Equifax Inc 10-Q for FY2023 Q3

Equifax Inc (EFX)

10-Q 2023-10-23 For: 2023-09-30

Added on April 11, 2026

About this 10-Q

Equifax Inc filed this 10-Q on October 23, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.32B; up 6.0% from $1.24B a year earlier
Net income: $162.2M; down 2.1% from net income of $165.7M a year earlier
Diluted EPS: $1.31; down 2.2% from $1.34 a year earlier

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Georgia			58-0401110
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)


		Page
PART I.	Financial Information	4
Item 1.	Financial Statements (Unaudited)	4
	Consolidated Statements of Income—Three Months Ended September 30 , 2023 and 2022	4
	Consolidated Statements of Income—Nine Months Ended September 30 , 2023 and 2022	5
	Consolidated Statements of Comprehensive Income (Loss)—Three and Nine Months Ended September 30 , 2023 and 2022	6

	Consolidated Balance Sheets—September 30 , 2023 and December 31, 2022	7
	Consolidated Statements of Cash Flows—Nine Months Ended September 30 , 2023 and 2022	8
	Consolidated Statements of Shareholders' Equity—Three Months Ended September 30 , 2023 and 2022	9

	Consolidated Statements of Shareholders' Equity and Accumulated Other Comprehensive Loss—Nine Months Ended September 30, 2023 and 2022	10
	Notes to Consolidated Financial Statements (Unaudited)	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II.	Other Information	39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	42
Signatures		43


	Three Months Ended September 30,
	2023		2022
(In millions, except per share amounts)
Operating revenue	$	1,319.1	$	1,244.3
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)	585.2		542.5
Selling, general and administrative expenses	333.1		318.0
Depreciation and amortization	154.4		140.9
Total operating expenses	1,072.7		1,001.4
Operating income	246.4		242.9
Interest expense	(62.8)		(47.1)
Other income, net	7.1		23.9
Consolidated income before income taxes	190.7		219.7
Provision for income taxes	(26.4)		(52.8)


Consolidated net income	164.3		166.9
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests	(2.1)		(1.2)

Net income attributable to Equifax	$	162.2	$	165.7




Basic earnings per common share:


Net income attributable to Equifax	$	1.32	$	1.35
Weighted-average shares used in computing basic earnings per share	123.0		122.4
Diluted earnings per common share:


Net income attributable to Equifax	$	1.31	$	1.34
Weighted-average shares used in computing diluted earnings per share	123.9		123.3
Dividends per common share	$	0.39	$	0.39


	Nine Months Ended September 30,
	2023		2022
(In millions, except per share amounts)
Operating revenue	$	3,938.7	$	3,924.3
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)	1,753.5		1,638.0
Selling, general and administrative expenses	1,042.3		988.5
Depreciation and amortization	454.4		417.8
Total operating expenses	3,250.2		3,044.3
Operating income	688.5		880.0
Interest expense	(181.1)		(128.5)
Other income, net	27.7		36.8
Consolidated income before income taxes	535.1		788.3
Provision for income taxes	(117.9)		(197.2)


Consolidated net income	417.2		591.1
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests	(4.3)		(3.1)

Net income attributable to Equifax	$	412.9	$	588.0




Basic earnings per common share:


Net income attributable to Equifax	$	3.36	$	4.81
Weighted-average shares used in computing basic earnings per share	122.7		122.3
Diluted earnings per common share:


Net income attributable to Equifax	$	3.34	$	4.77
Weighted-average shares used in computing diluted earnings per share	123.6		123.3
Dividends per common share	$	1.17	$	1.17


	Three Months Ended September 30,
	2023				2022
	Equifax Shareholders		Noncontrolling Interests		Total		Equifax Shareholders		Noncontrolling Interests		Total
	(In millions)
Net income	$	162.2	$	2.1	$	164.3	$	165.7	$	1.2	$	166.9
Other comprehensive loss:
Foreign currency translation adjustment	(118.0)		(2.6)		(120.6)		(181.1)		(0.5)		(181.6)
Change in unrecognized prior service cost related to our pension and other postretirement benefit plans, net	—		—		—		(0.7)		—		(0.7)

Comprehensive income (loss)	$	44.2	$	(0.5)	$	43.7	$	(16.1)	$	0.7	$	(15.4)


