What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-28 compared with 2022-08-03 · 187 added, 181 removed, 663 unchanged (36% of the section changed)

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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 and six months ended June 30, 2022.

(together with its consolidated subsidiaries, (“S&P Global,” the “Company,” “we,” “us” or “our”) for the three and nine months ended September 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 and Six Months Ended June 30, 2022 and 2021

• Results of Operations — Comparing the Three and Nine Months Ended September 30, 2022 and 2021

• Liquidity and Capital Resources

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• 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.

• Commodity Insights is a 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.

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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 for the three and six months ended June 30, 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 nine months ended September 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 periods ended June 30 are as follows:

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

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

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

2022 2021 % Change 1

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

2 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.

2 Operating profit for the three months ended September 30, 2022 includes IHS Markit merger costs of $144 million, employee severance charges of $55 million, an acquisition-related benefit of $18 million, an asset impairment of $9 million, a gain on acquisition of $10 million, a loss on dispositions of $2 million and an asset write-off of $1 million.

Operating profit for the nine months ended September 30, 2022 includes a gain on dispositions of $1.9 billion, IHS Markit merger costs of $523 million, a S&P Foundation grant of $200 million, employee severance charges of $195 million, a gain on acquisition of $10 million, an asset impairment of $9 million, an acquisition-related benefit of $6 million, lease impairments of $5 million and an asset write-off of $4 million.

Operating profit for the three months ended September 30, 2021 includes IHS Markit merger costs of $54 million and a gain on disposition of $3 million.

Operating profit for the nine months ended September 30, 2021 includes IHS Markit merger costs of $153 million, a gain on disposition of $5 million, a lease impairment of $3 million and Kensho retention related expense of $2 million.

Operating profit also includes amortization of intangibles from acquisitions of $280 million and $21 million for the three months ended September 30, 2022 and 2021, respectively, and $687 million and $74 million for the nine months ended September 30, 2022 and 2021, respectively.

Revenue increased 37% primarily due to the impact of the merger with IHS Markit;

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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.

higher exchange-traded derivative revenue, higher average levels of assets under management for mutual funds and higher data subscription revenue 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 3 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.

Operating profit decreased 21%.

Excluding the impact of higher amortization of intangibles from acquisitions in 2022 of 22 percentage points, higher IHS Markit merger costs in 2022 of 8 percentage points, higher employee severance charges in 2022 of 5 percentage points, operating profit increased 14%.

The increase was primarily due to revenue growth and lower incentive costs, 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 and an increase in technology expenses.

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

Revenue increased 33% primarily due to the impact of the merger with IHS Markit;

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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.

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

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

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

Operating profit increased 27%.

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

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

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

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Through this framework, we seek to deliver an exceptional, differentiated customer experience by enhancing our foundational capabilities, evolving and growing our core businesses, and pursuing growth via adjacencies.

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

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

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

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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 AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

RESULTS OF OPERATIONS — COMPARING THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Consolidated Review

(in millions) Three Months Six Months

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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Operating-related expenses 994 543 83% 2,754 1,598 72%

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

Selling and general expenses 720 423 70% 2,442 1,162 N/M

Depreciation and amortization 298 41 N/M 738 137 N/M

Total expenses 2,012 1,007 N/M 5,934 2,897 N/M

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

Loss (gain) on dispositions 2 (3) N/M (1,897) (5) N/M

Equity in Income on Unconsolidated Subsidiaries (6) — N/M (21) — N/M

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Interest expense, net 71 31 N/M 218 94 N/M

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

(Gain) loss on extinguishment of debt, net (4) — N/M 15 — N/M

Provision for taxes on income 145 213 (32)% 1,053 747 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 periods ended June 30:

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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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.

Non-transaction revenue decreased due to the unfavorable impact of foreign exchange rates, lower entity credit ratings revenue and a decrease in Ratings Evaluation Service (“RES”) revenue.

Asset linked fees decreased 1% as higher average levels of assets under management for mutual funds were offset by lower average levels of assets under management for ETFs at Indices.

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

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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.

Non-transaction revenue decreased primarily due to the unfavorable impact of foreign exchange rates, a decrease in entity credit ratings revenue and lower RES revenue, partially offset by an increase in revenue at our CRISIL subsidiary and an increase in surveillance revenue at Ratings.

