark, a measure of volatility, and a time period of evaluation.

The asset allocation strategy is determined by our external advisor forecasting investment returns by asset class and providing allocation guidelines to maximize returns while minimizing the volatility and correlation of those returns. Investment recommendations are made by our external advisor, working in conjunction with our in-house Investment Committee. The asset allocation and ranges are approved by our in-house Investment Committee and Plan Administrators, who are Named Fiduciaries under ERISA.

The Plan, in an effort to meet asset allocation objectives, utilizes a variety of asset classes which have historically produced returns which are relatively uncorrelated to those of the S&P 500 in most environments. Asset classes included in this category of alternative assets include hedge funds, private equity (including secondary private equity) and real assets (real estate, funds of hard asset securities and private equity funds focused on real assets). The primary benefits of using these types of asset classes are: (1) their non-correlated returns reduce the overall volatility of the Plan’s portfolio of assets, and (2) their ability to produce superior risk-adjusted returns. Additionally, the Plan allows certain of their managers, subject to specific risk constraints, to utilize derivative instruments in order to enhance asset return, reduce volatility or both. Derivatives are primarily employed by the Plans in their fixed income portfolios and in the hedge fund-of-funds area. Derivatives can be used for hedging purposes to reduce risk.

No shares of Equifax common stock were directly owned by the Plan at December 31, 2017 or 2016. Not more than 5% of the portfolio (at cost) shall be invested in the securities of any one issuer, with the exceptions of U.S. Treasury and government agency securities.

The following asset allocation ranges and actual allocations were in effect as of December 31, 2017 and 2016:



	Range		Actual
USRIP	2017	2016	2017		2016
Large-Cap Equity	15% - 40%	15% - 40%	24.7	%	27.3	%
Small- and Mid-Cap Equity	0% - 15%	0% - 15%	7.6	%	6.7	%
International Equity	10% - 30%	10% - 30%	15.6	%	12.3	%
Private Equity	2% - 10%	2% - 10%	4.7	%	7.2	%
Hedge Funds	0% - 10%	0% - 10%	6.8	%	7.2	%
Real Assets	2% - 10%	2% - 10%	3.7	%	4.1	%
Fixed Income	20% - 55%	20% - 55%	35.1	%	32.3	%
Cash	0% - 15%	0% - 15%	1.8	%	2.9	%

CRIP Investment and Asset Allocation Strategies. The primary goal of the asset allocation strategy of the Plan is to produce a total investment return which will satisfy future annual cash benefit payments to participants and minimize future contributions from the Company. Additionally, this strategy will diversify the plan assets to minimize nonsystemic risk and provide reasonable assurance that no single security or class of security will have a disproportionate impact on the Plan. Due to the high funded status of the Plan, the Investment Committee of the CRIP has adopted a conservative asset allocation of 50/50 in equities and fixed income. The Investment Committee maintains an investment policy for the CRIP, which imposes certain limitations and restrictions regarding allowable types of investments. The current investment policy imposes those restrictions on investments or transactions such as (1) Equifax common stock or securities, except as might be incidental to any pooled funds which the plan may have, (2) commodities or loans, (3) short sales and the use of margin accounts, (4) put and call options, (5) private placements, and (6) transactions which are “related-party” in nature as specified by the Canadian Pension Benefits Standards Act and its regulations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following specifies the asset allocation ranges and actual allocation as of December 31, 2017 and 2016:



		Actual
CRIP	Range	2017		2016
Canadian Equities	25% - 50%	35.2	%	34.7	%
International Equities (including U.S. Equities)	0% - 19%	14.9	%	14.9	%
Fixed Income	40% - 60%	49.1	%	49.1	%
Money Market	0% - 10%	0.8	%	1.3	%

Equifax Retirement Savings Plans. Equifax sponsors a tax qualified defined contribution plan, the Equifax Inc.

401(k) Plan, or the Plan. We provide a discretionary match of participants’ contributions, up to four or six percent of employees eligible pay depending on certain eligibility rules under the Plan. We also provide a discretionary direct contribution to certain eligible employees, the percentage of which is based upon an employee’s credited years of service. Company contributions for the Plan during the twelve months ended December 31, 2017, 2016 and 2015 were $29.7 million, $27.1 million and $23.2 million, respectively.

Foreign Retirement Plans. We also maintain defined contribution plans for certain employees in Australia, the U.K., Ireland and Canada. For the years ended December 31, 2017, 2016 and 2015, our contributions related to these plans were $7.3 million, $5.9 million, and $0.7 million, respectively.

