S&P Global Inc. 10-Q

Item 1. Financial Statements S&P Global Inc. Consolidated Statements of Income (Unaudited) (in millions, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenue $ 2,993 $ 2,106 $ 5,383 $ 4,122 Expenses: Operating-related expenses 1,011 533 1,760 1,055 Selling and general expenses 764 374 1,722 740 Depreciation 36 23 62 42 Amortization of intangibles 267 22 379 53 Total expenses 2,078 952 3,923 1,890 Gain on dispositions ( 556 ) — ( 1,899 ) ( 2 ) Equity in income on unconsolidated subsidiaries ( 11 ) — ( 15 ) — Operating profit 1,482 1,154 3,374 2,234 Other income, net ( 1 ) ( 22 ) ( 50 ) ( 29 ) Interest expense, net 90 32 147 63 Loss on extinguishment of debt, net 2 — 19 — Income before taxes on income 1,391 1,144 3,258 2,200 Provision for taxes on income 340 287 908 534 Net income 1,051 857 2,350 1,666 Less: net income attributable to noncontrolling interests ( 79 ) ( 59 ) ( 143 ) ( 113 ) Net income attributable to S&P Global Inc. $ 972 $ 798 $ 2,207 $ 1,553 Earnings per share attributable to S&P Global Inc. common shareholders: Net income: Basic $ 2.87 $ 3.31 $ 7.19 $ 6.45 Diluted $ 2.86 $ 3.30 $ 7.17 $ 6.42 Weighted-average number of common shares outstanding: Basic 338.0 240.8 306.8 240.7 Diluted 339.3 241.8 308.0 241.7 Actual shares outstanding at period end 336.2 241.0 See accompanying notes to the unaudited consolidated financial statements. 4 S&P Global Inc. Consolidated Statements of Comprehensive Income (Unaudited) (in millions) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 1,051 $ 857 $ 2,350 $ 1,666 Other comprehensive income: Foreign currency translation adjustments ( 95 ) 38 ( 116 ) 13 Income tax effect ( 22 ) 7 ( 27 ) 2 ( 117 ) 45 ( 143 ) 15 Pension and other postretirement benefit plans ( 4 ) ( 1 ) 1 20 Income tax effect 1 — — ( 4 ) ( 3 ) ( 1 ) 1 16 Unrealized gain (loss) on cash flow hedges 122 ( 216 ) 229 ( 214 ) Income tax effect ( 31 ) 56 ( 57 ) 56 91 ( 160 ) 172 ( 158 ) Comprehensive income 1,022 741 2,380 1,539 Less: comprehensive income attributable to nonredeemable noncontrolling interests ( 7 ) ( 8 ) ( 12 ) ( 10 ) Less: comprehensive income attributable to redeemable noncontrolling interests ( 72 ) ( 51 ) ( 131 ) ( 103 ) Comprehensive income attributable to S&P Global Inc. $ 943 $ 682 $ 2,237 $ 1,426 See accompanying notes to the unaudited consolidated financial statements. 5 S&P Global Inc. Consolidated Balance Sheets (in millions) June 30, 2022 December 31, 2021 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,571 $ 6,497 Restricted cash 2 8 Accounts receivable, net of allowance for doubtful accounts: 2022 - $ 43 ; 2021 - $ 26 2,125 1,650 Prepaid and other current assets 537 334 Assets of a business held for sale — 321 Total current assets 6,235 8,810 Property and equipment, net of accumulated depreciation: 2022 - $ 970 ; 2021 - $ 620 332 241 Right of use assets 557 426 Goodwill 34,444 3,506 Other intangible assets, net 20,059 1,285 Equity investment in unconsolidated subsidiaries 1,859 165 Other non-current assets 837 593 Total assets $ 64,323 $ 15,026 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 385 $ 205 Accrued compensation and contributions to retirement plans 431 607 Short-term debt 14 — Income taxes currently payable 166 90 Unearned revenue 2,933 2,217 Other current liabilities 1,029 547 Liabilities of a business held for sale — 149 Total current liabilities 4,958 3,815 Long-term debt 10,776 4,114 Lease liabilities — non-current 632 492 Pension and other postretirement benefits 267 262 Deferred tax liability — non-current 4,449 174 Other non-current liabilities 441 633 Total liabilities 21,523 9,490 Redeemable noncontrolling interest (Note 8) 3,294 3,429 Commitments and contingencies (Note 12) Equity: Common stock, $ 1 par value: authorized - 600 million shares; issued: 2022 - 415 million shares; 2021 - 294 million shares 415 294 Additional paid-in capital 43,242 1,031 Retained income 17,298 15,017 Accumulated other comprehensive loss ( 811 ) ( 841 ) Less: common stock in treasury ( 20,711 ) ( 13,469 ) Total equity — controlling interests 39,433 2,032 Total equity — noncontrolling interests 73 75 Total equity 39,506 2,107 Total liabilities and equity $ 64,323 $ 15,026 See accompanying notes to the unaudited consolidated financial statements. 6 S&P Global Inc. Consolidated Statements of Cash Flows (Unaudited) (in millions) Six Months Ended June 30, 2022 2021 Operating Activities: Net income $ 2,350 $ 1,666 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 62 42 Amortization of intangibles 379 53 Provision for losses on accounts receivable 12 13 Deferred income taxes ( 91 ) ( 47 ) Stock-based compensation 143 50 Gain on dispositions ( 1,899 ) ( 2 ) Loss on extinguishment of debt, net 19 — Other 94 22 Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: Accounts receivable 387 153 Prepaid and other current assets ( 31 ) ( 71 ) Accounts payable and accrued expenses ( 285 ) ( 199 ) Unearned revenue ( 150 ) ( 76 ) Other current liabilities ( 265 ) ( 26 ) Net change in prepaid/accrued income taxes 90 100 Net change in other assets and liabilities ( 139 ) 13 Cash provided by operating activities 676 1,691 Investing Activities: Capital expenditures ( 40 ) ( 25 ) Acquisitions, net of cash acquired 275 ( 10 ) Proceeds from dispositions 3,506 2 Changes in short-term investments 4 — Cash provided by (used for) investing activities 3,745 ( 33 ) Financing Activities: Payments on short-term debt, net ( 219 ) — Proceeds from issuance of senior notes, net 5,395 — Payments on senior notes ( 3,684 ) — Dividends paid to shareholders ( 472 ) ( 371 ) Proceeds from noncontrolling interest holders 410 — Distributions to noncontrolling interest holders ( 126 ) ( 118 ) Repurchase of treasury shares ( 8,503 ) — Exercise of stock options 5 7 Employee withholding tax on share-based payments ( 74 ) ( 44 ) Cash used for financing activities ( 7,268 ) ( 526 ) Effect of exchange rate changes on cash ( 85 ) ( 33 ) Net change in cash, cash equivalents, and restricted cash ( 2,932 ) 1,099 Cash, cash equivalents, and restricted cash at beginning of period 6,505 4,122 Cash, cash equivalents, and restricted cash at end of period $ 3,573 $ 5,221 See accompanying notes to the unaudited consolidated financial statements. 7 S&P Global Inc. Consolidated Statements of Equity (Unaudited) Three Months Ended June 30, 2022 (in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less: Treasury Stock Total SPGI Equity Noncontrolling Interests Total Equity Balance as of March 31, 2022 $ 415 $ 43,445 $ 16,065 $ ( 782 ) $ 19,441 $ 39,702 $ 79 $ 39,781 Comprehensive income 1 972 ( 29 ) 943 7 950 Dividends (Dividend declared per common share — $ 0.85 per share) ( 286 ) ( 286 ) ( 10 ) ( 296 ) Share repurchases ( 225 ) 1,275 ( 1,500 ) ( 1,500 ) Employee stock plans 22 ( 5 ) 27 27 Change in redemption value of redeemable noncontrolling interest 548 548 548 Other ( 1 ) ( 1 ) ( 3 ) ( 4 ) Balance as of June 30, 2022 $ 415 $ 43,242 $ 17,298 $ ( 811 ) $ 20,711 $ 39,433 $ 73 $ 39,506 Three Months Ended June 30, 2021 (in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less: Treasury Stock Total SPGI Equity Noncontrolling Interests Total Equity Balance as of March 31, 2021 $ 294 $ 935 $ 13,920 $ ( 648 ) $ 13,469 $ 1,032 $ 66 $ 1,098 Comprehensive income 1 798 ( 116 ) 682 8 690 Dividends (Dividend declared per common share — $ 0.77 per share) ( 185 ) ( 185 ) ( 7 ) ( 192 ) Employee stock plans 28 ( 4 ) 32 32 Change in redemption value of redeemable noncontrolling interest ( 296 ) ( 296 ) ( 296 ) Other — ( 1 ) ( 1 ) Balance as of June 30, 2021 $ 294 $ 963 $ 14,237 $ ( 764 ) $ 13,465 $ 1,265 $ 66 $ 1,331 8 Six Months Ended June 30, 2022 (in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less: Treasury Stock Total SPGI Equity Noncontrolling Interests Total Equity Balance as of December 31, 2021 $ 294 $ 1,031 $ 15,017 $ ( 841 ) $ 13,469 $ 2,032 $ 75 $ 2,107 Comprehensive income 1 2,207 30 2,237 12 2,249 Dividends (Dividend declared per common share — $ 1.62 per share) ( 472 ) ( 472 ) ( 10 ) ( 482 ) Acquisition of IHS Markit 121 43,415 43,536 43,536 Share repurchases ( 1,275 ) 7,228 ( 8,503 ) ( 8,503 ) Employee stock plans 71 14 57 57 Change in redemption value of redeemable noncontrolling interest 547 547 547 Other ( 1 ) ( 1 ) ( 4 ) ( 5 ) Balance as of June 30, 2022 $ 415 $ 43,242 $ 17,298 $ ( 811 ) $ 20,711 $ 39,433 $ 73 $ 39,506 Six Months Ended June 30, 2021 (in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less: Treasury Stock Total SPGI Equity Noncontrolling Interests Total Equity Balance as of December 31, 2020 $ 294 $ 946 $ 13,367 $ ( 637 ) $ 13,461 $ 509 $ 62 $ 571 Comprehensive income 1 1,553 ( 127 ) 1,426 10 1,436 Dividends (Dividend declared per common share — $ 1.54 per share) ( 371 ) ( 371 ) ( 7 ) ( 378 ) Employee stock plans 17 4 13 13 Change in redemption value of redeemable noncontrolling interest ( 312 ) ( 312 ) ( 312 ) Other — 1 1 Balance as of June 30, 2021 $ 294 $ 963 $ 14,237 $ ( 764 ) $ 13,465 $ 1,265 $ 66 $ 1,331 1 Excludes comprehensive income of $ 72 million and $ 51 million for the three months ended June 30, 2022 and 2021, respectively, and $ 131 million and $ 103 million for the six months ended June 30, 2022 and 2021, respectively, attributable to our redeemable noncontrolling interest. See accompanying notes to the unaudited consolidated financial statements. 