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 Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Revenue $ 3,575 $ 3,084 $ 10,616 $ 9,345 Expenses: Operating-related expenses 1,072 995 3,277 3,109 Selling and general expenses 808 741 2,247 2,217 Depreciation 22 22 70 71 Amortization of intangibles 271 260 803 782 Total expenses 2,173 2,018 6,397 6,179 (Gain) loss on dispositions, net ( 21 ) — ( 21 ) 69 Equity in income on unconsolidated subsidiaries ( 11 ) ( 8 ) ( 31 ) ( 33 ) Operating profit 1,434 1,074 4,271 3,130 Other loss (income), net 2 ( 5 ) ( 10 ) ( 5 ) Interest expense, net 72 84 227 258 Income before taxes on income 1,360 995 4,054 2,877 Provision for taxes on income 313 181 854 628 Net income 1,047 814 3,200 2,249 Less: net income attributable to noncontrolling interests ( 76 ) ( 72 ) ( 228 ) ( 202 ) Net income attributable to S&P Global Inc. $ 971 $ 742 $ 2,972 $ 2,047 Earnings per share attributable to S&P Global Inc. common shareholders: Net income: Basic $ 3.12 $ 2.34 $ 9.51 $ 6.41 Diluted $ 3.11 $ 2.33 $ 9.50 $ 6.40 Weighted-average number of common shares outstanding: Basic 311.2 317.5 312.6 319.4 Diluted 311.5 318.0 312.9 319.9 Actual shares outstanding at period end 310.3 316.8 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 Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Net income $ 1,047 $ 814 $ 3,200 $ 2,249 Other comprehensive income: Foreign currency translation adjustments 98 ( 113 ) 20 ( 40 ) Income tax effect 26 ( 6 ) 15 2 124 ( 119 ) 35 ( 38 ) Pension and other postretirement benefit plans 1 — ( 4 ) ( 12 ) Income tax effect — — 2 4 1 — ( 2 ) ( 8 ) Unrealized gain on cash flow hedges — 115 19 115 Income tax effect — ( 29 ) ( 3 ) ( 29 ) — 86 16 86 Comprehensive income 1,172 781 3,249 2,289 Less: comprehensive income attributable to nonredeemable noncontrolling interests ( 7 ) ( 7 ) ( 20 ) ( 19 ) Less: comprehensive income attributable to redeemable noncontrolling interests ( 69 ) ( 65 ) ( 208 ) ( 183 ) Comprehensive income attributable to S&P Global Inc. $ 1,096 $ 709 $ 3,021 $ 2,087 See accompanying notes to the unaudited consolidated financial statements. 5 S&P Global Inc. Consolidated Balance Sheets (in millions) September 30, 2024 December 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,696 $ 1,290 Restricted cash 1 1 Accounts receivable, net of allowance for doubtful accounts: 2024 - $ 46 ; 2023 - $ 54 2,635 2,826 Prepaid and other current assets 832 1,026 Assets of a business held for sale 38 — Total current assets 5,202 5,143 Property and equipment, net of accumulated depreciation: 2024 - $ 820 ; 2023 - $ 794 252 258 Right of use assets 390 379 Goodwill 34,991 34,850 Other intangible assets, net 16,848 17,398 Equity investments in unconsolidated subsidiaries 1,800 1,787 Other non-current assets 885 774 Total assets $ 60,368 $ 60,589 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 475 $ 557 Accrued compensation and contributions to retirement plans 823 906 Short-term debt 4 47 Income taxes currently payable 188 121 Unearned revenue 3,288 3,461 Other current liabilities 720 1,033 Liabilities of a business held for sale 7 — Total current liabilities 5,505 6,125 Long-term debt 11,398 11,412 Lease liabilities — non-current 527 541 Pension and other postretirement benefits 199 199 Deferred tax liability — non-current 3,415 3,690 Other non-current liabilities 933 522 Total liabilities 21,977 22,489 Redeemable noncontrolling interests (Note 8) 4,305 3,800 Commitments and contingencies (Note 12) Equity: Common stock, $ 1 par value: authorized - 600 million shares; issued - 2024 and 2023 415 million shares 415 415 Additional paid-in capital 44,273 44,231 Retained income 20,364 18,728 Accumulated other comprehensive loss ( 714 ) ( 763 ) Less: common stock in treasury ( 30,346 ) ( 28,411 ) Total equity — controlling interests 33,992 34,200 Total equity — noncontrolling interests 94 100 Total equity 34,086 34,300 Total liabilities and equity $ 60,368 $ 60,589 See accompanying notes to the unaudited consolidated financial statements. 