Deferred Compensation Plans. We maintain deferred compensation plans that allow for certain management employees and the Board of Directors to defer the receipt of compensation (such as salary, incentive compensation, commissions or shares payable under vested restricted stock units) until a later date based on the terms of the plans. The Company also makes contributions to the accounts of certain executives who are not eligible to participate in either of the Supplemental Retirement Plans. The benefits under our deferred compensation plans are guaranteed by the assets of a grantor trust which, through our funding, make investments in certain mutual funds. The purpose of this trust is to ensure the distribution of benefits accrued by participants of the deferred compensation plans in case of a change in control, as defined in the trust agreement.

Annual Incentive Plan. We have a shareholder-approved Annual Incentive Plan, which is a component of our amended and restated 2008 Omnibus Incentive Plan, for certain key officers that provides for annual or long-term cash awards at the end of various measurement periods, based on the earnings per share, revenue and/or various other criteria over the measurement period. Our total accrued incentive compensation for all incentive plans included in accrued salaries and bonuses on our Consolidated Balance Sheets was $44.9 million and $90.0 million at December 31, 2017 and 2016, respectively.

Employee Benefit Trusts. We maintain employee benefit trusts for the purpose of satisfying obligations under certain benefit plans. These trusts held 0.6 million shares of Equifax stock with a value, at cost, of $5.9 million at December 31, 2017 and 2016, as well as cash, which was not material for both periods presented. The employee benefits trusts are as follows:


•	The Executive Life and Supplemental Retirement Benefit Plan Grantor Trust was used to ensure that the insurance premiums due under the Executive Life and Supplemental Retirement Benefit Plan were paid in case we fail to make scheduled payments following a change in control, as defined in this trust agreement. This trust was terminated in 2016 as the obligations noted above were satisfied.


•	The Supplemental Retirement Plan Grantor Trust’s assets are dedicated to ensure the payment of benefits accrued under our Supplemental Retirement Plan in case of a change in control, as defined in this trust agreement.

The assets in these plans which are recorded on our Consolidated Balance Sheets are subject to creditor’s claims in case of insolvency of Equifax Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCUMULATED OTHER COMPREHENSIVE INCOME

Changes in accumulated other comprehensive income by component, after tax, for the twelve months ended December 31, 2017, are as follows:



	Foreign currency			Pension and other postretirement benefit plans			Cash flow hedging transactions			Total
	(In millions)
Balance, December 31, 2016	$	(262.0	)	$	(265.9	)	$	(1.0	)	$	(528.9	)
Other comprehensive income before reclassifications	158.7			(4.0		)	(0.2		)	154.5
Amounts reclassified from accumulated other comprehensive income	—			12.4			—			12.4
Net current-period other comprehensive income	158.7			8.4			(0.2		)	166.9
Amounts reclassified to retained earnings	—			(50.0		)	$	—		(50.0		)
Balance, December 31, 2017	$	(103.3	)	$	(307.5	)	$	(1.2	)	$	(412.0	)

Reclassifications out of accumulated other comprehensive income for the twelve months ended December 31, 2017, are as follows:



Details about accumulated other comprehensive income components	Amount reclassified from accumulated other comprehensive income			Affected line item in the statement where net income is presented
	(In millions)
Amortization of pension and other postretirement plan items:
Prior service cost	$	0.4		(1)
Recognized actuarial loss	(16.8		)	(1)
	(16.4		)	Total before tax
	4.0			Tax benefit
	$	(12.4	)	Net of tax


(1)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (See Note 10 Benefit Plans for additional details).

Changes in accumulated other comprehensive income related to noncontrolling interests were not material as of December 31, 2017.

RESTRUCTURING CHARGES

In the fourth quarter of 2016 and the first quarter of 2015, we recorded a $5.7 million ($3.7 million, net of tax) and $20.7 million ($13.2 million, net of tax) restructuring charge, respectively, all of which was recorded in selling, general and administrative expenses on our Consolidated Statements of Income. These charges were recorded to general corporate expense and resulted from our continuing efforts to realign our internal resources to support the Company’s strategic objectives and increase the integration of our global operations. The 2016 restructuring charge primarily relates to a reduction in headcount. Payments related to the 2016 restructuring charge have been substantially completed in 2017.

