Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Equifax Inc. MD&A is provided as a supplement to and should be read in conjunction with our consolidated financial statements and the accompanying Notes to Financial Statements in Item 1 of this Form 10-Q. This section discusses the results of our operations for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. All percentages have been calculated using unrounded amounts for each of the periods presented.

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

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

BUSINESS OVERVIEW

Equifax Inc. is a global data, analytics and technology company. We provide information solutions for businesses, governments and consumers, and we provide human resources business process automation and outsourcing services for employers. We have a large and diversified group of clients, including financial institutions, corporations, government agencies and individuals. Our services are based on comprehensive databases of consumer and business information derived from numerous sources including credit, financial assets, telecommunications and utility payments, employment, income, educational history, criminal history, healthcare professional licensure and sanctions, demographic and marketing data. We use advanced statistical techniques, machine learning and proprietary software tools to analyze available data to create customized insights, decision-making and process automation solutions and processing services for our clients. We are a leading provider of information and solutions used in payroll-related and human resource management business process services in the U.S. For consumers, we provide products and services to help people understand, manage and protect their personal information and make more informed financial decisions. Additionally, we also provide information, technology and services to support debt collections and recovery management.

We currently operate in four global regions: North America (U.S. and Canada), Asia Pacific (Australia, New Zealand and India), Europe (the U.K., Spain and Portugal) and Latin America (Argentina, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru and Uruguay). We maintain support operations in the Republic of

Ireland, Chile, Costa Rica and India. We also have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia and Singapore and have an investment in a consumer and commercial credit information company in Brazil. We have a joint venture in Russia that offers consumer credit services, however, we have determined as of March 31, 2022 that we expect no future economic benefit from the joint venture going forward.

Recent Events and Company Outlook

As further described in our 2021 Form 10-K, we operate in the U.S., which represented 78% of our revenue in 2021, and internationally in more than 20 countries. Our products and services span a wide variety of vertical markets including financial services, mortgage, federal, state and local governments, automotive, telecommunications and many others.

Demand for our services tends to be correlated to general levels of economic activity and to consumer credit activity, small commercial credit and marketing activity and employee hiring and onboarding activity. The impact of the COVID-19 pandemic and related actions to attempt to control its spread began to impact our consolidated operating results in the first quarter of 2020. During 2020, overall revenue grew, reflecting strong U.S. mortgage market demand in 2020 compared to 2019 and growth across our Workforce Solutions business. In 2021 and 2022 to-date, as efforts to minimize the spread of COVID-19 were more successful and access to vaccinations increased, our consolidated revenue grew when compared to prior year, reflecting recovering country economies, growth from Equifax initiatives and, to a lesser extent, revenue from acquired companies. The continued impact of the COVID-19 pandemic remains uncertain and may affect certain markets or regions we serve differently. To date, changes to our working environment as a result of COVID-19 have not caused material disruptions in the execution of our strategic plans and have not impacted our internal controls, financial reporting systems or operations.

In light of the evolving health, social, economic and business environment, governmental regulations or mandates, and business disruptions that could occur, the potential impact that COVID-19 could have on our financial condition and operating results remains unclear. For more information, see “Item 1A. Risk Factors—Our business has been and may continue to be negatively impacted by the COVID-19 pandemic,” in our 2021 Form 10-K.

For 2022, our planning assumes economies in which we operate continue to show growth relative to 2021. In the U.S., 2022 economic activity, as measured by GDP, is expected to grow but not at the same rate of growth experienced in 2021. We expect modest growth in consumer credit, excluding mortgage, over the course of 2022. Our plan assumes the U.S. mortgage market, as measured by credit inquiries, will decline by greater than 35 percent on average for the remaining nine months of 2022 versus the same period in 2021. The U.S. mortgage market, particularly the mortgage refinance portion of the U.S. mortgage market, can be further impacted by U.S. interest rates and therefore mortgage rates. In the International markets in which we operate, we expect 2022 economic activity, as measured by GDP, to improve but less than the rates of growth experienced in 2021.