6 S&P Global Inc. Consolidated Statements of Cash Flows (Unaudited) (in millions) Nine Months Ended September 30, 2024 2023 Operating Activities: Net income $ 3,200 $ 2,249 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 70 71 Amortization of intangibles 803 782 Provision for losses on accounts receivable 36 19 Deferred income taxes ( 271 ) ( 430 ) Stock-based compensation 177 143 (Gain) loss on dispositions, net ( 21 ) 69 Other ( 15 ) 151 Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: Accounts receivable 188 ( 64 ) Prepaid and other current assets ( 14 ) ( 128 ) Accounts payable and accrued expenses ( 131 ) ( 120 ) Unearned revenue ( 209 ) ( 71 ) Other current liabilities ( 399 ) ( 313 ) Net change in prepaid/accrued income taxes 314 62 Net change in other assets and liabilities 221 ( 44 ) Cash provided by operating activities 3,949 2,376 Investing Activities: Capital expenditures ( 91 ) ( 95 ) Acquisitions, net of cash acquired ( 264 ) ( 293 ) Proceeds from dispositions, net 94 1,004 Changes in short-term investments ( 1 ) ( 9 ) Cash (used for) provided by investing activities ( 262 ) 607 Financing Activities: Payments on short-term debt, net — ( 188 ) Proceeds from issuance of senior notes, net — 744 Payments on senior notes ( 47 ) — Dividends paid to shareholders ( 854 ) ( 864 ) Distributions to noncontrolling interest holders, net ( 213 ) ( 211 ) Contingent consideration payments ( 107 ) ( 8 ) Repurchase of treasury shares ( 2,001 ) ( 2,001 ) Employee withholding tax on share-based payments and other ( 58 ) ( 74 ) Cash used for financing activities ( 3,280 ) ( 2,602 ) Effect of exchange rate changes on cash ( 1 ) ( 22 ) Net change in cash, cash equivalents, and restricted cash 406 359 Cash, cash equivalents, and restricted cash at beginning of period 1,291 1,287 Cash, cash equivalents, and restricted cash at end of period $ 1,697 $ 1,646 See accompanying notes to the unaudited consolidated financial statements. 7 S&P Global Inc. Consolidated Statements of Equity (Unaudited) Three Months Ended September 30, 2024 (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 June 30, 2024 $ 415 $ 44,407 $ 19,957 $ ( 839 ) $ 29,059 $ 34,881 $ 89 $ 34,970 Comprehensive income 1 971 125 1,096 7 1,103 Dividends (Dividend declared per common share — $ 0.91 per share) ( 283 ) ( 283 ) ( 2 ) ( 285 ) Share repurchases ( 225 ) 1,276 ( 1,501 ) ( 1,501 ) Employee stock plans 91 11 80 80 Change in redemption value of redeemable noncontrolling interests ( 281 ) ( 281 ) ( 281 ) Balance as of September 30, 2024 $ 415 $ 44,273 $ 20,364 $ ( 714 ) $ 30,346 $ 33,992 $ 94 $ 34,086 Three Months Ended September 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 June 30, 2023 $ 415 $ 44,293 $ 18,279 $ ( 813 ) $ 26,706 $ 35,468 $ 91 $ 35,559 Comprehensive income 1 742 ( 33 ) 709 7 716 Dividends (Dividend declared per common share — $ 0.90 per share) ( 286 ) ( 286 ) ( 2 ) ( 288 ) Share repurchases 125 625 ( 500 ) ( 500 ) Employee stock plans 21 ( 17 ) 38 38 Change in redemption value of redeemable noncontrolling interests ( 10 ) ( 10 ) ( 10 ) Other — ( 1 ) ( 1 ) Balance as of September 30, 2023 $ 415 $ 44,439 $ 18,725 $ ( 846 ) $ 27,314 $ 35,419 $ 95 $ 35,514 8 Nine Months Ended September 30, 2024 (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, 2023 $ 415 $ 44,231 $ 18,728 $ ( 763 ) $ 28,411 $ 34,200 $ 100 $ 34,300 Comprehensive income 1 2,972 49 3,021 20 3,041 Dividends (Dividend declared per common share — $ 2.73 per share) ( 854 ) ( 854 ) ( 14 ) ( 868 ) Share repurchases ( 30 ) 1,971 ( 2,001 ) ( 2,001 ) Employee stock plans 72 ( 36 ) 108 108 Change in redemption value of redeemable noncontrolling interests ( 482 ) ( 482 ) ( 482 ) Other — ( 12 ) ( 12 ) Balance as of September 30, 2024 $ 415 $ 44,273 $ 20,364 $ ( 714 ) $ 30,346 $ 33,992 $ 94 $ 34,086 Nine Months Ended September 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 2,047 40 2,087 19 2,106 Dividends (Dividend declared per common share — $ 2.70 per share) ( 864 ) ( 864 ) ( 11 ) ( 875 ) Share repurchases 125 2,126 ( 2,001 ) ( 2,001 ) Employee stock plans ( 106 ) ( 159 ) 53 53 Change in redemption value of redeemable noncontrolling interests ( 247 ) ( 247 ) ( 247 ) Adjustment to noncontrolling interest ( 2 ) ( 2 ) ( 2 ) Other 5 5 ( 2 ) 3 Balance as of September 30, 2023 $ 415 $ 44,439 $ 18,725 $ ( 846 ) $ 27,314 $ 35,419 $ 95 $ 35,514 1 Excludes comprehensive income of $ 69 million and $ 65 million for the three months ended September 30, 2024 and 2023, respectively, and $ 208 million and $ 183 million for the nine months ended September 30, 2024 and 2023, respectively, attributable to our redeemable noncontrolling interests. See accompanying notes to the unaudited consolidated financial statements. 