The 2015 restructuring charge primarily relates to a reduction of headcount of approximately 300 positions resulting in a charge of $16.2 million, which was accrued for under existing severance plans or statutory requirements. The remainder was related to costs associated with real estate exits of $1.2 million and other integration costs of $3.3 million. Generally, severance benefits for our U.S. and international employees are paid in the form of a lump sum cash payment according to the number of weeks of severance benefit provided to the employee. Payments related to the above restructuring charges totaled $16.6 million for the twelve months ended December 31, 2015. Payments related to the 2015 restructuring charges were substantially completed in 2016.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

Organizational Realignment. In the first quarter of 2016, we acquired Veda, which operates primarily in Australia and New Zealand. We have included Veda's operations within a newly-created Asia Pacific reporting unit within the International operating segment. Additionally, we moved the TDX Australia and India operations that were included in our Europe reporting unit, along with corporate assets including equity method investments in Russia and India, to the Asia Pacific reporting unit to align with how we manage our business. Our financial results for the year ended December 31, 2015 reflect our new organizational structure. Additionally in 2016, we renamed our Personal Solutions operating segment Global Consumer Solutions.

In 2015, the personal solutions business in the United Kingdom was consolidated into the North America Personal Solutions segment, which was reorganized into the Global Consumer Solutions segment. Additionally in 2015, the direct to consumer reseller businesses in the U.S., Canada, and the United Kingdom were also consolidated into the Global Consumer Solutions segment. These changes were driven by an enterprise wide strategy to maximize the penetration of our products and services in our targeted markets. We determined that market focus and operating efficiency could be further improved by reorganizing and consolidating the United States, Canada and the United Kingdom Global Consumer Solutions and Direct to Consumer Reseller operating activities into one segment, Global Consumer Solutions. As a result, we modified our segment reporting effective 2015.

Reportable Segments. We manage our business and report our financial results through the following four reportable segments, which are the same as our operating segments:


•	U.S. Information Solutions


•	International


•	Workforce Solutions


•	Global Consumer Solutions

The accounting policies of the reportable segments are the same as those described in our summary of significant accounting policies (see Note 1). We evaluate the performance of these reportable segments based on their operating revenue, operating income and operating margins, excluding any unusual or infrequent items, if any. The measurement criteria for segment profit or loss and segment assets are substantially the same for each reportable segment. Inter-segment sales are not material for all periods presented. All transactions between segments are accounted for at fair market value or cost depending on the nature of the transaction, and no timing differences occur between segments.

A summary of segment products and services is as follows:

U.S. Information Solutions. This segment includes consumer and commercial information services (such as credit information and credit scoring, credit modeling services and portfolio analytics (decisioning tools), which are derived from our databases of business credit and financial information, locate services, fraud detection and prevention services, identity verification services and other consulting services); mortgage loan origination information; financial marketing services; and identity management.

International. This segment includes information services products, which includes consumer and commercial services (such as credit and financial information, credit scoring and credit modeling services), credit and other marketing products and services. In Asia Pacific, Europe, Latin America and Canada, we also provide information, technology and services to support debt collections and recovery management.

Workforce Solutions. This segment includes employment, income and social security number verification services as well as complementary payroll-based transaction services and employment tax management services.

Global Consumer Solutions. This segment includes credit information, credit monitoring and identity theft protection products sold directly to consumers via the internet and in various hard-copy formats in the U.S., Canada, and the U.K. 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment information for the twelve months ended December 31, 2017, 2016 and 2015 and as of December 31, 2017 and 2016 is as follows:



	Twelve Months Ended December 31,
Operating revenue:	2017		2016		2015
	(In millions)
U.S. Information Solutions	$	1,262.7	$	1,236.5	$	1,171.3
International	932.3		803.6		568.5
Workforce Solutions	764.2		702.2		577.7
Global Consumer Solutions	403.0		402.6		346.1
Total operating revenue	$	3,362.2	$	3,144.9	$	2,663.6



	Twelve Months Ended December 31,
Operating income:	2017			2016			2015
	(In millions)
U.S. Information Solutions	$	539.1		$	537.0		$	491.2
International	169.4			111.4			113.5
Workforce Solutions	331.9			295.5			218.8
Global Consumer Solutions	106.2			112.4			95.2
General Corporate Expense	(322.0		)	(238.4		)	(224.8		)
Total operating income	$	824.6		$	817.9		$	693.9



	December 31,
Total assets:	2017		2016
	(In millions)
U.S. Information Solutions	$	1,587.3	$	1,824.0
International	3,145.7		2,932.5
Workforce Solutions	1,227.4		1,337.0
Global Consumer Solutions	254.0		193.7
General Corporate	1,019.0		376.8
Total assets	$	7,233.4	$	6,664.0



