Good day, everyone, and welcome to the Equifax First Quarter 2020 Earnings Conference Call. Today's conference is being recorded. I'd like to now turn the conference to your host, Mr. Jeffrey Dodge. Please go ahead, sir.

Jeffrey Dodge - Senior Vice President, Investor Relations

Thank you, and good morning, everyone. Welcome to today's conference call. I'm Jeff Dodge and on today's call with me are Mark Begor, Chief Executive Officer and John Gamble, Chief Financial Officer. Today's call is being recorded. An archive of the recording will be available later today on our website at www.equifax.com in the Investor Relations section under Earnings Calls, Presentations, and Webcasts.

During the call today, we will be making reference to certain materials. It can also be found under the Earnings Calls, Presentations, and Webcasts section. These materials are labeled Q1 2020 Earnings Release Presentation.

During this call, we'll also be making certain forward-looking statements to help you understand Equifax and its business environment. These statements involve a number of risks, uncertainties, and other factors, including the impact of COVID-19 and economic conditions on our future operations that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in filings with the SEC, including our 2019 Form 10-K and subsequent filings.

Also, we will be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. For the first quarter of 2020, adjusted EPS, attributable to Equifax, excludes cost associated with acquisition-related amortization expense, gains on fair market value adjustment of equity investments, the foreign currency impact of certain intercompany loans, a valuation allowance for certain deferred tax assets, a tax benefit on the legal settlement related to the 2017 cybersecurity incident, income tax effects of stock awards recognized upon vesting or settlement, and foreign currency losses for remeasuring the Argentinean peso-denominated net monetary assets. Adjusted EPS attributable to Equifax - excuse me, it also excludes legal and professional fees related to the 2017 cybersecurity incident, principally fees related to our outstanding litigation and government investigations as well as the incremental non-recurring project cost designed to enhance our technology, and data security. This includes projects to implement systems and processes to enhance our technology and data security infrastructure as well as projects to replace and substantially consolidate our global networks and systems as well as the cost to manage these projects. These projects that will transform our technology infrastructure and further enhance our data security were incurred throughout 2018 and 2019 and are expected to occur in 2020 and '21. Adjusted EBITDA is defined as net income attributable to Equifax, adding back interest expense, net of interest income, income tax expense, depreciation and amortization and also, as is the case for adjusted EPS, excluding costs related to the 2017 cybersecurity incident, gains on fair market value adjustments of equity investments, the foreign currency impact of certain intercompany loans, and foreign currency losses from remeasuring the Argentinian peso-denominated net monetary assets. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings release and are also posted on our website.

Now, I'd like to turn it over to Mark.

Mark Begor - Chief Executive Officer

Thanks, Jeff and good morning, everyone. We are all facing unprecedented times during the COVID global pandemic. I hope you and your families are safe and managing in this unusual environment. We'd like to start by thanking the dedicated and selfless healthcare professionals, first responders, volunteers, and others around the world who are fighting the front line pandemic. Their dedication and sacrifice is nothing less than heroic. The economic impact from the COVID-19 pandemic is still unfolding and will clearly be deeper than anything we've seen in our lifetimes. To help with today's discussion, we posted a first quarter 2020 investor relations presentation, which is available in the Investor Relations section of our website under Events and Presentations. We plan to walk through the presentation on today's call, if you want to pull it up.

At Equifax, as we execute during this pandemic at our work-from-home protocol and business continuity plans, we're focused on five critical priorities highlighted on Slide 4. Number one, the health and safety of our employees and their families; number two, continuing to deliver for our customers with the highest level of service and supporting our customers with new data and analytical services they will need as they respond to the pandemic and economic impacts in their businesses and priorities change; number three, supporting consumers as they are challenged by the economic impacts of COVID-19 by providing free credit reports and financial education; number four, executing on our cloud technology, data, and security transformation. Our focus and investment in our cloud-native technology, data and security transformation are continuing at the same levels we originally planned for 2020, with the goal of accelerating our cloud-based data and technology capabilities to make them available more rapidly to our customers. Funding and executing of our cloud technology transformation continues to be a priority for Equifax. And number five, continuing on the new product momentum from 2019 with NPIs tailored off Equifax's unique data assets for the recession environment. We started to accelerate new product rollouts in 2019 and that focus is continuing in 2020.

Like most companies, we initiated our COVID-19 business continuity plans in mid-March, which included activating our crisis management team reporting directly to me, as well as instituting ongoing interaction with our Board to keep them apprised of our plans. We have over 9,000 employees working from home across our global workforce. Only essential roles and customer support and data center operations continue to work from our facilities. We virtually eliminated travel with limited exceptions for central customer or regulatory business needs. For our close to 2,000 associates in essential roles that are still working from our facilities, we have implemented social distancing of workspaces, aggressive cleaning and sanitizing, and other actions to make sure our sites are as safe as possible.

We've been in the work-from-home mode and no travel environment for five weeks, actually now going on six weeks, and are operating continuously and effectively for our customers. We believe our team's efficiency and productivity is continuing at levels at or better than pre-crisis. We are seeing tremendous benefits from our move to cloud-native tools that are driving significant collaboration as a part of our cloud technology and data transformation. Our development teams are working almost exclusively on Google Cloud platform and Amazon Cloud services and their efficiency continues at very high levels, and our movement to cloud-based security tools over the past 30 months has also proven to be highly beneficial in this new work-from-home environment.

I hope this gives you a strong sense that Equifax is executing and delivering well during these challenging times for our customers and consumers, while continuing our cloud and new product investments for the future. I'm also pleased with the team we have in place to manage through these challenging COVID-19 crisis. They are battle-tested with deep domain and experience. My personal experience, leading GE Capital's card business during the 2009 global financial crisis gives me a very unique customer lens on the value of data and analytics in a recession environment.

Moving now to our results for the first quarter, let's turn to Slide 5. We're very pleased with our financial performance in the first quarter at both revenue and adjusted EPS significantly exceeded our expectations and our guidance for the quarter. The first quarter delivered our strongest performance since the 2017 cyber event and continued our strong momentum from the second half of 2019, where our organic growth revenue rate jumped to over 9% during the last six months of 2019. First quarter revenue of $958 million was up over 15% in constant currency and up 14% on an organic constant currency basis.

We had strong revenue growth, driven by our U.S. B2B businesses, USIS and EWS. They collectively were up a very strong 22% overall, with Workforce Solutions up an outstanding 32% and USIS up a very strong 15%. U.S. mortgage market inquiries were historic high levels, given the low interest rate environment, with inquiries up almost 42%. International revenue was up 3% in constant currency and global consumer continued their path back to growth, with revenue up over 3%, consistent with fourth quarter and their third consecutive quarter of year-over-year growth. These results were dampened by the COVID-19 lockdown impacts during the last two weeks of March, which reduced first quarter revenue by around $20 million.

Adjusted EPS of $1.40 per share was up 16% and well above our expectations and the top-end of the guidance we've provided in February. As we discussed on prior calls, we incurred redundant systems costs in the quarter, including incremental D&A, cloud, and other operating costs of $15 million or about $0.09 a share, which dampened our earnings growth rate. Adjusted EBITDA was up a strong 20%, with margins of 32.4% that were up 190 basis points compared with the first quarter of 2019, given our strong revenue growth and the cost actions that we took in the fourth quarter of 2018 and first quarter of 2019, with strong margin growth in USIS, EWS, and International.

As we discussed on prior calls, we expect our EBITDA to grow more rapidly than EPS in the coming years, due to the increased amortization of our incremental cloud transformation investments. FX movements in the quarter were more negative to revenue and adjusted EPS than expected by $13 million and $0.02 per share, respectively. Our constant dollar revenue growth through February of 15% provides a good view of the continued strong progress we are making across all of our businesses and the positive momentum of Equifax over the past three quarters. This performance positions us well to navigate the COVID-19 economic headwinds.

I'll shift now to a discussion of the first quarter performance of each of the four business units as highlighted on Slide 6. Later in my comments, I will discuss in some detail the impacts we are seeing in April, as the coronavirus lockdown impact portions of our business and their implications for our financial performance in the second quarter. USIS revenue of $343 million in the first quarter was up 15% versus the first quarter of 2019 on a reported basis and 13% on an organic basis. For the quarter, Online revenue was up 16%. Online non-mortgage revenue was up 3% in the quarter and Online non-mortgage organic revenue declined 1%, reflecting the decline in March volumes associated with declines in economic activity from the COVID-19 pandemic. Through February, USIS' Online non-mortgage revenue was up 7% in total and a solid 2.5% on an organic basis. We saw a nice growth across auto, direct-to-consumer, banking insurance, which was partially offset by declines in telco in the first two months of the first quarter. In Telco, we won back primary share with a major customer beginning in March, which is a positive going into second quarter. The strengthening of Online revenue through February is very positive, and another sign of our continued progress in USIS commercially. This positive momentum in the first quarter and second half of 2019 will serve USIS well as we enter the COVID-19 economic environment.

Mortgage Solutions was up a very strong 33% in the quarter and lower than mortgage market inquiry growth, given the mix shift in the quarter from Mortgage Solutions to Online. Mortgage Solutions continues to perform very well in this low interest rate environment. USIS' Financial Marketing Services business revenue was down 2% in the quarter compared to last year. Revenue declines were due to lower-than-expected project revenue in March brought on by the COVID-19 lockdowns. I'm very encouraged by the performance of Sid Singh and his USIS team in the first quarter, both in their strong growth through February and then the speed at which they are adapting product offerings and their selling efforts in March to meet the substantial change in customer needs from the COVID-19 pandemic. This follows USIS' momentum in the second half of 2019.

Later in my comments, I'll discuss the success we are having across Equifax and focusing our efforts with customers on solutions leveraging our unique data assets to help them manage through this new COVID-19 recession environment. U.S. is accelerating commercial activity and new deal pipelines remain strong. During the current market condition, the number of pipeline opportunities as of the end of March was up 6% compared to December 2019 and up 33% from March 2019, and our win rate in the first quarter was up about 500 basis points from the first quarter of 2019. We are continuing to close new deals with customers in the past few weeks, even with the COVID-19 work environment, and we expect strong mortgage growth in the second quarter in the current low interest rate environment. USIS adjusted EBITDA margins of 44.7% were up 170 basis points from the first quarter of 2019, driven by the increase in revenue, partially offset by increased royalty costs as well as the increased investments in new product development, data analytics, increased consumer support costs, and redundant systems costs.