9 S&P Global Inc. Notes to the Consolidated Financial Statements (Unaudited) 1. Nature of Operations and Basis of Presentation S&P Global Inc. (together with its consolidated subsidiaries, “S&P Global,” the “Company,” “we,” “us” or “our”) is a provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. Our operations consist of five 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”) and S&P Dow Jones Indices (“Indices”). • 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 (Original Equipment Manufacturers or 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. As of May 2, 2023, we completed the sale of S&P Global Engineering Solutions (“Engineering Solutions”), a provider of engineering standards and related technical knowledge, and the results are included through that date . 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, 2023 (our “Form 10-K”). 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 nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the full year. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, 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 September 30, 2024 and December 31, 2023. 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 September 30, 2024 and December 31, 2023, contract assets were $ 82 million and $ 75 million, respectively, and are included in accounts receivable in our consolidated balance sheets. 10 Unearned Revenue We record unearned revenue when cash payments are received in advance of our performance. The decrease in the unearned revenue balance at September 30, 2024 compared to December 31, 2023 is primarily driven by $ 3.0 billion of revenues recognized that were included in the unearned revenue balance at the beginning of the period, offset by cash payments received in advance of satisfying our performance obligations. Remaining Performance Obligations Remaining performance obligations represent the transaction price of contracts for work that has not yet been performed. As of September 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 4.1 billion. We expect to recognize revenue on approximately sixty percent and eighty-five percent 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 Contracts 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 contracts were $ 274 million and $ 234 million as of September 30, 2024 and December 31, 2023, 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 benefit of those costs 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 combines each company’s post-trade services into a joint venture, OSTTRA. The joint venture provides trade processing and risk mitigation operations and incorporates CME Group’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. Our share of earnings or losses are recognized in Equity in income on unconsolidated subsidiaries in our consolidated statements of income. Other Loss (Income), net The components of other loss (income), net for the periods ended September 30 are as follows: (in millions) Three Months Nine Months 2024 2023 2024 2023 Other components of net periodic benefit cost $ ( 5 ) $ ( 6 ) $ ( 17 ) $ ( 18 ) Net loss from investments 7 1 7 13 Other loss (income), net $ 2 $ ( 5 ) $ ( 10 ) $ ( 5 ) 11 2. Acquisitions and Divestitures Acquisitions 2024 On May 1, 2024, we completed the acquisition of Visible Alpha, the financial technology provider of deep industry and segment consensus data creating a premium offering of fundamental investment research capabilities on Market Intelligence’s Capital IQ Pro platform. The acquisition is part of our Market Intelligence segment and further enhances the depth and breadth of the overall Visible Alpha and S&P Capital IQ Pro offering. The acquisition of Visible Alpha is not material to our consolidated financial statements. On May 14, 2024, we completed the acquisition of World Hydrogen Leaders, a globally-recognized portfolio of hydrogen-related conferences and events, digital training and market intelligence. The acquisition is part of our Commodity Insight’s segment and complements Commodity Insights global conference business and provides customers with full coverage of the hydrogen and derivative value chain alongside Energy Transition and Sustainability solutions, including hydrogen price assessments, emission factors and market research. The acquisition of World Hydrogen Leaders is not material to our consolidated financial statements. 