Segment and Geographic Information

Segments. The Workforce Solutions segment consists of the Verification Services and Employer Services business lines. Verification Services revenue is transaction-based and is derived primarily from employment and income verification. Employer Services revenue is derived from our provision of certain human resources business process outsourcing services that include both transaction and subscription based product offerings. These services include unemployment claims management, employment-based tax credit services and other complementary employment-based transaction services.

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

The International segment consists of Asia Pacific, Europe, Canada and Latin America. Canada’s services are similar to our USIS offerings. Asia Pacific, Europe and Latin America are made up of varying mixes of service lines that are generally consistent with those in our USIS reportable segment. We also provide information and technology services to support lenders and other creditors in the collections and recovery management process.

Geographic Information. We currently have operations in the following countries: Argentina, Australia, Canada, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, India, Mexico, New Zealand, Paraguay, Peru, Portugal, the Republic of Ireland, Spain, the U.K., Uruguay and the U.S. We also have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore and Russia and have an investment in a consumer and commercial credit information company in Brazil. Approximately 79% and 78% of our revenue was generated in the U.S. during the three months ended March 31, 2022 and 2021, respectively.

Seasonality. We experience seasonality in certain of our revenue streams. Revenue generated by the online consumer information services component of our USIS operating segment is typically the lowest during the first quarter, when consumer lending activity is at a seasonal low. Revenue generated from the Employer Services business unit within the Workforce Solutions operating segment is generally higher in the first quarter due primarily to the provision of Form W-2 and 1095-C services that occur in the first quarter each year. Revenue generated from our financial wealth asset products and data management services in our Financial Marketing Services business is generally higher in the fourth quarter each year due to the significant portion of our annual renewals and deliveries which occur then. Mortgage related revenue is generally higher in the second and third quarters of the year due to the increase in consumer home purchasing during the summer in the U.S. Any change in the U.S. mortgage market has a corresponding impact on revenue and operating profit for our business within the Workforce Solutions and USIS operating segments.

Key Performance Indicators. Management focuses on a variety of key indicators to monitor operating and financial performance. These performance indicators include measurements of operating revenue, change in operating revenue, operating income, operating margin, net income, diluted earnings per share, cash provided by operating activities and capital expenditures. The key performance indicators for the three months ended March 31, 2022 and 2021 were as follows:

						Key Performance Indicators
						Three Months Ended March 31,
						2022						2021
						(In millions, except per share data)
Operating revenue						$	1,363.2					$	1,213.0
Operating revenue change						12		%				27		%
Operating income						$	332.4					$	306.6
Operating margin						24.4		%				25.3		%
Net income attributable to Equifax						$	221.8					$	201.6
Diluted earnings per share						$	1.80					$	1.64
Cash (used in) provided by operating activities						$	(198.5)					$	143.4
Capital expenditures*						$	(140.8)					$	(107.4)

*Amounts include accruals for capital expenditures.

Operational and Financial Highlights

• We did not repurchase any shares from public market transactions in 2022. We repurchased 0.2 million shares of our common stock on the open market for $34.1 million during the first three months of 2021. At March 31, 2022, $520.2 million was available for future purchases of common stock under our share repurchase authorization.

• We paid out $47.9 million or $0.39 per share in dividends to our shareholders during the first three months of 2022.

RESULTS OF OPERATIONS—THREE MONTHS ENDED MARCH 31, 2022 AND 2021

Consolidated Financial Results

Operating Revenue

						Three Months Ended March 31,												Change
Consolidated Operating Revenue						2022						2021						$						%
						(In millions)
Workforce Solutions						$	649.0					$	487.2					$	161.8					33		%
U.S. Information Solutions						432.9						459.4						(26.5)						(6)		%
International						281.3						266.4						14.9						6		%
Consolidated operating revenue						$	1,363.2					$	1,213.0					$	150.2					12		%

Revenue increased by $150.2 million, or 12%, for the first quarter of 2022, compared to the same period in 2021. Total revenue was negatively impacted by foreign exchange rates, which decreased revenue by $12.6 million, or 1%, for the first quarter of 2022, compared to the same period in 2021.

