What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-08 compared with 2021-02-09 · 288 added, 303 removed, 698 unchanged (46% of the section changed)

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(together with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) for the years ended December 31, 2021 and 2020, respectively.

The MD&A provides information of factors that we believe are important in understanding our results of operations and comparability and certain other factors that may affect our future results.

The MD&A should be read in conjunction with the consolidated financial statements and accompanying notes included in this Annual Report on Form 10-K for the year ended December 31, 2021, which have been prepared in accordance with accounting principles generally accepted in the U.S.

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• Indices is a global index provider maintaining a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors.

Major Portfolio Changes

The following significant changes were made to our portfolio during the three years ended December 31, 2020:

• In January of 2020, we completed the acquisition of the ESG Ratings Business from RobecoSAM, which includes the widely followed SAM* Corporate Sustainability Assessment, an annual evaluation of companies' sustainability practices.

The acquisition will bolster our position as the premier resource for essential environmental, social, and governance ("ESG") insights and product solutions for our customers.

Through this acquisition, we will be able to offer our customers even more transparent, robust and comprehensive ESG solutions.

• In April of 2018, we acquired Kensho Technologies Inc.

("Kensho") for approximately $550 million, net of cash acquired, in a mix of cash and stock.

Kensho is a leading-edge provider of next-generation analytics, artificial intelligence, machine learning, and data visualization systems to Wall Street's premier global banks and investment institutions, as well as the National Security community.

Beginning in the first quarter of 2019, the contract obligations for revenue from Kensho's major customers were transferred to Market Intelligence for fulfillment.

As a result of this transfer, from January 1, 2019 revenue from contracts with Kensho’s customers is reflected in Market Intelligence’s results.

In 2018, the revenue from contracts with Kensho’s customers was reported in Corporate revenue.

Merger Agreement

In November of 2020, S&P Global and IHS Markit Ltd ("IHS Markit") entered into a merger agreement, pursuant to which, among other things, a subsidiary of S&P Global will merge with and into IHS Markit, with IHS Markit surviving the merger as a wholly owned subsidiary of S&P Global.

Under the terms of the merger agreement, each share of IHS Markit issued and outstanding (other than excluded shares and dissenting shares) will be converted into the right to receive 0.2838 fully paid and nonassessable shares of S&P Global common stock (and, if applicable, cash in lieu of fractional shares, without interest), less any applicable withholding taxes.

On March 11, 2021, S&P Global and IHS Markit shareholders voted to approve the merger agreement.

As of December 31, 2021, IHS Markit had approximately 399.1 million shares outstanding.

Subject to certain closing conditions, the merger is expected to be completed in the first quarter of 2022.

Shareholder Return

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we completed share repurchases of approximately $2.4 billion and distributed regular quarterly dividends totaling approximately $1.9 billion.

Also, on January 27, 2021 the Board of Directors approved an increase in the quarterly common stock dividend from $0.67 per share to $0.77 per share.

Also, on January 26, 2022, the Board of Directors approved a quarterly common stock dividend of $0.77 per share.

Following the expected closing of the merger with IHS Markit, the Board of Directors will revisit the dividend policy of the combined Company.

(in millions) Year ended December 31, % Change 1

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1 % changes in the tables throughout the MD&A are calculated off of the actual number, not the rounded number presented.

2 2021 includes IHS Markit merger costs of $249 million, employee severance charges of $19 million, gain on dispositions of $11 million, a lease impairment of $3 million, Kensho retention related expense of $2 million, acquisition-related costs of $4 million and recovery of lease-related costs of $2 million.

2020 includes lease impairments of $120 million, employee severance charges of $66 million, IHS Markit merger costs of $24 million, a gain on dispositions $16 million, a technology-related impairment charge of $12 million, lease-related costs of $11 million and Kensho retention related expense of $11 million.

2019 includes a gain on the sale of RigData and SPIAS of $27 million and $22 million, respectively, employee severance charges of $25 million, Kensho retention related expense of $21 million, lease impairments of $11 million and acquisition-related costs of $4 million.

2018 includes legal settlement expenses of $74 million, Kensho retention related expense of $31 million, restructuring charges related to a business disposition and employee severance charges of $25 million and lease impairments of $11 million.

2020 also includes amortization of intangibles from acquisitions of $123 million and 2019 and 2018 includes amortization of intangibles from acquisitions of $122 million.

Revenue increased 11% with an unfavorable impact of 1 percentage point from the net impact of recent acquisitions and dispositions, driven by increases at all of our reportable segments.

Revenue growth at Ratings was driven by an increase in both transaction revenue and non-transaction revenue.

Transaction revenue increased due to higher bank loan ratings revenue and structured finance revenue.

Non-transaction revenue increased primarily due to an increase in surveillance, entity credit ratings, an increase in revenue at our CRISIL subsidiary and higher Ratings Evaluation Service (“RES”) revenue.

Revenue growth at Market Intelligence was driven by subscription revenue growth in Market Intelligence Desktop products, Credit Risk Solutions and Data Management Solutions.

Revenue growth at Indices was due to higher average levels of assets under management for exchange traded funds ("ETFs") and mutual funds and higher data subscription revenue, partially offset by lower exchange-traded derivative revenue.

The revenue increase at Platts was primarily due to continued demand for market data and market insights products.

Foreign exchange rates had a favorable impact of less than 1 percentage point.

Operating profit increased 17%, with a favorable impact from foreign exchange rates of 1 percentage point.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 31 percentage points, partially offset by higher lease impairment charges in 2020 of 16 percentage points, higher employee severance charges in 2020 of 7 percentage points, higher amortization of intangibles from acquisitions in 2020 of 4 percentage points and higher technology-related impairment charges in 2020 of 2 percentage points, operating profit increased 15%.

The increase was primarily due to revenue growth at all of our reportable segments combined with a decrease in occupancy costs, partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

Revenue increased 11%, with a favorable benefit of 1 percentage point from the net impact of recent acquisitions and dispositions, driven by increases at all of our reportable segments.

Revenue growth at Ratings was mainly driven by higher corporate bond ratings revenue, partially offset by a decrease in bank loan ratings revenue and structured finance transaction revenues.

Revenue growth at Market Intelligence was driven by annualized contract value growth in Market Intelligence Desktop products, Credit Risk Solutions and Data Management Solutions.

Revenue growth at Indices was due to higher assets under management for exchange traded funds ("ETFs") and mutual funds, an increase in exchange-traded derivatives revenue and higher data subscription revenue.

Revenue growth at Market Intelligence was driven by subscription revenue growth in Market Intelligence Desktop products, Credit Risk Solutions and Data Management Solutions.

Revenue growth at Indices was due to higher assets under management for ETFs and mutual funds, an increase in exchange-traded derivatives revenue and higher data subscription revenue.

The revenue increase at Platts was primarily due to continued demand for market data, price assessment and analytics products.

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Excluding the impact of a higher lease impairment charges in 2020 of 3 percentage points, higher employee severance charges in 2020 of 1 percentage point, a higher gain on dispositions in 2019 of 1 percentage point primarily related to the sale of RigData and Standard & Poor's Investment Advisory Services LLC ("SPIAS") and IHS Markit merger costs in 2020 of 1 percentage point, operating profit increased 18%.

The increase was primarily due to revenue growth at all of our reportable segments combined with a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19, partially offset by an increase in incentive costs and higher compensation costs driven by annual merit increases and additional headcount.

Revenue increased 7%, with an unfavorable impact of 1 percentage point from foreign exchange rates.

The increase was driven by revenue growth at all of our reportable segments.

Revenue growth at Ratings was driven by an increase in corporate bond ratings revenue and public finance revenue, partially offset by lower bank loan ratings revenue.

The increase at Market Intelligence was driven by annualized contract value growth in the Market Intelligence Desktop, Credit Risk Solutions and Data Management Solutions products.

The increase at Indices was due to higher levels of assets under management for ETFs and mutual funds.

Revenue growth at Indices was also favorably impacted by the buyout of the balance of intellectual property rights in a family of indices from one of our co-marketing and index development partners in the fourth quarter of 2018, retrospective fees for previously unlicensed and unreported index usage and benefits related to recent contract renegotiation.

The increase at Platts was primarily due to continued demand for market data and price assessment products.

Operating profit increased 16%, with a favorable impact from foreign exchange rates of less than 1 percentage point.

Excluding the impact of higher legal settlement expenses in 2018 of 3 percentage points, a gain on our dispositions of 2 percentage points and higher Kensho retention related expense in 2018 of 1 percentage point, operating profit increased 10%.

The increase was primarily due to revenue growth at all of our reportable segments, lower professional fees and decreased expenses at Corporate Unallocated driven by a $20 million reduction in contributions made to the S&P Global Foundation in 2018.

These increases to operating profit were partially offset by higher technology costs, an increase in incentive costs and higher compensation costs driven by annual merit increases and additional headcount.

We are closely monitoring the impact of the outbreak of COVID-19 on all aspects of our business.

While COVID-19 did not have a material adverse effect on our reported results for the year ended December 31, 2020, we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

The increase was primarily due to revenue growth at all of our reportable segments combined with a decrease in travel and entertainment expenses from non-essential travel restrictions in response to the 2019 novel coronavirus ("COVID-19"), partially offset by an increase in incentive costs and higher compensation costs driven by annual merit increases and additional headcount.

We are continuing to closely monitor the impact of the outbreak of COVID-19 on all aspects of our business as the pandemic and associated macroeconomic impacts continue to evolve.

While COVID-19 did not have a material adverse effect on our reported results for the years ended December 31, 2021 and 2020, we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

We are a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

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In 2022, we will strive to deliver on our strategic priorities in the following key areas:

• Meeting or exceeding revenue growth and EBITA margin targets with particular focus on accelerating growth in the greater Asia Pacific region;

• Funding organic opportunities and pursuing disciplined acquisitions, investments and partnerships to support our key growth areas;

• Taking a lead role in the market regarding ESG disclosures and achieving our stated environmental sustainability targets;

• Executing against Integration Management Office ("IMO") and regulatory milestones;

building trust and team cohesion with INFO colleagues;

laying groundwork to set proforma organization up for successful realization of our synergy and strategic goals.

• Continuing to deliver our key initiatives to the market and building them through a customer-first lens;

• Prioritizing customer preferences, while enhancing and adjusting the delivery of our products across multiple channels such as feeds and APIs;

and delivering on S&P Global Platform initiatives;

• Incorporating a customer perspective in all divisions and functions, including the reimagining of our customer's work environments and how best to serve them;

pursuing partnerships to meet customers where they are;

• Nurturing and protecting the core franchise, while growing brand equity with the appropriate investments.

• Improving end-user productivity and experience by providing our employees with the tools and processes to better serve our customers;

• Reimagining our work environment by continuing to standardize our technology and encouraging employee participation in the reshaping of where we work, how we work and how we serve;

• Advancing our risk culture by maturing risk management & compliance processes and our cyber security posture;

• Utilizing our innovation teams and latest technology to maintain our commitment to advancing our shared data processes and technical capabilities.

