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, 2023 2022 2023 2022 Revenue $ 3,101 $ 2,993 $ 6,261 $ 5,383 Expenses: Operating-related expenses 1,026 1,007 2,114 1,756 Selling and general expenses 771 768 1,476 1,726 Depreciation 24 36 49 62 Amortization of intangibles 261 267 522 379 Total expenses 2,082 2,078 4,161 3,923 Loss (gain) on dispositions 119 ( 556 ) 69 ( 1,899 ) Equity in income on unconsolidated subsidiaries ( 11 ) ( 11 ) ( 25 ) ( 15 ) Operating profit 911 1,482 2,056 3,374 Other income, net ( 11 ) ( 1 ) — ( 50 ) Interest expense, net 88 90 174 147 Loss on extinguishment of debt, net — 2 — 19 Income before taxes on income 834 1,391 1,882 3,258 Provision for taxes on income 259 340 447 908 Net income 575 1,051 1,435 2,350 Less: net income attributable to noncontrolling interests ( 64 ) ( 79 ) ( 130 ) ( 143 ) Net income attributable to S&P Global Inc. $ 511 $ 972 $ 1,305 $ 2,207 Earnings per share attributable to S&P Global Inc. common shareholders: Net income: Basic $ 1.60 $ 2.87 $ 4.08 $ 7.19 Diluted $ 1.60 $ 2.86 $ 4.07 $ 7.17 Weighted-average number of common shares outstanding: Basic 319.3 338.0 320.3 306.8 Diluted 319.8 339.3 320.9 308.0 Actual shares outstanding at period end 318.2 336.2 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, 2023 2022 2023 2022 Net income $ 575 $ 1,051 $ 1,435 $ 2,350 Other comprehensive income: Foreign currency translation adjustments 30 ( 95 ) 73 ( 116 ) Income tax effect 5 ( 22 ) 8 ( 27 ) 35 ( 117 ) 81 ( 143 ) Pension and other postretirement benefit plans ( 12 ) ( 4 ) ( 12 ) 1 Income tax effect 3 1 4 — ( 9 ) ( 3 ) ( 8 ) 1 Unrealized gain on cash flow hedges 28 122 — 229 Income tax effect ( 6 ) ( 31 ) — ( 57 ) 22 91 — 172 Comprehensive income 623 1,022 1,508 2,380 Less: comprehensive income attributable to nonredeemable noncontrolling interests ( 6 ) ( 7 ) ( 11 ) ( 12 ) Less: comprehensive income attributable to redeemable noncontrolling interests ( 58 ) ( 72 ) ( 119 ) ( 131 ) Comprehensive income attributable to S&P Global Inc. $ 559 $ 943 $ 1,378 $ 2,237 See accompanying notes to the unaudited consolidated financial statements. 5 S&P Global Inc. Consolidated Balance Sheets (in millions) June 30, 2023 December 31, 2022 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,561 $ 1,286 Restricted cash 1 1 Accounts receivable, net of allowance for doubtful accounts: 2023 - $ 49 ; 2022 - $ 48 2,545 2,494 Prepaid and other current assets 613 588 Assets of a business held for sale — 1,298 Total current assets 4,720 5,667 Property and equipment, net of accumulated depreciation: 2023 - $ 802 ; 2022 - $ 859 258 297 Right of use assets 401 423 Goodwill 34,827 34,545 Other intangible assets, net 17,912 18,306 Equity investments in unconsolidated subsidiaries 1,792 1,752 Other non-current assets 785 794 Total assets $ 60,695 $ 61,784 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 488 $ 450 Accrued compensation and contributions to retirement plans 507 753 Short-term debt 825 226 Income taxes currently payable 127 116 Unearned revenue 3,148 3,126 Other current liabilities 935 1,094 Liabilities of a business held for sale — 234 Total current liabilities 6,030 5,999 Long-term debt 10,676 10,730 Lease liabilities — non-current 547 577 Pension and other postretirement benefits 185 180 Deferred tax liability — non-current 3,693 4,065 Other non-current liabilities 495 489 Total liabilities 21,626 22,040 Redeemable noncontrolling interest (Note 8) 3,510 3,267 Commitments and contingencies (Note 12) Equity: Common stock, $ 1 par value: authorized - 600 million shares; issued - 2023 and 2022 415 million shares 415 415 Additional paid-in capital 44,293 44,422 Retained income 18,279 17,784 Accumulated other comprehensive loss ( 813 ) ( 886 ) Less: common stock in treasury ( 26,706 ) ( 25,347 ) Total equity — controlling interests 35,468 36,388 Total equity — noncontrolling interests 91 89 Total equity 35,559 36,477 Total liabilities and equity $ 60,695 $ 61,784 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, 2023 2022 Operating Activities: Net income $ 1,435 $ 2,350 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 49 62 Amortization of intangibles 522 379 Provision for losses on accounts receivable 12 12 Deferred income taxes ( 384 ) ( 91 ) Stock-based compensation 97 143 Loss (gain) on dispositions 69 ( 1,899 ) Loss on extinguishment of debt, net — 19 Other 44 94 Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: Accounts receivable ( 44 ) 387 Prepaid and other current assets ( 164 ) ( 31 ) Accounts payable and accrued expenses ( 93 ) ( 285 ) Unearned revenue ( 142 ) ( 150 ) Other current liabilities ( 305 ) ( 265 ) Net change in prepaid/accrued income taxes 123 90 Net change in other assets and liabilities 144 ( 139 ) Cash provided by operating activities 1,363 676 Investing Activities: Capital expenditures ( 59 ) ( 40 ) Acquisitions, net of cash acquired ( 286 ) 275 Proceeds from dispositions 1,002 3,506 Changes in short-term investments ( 1 ) 4 Cash provided by investing activities 656 3,745 Financing Activities: Additions to (payments on) short-term debt, net 552 ( 219 ) Proceeds from issuance of senior notes, net — 5,395 Payments on senior notes — ( 3,684 ) Dividends paid to shareholders ( 578 ) ( 472 ) Proceeds from noncontrolling interest holders — 410 Distributions to noncontrolling interest holders ( 140 ) ( 126 ) Contingent consideration payments ( 8 ) — Repurchase of treasury shares ( 1,501 ) ( 8,503 ) Exercise of stock options 7 5 Employee withholding tax on share-based payments ( 79 ) ( 74 ) Cash used for financing activities ( 1,747 ) ( 7,268 ) Effect of exchange rate changes on cash 3 ( 85 ) Net change in cash, cash equivalents, and restricted cash 275 ( 2,932 ) Cash, cash equivalents, and restricted cash at beginning of period 1,287 6,505 Cash, cash equivalents, and restricted cash at end of period $ 1,562 $ 3,573 See accompanying notes to the unaudited consolidated financial statements. 7 S&P Global Inc. Consolidated Statements of Equity (Unaudited) Three Months Ended June 30, 2023 (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, 2023 $ 415 $ 44,329 $ 18,171 $ ( 861 ) $ 25,779 $ 36,275 $ 95 $ 36,370 Comprehensive income 1 511 48 559 6 565 Dividends (Dividend declared per common share — $ 0.90 per share) ( 290 ) ( 290 ) ( 9 ) ( 299 ) Share repurchases ( 50 ) 951 ( 1,001 ) ( 1,001 ) Employee stock plans 16 ( 24 ) 40 40 Change in redemption value of redeemable noncontrolling interest ( 117 ) ( 117 ) ( 117 ) Adjustment to noncontrolling interest ( 2 ) ( 2 ) ( 2 ) Other 4 4 ( 1 ) 3 Balance as of June 30, 2023 $ 415 $ 44,293 $ 18,279 $ ( 813 ) $ 26,706 $ 35,468 $ 91 $ 35,559 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 See accompanying notes to the unaudited consolidated financial statements. 