Asset linked fees increased primarily due to higher average levels of assets under management for mutual funds at Indices.

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

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See “Segment Review” below for further information.

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

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.

Total Expenses

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

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

(in millions) 2022 2021 % Change

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Market Intelligence 1

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

$ 444 $ 237 $ 229 $ 123 94% 93%

233 59 245 118 (5)% (51)%

Commodity Insights 3

139 124 52 55 N/M N/M

132 125 53 62 N/M 102%

88 90 — — N/M N/M

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(43) — (37) — (17)% N/M

Total segments 980 630 524 300 87% N/M

Total segments 964 581 534 343 81% 69%

Corporate Unallocated expense 8

30 139 9 80 N/M 75%

Total $ 1,011 $ 764 $ 533 $ 374 90% N/M

Total $ 994 $ 720 $ 543 $ 423 83% 70%

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

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

3 In 2022, selling and general expenses include employee severance charges of $14 million and IHS Markit merger costs of $10 million.

4 In 2022, selling and general expenses include acquisition-related benefit of $19 million and employee severance charges of $1 million.

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

8 In 2022, selling and general expenses include IHS Markit merger costs of $127 million, employee severance charges of $23 million, an asset impairment of $9 million, a gain on acquisition of $10 million and acquisition-related costs of $1 million.

In 2021, selling and general expenses include IHS Markit merger costs of $54 million.

Operating-Related Expenses

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Selling and general expenses increased 70%.

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%.

Excluding the unfavorable impact of higher IHS Markit merger costs in 2022 of 17 percentage points, higher employee severance charges of 11 percentage points, partially offset by an acquisition-related benefit of 3 percentage points and a gain on acquisition of 1 percentage point, selling and general expenses increased 46%.

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

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$ 1,223 $ 669 $ 687 $ 350 78% 91%

467 196 466 188 N/M 4%

700 255 711 307 (1)% (17)%

Commodity Insights 3

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2 In 2022, selling and general expenses include employee severance charges of $14 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

3 In 2022, selling and general expenses include employee severance charges of $38 million and IHS Markit merger costs of $16 million.

4 In 2022, selling and general expenses include acquisition-related benefit of $15 million, employee severance charges of $3 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 $4 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 $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.

8 In 2022, selling and general expenses include IHS Markit merger costs of $483 million, a S&P Foundation grant of $200 million, employee severance charges of $87 million, an asset impairment of $9 million, a gain on acquisition of $10 million, acquisition-related costs of $7 million, 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 $153 million, a lease impairment of $3 million and Kensho retention related expense of $2 million.

Operating-Related Expenses

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Selling and general expenses increased 110%.

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%.

Excluding the unfavorable impact of higher IHS Markit merger costs in 2022 of 28 percentage points, a S&P Foundation grant of 15 percentage points and higher employee severance charges of 15 percentage points, selling and general expenses increased 52%.

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

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Depreciation and amortization was $738 million in 2022 compared to $137 million in 2021, primarily due to higher intangible asset amortization driven by the impact of the merger with IHS Markit.

Gain on Dispositions

Loss (Gain) on Dispositions

During the three and nine months ended September 30, 2022, we completed the following dispositions that resulted in a pre-tax loss of $2 million and a pre-tax gain of $1,897 million, respectively, which was included in Loss (Gain) on dispositions in the consolidated statement of income:

• 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.

During the three and nine months ended September 30, 2022, we recorded a pre-tax loss of $15 million ($11 million after tax) and pre-tax gain of $505 million ($378 million after tax) for the sale of LCD.

During the three and nine months ended September 30, 2022, we recorded a pre-tax gain of $14 million ($12 million after tax) and $52 million ($43 million after-tax) for the sale of a family of leveraged loan indices in Loss (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.

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

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.

During the three and nine months ended September 30, 2022, we recorded a pre-tax loss of $2 million ($2 million after tax) and a pre-tax gain of $1.341 billion ($1.005 billion after tax) in Loss (gain) on dispositions in the consolidated statements of income related to the sale of CGS.

• In February of 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.

During the three and nine months ended September 30, 2021, we completed the following dispositions that resulted in a pre-tax gain of $3 million and $5 million, respectively, which was included in Gain on dispositions in the consolidated statements of income:

• During the three and nine months ended September 30, 2021, we recorded a pre-tax gain of $3 million ($2 million after-tax) in Loss (gain) on dispositions in the consolidated statements of income related to the sale of an office facility in India in September of 2021.