• Continuing to foster a people first environment, while maintaining existing levels of engagement;

• Encouraging career mobility through career coaching, while attracting and retaining the best people;

• Improving diverse representation through talent acquisition, advancement and retention, while continuing to raise awareness of racial education.

• Meeting or exceeding year 1 cost and revenue synergy targets from our merger commitments as well as our organic revenue growth and EBITA margin targets;

• Continuing to fund key growth areas - Environmental, Social and Governance ("ESG"), Energy Transition, China, Small and Medium-sized Enterprise/Private Markets, Credit and Risk Management, Distribution and Multi-asset, Thematic and Factor Indices - and support with disciplined organic, inorganic and partnership strategies;

• Demonstrating active leadership in ESG disclosure through advocacy, best-in-class SPGI disclosure and meaningful progress against our stated environmental sustainability targets.

• Accelerating Sustainable1's growth and market position with a specific focus on Energy transition, Climate and on improving market share in ESG Data/Scores and ESG Indices;

• Continuing to grow and defend the core and delivering our key initiatives, while leveraging the combined company's extended capabilities;

delivering our products across multiple channels, e.g., feeds and Application Programming Interfaces, aligned to our customer's needs;

• Responding to evolving customer needs and driving innovation leveraging our data, technology, and deep industry expertise by developing a digital ecosystem strategy with collaboration across customers, vendors and technology partners;

• Differentiating through innovative solutions including data science, Artificial Intelligence, Machine Learning and next generation tools to unlock the power of our data and insights;

• Growing S&P Global's brand through an integrated marketing and communications strategy while protecting our reputation.

• Delivering on the key integration projects that help transform the company and delivering on merger commitments;

• Enhancing the tools and processes our people use to better service our customers, expand intelligence and analytics capabilities, support data-driven decisions and improve end-user productivity;

• Reimagining and implementing the future hybrid office model by standardizing our technology to reshape where we work, how we work and how we serve;

• Advancing our technical capabilities, data transformation and building the next generation of products and services using the combined entity's data, technology & expertise;

• Maintaining our commitment to risk management, control and compliance and strengthening engagement and partnership across the company.

• Rolling out and embedding our new purpose and values to unify and combine S&P Global;

• Encouraging career mobility and career development through career coaching and Thrive;

• Improving diverse representation through hiring, advancement and retention, while continuing to raise awareness through Diversity, Equity, and Inclusion education;

• Attracting and retaining our people through recognition programs, learning opportunities and fair compensation.

There can be no assurance that we will achieve success in implementing any one or more of these strategies as a variety of factors could unfavorably impact operating results, including prolonged difficulties in the global credit markets and a change in the regulatory environment affecting our businesses.

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Total expenses 4,087 3,841 3,522 6% 9%

Gain on dispositions (16) (49) — (67)% N/M

Gain on dispositions (11) (16) (49) (30)% (67)%

Operating profit 4,221 3,617 3,226 17% 12%

Other (income) expense, net (31) 98 (25) N/M N/M

Other (income) expense, net (62) (31) 98 (96)% NM

Interest expense, net 119 141 141 (16)% —%

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$ 3,024 $ 2,339 $ 2,123 29% 10%

N/M- not meaningful

N/M- Represents a change equal to or in excess of 100% or not meaningful

(in millions) Year ended December 31, % Change

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Higher data subscription revenue at Indices also contributed to subscription revenue growth.

Non-subscription / transaction revenue increased due to an increase in corporate bond ratings revenue, partially offset by a decrease in bank loan ratings revenue and structured finance transaction revenues at Ratings.

Non-transaction revenue increased primarily due to an increase in surveillance revenue, royalty revenue, and higher Ratings Evaluation Service activity.

Asset linked fees increased due to the impact of higher average levels of assets under management for ETFs and mutual funds at Indices.

The increase in sales-usage based royalties was primarily driven by higher exchange-traded derivative volumes at Indices.

Non-subscription / transaction revenue increased due to an increase in bank loan ratings revenue and higher structured finance revenue at Ratings.

Non-transaction revenue increased primarily due to an increase in surveillance, entity credit ratings, an increase in revenue at our CRISIL subsidiary and higher RES revenue at Ratings.

Asset linked fees increased reflecting higher average levels of assets under management for ETFs and mutual funds at Indices.

The decrease in sales usage-based royalties was primarily driven by lower exchange-traded derivative revenue at Indices.

See “Segment Review” below for further information.

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Revenue increased 11% as compared to 2019.

Subscription revenue increased primarily from growth in Market Intelligence's average contract values and continued demand for Platt's proprietary content.

Subscription revenue increased primarily from growth in Market Intelligence's average contract values and continued demand for Platts proprietary content.

Higher data subscription revenue at Indices also contributed to subscription revenue growth.

Non-subscription / transaction revenue increased driven by an increase in corporate bond ratings revenue and public finance revenue, partially offset by a decline in bank loan ratings revenue at Ratings.

Non-transaction revenue decreased 1% primarily due to the unfavorable impact from foreign exchange rates.

Non-transaction revenue was unfavorably impacted by a decline in Ratings Evaluation Service activity, a decrease at CRISIL, primarily within the risk and analytics sector, and lower entity credit ratings revenue, and benefited from an increase in surveillance revenue and higher royalty revenue.

Asset linked fees increased due to the impact of higher levels of assets under management for ETFs and mutual funds at Indices.

Additionally, asset-linked fees was favorably impacted by the buyout of the balance of intellectual property rights in a family of indices from one of our co-marketing and index development partners in the fourth quarter of 2018, retrospective fees for previously unlicensed and unreported index usage and benefits related to recent contract renegotiations.

The decline in sales-usage based royalties was primarily driven by lower exchange-traded derivative volumes at Indices in 2019.

Non-transaction revenue increased primarily due to an increase in surveillance revenue, royalty revenue, and higher RES activity.

Asset linked fees increased due to the impact of higher average levels of assets under management for ETFs and mutual funds at Indices.

The increase in sales-usage based royalties was primarily driven by higher exchange-traded derivative volumes at Indices.

See “Segment Review” below for further information.

The unfavorable impact of foreign exchange rates reduced revenue by 1 percentage point.

The favorable impact of foreign exchange rates increased revenue by less than 1 percentage point.

This impact refers to constant currency comparisons estimated by recalculating current year results of foreign operations using the average exchange rate from the prior year.

Total Expenses

In the first quarter of 2020, we changed our allocation methodology for allocating our centrally managed technology-related expenses to our reportable segments to more accurately reflect each segment's respective usage.

Prior-year amounts have been reclassified to conform with current presentation.

The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the years ended December 31, 2021 and 2020:

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$ 2,195 $ 1,714 $ 2,094 $ 1,541 5% 11%

N/M - not meaningful

N/M - Represents a change equal to or in excess of 100% or not meaningful

1 In 2021, selling and general expenses include employee severance charges of $3 million and recovery of lease-related costs of $4 million.

In 2020, selling and general expenses include a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million.

In 2019, selling and general expenses include employee severance charges of $11 million.

2 In 2021, selling and general expenses include employee severance charges of $3 million, acquisition-related costs of $2 million and lease-related costs of $1 million.

In 2020, selling and general expenses include employee severance charges of $27 million and lease-related costs of $3 million.

In 2019, selling and general expenses include employee severance charges of $6 million and acquisition-related costs of $4 million.

3 In 2021, selling and general expenses include recovery of lease-related costs of $2 million.

In 2020, selling and general expenses include employee severance charges of $11 million and lease-related costs of $2 million.

In 2019, selling and general expenses include employee severance charges of $1 million.

4 In 2021, selling and general expenses include recovery of lease-related costs of $1 million.

In 2020, selling and general expenses include employee severance charges of $5 million, a lease impairment charge of $4 million, a technology-related impairment charge of $2 million and lease-related costs of $1 million.

5 Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

6 In 2021, selling and general expenses include IHS Markit merger costs of $249 million, employee severance charges of $13 million, lease-related costs of $4 million, a lease impairment of $3 million, Kensho retention related expenses of $2 million and acquisition-related costs of $2 million.

In 2020, selling and general expenses include lease impairments of $116 million, IHS Markit merger costs of $24 million, employee severance charges of $19 million, Kensho retention related expense of $12 million and a gain related to an acquisition of $1 million.

In 2019, selling and general expenses include Kensho retention related expense of $21 million, lease impairments of $11 million and employee severance charges of $7 million.

Operating-Related Expenses

Operating-related expenses increased as compared to 2019 driven by increases at Market Intelligence and Ratings.

The increase at Market Intelligence was primarily due to higher compensation costs driven by investments in growth initiatives and the acquisition of 451 Research, LLC, and higher incentive costs.

The increase at Ratings was primarily driven by higher incentive costs.

These increases were partially offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19.

Operating-related expenses increased by 5% as compared to 2020.

Increases at Ratings, Indices and Platts were primarily driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases.

The increase at Market Intelligence was primarily due to an increase in intersegment royalties tied to annualized contract value growth and higher incentive costs.

Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

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Selling and general expenses increased 11%.

Excluding the impact of higher lease impairment charges in 2020 of 9 percentage points, higher employee severance charges in 2020 of 3 percentage costs, lease-related costs in 2020 of 1 percentage point, IHS Markit merger costs in 2020 of 1 percentage point and a technology-related impairment charge of 1 percentage point, partially offset by higher Kensho related retention expense in 2019 of 1 percentage point, selling and general expenses increased 1%.

This increase was primarily driven by an increase at Market Intelligence due to higher compensation costs driven by investments in growth initiatives and the acquisition of 451 Research, LLC, and higher incentive costs, and an increase at Indices driven by an increase in legal related costs.

These increases were partially offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19 and lower rental expense from a reduction in the Company's real estate footprint.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 2 percentage points, offset by higher lease impairments in 2020 of 1 percentage point, higher employee severance charges in 2020 of less than 1 percentage point and higher lease-related costs in 2020 of less than 1 percentage point, selling and general expenses increased 11%.

Increases at Ratings, Platts and Indices were primarily driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases.

The increase at Market Intelligence was primarily due to an increase in technology costs and higher incentive costs, partially offset by a decrease in compensation costs due to reduced headcount.

These increases were partially offset by lower occupancy costs and a decrease in legal related costs at Indices.

Depreciation and Amortization

Depreciation and amortization increased $2 million, or 1%, compared to 2019 due to an increase in depreciation expense related to assets that began being depreciated in the second half of 2019 and an increase in amortization expense driven by the acquisitions of RobecoSAM, Greenwich Associates LLC and 451 Research, LLC in January 2020, February 2020 and December 2019, respectively.

Depreciation and amortization decreased $28 million, or 13%, compared to 2020 primarily due to a decrease in intangible asset amortization related to assets that became fully amortized, partially offset by an increase in amortization expense driven by the acquisitions of RobecoSAM and Greenwich Associates LLC in January 2020 and February 2020, respectively.