8 Six Months Ended June 30, 2023 (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, 2022 $ 415 $ 44,422 $ 17,784 $ ( 886 ) $ 25,347 $ 36,388 $ 89 $ 36,477 Comprehensive income 1 1,305 73 1,378 11 1,389 Dividends (Dividend declared per common share — $ 1.80 per share) ( 578 ) ( 578 ) ( 9 ) ( 587 ) Share repurchases 1,501 ( 1,501 ) ( 1,501 ) Employee stock plans ( 127 ) ( 142 ) 15 15 Change in redemption value of redeemable noncontrolling interest ( 237 ) ( 237 ) ( 237 ) Adjustment to noncontrolling interest ( 2 ) ( 2 ) ( 2 ) Other 5 5 5 Balance as of June 30, 2023 $ 415 $ 44,293 $ 18,279 $ ( 813 ) $ 26,706 $ 35,468 $ 91 $ 35,559 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 1 Excludes comprehensive income of $ 58 million and $ 72 million for the three months ended June 30, 2023 and 2022, respectively, and $ 119 million and $ 131 million for the six months ended June 30, 2023 and 2022, respectively, attributable to our redeemable noncontrolling interest. 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 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. • Indices is a global index provider maintaining 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. As of May 2, 2023, we completed the sale of Engineering Solutions and the results are included through that date. On May 2, 2023, we completed the sale of Engineering Solutions to Allium Buyer LLC, a Delaware limited liability company controlled by funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”). We received the full proceeds from the sale of $ 975 million in cash, subject to purchase price adjustments, which we expect to result in approximately $ 750 million in after-tax proceeds. The assets and liabilities of Engineering Solutions were classified as held for sale in our consolidated balance sheet as of December 31, 2022. During the three months ended June 30, 2023, we recorded a pre-tax loss of $ 120 million in Loss (gain) on dispositions and disposition-related costs of $ 3 million in selling and general expenses in the consolidated statement of income ($ 189 million after-tax, net of a release of a deferred tax liability of $ 101 million) related to the sale of Engineering Solutions. During the six months ended June 30, 2023, we recorded a pre-tax loss of $ 120 million in Loss (gain) on dispositions and disposition-related costs of $ 16 million in selling and general expenses in the consolidated statement of income ($ 182 million after-tax, net of a release of a deferred tax liability of $ 157 million) related to the sale of Engineering Solutions. Following the sale, the assets and liabilities of Engineering Solutions are no longer reported in our consolidated balance sheet as of June 30, 2023. The transaction follows our announced intent in November of 2022 to divest the business. Engineering Solutions became part of the Company following our merger with IHS Markit. On February 28, 2022, we completed the merger with IHS Markit Ltd (“IHS Markit”), and as a result, IHS Markit and its subsidiaries became wholly owned consolidated subsidiaries of S&P Global, and the financial results include IHS Markit from the date of acquisition. 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, 2022 (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, 2023 are not necessarily indicative of the results that may be expected for the full year. 10 On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, business combinations, 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 $ 1 million as of June 30, 2023 and December 31, 2022. 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, 2023 and December 31, 2022, contract assets were $ 97 million and $ 60 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, 2023 compared to December 31, 2022 is primarily driven by cash payments received in advance of satisfying our performance obligations, partially offset by $ 2.0 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, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 4.0 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 $ 194 million and $ 175 million as of June 30, 2023 and December 31, 2022, 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 company’s post-trade services into a 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 businesses 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: 11 (in millions) Three Months Six Months 2023 2022 2023 2022 Other components of net periodic benefit cost $ ( 6 ) $ ( 7 ) $ ( 12 ) $ ( 11 ) Net (gain) loss from investments ( 5 ) 6 12 ( 39 ) Other income, net $ ( 11 ) $ ( 1 ) $ — $ ( 50 ) 2. Acquisitions and Divestitures Acquisitions 2023 On February 16, 2023, we completed the acquisition of Market Scan Information Systems, Inc. (“Market Scan”), a leading provider of automotive pricing and incentive intelligence, including Automotive Payments as a Service TM and its powerful payment calculation engine. The addition of Market Scan to Mobility will enable the integration of detailed transaction intelligence in areas that are complementary to existing services for dealers, OEMs, lenders, and other market participants. The acquisition of Market Scan is not material to our consolidated financial statements. On January 3, 2023, we completed the acquisition of ChartIQ, a premier charting provider for the financial services industry. ChartIQ is a professional grade charting solution that allows users to visualize data with a fully interactive web-based library that works seamlessly across web, mobile and desktop. It provides advanced capabilities including trade visualization, options analytics, technical analysis and more. Additionally, ChartIQ allows clients to visualize vendor-supplied data combined with their own proprietary content, alternative datasets or analytics. The acquisition will be part of our Market Intelligence segment and further enhances our S&P Capital IQ Pro platform, our digital investment solutions provider Markit Digital and other workflow solutions to provide the industry with leading visualization capabilities. The acquisition of ChartIQ is not material to our consolidated financial statements. On January 4, 2023, we completed the acquisition of TruSight Solutions LLC (“TruSight”) a provider of third-party vendor risk assessments. The acquisition will be integrated into our Market Intelligence segment and further expands the breadth and depth of S&P Global’s third party vendor risk management solutions by offering high-quality validated assessment data to clients designed to reduce further the vendor due diligence burden on service providers to the financial services industry. The acquisition of TruSight is not material to our consolidated financial statements. 