What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-03 compared with 2022-05-04 · 329 added, 156 removed, 515 unchanged (49% of the section changed)

1 unchanged sentence

The following Management's Discussion and Analysis (“MD&A”) provides a narrative of the results of operations and financial condition of S&P Global Inc.

(together with its consolidated subsidiaries, "S&P Global," the “Company,” “we,” “us” or “our”) for the three months ended March 31, 2022.

(together with its consolidated subsidiaries, "S&P Global," the “Company,” “we,” “us” or “our”) for the three and six months ended June 30, 2022.

The MD&A should be read in conjunction with the consolidated financial statements, accompanying notes and MD&A included in our Form 10-K for the year ended December 31, 2021 (our “Form 10-K”), which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The MD&A includes the following sections:

• Results of Operations — Comparing the Three Months Ended March 31, 2022 and 2021

• Results of Operations — Comparing the Three and Six Months Ended June 30, 2022 and 2021

• Liquidity and Capital Resources

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• Forward-Looking Statements

We are a provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets.

We are a provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity, automotive and engineering markets.

The capital markets include asset managers, investment banks, commercial banks, insurance companies, exchanges, trading firms and issuers;

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and the automotive markets include manufacturers, suppliers, dealerships and service shops.

During the quarter ended March 31, 2022, following the completion of our merger with IHS Markit, we reorganized our reportable segments increasing from four reportable segments to six reportable segments consisting of:

During 2022, following the completion of our merger with IHS Markit, we reorganized our reportable segments increasing from four reportable segments to six reportable segments consisting of:

S&P Global Market Intelligence ("Market Intelligence"), S&P Global Ratings ("Ratings"), S&P Global Commodity Insights ("Commodity Insights"), S&P Global Mobility ("Mobility"), S&P Dow Jones Indices ("Indices") and S&P Global Engineering Solutions ("Engineering Solutions").

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• Engineering Solutions is a leading provider of engineering standards and related technical knowledge.

On February 28, 2022, we completed the merger with IHS Markit Ltd ("IHS Markit") by acquiring 100% of the IHS Markit common stock that was issued and outstanding as of the date of acquisition, and as a result, IHS Markit and its subsidiaries became wholly owned consolidated subsidiaries of S&P Global, and the consolidated financial statements as of and during the three months ended March 31, 2022 include the financial results of IHS Markit from the date of acquisition.

On February 28, 2022, we completed the merger with IHS Markit Ltd ("IHS Markit") by acquiring 100% of the IHS Markit common stock that was issued and outstanding as of the date of acquisition, and as a result, IHS Markit and its subsidiaries became wholly owned consolidated subsidiaries of S&P Global, and the consolidated financial statements as of and for the three and six months ended June 30, 2022 include the financial results of IHS Markit from the date of acquisition.

The merger with IHS Markit, a world leader in critical information, analytics, and solutions for the major industries and markets that drive economies, brings together two world-class organizations with leading brands and capabilities across information services that will be uniquely positioned to serve, facilitate and power the markets of the future.

Key results for the three months ended March 31 are as follows:

(in millions, except per share amounts) 2022 2021 % Change 1

Key results for the periods ended June 30 are as follows:

(in millions, except per share amounts) Three Months Six Months

2022 2021 % Change 1

Revenue $ 2,993 $ 2,106 42% $ 5,383 $ 4,122 31%

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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 2022 includes a gain on dispositions of $1.3 billion, IHS Markit merger costs of $230 million, a S&P Foundation grant of $200 million, employee severance charges of $78 million, acquisition-related costs of $15 million and lease impairments of $5 million.

2021 includes IHS Markit merger costs of $49 million, Kensho retention related expense of $2 million and a gain on disposition of $2 million.

2022 and 2021 also includes amortization of intangibles from acquisitions of $125 million and $31 million, respectively.

2 Operating profit for the three months ended June 30, 2022 includes a gain on dispositions of $556 million, IHS Markit merger costs of $135 million, employee severance charges of $61 million, acquisition-related costs of $7 million and an asset impairment of $3 million.

Operating profit for the six months ended June 30, 2022 includes a gain on dispositions of $1.9 billion, IHS Markit merger costs of $379 million, a S&P Foundation grant of $200 million, employee severance charges of $139 million, acquisition-related costs of $8 million, lease impairments of $5 million and an asset write-off of $3 million.

Operating profit for the three months ended June 30, 2021 includes IHS Markit merger costs of $50 million and a lease impairment of $3 million.

Operating profit for the six months ended June 30, 2021 includes IHS Markit merger costs of $99 million, a lease impairment of $3 million, Kensho retention related expense of $2 million and a gain on disposition of $2 million.

Operating profit also includes amortization of intangibles from acquisitions of $282 million and $$22 million for the three months ended June 30, 2022 and 2021, respectively, and $407 million and $53 million for the six months ended June 30, 2022 and 2021, respectively.

Revenue increased 42% primarily due to the impact of the merger with IHS Markit;

subscription revenue growth for certain Desktop products, RatingsXpress®, RatingsDirect®, and certain data feed products within Data and Advisory Solutions at Market Intelligence;

higher conference revenue and continued demand for market data and market insights products at Commodity Insights;

continued demand for market data and market insights products at Commodity Insights;

higher exchange-traded derivative revenue and higher average levels of assets under management for mutual funds at Indices.

These increases were partially offset by a decrease in revenue at Ratings due to lower corporate bond ratings revenue driven by a decrease in high-yield and investment-grade issuance volumes and lower bank loan ratings revenue.

Foreign exchange rates had an unfavorable impact of 2 percentage points.

Operating profit increased 28%.

Excluding the favorable impact of a higher gain on dispositions of 52 percentage points, partially offset by the impact of higher amortization of intangibles from acquisitions in 2022 of 24 percentage points, higher IHS Markit merger costs in 2022 of 8 percentage points, higher employee severance charges in 2022 of 6 percentage points, operating profit increased 15%.

The increase was primarily due to revenue growth, lower incentive costs and lower occupancy costs from reduced real estate footprint, partially offset by expenses associated with the merger with IHS Markit, an increase in compensation costs driven by additional headcount and annual merit and promotion increases, the resumption of business travel from the lifting of COVID restrictions and an increase in technology expenses.

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

Revenue increased 31% primarily due to the impact of the merger with IHS Markit;

subscription revenue growth for certain Desktop products, RatingsXpress®, RatingsDirect®, and certain data feed products within Data and Advisory Solutions at Market Intelligence;

continued demand for market data and market insights products and higher conference revenue at Commodity Insights;

and higher average levels of assets under management for ETFs and mutual funds and higher exchange-traded derivative revenue at Indices.

These increases were partially offset by a decrease in transaction revenue at Ratings due to lower corporate bond ratings revenue driven by a decrease in high-yield and investment-grade issuance volumes and lower bank loan ratings due to decreased U.S.

issuance volumes.

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

Operating profit increased 51%.

Excluding the favorable impact of a higher gain on dispositions of 125 percentage points, partially offset by the impact of a S&P Foundation grant in 2022 of 19 percentage points, higher IHS Markit merger costs in 2022 of 17 percentage points, higher amortization of intangibles from acquisitions in 2022 of 9 percentage points, higher employee severance charges in 2022 of 7 percentage points and acquisition-related costs in 2022 of 1 percentage point, operating profit increased 3%.

The increase was primarily due to revenue growth, partially offset by an increase in compensation costs driven by additional headcount and annual merit increases, higher incentive costs and an increase in technology expenses.