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(In millions, except par values)	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	412.6	$	285.2
Trade accounts receivable, net of allowance for doubtful accounts of $18.3 and $19.1 at September 30, 2023 and December 31, 2022, respectively	967.9		857.7
Prepaid expenses	142.0		134.3
Other current assets	74.9		93.3
Total current assets	1,597.4		1,370.5
Property and equipment:
Capitalized internal-use software and system costs	2,428.2		2,139.1
Data processing equipment and furniture	286.3		281.4
Land, buildings and improvements	267.1		261.6
Total property and equipment	2,981.6		2,682.1
Less accumulated depreciation and amortization	(1,218.0)		(1,095.1)
Total property and equipment, net	1,763.6		1,587.0
Goodwill	6,730.8		6,383.9
Indefinite-lived intangible assets	95.1		94.8
Purchased intangible assets, net	1,903.9		1,818.5
Other assets, net	258.1		293.2
Total assets	$	12,348.9	$	11,547.9
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt	$	501.0	$	967.2
Accounts payable	190.7		250.8
Accrued expenses	267.1		229.0
Accrued salaries and bonuses	173.7		138.7
Deferred revenue	115.2		132.9
Other current liabilities	334.1		296.6
Total current liabilities	1,581.8		2,015.2
Long-term debt	5,500.4		4,820.1
Deferred income tax liabilities, net	468.8		460.3
Long-term pension and other postretirement benefit liabilities	97.7		100.4
Other long-term liabilities	215.6		178.6
Total liabilities	7,864.3		7,574.6
Commitments and Contingencies (see Note 6)

Redeemable noncontrolling interests	175.5		—
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 September 30, 2023 and December 31, 2022; Outstanding shares - 123.2 and 122.5 at September 30, 2023 and December 31, 2022, respectively	236.6		236.6
Paid-in capital	1,736.6		1,594.2
Retained earnings	5,524.5		5,256.0
Accumulated other comprehensive loss	(563.9)		(473.7)
Treasury stock, at cost, 65.5 shares and 66.2 shares at September 30, 2023 and December 31, 2022, respectively	(2,634.6)		(2,650.7)
Stock held by employee benefit trusts, at cost, 0.6 shares at September 30, 2023 and December 31, 2022	(5.9)		(5.9)

Total Equifax shareholders’ equity	4,293.3		3,956.5
Noncontrolling interests	15.8		16.8
Total shareholders' equity	4,309.1		3,973.3
Total liabilities, redeemable noncontrolling interests, and shareholders' equity	$	12,348.9	$	11,547.9


	Equifax Shareholders
								Accumulated Other Comprehensive Loss				Stock Held By Employee Benefits Trusts
	Common Stock
	Shares Outstanding	Amount		Paid-In Capital		Retained Earnings				Treasury Stock				Noncontrolling Interests		Total Equity
	(In millions, except per share amounts)
Balance, June 30, 2023	122.7	$	236.6	$	1,650.5	$	5,410.5	$	(445.9)	$	(2,654.6)	$	(5.9)	$	17.1	$	4,208.3

Net income	—	—		—		162.2		—		—		—		2.1		164.3
Other comprehensive loss	—	—		—		—		(118.0)		—		—		(2.6)		(120.6)
Shares issued under stock and benefit plans, net of minimum tax withholdings	—	—		1.6		—		—		0.7		—		—		2.3

Cash dividends ($0.39 per share)	—	—		—		(48.2)		—		—		—		—		(48.2)
Dividends paid to employee benefits trusts	—	—		0.1		—		—		—		—		—		0.1
Stock-based compensation expense	—	—		9.1		—		—		—		—		—		9.1


Shares issued in acquisition of Boa Vista Serviços	0.5	—		75.3		—		—		19.3		—		—		94.6

Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(0.8)		(0.8)



Balance, September 30, 2023	123.2	$	236.6	$	1,736.6	$	5,524.5	$	(563.9)	$	(2,634.6)	$	(5.9)	$	15.8	$	4,309.1