Revenue in the first quarter of 2022 increased primarily due to growth in Workforce Solutions and International, partially offset by a decline in the USIS business.

Operating Expenses

						Three Months Ended March 31,												Change
Consolidated Operating Expenses						2022						2021						$						%
						(In millions)
Consolidated cost of services						$	553.4					$	483.3					$	70.1					15		%
Consolidated selling, general and administrative expenses						340.3						308.8						31.5						10		%
Consolidated depreciation and amortization expense						137.1						114.3						22.8						20		%
Consolidated operating expenses						$	1,030.8					$	906.4					$	124.4					14		%

Cost of services increased $70.1 million for the first quarter of 2022, compared to the same period in 2021. The increase was primarily due to higher royalty costs, people costs and production costs, which include third party cloud usage fees. The impact of changes in foreign exchange rates on costs of services led to a decrease of $6.5 million for the first quarter of 2022, compared to the same period in 2021.

Selling, general and administrative expenses increased $31.5 million for the first quarter of 2022, compared to the same period in 2021. The increase was due to increases in sales and marketing related costs. The impact of changes in foreign currency exchange rates led to an decrease in selling, general and administrative expenses of $3.6 million for the first quarter of 2022, compared to the same period in 2021.

Depreciation and amortization expense increased $22.8 million for the first quarter of 2022, compared to the same period in 2021. The increase was due to the higher amortization of purchased intangible assets related to recent acquisitions and increased amortization of capitalized internal-use software and system costs from technology transformation capital spending incurred previously.

Operating Income and Operating Margin

						Three Months Ended March 31,												Change
Consolidated Operating Income						2022						2021						$						%
						(In millions)
Consolidated operating revenue						$	1,363.2					$	1,213.0					$	150.2					12		%
Consolidated operating expenses						1,030.8						906.4						124.4						14		%
Consolidated operating income						$	332.4					$	306.6					$	25.8					8		%
Consolidated operating margin						24.4		%				25.3		%										(0.9)		pts

Total company operating margin decreased by 0.9 percentage points in the first quarter of 2022, compared to the same period in 2021. The margin decrease was due to the aforementioned increased operating expense and amortization expense that slightly outpaced revenue growth during the period.

Interest Expense and Other Income, net

						Three Months Ended March 31,												Change
Consolidated Interest Expense and Other Income, net						2022						2021						$						%
						(In millions)
Consolidated interest expense						$	(39.7)					$	(37.2)					$	(2.5)					7		%
Consolidated other income (expense), net						11.1						(0.9)						12.0						nm
Average cost of debt						2.8		%				3.4		%
Total consolidated debt, net, at quarter end						$	5,814.0					$	4,379.7					$	1,434.3					33		%

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Interest expense increased by $2.5 million in the first quarter of 2022, compared to the same period in 2021. The increase for the first quarter of 2022 was due to the issuance of the $1.0 billion 2.35% senior notes in August 2021 and increased commercial paper activity, partially offset by the retirement of various senior notes during the second and third quarters of 2021.

Other income, net, increased by $12.0 million in the first quarter of 2022, compared to the same period in 2021. The increase for the first quarter of 2022 was due to the fair value adjustment of our investment in Brazil, partly offset by the other-than-temporary impairment recognized related to our equity investment in Russia.

Income Taxes

						Three Months Ended March 31,												Change
Consolidated Provision for Income Taxes						2022						2021						$						%
						(In millions)
Consolidated provision for income taxes						$	(81.0)					$	(65.6)					$	(15.4)					23		%
Effective income tax rate						26.7		%				24.4		%

Our effective income tax rate was 26.7% for the three months ended March 31, 2022, compared to 24.4% for the three months ended March 31, 2021. Our effective tax rate was higher during the first quarter of 2022 as compared to 2021 due to a greater foreign income tax rate differential and a change in deferred tax balances driven by a change in state law. The increase in the foreign rate differential was driven by the fair value adjustment of our equity investment in Brazil and adjustment to fully impair our investment in Russia.