Excluding the favorable impact of a higher gain on dispositions of 85 percentage points, partially offset by the impact of higher IHS Markit merger costs in 2022 of 13 percentage points, a S&P Foundation grant in 2022 of 9 percentage points, higher amortization of intangibles from acquisitions in 2022 of 16 percentage points and higher employee severance charges in 2022 of 6 percentage points, operating profit increased 10%.

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

We are a provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets.

We are a provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity, automotive and engineering markets.

Our purpose is to accelerate progress.

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See Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

RESULTS OF OPERATIONS — COMPARING THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

RESULTS OF OPERATIONS — COMPARING THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

Consolidated Review

(in millions) 2022 2021 % Change

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 2,993 $ 2,106 42% $ 5,383 4,122 31%

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Operating-related expenses 1,011 533 90% 1,760 1,055 67%

Selling and general expenses 958 360 N/M

Depreciation and amortization 137 50 N/M

Total expenses 1,844 937 96%

Gain on dispositions (1,344) (2) —%

Equity in Income on Unconsolidated Subsidiaries (3) — N/M

Selling and general expenses 764 374 N/M 1,722 740 N/M

Depreciation and amortization 303 45 N/M 441 95 N/M

Total expenses 2,078 952 N/M 3,923 1,890 N/M

Gain on dispositions (556) — N/M (1,899) (2) N/M

Equity in Income on Unconsolidated Subsidiaries (11) — N/M (15) — N/M

Operating profit 1,482 1,154 28% 3,374 2,234 51%

Other income, net (49) (7) N/M

Interest expense, net 57 32 77%

Loss on extinguishment of debt 17 — N/M

Provision for taxes on income 568 248 N/M

Other income, net (1) (22) 95% (50) (29) (68)%

Interest expense, net 90 32 N/M 147 63 N/M

Loss on extinguishment of debt 2 — N/M 19 — N/M

Provision for taxes on income 340 287 19% 908 534 70%

Net income 1,051 857 23% 2,350 1,666 41%

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

The following table provides consolidated revenue information for the three months ended March 31:

(in millions) 2022 2021 % Change

The following table provides consolidated revenue information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 2,993 $ 2,106 42% $ 5,383 $ 4,122 31%

Subscription revenue $ 1,125 $ 781 44%

Subscription revenue 1,685 805 N/M 2,810 $ 1,586 77%

Non-subscription / transaction revenue 492 633 (22)% 1,004 1,228 (18)%

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Sales usage-based royalties 72 51 42% 140 108 31%

Recurring variable 40 — N/M

Recurring variable 121 — N/M 161 — N/M

% of total revenue:

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Subscription revenue growth in Desktop products, Credit & Risk Solutions and Data & Advisory Solutions at Market Intelligence, and continued demand for Commodity Insights market data and market insights products also contributed to the increase.

Non-subscription / transaction revenue decreased due to a decrease in corporate bond ratings revenue, bank loan ratings revenue and structured finance revenue at Ratings, partially offset by the impact of the merger with IHS Markit.

Non-transaction revenue at Ratings decreased due to the unfavorable impact from foreign exchange rates.

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

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

Recurring variable revenue at Market Intelligence represents revenue from contracts for services that specify a fee based on, among other factors, the number of trades processed, assets under management, or the number of positions valued.

See “Segment Review” below for further information.

The unfavorable impact of foreign exchange rates reduced revenue by 2 percentage points.

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.

Subscription revenue increased primarily due to the impact of the merger with IHS Markit.

Non-transaction revenue increased due to an increase in surveillance revenue and revenue at our CRISIL subsidiary at Ratings.

Non-transaction revenue at Ratings increased primarily due to an increase in revenue at our CRISIL subsidiary and an increase in surveillance revenue, partially offset by a decrease in entity credit ratings revenue and lower RES revenue.

Asset linked fees increased reflecting 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 revenue at Indices.

See “Segment Review” below for further information.

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Total Expenses

The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the three months ended March 31:

The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the periods ended June 30:

(in millions) 2022 2021 % Change

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Market Intelligence 1

$ 322 $ 190 $ 230 $ 113 40% 69%

$ 458 $ 241 $ 228 $ 114 N/M N/M

229 86 238 93 (4)% (7)%

Commodity Insights 3

114 78 50 53 NM 47%

139 124 52 55 N/M N/M

86 114 — — N/M N/M

52 43 42 38 24% 14%

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(43) — (36) — (18)% N/M

Total segments 733 472 518 292 41% 61%

Total segments 980 630 524 300 87% N/M

Corporate Unallocated expense 8

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

1 In 2022, selling and general expenses include employee severance charges of $18 million and acquisition-related costs of $2 million.

1 In 2022, selling and general expenses include include employee severance charges of $13 million, IHS Markit merger costs of $12 million, and acquisition-related costs of $1 million.

2 In 2022, selling and general expenses include employee severance charges of $7 million.

3 In 2022, selling and general expenses include employee severance costs of $17 million and acquisition-related costs of $4 million.

4 In 2022, selling and general expenses include acquisition-related costs of $1 million.

4 In 2022, selling and general expenses include acquisition-related costs of $3 million, employee severance charges of $2 million and IHS Markit merger costs of $1 million.

5 In 2022, selling and general expenses include employee severance charges of $2 million and acquisition-related costs of $1 million.

6 In 2022, selling and general expenses include employee severance charges of $1 million.

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

8 In 2022, selling and general expenses include IHS Markit merger costs of $117 million, employee severance charges of $18 million, an asset write-off of $3 million and acquisition-related costs of $1 million.

In 2021, selling and general expenses include IHS Markit merger costs of $50 million and a lease impairment of $3 million.

Operating-Related Expenses

Operating-related expenses increased 90% primarily driven by expenses associated with the merger with IHS Markit and higher compensation costs, partially offset by lower 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.

Selling and General Expenses

Selling and general expenses increased 103%.

Excluding the unfavorable impact of higher IHS Markit merger costs in 2022 of 17 percentage points, higher employee severance charges of 12 percentage points, and acquisition-related costs of 1 percentage point and an asset write-off of 1 percentage point, selling and general expenses increased 72%.

The increase was primarily driven by expenses associated with the merger with IHS Markit and higher compensation costs, partially offset by lower incentive costs.

Depreciation and Amortization

Depreciation and amortization was $303 million in 2022 compared to $45 million in 2021, primarily due to higher intangible asset amortization driven by the impact of the merger with IHS Markit.

(in millions) 2022 2021 % Change

related expenses Selling and

general expenses Operating-

related expenses Selling and

general expenses Operating-

related expenses Selling and

general expenses

Market Intelligence 1

$ 779 $ 431 $ 458 $ 227 70% 90%

467 196 466 188 N/M 4%

Commodity Insights 3

253 202 102 109 N/M 86%

117 155 — — N/M N/M

99 88 83 73 20% 21%

Engineering Solutions 6

79 29 — — N/M N/M

Intersegment eliminations 7

(81) — (71) — (14)% N/M

Total segments 1,713 1,101 1,037 597 65% 85%

Corporate Unallocated expense 8

47 621 17 143 N/M N/M

Total $ 1,760 $ 1,722 $ 1,055 $ 740 67% N/M

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

1 In 2022, selling and general expenses include employee severance charges of $31 million, IHS Markit merger costs of $15 million and acquisition-related costs of $1 million.

2 In 2022, selling and general expenses include employee severance charges of $12 million.

3 In 2022, selling and general expenses include employee severance costs of $23 million and IHS Markit merger costs of $6 million.