• During the nine months ended September 30, 2021, we recorded a pre-tax gain of $2 million ($2 million after-tax) in Loss (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 periods ended June 30:

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

(in millions) 2022 2021 % Change

Market Intelligence 1

$ 702 $ 174 NM

$ 174 $ 179 (3)%

377 644 (41)%

Commodity Insights 3

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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.

1 2022 includes a loss on disposition of $17 million, IHS Markit merger costs of $6 million, employee severance charges of $13 million and acquisition-related costs of $1 million.

2022 and 2021 include amortization of intangibles from acquisitions of $134 million and $16 million, respectively.

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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.

3 2022 includes employee severance charges of $14 million and IHS Markit merger costs of $10 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.

4 2022 includes acquisition-related benefit of $19 million, employee severance charges of $1 million, IHS Markit merger costs of $1 million and amortization of intangibles from acquisitions of $76 million.

5 2022 includes a gain on disposition of 14 million, employee severance charges of $1 million and IHS Markit merger costs of $1 million.

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2022 includes amortization of intangibles from acquisitions of $14 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.

7 2022 includes IHS Markit merger costs of $127 million, employee severance charges of $23 million, a gain on acquisition of $10 million, asset impairment of $9 million and acquisition-related costs of $1 million.

2021 includes IHS Markit merger costs of $54 million and a gain on disposition of $3 million.

8 2022 includes amortization of intangibles from acquisitions of $13 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.

Segment Operating Profit — Decreased 13% as compared to 2021.

Excluding the unfavorable impact of higher amortization of intangibles from acquisitions in 2022 of 21 percentage points, employee severance charges in 2022 of 3 percentage points and IHS Markit merger related costs in 2022 of 1 percentage point, partially offset by an acquisition-related benefit in 2022 of 1 percentage point, segment operating profit increased 11%.

The increase was primarily due to revenue growth primarily due to the impact of the merger with IHS Markit, lower incentive costs, 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 and an increase in technology expenses.

See “Segment Review” below for further information.

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Corporate Unallocated expense increased 95% 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.

Excluding higher IHS Markit merger costs in 2022 of 98 percentage points, employee severance charges in 2022 of 31 percentage points, an asset impairment in 2022 of 11 percentage points, a gain on disposition in 2021 of 3 percentage points and acquisition-related costs in 2022 of 2 percentage points, partially offset by a gain on acquisition in 2022 of 13 percentage points, Corporate Unallocated expense decreased 37% 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.

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.

Equity in Income on Unconsolidated Subsidiaries was $6 million for the three months ended September 30, 2022.

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

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

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2022 and 2021 includes amortization of intangibles from acquisitions of $5 million and $8 million, respectively.

3 2022 includes employee severance costs of $24 million and acquisition-related costs of $6 million.

3 2022 includes employee severance charges of $38 million and IHS Markit merger costs of $16 million.

2022 and 2021 include amortization of intangibles from acquisitions of $77 million and $6 million, respectively.

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.

4 2022 includes an acquisition-related benefit of $15 million, employee severance charges of $3 million, IHS Markit merger costs of $1 million and amortization of intangibles from acquisitions of $176 million.

5 2022 includes a gain on disposition of $52 million, employee severance charges of $4 million and IHS Markit merger costs of $1 million.

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2022 includes amortization of intangibles from acquisitions of $33 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.

7 2022 includes IHS Markit merger costs of $483 million, a S&P Foundation grant of $200 million, employee severance charges of $87 million, a gain on acquisition of $10 million, asset impairment of $9 million, acquisition-related costs of $7 million, lease impairments of $5 million and asset write-off of $3 million.

2021 includes IHS Markit merger costs of $153 million, a lease impairment of $3 million, a gain on disposition 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.

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Segment Operating Profit — Increased 41% as compared to 2021.

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%.

Excluding the favorable impact of a higher gain on dispositions in 2022 of 53 percentage points, partially offset by higher amortization of intangibles from acquisitions in 2022 of 16 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 8%.

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.

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Corporate Unallocated expense increased 225% compared to 2021.

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.