Net Income

						Three Months Ended March 31,												Change
Consolidated Net Income						2022						2021						$						%
						(In millions, except per share amounts)
Consolidated operating income						$	332.4					$	306.6					$	25.8					8		%
Consolidated interest expense and other income (expense), net						(28.6)						(38.1)						9.5						(25)		%
Consolidated provision for income taxes						(81.0)						(65.6)						(15.4)						23		%
Consolidated net income						222.8						202.9						19.9						10		%
Net income attributable to noncontrolling interests						(1.0)						(1.3)						0.3						23		%
Net income attributable to Equifax						$	221.8					$	201.6					$	20.2					10		%
Diluted earnings per common share:
Net income attributable to Equifax						$	1.80					$	1.64					$	0.16					10		%
Weighted-average shares used in computing diluted earnings per share						123.5						123.2

Consolidated net income increased by $19.9 million for the first quarter of 2022,compared to the same period in 2021. The increase for the first quarter of 2022 was due to the increase in operating income from increased revenue, partially offset by increased tax expense.

Segment Financial Results

Workforce Solutions

						Three Months Ended March 31,												Change
Workforce Solutions						2022						2021						$						%
						(In millions)
Operating revenue:
Verification Services						$	513.3					$	385.1					$	128.2					33		%
Employer Services						135.7						102.1						33.6						33		%
Total operating revenue						$	649.0					$	487.2					$	161.8					33		%
% of consolidated revenue						47		%				40		%
Total operating income						$	308.4					$	265.7					$	42.7					16		%
Operating margin						47.5		%				54.5		%										(7.0)		pts

Workforce Solutions revenue increased by 33% in the first quarter of 2022, compared to the same period in 2021. The increase was due to strong growth in Verification Services driven by growth in non-mortgage verticals and acquisition revenue in both Verification and Employer Services.

Verification Services

Revenue increased by 33% for the first quarter of 2022, compared to the same period in 2021. The increase in revenue was due to strong growth in talent solutions, government and other non-mortgage verticals, acquisition revenue from Appriss Insights and, to a lesser extent, growth in the mortgage vertical. Verification Services benefited across all verticals from the continued growth of employment and income records in The Work Number database.

Employer Services

Revenue increased by 33% in the first quarter of 2022, compared to the same period in 2021. The increase was due to acquisition revenue and growth in employee services, partially offset by a decrease in unemployment claims revenue as the number of claims has greatly reduced in 2022 after having been significantly higher in 2021 due to the economic impact of COVID-19 on the U.S. economy.

Workforce Solutions Operating Margin

Operating margin decreased to 47.5% for the first quarter of 2022 from 54.5% for the first quarter of 2021. The decreased margin for the first quarter of 2022 is due to increased royalty costs, people costs, production costs and purchased intangible asset amortization costs, partially offset by the increase in revenue.

USIS

						Three Months Ended March 31,												Change
U.S. Information Solutions						2022						2021						$						%
						(In millions)
Operating revenue:
Online Information Solutions						$	343.8					$	352.0					$	(8.2)					(2)		%
Mortgage Solutions						43.4						54.1						(10.7)						(20)		%
Financial Marketing Services						45.7						53.3						(7.6)						(14)		%
Total operating revenue						$	432.9					$	459.4					$	(26.5)					(6)		%
% of consolidated revenue						32		%				38		%
Total operating income						$	121.5					$	154.9					$	(33.4)					(22)		%
Operating margin						28.1		%				33.7		%										(5.6)		pts

USIS revenue decreased by 6% for the first quarter of 2022, compared to the same period in 2021. The decrease was due to the negative impact of declining mortgage inquiry volumes of online services and mortgage solutions, partially offset by acquisition-related revenue and growth in non-mortgage online services.

Online Information Solutions

Revenue decreased by 2% for the first quarter of 2022, compared to the same period in 2021. The decrease in the first quarter of 2022 was due to declining mortgage origination volume compared to the prior year, partially offset by revenue from acquisitions and continued growth of non-mortgage online services.