Turning now to Workforce Solutions. They had another exceptional quarter, with revenue up a very strong 32% versus the first quarter of 2019. Rudy Ploder and his EWS team delivered the highest growth quarter for EWS since we acquired the business in 2007, and on a run rate basis for the 12 months ended March 31, EWS crossed $1 billion revenue mark for the first time in their history; both huge milestones. Verification Services revenue was up an extremely strong 48% compared with the prior year, driven by outstanding revenue growth in verification and mortgage. The strong Verification Services revenue growth also reflects continued year-over-year growth in Work Number active records as well as the rollout of new products in mortgage, talent solutions, and other verticals and continued expansion of system-to-system integration with customers, which you know is really critical.

EWS and Verification Services non-mortgage revenue growth was a strong 9% and 15% respectively compared to last year. Through February, Verification Services non-mortgage revenue growth was up 18%, with strong double-digit growth across key non-mortgage verticals, including government, auto, talent solutions, and debt management. Non-mortgage Verifier revenue growth for the quarter was up 15%, but down from the 18% run rate we saw in February, reflecting the COVID-19 impact in the latter half of March, principally in auto, debt management, and talent solutions. Work Number database closed the first quarter with 105 million active records and 80 million active unique individuals, up 18% compared to March 2019. And the database now represents about half of U.S. non-farm payroll. Our contributors are also growing rapidly from just under 30,000 a year ago to over 700,000 companies contributing in the first quarter. Growing TWN records drive hit rates that translates into revenue almost immediately. We expect to continue TWN contributor and record growth in second quarter and 2020. The Work Number database is Equifax's most unique and differentiated asset, particularly with the scale and currency of the database that can provide incremental value for our customers in today's challenging times, where there is so much income and employment uncertainty around consumers in the U.S.

Through February, our Employer Services business revenues were flat, compared to first quarter 2019. This was slightly better than the performance we saw over much of 2019 and reflected growth in our I-9 and other talent management businesses, offset by declines in unemployment insurance claims management in our workforce analytics business. For the quarter, Employer Services revenue was up 2%, with our unemployment insurance claims management business up 8% organically in the quarter, due to very substantial - due to a very substantial increase in unemployment claims volume in the second half of March, with daily volumes up six-fold during the last two weeks of March or the quarter, given the rise in U.S. unemployment filings. We expect continued substantial growth in unemployment claims in the second quarter. John will discuss this in more detail when he covers March and April trends in a few minutes.

The strong Verifier revenue growth resulted in strong adjusted EBITDA margins of 51.5%, an increase of 210 basis points compared to last year due to the strong revenue growth and proactive cost management, which more than offset increased royalty costs and our redundant system costs from the technology transformation. Workforce Solutions is an outstanding business that continues to deliver very strong results even in challenging times. John will discuss later that we expect Workforce Solutions to deliver strong growth again in the second quarter.

International revenue of $216 million was up 3% in constant currency and down 4% on a reported basis. Through February, International constant currency revenue was up a strong 8%, with organic revenue growth also up 7.5%. The strong growth through February was a continuation of International's strong second half 2019 momentum. Their commercial momentum in the first quarter positions the International business to operate well in the new COVID-19 environment. Asia-Pacific, which is primarily our Australian and New Zealand business and now also includes our India business, at first quarter, revenue of $70 million, up 3% in constant currency year-over-year. Through February, however, Asia-Pacific was up a strong 5% in local currency and Australia grew over 4%, both stronger than our expectations. Fraud and ID and commercial online were both very strong in Australia, up 20% and 9% respectively and marketing services continued to decline, but at a much slower rate than in 2019.

Shifting now to Europe, our European business with revenue of $66 million was down 1% year-over-year in constant currency, with the credit business and debt management businesses also down 1%, and our credit business is negatively impacted by the decline in the economic activity from COVID-19 pandemic in the second half of March. Through February in Europe, we showed strong constant currency growth of 8.5%. Our U.K. and Spain credit businesses grew 7% in total through February. In U.K., we saw growth in our financial services vertical, both direct and through reseller partners. We also saw growth in the gaming vertical and from new products launched in 2019 in open banking and digital marketing. European debt management revenue was up over 10% through February, as we saw higher debt placements with the U.K. government. As John will discuss shortly, we are expecting a significant decline in debt management revenue in the U.K. in the second quarter, as the U.K. government has suspended tax collection activities during the COVID crisis, as well as declines in our European credit businesses due to customers pausing on collection activities during the early phases of COVID-19.

Shifting now to Latin America, our business in Latin America delivered revenue of $43 million in the first quarter and was up 9% in local currency. However, through February, Latin America was up a strong 15% in local currency, led by strong double-digit growth in Argentina and Mexico, low-teens growth in Chile and Ecuador, and high-single growth in Uruguay. Our Latin American businesses are adding new logos and benefiting from the rapid adaption of Ignite and InterConnect in their markets.

Canada revenue of $37 million was up 2% in local currency in the first quarter. Unlike most of our international markets, Canada has a mortgage business that benefits like the U.S. from lower interest rates. Revenue growth in our Canadian mortgage business in the first quarter, which makes up just over 10% of Canadian revenue, were largely offset by declines in our consumer and commercial businesses during the last two weeks of March, due to the COVID-19 pandemic. Through February, Canada was up 5%, driven by consumer credit, specifically mortgage, and our commercial and ID and fraud businesses.

International adjusted EBITDA margins at 27.8% were up a strong 250 basis points compared to last year. The strong growth in margins reflects the benefit of revenue growth and the cost actions implemented by the international team in the fourth quarter of 2018 and throughout 2019.

Shifting now to Global Consumer Solutions, their revenue was up 3% on a reported basis in the quarter - in constant currency basis in the quarter. This was their third consecutive quarter of growth. Global Consumer Direct revenue, which represents about 40% of total GCS revenue, was down about 2% year-over-year in the quarter. We saw mid-single digit growth across the U.K. and Canada's combined Consumer Direct businesses. While the U.S. Consumer Direct business declined 7% in the first quarter, it continued to improve from the fourth quarter of 2019 and still represents a substantial improvement from the double-digit decline in the U.S. Consumer Direct business we saw in the third quarter of 2019 and since the cyber event in 2017. Sequentially versus fourth quarter, total subscribers are stable to slightly increasing across the U.S., Canada and U.K., which is an encouraging sign, as we move into second quarter.

Our GCS partner businesses increased 8% in the quarter as a result of growth from our U.S. free model partners, our benefits channel and our breach business, offset by revenue declines with some of our paid model partners. Our partners business was up a solid 9% through February, as we saw nice growth in our benefits business and event-based businesses, as well as our traditional partners. Revenue was negatively impacted in the last couple of weeks of March by declines at some partners, particularly in the lead-gen space, and we expect COVID-19 impacts at our partners to affect our second quarter partner revenue. John will discuss this in a few minutes when he discusses April trends.

GCS adjusted EBITDA margins of 23.1% decreased 80 basis points compared to the prior year, primarily driven by mix shifts and increased COVID-19 consumer call center support costs in late March. We also increased marketing spend in the U.S. and Canada in the quarter. With the substantial weakening in several of our business units and verticals that began in the second half of March from the coronavirus pandemic, we took actions to tighten costs to - to tighten controls all over our costs and to dramatically reduce travel. We've frozen hiring except for roles directly related to consumer support. The EFX 2020 technology and data transformation of new products will also continue its current levels, and we've also reduced discretionary spending across the Company. At this stage, we're looking at $90 million of discretionary cost takeout versus our business plan for 2020, and if necessary, we're prepared to take additional cost actions as required. That said, we will take actions to protect our franchise during this economic event. As I mentioned earlier, we are continuing our cloud technology and data transformation investment spending at planned levels and our new product growth initiatives because of the significant strategic and operational value from both initiatives. These strategic priorities will benefit Equifax during the COVID economic impacts and power us in the recovery.

Shifting now to trends we are seeing post the start of the COVID-19 crisis. Starting in mid-March, Equifax began seeing revenue impacts in several of our business units and verticals from the broad lockdown actions taken globally to slow the spread of COVID-19. To help as you form your view on the potential impact of this pandemic, we wanted to provide you with a couple of things. First, our perspective on which portions of our businesses are recession-resilient today; and second, our performance during the global financial crisis and a comparison of our business mix in 2009 compared to today or 2020. And then last, John will cover current revenue trends we're seeing in our daily transactions and over the past few weeks.

To estimate the impact of recession could have on Equifax or will have an Equifax, we signed our line of businesses into three categories. First, recession-resistant. These businesses have drivers that are not directly aligned with economic activity in the recession, and we expect them to grow through COVID-19. The best examples of these businesses are Workforce Solutions, our U.S. mortgage business, and our government lines of businesses that we expect will continue to grow from the uniqueness of the data, including TWN or from the low interest rate environments, including mortgage. Second, countercyclical businesses, and these are businesses that perform better during the recession and the best example is our unemployment claims management business in Workforce Solutions, where we expect significant growth in Workforce Solutions revenue from growing unemployment claims in the United States. And third, our recession impacted businesses. These are businesses that are directly impacted by economic activity and contraction in a recession and include auto, cards, and P loans were both consumer activity declines or lender activity is contracted for risk containment reasons. We expect these business lines to have negative growth in a recession.

Today, about 65% of Equifax U.S. businesses are either recession-resistant or countercyclical, and about 55% of our global business is recession-resistant or countercyclical. This compares with the 2009 global financial crisis, where only about 40% of our businesses were either recession-resistant or countercyclical compared to the 55% today. This meaningful growth - the meaningful growth in EWS and U.S. mortgage since 2009 positioned Equifax well for the COVID-19 recession.

As shown on Slide 7, during the 2009 global financial crisis, Equifax performed very well and exhibited the resiliency you would expect from a data analytics business. In 2009, we saw only a 6% decline in total revenue for the year, with our largest single quarterly decline at 10% in the first quarter of 2009 at the deepest point of the recession. The largest declines in 2009 were in International, with smaller declines in USIS, as we benefited from growth in mortgage from low interest rates. Importantly, Workforce Solutions grew throughout the period and showed substantial growth of 17% in 2009, both as the Work Number continued to grow records and contributors during the global financial crisis, which drove Verification hit rates, and we saw strong unemployment insurance claims revenue growth from growing unemployment levels in the U.S. in 2009, and we expect a similar pattern in 2020.