The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the years ended December 31, 2020 and 2019:

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196 207 197 196 (1)% 6%

Indices 138 139 129 130 7% 7%

146 168 138 139 6% 20%

Intersegment eliminations 5

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$ 2,094 $ 1,541 $ 1,976 $ 1,342 6% 15%

N/M - not meaningful

N/M - Represents a change equal to or in excess of 100% or not meaningful

1 In 2020, selling and general expenses include a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million.

In 2019, selling and general expenses include employee severance charges of $11 million.

In 2018, selling and general expenses include legal settlement expenses of $74 million and employee severance charges of $8 million.

2 In 2020, selling and general expenses include employee severance charges of $27 million and lease-related costs of $3 million.

In 2019, selling and general expenses include employee severance charges of $6 million and acquisition-related costs of $4 million.

In 2018, selling and general expenses include restructuring charges related to a business disposition and employee severance charges of $7 million.

3 In 2020, selling and general expenses include employee severance charges of $11 million and lease-related costs of $2 million.

In 2019, selling and general expenses include employee severance charges of $1 million.

4 In 2020, selling and general expenses include employee severance charges of $5 million, a lease impairment charge of $4 million, a technology-related impairment charge of $2 million and lease-related costs of $1 million.

5 Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

5 In 2019, selling and general expenses include Kensho retention related expense of $21 million, lease impairments of $11 million and employee severance charges of $7 million.

6 In 2020, selling and general expenses include lease impairments of $116 million, IHS Markit merger costs of $24 million, employee severance charges of $19 million, Kensho retention related expense of $12 million and a gain related to an acquisition of $1 million.

In 2019, selling and general expenses include Kensho retention related expense of $21 million, lease impairments of $11 million and employee severance charges of $7 million.

Operating-Related Expenses

Operating-related expenses increased as compared to 2018 driven by the acquisition of Kensho in April of 2018 and increases at Ratings, Market Intelligence and Indices.

Ratings increased primarily due to an increase in incentive costs, partially offset by lower professional fees.

The increase at Market Intelligence was due to higher technology costs, higher compensation costs and an increase in intersegment royalties tied to annualized contract value growth.

The increase at Indices was primarily related to increased royalties due to increased traction of royalty-based products and higher compensation costs.

Operating-related expenses increased as compared to 2019 driven by increases at Market Intelligence and Ratings.

The increase at Market Intelligence was primarily due to higher compensation costs driven by investments in growth initiatives and the acquisition of 451 Research, LLC, and higher incentive costs.

The increase at Ratings was primarily driven by higher incentive costs.

These increases were partially offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19.

Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

Selling and General Expenses

Selling and general expenses decreased 6%.

Excluding the impact of legal settlement expenses in 2018 of 5 percentage points and higher Kensho retention related expense in 2018 of 1 percentage point, selling and general expenses remained unchanged.

Increases at Platts, Indices and Ratings, were offset by a decrease in expenses at Corporate Unallocated.

The increase at Platts was primarily driven by higher technology costs.

The increase at Ratings was primarily driven by an increase in incentive costs.

Indices increased primarily due to higher legal expenses and compensation costs.

These increases were offset by a decrease in expenses at Corporate Unallocated primarily driven by a $20 million contribution made by the Company to the S&P Global Foundation in 2018 and a decrease in expenses at Kensho.

Selling and general expenses increased 15%.

Depreciation and Amortization

Depreciation and amortization decreased $2 million, or 1%, compared to 2018 due to decreases at Market Intelligence and Platts related to assets becoming fully depreciated and assets becoming fully amortized at Platts, partially offset by an increase in amortization expense from the acquisition of Kensho in April of 2018.

Gain on Dispositions

During the year ended December 31, 2021, we completed the following dispositions that resulted in a pre-tax gain of $11 million, which was included in Gain on dispositions in the consolidated statements of income:

• During the year ended December 31, 2021, we recorded a pre-tax gain of $8 million ($6 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of office facilities in India.

• During the year ended December 31, 2021, we recorded a pre-tax gain of $3 million ($3 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of Standard & Poor's Investment Advisory Services LLC ("SPIAS"), a business within our Market Intelligence segment, that occurred in July of 2019.

During the year ended December 31, 2020, we completed the following dispositions that resulted in a pre-tax gain of $16 million, which was included in Gain on dispositions in the consolidated statements of income:

• In January of 2020, Market Intelligence entered into a strategic alliance to transition S&P Global Market Intelligence's Investor Relations ("IR") webhosting business to Q4 Inc.

("Q4"), a third party provider of investor relations related services.

This alliance will integrate Market Intelligence's proprietary data into Q4's portfolio of solutions, enabling further opportunities for commercial collaboration.

In connection with transitioning its IR webhosting business to Q4, Market Intelligence made a minority investment in Q4.

This alliance integrated Market Intelligence's proprietary data into Q4's portfolio of solutions, enabling further opportunities for commercial collaboration.

In connection with transitioning its IR webhosting business to Q4, Market Intelligence received a minority investment in Q4.

During the year ended December 31, 2020, we recorded a pre-tax gain of $11 million ($6 million after-tax), respectively, in Gain on dispositions in the consolidated statement of income related to the sale of IR.

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We internally manage our operations by reference to operating profit with economic resources allocated primarily based on each segment's contribution to operating profit.

Segment operating profit is defined as operating profit before Corporate Unallocated.

Segment operating profit is defined as operating profit before Corporate Unallocated expense.

Segment operating profit is not, however, a measure of financial performance under U.S.

GAAP, and may not be defined and calculated by other companies in the same manner.

Prior-year amounts have been reclassified to conform with current presentation.

The table below reconciles segment operating profit to total operating profit:

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Total segment operating profit 4,647 3,936 3,438 18% 14%

Corporate Unallocated 5

Corporate Unallocated expense 5

(426) (319) (212) (33)% (50)%

Total operating profit $ 4,221 $ 3,617 $ 3,226 17% 12%

1 2021 includes a gain on disposition of $6 million, employee severance charges of $3 million and recovery of lease-related costs of $4 million.

2020 includes a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million.

2019 includes employee severance charges of $11 million.

2018 includes legal settlement expenses of $74 million and employee severance charges of $8 million.

2020 includes amortization of intangibles from acquisitions of $7 million and 2019 and 2018 includes amortization of intangibles from acquisitions of $2 million.

2 2020 includes employee severance charges of $27 million, a gain on dispositions of $12 million and lease-related costs of $3 million.

2021, 2020 and 2019 include amortization of intangibles from acquisitions of $10 million, $7 million and $2 million, respectively.

2 2021 includes acquisition-related costs of $2 million.

2021and 2020 include employee severance charges of $3 million and $27 million, respectively, a gain on dispositions of $3 million and $12 million, respectively, and lease-related costs of $1 million and $3 million, respectively.

2019 includes a gain on the sale of SPIAS of $22 million, employee severance charges of $6 million and acquisition-related costs of $4 million.

2018 includes restructuring charges related to a business disposition and employee severance charges of $7 million.

2021, 2020 and 2019 includes amortization of intangibles from acquisitions of $65 million, $76 million and $75 million, respectively.

3 2021 includes recovery of lease-related costs of $2 million.

2020 includes employee severance charges of $11 million and lease-related costs of $2 million.

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2021, 2020 and 2019 includes amortization of intangibles from acquisitions of $8 million, $9 million, and $12 million.

4 2021 includes recovery of lease-related costs of $1 million.

2020 includes employee severance charges of $5 million, a lease impairment charge of $4 million, a technology-related impairment charge of $2 million and lease-related costs of $1 million.

2021, 2020 and 2019 includes amortization of intangibles from acquisitions of $6 million.

5 2020 includes lease impairments of $116 million, IHS Markit merger costs of $24 million, employee severance charges of $19 million, Kensho retention related expense of $12 million and a gain related to an acquisition of $1 million.

2019 includes Kensho retention related expense of $21 million, lease impairments of $11 million and employee severance charges of $7 million.

2018 includes Kensho retention related expense of $31 million, lease impairments of $11 million and employee severance charges of $10 million.

2020, 2019 and 2018 includes amortization of intangibles from acquisitions of $26 million, $28 million, and 23 million.

5 2021 and 2020 includes IHS Markit merger costs of $249 million and $24 million, respectively.

2021, 2020, and 2019 include employee severance charges of $13 million, $19 million and $7 million, respectively, lease impairments of $3 million, $116 million and $11 million, respectively, and Kensho retention related expenses of $2 million, $12 million, and $21 million, respectively.

2021 includes lease-related costs of $4 million, acquisition-related costs of $2 million and a gain on disposition of $2 million.

2020 includes a gain related to an acquisition of $1 million.

Additionally, 2021, 2020 and 2019 include amortization of intangibles from acquisitions of $7 million, $26 million, and $28 million.

Segment Operating Profit — Increased $711 million or 18% as compared to 2020.

Excluding the impact of higher employee severance charges in 2020 of 1 percentage point, a higher gain on dispositions in 2019 of 1 percentage point primarily related to the sale of RigData and SPIAS, a technology-related impairment charge in 2020 of less than 1 percentage point and lease-related costs in 2020 of less than 1 percentage point, operating profit increased 17%.

Excluding the impact of higher employee severance charges in 2020 of 2 percentage points and higher lease-related costs of 1 percentage point in 2020, segment operating profit increased 15%.

The increase was primarily due to an increase in revenue at all of our reportable segments combined with a decrease in occupancy costs, partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

See “Segment Review” below for further information.

Corporate Unallocated Expense— Corporate Unallocated expense includes costs for corporate functions, select initiatives, unoccupied office space and Kensho, included in selling and general expenses.

Corporate Unallocated expense increased 33% compared to 2020.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 45 percentage points, higher lease-related costs in 2021 of 1 percentage point and higher acquisition-related costs in 2021 of 1 percentage point, partially offset by higher lease impairments in 2020 of 23 percentage points, higher amortization of intangibles in 2020 of 4 percentage points, higher Kensho retention related expense in 2020 of 2 percentage points and higher employee severance charges in 2020 of 1 percentage point, Corporate Unallocated expense increased 16% primarily due to higher incentive costs.

Foreign exchange rates had a favorable impact on operating profit of 1 percentage point.

This impact refers to constant currency comparisons and the remeasurement of monetary assets and liabilities.

Constant currency impacts are estimated by re-calculating current year results of foreign operations using the average exchange rate from the prior year.

Remeasurement impacts are based on the variance between current-year and prior-year foreign exchange rate fluctuations on assets and liabilities denominated in currencies other than the individual businesses functional currency.

Segment Operating Profit — Increased $498 million, or 14% as compared to 2019.

The increase was primarily due to an increase in revenue at all of our reportable segments combined with a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19, partially offset by an increase in incentive costs and higher compensation costs driven by annual merit increases and additional headcount.

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Remeasurement impacts are based on the variance between current-year and prior-year foreign exchange rate fluctuations on monetary assets and liabilities denominated in currencies other than the individual business' functional currency.

Segment Operating Profit — Increased $417 million, or 14% as compared to 2018.

