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

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

BUSINESS OVERVIEW

Equifax Inc. is a global data, analytics and technology company. We provide information solutions and human resources business process outsourcing services for businesses, governments and consumers. We have a large and diversified group of clients, including financial institutions, corporations, governments 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, 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 solutions and processing services for our clients. We also provide information, technology and services to support debt collections and recovery management. Additionally, we are a leading provider of payroll-related and human resource management business process outsourcing services in the United States of America, or 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. We currently operate in four global regions: North America (U.S. and Canada), Asia Pacific (Australia, New Zealand and India), Europe (the United Kingdom, or U.K., Spain and Portugal) and Latin America (Argentina, Chile, Costa Rica, 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 offer Equifax branded credit services in Russia through a joint venture, have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore and the United Arab Emirates, have an investment in a consumer and commercial credit information company in Brazil and have an investment in an identity authentication company in Canada.

Recent Events and Company Outlook



On March 11, 2020, the World Health Organization designated the novel
coronavirus disease ("COVID-19") as a global pandemic. In March of 2020, the
impact of COVID-19 and related actions to attempt to control its spread began to
impact our consolidated operating results. Through the end of February 2020,
consolidated revenue showed significant growth versus the same two-month period
in 2019. Principally beginning in the second half of March, however,
year-over-year consolidated revenue trends materially weakened. We expect
consolidated revenue to be negatively impacted in the second quarter of 2020,
and for negative impacts to continue until economic conditions improve.
As further described in our 2019 Form 10-K, we operate in the United States,
which represented 73% of our revenue in 2019, and internationally in 24
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. Since mid-March 2020, we have
experienced significant declines in most vertical markets, including financial
services, automotive and telecommunications. The exception, particularly in the
United States, is primarily in the mortgage market and our unemployment cost
management business in which we are seeing significant growth, and in certain
government services and our consumer direct businesses which are seeing far
smaller impacts. Due to this dynamic, at present, our revenue in the United
States is being impacted substantially less than our revenue internationally. We
are unable to determine the severity or duration of the impact of COVID-19 on
Equifax, or how the impact on the individual markets in the countries we serve
will change with time.
We expect that the global COVID-19 pandemic will continue to adversely impact
our business and results of operations. During this uncertain time, our critical
priorities are:
(i)the health and safety of our employees and their families;
(ii)providing support to consumers;
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(iii)helping our customers execute their changing business plans by providing
innovative solutions combining our unique data assets and leading analytical and
technology capabilities; and
(iv)executing on our EFX2020 cloud technology, data and security transformation
per our previously stated plans.
In the first quarter of 2020, we executed on our business continuity plans and
formed a crisis management team to address the challenges related to the ongoing
COVID-19 pandemic. Since March, our employees have been working from home in
each country where we operate, with only essential employees in customer support
and data center operations working on site at our facilities. For employees
working at our facilities, we have instituted social distancing protocols,
increased the level of cleaning and sanitizing in those facilities and
undertaken other actions to make these sites safer. We have also substantially
reduced employee travel to only essential business needs. As part of our
business continuity plans, we are generally following the requirements and
protocols published by the U.S. Centers for Disease Control and the World Health
Organization, and state and local governments. We cannot predict when or how we
will begin to lift the actions put in place as part of our business continuity
plans, including work from home requirements and travel restrictions. As of the
date of this filing, we do not believe our work from home protocol has
materially adversely impacted our internal controls, financial reporting systems
or our operations.
Our data and analytics, product and sales teams are focused on how to refine
existing products and services, as well as generate new products and services,
to meet changing needs of our customer in this environment. Our technology teams
continue to execute on our EFX2020 cloud technology, data and security
transformation, including the continued migration of our technology to cloud
native environments. To date, the change in working environment has not caused
meaningful disruptions in the execution of this plan.
As a response to the ongoing COVID-19 pandemic, we have implemented plans to
manage our costs. We have significantly limited the addition of new employees
and third party contracted services, eliminated all travel except where
necessary to meet customer or regulatory needs, and acted to limit discretionary
spending. To the extent the business disruption continues for an extended
period, additional cost management actions will be considered. Any future asset
impairment charges, increase in allowance for doubtful accounts, or
restructuring charges could be more likely and will be dependent on the severity
and duration of this crisis.
At March 31, 2020, we had approximately $370 million in cash and $1.2 billion
available to borrow under our revolving credit facility that matures in
September 2023 and receivables funding facility that matures in December 2022.
We recently amended our revolving credit facility to increase the maximum
leverage ratio through 2021 to provide us with additional financial flexibility.
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 highly uncertain.
For more information, see "Item 1A. Risk Factors-Our business has been and will
continue to be negatively impacted by the recent coronavirus outbreak."