Mortgage Solutions

Revenue decreased by 20% in the first quarter of 2022, compared to the same period in 2021. Mortgage Solutions transaction volumes declined by 24.5% in the first quarter of 2022, as compared to the prior year.

Financial Marketing Services

Revenue decreased by 14% for the first quarter of 2022, compared to the same period in 2021. The decrease for the period was due to lower offline data licensing.

USIS Operating Margin

USIS operating margin decreased to 28.1% for the first quarter of 2022 from 33.7% for the first quarter of 2021. The margin decrease for the first quarter of 2022 is due to the decrease in revenue and increase in depreciation expense related to increased capitalized software development spending, higher people costs and cloud production costs, partially offset by a decrease in royalty costs.

International

						Three Months Ended March 31,												Change
International						2022						2021						$						%
						(In millions)
Operating revenue:
Asia Pacific						$	86.5					$	87.0					$	(0.5)					(1)		%
Europe						85.8						77.0						8.8						11		%
Canada						61.6						60.7						0.9						1		%
Latin America						47.4						41.7						5.7						14		%
Total operating revenue						$	281.3					$	266.4					$	14.9					6		%
% of consolidated revenue						21		%				22		%
Total operating income						$	37.0					$	29.8					$	7.2					24		%
Operating margin						13.2		%				11.2		%										2.0		pts

International revenue increased by 6% for the first quarter of 2022, compared to the same period in 2021. On a local currency basis, revenue increased by 10% for the first quarter of 2022, driven by growth in all geographies. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $12.6 million, or 4%, for the first quarter of 2022.

Asia Pacific

On a local currency basis, revenue increased by 6% for the first quarter of 2022, compared to the same period in 2021. The increase was driven by growth in our commercial, consumer and background check verifications businesses in Australia. Additionally, the increase in revenue for the first quarter of 2022 is also attributable to growth in India due to higher consumer volumes. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $5.6 million, or 7% for the first quarter of 2022. Reported revenue decreased by 1% for the first quarter of 2022, compared to the same period in 2021.

Europe

On a local currency basis, revenue increased by 16% for the first quarter of 2022, compared to the same period in 2021. The increase was driven by growth in the debt management business with higher volumes in the public sector, partially offset by lower debt management volumes within the private sector for the region. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $3.2 million, or 5% for the first quarter of 2022. Reported revenue increased by 11% for the first quarter of 2022, compared to the same period in 2021.

Canada

On a local currency basis, revenue increased by 2% for the first quarter of 2022, compared to the same period in 2021. The increase was driven by growth in the identity and fraud and analytics businesses, mainly within the auto and telco verticals. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $0.1 million, or 1%, for the first quarter of 2022. Reported revenue increased by 1% for the first quarter of 2022, compared to the same period in 2021.

Latin America

On a local currency basis, revenue increased by 23% for the first quarter of 2022, compared to the same period in 2021. The increase reflects local currency growth in all countries, driven by price increases in Argentina and growth in the consumer and recovery management verticals in Chile. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $3.8 million, or 9%, for the first quarter of 2022, primarily within Argentina and Chile. Reported revenue increased by 14% for the first quarter of 2022, compared to the same period in 2021.

International Operating Margin

Operating margin increased to 13.2% for the first quarter of 2022 from 11.2% for the first quarter of 2021. The increased margin was due to higher revenue and lower purchased intangible asset amortization costs in Australia, partially offset by higher cloud production costs and higher depreciation expense related to technology transformation project spending.

General Corporate Expense

						Three Months Ended March 31,												Change
General Corporate Expense						2022						2021						$						%
						(In millions)
General corporate expense						$	134.5					$	143.8					$	(9.3)					(6)		%

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

General corporate expense decreased by $9.3 million for the first quarter of 2022, compared to the same period in 2021. The decrease was due to reduced incremental technology and data security costs as we work to complete our ongoing technology transformation and a decrease in people costs.