Excluding the impact of higher legal settlement expenses in 2018 of 3 percentage points and a gain on our dispositions in 2019 of 2 percentage points, segment operating profit increased 9%.

This increase was primarily driven by an increase in revenue at all of our reportable segments and lower professional fees, partially offset by higher technology costs, an increase in incentive costs and higher compensation costs driven by annual merit increases and additional headcount.

See “ – Segment Review” below for further information.

Corporate Unallocated — Corporate Unallocated includes costs for corporate center functions, select initiatives and unoccupied office space and Kensho, included in selling and general expenses, and Kensho revenue in 2018.

Corporate Unallocated improved by $19 million or 8% as compared to 2018.

Excluding the favorable impact of lower Kensho retention related expense in 2019 of 2 percentage points, partially offset by the unfavorable impact of higher deal-related amortization in 2019 of 1 percentage point, Corporate Unallocated improved 7% primarily driven by a $20 million contribution made by the Company to the S&P Global Foundation in 2018 and a reduction in professional fees.

Foreign exchange rates had a favorable impact on operating profit of less than 1 percentage point.

The foreign exchange rate impact refers to constant currency comparisons and the remeasurement of monetary assets and liabilities.

Constant currency impacts are estimated by recalculating current year results of foreign operations using the average exchange rate from the prior year.

Other (Income) Expense, net

Other (income) expense, net primarily includes the net periodic benefit cost for our retirement and post retirement plans.

Other income, net for 2020 was $31 million, other expense, net for 2019 was $98 million and other income, net for 2018 was $25 million.

Other income, net for 2021 and 2020 was $62 million and $31 million, respectively, and other expense, net for 2019 was $98 million .

During the year ended December 31, 2020, lump sum withdrawals exceeded the combined total anticipated annual service and interest cost of our U.K.

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In connection with this transaction, the Company recorded a pre-tax settlement charge of $113 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.

The Company also recorded pension settlement charges of $5 million in 2018.

Excluding these charges, other income, net was $34 million, $14 million and $29 for 2020, 2019 and 2018, respectively.

The increase in other income, net in 2020 compared to 2019 and the decrease in other income, net in 2019 compared to 2018 was primarily due to a higher loss on investments in 2019.

Excluding these charges, other income, net was $62 million, $34 million and $14 million for 2021, 2020 and 2019, respectively.

The increase in other (income) expense, net in 2021 compared to 2020 was primarily due to a higher gain on investments in 2021 and the increase in 2020 compared to 2019 was primarily due to a higher loss on investments in 2019.

Interest Expense, net

Net interest expense for 2021 decreased $22 million or 16% compared to 2020, primarily due to lower interest expense resulting from the refinancing of a series of our senior notes in August of 2020.

Net interest expense for 2020 remained relatively unchanged compared to 2019, increasing less than 1%.

Net interest expense for 2019 increased $7 million or 5% as compared to 2018, driven by the release of reserves for accrued interest related to the resolution of various tax audits in 2018.

Loss on Extinguishment of Debt

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Our effective tax rate was 21.6%, 21.5% and 21.4% for 2021, 2020 and 2019, respectively.

The increase in 2021 was primarily due to a change in the mix of income by jurisdiction.

The increase in 2020 was primarily due to a decrease in the recognition of excess tax benefits associated with share-based payments in the statement of income.

The increase in 2019 was primarily due to an increase in accruals for potential tax liabilities for prior years in various jurisdictions.

Segment Review

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• bank loan ratings.

• corporate credit estimates, which are intended, based on an abbreviated analysis, to provide an indication of our opinion regarding creditworthiness of a company which does not currently have a Ratings credit rating.

Non-transaction revenue primarily includes fees for surveillance of a credit rating, annual fees for customer relationship-based pricing programs, fees for entity credit ratings and global research and analytics at CRISIL.

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Transaction revenue 1

$ 2,253 $ 1,969 $ 1,570 14 % 25 %

Non-transaction revenue 1

$ 1,844 $ 1,637 $ 1,536 13 % 7 %

% of total revenue:

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% Operating margin 64 % 62 % 57 %

1 In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction revenue to non-transaction revenue of $8 million and $7 million for the years ended December 31, 2020 and 2019, respectively.

2 2021 includes a gain on disposition of $6 million, recovery of lease-related costs of $4 million, and employee severance charges of $3 million.

2020 includes a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million.

2019 includes employee severance charges of $11 million.

2018 includes legal settlement expenses of $74 million and employee severance charges of $8 million.

2020 includes amortization of intangibles from acquisitions of $7 million and 2019 and 2018 includes amortization of intangibles from acquisitions of $2 million.

2021, 2020 and 2019 include amortization of intangibles from acquisitions of $10 million, $7 million and $2 million, respectively.

Revenue increased 14%, with a favorable impact from foreign exchange rates of 1 percentage point.

Transaction revenue increased due to higher bank loan ratings revenue driven by increased M&A activity and an increase in structured finance revenue primarily driven by increased issuance of U.S.

Non-transaction revenue increased primarily due to an increase in surveillance, entity credit ratings, an increase in revenue at our CRISIL subsidiary and higher RES revenue driven by increased M&A activity.

Transaction and non-transaction revenue also benefited from improved contract terms across product categories.

Operating profit increased 18%, with a favorable impact from foreign exchange rates of 1 percentage point.

The impact of revenue growth and lower occupancy costs was partially offset by an increase in incentive costs and higher compensation costs due to annual merit increases, additional headcount and human capital investments, as well as the ramp up of technology and strategic initiatives.

Revenue increased 16% including a favorable benefit of 1 percentage point from the impact of recent acquisitions.

revenue grew due to an increase in corporate bond ratings revenue primarily driven by higher corporate bond issuance in the U.S.

Transaction revenue grew due to an increase in corporate bond ratings revenue primarily driven by higher corporate bond issuance in the U.S.

mainly resulting from borrowers’ need for increased liquidity in light of the pandemic-related economic downturn, historically low borrowing costs, and central bank lending actions initially announced at the end of the first quarter of 2020, partially offset by a decrease in bank loan ratings revenue and structured finance revenues.

Non-transaction revenue increased primarily due to an increase in surveillance revenue, royalty revenue, and higher Ratings Evaluation Service (“RES”) activity driven by increased M&A activity in the fourth quarter of 2020.

Non-transaction revenue increased primarily due to an increase in surveillance revenue, royalty revenue, and higher RES activity driven by increased M&A activity in the fourth quarter of 2020.

Transaction and non-transaction revenue also benefited from improved contract terms across product categories.

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Revenue was favorably impacted by the acquisitions of the ESG Ratings Business from RobecoSAM and Greenwich Associates LLC in January of 2020 and February of 2020, respectively.

See Note 2 - Acquisitions and Divestitures to the consolidated financial statements of this Form 10-K for further discussion.

See Note 2 - Acquisitions and Divestitures to the consolidated financial

statements under Item 8, Consolidated Financial Statements and Supplementary Data, in this Annual Report on Form 10-K.

Operating profit increased 25%, with a 2 percentage point favorable impact from foreign exchange rates.

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The impact of revenue growth was partially offset by an increase in incentive costs and higher compensation costs due to annual merit increases and additional headcount, partially offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19.

Revenue increased 8%, with a 1 percentage point unfavorable impact from foreign exchange rates, due to an increase in transaction revenue.

Transaction revenue increased due to an increase in corporate bond ratings revenue primarily driven by higher corporate bond issuance in the U.S.

and Europe mainly resulting from historically low borrowing costs, partially offset by lower bank loan ratings revenue driven by reduced U.S.

issuance volumes.

An increase in public finance revenue due to increased issuance also contributed to transaction revenue growth.

Non-transaction revenue decreased less than 1% primarily due to the unfavorable impact from foreign exchange rates.

Non-transaction revenue was unfavorably impacted by a decline in RES activity, a decrease at CRISIL, primarily within the risk and analytics sector, and lower entity credit ratings revenue, and benefited from an increase in surveillance revenue and higher royalty revenue.

Transaction and non-transaction revenue also benefited from improved contract terms across product categories.

Operating profit increased 15%, with a 1 percentage point unfavorable impact from foreign exchange rates.

Excluding the impact of higher legal settlement expenses in 2018 of 5 percentage points, operating profit increased 10%.

This increase was primarily due to the increase in revenue discussed above combined with a reduction in legal expenses, lower professional fees from increased leverage on the Global Technology Center and internal resources, partially offset by an increase in incentive costs and AWS cloud infrastructure spend.

Market Issuance Volumes

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* Includes Industrials and Financial Services.

• Corporate issuance was up in 2020 driven by increases in both high-yield and investment grade issuance in the U.S.

U.S high-yield issuance was particularly strong as issuers were taking advantage of historically low borrowing costs.

Issuance was also aided by central bank lending actions intended to provide market stabilization.

A number of large financing transactions contributed to the increase in investment-grade issuance in the U.S.

• High-yield issuance was up in both the U.S and Europe as issuers were taking advantage of historically low borrowing costs.

Investment-grade issuance was down in both the U.S.

and Europe reflecting comparisons against a strong prior year period as a number of large financing transactions contributed to the increase in investment-grade issuance in the U.S.

and Europe in 2020.

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** Represents no activity in 2021 and 2020.

• ABS issuance in the U.S.

decreased in 2020 driven by lower market activity due to the impact of COVID-19.

ABS issuance in Europe increased in 2020 reflecting low prior year activity as issuers were trying to comply with the new EU framework for STS Securitization (Simple, Transparent, and Standardized).

• Issuance was down in the U.S.

and European structured credit markets driven by a decline in CLO transactions as demand for leveraged loans decreased as borrowers turned to the high-yield bond market.

• CMBS issuance was down in the U.S.

and Europe reflecting decreased market volume due to the poor market environment and the impact of COVID-19 limiting third party site inspections and appraisal reports.

• RMBS issuance was down in the U.S.

and Europe reflecting decreased market volume in Non-Performing Loans (NPL) due to the impact of COVID-19 and the uncertainty on collateral performance.

• Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe decreased due to inexpensive central bank funding with TLTRO III.

• ABS issuance increased in the U.S.

and Europe primarily driven by growth across all sub asset classes led by Credit Cards, Student Loans, Autos and Esoterics.

• CLO issuance increased in the U.S.

and European structured credit markets driven by growth in leveraged loans due to strong M&A activity and investor demand for high risk adjusted yield.

• CMBS issuance was up in the U.S.

reflecting increased market volume in large single-asset single-borrower (SASB) as market conditions improved from early in the pandemic.

CMBS issuance in Europe was also up, although from a low 2020 base.

• RMBS issuance was up in the U.S.

and Europe reflecting increased market volume due to an improved housing market.

• Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe increased in 2021 driven by improved market conditions.

Industry Highlights and Outlook

Revenue increased in 2020 primarily driven by higher corporate bond issuance in the U.S.

In 2020, Ratings continued to focus on ESG initiatives and international expansion in China.