2017 Cybersecurity Incident

Litigation, Claims and Government Investigations. As a result of the 2017 cybersecurity incident, we are subject to a significant number of proceedings and investigations as described in Part II, "Item 1. Legal Proceedings" in this Form 10-Q.

We believe it is probable that we will incur losses associated with certain of the proceedings and investigations related to the 2017 cybersecurity incident. In 2019, we recorded expenses, net of insurance recoveries, of $800.9 million in other current liabilities and selling, general, and administrative expenses in our Consolidated Balance Sheets and Statements of Income (Loss), respectively, exclusive of our legal and professional services expenses. The amount accrued represents our best estimate of the liability related to these matters. The Company will continue to evaluate information as it becomes known and adjust accruals for new information and further developments in accordance with ASC 450-20-25. While it is reasonably possible that losses exceeding the amount accrued may be incurred, it is not possible at this time to estimate the additional possible loss in excess of the amount already accrued that might result from adverse judgments, settlements, penalties or other resolution of the proceedings and investigations described below based on a number of factors, such as the various stages of these proceedings and investigations, including matters on appeal, that alleged damages have not been specified or are uncertain, 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 ultimate amount paid on these actions, claims and investigations in


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excess of the amount already accrued could be material to the Company's consolidated financial condition, results of operations, or cash flows in future periods.

Future Costs. We are currently executing substantial initiatives in security and consumer support, and a company-wide transformation of our technology infrastructure, which we refer to as our technology transformation, and incurred substantial increased expenses and capital expenditures in 2019 related to these initiatives. We expect to continue to incur significant expenses and capital expenditures in 2020 related to these initiatives, at similar levels as those incurred in 2019. We incurred significant legal and professional services expenses related to the lawsuits, claims and government investigations to which we were a party in 2019, and expect to continue to incur these expenses until all matters are fully resolved. However, we expect that the level of legal and professional service expenses related to these matters will be significantly lower in 2020 due to the settlement of all of the significant matters in the U.S in 2019.

We will recognize the expenses and capital expenditures referenced herein as they are incurred.

Segment and Geographic Information

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

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

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

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

Geographic Information. We currently have operations in the following countries: Argentina, Australia, Canada, Chile, Costa Rica, Ecuador, El Salvador, Honduras, India, Mexico, New Zealand, Paraguay, Peru, Portugal, the Republic of Ireland, Spain, the U.K., Uruguay and the U.S. We also offer Equifax branded credit services in Russia through a joint venture, have investments in consumer and/or commercial credit information companies through joint ventures in Cambodia, Malaysia, Singapore, and the United Arab Emirates, have an investment in a consumer and commercial credit information company in Brazil, and have an investment in an identity authentication company in Canada. Approximately 76% and 72% of our revenue was generated in the U.S. during the three months ended March 31, 2020 and 2019, respectively.



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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, 2020 and 2019 were as follows:


                                                        Key Performance Indicators
                                                       Three Months Ended March 31,
                                                       2020                        2019
                                                   (In millions, except per share data)
Operating revenue                              $         957.9                  $  846.1
Operating revenue change                                    13    %                   (2) %
Operating income (loss)                        $         135.9                  $ (617.9)
Operating margin                                          14.2    %                (73.0) %
Net income (loss) attributable to Equifax      $         112.6                  $ (555.9)

Diluted earnings (loss) per share              $          0.92                  $  (4.57)
Cash provided by operating activities          $          30.8                  $   31.0
Capital expenditures*                          $         (89.4)                 $  (94.7)

*Amounts include accruals for capital expenditures.

Operational and Financial Highlights

•We did not repurchase shares of our common stock during the first three months of 2020. At March 31, 2020, $590.1 million was available for future purchases of common stock under our share repurchase authorization.

•We paid out $47.3 million or $0.39 per share in dividends to our shareholders during the first three months of 2020.




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