Shifting now to Slide 8, Equifax business mix is better positioned for an economic event today than it was during the global financial crisis. Strong Workforce Solutions growth has increased their relative size in Equifax from 10% of revenue in 2009 to 27% of revenue today, and U.S. mortgage has grown from 12% of Equifax revenue in 2009 to over 20% today. In addition, Workforce Solutions growth in revenue and significant margin expansion has increased their percentage of total Equifax EBITDA to 30% today from only 11% in 2008. Over the last 12 years, Workforce Solutions outsized revenue growth and the expansion of U.S. mortgage, as well as the growth of less cyclical government-related businesses, including the growth of Workforce Analytics, as increased Equifax recession-resistant fee and countercyclical businesses from 40% of revenue in 2009 to over 15% - over 55% today, which we believe has significantly improved our capability to continue to invest and execute during the COVID-19 economic impacts.

Our cloud technology and data transformation execution is well timed as the benefits begin to roll in during 2020 and accelerate in '21 and '22. The cloud transformation investments have allowed us to more rapidly access multi-data assets in the new cloud data fabric environment and deliver new products to market with speed to address the new COVID economic challenges for our customers. The cloud transformation will improve our revenue growth, cost structure, margins, and cash generation in the future. Clearly, the COVID-19 recession is much different than 2009 and like anything we've ever seen before, but Equifax has a stronger business with the scale of Workforce Solutions and U.S. mortgage and much better positioned to weather the COVID-19 economic impacts with our unique data and technology leadership. Our financial performance and strength allows us to continue to invest in the cloud transformation and new products, which will benefit us in the future.

I'll now turn the discussion over to John, so he can cover recent financial trends we are seeing in the business units as well as an update on our liquidity, technology cost savings, and some other financial items. I'll come back and review our progress on the cloud technology and data transformation, new products, and our vision for the future of Equifax in '21 and '22. John?

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Thanks, Mark. As a reminder, I will generally be referring to the financial results from continuing operations represented on a GAAP basis, but will refer to non-GAAP results as well. First, a few items in 1Q '20. In the first quarter, total non-recurring or one-time costs principally related to the cybersecurity incident and our transformation were $81 million, a decrease of $16 million compared to the prior year. The cost includes $78 million of technology and security and $3 million for legal fees. In the first quarter, general corporate expense was $134 million. Excluding non-recurring costs, adjusted general corporate expense for the quarter was $91 million, up $17 million from 1Q '19. The increase reflects the higher security technology and equity compensation costs in 2020 as compared to 2019 that we discussed with you in February. For 1Q '20, the effective tax rate used in calculating adjusted EPS was 25.3% and in line with the rate we guided to in February. Interest expense for the quarter was $31 million, an increase of $4 million from 1Q '19 and in line with our expectations, due to financing the $341 million of legal settlements, payments made during 3Q '19.

Our liquidity and balance sheet remained strong. As indicated on Slide 9, we had almost $1.6 billion in available liquidity at March 31, including $370 million in cash and available borrowing capacity on our bank credit and AR [Phonetic] facilities of $1.2 billion. We have no debt maturities in 2020. In 2021, we have debt maturities beginning in June and will likely pay the remaining $355 million of our U.S. comprehensive consumer settlement in the first quarter of '21. In addition, we recently worked with our credit facility lenders to modify our covenants beginning in 2Q '20 through 2021. At March 31, our leverage ratio was 2.7 on the basis of our amended credit agreement, well inside of our new leverage covenant of 4.5 times. This amendment provides us with significant and enhanced financial flexibility to support the continued execution of our Equifax 2020 cloud technology and data transformation and investment in new products and capabilities during this recession. We are watching current trends closely and we'll continue to manage proactively to protect these critical investments. This also gives us the ability to manage our liquidity and balance sheet.

1Q '20 operating cash flow of $31 million was flat with 1Q '19. As you know, our cash flow in the first quarter of each year is low as we make bonus payments, our annual 401(k) match, dividends, and interest payments all in 1Q. We also made legal settlement payments related to the 2017 cybersecurity incident in 1Q '20 of $47 million related to the $100 million accrued in 4Q '19. Capital expenditures in 1Q '20 was $88 million, down $27 million from 2019. We have approximately $400 million of remaining payments on litigation and regulatory outcomes related to the 2017 cybersecurity incident. About $53 million will be paid in 2020 predominantly in 2Q. The timing of when the remaining approximately $350 million of the U.S. consumer restitution fund is paid depends on the resolution of the appeals filed related to this case, which timing is uncertain at this time. At this time, we do not expect to fund the remainder of the settlement until early 2021. Details on the status of all outstanding regulatory and legal issues will be provided in our 1Q 2020 Form 10-Q.

Turning to Slide 10 entitled Cloud Technology and Data Transformation 2020 Impacts. As we discussed in our February call, as we put our new cloud-native systems into production, we begin to depreciate these new systems and incur the cloud and other operating costs of running these new cloud-native systems it will generally - as well as the costs related to our legacy systems. It will generally take six to 12 months from the time the cloud-native system is fully in production to transition a legacy exchange or decisioning system to a new cloud-native system. During that time period, in addition to the depreciation on the new cloud-native systems, we incur the cloud and other operating cost of the new system, as well as the operating cost of the legacy systems. As 2020 is a transition year and the decommissioning of legacy systems is not expected to substantially occur until late 4Q '20 and 2021, we will incur these additional redundant system transition costs for much of 2020. For 2020, we continue to expect these additional redundant system transition costs to be in the range of $0.40 to $0.50 per share, with increased depreciation representing about two-thirds of this additional cost and cloud costs, net of any legacy system decommissioning savings representing approximately one-third of this additional cost. At the midpoint of this range, this is a total of about $75 million, with $50 million of increased depreciation and $25 million of incremental cloud and other operating costs. In 1Q '20, these additional redundant systems costs were about $15 million or $0.09 per share. As we move into 2021, we expect the savings from the decommissioning of legacy systems to begin to exceed the cloud and other operating costs from our new cloud-native systems, resulting in a net benefit to COGS at some point in the second half of 2021. This net benefit to COGS will continue to grow in 2021 and through 2022 as well as customers migrating to our transformed infrastructure and we fully decommission our legacy systems.

As we have said and as shown in Slide 11, we expect to generate significant cost savings from our cloud technology and data transformation, a 15% plus savings in the technology costs, excluding depreciation and amortization of our cost of goods sold, excluding one-time items. In 2019, technology costs represent about 45% of total COGS and full run rate savings in COGS from the completion of the technology transformation on a 2019 basis would have been about $90 million. A 25% reduction in our development expense is expected to be generated when we complete the transformation. Again, at 2019 development expense run rate levels, this is a savings of about $35 million per year. At 2019 cost levels, these two items would drive cost savings of up to $125 million and margins to invest in new products and growth, as well as higher EBITDA. And capital spending levels are expected to decrease 35% from the 10.5% of revenue we saw in 2019. We believe our cloud-native infrastructure and dramatically-reduced application footprint should allow us to be more capital-efficient than our peers to at or under 7% of revenue. From 2019's elevated spend levels, this is a reduction in capital spending of about $115 million per year, which will enhance our long-term cash flow. In total, that is a pre-tax cash savings of about $240 million per year on a full run rate basis using 2019 spend levels as a proxy, substantially strengthening our financial profile and giving us the capability to further invest in new products and capabilities, while enhancing our margins.

In addition to the cost and cash benefits from the cloud transformation, we expect our new single data fabric and cloud-based applications to accelerate innovation and new products that will be accretive to our revenue growth rate. We expect to begin to see net COGS savings during second half of '21 and are targeting reaching the full run rate of COGS, development expense, and capital savings during '22. We will certainly reinvest some of the savings, so will all not fall to margin. We have come a long way since 2018 and are seeing accelerating progress on our cloud technology and data transformation. We are becoming increasingly confident we will achieve our goals.

Now let's take a few minutes to talk about the trends we were seeing in the markets over the past few weeks. Given the very unique nature of the COVID-19-led recession, the best perspective we can provide on the impact on our business is to share the trends we are seeing so far in the month of April. We are unable to forecast the economic event of COVID-19 in our markets. So we are not providing 2020 - sorry, 2Q '20 guidance and are removing our guidance for 2020 until we have more visibility on the economy. Slides 12 through 14 show details of revenue trends on a constant currency basis so far during the month of April and their implications on 2Q '20 if they were to continue. As you would expect, we have daily transaction reporting broadly available across our business, which we turn into daily revenue estimates. The trends I am sharing our based on this reporting and our view of these directional trends, which principally covers our online business activities, which is about 80% of revenue in the U.S. with lesser coverage in international.

As shown on Slide 12, USIS represents about 37% of our revenue in the first quarter, of which about 85% is online between OCIS and Mortgage Solutions. Looking at the trend in April, total USIS Online revenue is pointed toward down a little over 10% versus 2019. Online mortgage revenue, the sum of tri-merge and online single file, has continued to show strong year-to-year growth in April, up about 15%. Online non-mortgage revenue over the month of April is currently pointed at a decline of about 30% versus last year. As expected, the greatest declines are occurring in auto, banking, and insurance verticals from declines in economic activity with better performance in Telco, as we were gained primary position with a major customer. The remaining revenue in USIS' Financial Marketing Services, which is offline-backed revenue, which performed relatively well in the first quarter and was down about 4% in March. Our assumption is FMS will be down over 20% in the second quarter of '20, as it is a blend of marketing-related activity, which we expect to decline consistent with online non-mortgage, offset by portfolio reviews volume, which we expect to perform much better than marketing as a recession unfolds. We do not have a meaningful daily trend for FMS.

Workforce Solutions represented about 31% of Equifax revenue in the first quarter, of which over 75% is online for Verification Services. Over the last three weeks, Verification Services has shown high growth, but at a level below the 48% increase we saw in 1Q. Based on the April trends and movement in growth rates, Verification Services growth appears to be pointed at about a 25% increase over 2019. Mortgage, which is the largest of the Verification Services verticals, has been extremely strong, up over 50% over the past three weeks, showing substantial growth versus 2019. Non-mortgage Verification Services is about half government services related to our contract with the Center for Medicare Services and the provisioning of benefits at the state level, with the remaining being talent management, debt services, and banking, principally in auto. Non-mortgage Verification Services based on the April trends we have seen is pointed towards the decline of about 15%. Government Verification Services revenue is performing better than commercial verticals, as CMS has reopened for applications, and we are seeing more benefits activity at the state level. The non-government verticals, principally debt management, talent management, and banking have been down consistent with levels seen at USIS, with debt management performing much weaker than expected in the traditional recession as our customer base is weighted towards student loans.