In 2021, Ratings will continue to focus on accelerating growth in key markets globally and expanding Ratings capabilities in Asia.

Additionally, Ratings will continue to focus on developing key product offerings in ESG and developing new product and product features leveraging technology investments.

Revenue increased in 2021 primarily driven by an increase in bank loan ratings revenue, structured finance transaction revenues and non-transaction revenue.

In 2021, Ratings continued to focus on developing key product offerings in ESG and launched new Social and Sustainability products.

ESG initiatives and international expansion in China continues to be areas of focus for Ratings.

CRISIL revenue increased across all segments, primarily driven by Global Benchmarking Analytics and Global Research & Risk solutions from the recovery of the banking sector and increased focus on sustainability, credit risk and model validation projects.

This growth is expected to extend into 2022 led by the financial research and research & analytics businesses.

Continued focus on maintaining an effective analytical workforce with targeted hiring and a competitive compensation structure.

Technology investments from the expansion and improvements in the cloud infrastructure, as well as enhancements to the delivery and value add of the Ratings content to customers.

Legal and Regulatory Environment

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In addition, various government and self-regulatory agencies frequently make inquiries and conduct investigations into Ratings’ compliance with applicable laws and regulations.

Any of these proceedings, investigations

or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions, which could adversely impact our consolidated financial condition, cash flows, business or competitive position.

Any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions, which could adversely impact our consolidated financial condition, cash flows, business or competitive position.

The businesses conducted by our Ratings segment are, in certain cases, regulated under the Credit Rating Agency Reform Act of 2006 (the “Reform Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”), the Securities Exchange Act of 1934 (the “Exchange Act”) and/or the laws of the states or other jurisdictions in which they conduct business.

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Market Intelligence's portfolio of capabilities is designed to help investment professionals, government agencies, corporations and universities track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform valuations and assess credit risk.

In December of 2021, as part of our Sustainable1 investments, we completed the acquisition of The Climate Service, Inc.

("TCS"), which has developed a climate risk analytics platform assisting corporates, investors and governments with assessing physical climate risks.

Sustainable1 is S&P Global's single source of essential sustainability intelligence, bringing together S&P Global's resources and full product suite of data, benchmarking, analytics, evaluations and indices that provide customers with a 360-degree view to help achieve their sustainability goals.

The acquisition will add capabilities to S&P Global's leading portfolio of essential ESG insights and solutions for its customers.

Through this acquisition, S&P Global will be able to offer its clients even more transparent, robust and comprehensive climate data, models and analytics.

We accounted for the acquisition using the purchase method of accounting.

The acquisition of The Climate Service, Inc.

is not material to our consolidated financial statements.

In December of 2021, S&P Global entered into an agreement to sell CUSIP Global Services ("CGS") business, included in our Market Intelligence segment, to FactSet Research Systems for $1.925 billion, with the agreement subject to customary purchase price adjustments.

The agreement represents continued progress toward completing the pending merger of S&P Global and IHS Markit, and the divestiture is dependent on expected closing of the merger with IHS Markit and other customary conditions.

We have also pledged to divest our Leveraged Commentary and Data (“LCD”) business, included in our Market Intelligence segment, along with a related family of leveraged loan indices as a condition for regulatory approval.

Under the European Commission's conditional approval of the merger of S&P Global and IHS Markit, execution of an agreement to sell the LCD business can occur after the closing of the merger.

The divestitures remain subject to further review and approval by antitrust regulators.

Subject to certain closing conditions, the merger is expected to be completed in the first quarter of 2022.

In January of 2020, Market Intelligence entered into a strategic alliance to transition S&P Global Market Intelligence's IR webhosting business to Q4, a third party provider of investor relations related services.

This alliance will integrate Market Intelligence's proprietary data into Q4's portfolio of solutions, enabling further opportunities for commercial collaboration.

In connection with transitioning its IR webhosting business to Q4, Market Intelligence made a minority investment in Q4.

This alliance integrated Market Intelligence's proprietary data into Q4's portfolio of solutions, enabling further opportunities for commercial collaboration.

In connection with transitioning its IR webhosting business to Q4, Market Intelligence received a minority investment in Q4.

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During 2019, we recorded a pre-tax gain of $22 million ($12 million after-tax) in Gain on dispositions in the consolidated statement of income related to the sale of SPIAS.

During the year ended December 31, 2020, we recorded a pre-tax gain of $1 million ($1 million after-tax) in Gain on dispositions in the consolidated statement of income related to the sale of SPIAS in July of 2019.

During the years ended December 31, 2021 and 2020, we recorded a pre-tax gain of $3 million ($3 million after-tax) and $1 million ($1 million after-tax), respectively, in Gain on dispositions in the consolidated statement of income related to the sale of SPIAS in July of 2019.

See Note 2 - Acquisitions and Divestitures to the consolidated financial statements under Item 8, Consolidated Financial Statements and Supplementary Data, in this Annual Report on Form 10-K for further discussion.

Market Intelligence includes the following business lines:

• Desktop — a product suite that provides data, analytics and third-party research for global finance professionals, which includes the Market Intelligence Desktop (which are inclusive of the S&P Capital IQ and SNL Desktop products);

• Data Management Solutions — integrated bulk data feeds and application programming interfaces that can be customized, which includes Compustat, GICS, Point In Time Financials and CUSIP;

• Data Management Solutions — integrated bulk data feeds and application programming interfaces that can be customized, which includes Compustat, GICS, Point In Time Financials;

• Credit Risk Solutions — commercial arm that sells Ratings' credit ratings and related data, analytics and research, which includes subscription-based offerings, RatingsDirect® and RatingsXpress®, and Credit Analytics.

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% Operating margin 31 % 28 % 29 %

1 2021 includes employee severance charges of $3 million, a gain on disposition of $3 million, acquisition-related costs of $2 million and lease-related costs of $1 million.

2020 includes employee severance charges of $27 million, a gain on dispositions of $12 million and lease-related costs of $3 million.

2019 includes a gain on the disposition of SPIAS of $22 million, employee severance charges of $6 million and acquisition-related costs

of $4 million.

2018 includes restructuring charges related to a business disposition and employee severance charges of $7 million.

2021, 2020 and 2019 includes amortization of intangibles from acquisitions of $65 million, $76 million and $75 million, respectively.

Revenue increased 7% driven by subscription revenue growth for RatingsXpress®, RatingsDirect®, certain Market Intelligence Desktop products, and certain data feed products within Data Management Solutions.

Excluding the impact of recent dispositions favorably impacting Desktop revenue growth by 1 percentage point, revenue growth at Data Management Solutions, Credit Risk Solutions and Desktop was 11%, 8% and 5%, respectively.

revenue and international revenue increased compared to 2021.

Foreign exchange rates had a favorable impact of less than 1 percentage point.

Operating profit increased 19%, with an unfavorable impact from foreign exchange rates of less than 1 percentage point.

Excluding the impact from higher employee severance charges in 2020 of 6 percentage points and higher amortization of intangibles in 2020 of 3 percentage points, partially offset by the impact of a higher gain on the dispositions in 2020 of 3 percentage points, operating profit increased 13%.

The impact of revenue growth and lower compensation costs due to reduced headcount was partially offset by an increase in cost of sales and intersegment royalties tied to annualized contract value growth, increased technology costs and higher incentive costs.

Revenue increased 8% and was favorably impacted by 1 percentage point from the net effect of the recent acquisition of 451 Research, LLC, offset by the disposition of SPIAS and the IR webhosting business.

The increase in revenue was driven by growth in annualized contract values for RatingsXpress®, RatingsDirect®, CUSIP, our data feed products within Data Management Solutions and our Market Intelligence Desktop products.

The increase in revenue was driven by growth in annualized contract values for RatingsXpress®, RatingsDirect®, our data feed products within Data Management Solutions and our Market Intelligence Desktop products.

Excluding the impact of the acquisition and dispositions favorably impacting Desktop revenue growth by 3 percentage points, revenue growth at Credit Risk Solutions, Data Management Solutions and Desktop was 9%, 9% and 4%, respectively.

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The impact of revenue growth was partially offset by higher compensation costs primarily due to annual merit increases, an increase in incentive costs and higher technology costs, partially offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19.

Revenue increased 7% and was favorably impacted by less than 1 percentage point from the net impact of recent acquisitions and a disposition.

Excluding the impact of the acquisitions and disposition, increased revenue was driven by growth in annualized contract values in the Market Intelligence Desktop products, RatingsXpress®, RatingsDirect®, CUSIP and our data feed products within Data Management Solutions.

Excluding the impact of the acquisitions and disposition favorably impacting Desktop revenue growth by 1 percentage point, revenue growth at Data Management Solutions, Credit Risk Solutions and Desktop was 11%, 9% and 4%, respectively.

Both domestic and international revenue increased compared to 2018.

In 2019, international revenue represented 37% of Market Intelligence's total revenue compared to 36% in 2018.

Foreign exchange rates had an unfavorable impact of less than one percentage point.

Revenue was favorably impacted by the acquisitions of 451 Research, LLC, Panjiva Inc.

("Panjiva") and the Rate Watch business ("RateWatch") in December of 2019, February of 2018 and June of 2018, respectively, and the transfer of Kensho revenue from Corporate in January of 2019, and unfavorably impacted by the disposition of SPIAS in July of 2019.

See Note 1 - Nature of Operations and Basis of Presentation and Note 2 - Acquisitions and Divestitures to the Consolidated Financial Statements and Supplementary Data, in the Annual Report on Form 10-K for further discussion.

Operating profit increased 13%, with a 2 percentage point favorable impact from foreign exchange rates.

Excluding the favorable impact of the gain on disposition of SPIAS of 6 percentage points, partially offset by the unfavorable impact of acquisition-related costs in 2019 of 1 percentage point, operating profit increased 8%.

The increase was primarily due to revenue growth, partially offset by higher technology costs, higher compensation costs primarily driven by additional headcount and an increase in intersegment royalties tied to annualized contract value growth.

Industry Highlights and Outlook

In 2020, Market Intelligence continued to focus on leveraging its strong content heritage to expand the core business, streamlining and enriching the customer experience across all delivery platforms, and harnessing new data sources and technology to extend into new geographies and growth areas such as ESG.

In 2021, Market Intelligence will continue to focus on developing key product offerings in growth areas such as ESG and growing new products and product features leveraging technology investments.

Market Intelligence continues to focus on developing key product offerings in growth areas such as ESG and growing new products and product features leveraging technology investments.

Product launches and innovation continued at Market Intelligence in 2021 with the introduction of several new ESG related products and new products and product features leveraging technology investments.

Legal and Regulatory Environment

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European Union

The EU enacted a package of legislative measures known as MiFID II ("MiFID II"), which revises and updates the existing EU Markets in Financial Instruments Directive framework, and the substantive provisions became applicable in all EU Member

States as of January 3, 2018.

MiFID II includes provisions that, among other things, require the unbundling of investment research and direct how asset managers pay for research either out of a research payment account or from a firm’s profits.