2022 Merger with IHS Markit On February 28, 2022, we completed the merger with IHS Markit. The fair value of the consideration transferred for IHS Markit was approximately $ 43.5 billion. 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 allocation of purchase price recorded for IHS Markit is as follows: 12 (in millions) February 28, 2022 Assets acquired Cash and cash equivalents $ 310 Accounts receivable, net 968 Prepaid and other current assets 224 Assets of a business held for sale 1,519 Property and equipment 118 Right of use assets 240 Goodwill 31,456 Other intangible assets 18,620 Equity investments in unconsolidated subsidiaries 1,644 Other non-current assets 54 Total assets acquired $ 55,153 Liabilities assumed Account payable $ 174 Accrued compensation 90 Short-term debt 968 Unearned revenue 1,053 Other current liabilities 581 Liabilities of a business held for sale 72 Long-term debt 4,191 Lease liabilities - non-current 231 Deferred tax liability - non-current 4,200 Other non-current liabilities 57 Total liabilities assumed $ 11,617 Total consideration transferred $ 43,536 Acquired Identifiable Intangible Assets The following table sets forth the fair values of the components of the identifiable intangible assets acquired and their useful lives: (in millions) Fair Value Weighted Average Useful Lives Customer relationships $ 13,596 25 years Trade names and trademarks 1,469 14 years Developed technology 1,043 10 years Databases 2,512 12 years Total Identified Intangible Assets $ 18,620 21 years Divestitures 2023 On May 2, 2023, we completed the sale of Engineering Solutions to Allium Buyer LLC, a Delaware limited liability company controlled by funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”). We received the full proceeds from the sale of $ 975 million in cash, subject to purchase price adjustments, which we expect to result in approximately $ 750 million in after-tax proceeds. The assets and liabilities of Engineering Solutions were classified as held for sale in our consolidated balance 13 sheet as of December 31, 2022. During the three months ended June 30, 2023, we recorded a pre-tax loss of $ 120 million in Loss (gain) on dispositions and disposition-related costs of $ 3 million in selling and general expenses in the consolidated statement of income ($ 189 million after-tax, net of a release of a deferred tax liability of $ 101 million) related to the sale of Engineering Solutions. During the six months ended June 30, 2023, we recorded a pre-tax loss of $ 120 million in Loss (gain) on dispositions and disposition-related costs of $ 16 million in selling and general expenses in the consolidated statement of income ($ 182 million after-tax, net of a release of a deferred tax liability of $ 157 million) related to the sale of Engineering Solutions. Following the sale, the assets and liabilities of Engineering Solutions are no longer reported in our consolidated balance sheet as of June 30, 2023. The transaction follows our announced intent in November of 2022 to divest the business. Engineering Solutions became part of the Company following our merger with IHS Markit. In the first quarter of 2023, we received a contingent payment following the sale of Leveraged Commentary and Data (“LCD”) along with a related family of leveraged loan indices in June of 2022. The contingent payment was payable six months following the closing upon the achievement of certain conditions related to the transition of LCD customer relationships. During the six months ended June 30, 2023, the contingent payment resulted in a pre-tax gain of $ 46 million ($ 34 million after-tax) related to the sale of LCD in our Market Intelligence segment and $ 4 million ($ 3 million after-tax) in Loss (gain) on dispositions related to the sale of a family of leveraged loan indices in our Indices segment. 2022 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 included CUSIP Global Services (“CGS”), its LCD business and a related family of leveraged loan indices while IHS Markit’s divestitures included 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 was 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 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. 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 CGS, a business within our Market Intelligence segment, to FactSet Research Systems Inc. for a purchase price of $ 1.925 billion in cash, subject to customary adjustments. During the six months ended June 30, 2022, we recorded a pre-tax gain of $ 1.344 billion ($ 1.006 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 no t recognize a gain on the sale of OPIS. 14 Assets and Liabilities Held for Sale The components of assets and liabilities held for sale in the consolidated balance sheets consist of the following: (in millions) June 30, December 31, 2023 2022 1 Accounts Receivable, net $ — $ 88 Goodwill — 437 Other intangible assets, net — 697 Other assets — 76 Assets of a business held for sale $ — $ 1,298 Accounts payable and accrued expenses $ — $ 59 Deferred tax liability — 27 Unearned revenue — 148 Liabilities of a business held for sale $ — $ 234 1 Assets and liabilities held for sale as of December 31, 2022 relate to Engineering Solutions. 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 2023 2022 2023 2022 Operating profit 1 $ 4 $ 16 $ 19 $ 50 1 The operating profit presented includes the revenue and recurring direct expenses associated with businesses disposed of or held for sale. T he three and six m onths ended June 30, 2023 excludes a pre-tax loss related to the sale of Engineering Solutions of $ 120 million. T he three and six m onths ended June 30, 2022 excludes a pre-tax gain 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. 