9 S&P Global Inc. Notes to the Consolidated Financial Statements (Unaudited) 1. Nature of Operations and Basis of Presentation S&P Global Inc. (together with its consolidated subsidiaries, "S&P Global," the “Company,” “we,” “us” or “our”) is a provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity, automotive and engineering markets. Our operations consist of six reportable segments: 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"). • Market Intelligence is a global provider of multi-asset-class data and analytics integrated with purpose-built workflow solutions. • Ratings is an independent provider of credit ratings, research, and analytics, offering investors and other market participants information, ratings and benchmarks. • Commodity Insights is the leading independent provider of information and benchmark prices for the commodity and energy markets. • Mobility is a leading provider of solutions serving the full automotive value chain including vehicle manufacturers (OEMs), automotive suppliers, mobility service providers, retailers, consumers, and finance and insurance companies. • Indices is a global index provider that maintains a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors. • 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 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. The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Therefore, the financial statements included herein should be read in conjunction with the financial statements and notes included in our Form 10-K for the year ended December 31, 2021 (our “Form 10-K”). Certain prior-year amounts have been reclassified to conform with current presentation. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the interim periods have been included. The operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, valuation of long-lived assets, goodwill and other intangible assets, pension plans, incentive compensation and stock-based compensation, income taxes, contingencies and redeemable noncontrolling interests. Since the date of our Form 10-K, there have been no material changes to our critical accounting policies and estimates. Restricted Cash Restricted cash included in our consolidated balance sheets was $ 2 million and $ 8 million as of June 30, 2022 and December 31, 2021, respectively. Restricted cash primarily consisted of cash required to be on deposit under contractual agreements in connection with certain acquisitions and dispositions. 10 Contract Assets Contract assets include unbilled amounts from when the Company transfers service to a customer before a customer pays consideration or before payment is due. As of June 30, 2022 and December 31, 2021, contract assets were $ 78 million and $ 9 million, respectively, and are included in accounts receivable in our consolidated balance sheets. Unearned Revenue We record unearned revenue when cash payments are received in advance of our performance. The increase in the unearned revenue balance at June 30, 2022 compared to December 31, 2021 is primarily driven by cash payments received in advance of satisfying our performance obligations, partially offset by $ 1.3 billion of revenues recognized that were included in the unearned revenue balance at the beginning of the period. Remaining Performance Obligations Remaining performance obligations represent the transaction price of contracts for work that has not yet been performed. As of June 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 4.1 billion. We expect to recognize revenue on approximately half and three-quarters of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter. We do not disclose the value of unfulfilled performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts where revenue is a usage-based royalty promised in exchange for a license of intellectual property. Costs to Obtain a Contract We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that the costs associated with certain sales commission programs are incremental to the costs to obtain contracts with customers and therefore meet the criteria to be capitalized. Total capitalized costs to obtain a contract were $ 140 million and $ 137 million as of June 30, 2022 and December 31, 2021, respectively, and are included in prepaid and other current assets and other non-current assets on our consolidated balance sheets. The capitalized asset will be amortized over a period consistent with the transfer to the customer of the goods or services to which the asset relates, calculated based on the customer term and the average life of the products and services underlying the contracts which has been determined to be approximately 5 years. The expense is recorded within selling and general expenses. We expense sales commissions when incurred if the amortization period is one year or less. These costs are recorded within selling and general expenses. 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. Other Income, net The components of other income, net for the periods ended June 30 are as follows: (in millions) Three Months Six Months 2022 2021 2022 2021 Other components of net periodic benefit cost $ ( 7 ) $ ( 11 ) $ ( 11 ) $ ( 22 ) Net loss (gain) from investments $ 6 $ ( 11 ) $ ( 39 ) $ ( 7 ) Other income, net $ ( 1 ) $ ( 22 ) $ ( 50 ) $ ( 29 ) 11 2. Acquisitions and Divestitures Acquisitions 2022 Merger with IHS Markit On February 28, 2022, we completed the merger with 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. Upon completion of the merger with IHS Markit, IHS Markit stockholders received 113.8 million shares of S&P Global’s common stock, at an exchange ratio of 0.2838 S&P Global shares for each share of IHS Markit common stock, with cash paid in lieu of fractional shares. The Company also issued approximately 0.9 million replacement equity award shares for IHS Markit equity awards that were assumed pursuant to the merger agreement. The preliminary estimated fair value of the consideration transferred for IHS Markit was approximately $ 43.5 billion as of the merger date, which consisted of the following: (in millions, except for share and per share data) February 28, 2022 Number of shares IHS Markit issued and outstanding* 400,988,207 Exchange ratio 0.2838 Number of S&P Global common stock transferred to IHS Markit stockholders 113,800,453 Closing price per share of S&P Global common stock** $ 380.89 Fair value of S&P Global common stock transferred IHS Markit stockholders $ 43,345 Fair value of S&P Global replacement equity awards attributable to pre-combination service $ 191 Total equity consideration $ 43,536 *Excludes 25,219,470 IHS Markit shares held by the Markit Group Holdings Limited Employee Benefit Trust ("EBT"). The shares held by the EBT were converted in the merger into S&P Global shares at the exchange ratio of 0.2838 and will continue to be held by the trustee in the EBT. **Based on S&P Global's closing stock price on February 25, 2022. Preliminary Allocation of Purchase Price The merger with IHS Markit was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”). The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, of which $ 699 million is expected to be deductible for tax purposes. Goodwill is primarily attributed to synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from duplicative overhead, streamlined operations and enhanced operational efficiency. Goodwill associated with the merger has not yet been assigned to the Company’s reportable segments. The June 30, 2022 consolidated balance sheet includes the assets and liabilities of IHS Markit, which have been measured at fair value as of the acquisition date. The preliminary allocation of purchase price recorded for IHS Markit was as follows: 12 (in millions) February 28, 2022 Assets acquired Cash and cash equivalents $ 310 Accounts receivable, net 968 Prepaid and other current assets 242 Assets of a business held for sale 1,519 Property and equipment 122 Right of use assets 240 Goodwill 30,986 Other intangible assets 19,162 Equity investment in unconsolidated subsidiaries 1,644 Other non-current assets 86 Total assets acquired $ 55,279 Liabilities assumed Account payable $ 174 Accrued compensation 81 Short-term debt 968 Unearned revenue 1,053 Other current liabilities 584 Liabilities of a business held for sale 72 Long-term debt 4,191 Lease liabilities - non-current 231 Deferred tax liability - non-current 4,333 Other non-current liabilities 56 Total liabilities assumed $ 11,743 Total consideration transferred $ 43,536 The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The fair values of the assets acquired and liabilities assumed, including the identifiable assets acquired, have been preliminarily determined using the income and cost approaches, and are partially based on inputs that are unobservable. For intangible assets, these inputs include forecasted future cash flows, revenue growth rates, customer attrition rates and discount rates that require judgement and are subject to change. Differences between the preliminary estimates and final accounting will occur, and those differences could be material. The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company’s continuing review of matters related to the acquisition. The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. Acquired Identifiable Intangible Assets The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired and their estimated