	Twelve Months Ended December 31,
Depreciation and amortization expense:	2017		2016		2015
	(In millions)
U.S. Information Solutions	$	83.7	$	82.1	$	83.3
International	109.9		101.6		40.1
Workforce Solutions	42.1		42.7		42.0
Global Consumer Solutions	13.2		9.6		9.4
General Corporate	38.9		29.4		23.2
Total depreciation and amortization expense	$	287.8	$	265.4	$	198.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



	Twelve Months Ended December 31,
Capital expenditures:	2017		2016		2015
	(In millions)
U.S. Information Solutions	$	18.6	$	19.1	$	21.9
International	59.7		50.3		25.7
Workforce Solutions	28.9		22.2		22.1
Global Consumer Solutions	15.0		12.3		11.2
General Corporate	91.8		87.6		69.8
Total capital expenditures*	$	214.0	$	191.5	$	150.7

*Amounts above exclude changes in accruals for capital expenditures.

Financial information by geographic area is as follows:



	Twelve Months Ended December 31,
	2017				2016				2015
					(In millions)
Operating revenue (based on location of customer):	Amount		%		Amount		%		Amount		%
U.S.	$	2,379.7	71	%	$	2,290.9	73	%	$	2,041.7	77	%
U.K.	311.2		9	%	232.1		7	%	224.1		8	%
Australia	304.0		9	%	214.3		7	%	5.0		nm
Canada	148.9		4	%	134.3		4	%	135.5		5	%
Other	218.4		7	%	273.3		9	%	257.3		10	%
Total operating revenue	$	3,362.2	100	%	$	3,144.9	100	%	$	2,663.6	100	%



	December 31,
	2017				2016
			(In millions)
Long-lived assets:	Amount		%		Amount		%
U.S.	$	3,274.5	53	%	$	3,282.5	55	%
U.K.	303.2		5	%	278.1		5	%
Australia	2,207.1		35	%	2,061.7		34	%
Canada	67.4		1	%	52.4		1	%
Other	382.8		6	%	316.4		5	%
Total long-lived assets	$	6,235.0	100	%	$	5,991.1	100	%

QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data for 2017 and 2016 was as follows:



	Three Months Ended
2017	March 31,		June 30,		September 30,		December 31,
	(In millions, except per share data)
Operating revenue	$	832.2	$	856.7	$	834.8	$	838.5
Operating income	$	216.8	$	264.1	$	152.9	$	190.9
Consolidated net income	$	155.4	$	167.6	$	100.5	$	174.4
Net income attributable to Equifax	$	153.3	$	165.4	$	96.3	$	172.3
Basic earnings per share*
Net income attributable to Equifax	$	1.28	$	1.37	$	0.80	$	1.44
Diluted earnings per share*
Net income attributable to Equifax	$	1.26	$	1.36	$	0.79	$	1.42



	Three Months Ended
2016	March 31,		June 30,		September 30,		December 31,
	(In millions, except per share data)
Operating revenue	$	728.3	$	811.3	$	804.1	$	801.1
Operating income	$	176.2	$	225.7	$	212.1	$	203.9
Consolidated net income	$	102.4	$	133.0	$	134.9	$	124.8
Net income attributable to Equifax	$	102.1	$	130.9	$	132.8	$	123.0
Basic earnings per share*
Net income attributable to Equifax	$	0.86	$	1.10	$	1.11	$	1.03
Diluted earnings per share*
Net income attributable to Equifax	$	0.85	$	1.08	$	1.09	$	1.01


*	The sum of the quarterly EPS does not equal the annual EPS due to changes in the weighted-average shares between periods. Other amounts may not equal the annual total due to rounding between periods.

The comparability of our quarterly financial results during 2017 and 2016 was impacted by certain events, as follows:

•

For the year ended December 31, 2017, we recorded $114.0 million in pretax expenses, with $99.8 million within Selling, General and Administrative expenses and $14.2 million of these expenses in Cost of Services related to the Q3 cybersecurity incident. In addition, as a result of the Tax Act the company recorded preliminary adjustments totaling a net tax benefit of $48.3 million in the fourth quarter of 2017.

•

For the year ended December 31, 2016, we recorded $40.2 million ($28.2 million, net of tax) for Veda acquisition related amounts. Of this amount, $30.1 million relates to transaction and integration costs in operating income, $9.2 million is recorded in other income and is the impact of foreign currency changes on the transaction structure, including the economic hedges, and $0.7 million is recorded in interest expense. See Note 3 of the Notes to Consolidated Financial Statements.

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