4 In 2022, selling and general expenses include acquisition-related costs of $4 million, employee severance charges of $2 million and IHS Markit merger costs of $1 million

5 In 2022, selling and general expenses include employee severance charges of $4 million and IHS Markit merger costs of $1 million

6 In 2022, selling and general expenses include employee severance charges of $2 million.

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

8 In 2022, selling and general expenses include IHS Markit merger costs of $230 million, a S&P Foundation grant of $200 million, employee severance charges of $46 million and acquisition-related costs of $11 million and lease impairments of $5 million.

In 2021, selling and general expenses include IHS Markit merger costs of $49 million and Kensho retention related expense of $2 million.

8 In 2022, selling and general expenses include IHS Markit merger costs of $357 million, a S&P Foundation grant of $200 million, employee severance charges of $64 million and acquisition-related costs of $3 million and lease impairments of $5 million and an asset write-off of $3 million.

In 2021, selling and general expenses include IHS Markit merger costs of $99 million and a lease impairment of $3 million and Kensho retention related expense of $2 million.

Operating-Related Expenses

Operating-related expenses increased 42% primarily driven by expenses associated with the merger with IHS Markit and higher compensation and incentive costs.

Operating-related expenses increased 67% primarily driven by expenses associated with the merger with IHS Markit and higher compensation costs, partially offset by lower 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 133%.

Excluding the unfavorable impact of a S&P Foundation grant of 53 percentage points, IHS Markit merger costs in 2021 of 48 percentage points, higher employee severance charges of 21 percentage points, and acquisition-related costs of 4 percentage points, selling and general expenses increased 40%.

The increase was primarily driven by expenses associated with the merger with IHS Markit and higher compensation and incentive costs.

Excluding the unfavorable impact of higher IHS Markit merger costs in 2022 of 34 percentage points, a S&P Foundation grant of 25 percentage points, higher employee severance charges of 17 percentage points, and acquisition-related costs of 2 percentage points, selling and general expenses increased 55%.

The increase was primarily driven by expenses associated with the merger with IHS Markit and higher compensation costs, partially offset by lower incentive costs.

Depreciation and Amortization

Depreciation and amortization was $137 million for the three months ended March 31, 2022 compared to $50 million for the three months ended March 31, 2021, primarily due to the impact of the merger with IHS Markit.

Depreciation and amortization was $440 million in 2022 compared to $95 million in 2021, primarily due to higher intangible asset amortization driven by the impact of the merger with IHS Markit.

Gain on Dispositions

In June of 2022, we completed the previously announced sale of Leveraged Commentary and Data (“LCD”) along with a related family of leveraged loan indices, within our Market Intelligence and Indices segments, respectively, to Morningstar for a purchase price of $600 million in cash, subject to customary adjustments, and a contingent payment of up to $50 million which is payable six months following the closing upon the achievement of certain conditions related to the transition of LCD customer relationships.

During the three and six months ended June 30, 2022, we recorded a pre-tax gain of $518 million ($396 million after tax) for the sale of LCD and $38 million ($31 million after tax) for the sale of a family of leveraged loan indices in Gain on dispositions in the consolidated statements of income.

In June of 2022, we completed the previously announced sale of the Base Chemicals business to News Corp for $295 million in cash.

We did not recognize a gain on the sale of the Base Chemicals business.

In March of 2022, we completed the previously announced sale of CUSIP Global Services (“CGS”), a business within our Market Intelligence segment, to FactSet Research Systems Inc.

for a purchase price of $1.925 billion in cash, subject to customary adjustments.

During the three months ended March 31, 2022, we record a pre-tax gain of $1.344 billion ($999 million after tax) in Gain on dispositions in the consolidated statements of income related to the sale of CGS.

During the three months ended March 31, 2021, we recorded a pre-tax gain of $2 million ($2 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") within our Market Intelligence segment in July of 2019.

During the six months ended June 30, 2022, we recorded a pre-tax gain of $1.344 billion ($1.006 billion after tax) in Gain on dispositions in the consolidated statements of income related to the sale of CGS.

In February 2022, we completed the previously announced sale of OPIS to News Corp for $1.150 billion in cash.

We did not recognize a gain on the sale of OPIS.

During the six months ended June 30, 2021, we recorded a pre-tax gain of $2 million ($2 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") within our Market Intelligence segment in July of 2019.

Operating Profit

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

The tables below reconcile segment operating profit to total operating profit for the three months ended March 31:

The tables below reconcile segment operating profit to total operating profit for the periods ended June 30:

(in millions) 2022 2021 % Change

Market Intelligence 1

1,489 161 N/M

$ 702 $ 174 NM

464 729 (36)%

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Corporate Unallocated expense 7

(165) (86) (91)%

Equity in Income on Unconsolidated Subsidiaries 8

Total operating profit $ 1,482 $ 1,154 28%

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

1 2022 includes a gain on disposition of $518 million, IHS Markit merger costs of $12 million, employee severance charges of $13 million and acquisition-related costs of $1 million.

2022 and 2021 include amortization of intangibles from acquisitions of $133 million and $16 million, respectively.

2 2022 includes employee severance charges of $7 million.

2022 and 2021 includes amortization of intangibles from acquisitions of $2 million.

3 2022 includes employee severance costs of $17 million and acquisition-related costs of $4 million.

2022 and 2021 include amortization of intangibles from acquisitions of $32 million and $2 million, respectively.

4 2022 includes acquisition-related costs of $3 million, employee severance costs of $2 million, IHS Markit merger costs of $1 million and amortization of intangibles from acquisitions of $77 million.

5 2022 includes a gain on disposition of $38 million, employee severance charges of $2 million and IHS Markit merger costs of $1 million.

2022 and 2021 include amortization of intangibles from acquisitions of $9 million and $1 million, respectively.

6 2022 includes employee severance charges of $1 million.

2022 includes amortization of intangibles from acquisitions of $15 million.

7 2022 includes IHS Markit merger costs of $117 million, employee severance charges of $18 million, acquisition-related costs of $4 million and asset write-off of $3 million.

2021 includes IHS Markit merger costs of $50 million and a lease impairment of $3 million.

8 2022 includes amortization of intangibles from acquisitions of $14 million.

Segment Operating Profit — Increased 32% as compared to 2021.

Excluding the favorable impact of a higher gain on dispositions of 45 percentage points, partially offset by higher amortization of intangibles from acquisitions in 2022 of 20 percentage points, higher employee severance charges in 2022 of 3 percentage points and IHS Markit merger related costs in 2022 of 2 percentage points, segment operating profit increased 12%.

The increase was primarily due to revenue growth primarily due to the impact of the merger with IHS Markit, lower incentive costs and lower occupancy costs from reduced real estate footprint, partially offset by a decrease in revenue at Ratings, expenses associated with the merger with IHS Markit, an increase in compensation costs driven by additional headcount and annual merit and promotion increases, the resumption of business travel from the lifting of COVID restrictions and an increase in technology expenses.

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 91% compared to 2021.

Excluding higher IHS Markit merger costs in 2022 of 95 percentage points, employee severance charges in 2022 of 26 percentage points, an asset impairment in 2022 of 5 percentage points and acquisition-related costs in 2022 of 6 percentage points, partially offset by a lease impairment in 2021 of 5 percentage points, Corporate Unallocated expense decreased 36% primarily due to cost synergies and lower incentive costs.

Equity in Income on Unconsolidated Subsidiaries— The Company holds an investment in a 50/50 joint venture arrangement with shared control with CME Group that combined each of the company’s post-trade services into a new joint venture, OSTTRA.