Excluding higher IHS Markit merger costs in 2022 of 137 percentage points, a S&P Foundation grant in 2022 of 83 percentage points, employee severance charges in 2022 of 36 percentage points, an asset impairment in 2022 of 4 percentage points, acquisition-related costs in 2022 of 3 percentage points, partially offset by a gain on acquisition of 4 percentage points and lower amortization of intangibles from acquisitions in 2022 of 2 percentage points, Corporate Unallocated expense decreased 32% 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 $15 million for the six months ended June 30, 2022.

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

Equity in Income on Unconsolidated Subsidiaries was $21 million for the nine months ended September 30, 2022.

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

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

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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.

Other income, net was $37 million for the three months ended September 30, 2022 compared to $22 million for the three months ended September 30, 2021, and $86 million for the nine months ended September 30, 2022 compared to $51 million for the nine months ended September 30, 2021 primarily due to higher gains on our mark-to-market investments in 2022.

Interest Expense, net

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.

Interest expense, net increased $40 million compared to the three months ended September 30, 2021, and increased $124 million compared to the nine months ended September 30, 2021 primarily due to higher debt balances.

See Note 4 – Debt for further details.

Loss on Extinguishment of Debt, Net

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.

Gain (loss) on Extinguishment of Debt, Net

During the three and nine ended September 30, 2022, we recognized a $4 million gain and $15 million loss on extinguishment of debt.

The nine months ended September 30, 2022 includes a $142 million tender premium paid to tendering note holders in accordance with the terms of the tender offer, offset by a $127 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 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.

The effective income tax rate was 17.6% and 25.8% for the three and nine months ended September 30, 2022 and 19.9% and 22.8% for the three and nine months September 30, 2021, respectively.

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

The increase in nine months ended September 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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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.

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 periods ended June 30:

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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Operating profit 1

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

$ 174 $ 179 (3)% $ 2,366 $ 514 N/M

Operating margin % 17 % 32 % 85 % 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 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.

1 Operating profit for the three and nine months ended September 30, 2022 includes loss on dispositions of $17 million and gain on dispositions $1.8 billion, respectively, employee severance charges of $13 million and $44 million, respectively, IHS Markit merger costs of $6 million and $21 million, respectively, and acquisition-related costs of $1 million and $2 million, respectively.

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

Operating profit includes amortization of intangibles from acquisitions of $134 million and $16 million is included for the three months ended September 30, 2022 and 2021, respectively, and $331 million and $49 million for the nine months ended September 30, 2022 and 2021, respectively.

Revenue increased 83% primarily due to the impact of the merger with IHS Markit.

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

Operating profit increased 304%.

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.

Operating profit decreased 3%.

Excluding the impact of higher amortization of intangibles of 60 percentage points, a loss on dispositions of 9 percentage points, employee severance charges in 2022 of 7 percentage points, IHS Markit merger costs in 2022 of 3 percentage points, operating profit increased 76% primarily due to revenue growth and lower incentive costs, 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 8% percentage points.

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Operating profit increased 360%.

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.

Excluding the impact of a gain on dispositions of 366 percentage points, partially offset by higher amortization of intangibles of 56 percentage points, employee severance charges in 2022 of 9 percentage points and IHS Markit merger costs in 2022 of 4 percentage points, operating profit increased 64% primarily due to revenue growth and lower incentive costs, 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 4 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.

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.

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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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 $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

Royalty revenue was $36 million and $107 million for the three and nine months ended September 30, 2022, respectively, and $34 million and $101 million for the three and nine months ended September 30, 2021, respectively.

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

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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Operating margin % 55 % 63 % 58 % 66 %

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.

1 Operating profit for the three and nine months ended September 30, 2022 includes employee severance charges of $2 million and $14 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $2 million for the three months ended September 30, 2022 and 2021, and $5 million and $8 million for the nine months ended September 30, 2022 and 2021, respectively.

Revenue decreased 33%, with an unfavorable impact from foreign exchange rates of 3% percentage points.

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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.

Non-transaction revenue decreased due to the unfavorable impact of foreign exchange rates, lower entity credit ratings revenue and a decrease in Ratings Evaluation Service (“RES”) revenue.

Excluding the unfavorable impact of foreign exchange rates of 4 percentage points, non-transaction revenue decreased 2%.

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

Operating profit decreased 41%, 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.

Excluding the impact of employee severance charges in 2022 of less than 1 percentage point, operating profit decreased 41% primarily due to a decline in revenue partially offset by a decrease in expenses.