LIQUIDITY AND FINANCIAL CONDITION

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

Funds generated by operating activities, our Revolver and related CP program, more fully described below, are our most significant sources of liquidity. At March 31, 2022, we had $200.9 million in cash balances, as well as $663.3 million available to borrow under our Revolver.

Sources and Uses of Cash

We believe that our existing cash balance, liquidity available from our CP and Revolver, cash generated from ongoing operations and continued access to public or private debt markets will be sufficient to satisfy cash requirements over the next 12 months and beyond. While there was no significant change in our cash requirements as of March 31, 2022 compared to December 31, 2021, we have utilized existing CP capacity, together with cash from operating activities, to meet our current obligations. This includes the $345.0 million consumer class action settlement payment that was made in January 2022 related to the U.S. Consumer MDL Litigation settlement that became effective on January 11, 2022. In addition, we plan to pay off the $500.0 million Senior Notes due December 2022 with a combination of operating cash flow, available capacity under our Revolver and related CP program, or borrowings in the public or private debt markets.

Fund Transfer Limitations. The ability of certain of our subsidiaries and associated companies to transfer funds to the U.S. may be limited, in some cases, by certain restrictions imposed by foreign governments. These restrictions do not, individually or in the aggregate, materially limit our ability to service our indebtedness, meet our current obligations or pay dividends. As of March 31, 2022, we held $188.3 million of cash in our foreign subsidiaries.

Information about our cash flows, by category, is presented in the Consolidated Statements of Cash Flows. The following table summarizes our cash flows for the three months ended March 31, 2022 and 2021:

						Three Months Ended March 31,												Change
Net cash provided by (used in):						2022						2021						2022 vs. 2021
						(In millions)
Operating activities						$	(198.5)					$	143.4					$	(341.9)
Investing activities						$	(268.2)					$	(973.5)					$	705.3
Financing activities						$	444.3					$	(88.6)					$	532.9

Operating Activities

Cash provided by operating activities in the three months ended March 31, 2022 decreased by $341.9 million compared to the prior year period due to the $345.0 million consumer class action settlement payment that was made in January 2022 related to the U.S. Consumer MDL Litigation settlement that became effective on January 11, 2022.

Investing Activities

Capital Expenditures

						Three Months Ended March 31,												Change
Net cash used in:						2022						2021						2022 vs. 2021
						(In millions)
Capital expenditures*						$	(156.5)					$	(113.0)					$	(43.5)

*Amounts above are total cash outflows for capital expenditures.

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

Capital expenditures paid in the first three months of 2022 increased by $43.5 million from the same period in 2021. We are continuing to invest in enhanced technology systems and infrastructure as part of our technology transformation.

Acquisitions, Divestitures and Investments

						Three Months Ended March 31,												Change
Net cash used in:						2022						2021						2022 vs. 2021
						(In millions)
Acquisitions, net of cash acquired						$	(111.7)					$	(862.0)					$	750.3
Cash received from divestiture						$	—					$	1.5					$	(1.5)

During the first three months of 2022, we acquired Efficient Hire within our Workforce Solutions segment and Data Crédito within our International segment. During the first three months of 2021, we acquired Kount within our USIS segment, HIRETech and i2Verify within our Workforce Solutions segment and a small tuck-in acquisition within our International segment. In addition, in 2021, we also sold a small business within our International segment.

Financing Activities

Borrowings and Credit Facility Availability

						Three Months Ended March 31,												Change
Net cash provided by (used in):						2022						2021						2022 vs. 2021
						(In millions)
Net short-term borrowings						$	516.8					$	(0.7)					$	517.5

Credit Facilities Availability

In August 2021, we refinanced our existing unsecured revolving credit facility of $1.1 billion set to expire in September 2023, and entered into a new $1.5 billion five-year unsecured Revolver and a new $700.0 million delayed draw Term Loan, collectively known as the “Senior Credit Facilities,” both which mature in August 2026. Borrowings under the Senior Credit Facilities may be used for working capital, for capital expenditures, to refinance existing debt, to finance acquisitions and for other general corporate purposes. The Revolver includes an option to request a maximum of three one-year extensions of the maturity date, any time after the first anniversary of the closing date of the Revolver. Availability of the Revolver is reduced by the outstanding principal balance of our commercial paper notes and by any letters of credit issued under the Revolver.