In Employer Services, unemployment insurance claims management represents about half of the revenue. We expect meaningful revenue growth in UC in the second quarter as we process about one in six unemployment claims filings in the U.S. Over the past three weeks, claims filings by EWS averaged about 600,000 per week versus an average in 2019 of 20,000 per week. We expect our UC business to increase by well over 50% versus the just under $30 million of revenue we saw in 2Q '19. Workforce analytics, our W2 business, and our talent management businesses are principally subscription-based businesses and make up the bulk of the remainder of Employer Services. These businesses are expected to see low-single digit percentage declines year-to-year in the second quarter due to limited new customer acquisition. In total, if April trends hold as well as these assumptions, we expect Employer Services revenue to be up over 35% in the second quarter. Our U.S. B2B businesses, USIS and EWS, make up about 67% of Equifax revenue. The online portions of these businesses make up 54% of Equifax revenue and based on April trends, online is trending to be up low-single digit percent. Overall, based on April trends and assuming they hold throughout 2Q, our U.S. B2B should be up a little under 5% in 2Q '20.

Moving to Slide 13, International represents about 25% [Phonetic] of Equifax revenue, of which under half is online across its four regions. Based on April revenue trends, Asia-Pacific is pointed to be down about 20 - between 20% and 25%. This excludes revenue from our recent acquisition of the remainder of our India operations, which will be about $2 million in the second quarter. LatAm's April revenue trends also point to a decline of a little over 20%. In April, Canada is seeing more significant declines, pointing to revenue declines of about 40%. In Europe, we have both the CRA business and a debt management business. The CRA business has seen a weakening trend in April and is pointing to a decline at current trends of about 40%. Although not an online business, our debt management business will be significantly impacted in the second quarter, with revenue expected to be down almost 60%, reflecting the U.K. government's suspension of tax-related debt collection activities during the pandemic. Debt management is about one-third of our European business. On the basis of these metrics, in total, International revenue is pacing down over 30% in April. GCS represents about 10% of Equifax revenue. GCS Consumer Direct, which represents about 40% of the GCS business saw very limited impact on revenue in the second half of March. Total subscriptions in the U.S., Canada, and the U.K. are down slightly versus 1Q '20 averages, with these trends holding relatively stable. Versus 2Q '19, U.S. Consumer Direct is expected to be down, reflecting subscriber declines that occurred in 2019. We are seeing overall declines in partner revenue run rate in a high-single digit percent range as our partners' businesses are impacted by the pandemic. In total, GCS is seeing revenue declines in the high-single digit percent so far in April. Although we are certainly seeing meaningful impact from the COVID-19 lockdowns over the past month, the resiliency of our business model and strength of Workforce Solutions and our U.S. mortgage business as well as GCS to a degree is mitigating this impact, particularly in the U.S.

Due to the uncertainties in forecasting the depth and duration of the recession-related to the actions to combat COVID-19, we are not going to provide second quarter guidance and are retracting our full-year guidance as we indicated earlier. We will reinstate guidance when the path of recovery from the COVID-19 recession becomes more clear. However, for perspective on total Equifax 2Q '20 performance as shown on Slide 14, we are providing an illustrative second quarter framework to help you think about our performance. To the extent total Equifax revenue continued at the pace I described earlier based on April trends, 2Q '20 revenue would be down about 6.5% to 8.5% on a constant currency basis or $55 million to $75 million versus 2019. Based on current FX rates, revenue would be down 8.5% to 10.5% or $75 million to $95 million year-to-year, resulting in 2Q '20 revenue of $785 million to $805 million. Adjusted EPS in 2Q '20 at these revenue levels could be in the range of $0.78 per share to $0.88 per share, down 37% to 44% from 2Q '19.

Slide 19 also provides a walk through explaining the translation versus 2Q '19 of the revenue decline to the decline in pre-tax income and adjusted EPS. Importantly, at these adjusted EPS levels, Equifax will still deliver about $225 million in adjusted EBITDA. This is not guidance as there is still much uncertainty as to what impact the pandemic will have on the economy, our customers' business activities, any path to opening up the economy, and therefore, our revenue and earnings. This range provided reflects current variability in trends, not a view of potential quarter outcomes. We are offering this framework as you determine your view of the possible impacts to Equifax revenue in 2Q '20 and think about your modeling for Equifax. We hope the detail and framework we provided on the impacts we have seen to-date are helpful as you estimate Equifax second quarter results.

Let me turn it back to Mark.

Mark Begor - Chief Executive Officer

Thanks, John. I hope our transparency on recent revenue trends and the framework for the second quarter is helpful. Let me wrap up with a discussion on our future, our $1.25 billion EFX 2020 cloud technology and data transformation, and our continuing investment in new products. Turning first to the cloud transformation. As it is only been two months since we last discussed our progress with you on the technology transformation, my discussion today will be abbreviated and I'll return to a full update in July. Our investment in the transformation continues to be a top priority during 2020, as we work towards completing the strategic transformation and delivering the topline revenue, cost, and cash benefits that John talked about from the investment. We are not seeing any negative impacts on the cloud transformation progress from the new working environment as our technology team was already well versed in remote working capabilities. We remain on track to complete the initial migrations of several large data exchanges by the end of the third quarter, including the Work Number, NCTUE, U.S. consumer risk or ACRO, IXI Wealth, U.S. commercial, auto, and property data assets. Our DataX exchange will follow in the fourth quarter as we made the decision to migrate DataX to the new cloud environment after the ACRO database conversion or transformation is completed to allow us to leverage the ACRO cloud exchange for DataX integration.

In addition, initial migration of our EID identity validation systems will be completed in April, with customer migrations expected to be completed over the next three or four months. Our new Luminate, cloud identity and fraud suite, which includes a new EID as a service, is being developed as a cloud-native solution, and is expected to be available to customers in the U.S. and Canada beginning in the third quarter. Our Ignite analytics and machine learning platform that includes attribute and model management capability as well as the ability for customers to easily and securely ingest their own data is integrated with InterConnect, and is now available for customer migrations at AWS and on track to be available at GCP by the end of the second quarter. We continue to make strong progress globally, rolling out Ignite analytics platform, with almost 200 customers now using Ignite Direct and Marketplace and more than 30 customers using our patented explainable machine learning or NDT-based models.

We are continuing our progress in the migration of our customers onto our new cloud-based systems, including our InterConnect Ignite API framework. As a reminder, this is a common set of services on which we are working to migrate all USIS, EWS, and International customers. As of the end of the first quarter, USIS had migrated over 1,200 U.S. customers and International completed migrations with almost 1,000 customers. This is slightly ahead of the pace we discussed with you back in February. We expect this pace to accelerate significantly through 2020 with over 10,000 U.S. customer migrations expected by year-end and the vast majority of U.S. customer migrations completed in early 2021. Customer migrations are an important part of our technology transformation and we continue to work closely with customers to define and execute migration plans and speed their access to the advanced products and services we can increasingly offer with our new cloud-native services. We are seeing the customer migration work continue at a normal pace in the past five weeks of the COVID-19 environment, which is encouraging. We are focused on the execution and where possible accelerating our cloud technology and data transformation roadmap in 2020 to ensure we deliver the customer and commercial benefits from the transformation and achieve the revenue cost and cash benefits in '21 and '22. This is a top priority for Equifax.

Turning now to Slide 15. New product innovation remains a key component of our EFX 2020 strategy and accelerated new product generation is key to our long-term revenue growth. We have an active pipeline of new products with over 100 launches forecast for 2020, which is up from about 90 in 2019 and 60 in 2018. We're off to a strong start to the year with 34 new product launches in 2020, which is up 2x from the 14 we delivered in the first quarter last year. Increasingly, our new products are leveraging the broad scope and capabilities of our cloud-native production systems, including a rapid acceleration in time to market. This quarter, Workforce Solutions launched several new products, including an expanded suite of mortgage products that provides access to richer employment and income data to customers as well as access to pull data throughout the mortgage application lifecycle and enhanced talent reports that provide a more complete view of candidate employment, income, education credentials and licenses, as well as identity validation, all critical in the hiring process.

In March, as the depth of the COVID-19 pandemic-initiated recession became clear, our data and analytics product and commercial teams quickly refocused their activities to work with customers and partners to leverage Equifax's unique and differentiated data assets and capabilities to support all elements of our customers' operations in this challenging work environment. Central to that effort is the Work Number. Our unique and differentiated employment and income data asset becomes increasingly essential in this environment with unprecedented consumer income and employment dynamics from accelerating unemployment, salary reductions and furloughs in the United States. Our team is focused on how to refine existing products as well as generate new products to utilize the differentiated capabilities to meet these new customer needs. Our data and analytics teams reacted immediately to enhance our credit trends reporting that has long been utilized by our customers to evaluate trends across consumer and commercial lending, as well as the changes in overall consumer and small business credit standing. We immediately moved from a monthly update to weekly reporting service and added more proprietary Equifax data to help customers have more real-time data to make critical decisions. This product is now available on our Ignite Marketplace analytics platform.

We also customized this capability for specific needs of our customers. This includes making it available over secure Ignite application that includes advanced visualization of analytics across our diverse data assets, including over 11 industry groups, eight different VantageScore bands, for 11 loan products with three delinquency stages across 55 states and territories as well as over 350 metropolitan areas in the United States. In the mortgage market, we are working across the industry to utilize our data to meet the requirements for the more current employment and income data and originations using TWN and enhancing offline analysis using - including the use of income and employment data again to help mitigate portfolio risk and help customers identify consumers that may require specific collections treatment or support. We are in discussions with customers about weekly and monthly versus quarterly or annual portfolio reviews using our differentiated data, given the rapidly-changing financial condition of the consumer.

We've also launched a product we call Response Now, a premium portfolio review solution across auto, credit card, personal loan, and other product lines, which incorporates credit trends, weekly reporting, economic data, consumer financial behavior, and income and employment solutions, allowing customers to proactively manage their risk portfolio and lower credit losses, while factoring in current economic - the current economic environment. These models are highly predictive and calibrated to the current economic environment and help lenders identify deteriorating credit risks. We also launched a capital markets economic suite, a suite of products to provide insight to the credit health of U.S. consumers and small businesses, including delinquency, default, and loss severity analytics for mortgage and other product products, as well as the loan detail level across zip codes, vintages, and market segments.