The joint venture provides trade processing and risk mitigation operations and incorporates CME’s optimization businesses (Traiana, TriOptima, and Reset) and the Company’s MarkitSERV business.

The combination is intended to increase operating efficiencies of both the company’s business to more effectively service clients with enhanced platforms and services for OTC markets across interest rate, FX, equity, and credit asset classes.

Equity in Income on Unconsolidated Subsidiaries includes the OSTTRA joint venture acquired in connection with the merger with IHS Markit.

Equity in Income on Unconsolidated Subsidiaries was $11 million for the three months ended June 30, 2022.

Foreign exchange rates had an unfavorable 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.

(in millions) 2022 2021 % Change

Market Intelligence 1

$ 2,191 $ 335 N/M

976 1,410 (31)%

Commodity Insights 3

Engineering Solutions 6

Total segment operating profit 4,037 2,407 68%

Corporate Unallocated expense 7

(678) (173) NM

Equity in Income on Unconsolidated Subsidiaries 8

1 unchanged sentence

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

1 2022 includes a gain on disposition of $1.3 billion, employee severance charges of $18 million and acquisition-related costs of $2 million.

1 2022 includes a gain on disposition of $1.9 billion, employee severance charges of $31 million, IHS Markit merger costs of $15 million and acquisition-related costs of $1 million.

2021 includes a gain on disposition of $2 million.

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2022 and 2021 include amortization of intangibles from acquisitions of $45 million and $4 million, respectively.

4 2022 includes acquisition-related costs of $1 million and amortization of intangibles from acquisitions of $24 million.

5 2022 includes employee severance charges of $2 million.

4 2022 includes employee severance costs of $2 million, acquisition-related costs of $4 million, IHS Markit merger costs of $1 million and amortization of intangibles from acquisitions of $101 million.

5 2022 includes a gain on disposition of $38 million, employee severance charges of $4 million and IHS Markit merger costs of $1 million.

2022 and 2021 include amortization of intangibles from acquisitions of $13 million and $3 million, respectively.

1 unchanged sentence

2022 includes amortization of intangibles from acquisitions of $19 million.

7 2022 includes IHS Markit merger costs of $230 million, a S&P Foundation grant of $200 million, employee severance charges of $46 million, acquisition-related costs of $11 million and lease impairments of $5 million.

2021 includes IHS Markit merger costs of $49 million and Kensho retention related expense of $2 million.

7 2022 includes IHS Markit merger costs of $357 million, a S&P Foundation grant of $200 million, employee severance charges of $64 million, lease impairments of $5 million acquisition-related costs of $3 million and asset write-off of $3 million.

2021 includes IHS Markit merger costs of $99 million, a lease impairment of $3 million and Kensho retention related expense of $2 million.

2022 and 2021 includes and amortization of intangibles from acquisitions of $1 million and $7 million, respectively.

1 unchanged sentence

Segment Operating Profit — Increased 68% as compared to 2021.

Excluding the favorable impact of a higher gain on dispositions of 115 percentage points, partially offset by higher amortization of intangibles from acquisitions in 2022 of 7 percentage points and higher employee severance charges in 2022 of 3 percentage points, segment operating profit increased 1%.

The increase was primarily due to revenue growth primarily due to the impact of the merger with IHS Markit, partially offset a decrease in transaction revenue at Ratings, expenses associated with the merger with IHS Markit, an increase in compensation costs, higher incentive costs and an increase in technology expenses.

Excluding the favorable impact of a higher gain on dispositions of 79 percentage points, partially offset by higher amortization of intangibles from acquisitions in 2022 of 14 percentage points, higher employee severance charges in 2022 of 3 percentage points and IHS Markit merger related costs in 2022 of 1 percentage point, segment operating profit increased 7%.

The increase was primarily due to revenue growth primarily due to the impact of the merger with IHS Markit, lower incentive costs and lower occupancy costs from reduced real estate footprint, partially offset by a decrease in transaction revenue at Ratings, expenses associated with the merger with IHS Markit, an increase in compensation costs driven by additional headcount and annual merit and promotion increases, the resumption of business travel from the lifting of COVID restrictions and an increase in technology expenses.

See “Segment Review” below for further information.

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Corporate Unallocated expense increased 292% compared to 2021.

Excluding a S&P Foundation grant in 2022 of 238 percentage points, higher IHS Markit merger costs in 2022 of 214 percentage points, higher employee severance charges in 2022 of 54 percentage points, acquisition-related costs in 2022 of 14 percentage points and lease impairments in 2022 of 5 percentage points, partially offset by lower amortization of intangibles from acquisitions in 2022 of 7 percentage points and Kensho retention related expense in 2021 of 3 percentage points, Corporate Unallocated expense decreased 23% due to a benefit from a reduction in certain benefit accruals and lower incentives.

Excluding a S&P Foundation grant in 2022 of 123 percentage points, higher IHS Markit merger costs in 2022 of 158 percentage points, higher employee severance charges in 2022 of 38 percentage points, an asset impairment in 2022 of 2 percentage points, acquisition-related costs in 2022 of 2 percentage points and higher lease impairments in 2022 of 1 percentage point, partially offset by lower amortization of intangibles from acquisitions in 2022 of 3 percentage points, Corporate Unallocated expense decreased 30% primarily due to cost synergies and lower incentive costs.

The joint venture provides trade processing and risk mitigation operations and incorporates CME’s optimization businesses (Traiana, TriOptima, and Reset) and the Company’s MarkitSERV business.

The joint venture provides trade processing and risk mitigation operations and incorporates CME’s optimization

businesses (Traiana, TriOptima, and Reset) and the Company’s MarkitSERV business.

Equity in Income on Unconsolidated Subsidiaries includes the OSTTRA joint venture acquired in connection with the merger with IHS Markit.

Equity in Income on Unconsolidated Subsidiaries was $3 million for the three months ended March 31, 2022.

Equity in Income on Unconsolidated Subsidiaries was $15 million for the six months ended June 30, 2022.

Foreign exchange rates had an unfavorable impact on operating profit of 1 percentage point.

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Other Income, net

Other income, includes the net periodic benefit cost for our retirement and post retirement plans and gains and losses on our mark-to-market investments.

Other income, net was $49 million for the three months ended March 31, 2022 compared to $7 million for the three months ended March 31, 2021.

The increase in Other income, net was primarily due to higher gains on our mark-to-market investments in 2022.

Other income, net includes the net periodic benefit cost for our retirement and post retirement plans and gains and losses on our mark-to-market investments.

Other income, net was $1 million for the three months ended June 31, 2022 compared to $22 million for the three months ended June 30, 2021, primarily due to losses on our mark-to-market investments in 2022 compared to gains in 2021.

Other income, net was $50 million for the six months ended June 30, 2022 compared to $29 million for the six months ended June 30, 2021 primarily due to higher gains on our mark-to-market investments in 2022.

Interest Expense, net

Net interest expense increased $25 million or 77% compared to the three months ended March 31, 2021 primarily due to higher debt balances.

Interest expense,net increased $58 million or 184% compared to the three months ended June 30, 2021, and increased $84 million or 131% compared to the six months ended June 30, 2021 primarily due to higher debt balances.

See Note 4 – Debt for further details.

Loss on Extinguishment of Debt, Net

During the three months ended March 31, 2022, we recognized a $17 million loss on extinguishment of debt which includes a $118 million tender premium paid to tendering note holders in accordance with the terms of the tender offer, offset by a $101 million non-cash write-off related to the fair market value step up premium on extinguished debt.

During the three and six months ended June 30, 2022, we recognized a $2 million and $19 million loss on extinguishment of debt.