Although the MiFID II package is “framework” legislation (meaning that much of the detail of the rules will be set out in subordinate measures, including some technical standards yet to be adopted by the European Commission), the introduction of the MiFID II package may result in changes to the manner in which Market Intelligence licenses its price certain products.

MiFID II may impose regulatory burdens on Market Intelligence activities in the EU, although the exact impact and costs are not yet known.

For a further discussion of competitive and other risks inherent in our Market Intelligence business, see Item 1A, Risk Factors, in this Annual Report on Form 10-K.

For a further discussion of the legal and regulatory environment in our Market Intelligence business, see Note 13 - Commitments and Contingencies to the consolidated financial statements under Item 8, Consolidated Financial Statements and Supplementary Data, in this Annual Report on Form 10-K.

Platts is the leading independent provider of information and benchmark prices for the commodity and energy markets.

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During the year ended December 31, 2019, we recorded a pre-tax gain of $27 million ($26 million after-tax) in Gain on dispositions in the consolidated statement of income related to the sale of RigData.

See Note 2 - Acquisitions and Divestitures to the consolidated financial statements of this Form 10-K for further discussion.

Platts' revenue is generated primarily through the following sources:

• Subscription revenue — primarily from subscriptions to our real-time news, market data and price assessments, along with other information products;

• Subscription revenue — primarily from subscriptions to our market data and market insights (price assessments, market reports and commentary and analytics) along with other information products;

• Sales usage-based royalties — primarily from licensing of our proprietary market price data and price assessments to commodity exchanges;

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Non-subscription revenue

$ 7 $ 10 $ 11 (39) % (5) %

$ 13 $ 7 $ 10 N/M (39) %

% of total revenue:

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% Operating margin 54 % 52 % 54 %

N/M- Represents a change equal to or in excess of 100% or not meaningful

1 2021 includes recovery of lease-related costs of $2 million.

2020 includes employee severance charges of $11 million and lease-related costs of $2 million.

2019 includes a gain on the disposition of RigData of $27 million and employee severance charges of $1 million.

2020, 2019, and 2018 includes amortization of intangibles from acquisitions of $9 million, $12 million, and $18 million.

2021, 2020, and 2019 includes amortization of intangibles from acquisitions of $8 million, $9 million, and $12 million, respectively.

Revenue increased 8% primarily due to continued demand for market data and market insights products driven by expanded product offerings to our existing customers under enterprise use contracts.

An increase in sales usage-based royalties from the licensing of our proprietary market price data and price assessments to commodity exchanges mainly due to increased trading volumes in Petroleum and LNG also contributed to revenue growth.

revenue and international revenue grew compared to 2021.

Petroleum continues to be the most significant revenue driver, followed by natural gas, power & renewables, petrochemicals, metals & agriculture, and shipping also contributing to revenue growth.

Operating profit increased 13% with an unfavorable impact from foreign exchange rates of less than 1 percentage point.

Excluding the impact of higher employee severance charges in 2020 of 3 percentage points and higher lease-related costs in 2020 of 1%, operating profit increased 9%.

The increase was primarily due to revenue growth partially offset by an increase in operating costs to support business initiatives at Platts and an increase in incentive costs.

Revenue increased 4% and was unfavorably impacted by less than 1 percentage point from the net effect of recent acquisitions of Enerdata and Live Rice Index and the disposition of RigData.

Revenue increased primarily due to continued demand for market data, price assessment and analytics products driven by both expanded product offerings to our existing customers combined with enhanced contract terms.

Revenue increased primarily due to continued demand for market data and market insights products driven by both expanded product offerings to our existing customers combined with enhanced contract terms.

Additionally, an increase in sales usage-based royalties from the licensing of our proprietary market price data and price assessments to commodity exchanges due to increased trading volumes in the first half of 2020 contributed to revenue growth.

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revenue remained relatively unchanged compared to 2019 with the U.S revenue growth rate being unfavorably impacted by the disposition of RigData in July of 2019.

Petroleum continues to be the most significant revenue driver, followed by power & gas, metals & agriculture and petrochemicals also contributing to revenue growth.

Petroleum continues to be the most significant revenue driver, followed by natural gas, power & renewables, metals & agriculture and petrochemicals also contributing to revenue growth.

Foreign exchange rates had a favorable impact of less than 1 percentage point.

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These decreases were partially offset by an increase in operating costs to support business initiatives at Platts and higher incentive costs.

Revenue increased 4% and was unfavorably impacted by less than 1 percentage point from the net impact of recent acquisitions and a disposition.

Excluding the acquisitions and disposition, revenue increased due to continued demand for market data and price assessment products driven by both expanded product offerings to our existing customers combined with enhanced contract terms.

Additionally, revenue growth was driven by an increase in sales usage-based royalties from the licensing of our proprietary market price data and price assessments to commodity exchanges mainly due to increased trading volumes in Iron Ore, LNG and Gasoil.

Demand for market data and price assessment products was driven by international customers.

International revenue increased and domestic revenue, which was unfavorably impacted by the disposition of RigData in July of 2019, remained relatively unchanged compared to 2018.

In 2019, international revenue represented 67% of Platts total revenue compared to 65% in 2018.

Petroleum continues to be the most significant revenue driver, followed by power & gas, metals and petrochemicals also contributing to revenue growth.

Foreign exchange rates had an unfavorable impact of less than 1 percentage point.

Revenue was unfavorably impacted by the disposition of RigData in July of 2019 and favorably impacted by the acquisitions of Live Rice Index and Enerdata in August of 2019 and September of 2019, respectively.

See Note 2 - Acquisitions and Divestitures to the Consolidated Financial Statements and Supplementary Data, in the Annual Report on Form 10-K for further discussion.

Operating profit increased 14% with a 2 percentage point favorable impact from foreign exchange rates.

Excluding the favorable impact of the gain on the disposition of RigData of 7 percentage points and lower amortization of intangibles in 2019 of 2 percentage points, operating profit increased 6%.

The increase was primarily due to revenue growth, partially offset by an increase in operating costs to support revenue growth and business initiatives at Platts, including Asia expansion initiatives, an increase in compensation costs due to annual merit increases and increased headcount, higher technology costs, an increase in the bad debt provision in the current year and one-time costs related to the discontinuation of a product line at Platts.

Industry Highlights and Outlook

In 2020, sustained demand for market data and price assessment products, led by petroleum, continued to drive revenue growth.

In 2020, Platts continued to focus on extending the core business through innovation, simplifying its product and platform strategy, and driving commercial transformation.

In 2021, Platts will continue to focus on accelerating growth in key markets globally and expanding Platts capabilities in Asia.

Additionally, Platts will continue to focus on developing new product and product features leveraging technology investments and developing key product offerings in ESG.

In 2021, sustained demand for market data and market insight products, led by petroleum, continued to drive revenue growth.

Platts introduced S&P Platts Dimension Pro in 2021 that provides a fully integrated user experience connecting pricing, market commentary, news and analytics.

Additionally, Platts introduced several new ESG related products in 2021.

Platts continues to focus on developing new product and product features leveraging technology investments and developing key product offerings in ESG.

Legal and Regulatory Environment

Platts’ commodities price assessment and information business is subject to increasing regulatory scrutiny in the U.S.

As discussed below under the heading “Indices-Legal and Regulatory Environment”, the financial benchmarks industry is subject to the new benchmark regulation in the EU (the “EU Benchmark Regulation”) as well as potential increased regulation in other jurisdictions.

Platts has obtained authorization and is now supervised by the Dutch Authority for the Financial Markets in the Netherlands under the EU Benchmark Regulation, and may need to take similar steps in other jurisdictions including the United Kingdom post-Brexit and jurisdictions outside of Europe if they pass similar legislation.

Platts’ commodities price assessment and information business is subject to increasing regulatory scrutiny.

As discussed below under the heading “Indices-Legal and Regulatory Environment”, the benchmarks industry is subject to the new regulation in the EU (the “EU Benchmark Regulation”) as well as potential increased regulation in other jurisdictions.

Platts has obtained authorization and is now supervised by the Dutch Authority for the Financial Markets in the Netherlands under the EU Benchmark Regulation, will likely need to take similar steps in other jurisdictions including the United Kingdom when the transitional period under the EU Benchmark Regulation (and its UK equivalent) ends, as well as in jurisdictions outside of Europe if they pass similar legislation.

For a further discussion of competitive and other risks inherent in our Platts business, see Item 1A, Risk Factors, in this Annual Report on Form 10-K.

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Platts has aligned its operations with the PRA Principles and, as recommended by IOSCO in its final report on the PRA Principles, has aligned to the PRA Principles for other commodities for which it publishes benchmarks.

For a further discussion of competitive and other risks inherent in our Platts business, see Item 1A, Risk Factors, in this Annual Report on Form 10-K.

For a further discussion of the legal and regulatory environment in our Platts business, see Note 13 - Commitments and Contingencies to the consolidated financial statements under Item 8, Consolidated Financial Statements and Supplementary Data, in this Annual Report on Form 10-K.

Indices is a global index provider maintaining a wide variety of indices to meet an array of investor needs.

Indices’ mission is to provide transparent benchmarks to help with decision making, collaborate with the financial community to create innovative products, and provide investors with tools to monitor world markets.

Indices derives revenue from asset-linked fees when investors direct funds into its proprietary designed or owned indexes, sales-usage royalties of its indices, and to a lesser extent data subscription arrangements.

Indices derives revenue from asset-linked fees when investors direct funds into its proprietary designed or owned indexes, sales usage-based royalties of its indices, and to a lesser extent data subscription arrangements.

Specifically, Indices generates revenue from the following sources:

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% Net operating margin 51 % 49 % 50 %

1 2021 includes recovery of lease-related costs of $1 million.

2020 includes employee severance charges of $5 million, a lease impairment charge of $4 million, a technology-related impairment charge of $2 million and lease-related costs of $1 million.

2021, 2020 and 2019 includes amortization of intangibles from acquisitions of $6 million.

Revenue increased 8% primarily due to higher average levels of assets under management ("AUM") for ETFs and mutual funds, an increase in exchange-traded derivatives revenue and higher data subscription revenue, partially offset by lower over-the-counter derivative revenue.

Revenue at Indices increased 16% primarily due to higher average levels of assets under management ("AUM") for ETFs and mutual funds and higher data subscription revenue, partially offset by lower exchange-traded derivative revenue.

Average levels of AUM for ETFs increased 44% to $2.419 trillion and ending AUM for ETFs increased 40% to $2.796 trillion compared to 2020 while exchange-traded derivative activity was impacted by both lower average daily trading volume from reduced volatility and lower rates per trade from a shift in product mix in the first half of 2021.

Foreign exchange rates had a favorable impact of less than 1 percentage point.

Operating profit increased 20%.

Excluding the impact of employee severance charges in 2020 of 1 percentage point, a lease impairment charge in 2020 of 1 percentage point and higher lease-related costs in 2020 of less than 1 percentage point, operating profit increased 17%.