Our ability to bring these new capabilities to market so quickly is accelerated by our progress for moving our data assets into a cloud-native data fabric. This is just the beginning of the new product and analytic offerings in front of us from our cloud, data, and technology investments. We will continue to prioritize invest in new products, including recession-based product solutions during the second quarter and beyond. We recognize that Equifax - we recognize the important role that Equifax plays in the markets around the world where we do business. During this COVID-19 pandemic, we are working with consumers and other stakeholders in the public and private sectors on creative solutions that ease the burdens on consumers and businesses, while assisting in recovery efforts. In every country where we do business, Equifax is actively engaged with national and local governments to ensure continued credit reporting that captures the status of consumer payments and lender accommodations, while recognizing the intentions of policy makers to minimize negative impacts to consumers' credit ratings caused by COVID-19 hardships.

In the U.S., we work independently and in conjunction with Experian and TransUnion to provide assistance to financial institutions seeking guidance on how to report during this challenging time period. We recognize that many consumers have been impacted by the COVID-19 pandemic and we'll experience economic distress, particularly in the short term. Equifax is offering support through our website and other channels to consumers looking to minimize the pandemic's potential impact on their credit standing. Yesterday, we announced that the three U.S. credit bureaus, Equifax, Experian, and TransUnion would be making free weekly credit reports available to all U.S. customers - all U.S. consumers for one year through April 2021. We are also offering free credit reports to Canadian consumers. We encourage consumers to take advantage of ongoing educational support regarding how credit reports and scores work, and for small businesses, we are partnering with policymakers and others to support small businesses as they navigate the current environment. I'm proud of the many steps that we've taken to support consumers and small businesses, and look forward to engaging as a constructive partner to help with additional solutions to help consumers and businesses in the overall economy during this challenging time.

Wrapping up, let's turn to Slide 16 on the future of Equifax in 2021 and '22. As we battle through the economic impacts of COVID-19, we remain confident that the future of Equifax is strong. Our financial performance allows us to continue on offense and invest in our cloud transformation and new products. As we look forward to the rest of 2020 and into '21 and '22, we are confident in our business model, our investments, and our ability to perform in this challenging COVID-19 economic environment. First, we have the right team in place of seasoned leaders who understand data and analytics and how to operate in a recessionary environment. Second, our unique and differentiated data assets, including consumer credit, employment and income, utilities and property data assets, along with unique commercial credit data assets, position us to deliver the products and analytics our customers will demand as they manage through this unprecedented environment. Third, Workforce Solutions is a powerful business that we expect to grow through the COVID-19 recession and have strong growth potential on the long term. Our very unique TWN income and employment data is even more valuable in this unprecedented economic environment due to the scale, accuracy, and latency of the data. EWS will continue to grow and monetize the TWN database and has real scale with half of the U.S. non-farm payroll in the database today, which drives hit rates in Workforce Solutions revenue. At 105 million records, the TWN database is up more than 2x times from 2009, making it even more valuable than the global financial crisis many years ago. We expect TWN record growth to continue and to enhance the value of the database as hit rates continue to increase. Fourth, the momentum of the U.S. recovery and USIS, International and GCS performances in the second half of '19 and the first quarter give us confidence that our businesses are competitive and well down the path of recovery following the 2017 cyber event. Fifth, Equifax is winning in the marketplace. Recently, Workforce Solutions was awarded one of the largest contracts in our history from U.S. Social Security Administration that is expected to deliver $40 million to $50 million of revenue per year over five years starting in 2021. This contract reinforces the unique capabilities of our TWN data assets and will deliver strong growth in margins in the future. Sixth, we are continuing to invest in new products. As you know, NPIs fuel our growth not only in the current year, but in the future. In 2019, we increased our NPI spending and delivered 90 new products. We are continuing to invest in 2020 and expect over 100 new products this year. Our NPI capabilities are being accelerated by our cloud transformation and remain a top priority for 2020 and the future. We will continue to expand our investments in new products, inspect the cloud transformation to accelerate our growth from NPIs in the future. And seventh and last, we're making strong progress on our cloud transformation and the execution of the cloud investments is a clear priority for our team in 2020. There is no change in our spending or focus on the cloud transformation. We are continuing our investments and expect to make continued progress in 2020 and be substantially complete in the North America transformation in early '21 with international to follow. Our new cloud-native data and applications and always on stability and speed to market and ability to market [Phonetic] products around the globe will deliver significant benefits to Equifax that John discussed earlier. They will enhance our competitiveness and drive our market share in products and accelerate our revenue growth, they'll reduce our technology, COGS, and development expense by over 15%, delivering $125 million of savings in '21 and '22. These savings ramp through '21 and '22 and allow us to reinvest further in new products and growth, while expanding EBITDA margins. And they will also reduce our capital spending to below 7% of revenue in the '21 and '22 period from the 10.5% of revenue we saw in 2019 and during the last couple of years. This is equivalent to about $115 million reduction in capital spending from 2019 levels, which provides additional cash for investments or distribution to shareholders. We believe Equifax is well positioned to weather the economic challenges with strong revenues for growth in '21 and '22. We are still working towards re-establishing our long-term financial framework and in Investor Day in the second half of 2020.

Wrapping up, these are challenging and unprecedented times for everyone. None of us know the depth or duration of this economic event, but Equifax is operating well, we're prepared for the crisis, and we're well positioned to weather the economic impacts of the COVID-19 pandemic. We are focused on protecting the health and safety of our team, supporting consumers, and delivering for our customers worldwide. We remain confident that the future of Equifax is strong. Our financial performance allows us to continue to invest in our future. Our business model is resilient and we've seen a strong - we have a strong balance sheet that allows us to invest and accelerate our cloud transformation and new product investments for future growth, cost improvements, margin expansion, and cash generation in '21 and '22. We hope for the continued health of our employees and the consumers, customers, partners, shareholders, and all of our stakeholders. And again, we thank the healthcare professionals, first responders, and others on the front line of this pandemic for their bravery and dedication. We will continue to be transparent with you and our investors as the COVID-19 pandemic and the economic fallout unfolds. We plan to reinstate our 2020 guidance as soon as we have more clarity on the economic impact from COVID-19 and the path to recovery.

And with that, operator, please open it up for questions.

Question & Answers

Operator

Thank you. [Operator Instructions] We'll go first to Andrew Steinerman with JPMorgan.

Andrew Steinerman - JP Morgan Securities - Analyst

Hi, good morning. First, I want to thank you for that slide deck. That disclosure is like industry best. I want to go back to Slide 7 when you really went over the great financial crisis and how all the divisions did, including EWS during that crisis and the 17% growth you pointed to in 2009, and then Mark, you kind of segued to talking about how EWS might do through this crisis. And my feeling, I guess, thinking back to 2009, 2009 is really just two years after Talx was acquired in 2007 and I remember, it was benefiting - getting a lot of benefit - initial benefit from just being part of the Equifax ecosystem and now obviously decade later, that sort of like a standard. And so, I'm thinking just about Verifier, do you feel like it might just be more subject to end market volatility now than it was in 2009 just because, again that benefit has been kind of in place for a decade now?

Mark Begor - Chief Executive Officer

Hey, Andrew, thanks for the question and you're right. Workforce Solutions or Talx was only a couple of years into Equifax at the point and it was a different scale of the business. Their database was a fraction of the size it is today. It's 2x the scale of it. There is no question that there will be pockets in our perspective, and I think John showed you some of the trends in April, where income and employment data is used in personal loans or in auto - subprime auto, where we're seeing some pressure there, declines in the recent weeks as a result of reductions in originations. There aren't many people buying cars in the last five weeks, for example.

But if you look at the broader perspective of the business and where income and employment data is used, we believe that the TWN data or income and employment data is more valuable today in this economic event from COVID-19 than it was in the global financial crisis. In the global financial crisis, you had unemployment levels that were quite high. We're going to have that again but you didn't have the uncertainty around consumers that were on furlough that had reduced salaries, you didn't have the salary reductions that are so widespread today and you didn't have the pace of the scale of the unemployment waves going through the economy. And what we're hearing from our customers is it the value of knowing if someone is working and the value of knowing how much they're making is more important today in this economic cycle, because of the unprecedented impact on consumers' incomes in the United States is really just - changes dramatically. You add to it the scale of the use of the product in mortgage, which is what - much larger today than it was back then, the system-to-system connections that we have. We have a low interest environment today that's going to drive refis, the purchase volume, we expect to be down during the pandemic, but with low interest rate environments and stimulus will that increase in the future, and then you have the ability of the business to continue to add data records. We've really scaled our capability to add records. And as you know, while we have hit rate could vary from 30% to 40%, we have 50%, 60%, 70% situations, where we can't meet our customers' request for income and employment data, because our database is only 50% of non-farm payroll.

So, as we grow the database, the revenue in that business just grows from hit rates because of the system-to-systems impacts there. So that's a bit of a long-winded discussion that first off, we think Workforce Solutions has really strong position in this COVID pandemic environment, and we think it has a lot of levers to continue to strengthen that position going forward. And then last is that we really believe that if you think about data assets and value in the COVID pandemic versus the global financial crisis or prior recessions, understanding someone's income and employment is critical. I don't know [Phonetic] if that helps.

Andrew Steinerman - JP Morgan Securities - Analyst

I agree. Thank you.

Mark Begor - Chief Executive Officer

Thanks, Andrew.

Operator

We'll go next to Andrew Jeffrey with SunTrust.

Andrew Jeffrey - SunTrust Robinson-Humphrey - Analyst

Hi, good morning, appreciate all the detail guys. Mark, a couple of questions for you, I guess. First of all, I think on Verifier, I think you touched on in response to Andrew's question. Could you discuss how much of the business is SMB? It seems like much of the disruption we're seeing is at that level? So, I wonder if that - how much - in terms of the employer business, how much you wind up capturing based on mix?

Mark Begor - Chief Executive Officer

Do you mean on the contributor side or on the verification side, Andrew?

Andrew Jeffrey - SunTrust Robinson-Humphrey - Analyst

On the contributor side.

Mark Begor - Chief Executive Officer

Yeah, well, there is no question. If you look back, I think we shared some stats, back in 2009, we had 30,000 contributors. Those were largely large - primarily large businesses, and I think you know we had an intentional strategy of not only adding large businesses over the last decade and last year and current month but also really getting to small businesses, because that's where a lot of the workforce is and we ended the quarter, I think, with 700,000 companies contributing data to us. So we're clearly getting more small businesses contributing. Where the impact of the pandemic is it's really going to be widespread. You think about large companies, whether they're airlines or hotels or hospitality, restaurants, there is large companies out there that are furloughing lots of their employees, their executive team, and salaried employees are taking large salary reductions. So, this is a pretty broad-based economic event and I discussed with Andrew what we're hearing from our customers is that understanding the impact of forbearances and delinquencies is a challenge and it's more challenging now than it was in the global financial crisis. But understanding who is working, how much they're making, has their salary been reduced, are they on furlough with 30% reduction, are they in a salary reduction and down 50% is really critically important and the pace of those changes are so rapid, meaning salary reductions happening last week, and if you think about the data assets we have and the industry has, this is the most current data asset in the industry, meaning, we're updated every pay cycle. So we have data every week or two weeks from our contributors, which make that data incredibly valuable because of its currency. So that's why that business is doing so well and why we expected to do well in this economic environment.