3. Income Taxes The effective income tax rate was 31.1 % and 23.8 % for the three and six months ended June 30, 2023, respectively, and 24.5 % and 27.9 % for the three and six months ended June 30, 2022, respectively. The higher rate for the three months ended June 30, 2023 was primarily due to the tax charge on divestitures. The higher rate for the 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, 2023 and December 31, 2022, the total amount of federal, state and local, and foreign unrecognized tax benefits was $ 245 million and $ 223 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, 2023 and December 31, 2022, we had $ 47 million and $ 38 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 $ 20 million in the next twelve months as a result of the resolution of local tax examinations. For tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act of 2017 (“TCJA”) requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code (“IRC”) Section 174. Section 174 requires taxpayers to capitalize research and development costs and amortize them over 5 years for expenditures attributed to domestic research and 15 years for expenditures attributed to foreign research. This provision affects a significant proportion of the 15 Company for the first time in 2023. The actual impact of Section 174 capitalization and amortization on the income tax payable and deferred tax asset will depend on multiple factors, including the amount of research and development expenses we will incur and whether we conduct our research and development activities inside or outside the United States. Although Congress is considering legislation that would defer, repeal or otherwise modify this capitalization and amortization requirement, the possibility that this will happen is uncertain. If legislation is not passed to defer, repeal, or otherwise modify the capitalization and amortization requirement we expect our cash taxes to be greater than in the prior year. 4. Debt A summary of short-term and long-term debt outstanding is as follows: (in millions) June 30, 2023 December 31, 2022 4.125 % Senior Notes, due 2023 1 $ 38 $ 38 3.625 % Senior Notes, due 2024 2 47 48 4.75 % Senior Notes, due 2025 3 4 4 4.0 % Senior Notes, due 2026 4 3 3 2.95 % Senior Notes, due 2027 5 497 496 2.45 % Senior Notes, due 2027 6 1,238 1,237 4.75 % Senior Notes, due 2028 7 817 823 4.25 % Senior Notes, due 2029 8 1,023 1,029 2.5 % Senior Notes, due 2029 9 497 497 2.70 % Sustainability-Linked Senior Notes, due 2029 10 1,234 1,233 1.25 % Senior Notes, due 2030 11 594 594 2.90 % Senior Notes, due 2032 12 1,473 1,472 6.55 % Senior Notes, due 2037 13 291 290 4.5 % Senior Notes, due 2048 14 272 272 3.25 % Senior Notes, due 2049 15 590 590 3.70 % Senior Notes, due 2052 16 974 974 2.3 % Senior Notes, due 2060 17 683 682 3.9 % Senior Notes, due 2062 18 486 486 Commercial paper 740 188 Total debt 11,501 10,956 Less: short-term debt including current maturities 825 226 Long-term debt $ 10,676 $ 10,730 1 Interest payments are due semiannually on February 1 and August 1. 2 Interest payments are due semiannually on May 1 and November 1. 3 Interest payments are due semiannually on February 15 and August 15. 4 Interest payments are due semiannually on March 1 and September 1. 5 Interest payments are due semiannually on January 22 and July 22, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 3 million. 6 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 12 million. 7 Interest payments are due semiannually on February 1 and August 1. 8 Interest payments are due semiannually on May 1 and November 1. 9 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 3 million. 10 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 16 million. 11 Interest payments are due semiannually on February 15 and August 15, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 6 million. 16 12 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 27 million. 13 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 2 million. 14 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 11 million. 15 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 10 million. 16 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 26 million. 17 Interest payments are due semiannually on February 15 and August 15, and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 17 million. 18 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2023, the unamortized debt discount and issuance costs total $ 14 million. The fair value of our total debt borrowings was $ 9.4 billion and $ 9.3 billion as of June 30, 2023 and December 31, 2022, 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. The adjustment to fair value of the Senior Notes of approximately $ 292 million on the acquisition date is being amortized as an adjustment to interest expense over the remaining contractual terms of the Senior Notes. During the six months ended June 30, 2022, we recognized a $ 19 million loss on extinguishment of debt which includes a $ 118 million tender premium paid to tendering note holders in accordance with the terms of the tender offer, offset by a $ 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. As of June 30, 2023 and December 31, 2022, respectively, there was $ 740 million and $ 188 million of 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 occurr ence of an event of default could result in an acceleration of the obligations under the credit facility. T he 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, 2023 and December 31, 2022, 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. As of June 30, 2023 and December 31, 2022, 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. 17 Undesignated Derivative Instruments During the six months ended June 30, 2023 and twelve months ended December 31, 2022, 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 sheets. These forward contracts do not qualify for hedge accounting. As of June 30, 2023 and December 31, 2022, the aggregate notional value of these outstanding forward contracts was $ 2.0 billion and $ 1.8 billion, respectively. The changes in fair value of these forward contracts are recorded in prepaid and other current assets or other current liabilities in the consolidated balance sheets with their corresponding change in fair value recognized in selling and general expenses in the consolidated statements of income. The amount recorded in prepaid and other current assets as of June 30, 2023 and December 31, 2022 was $ 21 million and $ 5 million, respectively. The amount recorded in other current liabilities as of June 30, 2023 and December 31, 2022 was $ 1 million and $ 37 million, respectively. The amount recorded in selling and general expense related to these contracts was a net gain of $ 29 million and $ 58 million for three and six months ended June 