The impact of revenue growth and lower legal related costs was partially offset by higher cost of sales, higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

Foreign exchange rates had an unfavorable impact of less than 1 percentage point.

Revenue increased 8% primarily due to higher average levels of AUM for ETFs and mutual funds, an increase in exchange-traded derivatives revenue and higher data subscription revenue, partially offset by lower over-the-counter derivative revenue.

Average levels of AUM for ETFs increased 12% to $1.681 trillion and ending AUM for ETFs increased 18% to $1.998 trillion compared to 2019.

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Foreign exchange rates had a favorable impact of less than 1 percentage point.

Revenue increased 10% due to higher levels of AUM for ETFs and mutual funds.

Additionally, revenue was favorably impacted by the buyout of the balance of intellectual property rights in a family of indices from one of our co-marketing and index development partners in the fourth quarter of 2018, retrospective fees for previously unlicensed and unreported index usage and benefits related to contract renegotiations.

These increases were partially offset by a decrease in exchange-traded derivatives revenue primarily driven by lower volumes in 2019.

Ending AUM for ETFs increased 30% to $1.696 trillion in 2019 and average AUM for ETFs increased 8% to $1.503 trillion compared to 2018.

Foreign exchange rates had an unfavorable impact of less than 1 percentage point.

Operating profit grew 12%.

The impact of revenue growth was partially offset by higher operating costs from increased royalties due to increased traction of royalty-based products, higher legal expenses and increased compensation costs primarily driven by additional headcount, partially offset by lower incentive costs.

Foreign exchange rates had a favorable impact of 1 percentage point.

Industry Highlights and Outlook

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In 2021, higher average levels of AUM for ETFs contributed to revenue growth.

In 2020, Indices continued to focus on growing the core business, expanding innovative offerings with focus on differentiated solutions such as factor, multi-asset-class, and ESG indices, and growing globally through collaborative client relationships.

In 2021, Indices will continue to focus on developing key product offerings in ESG, multi-asset-class and factor indices and developing new product and product features leveraging technology investments.

In 2021, Indices continued to launch new ESG ETFs and expand innovative index offerings with key index product launches.

Indices continues to focus on developing key product offerings in ESG, multi-asset-class and factor indices and developing new product and product features leveraging technology investments.

Legal and Regulatory Environment

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The IOSCO Principles address governance, benchmark quality and accountability mechanisms, including with regard to the indices published by Indices.

Even though the IOSCO Principles are not binding law, Indices has taken steps to align its governance regime and operations with the IOSCO Principles and engaged an independent auditor to perform an annual reasonable assurance review of such alignment.

Even though the IOSCO Principles are not binding law,

Indices has taken steps to align its governance regime and operations with the IOSCO Principles and engaged an independent auditor to perform an annual reasonable assurance review of such alignment.

The markets for index providers are very competitive.

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For a further discussion of competitive and other risks inherent in our Indices business, see Item 1A, Risk Factors, in this Annual Report on Form 10-K.

For a further discussion of the legal and regulatory environment in our Indices business, see Note 13 - Commitments and Contingencies to the consolidated financial statements under Item 8, Consolidated Financial Statements and Supplementary Data, in this Annual Report on Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

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Financing activities (1,013) (2,166) (1,751)

In 2020, free cash flow increased to $3.3 billion compared to $2.5 billion in 2019.

In 2021 and 2020, free cash flow remained unchanged at $3.3 billion.

Free cash flow is a non-GAAP financial measure and reflects our cash flow provided by operating activities less capital expenditures and distributions to noncontrolling interest holders.

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See “Reconciliation of Non-GAAP Financial Information” below for a reconciliation of cash flow provided by operating activities, the most directly comparable U.S.

GAAP financial measure, to free cash flow and free cash flow excluding certain items.

GAAP financial measure, to free cash flow.

Operating activities

Cash provided by operating activities remained unchanged at $3.6 billion compared to 2020 as higher operating results in 2021 were offset by the acceleration of payments to vendors, higher incentive compensation payments and higher income tax payments.

Cash provided by operating activities increased to $3.6 billion in 2020 as compared to $2.8 billion in 2019.

The increase is mainly due to higher results from operations in 2020 and improved cash collections on accounts receivable in 2020.

Cash provided by operating activities increased to $2.8 billion in 2019 as compared to $2.1 billion in 2018.

The increase is mainly due to higher results from operations, lower incentive compensation payments and low legal settlement payments in 2019.

Investing activities

Our cash outflows from investing activities are primarily for acquisitions and capital expenditures, while cash inflows are primarily proceeds from dispositions.

Cash used for investing activities decreased to $0.1 billion for 2021 as compared to $0.2 billion in 2020, primarily due to higher cash paid for acquisitions in 2020 for the ESG Ratings Business from RobecoSAM and Greenwich Associates LLC.

Cash used for investing activities increased to $0.2 billion for 2020 as compared to $0.1 billion in 2019, primarily due to cash used for the acquisitions of the ESG Ratings Business from RobecoSAM and Greenwich Associates LLC in 2020.

Cash used for investing activities decreased to $0.1 billion for 2019 as compared to $0.5 billion in 2018, primarily due to cash used for the acquisition of Kensho and the purchase of intellectual property in 2018.

Refer to Note 2 – Acquisitions and Divestitures to the Consolidated Financial Statements and Supplementary Data, in the Annual Report on Form 10-K for further information.

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Our cash outflows from financing activities consist primarily of share repurchases, dividends and repayment of short-term and long-term debt, while cash inflows are primarily inflows from long-term and short-term debt borrowings and proceeds from the exercise of stock options.

Cash used for financing activities decreased to $1.0 billion in 2021 from $2.2 billion in 2020.

The decrease is primarily attributable to a decrease in cash used for share repurchases in 2021.

Cash used for financing activities increased to $2.2 billion in 2020 from $1.8 billion in 2019.

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See Note 5 — Debt to the Consolidated Financial Statements and Supplementary Data, in the Annual Report on Form 10-K for further discussion.

Cash used for financing activities decreased to $1.8 billion in 2019 from $2.3 billion in 2018.

The decrease is primarily attributable to higher cash paid for share repurchases in 2018 and proceeds from the issuance of senior notes in 2019.

During 2021, we did not use cash to purchase any shares.

We expect to resume share repurchases following the expected closing of the merger with IHS Markit.

During 2020, we used cash to repurchase 4.0 million shares for $1,164 million.

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We entered into an ASR agreement with a financial institution on August 5, 2019 to initiate share repurchases aggregating $500 million.

We repurchased a total of

2.0 million shares under the ASR agreement for an average purchase price of $253.36 per share.

We entered into an ASR agreement with a financial institution on February 11, 2019 to initiate share repurchases aggregating $500 million.

We repurchased a total of 2.0 million shares under the ASR agreement for an average purchase price of $253.36 per share.

During 2018, we used cash to repurchase 8.4 million shares for $1.7 billion.

We entered into an ASR agreement with a financial institution on October 29, 2018 to initiate share repurchases aggregating $500 million.

We entered into an ASR agreement with a financial institution on February 11, 2019 to initiate share repurchases aggregating $500 million.

We repurchased a total of 2.3 million shares under the ASR agreement for an average purchase price of $214.65 per share.

We entered into an ASR agreement with a financial institution on March 6, 2018 to initiate share repurchases aggregating $1 billion.

We repurchased a total of 5.1 million shares under that ASR agreement for an average purchase price of $197.49 per share.

On January 29, 2020, the Board of Directors approved a share repurchase program authorizing the purchase of 30 million shares (the "2020 Repurchase Program"), which was approximately 12% of the total shares of our outstanding common stock at that time.

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Additional Financing

We have the ability to borrow a total of $1.2 billion through our commercial paper program, which is supported by our revolving $1.2 billion five-year credit agreement (our "credit facility") that we entered into on June 30, 2017.

This credit facility will terminate on June 30, 2022.

As of December 31, 2020 and 2019, there was no commercial paper issued or outstanding, and we similarly did not draw or have any borrowings outstanding from the credit facility during the year ended December 31, 2020 and 2019.

Depending on our corporate credit rating, we pay a commitment fee of 8 to 17.5 basis points for our credit facility, whether or not amounts have been borrowed.

On April 26, 2021, we entered into a revolving $1.5 billion five-year credit agreement (our "credit facility") that will terminate on April 26, 2026.

This credit facility replaced our revolving $1.2 billion five-year credit facility (our "previous credit facility") that was scheduled to terminate on June 30, 2022.

The previous credit facility was canceled immediately after the new credit facility became effective.

There were no outstanding borrowings under the previous credit facility when it was replaced.

We have the ability to borrow a total of $1.5 billion through our commercial paper program, which is supported by our credit facility.

As of December 31, 2021 and 2020, there was no commercial paper issued or outstanding, and we similarly did not draw or have any borrowings outstanding from the credit facility or the previous credit facility during the years ended December 31, 2021 and 2020.

Commitment fees for the unutilized commitments under the credit facility and applicable margins for borrowings thereunder are linked to the Company achieving three environmental sustainability performance indicators related to emissions, tested annually.

We currently pay a commitment fee of 9 basis points.

The interest rate on borrowings under our credit facility is, at our option, calculated using rates that are primarily based on either the prevailing London Inter-Bank Offer Rate, the prime rate determined by the administrative agent or the Federal Funds Rate.

For certain borrowings under this credit facility, there is also a spread based on our corporate credit rating.

Our credit facility contains certain covenants.

The only financial covenant requires that our indebtedness to cash flow ratio, as defined in our credit facility, is not greater than 4 to 1, and this covenant level has never been exceeded.

On January 27, 2021, the Board of Directors approved an increase in the quarterly common stock dividend from $0.67 per share to $0.77 per share.

The credit facility also includes an accordion feature which allows the Company to increase the total commitments thereunder by up to an additional $500 million, subject to certain customary terms and conditions.

The credit facility contains customary affirmative and negative covenants and customary events of default.

The occurrence of an event of default could result in an acceleration of the obligations under the credit facility.

The only financial covenant required under our credit facility is that our indebtedness to cash flow ratio, as defined in our credit facility, was not greater than 4 to 1, and this covenant level has never been exceeded.

Merger-Related Financing

On November 16, 2021, we launched an offer (the “Exchange Offer”) to exchange outstanding notes issued by IHS Markit for new notes issued by us and fully and unconditionally guaranteed by Standard & Poor’s Financial Services LLC with the same interest rate, interest payment dates, maturity date and redemption terms as each corresponding series of exchanged IHS Markit notes and cash.

The approximately $4.6 billion in aggregate principal amount of IHS Markit’s notes subject to the Exchange Offer range in maturities from 2022 to 2029.

The Exchange Offer is conditioned upon closing of the Merger and we expect to extend the Exchange Offer until closing of the Merger.

As of January 26, 2022, 95.83% of the IHS Markit notes had been tendered.

In conjunction with the Exchange Offer, we successfully solicited consents to amend each of the indentures governing the IHS Markit notes to, among other things, eliminate certain covenants, restrictive provisions, events of default and the obligation to offer to repurchase the IHS Markit notes upon certain change of control transactions.