useful lives: 13 (in millions) Fair Value Weighted Average Useful Lives Customer relationships $ 14,082 25 years Trade names and trademarks 1,459 14 years Developed technology 1,042 10 years Databases 2,579 12 years Total Identified Intangible Assets $ 19,162 21 years Expected Amortization Expense Expected amortization expense for the Company's intangible assets over the next five years for the years ended December 31 is as follows: (in millions) 2022 2023 2024 2025 2026 Amortization expense $ 926 $ 1,090 $ 1,089 $ 1,053 $ 1,038 Acquisition-Related Expenses The Company incurred acquisition-related costs of $ 135 million and $ 379 million related to the IHS Markit merger for the three and six months ended June 30, 2022, respectively, and $ 50 million and $ 99 million for the three and six months ended June 30, 2021, respectively. These costs were included in selling and general expenses within the Company’s consolidated statements of income for the three and six months ended June 30, 2022, and June 30, 2021, respectively. Pro forma information Since the acquisition date, the results of operations for IHS Markit of $ 1.122 billion of revenue and $ 196 million of operating profit for the three months ended June 30, 2022, and $ 1.548 billion of revenue and $ 249 million of operating profit for the six months ended June 30, 2022, respectively, have been included within the accompanying consolidate d statements of income. The following unaudited supplemental pro forma combined financial information presents the Company’s results of operations for the three and six months ended June 30, 2022 and 2021 as if the acquisition of IHS Markit had occurred on January 1, 2021. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the Company’s operating results that may have actually occurred had the acquisition of IHS Markit been completed on January 1, 2021. The pro forma results do not include anticipated synergies or other expected benefits of the acquisition. Three months ended June 30 Six months ended June 30 (in millions) 2022 2021 2022 2021 Revenue $ 2,970 $ 3,113 $ 6,042 $ 6,135 Net income $ 961 $ 865 $ 2,491 $ 1,539 The unaudited pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the acquisition had occurred on January 1, 2021 to give effect to certain events the Company believes to be directly attributable to the acquisition. 2021 During the three and six months ended June 30, 2021, we did not complete any material acquisitions. Divestitures 2022 14 As a condition of securing regulatory approval for the merger, S&P Global and IHS Markit agreed to divest of certain of their businesses. S&P Global’s divestitures include CUSIP Global Services, its Leveraged Commentary and Data (“LCD”) business and a related family of leveraged loan indices while IHS Markit’s divestitures include Oil Price Information Services (“OPIS”); Coal, Metals and Mining; and PetroChem Wire businesses and its Base Chemicals business. In June of 2022, we completed the previously announced sale of 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 adjustment s. 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 no t recognize a gain on the sale of OPIS. 2021 During the six months ended June 30, 2021, we did not complete any dispositions. 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"), a business within our Market Intelligence segment, in July of 2019. Assets and Liabilities Held for Sale The components of assets and liabilities held for sale in the consolidated balance sheet consist of the following: (in millions) June 30, December 31, 2022 2021 1 Accounts Receivable, net $ — $ 59 Goodwill — 255 Other assets — 7 Assets of businesses held for sale $ — $ 321 Accounts payable and accrued expenses $ — $ 11 Unearned revenue — 138 Liabilities of businesses held for sale $ — $ 149 1 Assets and liabilities held for sale as of December 31, 2021 relate to CGS and LCD. 15 The operating profit of our businesses that were disposed of for the periods ended June 30 is as follows: (in millions) Three Months Six Months 2022 2021 2022 2021 Operating profit 2 $ 15 $ 42 $ 48 $ 84 2 The operating profit presented includes the revenue and recurring direct expenses associated with businesses disposed of or held for sale. The three and six months ended June 30, 2022 excludes pre-tax gains related to the sale LCD and a related family of leveraged loan indices of $ 518 million and $ 38 million, respectively. The six months ended June 30, 2022 also excludes a pre-tax gain related to the sale of CGS of $ 1.3 billion. The six months ended June 30, 2021 excludes a pre-tax gain related to the sale of SPIAS of $ 2 million. 3. Income Taxes The effective income tax rate was 24.5 % and 27.9 % for the three and six months ended June 30, 2022, respectively, and 25.1 % and 24.3 % for the three and six months ended 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 six months ended June 30, 2022 was primarily due to the tax charge on merger related divestitures and deal related non-deductible costs. At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary quarterly earnings. The tax expense or benefit related to significant unusual or infrequently occurring items that will be separately reported or reported net of their related tax effect, and are individually computed, is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs. The Company is continuously subject to tax examinations in various jurisdictions. As of June 30, 2022 and December 31, 2021, the total amount of federal, state and local, and foreign unrecognized tax benefits was $ 197 million and $ 147 million, respectively, exclusive of interest and penalties. We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating-related expense, respectively. As of June 30, 2022 and December 31, 2021, we had $ 32 million and $ 24 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits. Based on the current status of income tax audits, we believe that the total amount of unrecognized tax benefits may decrease by approximately $ 19 million in the next twelve months as a result of the resolution of local tax examinations. 16 4. Debt A summary of short-term and long-term debt outstanding is as follows: (in millions) June 30, 2022 December 31, 2021 5.0 % Senior Notes, due 2022 1 $ 14 $ — 4.125 % Senior Notes, due 2023 2 39 — 3.625 % Senior Notes, due 2024 3 48 — 4.75 % Senior Notes, due 2025 4 4 — 4.0 % Senior Notes, due 2025 5 — 696 4.0 % Senior Notes, due 2026 6 3 — 2.95 % Senior Notes, due 2027 7 496 496 2.45 % Senior Notes, due 2027 8 1,235 — 4.75 % Senior Notes, due 2028 9 830 — 4.25 % Senior Notes, due 2029 10 1,035 — 2.5 % Senior Notes, due 2029 11 496 496 2.7 % Sustainability-Linked Senior Notes, due 2029 12 1,232 — 1.25 % Senior Notes, due 2030 13 594 593 2.90 % Senior Notes, due 2032 14 1,470 — 6.55 % Senior Notes, due 2037 15 290 290 4.5 % Senior Notes, due 2048 16 272 273 3.25 % Senior Notes, due 2049 17 590 589 3.70 % Senior Notes, due 2052 18 974 — 2.3 % Senior Notes, due 2060 19 682 681 3.9 % Senior Notes, due 2062 20 486 — Total debt 10,790 4,114 Less: short-term debt including current maturities 14 — Long-term debt $ 10,776 $ 4,114 1 Interest payments are due semiannually on May 1 and November 1. 2 Interest payments are due semiannually on February 1 and August 1. 3 Interest payments are due semiannually on May 1 and November 1. 4 Interest payments are due semiannually on February 15 and August 15. 5 We made a $ 287 million payment on the early retirement of our 4.0 % senior notes in the second quarter of 2022. 6 Interest payments are due semiannually on March 1 and September 1. 7 Interest payments are due semiannually on January 22 and July 22, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 4 million. 8 Interest payments are due semiannually on March 1 and September 1, beginning on September 1, 2022, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 15 million. 9 Interest payments are due semiannually on February 1 and August 1. 10 Interest payments are due semiannually on May 1 and November 1. 11 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 4 million. 12 Interest payments are due semiannually on March 1 and September 1, beginning on September 1, 2022, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 18 million. 13 Interest payments are due semiannually on February 15 and August 15, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 6 million. 14 Interest payments are due semiannually on March 1 and September 1, beginning on September 1, 2022, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 30 million. 17 15 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 3 million. 16 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 11 million. 17 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 10 million. 18 Interest payments are due semiannually on March 1 and September 1, beginning on September 1, 2022, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 26 million. 19 Interest payments are due semiannually on February 15 and August 15, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 18 million. 