30, 2023, respectively, and a net loss of $ 49 million and $ 69 million for three and six months ended June 30, 2022, respectively. Net Investment Hedges As of June 30, 2023 and December 31, 2022, we held 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, 2023 and December 31, 2022, 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, 2023 represent net periodic interest settlements and accruals, which are recognized in interest expense, net. We recognized net interest income of $ 6 million and $ 12 million for the three and six months ended June 30, 2023 and net interest expense of $ 8 million and $ 18 million for the three and six months ended June 30, 2022, respectively. Cash Flow Hedges Foreign Exchange Forward Contracts During the six months ended June 30, 2023 and the twelve months ended December 31, 2022, 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 2025 and the fourth quarter of 2024, 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, 2023, we estimate that $ 7 million of pre-tax gain 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, 2023 and December 31, 2022, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $ 443 million and $ 529 million, respectively. Interest Rate Swaps As of June 30, 2023 and December 31, 2022, we held positions in 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, 2023 and December 31,2022, the aggregate notional value of our outstanding interest rate swaps designated as cash flow hedges was $ 1.4 billion. 18 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, 2023 and December 31, 2022: (in millions) June 30, December 31, Balance Sheet Location 2023 2022 Derivatives designated as cash flow hedges: Prepaid and other current assets Foreign exchange forward contracts $ 10 $ 3 Other current liabilities Foreign exchange forward contracts $ 1 $ 7 Other non-current assets Interest rate swap contracts $ 134 $ 145 Derivatives designated as net investment hedges: Other non-current assets Cross currency swaps $ 54 $ 84 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) 2023 2022 2023 2022 Cash flow hedges - designated as hedging instruments Foreign exchange forward contracts $ 4 $ ( 12 ) Revenue, Selling and general expenses $ 2 $ ( 1 ) Interest rate swap contracts $ 25 $ 135 Interest expense, net $ ( 1 ) $ ( 1 ) Net investment hedges - designated as hedging instruments Cross currency swaps $ ( 22 ) $ 80 Interest expense, net $ ( 1 ) $ ( 1 ) 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) 2023 2022 2023 2022 Cash flow hedges - designated as hedging instruments Foreign exchange forward contracts $ 9 $ ( 18 ) Revenue, Selling and general expenses $ 3 $ 1 Interest rate swap contracts $ ( 9 ) $ 248 Interest expense, net $ ( 2 ) $ ( 2 ) Net investment hedges - designated as hedging instruments Cross currency swaps $ ( 31 ) $ 106 Interest expense, net $ ( 2 ) $ ( 2 ) 19 The activity related to the change in unrealized gains (losses) in accumulated other comprehensive loss was as follows for the periods ended June 30: (in millions) Three Months Six Months 2023 2022 2023 2022 Cash Flow Hedges Foreign exchange forward contracts Net unrealized gains on cash flow hedges, net of taxes, beginning of period $ 4 $ 1 $ — $ 6 Change in fair value, net of tax 5 ( 11 ) 10 ( 14 ) Reclassification into earnings, net of tax ( 2 ) 1 ( 3 ) ( 1 ) Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period $ 7 $ ( 9 ) $ 7 $ ( 9 ) Interest rate swap contracts Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of period $ 23 $ ( 118 ) $ 48 $ ( 203 ) Change in fair value, net of tax 17 101 ( 9 ) 185 Reclassification into earnings, net of tax 1 1 2 2 Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period $ 41 $ ( 16 ) $ 41 $ ( 16 ) Net Investment Hedges Net unrealized gains (losses) on net investment hedges, net of taxes, beginning of period $ 49 $ ( 2 ) $ 56 $ ( 17 ) Change in fair value, net of tax ( 18 ) 63 ( 26 ) 77 Reclassification into earnings, net of tax 1 1 2 2 Net unrealized gains on net investment hedges, net of taxes, end of period $ 32 $ 62 $ 32 $ 62 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. 20 The components of net periodic benefit cost for our retirement plans and postretirement plans for the periods ended June 30 are as follows: (in millions) Three Months Six Months 2023 2022 2023 2022 Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 19 12 37 25 Expected return on assets ( 25 ) ( 22 ) ( 50 ) ( 44 ) Amortization of prior service credit / actuarial loss — 3 1 6 Net periodic benefit cost $ ( 5 ) $ ( 6 ) $ ( 11 ) $ ( 12 ) 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, 2023 and 2022. 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, 2023. The effect of the assumption changes on retirement and postretirement expense for the three and six months ended June 30, 2023 did not have a material impact to our financial position, results of operations or cash flows. In the first six months of 2023, we contributed $ 5 million to our retirement plans and expect to make additional required contributions of approximately $ 5 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 2023. 7. Stock-Based Compensation We issue stock-based incentive awards to our eligible employees under the 2019 Employee Stock Incentive Plan and to our eligible non-employee members of the Board of Directors under a Director Deferred Stock Ownership Plan. Total stock-based compensation expense related to restricted stock and other stock-based awards was $ 97 million for the six months ended June 30, 2023 and $ 143 million for the six months ended June 30, 2022. Stock-based compensation expense for the six months ended June 30, 2022 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, 2023 , the Com pany granted 0.5 million shares of restricted stock and other stock-based awards, which had a weighted average grant date fair value of $ 350.42 per share. Total unrecognized compensation expense related to unvested equity awards as of June 30, 2023 wa s $ 235 million, which is expected to be recognized over a weighted average period of 1.7 years . 8. Equity Dividends On January 25, 2023, the Board of Directors approved an increase in the dividends for 2023 to a quarterly common stock dividend of $ 0.90 per share. Stock Repurchases On June 22, 2022, the Board of Directors approved a share repurchase program authorizing the purchase of 30 million shares (the “2022 Repurchase Program”), which was approximately 9 % of the total shares of our outstanding common stock at that time. 