The decrease in expenses was primarily driven by lower incentive costs due to weaker financial performance, partially offset by higher compensation costs driven by targeted investment into key areas of the business, as well as annual merits and promotion, and higher legal fees.

Revenue decreased 25%, 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.

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.

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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.

Non-transaction revenue remained relatively unchanged, decreasing less than 1%, primarily due to the unfavorable impact of foreign exchange rates, a decrease in entity credit ratings revenue and lower RES revenue, offset by an increase in revenue at our CRISIL subsidiary and an increase in surveillance revenue.

Excluding the unfavorable impact of foreign exchange rates of 3 percentage points, non-transaction revenue increased 3%.

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

Operating profit decreased 34%, 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.

Excluding the impact of employee severance charges in 2022 of 1 percentage point, operating profit decreased 33% primarily due to a decline in revenue partially offset by decrease in expenses.

The decrease in expenses was driven by lower incentive costs due to weaker financial performance, lower occupancy costs from reduced real estate footprint, and lower project amortization costs, partially offset by higher compensation costs driven by targeted investment into key areas of the business, as well as annual merits and promotion, legal fees and the resumption of business travel from the lifting of COVID restrictions.

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.

Second Quarter

Third Quarter

Compared to Prior Year Year-to-Date

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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

Third Quarter Compared to Prior Year Year-to-Date Compared to Prior Year

Structured Finance Issuance U.S.

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* Represents no activity in 2022.

• ABS issuance increased in the U.S.

primarily driven by growth in Consumer Credit Cards and Loans.

Issuance was down in Europe primarily driven by a decline in Consumer Loans and Auto Leases.

** Represents no activity in 2021.

• ABS issuance decreased in the U.S.

and Europe driven by a decline in Autos, Student Loans, and Non-Traditional / Esoterics.

• CLO issuance was down in the U.S.

and European structured credit markets due to the Libor-to Sofr transition and market volatility around inflation and the crisis in Ukraine.

• CMBS issuance was up in the U.S.

reflecting increases in Single-Asset, Single-Borrower (SASB), Conduit and CRE-CLOs.

CMBS issuance was down in Europe, although from a low 2021 base.

• RMBS issuance was up in the U.S.

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

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

and European structured credit markets due to unfavorable market conditions and widening spreads slowing down new issues and eliminating refinancing and resets.

• CMBS issuance was down in the U.S.

in the quarter reflecting unfavorable market conditions.

CMBS issuance was also down in Europe, although from a low 2021 base.

• RMBS issuance was down the U.S.

in the quarter reflecting decreased market volume due to unfavorable market conditions.

RMBS issuance increased in Europe reflecting an increase in large jumbo deals.

• 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

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

Commodity Insights is a leading independent provider of information and benchmark prices for the commodity and energy markets.

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.

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• 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;

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

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

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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 periods ended June 30:

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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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 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.

1 Operating profit for the three and nine months ended September 30, 2022 includes employee severance charges of $14 million and $38 million, respectively, and IHS Markit merger costs of $10 million and $16 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $32 million and $2 million for the three months ended September 30, 2022 and 2021, respectively, and $77 million and $6 million for the nine months ended September 30, 2022 and 2021, respectively.

Revenue increased 70% 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.

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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.

Foreign exchange rates had a favorable impact of 2% percentage points.

Revenue increased 65% 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.

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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.

Foreign exchange rates had a favorable 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.

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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 periods ended June 30:

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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

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.

1 Operating profit for the three and nine months ended September 30, 2022 includes an acquisition-related benefit of $19 million and $15 million, respectively, and employee severance charges of $1 million and $3 million, respectively.

The nine months ended September 30, 2022 includes IHS Markit merger costs of $1 million.

Operating profit includes amortization of intangibles from acquisitions of $76 million and $176 million for the three and nine months ended September 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 June 30:

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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Net operating margin % 52 % 52 % 54 % 52 %

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.

1 Operating profit for the three and nine months ended September 30, 2022 includes a gain on disposition of $14 million and $52 million, respectively, employee severance charges of $1 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

September 30, 2022 and 2021, respectively, and $22 million and $4 million for the nine months ended September 30, 2022 and 2021, respectively.

Revenue at Indices increased 12% 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, higher data subscription revenue and the impact of the merger with IHS Markit.