The six months ended June 30, 2022 includes a $118 million tender premium paid to tendering note holders in accordance with the terms of the tender offer, offset by a $99 million non-cash write-off related to the fair market value step up premium on extinguished debt.

Provision for Income Taxes

The effective income tax rate was 30.4% and 23.4% for the three months ended March 31, 2022 and March 31, 2021, respectively.

The increase in the three months ended March 31, 2022 was primarily due to to the tax charge on merger related divestitures and deal related non-deductible costs.

The effective income tax rate was 24.5% and 27.9% for the three and six months ended June 30, 2022 and 25.1% and 24.3% for the three and six months June 30, 2021, respectively.

The decrease in the three months ended June 30, 2022 was primarily due to mix of income by jurisdiction.

The increase in the six months ended June 30, 2022 was primarily due to the tax charge on merger related divestitures and deal related non-deductible costs.

Segment Review

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

In June of 2022, we completed the previously announced sale of Leveraged Commentary and Data (“LCD”), a business within our Market Intelligence segment, to Morningstar.

During the three and six months ended June 30, 2022, we recorded a pre-tax gain of $518 million ($396 million after tax) in Gain on dispositions in the consolidated statements of income related to the sale of LCD.

In March of 2022, we completed the previously announced sale of CUSIP Global Services (“CGS”), a business within our Market Intelligence segment, to FactSet Research Systems Inc.

for a purchase price of $1.925 billion in cash, subject to customary adjustments.

During the three months ended March 31, 2022, we recorded a pre-tax gain of $1.344 billion ($999 million after tax) in Gain on dispositions in the consolidated statements of income related to the sale of CGS.

Market Intelligence includes the following business lines:

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Non-subscription revenue at Market Intelligence is primarily related to certain advisory, pricing conferences and events, and analytical services.

The following table provides revenue and segment operating profit information for the three months ended March 31:

(in millions) 2022 2021 % Change

The following table provides revenue and segment operating profit information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 1,030 $ 539 91% $ 1,758 $ 1,063 65%

Subscription revenue $ 867 $ 524 65% $ 1,526 $ 1,037 47%

Recurring variable revenue $ 40 $ — N/M

Non-subscription revenue $ 28 $ 12 N/M

Recurring variable revenue $ 121 $ — N/M $ 161 $ — N/M

Non-subscription revenue $ 42 $ 15 N/M $ 71 $ 26 N/M

% of total revenue:

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revenue $ 602 $ 339 77% $ 1,036 $ 674 53%

International revenue $ 293 $ 190 55%

International revenue $ 428 $ 200 N/M $ 722 $ 389 86%

% of total revenue:

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Operating profit 1

$ 1,489 $ 161 N/M

$ 702 $ 174 N/M $ 2,191 $ 335 N/M

Operating margin % 68 % 32 % 125 % 32 %

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Note – In the first quarter of 2022, the Market Intelligence Commodities business was transferred to th e Commodity Insights segment and prior-year amounts have been reclassified to conform with current presentation.

1 2022 includes a gain on disposition of $1.3 billion, employee severance charges of $18 million and acquisition-related costs of $2 million.

2021 includes a gain on disposition of $2 million.

2022 and 2021 include amortization of intangibles from acquisitions of $64 million and $16 million, respectively.

1 Operating profit for the three and six months ended June 30, 2022 includes gain on dispositions of $518 million and $1.9 billion, respectively, employee severance charges of $13 million and $31 million, respectively, IHS Markit merger costs of $12 million and $15 million, respectively, and acquisition-related costs of $1 million.

Operating profit for the six months ended June 30, 2021 includes a gain on disposition of $2 million.

Operating profit includes amortization of intangibles from acquisitions of $133 million and $16 million is included for the three months ended June 30, 2022 and 2021, respectively, and $197 million and $33 million for the six months ended June 30, 2022 and 2021, respectively.

Revenue increased 91% primarily due to the impact of the merger with IHS Markit.

Subscription revenue growth for certain Market Intelligence Desktop products, RatingsXpress®, RatingsDirect®, and certain data feed products within Data and Advisory Solutions also contributed to revenue growth.

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

Foreign exchange rates had an unfavorable impact of 2 percentage points.

Operating profit increased 304%.

Excluding the impact of a gain dispositions of 835 percentage points, partially offset by higher amortization of intangibles of 30 percentage points, employee severance charges in 2022 of 11 percentage points and acquisition-related costs in 2022 of 2 percentage points, operating profit increased 31% primarily due to revenue growth partially offset by expenses associated with the merger with IHS Markit, an increase in technology expenses and higher compensation costs.

Excluding the impact of gain on dispositions of 308 percentage points, partially offset by higher amortization of intangibles of 69 percentage points, employee severance charges in 2022 of 8 percentage points, IHS Markit merger costs in 2022 of 7 percentage points and acquisition-related costs in 2022 of 1 percentage point, operating profit increased 81% primarily due to revenue growth, partially offset by expenses associated with the merger with IHS Markit, higher compensation costs and an increase in technology expenses.

Foreign exchange rates had a favorable impact of 3 percentage points.

Revenue increased 65% primarily due to the impact of the merger with IHS Markit.

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

Operating profit increased 554%.

Excluding the impact of a gain on dispositions of 561 percentage points, partially offset by higher amortization of intangibles of 50 percentage points, employee severance charges in 2022 of 10 percentage points and IHS Markit merger costs in 2022 of 4 percentage points, operating profit increased 57% primarily due to revenue growth, partially offset by expenses associated with the merger with IHS Markit, an increase in technology expenses and higher compensation costs.

Foreign exchange rates had a favorable impact of 3 percentage points.

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

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Non-transaction revenue also includes an intersegment royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

Royalty revenue was $34 million and $33 million for the three months ended March 31, 2022 and March 31, 2021, respectively.

The following table provides revenue and segment operating profit information for the three months ended March 31:

(in millions) 2022 2021 % Change

Royalty revenue was $36 million and $70 million for the three and six months ended June 30, 2022, respectively, and $34 million and $67 million for the three and six months ended June 30, 2021, respectively.

The following table provides revenue and segment operating profit information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 796 $ 1,073 (26)% $ 1,663 $ 2,090 (20)%

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Transaction revenue

43 % 57 % 45 % 57 %

Non-transaction revenue

57 % 43 % 55 % 43 %

revenue $ 438 $ 624 (30)% $ 912 $ 1,236 (26)%

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Operating margin % 58 % 68 % 59 % 67 %

1 2022 includes employee severance charges of $5 million.

2022 and 2021 includes amortization of intangibles from acquisitions of $2 million and $5 million, respectively.

1 Operating profit for the three and six months ended June 30, 2022 includes employee severance charges of $7 million and $12 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $2 million for the three months ended June 30, 2022 and 2021, and $3 million and $7 million for the six months ended June 30, 2022 and 2021, respectively.

Revenue decreased 26%, with an unfavorable impact from foreign exchange rates of 2 percentage points.

Transaction revenue decreased due to lower corporate bond ratings revenue driven by a decrease in high-yield and investment-grade issuance volumes and lower bank loan ratings due to decreased U.S.

issuance volumes.

Transaction revenue decreased due to lower corporate bond ratings revenue driven by a decrease in high-yield and investment-grade issuance volumes and lower bank loan ratings revenue.

A decrease in structured finance revenues primarily driven by decreased issuance of U.S.

collateralized loan obligations (“CLOs”) also contributed to the decrease in transaction revenue.

Reduced issuance volumes mainly resulting from unfavorable macroeconomic conditions in 2022 compared to strong issuance levels in the prior year period.

Non-transaction revenue increased primarily due to an increase in surveillance revenue and an increase in revenue at our CRISIL subsidiary.

Reduced issuance volumes mainly resulted from unfavorable macroeconomic conditions in 2022 compared to strong issuance levels in the prior year period.

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

Excluding the unfavorable impact of foreign exchange rates of 3 percentage points, non-transaction revenue increased 2% due to an increase in revenue at our CRISIL subsidiary and an increase in surveillance revenue, partially offset by a decrease in entity credit ratings revenue and lower Ratings Evaluation Service (“RES”) revenue.

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

Operating profit decreased 25%, with an unfavorable impact from foreign exchange rates of 2 percentage points.

Excluding the impact of higher employee severance charges in 2022 of 1 percentage point partially offset by lower amortization of intangibles from acquisitions of 1 percentage point, operating profit decreased 25%.

The lower operating profit is a combination of softer revenue and higher expenses, primarily from compensation costs due to the realignment of the timing of merit and grant cycles and impact from investments in analytical capabilities (in both Ratings and CRISIL).

Non-compensation costs also increased driven by the resumption of business travel from the lifting of COVID restrictions and the ramp up of technology investment spend, partially offset by lower occupancy costs from reduced real estate footprint.

Operating profit decreased 36%, with an unfavorable impact from foreign exchange rates of 1 percentage point.

Excluding the impact employee severance charges in 2022, operating profit decreased 35% primarily due to a decline in revenue partially offset by a decrease in expenses.

The decrease in expenses was driven by lower incentive costs, lower occupancy costs from reduced real estate footprint, and lower project amortization costs, partially offset by higher compensation costs driven by additional headcount and annual merit and promotion increases, resumption of business travel from the lifting of COVID restrictions, and higher legal fees.

Revenue decreased 20%, with an unfavorable impact from foreign exchange rates of 2 percentage points.

Transaction revenue decreased due to lower corporate bond ratings revenue driven by a decrease in high-yield and investment-grade issuance volumes and lower bank loan ratings.

A decrease in structured finance revenues primarily driven by decreased issuance of U.S.

CLOs also contributed to the decrease in transaction revenue.

Reduced issuance volumes mainly resulted from unfavorable macroeconomic conditions in 2022 compared to strong issuance levels in the prior year period.

Non-transaction revenue increased primarily due to an increase in revenue at our CRISIL subsidiary and an increase in surveillance revenue, partially offset by a decrease in entity credit ratings revenue and lower RES revenue.

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

Operating profit decreased 31%, with an unfavorable impact from foreign exchange rates of 1 percentage point.

Excluding the impact of employee severance charges in 2022 of 1 percentage point partially offset by lower amortization of intangibles from acquisitions of 1 percentage point, operating profit decreased 30% primarily due to a decline in revenue partially offset by a slight decrease in expenses.

The decrease in expenses was driven by lower incentive costs, lower occupancy costs from reduced real estate footprint, and lower project amortization costs, partially offset by higher compensation costs driven by additional headcount and annual merit and promotion increases, the resumption of business travel from the lifting of COVID restrictions and legal fees.

Market Issuance Volumes

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The following tables depict changes in issuance levels as compared to the prior year based on data from SDC Platinum for Corporate bond issuance and based on a composite of external data feeds and Ratings' internal estimates for Structured Finance issuance.

First Quarter

Second Quarter

Compared to Prior Year Year-to-Date

Compared to Prior Year

Corporate Bond Issuance * U.S.

Europe Global U.S.

Europe Global

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Total issuance **

(47)% (51)% (34)% (38)% (31)% (22)%

* Includes Industrials and Financial Services.

** Includes rated and non-rated issuance

• Corporate issuance was down in the U.S.

and Europe for the quarter driven by weakness in high-yield and investment-grade issuance reflecting unfavorable macroeconomic conditions in 2022 compared to strong issuance levels in the prior year period.

First Quarter Compared to Prior Year

and Europe for the quarter and year-to-date driven by reflecting unfavorable macroeconomic conditions in 2022 compared to strong issuance levels in the prior year periods.

Second Quarter Compared to Prior Year Year-to-Date Compared to Prior Year

Structured Finance Issuance U.S.

Europe Global U.S.

Europe Global

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Total issuance (23)% (7)% (17)% (8)% 12% 4%

* Represents no activity in 2022 and 2021.

* Represents no activity in 2021.

• ABS issuance increased in the U.S.

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reflecting increased market volume in Prime, Performing and Credit Risk Transfers.

RMBS issuance increased in Europe in the quarter reflecting growth in Performing loans.

RMBS issuance decreased in Europe in the quarter reflecting a decline in Performing loans.

• Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe increased from a low 2021 base as cheaper government funding programs slowed down.

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Commodity Insights provides essential price data, analytics, industry insights and software & services, enabling the commodity and energy markets to perform with greater transparency and efficiency.

Commodity Insights includes the following business lines:

• Energy & Resources Data & Insights — includes data, news, insights, and analytics for petroleum, gas, power & renewables, petrochemicals, metals & steel, agriculture, and other commodities;

• Price Assessments — includes price assessments and benchmarks, forward curves, and market reports;

• Upstream Data & Insights — includes exploration & production data and insights, software and analytics;

• Advisory & Transactional Services — includes consulting services, conferences, events and global trading services.

Commodity Insights revenue is generated primarily through the following sources:

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• Non-subscription revenue — conference sponsorship, consulting engagements, events, and perpetual software licenses.

The following table provides revenue and segment operating profit information for the three months ended March 31:

(in millions) 2022 2021 % Change

The following table provides revenue and segment operating profit information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 438 $ 252 74% $ 801 $ 492 63%

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Sales usage-based royalties $ 15 $ 16 (6)% $ 33 $ 32 6%

Non-subscription revenue $ 48 $ 1 N/M

Non-subscription revenue $ 26 $ 3 N/M $ 74 $ 5 N/M

% of total revenue:

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Note – In the first quarter of 2022, the Market Intelligence Commodities business was transferred to the Commodity Insights segment and prior-year amounts have been reclassified to conform with current presentation.

1 2022 includes employee severance costs of $7 million and acquisition-related costs of $2 million.

2022 and 2021 includes amortization of intangibles from acquisitions of $13 million and $2 million, respectively.

Revenue increased 51% primarily due to the impact of the merger with IHS Markit, higher conference revenue driven by the return of in-person attendance at Commodity Insights conferences in 2022 compared to virtual events in 2021 and 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 Fuel Oil and Iron Ore also contributed to revenue growth.

The Price Assessments, Energy & Resources Data & Insights, and Upstream Data & Insights businesses continue to be the most significant revenue drivers, followed by the Advisory & Transactional Services business, which contributed large growth in the first quarter of 2022.

1 Operating profit for the three and six months ended June 30, 2022 includes employee severance charges of $17 million and $24 million, respectively, and IHS Markit merger costs of $4 million and $6 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $32 million and $2 million for the three months ended June 30, 2022 and 2021, respectively, and $45 million and $4 million for the six months ended June 30, 2022 and 2021, respectively.

Revenue increased 74% primarily due to the impact of the merger with IHS Markit and continued demand for market data and market insights products driven by expanded product offerings to our existing customers under enterprise use contracts.

The Energy & Resources Data & Insights, Price Assessments and Upstream Data & Insights businesses continue to be the most significant revenue drivers, followed by the Advisory & Transactional Services business.

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

Operating profit increased 1%.

Excluding the impact of higher amortization of intangibles from acquisitions of 8 percentage points, employee severance charges in 2022 of 5 percentage points and acquisition-related costs in 2022 of 1 percentage point, operating profit increased 32%.

The increase was primarily due to revenue growth partially offset by expenses associated with the merger with IHS Markit, an increase in costs related to the Commodity Insights conferences in 2022, higher compensation costs and an increase in operating costs to support business initiatives at Commodity Insights.

Excluding the impact of higher amortization of intangibles from acquisitions of 21 percentage points, employee severance charges in 2022 of 12 percentage points and IHS Markit merger costs in 2022 of 3 percentage points, operating profit increased 37%.

The increase was primarily due to revenue growth partially offset by expenses associated with the merger with IHS Markit, higher compensation costs, the resumption of business travel from the lifting of COVID restrictions and an increase in operating costs to support business initiatives at Commodity Insights.

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

For a further discussion of competitive and other risks inherent in our Commodity Insights business, see Item 1A, Risk Factors

in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

Revenue increased 63% primarily due to the impact of the merger with IHS Markit, continued demand for market data and market insights products driven by expanded product offerings to our existing customers under enterprise use contracts and higher conference revenue driven by the return of in-person attendance at Commodity Insights conferences in 2022 compared to virtual events in 2021.

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

Operating profit increased 9%.

Excluding the impact of higher amortization of intangibles from acquisitions of 15 percentage points, employee severance charges in 2022 of 8 percentage points and IHS Markit merger costs in 2022 of 2 percentage points, operating profit increased 34%.

The increase was primarily due to revenue growth partially offset by expenses associated with the merger with IHS Markit, an increase in costs related to the Commodity Insights conferences in 2022, higher compensation costs, the resumption of business travel from the lifting of COVID restrictions and an increase in operating costs to support business initiatives at Commodity Insights.

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

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

For a further discussion of the legal and regulatory matters see Note 12 – Commitments and Contingencies to the consolidated financial statements of this Form 10-Q.

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Mobility also sells a range of services to financial institutions, to support their marketing, insurance underwriting and claims management activities;

• Non-subscription revenue — One-time transactional sales of data that are non-cyclical in nature – and that are usually tied to underlying business metrics such as OEM marketing spend or safety recall activity – as well as consulting and advisory services.

• Non-subscription revenue — One-time transactional sales of data that are non-cyclical in nature – and that are usually

tied to underlying business metrics such as OEM marketing spend or safety recall activity – as well as consulting and advisory services.

The Mobility business was acquired in connection with the merger with IHS Markit on February 28, 2022 and financial results are included since the date of acquisition.

The following table provides revenue and segment operating profit information for the three months ended March 31:

(in millions) 2022 2021 % Change

Revenue $ 115 $ — N/M

Subscription revenue $ 86 $ — N/M

Non-subscription revenue $ 29 $ — N/M

The following table provides revenue and segment operating profit information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 337 $ — N/M $ 452 $ — N/M

Subscription revenue $ 264 $ — N/M $ 350 $ — N/M

Non-subscription revenue $ 73 $ — N/M $ 102 $ — N/M

% of total revenue:

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Non-subscription revenue 22 % — % 23 % — %

revenue $ 92 $ — N/M

International revenue $ 23 $ — N/M

revenue $ 273 $ — N/M $ 365 $ — N/M

International revenue $ 64 $ — N/M $ 87 $ — N/M

% of total revenue:

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Operating profit 1

$ 58 $ — N/M $ 76 $ — N/M

Operating margin % 17 % — % 17 % — %

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

1 2022 includes acquisition-related costs of $1 million and amortization of intangibles from acquisitions of $24 million.

1 Operating profit for the three and six months ended June 30, 2022 includes acquisition-related costs of $3 million and $4 million, respectively, employee severance charges of $2 million, and IHS Markit merger costs of $1 million.

Operating profit includes amortization of intangibles from acquisitions of $77 million and $101 million for the three and six months ended June 30, 2022, respectively.

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

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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.

During the three and six months ended June 30, 2022, we recorded a pre-tax gain of $38 million ($31 million after tax) in Gain on dispositions in the consolidated statements of income related to the previously announced sale of a family of leveraged loan indices, within our Indices segment, to Morningstar.

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.

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• Data and customized index subscription fees — fees from supporting index fund management, portfolio analytics and research.

The following table provides revenue and segment operating profit information for the periods ended March 31:

(in millions) 2022 2021 % Change

The following table provides revenue and segment operating profit information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 339 $ 278 22% $ 661 $ 548 21%

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Net operating margin % 58 % 52 % 55 % 52 %

1 2022 includes employee severance charges of $2 million.

2022 and 2021 includes amortization of intangibles from acquisitions of $4 million and $1 million, respectively.

Revenue at Indices increased 19% primarily due to higher average levels of assets under management ("AUM") for ETFs and mutual funds, higher exchange-traded derivative revenue and the impact of the merger with IHS Markit.

Ending AUM for ETFs at March 31, 2022 was $2.892 trillion.

Excluding AUM related to the merger IHS Markit, ending AUM for ETFs increased 25% to $2.756 trillion and average levels of AUM for ETFs increased 27% to $2.680 trillion.

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

1 Operating profit for the three and six months ended June 30, 2022 includes a gain on disposition of $38 million, employee severance charges of $2 million and $4 million, respectively, and IHS Markit merger costs of $1 million.

Operating profit includes amortization of intangibles from acquisitions of $9 million and $1 million for the three months ended June 30, 2022 and 2021, respectively, and $13 million and $3 million for the six months ended June 30, 2022 and 2021, respectively.

Revenue at Indices increased 22% primarily due to higher exchange-traded derivative revenue driven by higher average trading volume from increased volatility, higher average levels of assets under management ("AUM") for mutual funds and the impact of the merger with IHS Markit.

Ending AUM for ETFs at June 30, 2022 was $2.459 trillion.

Excluding AUM related to the merger IHS Markit, ending AUM for ETFs decreased 4% to $2.335 trillion and average levels of AUM for ETFs increased 7% to $2.511 trillion compared to the three months ended June 30, 2021.

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

Operating profit increased 37%.

Excluding the impact of employee severance charges in 2022 of 1 percentage point and higher amortization of intangibles from acquisitions of 1 percentage point, operating profit increased 19%.

The impact of revenue growth was partially offset by an increase in strategic investments, higher compensation costs driven by annual merit increases, higher incentive costs and expenses associated with the merger with IHS Markit.

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

Excluding the impact of a gain on disposition of 19 percentage points, partially offset by higher amortization of intangibles from acquisitions of 4 percentage points and employee severance charges in 2022 of 1 percentage point, operating profit increased 23%.

Revenue growth and lower incentive costs were partially offset by an increase in strategic investments, the resumption of business travel from the lifting of COVID restrictions and the impact of the merger with IHS Markit.

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

Revenue at Indices increased 21% primarily due to higher average levels of AUM for mutual funds and ETFs, higher exchange-traded derivative revenue driven by higher average trading volume from increased volatility and the impact of the merger with IHS Markit.

Ending AUM for ETFs at June 30, 2022 was $2.459 trillion.

Excluding AUM related to the merger IHS Markit, ending AUM for ETFs decreased 4% to $2.335 trillion and average levels of AUM for ETFs increased 16% to $2.593 trillion compared to the six months ended June 30, 2021.

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

Operating profit increased 27%.

Excluding the impact of a gain on disposition of 10 percentage points, partially offset by higher amortization of intangibles from acquisitions of 3 percentage points and employee severance charges in 2022 of 1 percentage point, operating profit increased 21%.

The impact of revenue growth and lower incentive costs were partially offset by an increase in strategic investments, higher compensation costs driven by annual merit increases, the resumption of business travel from the lifting of COVID restrictions and the impact of the merger with IHS Markit.

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

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

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Our offerings utilize advanced knowledge discovery technologies, research tools, and software-based engineering decision engines to advance innovation, maximize productivity, improve quality and reduce risk.

Engineering Solution's revenue is generated primarily through the following sources:

Engineering Solutions' revenue is generated primarily through the following sources:

• Subscription revenue — primarily from subscriptions to our Product Design offerings providing standards, codes and specifications;

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The Engineering Solutions business was acquired in connection with the merger with IHS Markit on February 28, 2022 and financial results are included since the date of acquisition.

The following table provides revenue and segment operating profit information for the three months ended March 31:

(in millions) 2022 2021 % Change

Revenue $ 33 $ — N/M

Subscription revenue $ 30 $ — N/M

Non-subscription revenue $ 3 $ — N/M

The following table provides revenue and segment operating profit information for the periods ended June 30:

(in millions) Three Months Six Months

2022 2021 % Change 2022 2021 % Change

Revenue $ 96 $ — N/M $ 129 $ — N/M

Subscription revenue $ 89 $ — N/M $ 119 $ — N/M

Non-subscription revenue $ 7 $ — N/M $ 10 $ — N/M

% of total revenue:

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Non-subscription revenue 7 % — % 8 % — %

revenue $ 18 $ — N/M

International revenue $ 15 $ — N/M

revenue $ 53 $ — N/M $ 71 $ — N/M

International revenue $ 43 $ — N/M $ 58 $ — N/M

% of total revenue:

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Operating profit 1

$ 1 $ — N/M $ 2 $ — N/M

Operating margin % 1 % — % 1 % — %

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

1 2022 includes employee severance charges of $1 million and amortization of intangibles from acquisitions of $4 million.

1 Operating profit for three and six months ended June 30, 2022 includes employee severance charges of $1 million and $2 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $15 million and $19 million for the three and six months ended June 30, 2022, respectively.

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

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Cash Flow Overview

Cash, cash equivalents, and restricted cash were $4,407 million as of March 31, 2022, a decrease of $2,098 million from December 31, 2021.

The following table provides cash flow information for the three months ended March 31:

Cash, cash equivalents, and restricted cash were $3,573 million as of June 30, 2022, a decrease of $2,932 million from December 31, 2021.

The following table provides cash flow information for the six months ended June 30:

(in millions) 2022 2021 % Change

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Financing activities $ (7,268) $ (526) N/M

In the first three months of 2022, free cash flow decreased $530 million to $151 million compared to $681 million in the first three months of 2021.

In the first six months of 2022, free cash flow decreased $1,038 million to $510 million compared to $1,548 million in the first six months of 2021.

The decrease is primarily due to a decrease in cash provided by operating activities as discussed below.

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Capital expenditures include purchases of property and equipment and additions to technology projects.

See “Reconciliation of Non-GAAP Financial Information” below for a

reconciliation of cash flow provided by operating activities, the most directly comparable U.S.

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.

Operating activities

Cash provided by operating activities decreased $546 million to $222 million for the first three months of 2022.

The decrease is mainly due to an increase in IHS Markit merger costs and a grant payment to the S&P Global Foundation in 2022.

Cash provided by operating activities decreased $1,015 million to $676 million for the first six months of 2022.

The decrease is mainly due to an increase in IHS Markit merger costs, higher taxes paid on divestitures and a grant payment to the S&P Global Foundation in 2022.

Investing activities

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

Cash provided by investing activities was $2,901 million for the first three months of 2022 compared to cash used for investing activities of $24 million in the first three months of 2021, primarily due to cash received from the dispositions of CUSIP Global Services and Oil Price Information Services in 2022.

Cash provided by investing activities was $3,745 million for the first six months of 2022 compared to cash used for investing activities of $33 million in the first six months of 2021, primarily due to cash received from the dispositions of CUSIP Global Services, Oil Price Information Services, the Leveraged Commentary and Data business and a related family of leveraged loan indices, and the Base Chemicals business in 2022.

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

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

Cash used for financing activities increased $4,912 million to $5,205 million for the first three months of 2022.

Cash used for financing activities increased $6,742 million to $7,268 million for the first six months of 2022.

The increase is primarily attributable to an increase in cash used for share repurchases in 2022.

During the three months ended March 31, 2022, we purchased a total of 15.2 million shares for $7.0 billion of cash.

During the three months ended March 31, 2021, we did not use cash to repurchase shares.

During the six months ended June 30, 2022, we purchased a total of 19.0 million shares for $8.5 billion of cash.

During the six months June 30, 2021, we did not use cash to repurchase shares.

See Note 8 — Equity to the consolidated financial statements of this Form 10-Q for further discussion.

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On February 25, 2022, we exercised the accordion feature which increased the total commitments available under our credit facility from $1.5 billion to $2.0 billion.

As of March 31, 2022 and December 31, 2021, there was no commercial paper outstanding.

As of June 30, 2022 and December 31, 2021, there was no commercial paper outstanding.

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.

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On February 28, 2022, the Board of Directors approved a quarterly common stock dividend of $0.85 per share.

The quarterly dividend will increase from $0.77 to $0.85 per share in the second quarter.

The quarterly dividend increased from $0.77 to $0.85 per share in the second quarter.

Supplemental Guarantor Financial Information

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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 for the three months ended March 31, 2022 are as follows:

Summarized results of operations for the periods ended June 30, 2022 are as follows:

Three Months Six Months

(in millions) 2022 2022

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Net income attributable to S&P Global Inc.

Summarized balance sheet information as of March 31, 2022 and December 31, 2021 is as follows:

(in millions) March 31, December 31,

Summarized balance sheet information as of June 30, 2022 and December 31, 2021 is as follows:

(in millions) June 30, December 31,

Current assets (excluding intercompany from Non-Obligor Group) $ 2,504 $ 6,124

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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 for the three months ended March 31:

The following table presents a reconciliation of our cash flow provided by operating activities to free cash flow for the six months ended June 30:

(in millions) 2022 2021 % Change

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This report contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995.

These statements, including statements about COVID-19 and the merger (the “Merger”) between a subsidiary of the Company and IHS Markit Ltd.

These statements, including statements about COVID-19 and the completed merger (the “Merger”) between a subsidiary of the Company and IHS Markit Ltd.

(“IHS Markit”), which express management’s current views concerning future events, trends, contingencies or results, appear at various places in this report and use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would.” For example, management may use forward-looking statements when addressing topics such as:

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• the Company’s ability to meet expectations regarding the accounting and tax treatments of the Merger;

• the health of debt and equity markets, including credit quality and spreads, the level of liquidity and future debt issuances, demand for investment products that track indices and assessments and trading volumes of certain exchange traded derivatives;

• the demand and market for credit ratings in and across the sectors and geographies where the Company operates;

• the Company’s ability to successfully recover should it experience a disaster or other business continuity problem from a hurricane, flood, earthquake, terrorist attack, pandemic, security breach, cyber attack, data breach, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the ongoing COVID-19 pandemic;

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• the outcome of litigation, government and regulatory proceedings, investigations and inquiries;

• the demand and market for credit ratings in and across the sectors and geographies where the Company operates;

• concerns in the marketplace affecting the Company’s credibility or otherwise affecting market perceptions of the integrity or utility of independent credit ratings, benchmarks and indices;

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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-Q

Item 2. Management’s Discussion and Analysis