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
Consolidated Operating Revenue	2023		2022		$		%		2023		2022		$		%
	(In millions)								(In millions)
Verification Services	$	459.3	$	454.5	$	4.8	1	%	$	1,389.1	$	1,472.4	$	(83.3)	(6)	%
Employer Services	117.9		104.4		13.5		13	%	367.2		344.7		22.5		7	%
Total Workforce Solutions	577.2		558.9		18.3		3	%	1,756.3		1,817.1		(60.8)		(3)	%
Online Information Solutions	348.2		314.4		33.8		11	%	1,047.8		987.5		60.3		6	%
Mortgage Solutions	27.3		32.1		(4.8)		(15)	%	90.8		112.3		(21.5)		(19)	%
Financial Marketing Services	50.5		50.9		(0.4)		(1)	%	154.1		152.0		2.1		1	%
Total U.S. Information Solutions	426.0		397.4		28.6		7	%	1,292.7		1,251.8		40.9		3	%
Asia Pacific	85.5		87.1		(1.6)		(2)	%	263.1		263.7		(0.6)		—	%
Europe	85.2		80.7		4.5		6	%	239.6		246.3		(6.7)		(3)	%
Canada	65.1		66.2		(1.1)		(2)	%	194.7		191.8		2.9		2	%
Latin America	80.1		54.0		26.1		48	%	192.3		153.6		38.7		25	%
Total International	315.9		288.0		27.9		10	%	889.7		855.4		34.3		4	%
Total operating revenue	$	1,319.1	$	1,244.3	$	74.8	6	%	$	3,938.7	$	3,924.3	$	14.4	—	%


Performance Obligation	Amount
	(In millions)
Less than 1 year	$	25.7
1 to 3 years	28.9
3 to 5 years	14.3
Thereafter	21.8
Total remaining performance obligation	$	90.7


Fair value of consideration	Amount
	(In millions)

Cash transferred (1)	$	509.7
Equifax do Brasil common shares issued (2)	176.4
Equifax Brazilian Depositary Receipts ("Equifax BDRs") issued (3)	94.6
Fair value of 10% investment	88.9
Total value of consideration	$	869.6


Net assets acquired:	Amount
	(In millions)
Cash and cash equivalents	$	239.5
Trade accounts receivable and other current assets	36.2
Other assets, net	48.6
Purchased intangible assets (1)	241.9

Goodwill (2)	407.2
Total assets acquired	973.4



Total liabilities assumed	(103.8)

Net assets acquired	$	869.6


Purchased intangible assets	Amount		Weighted-average useful life
	(In millions)		(In years)
Customer relationships	$	172.4	10.0
Purchased data files	64.3		15.0

Trade names and other intangible assets	5.2		2.4
Total acquired definite-lived intangibles	$	241.9	11.2


	Workforce Solutions		U.S. Information Solutions		International		Total

Balance, December 31, 2022	$	2,520.8	$	2,004.8	$	1,858.3	$	6,383.9
Acquisitions	—		—		410.4		410.4
Adjustments to initial purchase price allocation	(0.7)		1.4		0.3		1.0
Foreign currency translation	—		—		(64.5)		(64.5)

Balance, September 30, 2023	$	2,520.1	$	2,006.2	$	2,204.5	$	6,730.8


	September 30, 2023						December 31, 2022
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Definite-lived intangible assets:	(In millions)
Purchased data files	$	1,136.5	$	(574.5)	$	562.0	$	1,090.0	$	(527.8)	$	562.2
Customer relationships	1,036.7		(455.2)		581.5		874.6		(407.4)		467.2

Proprietary database	706.3		(157.3)		549.0		705.9		(115.0)		590.9
Acquired software and technology	222.2		(66.1)		156.1		225.4		(42.6)		182.8
Trade names, non-compete agreements and other intangible assets	83.3		(28.0)		55.3		41.2		(25.8)		15.4

Total definite-lived intangible assets	$	3,185.0	$	(1,281.1)	$	1,903.9	$	2,937.1	$	(1,118.6)	$	1,818.5


Years ending December 31,	Amount
	(In millions)
2023	$	66.0
2024	252.2
2025	247.4
2026	231.5
2027	218.7
Thereafter	888.1
	$	1,903.9


	September 30, 2023		December 31, 2022
	(In millions)
Commercial paper	$	483.5	$	566.8



Notes, 3.95%, due June 2023	—		400.0
Notes, 2.6%, due December 2024	750.0		750.0
Notes, 2.6%, due December 2025	400.0		400.0
Notes, 3.25%, due June 2026	275.0		275.0

Term loan, due August 2026	700.0		700.0
Notes, 5.10%, due December 2027	750.0		750.0
Notes, 5.10%, due June 2028	700.0		—
Debentures, 6.9%, due July 2028	125.0		125.0
Notes, 3.1%, due May 2030	600.0		600.0
Notes, 2.35%, due September 2031	1,000.0		1,000.0
Notes, 7.0%, due July 2037	250.0		250.0
Other	—		0.4
Total debt	6,033.5		5,817.2
Less short-term debt and current maturities	(501.0)		(967.2)
Less unamortized discounts and debt issuance costs	(32.1)		(29.9)
Total long-term debt, net	$	5,500.4	$	4,820.1