These increases were partially offset by lower levels of AUM for ETFs and the impact of a breakup fee associated with the a termination of several ETF funds in the prior year period.

Ending AUM for ETFs at September 30, 2022 was $2.348 trillion.

Excluding AUM related to the merger with IHS Markit, ending AUM for ETFs decreased 10% to $2.230 trillion and average levels of AUM for ETFs decreased 3% to $2.458 trillion compared to the three months ended September 30, 2021.

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

Operating profit increased 12%.

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.

Excluding the impact of a gain on disposition of 7 percentage points, partially offset by higher amortization of intangibles from acquisitions of 4 percentage points, operating profit increased 10%.

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 2 percentage points.

Revenue at Indices increased 18% 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, higher data subscription revenue and the impact of the merger with IHS Markit.

Ending AUM for ETFs at September 30, 2022 was $2.348 trillion.

Excluding AUM related to the merger with IHS Markit, ending AUM for ETFs decreased 10% to $2.230 trillion and average levels of AUM for ETFs increased 9% to $2.548 trillion compared to the nine months ended September 30, 2021.

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

Operating profit increased 22%.

Excluding the impact of a gain on disposition of 9 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 17%.

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.

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, higher data costs, 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.

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• Non-subscription revenue — primarily from retail transaction and consulting services.

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 periods ended June 30:

(in millions) Three Months Six Months

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 periods ended September 30:

(in millions) Three Months Nine Months

2022 2021 % Change 2022 2021 % Change

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

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.

1 Operating profit for three and nine months ended September 30, 2022 includes employee severance charges of $2 million and $4 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $14 million and $33 million for the three and nine months ended September 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 $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:

Cash, cash equivalents, and restricted cash were $1,389 million as of September 30, 2022, a decrease of $5,116 million from December 31, 2021.

The following table provides cash flow information for the nine months ended September 30:

(in millions) 2022 2021 % Change

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Financing activities $ (10,128) $ (772) N/M

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.

In the first nine months of 2022, free cash flow decreased $1,222 million to $1,232 million compared to $2,454 million in the first nine months of 2021.

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

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

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Operating activities

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.

Cash provided by operating activities decreased $1,168 million to $1,490 million for the first nine months of 2022.

The decrease is mainly due to a decrease in operating results, 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 $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.

Cash provided by investing activities was $3,689 million for the first nine months of 2022 compared to cash used for investing activities of $42 million in the first nine 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 $6,742 million to $7,268 million for the first six months of 2022.

Cash used for financing activities increased $9,356 million to $10,128 million for the first nine months of 2022.

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

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.

During the nine months ended September 30, 2022, we purchased a total of 29.5 million shares for $11.0 billion of cash.

During the nine months ended September 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 June 30, 2022 and December 31, 2021, there was no commercial paper outstanding.

As of September 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 increased from $0.77 to $0.85 per share in the second quarter.

The quarterly dividend increased from $0.77 to $0.85 per share beginning 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 periods ended June 30, 2022 are as follows:

Three Months Six Months

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

Three Months Nine Months

(in millions) 2022 2022

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Net income attributable to S&P Global Inc.

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

(in millions) June 30, December 31,

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

(in millions) September 30, December 31,

Current assets (excluding intercompany from Non-Obligor Group) $ 936 $ 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 six months ended June 30:

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

(in millions) 2022 2021 % Change

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There can be no assurance that actual results will not differ from those estimates.

Since the date of our Form 10-K, there have been no material changes to our critical accounting estimates.

Since the date of our most recent Form 10-K, there have been no material changes to our critical accounting estimates.

RECENTLY ISSUED OR ADOPTED ACCOUNTING STANDARDS

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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 volatility and health of debt, equity, commodities and energy 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;

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• the level of merger and acquisition activity in the United States and abroad;

• the volatility and health of the energy and commodities markets;

• our ability to attract, incentivize and retain key employees, especially in today’s competitive business environment;

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• the impact on the Company’s revenue and net income caused by fluctuations in foreign currency exchange rates;

• the Company's ability to adjust to changes in European and United Kingdom markets as the United Kingdom leaves the European Union, and the impact of the United Kingdom’s departure on our credit rating activities and other offerings in the European Union and United Kingdom;

• the impact of changes in applicable tax or accounting requirements on the Company.

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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