20 Interest payments are due semiannually on March 1 and September 1, beginning on September 1, 2022, and as of June 30, 2022, the unamortized debt discount and issuance costs total $ 14 million. The fair value of our total debt borrowings was $ 9.7 billion and $ 4.4 billion as of June 30, 2022 and December 31, 2021, respectively, and was estimated based on quoted market prices. On February 28, 2022, we completed the merger with IHS Markit in an all-stock transaction. In the transaction, we assumed IHS Markit's publicly traded debt, with an outstanding principal balance of $ 4.6 billion, which was recorded at fair value of $ 4.9 billion on the acquisition date. Debt assumed consisted of the following: • 5.00 % Senior Notes due November 1, 2022 with an outstanding principal balance of $ 748 million. • 4.125 % Senior Notes due August 1, 2023 with an outstanding principal balance of $ 500 million. • 3.625 % Senior Notes due May 1, 2024 with an outstanding principal balance of $ 400 million. • 4.75 % Senior Notes due February 15, 2025 with an outstanding principal balance of $ 800 million. • 4.00 % Senior Notes due March 1, 2026 with an outstanding principal balance of $ 500 million. • 4.75 % Senior Notes due August 1, 2028 with an outstanding principal balance of $ 750 million. • 4.25 % Senior Notes due May 1, 2029 with an outstanding principal balance of $ 950 million. The adjustment to fair value of the Senior Notes of approximately $ 292 million on the acquisition date will be amortized as an adjustment to interest expense over the remaining contractual terms of the Senior Notes. On March 2, 2022, we completed the 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 exchange IHS Markit notes and cash. Of the approximately $ 4.6 billion in aggregate principal amount of IHS Markit's Senior Notes offered in the exchange, 96 % percent, or approximately $ 4.5 billion, were tendered and accepted. The portion not exchanged, approximately $ 175 million, remains outstanding across seven series of Senior Notes issued by IHS Markit. The Exchange Offer was treated as a debt modification for accounting purposes resulting in a portion of the unamortized fair value adjustment of the IHS Markit Senior Notes allocated to the new debt issued by S&P Global on the settlement date of the exchange. See Note 2 — Acquisitions and Divestitures for additional information on the merger. 18 On March 4, 2022, we issued $ 1,250 million of 2.45 % Senior Notes due 2027, $ 1,250 million of 2.7 % Sustainability-Linked Senior Notes due 2029, $ 1,500 million of 2.9 % Senior Notes due 2032, $ 1,000 million of 3.7 % Senior Notes due 2052, and $ 500 million of 3.9 % Senior Notes due 2062. The Notes are fully and unconditionally guaranteed by our wholly-owned subsidiary, Standard & Poor's Financial Services LLC. In the first quarter of 2022, we used a portion of the net proceeds from the new debt issuance to fund the redemption and extinguishment of the outstanding principal amount of our 4.125 % Senior Notes due 2023, 3.625 % Senior Notes due 2024, and our 4.0 % Senior Notes due 2026 which were former IHS Markit Notes that were exchanged to SPGI Notes as part of the Exchange Offer. In addition, we also used part of the net proceeds from the new debt issuance noted above to fund the early tender as well as a subsequent full redemption of our 5.0 % Senior Notes due 2022 and the 4.750 % Senior Notes due 2025, both of which were former IHS Markit Notes that were exchanged to SPGI Notes as part of the Exchange Offer, as well as our 4.0 % Senior Notes due 2025. The majority of these transactions settled within the first quarter of 2022, however, given the timing of certain redemptions, a lesser portion of these settled in the second quarter of 2022, including the redemption and extinguishment of the $ 287 million outstanding principal amount on our 4.0 % senior notes due in 2025, and a portion of the outstanding principal amounts of our 5.0 % senior notes due in 2022 and our 4.75 % senior notes due in 2025, of approximately $ 52 million and $ 247 million, respectively. 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. We have the ability to borrow a total of $ 2.0 billion through our commercial paper program, which is supported by our $ 2.0 billion five-year credit agreement (our "credit facility") that will terminate on April 26, 2026. On April 26, 2021, we entered into a revolving $ 1.5 billion five-year credit agreement that included an accordion feature which allowed the Company to increase the total commitments thereunder by up to a n addi tional $ 500 million, subject to certain customary terms and conditions. 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 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. We currently pay a commitment fee of 8 basis points. 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 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. 5. Derivative Instruments Our exposure to market risk includes changes in foreign exchange rates and interest rates. We have operations in foreign countries where the functional currency is primarily the local currency. For international operations that are determined to be extensions of the parent company, the U.S. dollar is the functional currency. We typically have naturally hedged positions in most countries from a local currency perspective with offsetting assets and liabilities. As of June 30, 2022 and December 31, 2021, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange rates and cross currency swap contracts to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates. During the twelve months ended December 31, 2021, we entered into a series of interest rate swaps to mitigate or hedge the adverse fluctuations in interest rates on our future debt refinancing. These contracts are recorded at fair value that is based on foreign currency exchange rates and interest rates in active markets; therefore, we classify these derivative contracts within Level 2 of the fair value hierarchy. We do not enter into any derivative financial instruments for speculative purposes. Undesignated Derivative Instruments During the six months ended June 30, 2022 and twelve months ended December 31, 2021, we entered into foreign exchange forward contracts in order to mitigate the change in fair value of specific assets and liabilities in the consolidated balance sheet. These forward contracts do not qualify for hedge accounting. As of June 30, 2022 and December 31, 2021, the aggregate notional value of these outstanding forward contracts was $ 1.1 billion and $ 376 million, respectively. The changes in fair value 19 of these forward contracts are recorded in prepaid and other assets or other current liabilities in the consolidated balance sheet with their corresponding change in fair value recognized in selling and general expenses in the consolidated statement of income. The amount recorded in prepaid and other current assets as of June 30, 2022 and December 31, 2021 was $ 2 million and $ 5 million, respectively. The amount recorded in other current liabilities as of June 30, 2022 and December 31, 2021 was $ 23 million and less than $ 1 million, respectively. The amount recorded in selling and general expense related to these contracts was a net loss of $ 49 million and $ 69 million for three and six months ended June 30, 2022 respectively, and a net gain of $ 3 million and a net loss of $ 3 million for three and six months ended June 30, 2021, respectively Net Investment Hedges During the twelve months ended December 31, 2021, we entered into cross currency swaps to hedge a portion of our net investment in one of our European subsidiaries against volatility in the Euro/U.S. dollar exchange rate. These swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2024, 2029 and 2030. As of June 30, 2022 and December 31, 2021, the notional value of our outstanding cross currency swaps designated as a net investment hedge was $ 1 billion. The changes in the fair value of these swaps are recognized in foreign currency translation adjustments, a component of other comprehensive income (loss), and reported in accumulated other comprehensive loss in our consolidated balance sheet. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. We have elected to assess the effectiveness of our net investment hedges based on changes in spot exchange rates. Accordingly, amounts related to the cross currency swaps recognized directly in net income for the three and six months ended June 30, 2022 represent net periodic interest settlements and accruals, which are recognized in interest expense, net. We recognized net interest expense of $ 8 million and $ 18 million for the three and six months ended June 30, 2022 and net interest income of $ 5 million and $ 9 million for the three and six months ended June 30, 2021, respectively. Cash Flow Hedges Foreign Exchange Forward Contracts During the six months ended June 30, 2022 and twelve months ended December 31, 2021, we entered into a series of foreign exchange forward contracts to hedge a portion of the Indian rupee, British pound, and Euro exposures through the second quarter of 2024 and the fourth quarter of 2023, respectively. These contracts are intended to offset the impact of movement of exchange rates on future revenue and operating costs and are scheduled to mature within twenty-four months . The changes in the fair value of these contracts are initially reported in accumulated other comprehensive loss in our consolidated balance sheet and are subsequently reclassified into revenue and selling and general expenses in the same period that the hedged transaction affects earnings. As of June 30, 2022, we estimate that $ 13 million of pre-tax loss related to foreign exchange forward contracts designated as cash flow hedges recorded in other comprehensive income is expected to be reclassified into earnings within the next twelve months. As of June 30, 2022 and December 31, 2021, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $ 493 million and $ 498 million, respectively. Interest Rate Swaps During the the twelve months ended December 31, 2021, we entered into a series of interest rate swaps. These contracts are intended to mitigate or hedge the adverse fluctuations in interest rates on our future debt refinancing and are scheduled to mature beginning in the first quarter of 2027. These interest rate swaps are designated as cash flow hedges. The changes in the fair value of these contracts are initially reported in accumulated other comprehensive loss in our consolidated balance sheet and will be subsequently reclassified into interest expense, net in the same period that the hedged transaction affects earnings. As of June 30, 2022, the aggregate notional value of our outstanding interest rate swaps designated as cash flow hedges was $ 1.4 billion. 