These amendments become operative upon the settlement of the Exchange Offer.

Following the Merger, we expect to raise additional capital, including by issuing new senior notes of various maturities, potentially ranging from 5 years to 40 years, in an aggregate principal amount up to $6 billion, portions of which we expect to use to refinance existing indebtedness.

We also expect to exercise the accordion feature under our existing credit facility to increase the total commitments thereunder by an additional $500 million.

Merger-Related Costs

In 2022, we will continue to incur costs associated with the anticipated merger with IHS Markit including certain transaction costs upon completion of the merger that is expected to close in the first quarter of 2022.

On January 26, 2022, the Board of Directors approved a quarterly common stock dividend of $0.77 per share.

Following the expected closing of the merger with IHS Markit, the Board of Directors will revisit the dividend policy of the combined Company.

Supplemental Guarantor Financial Information

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and are fully and unconditionally guaranteed by Standard & Poor's Financial Services LLC, a 100% owned subsidiary of the Company.

All senior notes have been registered with the SEC in connection with exchange offers.

All senior notes have been registered with the SEC.

• On August 13, 2020, we issued $600 million of 1.25% senior notes due in 2030 and $700 million of 2.3% senior notes due in 2060.

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This information is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S.

Summarized results of operations year ended December 31 is as follows:

Summarized results of operations for the year ended December 31 is as follows:

(in millions) 2021

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For example, we are contractually committed to contracts for information-technology outsourcing, certain enterprise-wide information-technology software licensing and maintenance.

We believe that the amount of cash and cash equivalents on hand, cash flow expected from operations and availability under our credit facility will be adequate for us to execute our business strategy and meet anticipated requirements for lease obligations, capital expenditures, working capital and debt service for 2021.

We believe that the amount of cash and cash equivalents on hand, cash flows expected from operations and availability under our credit facility will be adequate for us to execute our business strategy and meet anticipated requirements for lease obligations, capital expenditures, working capital and debt service for 2022.

The following table summarizes our significant contractual obligations and commercial commitments as of December 31, 2021, over the next several years.

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As of December 31, 2021, we have recorded $3,429 million for our redeemable noncontrolling interest in our S&P Dow Jones Indices LLC partnership discussed in Note 9 – Equity to our consolidated financial statements.

Specifically, this amount relates to the put option under the terms of the operating agreement of S&P Dow Jones Indices LLC, whereby, after December 31, 2017, CME Group and CME Group Index Services LLC ("CGIS") has the right at any time to sell, and we are obligated to buy,

at least 20% of their share in S&P Dow Jones Indices LLC.

We have excluded this amount from our contractual obligations table because we are uncertain as to the timing and the ultimate amount of the potential payment we may be required to make.

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See Note 7 – Employee Benefits to our consolidated financial statements for further discussion.

Off-Balance Sheet Arrangements

As of December 31, 2020 and 2019, we did not have any material relationships with unconsolidated entities, such as entities often referred to as specific purpose or variable interest entities where we are the primary beneficiary, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As such we are not exposed to any financial liquidity, market or credit risk that could arise if we had engaged in such relationships.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

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GAAP financial measure to free cash flow.

Additionally, we have considered certain items in evaluating free cash flow, which are included in the table below.

We believe the presentation of free cash flow and free cash flow excluding certain items allows our investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management.

We believe the presentation of free cash flow allows our investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management.

We use free cash flow to conduct and evaluate our business because we believe it typically presents a more conservative measure of cash flows since capital expenditures and distributions to noncontrolling interest holders are considered a necessary component of ongoing operations.

Free cash flow is useful for management and investors because it allows management and investors to evaluate the cash available to us to prepay debt, make strategic acquisitions and investments and repurchase stock.

The presentation of free cash flow and free cash flow excluding certain items are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S.

The presentation of free cash flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S.

Free cash flow, as we calculate it, may not be comparable to similarly titled measures employed by other companies.

The following table presents a reconciliation of our cash flow provided by operating activities to free cash flow excluding the impact of the items below:

The following table presents a reconciliation of our cash flow provided by operating activities to free cash flow:

(in millions) Year ended December 31, % Change

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Distributions to noncontrolling interest holders, net (227) (194) (143)

(194) (143) (154)

Free cash flow $ 3,336 $ 3,297 $ 2,518 1% 31%

Settlement of prior-year tax audits — 51 73

Tax on gain from sale of SPIAS and RigData — 13 —

Payment of legal settlements — 1 180

Tax benefit from legal settlements — — (44)

Free cash flow excluding above items $ 3,297 $ 2,583 $ 2,006 28% 29%

1 Distributions to noncontrolling interest holders is net of amounts owed to the S&P Dow Jones Indices LLC joint venture by the noncontrolling interest holders.

(in millions) 2021 2020 2019 ’21 vs ’20 ’20 vs ’19

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Cash used for financing activities (1,013) (2,166) (1,751) (53)% (23)%

N/M - not meaningful

CRITICAL ACCOUNTING ESTIMATES

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Revenue recognition

We adopted Financial Accounting Standards Board Accounting Standards Codification ("ASC") 606 "Revenue from Contracts with Customers" using the modified retrospective transition method applied to our revenue contracts with customers as of January 1, 2018.

Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior year amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605 "Revenue Recognition".

We recorded a net increase to opening retained earnings of $35 million as of January 1, 2018 due to the cumulative effect of adopting ASC 606, with the impact primarily related to our treatment of costs to obtain a contract and to a lesser extent, changes to the timing of the recognition of our subscription and non-transaction revenues.

Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services.

Under ASC 605, revenue was recognized as it was earned and when services were rendered.

See Note 1 - Accounting Policies to our consolidated financial statements for further information.

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Conversely, if the results of our qualitative assessment determine that it is more likely than not that the indefinite-lived asset is impaired, a quantitative impairment test is performed.

If necessary, the impairment test is performed by comparing the estimated fair value of the intangible asset to its carrying value.

If the indefinite-lived intangible asset carrying value exceeds its fair value, an impairment analysis is performed using the income approach.

The fair value of loss is recognized in an amount equal to that excess.

If necessary, an impairment analysis is performed using the income approach to estimate the fair value of the indefinite-lived intangible asset.

If the intangible asset carrying value exceeds its fair value, an impairment charge is recognized in an amount equal to that excess.

Significant judgments inherent in these analyses include estimating the amount and timing of future cash flows and the selection of appropriate discount rates, royalty rates and long-term growth rate assumptions.

Changes in these estimates and assumptions could materially affect the determination of fair value for this indefinite-lived intangible asset and could result in an impairment charge, which could be material to our financial position and results of operations.

position and results of operations.

We performed our impairment assessment of goodwill and indefinite-lived intangible assets and concluded that no impairment existed for the years ended December 31, 2021, 2020, and 2019.

Retirement plans and postretirement healthcare and other benefits

Our employee pension and other postretirement benefit costs and obligations are dependent on assumptions concerning the outcome of future events and circumstances, including compensation increases, long-term return on pension plan assets, healthcare cost trends, discount rates and other factors.

In determining such assumptions, we consult with outside actuaries and other advisors where deemed appropriate.

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• Discount rate assumptions are based on current yields on high-grade corporate long-term bonds.

• Healthcare cost trend assumptions are based on historical market data, the near-term outlook and an assessment of likely long-term trends.

• The expected return on assets assumption is calculated based on the plan’s asset allocation strategy and projected market returns over the long-term.

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Return on assets 4.00 % 5.00 % 5.50 %

Weighted-average healthcare cost rate 6.00 % 6.50 % 6.50 %

As of December 31, 2021, the Company had $1.5 billion in pension benefit obligation.

A 0.25 percentage point increase or decrease in the discount rate would result in an estimated decrease or increase to the accumulated benefit obligation of approximately $50 million and an increase or decrease in 2022 pension expense of approximately $1 million.

An increase or decrease of 1 percentage point in the expected rate of return on plan assets would result in a decrease or increase of approximately $15 million to 2022 pension expense.

Stock-based compensation

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Stock-based compensation is classified as both operating-related expense and selling and general expense in our consolidated statements of income.

We use a lattice-based option-pricing model to estimate the fair value of options granted.

The following assumptions were used in valuing the options granted:

December 31, 2018

Risk-free average interest rate 2.6 - 2.7%

Dividend yield 1.1 %

Volatility 21.8 - 22.0%

Expected life (years) 5.67 - 6.07

Weighted-average grant-date fair value per option $ 112.98

Because lattice-based option-pricing models incorporate ranges of assumptions, those ranges are disclosed.

These assumptions are based on multiple factors, including historical exercise patterns, post-vesting termination rates, expected future exercise patterns and the expected volatility of our stock price.

The risk-free interest rate is the imputed forward rate based on the U.S.

Treasury yield at the date of grant.

We use the historical volatility of our stock price over the expected term of the options to estimate the expected volatility.

The expected term of options granted is derived from the output of the lattice model and represents the period of time that options granted are expected to be outstanding.

In 2018, we made a one-time issuance of incentive stock options under the 2002 Plan to replace Kensho employees' stock options that were assumed in connection with our acquisition of Kensho in April of 2018.

There were no stock options granted in 2021, 2020 and 2019.

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We file income tax returns in the U.S.

federal jurisdiction, various states, and foreign jurisdictions, and we are routinely under audit by many different tax authorities.

We believe that our accrual for tax liabilities is adequate for all open audit years based on our assessment of many factors including past experience and interpretations of tax law.

federal jurisdiction and various state and foreign jurisdictions, and we are routinely under audit by many different tax authorities.

We believe that our accrual for tax liabilities is adequate for all open audit years based on an assessment of many factors including past experience and interpretations of tax law.

This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.

It is possible that examinations will be settled prior to December 31, 2021.

It is possible that tax examinations will be settled prior to December 31, 2022.

If any of these tax audit settlements do occur within that period, we would make any necessary adjustments to the accrual for unrecognized tax benefits.

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The significant judgmental assumptions used that incorporate market data, including the relative weighting of market observable information and the comparability of that information in our valuation models, are forward-looking and could be affected by future economic and market conditions.

As of December 31, 2021, the Company had $3.4 billion in redeemable noncontrolling interest on the Consolidated Balance Sheet.

The ultimate amount paid for the redeemable noncontrolling interest in Indices business could be significantly different because the redemption amount depends on the future results of operations of the business.

As of December 31, 2021, the weighted average cost of capital used in the Company's income analysis to estimate the fair value of the redeemable noncontrolling interest was 9%.

A 0.25 percentage point increase or decrease in the weighted average cost of capital would decrease or increase the redemption value by approximately $80 million.

As of December 31, 2021, the terminal growth rate used in the Company's income analysis to estimate the fair value of the redeemable noncontrolling interest was 2.2%.

A 0.25 percentage point increase or decrease in the terminal growth rate would increase or decrease the redemption value by approximately $50 million.

RECENT ACCOUNTING STANDARDS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis