efx-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2021


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

For the transition period from to .

Commission File Number: 001-06605

EQUIFAX INC.

(Exact name of registrant as specified in its charter)


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

1550 Peachtree Street

N.W.

Atlanta

Georgia

30309

(Address of principal executive offices)

(Zip Code)

404-885-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $1.25 par value per share

EFX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On July 9, 2021, there were 121,837,277 shares of the registrant’s common stock outstanding.

EQUIFAX INC.

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, 2021

INDEX


		Page
PART I.	Financial Information	4
Item 1.	Financial Statements (Unaudited)	4
	Consolidated Statements of Income—Three Months Ended June 30, 2021 and 2020	4
	Consolidated Statements of Income—Six Months Ended June 30, 2021 and 2020	5
	Consolidated Statements of Comprehensive Income—Three and Six Months Ended June 30, 2021 and 2020	6
	Consolidated Balance Sheets—June 30, 2021 and December 31, 2020	7
	Consolidated Statements of Cash Flows—Six Months Ended June 30, 2021 and 2020	8
	Consolidated Statements of Shareholders' Equity—Three Months Ended June 30, 2021 and 2020	9
	Consolidated Statements of Shareholders' Equity and Accumulated Other Comprehensive Loss—Six Months Ended June 30, 2021 and 2020	10
	Notes to Consolidated Financial Statements (Unaudited)	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
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	41
Item 6.	Exhibits	42
Signatures		43

FORWARD-LOOKING STATEMENTS

This report contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “may” and similar expressions identify forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to future operating results, the 2017 cybersecurity incident, improvements in our information technology and data security infrastructure, including as a part of our cloud data and technology transformation, our strategy, our ability to mitigate or manage disruptions posed by COVID-19, the impact of COVID-19 and changes in U.S. and worldwide economic conditions that materially impact consumer spending, consumer debt and employment and the demand for Equifax's products and services, our culture, our ability to innovate, the market acceptance of new products and services and similar statements about our business plans are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, “Item 1A. Risk Factors,” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020, as well as subsequent reports filed with the Securities and Exchange Commission. As a result of such risks and uncertainties, we urge you not to place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

EQUIFAX INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,
	2021		2020
(In millions, except per share amounts)
Operating revenue	$	1,234.8	$	982.8
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)	483.0		409.3
Selling, general and administrative expenses	328.4		309.9
Depreciation and amortization	117.4		96.8
Total operating expenses	928.8		816.0
Operating income	306.0		166.8
Interest expense	(34.9)		(36.6)
Other income (expense), net	6.0		(1.8)
Consolidated income before income taxes	277.1		128.4
Provision for income taxes	(61.2)		(28.0)


Consolidated net income	215.9		100.4
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests	(0.8)		(0.2)

Net income attributable to Equifax	$	215.1	$	100.2




Basic earnings per common share:


Net income attributable to Equifax	$	1.77	$	0.83
Weighted-average shares used in computing basic earnings per share	121.8		121.4
Diluted earnings per common share:


Net income attributable to Equifax	$	1.74	$	0.82
Weighted-average shares used in computing diluted earnings per share	123.5		122.7
Dividends per common share	$	0.39	$	0.39

See Notes to Consolidated Financial Statements.

EQUIFAX INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Six Months Ended June 30,
	2021		2020
(In millions, except per share amounts)
Operating revenue	$	2,447.8	$	1,940.8
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)	966.2		823.4
Selling, general and administrative expenses	637.3		626.0
Depreciation and amortization	231.7		188.7
Total operating expenses	1,835.2		1,638.1
Operating income	612.6		302.7
Interest expense	(72.1)		(67.3)
Other income, net	5.1		49.3
Consolidated income before income taxes	545.6		284.7
Provision for income taxes	(126.8)		(65.5)


Consolidated net income	418.8		219.2
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests	(2.1)		(2.1)

Net income attributable to Equifax	$	416.7	$	217.1




Basic earnings per common share:


Net income attributable to Equifax	$	3.42	$	1.79
Weighted-average shares used in computing basic earnings per share	121.8		121.4
Diluted earnings per common share:


Net income attributable to Equifax	$	3.38	$	1.77
Weighted-average shares used in computing diluted earnings per share	123.4		122.7
Dividends per common share	$	0.78	$	0.78

See Notes to Consolidated Financial Statements.

EQUIFAX INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended June 30,
	2021				2020
	Equifax Shareholders		Noncontrolling Interests		Total		Equifax Shareholders		Noncontrolling Interests		Total
	(In millions)
Net income	$	215.1	$	0.8	$	215.9	$	100.2	$	0.2	$	100.4
Other comprehensive income (loss):
Foreign currency translation adjustment	4.8		(0.4)		4.4		233.4		0.5		233.9
Change in unrecognized prior service cost related to our pension and other postretirement benefit plans, net	(0.3)		—		(0.3)		(0.6)		—		(0.6)

Comprehensive income	$	219.6	$	0.4	$	220.0	$	333.0	$	0.7	$	333.7


	Six Months Ended June 30,
	2021				2020
	Equifax Shareholders		Noncontrolling Interests		Total		Equifax Shareholders		Noncontrolling Interests		Total
	(In millions)
Net income	$	416.7	$	2.1	$	418.8	$	217.1	$	2.1	$	219.2
Other comprehensive income (loss):
Foreign currency translation adjustment	15.2		0.5		15.7		(57.6)		(1.7)		(59.3)
Change in unrecognized prior service cost related to our pension and other postretirement benefit plans, net	(0.6)		—		(0.6)		(1.2)		—		(1.2)

Comprehensive income	$	431.3	$	2.6	$	433.9	$	158.3	$	0.4	$	158.7

See Notes to Consolidated Financial Statements.

EQUIFAX INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2021		December 31, 2020
(In millions, except par values)
ASSETS
Current assets:
Cash and cash equivalents	$	458.1	$	1,684.6
Trade accounts receivable, net of allowance for doubtful accounts of $11.2 and $12.9 at June 30, 2021 and December 31, 2020, respectively	694.0		630.6
Prepaid expenses	129.7		104.1
Other current assets	47.7		59.0
Total current assets	1,329.5		2,478.3
Property and equipment:
Capitalized internal-use software and system costs	1,557.9		1,374.5
Data processing equipment and furniture	303.5		299.9
Land, buildings and improvements	244.9		239.1
Total property and equipment	2,106.3		1,913.5
Less accumulated depreciation and amortization	(890.7)		(774.1)
Total property and equipment, net	1,215.6		1,139.4
Goodwill	5,085.1		4,495.8
Indefinite-lived intangible assets	95.2		94.9
Purchased intangible assets, net	1,221.9		997.8
Other assets, net	393.0		405.6
Total assets	$	9,340.3	$	9,611.8
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt	$	600.7	$	1,101.1
Accounts payable	171.3		159.1
Accrued expenses	219.1		251.8
Accrued salaries and bonuses	182.0		250.3
Deferred revenue	110.2		108.3
Other current liabilities	591.9		612.5
Total current liabilities	1,875.2		2,483.1
Long-term debt	3,280.9		3,277.3
Deferred income tax liabilities, net	378.3		332.3
Long-term pension and other postretirement benefit liabilities	122.4		130.7
Other long-term liabilities	184.9		178.1
Total liabilities	5,841.7		6,401.5
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 June 30, 2021 and December 31, 2020; Outstanding shares - 121.8 at June 30, 2021 and December 31, 2020	236.6		236.6
Paid-in capital	1,506.8		1,470.7
Retained earnings	4,505.7		4,185.4
Accumulated other comprehensive loss	(156.8)		(171.4)
Treasury stock, at cost, 66.9 shares at June 30, 2021 and December 31, 2020	(2,625.9)		(2,547.0)
Stock held by employee benefit trusts, at cost, 0.6 shares at June 30, 2021 and December 31, 2020	(5.9)		(5.9)

Total Equifax shareholders’ equity	3,460.5		3,168.4
Noncontrolling interests including redeemable noncontrolling interests	38.1		41.9
Total equity	3,498.6		3,210.3
Total liabilities and equity	$	9,340.3	$	9,611.8

See Notes to Consolidated Financial Statements.

EQUIFAX INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2021		2020
	(In millions)
Operating activities:
Consolidated net income	$	418.8	$	219.2
Adjustments to reconcile consolidated net income to net cash provided by operating activities:

Depreciation and amortization	236.4		192.1
Stock-based compensation expense	33.9		31.7

Deferred income taxes	14.1		32.3
Loss (gain) on fair market value adjustment of equity investments	17.5		(32.9)
Gain on divestiture	(0.2)		—
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable, net	(51.3)		(65.3)
Other assets, current and long-term	5.3		29.3
Current and long term liabilities, excluding debt	(123.4)		(124.4)
Cash provided by operating activities	551.1		282.0
Investing activities:
Capital expenditures	(235.5)		(192.8)
Acquisitions, net of cash acquired	(861.6)		(48.1)

Cash received from divestiture	1.5		—
Investment in unconsolidated affiliates, net	—		(10.0)
Cash used in investing activities	(1,095.6)		(250.9)
Financing activities:
Net short-term (repayments) borrowings	(0.6)		0.8
Payments on long-term debt	(500.1)		(125.0)
Borrowings on long-term debt	—		1,123.3
Treasury stock purchases	(69.9)		—
Dividends paid to Equifax shareholders	(95.0)		(94.6)
Dividends paid to noncontrolling interests	(5.8)		(1.6)
Proceeds from exercise of stock options and employee stock purchase plan	25.1		22.9
Payment of taxes related to settlement of equity awards	(30.4)		—

Purchase of redeemable noncontrolling interests	(3.6)		—
Debt issuance costs	—		(9.8)

Other	—		0.3
Cash (used in) provided by financing activities	(680.3)		916.3
Effect of foreign currency exchange rates on cash and cash equivalents	(1.7)		(1.3)
(Decrease) Increase in cash and cash equivalents	(1,226.5)		946.1
Cash and cash equivalents, beginning of period	1,684.6		401.3
Cash and cash equivalents, end of period	$	458.1	$	1,347.4

See Notes to Consolidated Financial Statements.

EQUIFAX INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

For the Three Months Ended June 30, 2021


	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, March 31, 2021	121.7	$	236.6	$	1,489.5	$	4,342.0	$	(161.3)	$	(2,582.9)	$	(5.9)	$	39.0	$	3,357.0

Net income	—	—		—		215.1		—		—		—		0.8		215.9
Other comprehensive income	—	—		—		—		4.5		—		—		(0.4)		4.1
Shares issued under stock and benefit plans, net of minimum tax withholdings	0.3	—		4.0		—		—		(7.1)		—		—		(3.1)
Treasury stock purchased under share repurchase program*	(0.2)	—		—		—		—		(35.9)		—		—		(35.9)
Cash dividends ($0.39 per share)	—	—		—		(47.8)		—		—		—		—		(47.8)
Dividends paid to employee benefits trusts	—	—		0.2		—		—		—		—		—		0.2
Stock-based compensation expense	—	—		13.3		—		—		—		—		—		13.3



Redeemable noncontrolling interest adjustment	—	—		—		(3.6)		—		—		—		3.6		—
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(5.1)		(5.1)


Other	—	—		(0.2)		—		—		—		—		0.2		—
Balance, June 30, 2021	121.8	$	236.6	$	1,506.8	$	4,505.7	$	(156.8)	$	(2,625.9)	$	(5.9)	$	38.1	$	3,498.6

* At June 30, 2021, $520.2 million was available for future purchases of common stock under our share repurchase authorization.

For the Three Months Ended June 30, 2020


	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, March 31, 2020	121.4	$	236.6	$	1,431.7	$	3,924.1	$	(646.0)	$	(2,553.9)	$	(5.9)	$	43.3	$	2,429.9
Net income	—	—		—		100.2		—		—		—		0.2		100.4
Other comprehensive income	—	—		—		—		232.8		—		—		0.5		233.3
Shares issued under stock and benefit plans, net of minimum tax withholdings	0.1	—		2.8		—		—		3.2		—		—		6.0

Cash dividends ($0.39 per share)	—	—		—		(47.6)		—		—		—		—		(47.6)
Dividends paid to employee benefits trusts	—	—		0.2		—		—		—		—		—		0.2
Stock-based compensation expense	—	—		13.1		—		—		—		—		—		13.1

Redeemable noncontrolling interest adjustment	—	—		—		2.8		—		—		—		(2.8)		—
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(1.3)		(1.3)


Other	—	—		—		—		—		—		—		0.3		0.3
Balance, June 30, 2020	121.5	$	236.6	$	1,447.8	$	3,979.5	$	(413.2)	$	(2,550.7)	$	(5.9)	$	40.2	$	2,734.3

EQUIFAX INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE LOSS

(Unaudited)

For the Six Months Ended June 30, 2021


	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, December 31, 2020	121.8	$	236.6	$	1,470.7	$	4,185.4	$	(171.4)	$	(2,547.0)	$	(5.9)	$	41.9	$	3,210.3

Net income	—	—		—		416.7		—		—		—		2.1		418.8
Other comprehensive income	—	—		—		—		14.6		—		—		0.5		15.1
Shares issued under stock and benefit plans, net of minimum tax withholdings	0.4	—		3.7		—		—		(9.0)		—		—		(5.3)
Treasury stock purchased under share repurchase program*	(0.4)	—		—		—		—		(69.9)		—		—		(69.9)
Cash dividends ($0.78 per share)	—	—		—		(95.5)		—		—		—		—		(95.5)
Dividends paid to employee benefits trusts	—	—		0.5		—		—		—		—		—		0.5
Stock-based compensation expense	—	—		33.9		—		—		—		—		—		33.9



Redeemable noncontrolling interest adjustment	—	—		—		(0.9)		—		—		—		0.9		—
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(5.8)		(5.8)
Purchases of noncontrolling interests	—	—		(1.8)		—		—		—		—		(1.8)		(3.6)

Other	—	—		(0.2)		—		—		—		—		0.3		0.1
Balance, June 30, 2021	121.8	$	236.6	$	1,506.8	$	4,505.7	$	(156.8)	$	(2,625.9)	$	(5.9)	$	38.1	$	3,498.6

*At June 30, 2021, $520.2 million was available for future purchases of common stock under our share repurchase authorization.

For the Six Months Ended June 30, 2020


	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, December 31, 2019	121.2	$	236.6	$	1,405.1	$	3,854.7	$	(354.4)	$	(2,557.4)	$	(5.9)	$	44.3	$	2,623.0
Net income	—	—		—		217.1		—		—		—		2.1		219.2
Other comprehensive loss	—	—		—		—		(58.8)		—		—		(1.7)		(60.5)
Shares issued under stock and benefit plans, net of minimum tax withholdings	0.3	—		10.5		—		—		6.7		—		—		17.2

Cash dividends ($0.78 per share)	—	—		—		(95.1)		—		—		—		—		(95.1)
Dividends paid to employee benefits trusts	—	—		0.5		—		—		—		—		—		0.5
Stock-based compensation expense	—	—		31.7		—		—		—		—		—		31.7

Redeemable noncontrolling interest adjustment	—	—		—		3.2		—		—		—		(3.2)		—
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(1.6)		(1.6)

Cumulative adjustment from change in accounting principle	—	—		—		(0.4)		—		—		—		—		(0.4)
Other	—	—		—		—		—		—		—		0.3		0.3
Balance, June 30, 2020	121.5	$	236.6	$	1,447.8	$	3,979.5	$	(413.2)	$	(2,550.7)	$	(5.9)	$	40.2	$	2,734.3

Accumulated Other Comprehensive Loss consists of the following components:


	June 30, 2021		December 31, 2020
	(In millions)
Foreign currency translation	$	(153.2)	$	(168.4)
Unrecognized prior service cost related to our pension and other postretirement benefit plans, net of accumulated tax of $0.7 and $0.5 at June 30, 2021 and December 31, 2020, respectively	(2.6)		(2.0)
Cash flow hedging transactions, net of accumulated tax of $0.6 and $0.7 at June 30, 2021 and December 31, 2020, respectively	(1.0)		(1.0)

Accumulated other comprehensive loss	$	(156.8)	$	(171.4)

See Notes to Consolidated Financial Statements.

EQUIFAX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2021

1. 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, analyze 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 June 30, 2021, 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 Russia through a joint venture, 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 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 Presentation. The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, the instructions to Form 10-Q and applicable sections of SEC Regulation S-X. This Form 10-Q should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”).

Our unaudited Consolidated Financial Statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the periods presented and are of a normal recurring nature.

Earnings Per Share. Our basic earnings per share, or EPS, is calculated as net income attributable to Equifax divided by the weighted-average number of common shares outstanding during the period. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options, restricted stock units, 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:


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
	(In millions)
Weighted-average shares outstanding (basic)	121.8	121.4	121.8	121.4
Effect of dilutive securities:
Stock options and restricted stock units	1.7	1.3	1.6	1.3
Weighted-average shares outstanding (diluted)	123.5	122.7	123.4	122.7

For the three and six months ended June 30, 2021 and 2020, stock options that were anti-dilutive were not material.

Financial Instruments. Our financial instruments consist of cash and cash equivalents, accounts 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 similar publicly traded instruments and for non-publicly traded instruments through valuation techniques involving observable inputs based on the specific characteristics of the debt instrument. As of June 30, 2021 and December 31, 2020, the fair value of our long-term debt, including the current portion, was $4.2 billion and $4.8 billion, respectively, compared to its carrying value of $3.9 billion and $4.4 billion, respectively.

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).

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. We completed various acquisitions during the six months ended June 30, 2021 and the year ended December 31, 2020. 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 or externally 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 used in the present value calculations.

Trade Accounts Receivable and Allowance for Doubtful Accounts. Accounts receivable are stated at cost. Significant payment terms for customers are identified in the contract. 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.

The allowance for doubtful accounts is based on management's estimate for expected credit losses for outstanding trade accounts receivables. We determine expected credit losses 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 also consider expected changes in macroeconomic conditions that may impact the collectability of outstanding receivables in determining expected credit losses. 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 in the accompanying Consolidated Statements of Income. Below is a rollforward of our allowance for doubtful accounts for the three and six months ended June 30, 2021 and 2020, respectively.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In millions)
Allowance for doubtful accounts, beginning of period	$	11.8	$	13.4	$	12.9	$	11.2
Current period bad debt expense	0.3		4.4		—