20 The following table provides information on the location and fair value amounts of our cash flow hedges and net investment hedges as of June 30, 2022 and December 31, 2021: (in millions) June 30, December 31, Balance Sheet Location 2022 2021 Derivatives designated as cash flow hedges: Prepaid and other current assets Foreign exchange forward contracts $ 6 $ 7 Other current liabilities Foreign exchange forward contracts $ 18 $ — Other non-current assets Interest rate swap contracts $ 62 Other non-current liabilities Interest rate swap contracts $ — $ 270 Derivatives designated as net investment hedges: Other non-current assets Cross currency swaps $ 93 $ — Other non-current liabilities Cross currency swaps $ — $ 17 The following table provides information on the location and amounts of pre-tax gains (losses) on our cash flow hedges and net investment hedges for the periods ended June 30: Three Months (in millions) Gain (Loss) recognized in Accumulated Other Comprehensive Loss (effective portion) Location of Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion) Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion) 2022 2021 2022 2021 Cash flow hedges - designated as hedging instruments Foreign exchange forward contracts $ ( 12 ) $ ( 6 ) Revenue, Selling and general expenses $ ( 1 ) $ 5 Interest rate swap contracts $ 135 $ ( 208 ) Interest expense, net $ ( 1 ) $ — Net investment hedges - designated as hedging instruments Cross currency swaps $ 80 $ 11 Interest expense, net $ ( 1 ) $ ( 3 ) Six Months (in millions) Gain (Loss) recognized in Accumulated Other Comprehensive Loss (effective portion) Location of Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion) Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion) 2022 2021 2022 2021 Cash flow hedges - designated as hedging instruments Foreign exchange forward contracts $ ( 18 ) $ ( 6 ) Revenue, Selling and general expenses $ 1 $ 10 Interest rate swap contracts $ 248 $ ( 206 ) Interest expense, net $ ( 2 ) $ — Net investment hedges - designated as hedging instruments Cross currency swaps $ 106 $ 26 Interest expense, net $ ( 2 ) $ ( 3 ) The activity related to the change in unrealized gains (losses) in accumulated other comprehensive loss was as follows for the periods ended June 30: 21 (in millions) Three Months Six Months 2022 2021 2022 2021 Cash Flow Hedges Foreign exchange forward contracts Net unrealized gains on cash flow hedges, net of taxes, beginning of period $ 1 $ 14 $ 6 $ 14 Change in fair value, net of tax ( 11 ) 3 ( 14 ) 8 Reclassification into earnings, net of tax 1 ( 5 ) ( 1 ) ( 10 ) Net unrealized (losses) gains on cash flow hedges, net of taxes, end of period $ ( 9 ) $ 12 $ ( 9 ) $ 12 Interest rate swap contracts Net unrealized losses (gains) on cash flow hedges, net of taxes, beginning of period $ ( 118 ) $ 2 $ ( 203 ) $ — Change in fair value, net of tax 101 ( 157 ) 185 ( 155 ) Reclassification into earnings, net of tax 1 — 2 — Net unrealized losses on cash flow hedges, net of taxes, end of period $ ( 16 ) $ ( 155 ) $ ( 16 ) $ ( 155 ) Net Investment Hedges Net unrealized losses on net investment hedges, net of taxes, beginning of period $ ( 2 ) $ ( 70 ) $ ( 17 ) $ ( 81 ) Change in fair value, net of tax 63 8 77 19 Reclassification into earnings, net of tax 1 3 2 3 Net unrealized gains (losses) on net investment hedges, net of taxes, end of period $ 62 $ ( 59 ) $ 62 $ ( 59 ) 6. Employee Benefits We maintain a number of active defined contribution retirement plans for our employees. The majority of our defined benefit plans are frozen. As a result, no new employees will be permitted to enter these plans and no additional benefits for current participants in the frozen plans will be accrued. We also have supplemental benefit plans providing senior management with supplemental retirement, disability and death benefits. Certain supplemental retirement benefits are based on final monthly earnings. In addition, we sponsor a voluntary 401(k) plan under which we may match employee contributions up to certain levels of compensation as well as profit-sharing plans under which we contribute a percentage of eligible employees' compensation to the employees' accounts. We also provide certain medical, dental and life insurance benefits for active and retired employees and eligible dependents. The medical and dental plans and supplemental life insurance plan are contributory, while the basic life insurance plan is noncontributory. We currently do not prefund any of these plans. We recognize the funded status of our retirement and postretirement plans in the consolidated balance sheets, with a corresponding adjustment to accumulated other comprehensive loss, net of taxes. The amounts in accumulated other comprehensive loss represent net unrecognized actuarial losses and unrecognized prior service costs. These amounts will be subsequently recognized as net periodic pension cost pursuant to our accounting policy for amortizing such amounts. Net periodic benefit cost for our retirement and postretirement plans other than the service cost component are included in other income, net in our consolidated statements of income. The components of net periodic benefit cost for our retirement plans and postretirement plans for the periods ended June 30 are as follows: 22 (in millions) Three Months Six Months 2022 2021 2022 2021 Service cost $ 1 $ 1 $ 1 $ 2 Interest cost 12 10 25 21 Expected return on assets ( 22 ) ( 26 ) ( 44 ) ( 52 ) Amortization of prior service credit / actuarial loss 3 5 6 9 Net periodic benefit cost $ ( 6 ) $ ( 10 ) $ ( 12 ) $ ( 20 ) Net periodic benefit cost related to our postretirement plans reflected in the table above was not material for the three and six months ended June 30, 2022 and 2021. As discussed in our Form 10-K, we changed certain discount rate assumptions for our retirement and postretirement plans and our expected return on assets assumption for our retirement plans which became effective on January 1, 2022. The effect of the assumption changes on retirement and postretirement expense for the three and six months ended June 30, 2022 did not have a material impact to our financial position, results of operations or cash flows. In the first six months of 2022, we contributed $ 4 million to our retirement plans and expect to make additional required contributions of approximately $ 7 million to our retirement plans during the remainder of the year. We may elect to make additional non-required contributions depending on investment performance or any potential deterioration of our pension plan status in the second half of 2022. 7. Stock-Based Compensation We issue stock-based incentive awards to our eligible employees under the 2019 Stock Incentive Plan ("2019 Plan") and to our eligible non-employee Directors under a Director Deferred Stock Ownership Plan. The 2019 Plan permits the granting of incentive stock options, nonqualified stock options, stock appreciation rights, performance stock, restricted stock and other stock-based awards. Total stock-based compensation expense primarily related to restricted stock and unit awards was $ 48 million and $ 143 million for the three and six months ended June 30, 2022, respectively, and $ 31 million and $ 50 million for the three and six months ended June 30, 2021, respectively. For the three and six months ended June 30, 2022, stock-based compensation expense primarily related to the early vesting of IHS Markit equity awards as a result of employee terminations and restructuring efforts. During the six months ended June 30, 2022, the Company granted 0.7 million shares of restricted stock and unit awards, which had a weighted average grant date fair value of $ 389.62 per share. T otal unrecognized compensation expense related to unvested restricted stock and unit awards as of June 30, 2022 was $ 264 million , which is expected to be recognized over a weighted average period of 1.8 years . 