And we're not going to slow down our strategy around adding new records. As you know, we have a dedicated team, that's all they do is work with big companies and in payroll processors to increase our data contributors and that's clearly a part of our strategy. You saw the growth that we've had in the last year, up to 105 million records or 80 million uniques and that's going to continue. So that's another lever for that business in April and May and June and in the second half of 2020, as we continue to add data records going forward. While we're pleased we have close to half of the non-farm payroll in our database, we don't have the other half, and that's our opportunity to go work on that, which is a unique lever for growth, because as you know, the business model, the system-to-system integrations, when a mortgage originators hitting our file, if they get a hit rate on our 80 million uniques, then they use that for the income and employment verification. If they don't, they have to go down another path. So, every day that we're adding new records that revenue goes up in any economic cycle as they hit our database.

Andrew Jeffrey - SunTrust Robinson-Humphrey - Analyst

Yeah. That's all very helpful, thanks. And then just a quick follow-up on mortgage, and I know you're not making any projections. But as you look into the back half, do you think the MBA forecast is the right way to think about your business?

Mark Begor - Chief Executive Officer

Yeah, as you know, and I'll let John jump in, we don't forecast mortgage. It's not our gig. There is others that do that quite well. We look at all the mortgage forecast when we're doing our normal modeling. I think as you know and we translate that through in a pretty formulaic way into our typical forecast and guidance and I think as John pointed out, with where the future is, it's very hard, I think, even for them to forecast what's going to happen. So we're not really using that beyond. We're really focused on daily trends at this point.

Andrew Jeffrey - SunTrust Robinson-Humphrey - Analyst

Okay, thank you.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

And as you know, right, between MBA, Fannie and Freddie, their forecasts are extremely divergent right now. So, it's made it more difficult to rely on those. We obviously talk to them a great deal, understand what their economists think, but as Mark said, given that no one can really forecast the economy right now, we're heavily focused on trends.

Andrew Jeffrey - SunTrust Robinson-Humphrey - Analyst

Right.

Operator

Our next question will come from Manav Patnaik with Barclays.

Manav Patnaik - Barclays Capital - Analyst

Well, thank you. Good morning, gentlemen. My first question is to your point you just made around the wide impact of the COVID crisis with lower salaries furloughed across the board. I was just curious why you bucketed mortgage as a recession-resilient bucket? I mean, I understand the trends early on with the rate of the refis. But I'm just curious how you think about how that will perform [Indecipherable] compared to '08/'09 and the nuances between [Indecipherable] probably?

Mark Begor - Chief Executive Officer

Okay. I think, Manav, thanks for the question. I think we and I don't think there's any company out there that can forecast where this is going to go. How long are these lockdowns going to last? When are this going to be relaxing with economic activity? If consumers are stuck in their homes, how can they buy a car or how can you do a lot of financial activity? And that's why we don't see a way to forecast 2020 versus 2009. We tried to point out some of the very powerful differences in Equifax versus the global financial crisis, which we think served us well as we entered this COVID crisis, but we don't know what the next stimulus package is going to be, we don't know what's going to happen when the payroll protection program ends in September. Is there going to be another wave of layoffs? Likely, you would think. It's hard to tell. Are people going to start flying again and going to hotels? Are they going to go to restaurants? Those things, there's so many uncertainties. So, what we focused on was try to be really transparent with you, try to help you understand the significant changes in Equifax versus 2009, with Workforce Solutions up to 37% of our business and a sizable part of our EBITDA. U.S. mortgage, which we expect to continue to grow through this pandemic because of low interest rates and refis driving that and the cost actions that we've taken, we tried to give you the best framework we can, and as soon as we have some visibility around where we think 2020 or '21 is going, we'll certainly provide it. But we think we're better positioned today than we certainly were in 2009 because of the mix of our businesses.

Manav Patnaik - Barclays Capital - Analyst

Got it. And then just to clarify on the Employer Services business and the business tied to unemployment claims, John, I think you mentioned you guys do one in six claims. So, I was just curious, is the revenue model just simply you get paid for each claim? Or is there some other nuance? I think there is some confusion around that.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Sure. So the way the business model works is it's a subscription business, in effect, where - when people sign up for a subscription, they get a certain number of claims as part of the subscription and then as they run through the subscription, they pay overages. So what's occurring, right, is obviously is no one anticipated this level of claims. So, customers are running through their annual subscription and then when they run through that, they start to pay overages and the reason you're seeing the revenue start to grow. But it's at a - it is consistent necessarily with movements on unemployment is because of the fact that as employers run through their subscription level, then we start - they start paying for overages based on when their subscription effectively started. So that's what you're seeing and that's why you're seeing the growth rates that we're talking about.

Mark Begor - Chief Executive Officer

And those, John, are happening as we speak, meaning, just with the massive spike in unemployment claims coming in, Manav, we're certainly in revenue mode with those subscription agreements that we have.

Manav Patnaik - Barclays Capital - Analyst

Got it. Thank you, guys.

Operator

We'll go next to George Mihalos with Cowen.

Mark Begor - Chief Executive Officer

Good morning, George.

Georgios Milhalos - Cowen & Company, LLC - Analyst

Let me add my thanks for the presentation you put out this morning. I guess, where I would like to start is, if we look at Slide Number 12, where you're talking about the 2020 April revenue trends, at least for the US business, USIS and EWS, can you maybe give us a sense of how those trends have trended throughout the month of April? Were they dramatically different last week versus, say, the first week of the month?

Mark Begor - Chief Executive Officer

John, maybe I'll start a little bit and maybe you can jump in. There was a difference between the last two weeks of March and as we got into April a lot [Phonetic] for sure. And if you remember, the last two weeks in March, all of us were schooling up our BCP plans, going into work from home, and there just was, I think, a different level of activity with our customers and with consumers. As we got into April, if you want to call the work-from-home, shelter-in-place mode being some level of normal, it was more normal in April. But John, I don't think there was much difference outside of like unemployment claims coming in and stuff like that.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

I guess the only thing I would add to that is it has been relatively variable, right? So, we look at the trends daily and you will see meaningful changes in any given day in the level of revenue when you look year-over-year, right? And that's why we tend to look over the longer periods. But I don't think there were any really distinct trends. Probably, if you looked at USIS online mortgage, you'd say it was probably somewhat trending a little bit negative, but quite honestly, we consider that in the chart that we put forward. So - but other than that, the trends - I'd say, the trends are a bit variable and that's quite honestly why we put a range on what we provided on Slide 14, not because it's a guidance range, but because there is variability in the activity we're seeing in the month.

And the only other place we're probably seeing some trends where we mentioned is seeing a little bit of a trend in the U.K. It's trending negatively and in some countries, we are seeing some stability, right. So, we started to see stability in, let's say, Australia. So, that's been a somewhat of a positive. But overall, the trends are relatively consistent, but they are highly variable in the period although wobbling around the averages we gave.

Mark Begor - Chief Executive Officer

I think what will be interesting is that next couple of weeks, as I think as everyone's watching, you're seeing some markets start to relax the shelter-in-place. Chile, I think, where we have a business is starting next week and New Zealand is starting. You see some states in the United States that are talking about relaxing that in the coming weeks. And I think that'll be indicative as we have this walk back from shelter-in-place to having some levels of economic activity of what that does to our current run rates.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

The other point to make sure is we're clear on, right, is that International, right, the percentage of online business is just lower. So the clarity on the impact of the rates that we're giving you, the percentages we're giving you, on the entire business is less. We think what we've done is reasonable, but the level of online reporting is just lower.

Georgios Milhalos - Cowen & Company, LLC - Analyst

Understood. I appreciate that color. And then John, just two numbers questions, if I may. Just on Slide 11, the $125 million of potential savings, which obviously would go into EBITDA once they're consummated, is it right to think that from an earnings perspective, there will also be additional savings coming through from lower depreciation and amortization?

And then, I know you're not giving guidance on Slide 14, but looking at that negative $85 million to $100 million impact, is it reasonable to assume that there will be some offsets from the $90 million of annualized cost-cutting that Mark talked about earlier in the call? Thank you.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Yeah. So just looking at Slide 11, right? I mean, what we tried to do was just provide some indicative levels of dollars based on 2019 actual cost levels, since that's what we - that's the only data we have that's a complete year and available. So, we've talked about this in the past, right? So the COGS savings or ex-D&A and those are things that will ramp in as we start shutting systems down, right? So, as things decommission, principally starting very late this year and then going into 2021 and then 2022, you'll see those ramp.

The development expense, obviously, next year, we stop with Sierra reporting in 2021. So our development expense, you'll actually see an increase in 2021, not because the spending is higher, the spending will actually be lower. It's just because in 2020 and 2019, we were showing - we included some of this development spending in Sierra in separate recording, right, which we had separated. So, it wasn't included in our adjusted - in our adjusted EPS. So, you'll see an increase in dev expense, but then as we complete the transformation, you will see the dev expense starts to decline principally as we get into 2022 and to Mark's comments.

Same thing with capital, right? As you complete the U.S. transformation, which Mark talked about completing in 2021, once that's complete, that's when you start seeing the capital reduction start to occur.

So, these things will phase in over time. D&A, D&A, I think we'd indicated was a big step-up this year. We don't have a crystal ball into 2021. It's unlikely you'll see a big reduction in 2021. You could actually see somewhat of an increase based on the spending we're seeing now. So I wouldn't expect that. But again, that - we don't have a crystal ball. That's a difficult thing at this point to forecast.

In terms of near term, if you're talking about second quarter, getting some benefit from this in the second quarter, now we've included everything that we believe that will occur in the second quarter. And it's the prior slide, which gives a view as to the impact on the transformation in 2020. And there, we're actually incurring the incremental cost of transformation because we're seeing the duplicate costs that we've talked about in the past and that we've shown on Slide 10. So, hopefully, that covered your question.