In the third quarter of 2021, we increased the size of our CP program from $1.1 billion to $1.5 billion, consistent with the increase in our Revolver. Our $1.5 billion CP program has been established to allow for borrowing through the private placement of CP with maturities ranging from overnight to 397 days. We may use the proceeds of CP for general corporate purposes. The CP program is supported by our Revolver and the total amount of CP which may be issued is reduced by the amount of any outstanding borrowings under our Revolver.

As of March 31, 2022, there were $0.7 million of letters of credit outstanding, no outstanding borrowings under the Revolver, $700.0 million outstanding under the Term Loan and $836.0 million of outstanding CP notes. Availability under the Revolver was $663.3 million at March 31, 2022.

At March 31, 2022, 74% of our debt was fixed-rate debt and 26% was effectively variable debt. Our variable-rate debt consists of our outstanding term loan and CP. The interest rates reset periodically, depending on the terms of the respective financing agreements. At March 31, 2022, the interest rate on our variable-rate debt ranged from 0.35% to 1.69%.

Borrowing and Repayment Activity

We primarily borrow under our CP program and Revolver as needed and as availability allows. Net short-term borrowings primarily represent net borrowings or repayments of outstanding amounts under our CP program. There were no borrowings or payments on long-term debt for the first three months of 2022 or 2021.

Debt Covenants. A downgrade in our credit ratings would increase the cost of borrowings under our CP program, Revolver and Term Loan, and could limit or, in the case of a significant downgrade, preclude our ability to issue CP. Our outstanding indentures and comparable instruments also contain customary covenants including, for example, limits on mortgages, liens, sale/leaseback transactions, mergers and sales of assets.

In August 2021, we entered into our new Senior Credit Facilities as noted above in anticipation of the Appriss Insights acquisition, which provides additional financial flexibility. The Senior Credit Facilities include a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA for the preceding four quarters, of (i) 3.75 to 1.0 initially, (ii) 4.25 to 1.0 for the first fiscal quarter ending after the consummation of the Company’s acquisition of Appriss Insights on October 1, 2021, until the fourth fiscal quarter ending September 30, 2022, (iii) 4.0 to 1.0 for the fifth fiscal quarter ending December 31, 2022 until the sixth fiscal quarter ending March 31, 2023 and (iv) 3.75 to 1.0 for the seventh fiscal quarter ending June 30 , 2023 and through the remaining term of the Revolver. We may also elect to increase the maximum leverage ratio by 0.5 to 1.0 (subject to a maximum leverage ratio of 4.75 to 1.0) in connection with certain material acquisitions if we satisfy certain requirements. The Senior Credit Facilities also permit cash in excess of $175 million to be netted against debt in the calculation of the leverage ratio, subject to certain restrictions.

As of March 31, 2022, we were in compliance with all of our debt covenants.

We do not have any credit rating triggers that would accelerate the maturity of a material amount of the outstanding debt; however, our 3.3% senior notes due 2022, 3.95% senior notes due 2023, 2.6% senior notes due 2024, 2.6% senior notes due 2025, 3.25% senior notes due 2026, 3.1% senior notes due 2030, 2.35% senior notes due 2031 and 7.0% senior notes due 2037 (collectively, the “Senior Notes”) contain change in control provisions. If the Company experiences a change of control or publicly announces the Company’s intention to effect a change of control and the rating on the Senior Notes is lowered by Standard & Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”) below an investment grade rating within 60 days of such change of control or notice thereof, then the Company will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes plus accrued and unpaid interest. As of March 31, 2022, our S&P credit rating was BBB with a stable outlook and our Moody’s credit rating was Baa2 with a stable outlook. These ratings are subject to change as events and circumstances change.