8. Equity Dividends On January 26, 2022, the Board of Directors approved a quarterly common stock dividend of $ 0.77 per share. On February 28, 2022, the Board of Directors approved a quarterly common stock dividend of $ 0.85 per share. The quarterly dividend increased from $ 0.77 to $ 0.85 per share in the second quarter. Stock Repurchases 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. On December 4, 2013, the Board of Directors approved a share repurchase program authorizing the purchase of 50 million shares (the "2013 Repurchase Program"), which was approximately 18 % of the total shares of our outstanding common stock at that time. 23 Our purchased shares may be used for general corporate purposes, including the issuance of shares for stock compensation plans and to offset the dilutive effect of the exercise of employee stock options. As of June 30, 2022, we completed the 2013 repurchase program and 11.7 million shares remained available under the 2020 Repurchase Program. Our 2020 Repurchase Program has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions. We enter into accelerated share repurchase (“ASR”) agreements with financial institutions to initiate share repurchases of our common stock. Under an ASR agreement, we pay a specified amount to the financial institution and receive an initial delivery of shares. This initial delivery of shares represents the minimum number of shares that we may receive under the agreement. Upon settlement of the ASR agreement, the financial institution delivers additional shares. The total number of shares ultimately delivered, and therefore the average price paid per share, is determined at the end of the applicable purchase period of each ASR agreement based on the volume weighted-average share price, less a discount. We account for our ASR agreements as two transactions: a stock purchase transaction and a forward stock purchase contract. The shares delivered under the ASR agreements resulted in a reduction of outstanding shares used to determine our weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share. The repurchased shares are held in Treasury. The forward stock purchase contracts were classified as equity instruments. During the six months ended June 30, 2022, we initiated a series of uncapped ASR agreements aggregating a total of $ 8.5 billion as follows: (in millions, except average price paid per share) ASR Agreement Initiation Date Initial Shares Delivered Additional Shares Delivered Total Number of Shares Purchased Average Price Paid Per Share Total Cash Utilized May 13, 2022 1 3.8 — 3.8 $ 336.85 $ 1,500 March 1, 2022 2 15.2 — 15.2 $ 390.58 $ 7,000 1 The ASR agreement was structured as an uncapped ASR agreement in which we paid $ 1.5 billion and received an initial delivery of 3.8 million shares, representing 85 % of the $ 1.5 billion at a price equal to the then market price of the Company. The final settlement of the transaction under the ASR is expected to be completed no later than the third quarter of 2022. The ASR agreement was executed under our 2020 Repurchase Program. 2 The ASR agreement was structured as an uncapped ASR agreement in which we paid $ 7 billion and received an initial delivery of 15.2 million shares, representing 85 % of the $ 7 billion at a price equal to the then market price of the Company. The final settlement of the transaction under the ASR is expected to be completed no later than the third quarter of 2022. The ASR agreement was executed under our 2020 Repurchase Program. 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 ended June 30, 2021, we did not use cash to repurchase shares. Redeemable Noncontrolling Interests The agreement with the minority partners that own 27 % of our S&P Dow Jones Indices LLC joint venture contains redemption features whereby interests held by minority partners are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within our control. Specifically, under the terms of the operating agreement of S&P Dow Jones Indices LLC, 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. In addition, in the event there is a change of control of the Company, for the 15 days following a change in control, CME Group and CGIS will have the right to put their interest to us at the then fair value of CME Group's and CGIS' minority interest. If interests were to be redeemed under this agreement, we would generally be required to purchase the interest at fair value on the date of redemption. This interest is presented on the consolidated balance sheets outside of equity under the caption “Redeemable noncontrolling interest” with an initial value based on fair value for the portion attributable to the net assets we acquired, and based on our historical cost for the portion attributable to our S&P Index business. We adjust the redeemable noncontrolling interest each reporting period to its estimated redemption value, but never less than its initial fair value, using both income and market valuation approaches. Our income and market valuation approaches incorporate Level 3 fair value measures for instances when observable inputs are not available. The more significant judgmental assumptions used to estimate the value of the S&P Dow Jones Indices LLC joint venture include an estimated discount rate, a range of assumptions that form the basis of the expected future net cash flows (e.g., the revenue growth rates and operating margins), and a company specific beta. 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 24 affected by future economic and market conditions. Any adjustments to the redemption value will impact retained income. Noncontrolling interests that do not contain such redemption features are presented in equity. Changes to redeemable noncontrolling interest during the six months ended June 30, 2022 were as follows: (in millions) Balance as of December 31, 2021 $ 3,429 Net income attributable to redeemable noncontrolling interest 131 Equity contribution from redeemable noncontrolling interest 410 Distributions payable to redeemable noncontrolling interest ( 129 ) Redemption value adjustment ( 547 ) Balance as of June 30, 2022 $ 3,294 On June 1, 2022 the Company contributed its interest in the IHSM Indices acquired as part of the Merger to S&P Dow Jones Indices LLC. The IHSM Indices will be operated, managed, and distributed by S&P Dow Jones Indices LLC. CME Group paid the Company $ 410 million in exchange for both a 27 % ownership of IHSM’s Indices and to maintain their 27 % proportionate ownership in the S&P Dow Jones Indices LLC joint venture. Accumulated Other Comprehensive Loss The following table summarizes the changes in the components of accumulated other comprehensive loss for the six months ended June 30, 2022: (in millions) Foreign Currency Translation Adjustments Pension and Postretirement Benefit Plans Unrealized Gain (Loss) on Cash Flow Hedges Accumulated Other Comprehensive Loss Balance as of December 31, 2021 $ ( 336 ) $ ( 305 ) $ ( 200 ) $ ( 841 ) Other comprehensive (loss) income before reclassifications ( 143 ) 1 ( 4 ) 172 25 Reclassifications from accumulated other comprehensive income (loss) to net earnings — 5 2 — 3 5 Net other comprehensive (loss) income ( 143 ) 1 172 30 Balance as of June 30, 2022 $ ( 479 ) $ ( 304 ) $ ( 28 ) $ ( 811 ) 1 Includes an unrealized gain related to our cross currency swaps. See note 5 – Derivative Instruments for additional detail of items recognized in accumulated other comprehensive loss. 2 Reflects amortization of net actuarial losses and is net of a tax benefit of $ 1 million for the six months ended June 30, 2022. See Note 6 — Employee Benefits for additional details of items reclassed from accumulated other comprehensive loss to net earnings. 3 See Note 5 — Derivative Instruments for additional details of items reclassified from accumulated other comprehensive loss to net earnings. 9. Earnings Per Share Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares is increased to include additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Potential common shares consist primarily of stock options and restricted performance shares calculated using the treasury stock method. 25 The calculation of basic and diluted EPS for the periods ended June 30 is as follows: (in millions, except per share amounts) Three Months Six Months 2022 2021 2022 2021 Amounts attributable to S&P Global Inc. common shareholders: Net income $ 972 $ 798 $ 2,207 $ 1,553 Basic weighted-average number of common shares outstanding 338.0 240.8 306.8 240.7 Effect of stock options and other dilutive securities 1.3 1.0 1.2 1.1 Diluted weighted-average number of common shares outstanding 339.3 241.8 308.0 241.7 Earnings per share attributable to S&P Global Inc. common shareholders: Net income: Basic $ 2.87 $ 3.31 $ 7.19 $ 6.45 Diluted $ 2.86 $ 3.30 $ 7.17 $ 6.42 We have certain stock options and restricted performance shares that are potentially excluded from the computation of diluted EPS. The effect of the potential exercise of stock options is excluded when the average market price of our common stock is lower than the exercise price of the related option during the period or when a net loss exists because the effect would have been antidilutive. Additionally, restricted performance shares are excluded because the necessary vesting conditions had not been met or when a net loss exists. For the three and six months ended June 30, 2022 and 2021, there were no stock options excluded. Restricted performance shares outstanding of 0.6 million and 0.5 million as of June 30, 2022 and 2021, respectively, were excluded. 