	Foreign currency translation adjustment		Pension and other postretirement benefit plans		Cash flow hedging transactions		Total
	(In millions)
Balance, December 31, 2022	$	(469.3)	$	(3.4)	$	(1.0)	$	(473.7)
Other comprehensive loss	(90.2)		—		—		(90.2)


Balance, September 30, 2023	$	(559.5)	$	(3.4)	$	(1.0)	$	(563.9)


	Three Months Ended				Nine Months Ended
(In millions)	September 30,				September 30,
Operating revenue:	2023		2022		2023		2022
Workforce Solutions	$	577.2	$	558.9	$	1,756.3	$	1,817.1
U.S. Information Solutions	426.0		397.4		1,292.7		1,251.8
International	315.9		288.0		889.7		855.4
Total operating revenue	$	1,319.1	$	1,244.3	$	3,938.7	$	3,924.3


	September 30,		December 31,
(In millions)	2023		2022
Total assets:
Workforce Solutions	$	4,173.0	$	4,156.5
U.S. Information Solutions	3,314.0		3,291.4
International	3,931.1		3,106.8
General Corporate	930.8		993.2
Total assets	$	12,348.9	$	11,547.9


	Key Performance Indicators
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(In millions, except per share data)
Operating revenue	$	1,319.1		$	1,244.3		$	3,938.7		$	3,924.3
Operating revenue change	6		%	2		%	—		%	7		%
Operating income	$	246.4		$	242.9		$	688.5		$	880.0
Operating margin	18.7		%	19.5		%	17.5		%	22.4		%
Net income attributable to Equifax	$	162.2		$	165.7		$	412.9		$	588.0
Diluted earnings per share	$	1.31		$	1.34		$	3.34		$	4.77
Cash provided by operating activities	$	381.7		$	354.9		$	794.7		$	431.7
Capital expenditures*	$	(145.7)		$	(160.9)		$	(448.6)		$	(454.2)


	Nine Months Ended September 30,				Change
Net cash provided by (used in):	2023		2022		2023 vs. 2022
	(In millions)
Operating activities	$	794.7	$	431.7	$	363.0
Investing activities	$	(724.7)	$	(807.1)	$	82.4
Financing activities	$	63.5	$	416.5	$	(353.0)


	Nine Months Ended September 30,				Change
Net cash used in:	2023		2022		2023 vs. 2022
	(In millions)
Capital expenditures*	$	(455.6)	$	(468.4)	$	12.8


	Nine Months Ended September 30,				Change
Net cash (used in) provided by:	2023		2022		2023 vs. 2022
	(In millions)
Acquisitions, net of cash acquired	$	(276.0)	$	(437.5)	$	161.5
Cash received from divestitures	$	6.9	$	98.8	$	(91.9)


	Total Number of Shares	Average Price Paid		Total Number of Shares Purchased as Part of Publicly-Announced	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or
Period	Purchased (1)	Per Share (2)		Plans or Programs	Programs (3)
July 1 - July 31, 2023	—	$	—	—	$	520,168,924
August 1 - August 31, 2023	19	$	—	—	$	520,168,924
September 1 - September 30, 2023	57	$	—	—	$	520,168,924
Total	76	$	—	—	$	520,168,924


Exhibit No.						Description






31.1						Rule 13a-14(a) Certification of Chief Executive Officer
31.2						Rule 13a-14(a) Certification of Chief Financial Officer
32.1						Section 1350 Certification of Chief Executive Officer
32.2						Section 1350 Certification of Chief Financial Officer
101.INS						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
101.LAB						XBRL Taxonomy Extension Label Linkbase
101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


		Equifax Inc.
		(Registrant)

Date:	October 23, 2023	By:	/s/ Mark W. Begor
			Mark W. Begor
			Chief Executive Officer
			(Principal Executive Officer)

Date:	October 23, 2023		/s/ John W. Gamble, Jr.
			John W. Gamble, Jr.
			Executive Vice President, Chief Financial Officer
			and Chief Operations Officer
			(Principal Financial Officer)

Date:	October 23, 2023		/s/ James M. Griggs
			James M. Griggs
			Chief Accounting Officer and Corporate Controller
			(Principal Accounting Officer)


1.	I have reviewed this quarterly report on Form 10-Q of Equifax Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.