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. 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, 2023, 22.9 million shares remained available under the 2022 Repurchase Program and the 2020 repurchase program was complete. Our 2022 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. 21 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. The terms of each ASR agreement entered into during the six months ended June 30, 2023 and 2022, structured as outlined above, are 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 8, 2023 1 2.5 — 2.5 $ — $ 1,000 February 13, 2023 2 1.1 0.3 1.4 $ 341.95 $ 500 May 13, 2022 3 3.8 0.6 4.4 $ 343.85 $ 1,500 March 1, 2022 4 15.2 4.1 19.3 $ 362.03 $ 7,000 1 The ASR agreement was structured as an uncapped ASR agreement in which we paid $ 1 billion and initially received shares valued at 87.5 % of the $ 1 billion at a price equal to the market price of the Company's common stock on May 8, 2023 when the Company received an initial delivery of 2.5 million shares from the ASR program. The final settlement of the transaction under the ASR is expected to be completed no later than the third quarter of 2023. The ASR agreement was executed under our 2022 Repurchase Program. 2 The ASR agreement was structured as an uncapped ASR agreement in which we paid $ 500 million and initially received shares valued at 85 % of the $ 500 million at a price equal to the market price of the Company's common stock on February 13, 2023 when the Company received an initial delivery of 1.1 million shares from the ASR program. We completed the ASR agreement on May 5, 2023 and received an additional 0.3 million shares. The ASR agreement was executed under our 2022 Repurchase Program. 3 The ASR agreement was structured as an uncapped ASR agreement in which we paid $ 1.5 billion and initially received shares valued at 85 % of the $ 1.5 billion at a price equal to the market price of the Company's common stock on May 13, 2022 when the Company received an initial delivery of 3.8 million shares from the ASR program. We completed the ASR agreement on August 2, 2022 and received an additional 0.6 million shares. The ASR agreement was executed under our 2020 Repurchase Program. 4 The ASR agreement was structured as an uncapped ASR agreement in which we paid $ 7 billion and initially received shares valued at 85 % of the $ 7 billion at a price equal to the then market price of the Company's common stock on March 1, 2022 when the company received an initial delivery of 15.2 million shares from the ASR program. We completed the ASR agreement on August 9, 2022 and received an additional 4.1 million shares. The ASR agreement was executed under our 2020 Repurchase Program. During the six months ended June 30, 2023, we received 4.3 million shares, including 0.4 million shares received in February of 2023 related to our December 2, 2022 ASR agreement. During the six months ended June 30, 2023, we purchased a total of 3.9 million shares for $ 1.5 billion of cash. During the six months ended June 30, 2022, we purchased a total of 19.0 million shares for $ 8.5 billion of cash. 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 22 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 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, 2023 were as follows: (in millions) Balance as of December 31, 2022 $ 3,267 Net income attributable to redeemable noncontrolling interest 119 Distributions payable to redeemable noncontrolling interest ( 121 ) Redemption value adjustment 237 Other 1 8 Balance as of June 30, 2023 $ 3,510 1 Relates to foreign currency translation adjustments. 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, 2023: (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, 2022 $ ( 582 ) $ ( 349 ) $ 45 $ ( 886 ) Other comprehensive income (loss) before reclassifications 81 1 ( 10 ) — 71 Reclassifications from accumulated other comprehensive income (loss) to net earnings — 2 2 — 3 2 Net other comprehensive income (loss) 81 ( 8 ) — 73 Balance as of June 30, 2023 $ ( 501 ) $ ( 357 ) $ 45 $ ( 813 ) 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 less than $ 1 million for the six months ended June 30, 2023. 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. 23 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 2023 2022 2023 2022 Amounts attributable to S&P Global Inc. common shareholders: Net income $ 511 $ 972 $ 1,305 $ 2,207 Basic weighted-average number of common shares outstanding 319.3 338.0 320.3 306.8 Effect of stock options and other dilutive securities 0.5 1.3 0.6 1.2 Diluted weighted-average number of common shares outstanding 319.8 339.3 320.9 308.0 Earnings per share attributable to S&P Global Inc. common shareholders: Net income: Basic $ 1.60 $ 2.87 $ 4.08 $ 7.19 Diluted $ 1.60 $ 2.86 $ 4.07 $ 7.17 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, 2023 and 2022, there were no stock options excluded. Restricted performance shares outstanding of 0.8 million and 0.6 million as of June 30, 2023 and 2022, respectively, were excluded. 10. Restructuring We continuously evaluate our cost structure to identify cost savings associated with streamlining our management structure. Our 2023 and 2022 restructuring plan consisted of a company-wide workforce reduction of approximately 290 and 1,440 positions, respectively, 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, 2023 by segment is as follows: 2023 Restructuring Plan 2022 Restructuring Plan (in millions) Initial Charge Recorded Ending Reserve Balance Initial Charge Recorded Ending Reserve Balance Market Intelligence $ 21 $ 19 $ 86 $ 26 Ratings 5 4 26 7 Commodity Insights 15 15 45 11 Mobility 4 3 2 1 Indices 3 3 13 5 Engineering Solutions — — 2 1 Corporate 14 12 109 22 Total $ 62 $ 56 $ 283 $ 73 We recorded a pre-tax restructuring charge of $ 62 million primarily related to employee severance charges for the 2023 restructuring plan during the six months ended June 30, 2023 and have reduced the reserve by $ 6 million. 24 The ending reserve balance for the 2022 restructuring plan was $ 164 million as of December 31, 2022. For the six months ended June 30, 2023, we have reduced the reserve for the 2022 restructuring plan by $ 91 million. The ending reserve balance for the 2021 restructuring plan was $ 2 million and $ 10 million as of June 30, 2023 and December 31, 2022, respectively. The reductions primarily related to cash payments for employee severance charges. 