For additional information about our debt, including the terms of our financing arrangements, basis for variable interest rates and debt covenants, see Note 5 of the Notes to Consolidated Financial Statements in our 2021 Form 10-K.

Equity Transactions

						Three Months Ended March 31,												Change
Net cash provided by (used in):						2022						2021						2022 vs. 2021
						(In millions)
Treasury stock repurchases						$	—					$	(34.1)					$	34.1
Dividends paid to Equifax shareholders						$	(47.9)					$	(47.5)					$	(0.4)
Dividends paid to noncontrolling interests						$	(0.5)					$	(0.7)					$	0.2
Proceeds from exercise of stock options and employee stock purchase plan						$	5.7					$	6.6					$	(0.9)
Purchase of noncontrolling interests						$	—					$	(3.6)					$	3.6

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

- During the first three months of 2022, we did not repurchase any shares of our common stock on the open market. During the first three months of 2021, we repurchased 0.2 million shares of our common stock for $34.1 million.

- We maintained our quarterly dividend of $0.39 per share in the first quarter of 2022. We paid cash dividends to Equifax shareholders of $47.9 million and $47.5 million, or $0.39 per share, during the three months ended March 31, 2022 and 2021, respectively.

- We received cash of $5.7 million and $6.6 million during the first three months of 2022 and 2021, respectively, from the exercise of stock options and the employee stock purchase plan.

At March 31, 2022, the Company had $520.2 million remaining for stock repurchases under the existing authorization from the board of directors.

Contractual Obligations, Commercial Commitments and Other Contingencies

Our contractual obligations and commercial commitments have not changed materially from those reported in our 2021 Form 10-K. For additional information about certain obligations and contingencies, see Note 6 of the Notes to Consolidated Financial Statements in this Form 10-Q.

Off-Balance Sheet Arrangements

There have been no material changes with respect to our off-balance sheet arrangements from those presented in our 2021 Form 10-K.

Benefit Plans

At December 31, 2021, our U.S. Retirement Income Plan met or exceeded ERISA’s minimum funding requirements. In the future, we expect to make minimum funding contributions as required and may make discretionary contributions, depending on certain circumstances, including market conditions and our liquidity needs. We believe additional funding contributions, if any, would not prevent us from continuing to meet our liquidity needs, which are primarily funded from cash flows generated by operating activities, available cash and cash equivalents, our CP program and our Revolver.

For our non-U.S., tax-qualified retirement plans, we fund an amount sufficient to meet minimum funding requirements but no more than allowed as a tax deduction pursuant to applicable tax regulations. For our non-qualified supplementary retirement plans, we fund the benefits as they are paid to retired participants, but accrue the associated expense and liabilities in accordance with U.S. GAAP.

For additional information about our benefit plans, see Note 9 of the Notes to Consolidated Financial Statements in our 2021 Form 10-K.

Foreign Currency

Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers. Beginning in the third quarter of 2018, we have accounted for Argentina as a highly inflationary economy which resulted in the recognition of a $1.1 million foreign currency gain that was recorded in other income, net in our Consolidated Statements of Income during the three months ended March 31, 2021. There was minimal foreign currency impact during the three months ended March 31, 2022.

RECENT ACCOUNTING PRONOUNCEMENTS

For information about new accounting pronouncements and the potential impact on our Consolidated Financial Statements, see Note 1 of the Notes to Consolidated Financial Statements in this Form 10-Q and Note 1 of the Notes to Consolidated Financial Statements in our 2021 Form 10-K.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The Company’s Consolidated Financial Statements are prepared in conformity with U.S. GAAP. This requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in our Consolidated Financial Statements and the Notes to Consolidated Financial Statements. We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates and assumptions about the effects of matters that are inherently uncertain. The “Application of Critical Accounting Policies and Estimates” section in the MD&A, and Note 1 of the Notes to Consolidated Financial Statements, in our 2021 Form 10-K describe the significant accounting estimates and policies used in the preparation of our Consolidated Financial Statements. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information available at the time. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.