Mark Begor - Chief Executive Officer

John, maybe I could just add. I think the group on the call knows that up until today's call, we've kind of talked about percentages that we see from savings from the cloud transformation. But now that we're at kind of the end of the first quarter and heading towards the last three quarters of the year, we thought it was helpful to put some dollars in of what we expect those benefits to be in '21 and '22 and going forward.

Georgios Milhalos - Cowen & Company, LLC - Analyst

Thank you.

Mark Begor - Chief Executive Officer

Thanks.

Operator

We'll go next to David Togut with Evercore ISI.

David Togut - Evercore ISI - Analyst

Thank you. Good morning. And thanks again for the added disclosure. Mark, you called out a 500 basis point increase year-over-year in the win rate in the first quarter. Can you just elaborate a little bit on where you're seeing the biggest increases in your win rate by business segment? And at this point, do you feel that you're completely back to where you were pre-breach in terms of win rates in USIS?

Mark Begor - Chief Executive Officer

Yeah, it's a great question, and there's clearly been momentum. We've seen fairly steady, but there's been some bumpy sequential improvement over the last couple of years post the cyber event in 2017. And as you know, USIS was impacted most significantly. And as we got into the second half of 2019 and the first quarter, you can see the non-mortgage online responding there. The win rates have been pretty broad-based. I think you know we've got a really strong commercially-oriented leader in Sid Singh that was kind of a year and change into his role. So he's really taking hold. He's restructured the commercial organization in the last few months, and that's bringing some new energy into how they're focused in the marketplace.

The new product rollouts are helpful, growing products last year, gives him more stuff to sell and his team, which I think is quite helpful. So really, there isn't a segment that stands out. We're focused on all of them. And I think you know we put a particular focus on fintech because that's a space where our competitors are much stronger than we are. We've spooled up, I think, we've gone probably from a year or 18 months ago from a couple of people calling on fintech to close to a dozen today that are in that space. And of course, that has historically been growing pre-COVID much more rapidly than the normal market. So, it was a space that we wanted to play in. So, no good answer on anything that really stands out except that there's just been a real focus around driving that.

And the second half of your question is, are we back yet? The question, no, of course, USIS, our competitors pre-COVID and I don't know what their first quarter numbers look like, but I expect their non-mortgage growth - organic growth would be higher than USIS' in the United States. So that's a growth rate we're still chasing. We still believe that that our team has the potential to get back and be competitive as exhibited by the win rates that they're having in the marketplace.

And when I think about going into the COVID pandemic and the economic impacts, having that momentum from USIS still in recovery mode is positive. And the fact that they had the sequential growth and the performance in the second half of '19 and the first quarter performance gives me confidence that they're going to react and support our customers in the marketplace.

And then you couple that with having the - some of the unique data assets we have like TWN that the USIS team can sell in the marketplace, that can bundle with the existing credit file sales or other ways to go to market and bring value to our customers and using our new single data fabric with integrated solutions that combine our USIS data with our TWN data, those are more opportunities for that team to have more wins in the marketplace.

David Togut - Evercore ISI - Analyst

Thank you very much.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

The only thing I'd throw in there is, as you know, and I'm sure every business is dealing with, as we now work through April, May, and June, we're evaluating the funnel very closely given the effects that are happening to our customers around - because of the pandemic.

David Togut - Evercore ISI - Analyst

Understood, thank you.

Operator

We'll go next to Jeff Meuler with Baird.

Jeffrey Meuler - Robert W. Baird & Co. - Analyst

Yeah, thank you. Just I wanted to talk through, I guess, the margin impacts and the cost-cutting a bit more. So what's all in the $90 million of annualized? Are you reflecting any of the benefit in the Q2 illustrative examples? And is it just like the cost actions? Or does it also include savings from things like variable compensation that might be impacted or like the higher increase? Just what's all in there and is it impacting Q2 at all? Thanks.

Mark Begor - Chief Executive Officer

Yeah, like most companies, we took actions as soon as we saw the pandemic hit. As I said in my comments, we've got a hiring freeze in place at Equifax. But that excludes where we see we need resources for the cloud transformation or for new products. So, there's some benefits from that, that you expect, Jeff, would roll through. There's the travel benefits. No one's traveling. We'll - I would guess there'll be no internal travel at Equifax for the rest of the year until there's some clarity around the vaccine and there'll be limited commercial travel. So, that rolls in there.

And then we also are tightening our belt around our other discretionary costs with third parties, advisers, consultants, others that are doing work that are not integral to the cloud transformation or to the - our new product rollouts. Those are areas that we're trimming back and that - John can answer the question around the framework, and I'll let John take that.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Sure. So you also specifically mentioned variable compensation. And no, it doesn't include savings on variable compensation since the first quarter was so strong. Obviously, if that was to occur, that would be in the future. So, I think Mark covered it, right? Effectively, what it is, it's the removal of any growth we had in spending in the plan that we would have shared with you back in February. And then the real reductions come in, in the reductions in discretionary spend, which we have taken some and we're continuing to work, and we'll expect to have more progress there, and then also substantial reductions in T&E. And then in terms of our employee expense, effectively, we're holding everything flat, as Mark said. So, no new hiring and we'll see the benefit of attrition. But that's what's in the numbers today and that's what the second quarter reflects. And that's how we've done our longer term scenario planning as we plan our business through the end of 2020. Beyond that, there is no incremental benefits to cost savings in the illustrative view that we provided you on Slide 14.

Mark Begor - Chief Executive Officer

Jeff, maybe I'll add one more comment. From our perspective, when you think about how we're running the Company, I said in my comments quite clearly and hopefully clearly, that we're going to protect our franchise. We've got the financial strength to continue to make strategic investments even in this challenging economic time, and that includes the cloud transformation, which John and I both said, we're - we're spending what we plan to spend in 2020. And frankly, if we could find a way to accelerate the spending to accelerate the savings and benefits, we might do that.

And the same with NPI. As you know, last year, we increased our spending in NPI, and that resulted in more new products. If we find opportunities to increase our spending around new products in 2020, we will do that in order to deliver in the near term new products related to the recession impacts, but also for the future of Equifax.

And then on the discretionary cost side, these are belt tightenings that are obviously meaningful, but are focused on areas where we won't, in my words, impact the franchise in the future of Equifax in '21 and '22.

Jeffrey Meuler - Robert W. Baird & Co. - Analyst

Okay. And then - I understand the subscription with overages model for the UE claims business, but can you just kind of help me better understand the timing factor? Like when do you recognize revenue relative to when the initial claim is filed?

Mark Begor - Chief Executive Officer

Well, if they're outside of their subscription, pretty quickly, meaning they're on the clock. That's how the economics work.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Yeah. It's just - tactically, it's when we deliver the service, right? So when this is delivered and the claim would be filed and then the overage has occurred and we can bill for it, then the revenue would be recognized in period.

Mark Begor - Chief Executive Officer

But we're clearly in that mode with a whole bunch of - a lot of the customers in the last couple of weeks.

Jeffrey Meuler - Robert W. Baird & Co. - Analyst

Got it. Thank you, guys.

Mark Begor - Chief Executive Officer

Thanks, Jeff.

Operator

We'll go next to Bill Warmington with Wells Fargo.

Mark Begor - Chief Executive Officer

Hi, Bill.

William Warmington - Wells Fargo Securities - Analyst

Good morning, everyone. So first, just want to say congratulations on the social security contract. And I wanted to ask, when in 2021 you start generating revenue? Is that a Jan 1 start?

Mark Begor - Chief Executive Officer

Yeah. We don't have a specific timetable for that. It's a very significant contract for us, as I mentioned. It's the largest contract in our history if we look back. It's one that really represents the power of that income and employment data that we have in EWS. And we wanted to give you some visibility as we were talking about '21 and '22, and obviously, '23 and '24, because it's a five-year contract, that contract is going to be rolling in. And as we get closer to either the next few quarters or closer to our '21 guidance or the financial framework that we plan to put in place later in the year, we'll certainly give you more specifics on that.

William Warmington - Wells Fargo Securities - Analyst

Okay. And then for my follow-up, I was going to ask if you could put some numbers around what you're seeing in terms of volume originations for credit card, for auto, and for insurance. And it would also be helpful in terms of doing our modeling, if you could get a sense of what that represents as a percentage of total Equifax revenue?

Mark Begor - Chief Executive Officer

Yeah. John, you're going to have to help me on that one. I don't know if we have handy that kind of data. I think you probably know that when it comes to cards and P loans, we're smaller than our competitors in the United States in that space. They're much larger than we are. And we've clearly globally seen the largest impacts in cards, P loans, and auto, just because it's common sense, right? If consumers can't get out of their homes, they can't go to a car dealership and buy a car and then they can't use the financing on it. So, there's clearly been impacts in every market in those spaces. John, would you add to that in any way?

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

No. I just - I'd say, I think we gave quite good detail on non-mortgage in total, but, no, we haven't broken it down for everybody by line of business. So I think that's a level of granularity we're going to hold back on. We're okay where we are.

Mark Begor - Chief Executive Officer

I think maybe just - as you might imagine, what we are seeing is that the customers we deal with have pulled back on pre-screens or originations. They're raising risk scores because of the uncertainty around the consumer, which impacts their volume. And as I mentioned in my comments, you may recall that I was running GE Capital's credit card business, which is now Synchrony, back in 2009 and those are the actions we took. Until you have some clarity around the consumer in those kind of businesses, whether it's P loan, auto or cards, you're going to be more conservative on your originations.

On the flip side of that is, as I mentioned, which is the beauty of the business that we're in, is the countercyclical side is in my experience, we spent more money on portfolio management and credit line increase and decrease actions in order to manage the existing book that you have because the consumer is changing so rapidly. And one area we see that we're seeing some real traction on is increased discussions and activity around our income and employment data from Workforce Solutions in some of those spaces where we historically had less penetration or market share.

William Warmington - Wells Fargo Securities - Analyst

Got it. Thank you very much.

Operator

We'll go next to Andrew Nicholas with William Blair.

Andrew Nicholas - William Blair & Company - Analyst

Hi, good morning.

Mark Begor - Chief Executive Officer

Good morning.

Andrew Nicholas - William Blair & Company - Analyst

Hi, good morning. You talked quite a bit about the new product enhancements you've rolled out to address the recessionary environment, many of which seem to prioritize more frequent data updates. Do you think demand for this level of frequency could persist coming out of the crisis? And then maybe relatedly, are there any other changes to customer behavior that you've seen that you think could have a more lasting impact on the demand side?

Mark Begor - Chief Executive Officer

Yeah. I think it's really tough to predict what's going to happen because we've never seen anything like this and there's so many uncertainties about how is the consumer going to come back? What's the stimulus going to look like? Is there going to be a second wave after the payroll protection plans here in the United States of unemployment action? So you have all those things layered in there which really impact how long this cycle is going to be and how much stimulus is going to be put at it. Clearly, we've seen unprecedented amounts that will be helpful. But the depth of this one, when you think about travel and the impacts from unemployment in so many sectors is just massive.

Whether it will persist on the frequency post this economic event, hard to predict. I do expect the frequency of refreshing your data, refreshing your portfolio to be much more in this economic event than it was in 2009, just because there's so many more uncertainties in this environment.

The second thing I would say that I mentioned earlier in my comments that I think is going to be uniquely valuable for Equifax is income and employment data, who's working and who's not, is going to be - we didn't have the database and the scale that we had in 2009. We do today, but the volatility of people's salaries and ability to repay their debt is so much different in this economic environment than last one.

And then to your point, does that result in Work Number or our TWN income and employment data becoming more of the workflows going forward? I think it's really possible, and we're opportunistically trying to work on that. When you think about mortgage, every mortgage in the United States that's originated for the most part pulls all three credit files and most - and they all have to really verify income and employment.

We're very integrated in that workflow, but we still have more opportunities for system-to-system integration. We don't have - we only have - I'd say only, we only have half of the non-farm payroll. So there is a 50% of the originations or whatever the percentage is, something like that, that have to be verified in another way. So we'll be able to grow going in that space. We don't have that same penetration in some of the other sectors. And this could result in an extended period for Workforce Solutions to increase its market share in some of those other spaces like auto, like P loans and like cards, which we've been working on pre-pandemic and we're really spooling up now.

Andrew Nicholas - William Blair & Company - Analyst

Great. That's helpful. And then one quick one. As the Workforce Solutions business mix potentially stabilizes a bit this year with a faster growing Employer Services business, could you refresh us on the margin profile of the Verification Employer Services businesses? Just trying to gain appreciation for how a stronger Employer Services business might impact margin expansion trends over the next handful of quarters? Thanks.

Mark Begor - Chief Executive Officer

John, maybe you could take that one.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Yes. So we haven't given specific margin differences. What we have said is that Verification Services looks somewhat like the online portions of USIS, somewhat lower, right, because they have some royalty payments that are larger than what USIS might pay and that Employer Services is quite a bit below that, okay? But we haven't actually given a specific breakdown. Although given the detail we gave on split of revenue and then total margin for the BU, I think you can probably get pretty close.

Mark Begor - Chief Executive Officer

John, I think it's safe to say that the incremental margins on this incremental unemployment claim volume is quite high.

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

It is. It is. Not quite the size of verification, but it's high. It is relatively high, yeah.

Andrew Nicholas - William Blair & Company - Analyst

Thank you.

Operator

Our next question will come from Gary Bisbee with Bank of America.

Gary Bisbee - Bank of America Merrill Lynch - Analyst

Hi, guys. Good morning. I guess, two-part question. First, on your Employer services - I'm sorry, Workforce Solutions business, how do we think about the 22 million jobs lost in the last couple of weeks on the record? How does that - you talked about continuing to grow records, but it would take the active records go down as people lose their jobs. How does that flow through to revenue?

Mark Begor - Chief Executive Officer

Well, there will clearly be some impact there. We don't process all unemployment claims. We pick up that data which is valuable on the claims that we do process. So there could be some impact, but I think it's quite minimal. John?

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Yeah. So I mean, effectively, the dynamic that's occurring, right, is that as we get payroll files to the extent that we have a given employer that has done a layoff so that the employment is much lower, which I think is what you're referring to, then, yes, Work Number records would decline. What's been offsetting that, right, I mean, certainly, year-on-year, but also continuing through this quarter - sorry, last quarter and the first quarter is there was a substantial increase in the number of subscribers starting really, as we talked about kind of September through the end of last year and a very large increase in records. So what you're looking at is very large increases in records year-on-year and absolutely some offset from unemployment increasing once individuals become unemployed. And I think the dynamic that's benefiting us is the year-over-year benefit we have from what I just referenced and then also the continued work that the team is doing to add new contributors at a relatively rapid pace. So, as we go through this year, we'll have to see how those two dynamics play out in terms of our ability to add new contributors and then also the negative effect, which is - which as our contributors have lower employee bases that you see our - that impact the record base.

But so far, because of the large additions in new contributors we've seen over the past five plus six to seven months, that continues to be a net positive. As we go through the year, we'll keep you up-to-date on what it looks like.

Mark Begor - Chief Executive Officer

And maybe, John, just to add to that, as you probably know or you may know, we sell various flavors of our Workforce Solutions TWN data. We sell system-to-system integration if the consumer's going through a mortgage process and the originator hits our file, if there's a consumer in that file, then they pull that record in their - we charge them for it, whether they're working today or they were working six months ago, nine months ago, 12 months ago, etc., dependent upon the product that they pull in. We also - there's applications or customer use cases where so-called inactive records, meaning someone was working or on our database a year ago or six months ago or two months ago and is not active today is another revenue source for us that we sell. So there's multiple ways that we're able to sell the data, including the active records.

Gary Bisbee - Bank of America Merrill Lynch - Analyst

Okay, great. And then just a quick follow-up. We've seen a number of reports out there about tighter bank underwriting standards beginning to impact refinancing volumes and potentially consumer lending more broadly. Have you - are you seeing that in the data? Is that incorporated at all in the mortgage strength that's implied by that April trend data? Thank you.

Mark Begor - Chief Executive Officer

I think it's hard for us to see that in mortgage because that's - mortgage is fairly strong, both in the credit file in USIS and then with the verification and Workforce Solutions. I think, as John pointed out, in USIS, our non-mortgage volume is, obviously, trends are down versus first quarter and last year. And those are going to reflect things like auto and P loans and credit cards, and it's going to be a combination. It's going to be primarily of them reducing originations. Part of it is just from economic activity or foot traffic, meaning with people in shelter in place, you can't buy a car - or you can, but it's not as much happening. And then some of it's going to be, as you described of lenders, which some I've talked to, and I know that's what I did in 2009, when I was running GE Capital's business, you tighten up originations, so you figure out where that - where the consumer is going to be. So you raise score cut-offs or different ways to make sure you're protecting your book while you're still doing some originations. But we've clearly seen declines in those markets, not only in the United States but in other markets around the globe.

Operator

We'll go next to Brett Huff with Stephens Incorporated.

Brett Huff - Stephens Inc. - Analyst

Good morning, and thanks for the exit rate data, guys. I hope you're all doing well. A couple of questions from me. I'm looking back at my model, and I think you guys bottomed out in the USIS online about minus 13% in one of the quarters in '09, if I'm remembering right. And I think you said you're seeing about minus 30% now. I'm just wondering kind of the compare contrast between those two numbers, if I've got those right. What's different and what's similar between those two, and why more today?

Mark Begor - Chief Executive Officer

Well, there's nothing similar about 2009. There is but I'm being a little sharp on that. This is so different. In 2009, there wasn't shelter in place and there wasn't every retail operation, auto dealers, you name it, shut down for months at a time. That's dramatically different, just the economic activity. And as I mentioned earlier, as we're starting to see some relaxation in states like here in Georgia, they're going to allow restaurants to open in a week or two and things like that, that to me is what is one point that's just dramatically different and you really can't compare how we performed until we get back to what I would call normal economic activity, meaning consumers are allowed to go to stores and want to go to stores and so on.

Even with that, it's my view that this is going to be dramatically different than 2009 from an economic standpoint, just because of how consumers are going to operate. Are they going to go on a plane on vacation? That drives economic activity and credit cards. Are they going to put off buying a new car? The waves of unemployment are very different now than they were in 2009, and we've never seen, in our lifetimes, the waves of furloughs or salary reductions. It's just never been at that scale, which obviously changes how the consumer is operating and can operate. So that's just dramatically different.

Now why we thought it was important to share that with you of what we looked like in 2009 was not about the specific percentages, but really how our - the resiliency of our business is, and we try to give you our view of how we categorize the businesses and a business like Workforce Solutions powered through the 2009 crisis is currently powering through the COVID crisis. We expect that to continue. The same with U.S. mortgage. With low interest rates, us being over-indexed to mortgage in the United States is a good thing. It's generating margin that we can use to reinvest in the business as that business goes forward.

So I think there is more differences in similarities, but the difference is around the scale of our recession-resistant businesses being dramatically larger in this economic event versus 2009, which was the worst we've ever seen until now, I think, serves us well as we get deeper into this COVID economic recession.

Brett Huff - Stephens Inc. - Analyst

Okay…

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

Sorry, just for clarity, we said non-mortgage is down 30% online. Total online, we said down just over 10%. I just wanted to make sure you're comparing the right numbers, that's all.

Brett Huff - Stephens Inc. - Analyst

Got you. That's helpful. Thank you. And then the second question is, John, you mentioned kind of having the online kind of daily tally, if you will. Do you have any insight into the credit files that are being pulled or the data that's being used, kind of what use cases are being more or less impacted? And I'm thinking sort of the difference between maybe marketing, credit offers versus originating credit offers versus doing kind of portfolio management type stuff. Any sort of hints in the data on that? Or is that too opaque still?

John W. Gamble, Jr. - Corporate Vice President, Chief Financial Officer

So for us, most, not all, marketing and portfolio management would be batched. So that would be an FMS. And that's a place where we would have less visibility now, I think, as we mentioned in the call, because the batch business tends to happen for end of periods and it isn't really as subject to reliable trends. So we've made assumptions about what will happen there, but they are far less based on trends. And they are based on the trends we're seeing in online.

Within online, we do know by general industry type. and I think there is some detail within industry type deeper than that. But in terms of a specific use case within a lender, no, not so much, right. So for example, if someone pulls a mortgage file, we'll certainly know who hold it. But we don't necessarily know if it's for a refi or not or we don't - or versus a new purchase or in some cases it's difficult to tell if it's even for HELOC.

Brett Huff - Stephens Inc. - Analyst

Great. Understood. Thanks, guys.

Mark Begor - Chief Executive Officer

Thanks.

Operator

And now I would like to turn the call over to Jeffrey Dodge. Please go ahead.

Jeffrey Dodge - Senior Vice President, Investor Relations

Okay. That will conclude our call for today. I appreciate everybody's time. I know the call went a little bit longer than normal, but again, refer you to the material that is on our website. And with that, operator, we will conclude our call. Thanks, everybody.

Operator

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Q1 2020

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