11. Segment and Related Information We have 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, equity in income on unconsolidated subsidiaries, 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. As of May 2, 2023, we completed the sale of Engineering Solutions and the results are included through that date. A summary of operating results for the periods ended June 30 is as follows: Revenue Three Months Six Months (in millions) 2023 2022 2023 2022 Market Intelligence $ 1,079 $ 1,030 $ 2,150 $ 1,758 Ratings 851 796 1,675 1,663 Commodity Insights 462 438 970 801 Mobility 369 337 727 452 Indices 348 339 689 661 Engineering Solutions 33 96 133 129 Intersegment elimination 1 ( 41 ) ( 43 ) ( 83 ) ( 81 ) Total revenue $ 3,101 $ 2,993 $ 6,261 $ 5,383 Operating Profit Three Months Six Months (in millions) 2023 2022 2023 2022 Market Intelligence 2 $ 176 $ 702 $ 404 $ 2,191 Ratings 3 486 464 962 976 Commodity Insights 4 156 141 343 299 Mobility 5 68 58 133 76 Indices 6 226 270 464 493 Engineering Solutions 7 4 1 19 2 Total reportable segments 1,116 1,636 2,325 4,037 Corporate Unallocated expense 8 ( 216 ) ( 165 ) ( 294 ) ( 678 ) Equity in Income on Unconsolidated Subsidiaries 9 11 11 25 15 Total operating profit $ 911 $ 1,482 $ 2,056 $ 3,374 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, 2023 includes employee severance charges of $ 16 million and $ 22 million, respectively, IHS Markit merger costs of $ 12 million and $ 25 million, respectively, and an asset impairment of $ 5 million. Operating profit for the six months ended June 30, 2023 includes a gain on dispositions of $ 46 million. Operating profit for the three and six months ended June 30, 2022 includes a 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. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 140 million and $ 133 million for the three months ended June 30, 2023 and 2022, respectively, and $ 281 million and $ 197 million for the six months ended June 30, 2023 and 2022, respectively. 3 Operating profit for the three and six months ended June 30, 2023 includes employee severance charges of $ 4 million and $ 5 million, respectively. Operating profit for the three and six months ended June 30, 2022 includes employee severance charges of $ 7 million and $ 12 million, respectively. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 2 million for the three months ended June 30, 2023 and 2022, and $ 4 million and $ 3 million for the six months ended June 30, 2023 and 2022, respectively. 25 4 Operating profit for the three and six months ended June 30, 2023 includes employee severance charges of $ 14 million and $ 15 million, respectively, and IHS Markit merger costs of $ 8 million and $ 20 million, respectively. Operating profit for the three and six months ended June 30, 2022 includes employee severance costs of $ 17 million and $ 24 million, respectively, and IHS Markit merger costs of $ 4 million and $ 6 million, respectively. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 33 million and $ 32 million for the three months ended June 30, 2023 and 2022, respectively, and $ 66 million and $ 45 million for the six months ended June 30, 2023 and 2022, respectively. 5 Operating profit for the three and six months ended June 30, 2023 includes employee severance charges of $ 3 million and $ 4 million, respectively, and acquisition-related costs of $ 1 million. Operating profit for the six months ended June 30, 2023 includes IHS Markit merger costs of $ 1 million. 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. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 76 million and $ 77 million for the three months ended June 30, 2023 and 2022, respectively, and $ 150 million and $ 101 million for the six months ended June 30, 2023 and 2022, respectively. 6 Operating profit for the three and six months ended June 30, 2023 includes employee severance charges of $ 2 million and $ 3 million, respectively, and IHS Markit merger costs of $ 1 million and $ 2 million, respectively. Operating profit for the six months ended June 30, 2023 includes a gain on disposition of $ 4 million. 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. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 9 million for the three months ended June 30, 2023 and 2022 and $ 18 million and $ 13 million for the six months ended June 30, 2023 and 2022, respectively. 7 As of May 2, 2023, we completed the sale of Engineering Solutions and the results are included through that date. Operating profit for the three and six months ended June 30, 2022 includes employee severance charges of $ 1 million and $ 2 million, respectively. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 15 million for the three months ended June 30, 2022 and $ 1 million and $ 19 million for the six months ended June 30, 2023 and 2022, respectively. 8 Corporate Unallocated expense for the three and six months ended June 30, 2023 includes a loss on disposition of $ 120 million, IHS Markit merger costs of $ 30 million and $ 66 million, respectively, lease impairments of $ 15 million, employee severance charges of $ 12 million and $ 14 million, respectively, disposition-related costs of $ 3 million and $ 16 million, respectively, and acquisition-related costs of $ 1 million and $ 2 million, respectively. 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. Additionally, Corporate Unallocated expense includes amortization of intangibles from acquisitions of $ 1 million for the three months ended June 30, 2023 and $ 2 million and $ 1 million for the six months ended June 30, 2023 and 2022, respectively. 9 Equity in Income on Unconsolidated Subsidiaries includes amortization of intangibles from acquisitions of $ 14 million for the three months ended June 30, 2023 and 2022 and $ 28 million for the six months ended June 30, 2023 and 2022. The following table presents our revenue disaggregated by revenue type for the periods ended June 30: (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions Intersegment Elimination 1 Total Three Months Ended June 30, 2023 Subscription $ 910 $ — $ 420 $ 292 $ 70 $ 31 $ — $ 1,723 Non-subscription / Transaction 39 383 24 77 — 2 — 525 Non-transaction — 468 — — — — ( 41 ) 427 Asset-linked fees — — — — 211 — — 211 Sales usage-based royalties — — 18 — 67 — — 85 Recurring variable revenue 130 — — — — — 130 Total revenue $ 1,079 $ 851 $ 462 $ 369 $ 348 $ 33 $ ( 41 ) $ 3,101 Timing of revenue recognition Services transferred at a point in time $ 39 $ 383 $ 24 $ 77 $ — $ 2 $ — $ 525 Services transferred over time 1,040 468 438 292 348 31 ( 41 ) 2,576 Total revenue $ 1,079 $ 851 $ 462 $ 369 $ 348 $ 33 $ ( 41 ) $ 3,101 26 (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions Intersegment Elimination 1 Total Six Months Ended June 30, 2023 Subscription $ 1,800 $ — $ 829 $ 573 $ 136 $ 125 $ — $ 3,463 Non-subscription / Transaction 95 761 104 154 — 8 — 1,122 Non-transaction — 914 — — — — ( 83 ) 831 Asset-linked fees — — — — 420 — — 420 Sales usage-based royalties — — 37 — 133 — — 170 Recurring variable revenue 255 — — — — — — 255 Total revenue $ 2,150 $ 1,675 $ 970 $ 727 $ 689 $ 133 $ ( 83 ) $ 6,261 Timing of revenue recognition Services transferred at a point in time $ 95 $ 761 $ 104 $ 154 $ — $ 8 $ — $ 1,122 Services transferred over time 2,055 914 866 573 689 125 ( 83 ) 5,139 Total revenue $ 2,150 $ 1,675 $ 970 $ 727 $ 689 $ 133 $ ( 83 ) $ 6,261 (in millions) Market Intelligence Ratings 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 42 344 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 $ 1,030 $ 796 $ 438 $ 337 $ 339 $ 96 $ ( 43 ) $ 2,993 Timing of revenue recognition Services transferred at a point in time $ 42 $ 344 $ 26 $ 73 $ — $ 7 $ — $ 492 Services transferred over time 988 452 412 264 339 89 ( 43 ) 2,501 Total revenue $ 1,030 $ 796 $ 438 $ 337 $ 339 $ 96 $ ( 43 ) $ 2,993 27 (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions Intersegment Elimination 1 Total Six Months Ended June 30, 2022 Subscription $ 1,526 $ — $ 694 $ 350 $ 121 $ 119 $ — $ 2,810 Non-subscription / Transaction 71 747 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 $ 1,758 $ 1,663 $ 801 $ 452 $ 661 $ 129 $ ( 81 ) $ 5,383 Timing of revenue recognition Services transferred at a point in time $ 71 $ 747 $ 74 $ 102 $ — $ 10 $ — $ 1,004 Services transferred over time 1,687 916 727 350 661 119 ( 81 ) 4,379 Total revenue $ 1,758 $ 1,663 $ 801 $ 452 $ 661 $ 129 $ ( 81 ) $ 5,383 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. The following provides revenue by geographic region for the periods ended June 30: (in millions) Three Months Six Months 2023 2022 2023 2022 U.S. $ 1,865 $ 1,782 $ 3,791 $ 3,208 European region 703 699 1,414 1,266 Asia 342 326 679 590 Rest of the world 191 186 377 319 Total $ 3,101 $ 2,993 $ 6,261 $ 5,383 See Note 2 — Acquisitions and Divestitures and Note 10 — Restructuring for additional actions that impacted the segment operating results. 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 10 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. During the three and six months ended June 30, 2023 we a recorded pre-tax impairment charge of $ 5 million and $ 11 million related to the impairment and abandonment of operating lease related ROU assets. During the three and six months ended June 30, 2022 we a recorded 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 ended 28 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, 2023 and December 31, 2022: (in millions) June 30, December 31, Balance Sheet Location 2023 2022 Assets Right of use assets Lease right of use assets $ 401 $ 423 Liabilities Other current liabilities Current lease liabilities 115 118 Lease liabilities — non-current Non-current lease liabilities 547 577 The components of lease expense for the periods ended June 30 are as follows: (in millions) Three Months Six Months 2023 2022 2023 2022 Operating lease cost $ 36 $ 39 $ 66 $ 71 Sublease income ( 5 ) ( 1 ) ( 9 ) ( 2 ) Total lease cost $ 31 $ 38 $ 57 $ 69 Supplemental information related to leases for the periods ended June 30 are as follows: (in millions) Three Months Six Months 2023 2022 2023 2022 Cash paid for amounts included in the measurement for operating lease liabilities Operating cash flows for operating leases $ 38 $ 43 $ 77 $ 81 Right of use assets obtained in exchange for lease obligations Operating leases — 4 — 4 Weighted-average remaining lease term and discount rate for our operating leases are as follows: June 30, December 31, 2023 2022 Weighted-average remaining lease term (years) 6.4 6.6 Weighted-average discount rate 3.20 % 3.17 % Maturities of lease liabilities for our operating leases are as follows: (in millions) 2023 (Excluding the six months ended June 30, 2023) $ 72 2024 122 2025 106 2026 93 2027 86 2028 and beyond 269 Total undiscounted lease payments $ 748 Less: Imputed interest 86 Present value of lease liabilities $ 662 29 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, 2023, S&P Dow Jones Indices LLC earned $ 45 million and $ 89 million, respectively, of revenue under the terms of the License Agreement. 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. 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. Contractual Obligations We typically have various contractual obligations, which are recorded as liabilities in our consolidated balance sheets, while other items, such as certain purchase commitments and other executory contracts, are not recognized. For example, we are contractually committed to contracts for information-technology outsourcing, certain enterprise-wide information-technology software licensing and maintenance. In the first quarter of 2023, S&P Global and Amazon Web Services (“AWS”) entered into a multi-year strategic collaboration agreement with a purchase obligation of $ 1.0 billion, before incremental credits, over a five-year period. With AWS as its preferred cloud provider, S&P Global will enhance its cloud infrastructure, accelerate business growth, engineer new innovations for key industry segments, and help their customers navigate rapidly changing market conditions . 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. 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. 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, antitrust matters and other matters, such as ESG. 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. 30 13. Recently Issued or Adopted Accounting Standards In March of 2023, the Financial Accounting Standards Board (“FASB”) issued accounting guidance that requires all entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. The guidance is effective for reporting periods beginning after December 15, 2023, however, early adoption is permitted. We do not expect this guidance to 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. In December of 2022, the FASB amended its guidance to defer the sunset date from December 31, 2022 to December 31, 2024. 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, 2024. We do not expect this guidance to have a significant impact on our consolidated financial statements. 31