10. Restructuring We continuously evaluate our cost structure to identify cost savings associated with streamlining our management structure. Our 2022 and 2021 restructuring plan consisted of a company-wide workforce reduction of approximately 418 and 30 positions, and is further detailed below. The charges for the restructuring plans are classified as selling and general expenses within the consolidated statements of income and the reserves are included in other current liabilities in the consolidated balance sheets. In certain circumstances, reserves are no longer needed because employees previously identified for separation resigned from the Company and did not receive severance or were reassigned due to circumstances not foreseen when the original plans were initiated. In these cases, we reverse reserves through the consolidated statements of income during the period when it is determined they are no longer needed. The initial restructuring charge recorded and the ending reserve balance as of June 30, 2022 by segment is as follows: 2022 Restructuring Plan 2021 Restructuring Plan (in millions) Initial Charge Recorded Ending Reserve Balance Initial Charge Recorded Ending Reserve Balance Market Intelligence $ 27 $ 19 $ 3 $ 3 Ratings 13 10 3 3 Commodity Insights 22 15 — — Mobility 2 2 — — Indices 4 3 — — Engineering Solutions 1 1 — — Corporate 58 42 13 11 Total $ 127 $ 92 $ 19 $ 17 26 We recorded a pre-tax restructuring charge of $ 127 million primarily related to employee severance charges for the 2022 restructuring plan during the six months ended June 30, 2022 and have reduced the reserve by $ 35 million. The ending reserve balance for the 2021 restructuring plan was $ 19 million as of December 31, 2021. For the six months ended June 30, 2022, we have reduced the reserve for the 2021 restructuring plan by $ 2 million. The reductions primarily related to cash payments for employee severance charges. 11. Segment and Related Information 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: Market Intelligence, Ratings, Commodity Insights, Mobility, Indices and Engineering Solutions. Our Chief Executive Officer is our chief operating decision-maker and evaluates performance of our segments and allocates resources based primarily on operating profit. Segment operating profit does not include Corporate Unallocated expense, other income, net, interest expense, net, or loss on extinguishment of debt, net, as these are amounts that do not affect the operating results of our reportable segments. The creation of the two additional segments in 2022 did not materially impact prior years’ reportable segments. A summary of operating results for the periods ended June 30 is as follows: Revenue Three Months Six Months (in millions) 2022 2021 2022 2021 Market Intelligence $ 1,030 $ 539 $ 1,758 $ 1,063 Ratings 796 1,073 1,663 2,090 Commodity Insights 438 252 801 492 Mobility 337 — 452 — Indices 339 278 661 548 Engineering Solutions 96 — 129 — Intersegment elimination 1 ( 43 ) ( 36 ) ( 81 ) ( 71 ) Total revenue $ 2,993 $ 2,106 $ 5,383 $ 4,122 Operating Profit Three Months Six Months (in millions) 2022 2021 2022 2021 Market Intelligence 2 $ 702 $ 174 $ 2,191 $ 335 Ratings 3 464 729 976 1,410 Commodity Insights 4 141 141 299 275 Mobility 5 58 — 76 — Indices 6 270 196 493 387 Engineering Solutions 7 1 — 2 — Total reportable segments 1,636 1,240 4,037 2,407 Corporate Unallocated expense 8 ( 165 ) ( 86 ) ( 678 ) ( 173 ) Equity in Income on Unconsolidated Subsidiaries 9 11 — 15 — Total operating profit $ 1,482 $ 1,154 $ 3,374 $ 2,234 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 Revenue for Ratings and expenses for Market Intelligence include an intersegment royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings. 2 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 six months ended June 30, 2021 includes a gain on disposition of $ 2 million. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 133 million and $ 16 million for the three months ended June 30, 2022 and 2021, respectively and $ 197 million and $ 33 million for six months ended June 30, 2022 and 2021, respectively. 3 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. 27 4 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. 5 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 changes 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. 6 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. 7 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. 8 Corporate Unallocated expense for the three and six months ended June 30, 2022 includes IHS Markit merger costs of $ 117 million and $ 357 million, respectively, employee severance charges of $ 18 million and $ 64 million, respectively, acquisition-related costs of $ 4 million and $ 5 million, respectively and asset write-offs of $ 3 million. The six months ended June 30, 2022 includes a S&P Foundation grant of $ 200 million and lease impairments of $ 5 million. Corporate Unallocated expense for the three and six months ended June 30, 2021 includes IHS Markit merger costs of $ 50 million and $ 99 million, respectively, a lease impairment of $ 3 million, and for six months ended June 30, 2021 includes Kensho retention related expense of $ 2 million. Corporate Unallocated expense also includes amortization of intangibles from acquisitions of $ 1 million for the six months ended June 30, 2022 and $ 7 million for the six months ended June 30, 2021. 9 Equity in Income on Unconsolidated Subsidiaries includes amortization of intangibles from acquisitions of $ 14 million and $ 28 million for the three and six months ended June 30, 2022, respectfully. 28 The following table presents our revenue disaggregated by revenue type for the periods ended June 30: (in millions) Ratings Market Intelligence Commodity Insights Mobility Indices Engineering Solutions Intersegment Elimination 1 Total Three Months Ended June 30, 2022 Subscription $ — $ 867 $ 397 $ 264 $ 68 $ 89 $ — $ 1,685 Non-subscription / Transaction 344 42 26 73 — 7 — 492 Non-transaction 452 — — — — — ( 43 ) 409 Asset-linked fees — — — — 214 — — 214 Sales usage-based royalties — — 15 — 57 — — 72 Recurring variable revenue — 121 — — — — 121 Total revenue $ 796 $ 1,030 $ 438 $ 337 $ 339 $ 96 $ ( 43 ) $ 2,993 Timing of revenue recognition Services transferred at a point in time $ 344 $ 42 $ 26 $ 73 $ — $ 7 $ — $ 492 Services transferred over time 452 988 412 264 339 89 ( 43 ) 2,501 Total revenue $ 796 $ 1,030 $ 438 $ 337 $ 339 $ 96 $ ( 43 ) $ 2,993 Six Months Ended June 30, 2022 Subscription $ — $ 1,526 $ 694 $ 350 $ 121 $ 119 $ — $ 2,810 Non-subscription / Transaction 747 71 74 102 — 10 — 1,004 Non-transaction 916 — — — — — ( 81 ) 835 Asset-linked fees — — — — 433 — — 433 Sales usage-based royalties — — 33 — 107 — — 140 Recurring variable revenue — 161 — — — — — 161 Total revenue $ 1,663 $ 1,758 $ 801 $ 452 $ 661 $ 129 $ ( 81 ) $ 5,383 Timing of revenue recognition Services transferred at a point in time $ 747 $ 71 $ 74 $ 102 $ — $ 10 $ — $ 1,004 Services transferred over time 916 1,687 727 350 661 119 ( 81 ) 4,379 Total revenue $ 1,663 $ 1,758 $ 801 $ 452 $ 661 $ 129 $ ( 81 ) $ 5,383 29 (in millions) Ratings Market Intelligence Commodity Insights Mobility Indices Engineering Solutions Intersegment Elimination 1 Total Three Months Ended June 30, 2021 Subscription $ — $ 524 $ 233 $ — $ 48 $ — $ — $ 805 Non-subscription / Transaction 615 15 3 — — — — 633 Non-transaction 458 — — — — — ( 36 ) 422 Asset-linked fees — — — — 195 — — 195 Sales usage-based royalties — — 16 — 35 — — 51 Total revenue $ 1,073 $ 539 $ 252 $ — $ 278 $ — $ ( 36 ) $ 2,106 Timing of revenue recognition Services transferred at a point in time $ 615 $ 15 $ 3 $ — $ — $ — $ — $ 633 Services transferred over time 458 524 249 — 278 — ( 36 ) 1,473 Total revenue $ 1,073 $ 539 $ 252 $ — $ 278 $ — $ ( 36 ) $ 2,106 Six Months Ended June 30, 2021 Subscription $ — $ 1,037 $ 455 $ — $ 94 $ — $ — $ 1,586 Non-subscription / Transaction 1,197 26 5 — — — — 1,228 Non-transaction 893 — — — — — ( 71 ) 822 Asset-linked fees — — — — 378 — — 378 Sales usage-based royalties — — 32 — 76 — — 108 Total revenue $ 2,090 $ 1,063 $ 492 $ — $ 548 $ — $ ( 71 ) $ 4,122 Timing of revenue recognition Services transferred at a point in time $ 1,197 $ 26 $ 5 $ — $ — $ — $ — $ 1,228 Services transferred over time 893 1,037 487 — 548 — ( 71 ) 2,894 Total revenue $ 2,090 $ 1,063 $ 492 $ — $ 548 $ — $ ( 71 ) $ 4,122 1 Intersegment eliminations primarily consists of a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings. 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. The following provides revenue by geographic region for the periods ended June 30: (in millions) Three Months Six Months 2022 2021 2022 2021 U.S. $ 1,782 $ 1,262 $ 3,208 $ 2,500 European region 699 524 1,266 998 Asia 326 214 590 422 Rest of the world 186 106 319 202 Total $ 2,993 $ 2,106 $ 5,383 $ 4,122 See Note 2 — Acquisitions and Divestitures and Note 10 — Restructuring for additional actions that impacted the segment operating results. 30 12. Commitments and Contingencies Leases We determine whether an arrangement meets the criteria for an operating lease or a finance lease at the inception of the arrangement. We have operating leases for office space and equipment. Our leases have remaining lease terms of 1 year to 11 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within 1 year. We sublease certain real estate leases to third parties which mainly consist of operating leases for space within our offices. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expenses for these leases on a straight line-basis over the lease term in operating-related expenses and selling and general expenses. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. Our future minimum based payments used to determine our lease liabilities include minimum based rent payments and escalations. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The February 28, 2022 merger with IHS Markit resulted in an increase in ROU assets and operating lease liabilities of $ 230 million and $ 268 million, respectively. During the three and six months ended June 30, 2022, we recorded a pre-tax impairment charge of $ 20 million and $ 25 million, respectively, related to the impairment and abandonment of operating lease related ROU assets. The pre-tax impairment charge recorded during the three months ending June 30, 2022 is primarily associated with consolidating our real estate facilities following the merger with IHS Markit. The impairment charges are included in selling and general expenses within the consolidated statements of income. The following table provides information on the location and amounts of our leases on our consolidated balance sheets as of June 30, 2022 and December 31, 2021: (in millions) June 30, December 31, Balance Sheet Location 2022 2021 Assets Right of use assets Lease right of use assets $ 557 $ 426 Liabilities Other current liabilities Current lease liabilities 127 96 Lease liabilities — non-current Non-current lease liabilities 632 492 The components of lease expense for the periods ended June 30 are as follows: (in millions) Three Months Six Months 2022 2021 2022 2021 Operating lease cost $ 39 $ 33 $ 71 $ 65 Sublease income ( 1 ) ( 1 ) ( 2 ) ( 1 ) Total lease cost $ 38 $ 32 $ 69 $ 64 31 Supplemental information related to leases for the periods ended June 30 are as follows: (in millions) Three Months Six Months 2022 2021 2022 2021 Cash paid for amounts included in the measurement for operating lease liabilities Operating cash flows for operating leases $ 43 $ 33 81 65 Right of use assets obtained in exchange for lease obligations Operating leases 4 3 4 3 Weighted-average remaining lease term and discount rate for our operating leases are as follows: June 30, December 31, 2022 2021 Weighted-average remaining lease term (years) 6.9 8.3 Weighted-average discount rate 3.36 % 3.59 % Maturities of lease liabilities for our operating leases are as follows: (in millions) 2022 (Excluding the six months ended June 30, 2022) $ 79 2023 137 2024 114 2025 102 2026 88 2027 and beyond 343 Total undiscounted lease payments $ 863 Less: Imputed interest 104 Present value of lease liabilities $ 759 Related Party Agreements In June of 2012, we entered into a license agreement (the "License Agreement") with the holder of S&P Dow Jones Indices LLC noncontrolling interest, CME Group, replacing the 2005 license agreement between Indices and CME Group. Under the terms of the License Agreement, S&P Dow Jones Indices LLC receives a share of the profits from the trading and clearing of CME Group's equity index products. During the three and six months ended June 30, 2022, S&P Dow Jones Indices LLC earned $ 46 million and $ 87 million, respectively, of revenue under the terms of the License Agreement. During the three and six months ended June 30, 2021, S&P Dow Jones Indices LLC earned $ 31 million and $ 67 million, respectively, of revenue under the terms of the License Agreement.The entire amount of this revenue is included in our consolidated statement of income and the portion related to the 27 % noncontrolling interest is removed in net income attributable to noncontrolling interests. Legal and Regulatory Matters In the normal course of business both in the United States and abroad, the Company and its subsidiaries are defendants in a number of legal proceedings and are often subjected to government and regulatory proceedings, investigations and inquiries. S&P Global Ratings has been cooperating with an SEC investigation into possible violations of Section 15E of the Exchange Act and Rule 17g-5(c)(8) thereunder in connection with a 2017 credit rating analysis by S&P Global Ratings. S&P Global Ratings is currently in active discussions to resolve the SEC’s inquiry. S&P Global Ratings has not yet reached a definitive settlement agreement with the SEC on this matter but in the fourth quarter of 2021, accrued for potential monetary penalties based on discussions to date. While we cannot predict with certainty whether we will reach agreement, or the terms of any such agreement, at this time, we do not believe that the resolution of this matter will have a material adverse effect on our business, financial condition or results of operations. 32 A class action lawsuit was filed in Australia on August 7, 2020 against the Company and a subsidiary of the Company. A separate lawsuit was filed against the Company and a subsidiary of the Company in Australia on February 2, 2021 by two entities within the Basis Capital investment group. The lawsuits both relate to alleged investment losses in collateralized debt obligations rated by Ratings prior to the financial crisis. We can provide no assurance that we will not be obligated to pay significant amounts in order to resolve these matters on terms deemed acceptable. From time to time, the Company receives customer complaints, particularly, though not exclusively, in its Ratings and Indices segments. The Company believes it has strong contractual protections in the terms and conditions included in its arrangements with customers. Nonetheless, in the interest of managing customer relationships, the Company from time to time engages in dialogue with such customers in an effort to resolve such complaints, and if such complaints cannot be resolved through dialogue, may face litigation regarding such complaints. The Company does not expect to incur material losses as a result of these matters. Moreover, various government and self-regulatory agencies frequently make inquiries and conduct investigations into our compliance with applicable laws and regulations, including those related to ratings activities and antitrust matters. For example, as a nationally recognized statistical rating organization registered with the SEC under Section 15E of the Exchange Act, S&P Global Ratings is in ongoing communication with the staff of the SEC regarding compliance with its extensive obligations under the federal securities laws. Although S&P Global seeks to promptly address any compliance issues that it detects or that the staff of the SEC or another regulator raises, there can be no assurance that the SEC or another regulator will not seek remedies against S&P Global for one or more compliance deficiencies. 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. In view of the uncertainty inherent in litigation and government and regulatory enforcement matters, we cannot predict the eventual outcome of such matters or the timing of their resolution, or in most cases reasonably estimate what the eventual judgments, damages, fines, penalties or impact of activity (if any) restrictions may be. As a result, we cannot provide assurance that such outcomes will not have a material adverse effect on our consolidated financial condition, cash flows, business or competitive position. As litigation or the process to resolve pending matters progresses, as the case may be, we will continue to review the latest information available and assess our ability to predict the outcome of such matters and the effects, if any, on our consolidated financial condition, cash flows, business or competitive position, which may require that we record liabilities in the consolidated financial statements in future periods. 13. Recently Issued or Adopted Accounting Standards In October of 2021, the Financial Accounting Standards Board ("FASB") issued guidance that amends the acquirer's accounting for contract assets and contract liabilities from contracts with customers in a business combination in accordance with Topic 606. The guidance is effective for reporting periods beginning after December 15, 2022, and early adoption is permitted. We early adopted this guidance on January 1, 2022. The early adoption of this standard applied to the acquired unearned revenue and contract costs associated with the IHS Markit merger. The adoption did not have a significant impact on our consolidated financial statements. In March of 2020, the FASB issued accounting guidance to provide temporary optional expedients and exceptions to the current contract modifications and hedge accounting guidance in light of the expected market transition from London Interbank Offered Rate ("LIBOR") to alternative rates. The new guidance provides optional expedients and exceptions to transactions affected by reference rate reform if certain criteria are met. The transactions primarily include (1) contract modifications, (2) hedging relationships, and (3) sale or transfer of debt securities classified as held-to-maturity. The Company may elect to adopt the amendments prospectively to transactions existing as of or entered into from the date of adoption through December 31, 2022. We do not expect this guidance to have a significant impact on our consolidated financial statements. 33