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 enabled 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 is part of our Market Intelligence segment and further enhances our S&P Capital IQ Pro platform 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 was integrated into our Market Intelligence segment and further expanded 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. Divestitures 2024 On October 7, 2024, we entered into an agreement to sell the PrimeOne business, our outsourced technology platform servicing the global prime finance business. The PrimeOne business is part of our Market Intelligence segment. The assets and liabilities of the PrimeOne business were classified as held for sale in our consolidated balance sheet as of September 30, 2024. This transaction is expected to close in the fourth quarter of 2024. The anticipated divestiture of the PrimeOne business is not expected to be material to our consolidated financial statements. On August 15, 2024, we completed the sale of Fincentric, formerly known as Markit Digital. This sale followed our announced intent to explore strategic opportunities for Fincentric in February of 2024. Fincentric was S&P Global’s premier digital solutions provider focused on developing mobile applications and websites for retail brokerages and other financial institutions. Fincentric specializes in designing cutting-edge financial data visualizations, interfaces and investor experiences. Fincentric was acquired by S&P Global through the merger with IHS Markit and was part of our Market Intelligence segment. During the three and nine months ended September 30, 2024, we recorded a pre-tax gain of $ 21 million ($ 12 million after-tax) in (Gain) loss on dispositions, net in the consolidated statement of income related to the sale of Fincentric in our Market Intelligence segment. 12 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 resulted in approximately $ 750 million in after-tax proceeds. During the nine months ended September 30, 2023, we recorded a pre-tax loss of $ 120 million in (Gain) loss on dispositions, net 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. The transaction followed 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 nine months ended September 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 (Gain) loss on dispositions, net related to the sale of a family of leveraged loan indices in our Indices segment. 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) September 30, December 31, 2024 1 2023 Accounts Receivable, net $ 4 $ — Goodwill 34 — Other assets — — Deferred tax asset — Assets of a business held for sale $ 38 $ — Accounts payable and accrued expenses $ ( 2 ) $ — Unearned revenue ( 5 ) — Liabilities of a business held for sale $ ( 7 ) $ — 1 Assets and lia bilities held for sale as of September 30, 2024 relate to the anticipated divestiture of the PrimeOne business. The operating profit (loss) of our businesses that were held for sale or disposed of for the periods ended September 30 is as follows: (in millions) Three Months Nine Months 2024 2023 2024 2023 Operating profit (loss) 2 $ — $ 1 $ ( 2 ) $ 22 2 T he operating profit (loss) presented includes the revenue and recurring direct expenses associated with businesses disposed of or held for sale. The three and nine months ended September 30, 2024 excludes a pre-tax gain related to the sale of Fincentric of $ 21 million. The nine months ended September 30, 2023 excludes a pre-tax loss related to the sale of Engineering Solutions of $ 120 million. 3. Income Taxes The effective income tax rate was 23.0 % and 21.1 % for the three and nine months ended September 30, 2024, respectively, and 18.2 % and 21.8 % for the three and nine months ended September 30, 2023, respectively. The lower rate for the three months ended September 30, 2023 was primarily due to a combination of discrete adjustments and change in the profit mix. The higher rate for the nine months ended September 30, 2023 was primarily due to the tax charge on divestitures. 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 13 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 subject to tax examinations in various jurisdictions. As of September 30, 2024 and December 31, 2023, the total amount of federal, state and local, and foreign unrecognized tax benefits was $ 274 million and $ 230 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 September 30, 2024 and December 31, 2023, we had $ 64 million and $ 50 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 $ 12 million in the next twelve months as a result of the resolution of local tax examinations. The Organization for Economic Co-operation and Development (“OECD”) introduced an international tax framework under Pillar Two which includes a global minimum tax of 15%. This framework has been implemented by several jurisdictions, including jurisdictions in which we operate, with effect from January 1, 2024, and many other jurisdictions, including jurisdictions in which we operate, are in the process of implementing it. The effect of enacted Pillar Two taxes has been included in the results disclosed and did not have a significant impact on our consolidated financial statements. The Company continues to monitor jurisdictions that are expected to implement Pillar Two in the future, and it is in the process of evaluating the potential impact of the enactment of Pillar Two by such jurisdictions on its consolidated financial statements. 4. Debt A summary of short-term and long-term debt outstanding is as follows: (in millions) September 30, 2024 December 31, 2023 3.625 % Senior Notes, due 2024 1 — 47 4.75 % Senior Notes, due 2025 2 4 4 4.0 % Senior Notes, due 2026 3 3 3 2.95 % Senior Notes, due 2027 4 498 497 2.45 % Senior Notes, due 2027 5 1,242 1,240 4.75 % Senior Notes, due 2028 6 801 810 4.25 % Senior Notes, due 2029 7 1,007 1,016 2.5 % Senior Notes, due 2029 8 497 497 2.70 % Sustainability-Linked Senior Notes, due 2029 9 1,238 1,236 1.25 % Senior Notes, due 2030 10 595 595 2.90 % Senior Notes, due 2032 11 1,476 1,474 5.25 % Senior Notes, due 2033 12 743 743 6.55 % Senior Notes, due 2037 13 291 291 4.5 % Senior Notes, due 2048 14 273 272 3.25 % Senior Notes, due 2049 15 590 590 3.70 % Senior Notes, due 2052 16 975 975 2.3 % Senior Notes, due 2060 17 683 683 3.9 % Senior Notes, due 2062 18 486 486 Total debt 11,402 11,459 Less: short-term debt including current maturities 4 47 Long-term debt $ 11,398 $ 11,412 1 We made a $ 47 million repayment of our 3.625 % senior note in the second quarter of 2024. 2 Interest payments are due semiannually on February 15 and August 15. 3 Interest payments are due semiannually on March 1 and September 1. 4 Interest payments are due semiannually on January 22 and July 22, and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 2 million. 14 5 Interest payments are due semiannually on March 1 and September 1 and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 8 million. 6 Interest payments are due semiannually on February 1 and August 1. 7 Interest payments are due semiannually on May 1 and November 1. 8 Interest payments are due semiannually on June 1 and December 1, and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 3 million. 9 Interest payments are due semiannually on March 1 and September 1 and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 12 million. 10 Interest payments are due semiannually on February 15 and August 15, and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 5 million. 11 Interest payments are due semiannually on March 1 and September 1 and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 24 million. 12 Interest payments are due semiannually on March 15 and September 15, beginning on March 15, 2024, and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 7 million. 13 Interest payments are due semiannually on May 15 and November 15, and as of September 30, 2024, 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 September 30, 2024, the unamortized debt discount and issuance costs total $ 10 million. 15 Interest payments are due semiannually on June 1 and December 1, and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 10 million. 16 Interest payments are d ue semiannually on March 1 and September 1 and as of September 30, 2024, the unamortized debt discount and issuance costs total $ 25 million. 17 Interest payments are due semiannually on February 15 and August 1 5, and as of September 30, 2024, 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 September 30, 2024, the unamortized debt discount and issuance costs total $ 14 million. The fair value of our total debt borrowings wa s $ 10.4 billion an d $ 10.3 billion as of September 30, 2024 and December 31, 2023, respectively, and was estimated based on quoted market prices. 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 September 30, 2024 and December 31, 2023, we had no outstanding commercial paper. 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 September 30, 2024 and December 31, 2023, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange rates. As of September 30, 2024 and December 31, 2023, we held cross currency swap contracts to hedge a portion of our net investment in foreign subsidiaries against volatility in foreign exchange rates. As of December 31, 2023, we held 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. 15 Undesignated Derivative Instruments During the nine months ended September 30, 2024 and twelve months ended December 31, 2023, 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 September 30, 2024 and December 31, 2023, the aggregate notional value of these outstanding forward contracts was $ 2.6 billion. 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 September 30, 2024 and December 31, 2023 was $ 37 million and $ 69 million, respectively. The amount recorded in other current liabilities as of September 30, 2024 and December 31, 2023 was $ 7 million and $ 1 million, respectively. The amount recorded in selling and general expense related to these contracts was a net gain of $ 100 million and $ 54 million for the three and nine months ended September 30, 2024, respectively, and a net loss of $ 82 million and $ 24 million for the three and nine months ended September 30, 2023, respectively. Net Investment Hedges During the nine months ended September 30, 2024, we entered into cross currency swaps to hedge a portion of our net investment in certain European subsidiaries against volatility in the Euro/U.S. dollar exchange rate. As of December 31, 2023, 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, 2030 and 2032. The notional value of our outstanding cross currency swaps designated as a net investment hedge was $ 3.5 billion and $ 1.5 billion as of September 30, 2024 and December 31, 2023. 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, liquidated 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 nine months ended September 30, 2024 represent net periodic interest settlements and accruals, which are recognized in interest expense, net. We recognized net interest income of $ 11 million and $ 27 million for the three and nine months ended September 30, 2024, respectively, and net interest income of $ 6 million and $ 18 million for the three and nine months ended September 30, 2023, respectively. Cash Flow Hedges Foreign Exchange Forward Contracts During the nine months ended September 30, 2024 and the twelve months ended December 31, 2023, 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 third quarter of 2026 and the fourth quarter of 2025, 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 September 30, 2024, we estimate that $ 1 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 September 30, 2024 and December 31, 2023, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $ 563 million and $ 529 million, respectively. Interest Rate Swaps In the first quarter of 2023, we terminated our interest rate swap contracts with an aggregate notional value of $ 813 million and received net proceeds of $ 155 million upon termination. These contracts were designated as cash flow hedges and were scheduled to mature beginning in the first quarter of 2027. We performed a final effectiveness test upon the termination of each swap, and the effective portion of the gain of $ 155 million was recorded in accumulated other comprehensive loss in our 16 consolidated balance sheet. The gain will be recognized into interest expense, net over the term which related interest payments will be made when we enter into anticipated future debt refinancing. The following table provides information on the location and fair value amounts of our cash flow hedges and net investment hedges as of September 30, 2024 and December 31, 2023: (in millions) September 30, December 31 Balance Sheet Location 2024 2023 Derivatives designated as cash flow hedges: Prepaid and other current assets Foreign exchange forward contracts $ 8 $ 9 Other current liabilities Foreign exchange forward contracts $ 2 $ 2 Other non-current assets Interest rate swap contracts $ — $ 134 Derivatives designated as net investment hedges: Other non-current assets Cross currency swaps $ 117 $ — Other non-current liabilities Cross currency swaps $ 187 $ 14 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 September 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) 2024 2023 2024 2023 Cash flow hedges - designated as hedging instruments Foreign exchange forward contracts $ — $ ( 5 ) Revenue, Selling and general expenses $ 3 $ 2 Interest rate swap contracts $ — $ 120 Interest expense, net $ — $ ( 1 ) Net investment hedges - designated as hedging instruments Cross currency swaps $ ( 104 ) $ 22 Interest expense, net $ ( 1 ) $ ( 1 ) Nine 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) 2024 2023 2024 2023 Cash flow hedges - designated as hedging instruments Foreign exchange forward contracts $ ( 1 ) $ 4 Revenue, Selling and general expenses $ 8 $ 4 Interest rate swap contracts $ 20 $ 111 Interest expense, net $ — $ ( 4 ) Net investment hedges - designated as hedging instruments Cross currency swaps $ ( 58 ) $ ( 9 ) Interest expense, net $ ( 3 ) $ ( 3 ) 17 The activity related to the change in unrealized gains (losses) in accumulated other comprehensive loss was as follows for the periods ended September 30: (in millions) Three Months Nine Months 2024 2023 2024 2023 Cash Flow Hedges Foreign exchange forward contracts Net unrealized gains on cash flow hedges, net of taxes, beginning of period $ 5 $ 7 $ 5 $ — Change in fair value, net of tax 3 ( 2 ) 8 7 Reclassification into earnings, net of tax ( 3 ) ( 2 ) ( 8 ) ( 4 ) Net unrealized gains on cash flow hedges, net of taxes, end of period $ 5 $ 3 $ 5 $ 3 Interest rate swap contracts Net unrealized gains on cash flow hedges, net of taxes, beginning of period $ 100 $ 41 $ 84 $ 48 Change in fair value, net of tax — 89 16 79 Reclassification into earnings, net of tax — 1 — 4 Net unrealized gains on cash flow hedges, net of taxes, end of period $ 100 $ 131 $ 100 $ 131 Net Investment Hedges Net unrealized gains (losses) on net investment hedges, net of taxes, beginning of period $ 14 $ 32 $ ( 21 ) $ 56 Change in fair value, net of tax ( 79 ) 16 ( 46 ) ( 10 ) Reclassification into earnings, net of tax 1 1 3 3 Net unrealized gains (losses) on net investment hedges, net of taxes, end of period $ ( 64 ) $ 49 $ ( 64 ) $ 49 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 that provide 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 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 loss (income), net in our consolidated statements of income. 18 The components of net periodic benefit cost for our retirement plans and postretirement plans for the periods ended September 30 are as follows: (in millions) Three Months Nine Months 2024 2023 2024 2023 Service cost $ — $ — $ 1 $ 1 Interest cost 18 19 53 56 Expected return on assets ( 24 ) ( 26 ) ( 73 ) ( 76 ) Amortization of prior service credit / actuarial loss 1 1 3 2 Net periodic benefit cost $ ( 5 ) $ ( 6 ) $ ( 16 ) $ ( 17 ) Net periodic benefit cost related to our postretirement plans reflected in the table above was not material for the three and nine months ended September 30, 2024 and 2023. As discussed in our Form 10-K, we changed certain discount rate assumptions for our retirement and postretirement plans which became effective on January 1, 2024. The effect of the assumption changes on retirement and postretirement expense for the three and nine months ended September 30, 2024 did not have a material impact to our financial position, results of operations or cash flows. In the first nine months of 2024, we contributed $ 7 million to our retirement plans and expect to make additional required contributions of approximately $ 4 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 fourth quarter of 2024. 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. For the nine months ended September 30, 2024 and 2023, total stock-based compensation expense related to restricted stock and other stock-based awards was $ 177 million and $ 143 million, respectively. During the nine months ended September 30, 2024, the Company granted 0.4 million shares of restricted stock and other stock-based awards, which had a weighted average grant date fair value of $ 423.79 per share. Total unrecognized compensation expense related to unvested equity awards as of September 30, 2024 was $ 235 million, which is expected to be recognized over a weighted average period of 1.2 years. 8. Equity Dividends On January 23, 2024, the Board of Directors approved an increase in the dividends for 2024 to a quarterly common stock dividend of $ 0.91 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. 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 September 30, 2024, 14.6 million shares remained available under the 2022 Repurchase Program. 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. 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. 19 Upon settlement of the ASR agreement, the financial institution typically 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 are classified as equity instruments. The terms of each ASR agreement entered into during the nine months ended September 30, 2024 and 2023, structured as outlined above, are as follows: (in millions, except average price paid per share) ASR Agreement Initiation Date ASR Agreement Completion Date Initial Shares Delivered Additional Shares Delivered Total Number of Shares Purchased Average Price Paid Per Share Total Cash Utilized July 31, 2024 1 2.6 — 2.6 $ — $ 1,500 February 12, 2024 2 April 12, 2024 1.0 0.2 1.2 $ 421.05 $ 500 August 7, 2023 3 September 8, 2023 1.1 0.2 1.3 $ 387.36 $ 500 May 8, 2023 4 August 4, 2023 2.5 0.1 2.6 $ 384.75 $ 1,000 February 13, 2023 5 May 5, 2023 1.1 0.3 1.4 $ 341.95 $ 500 1 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 July 31, 2024. The Company received an initial delivery of 2.6 million shares from the ASR program on August 1, 2024. We completed the ASR agreement on October 22, 2024 and received an additional 0.3 million shares. We repurchased a total of 3.0 million shares under the ASR agreement for an average purchase price $ 505.19 per share. 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 12, 2024 when the Company received an initial delivery of 1.0 million shares from the ASR program. We completed the ASR agreement on April 12, 2024 and received an additional 0.2 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 $ 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 August 7, 2023 when the Company received an initial delivery of 1.1 million shares from the ASR program. We completed the ASR agreement on September 8, 2023 and received an additional 0.2 million shares. The ASR agreement was executed under our 2022 Repurchase Program. 4 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.We completed the ASR agreement on August 4, 2023 and received an additional 0.1 million shares. The ASR agreement was executed under our 2022 Repurchase Program. 5 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. During the nine months ended September 30, 2024, we received 4.1 million shares, including 0.2 million shares received in February of 2024 related to our November 13, 2023 ASR agreement. During the nine months ended September 30, 2024, we purchased a total of 3.8 million shares for $ 2 billion of cash. During the nine months ended September 30, 2023, we received 5.8 million shares, including 0.4 million shares received in February of 2023 related to our December 2, 2022 ASR agreement. During the nine months ended September 30, 2023, we purchased a total of 5.4 million shares for $ 2 billion of cash. Redeemable Noncontrolling Interests Our redeemable noncontrolling interests include an agreement with the minority partners that own 27 % of our S&P Dow Jones Indices LLC joint venture that 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 20 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 interests” with an initial value based on fair value for the portion attributable to the net assets we acquired, and based on our historical cost for the portion attributable to our S&P Index business. We adjust the redeemable noncontrolling interest each reporting period to its estimated redemption value, but never less than its initial fair value, using both income and market valuation approaches. Our income and market valuation approaches incorporate Level 3 fair value measures for instances when observable inputs are not available. The more significant judgmental assumptions used to estimate the value of the S&P Dow Jones Indices LLC joint venture include an estimated discount rate, a range of assumptions that form the basis of the expected future net cash flows (e.g., the revenue growth rates and operating margins), and a company specific beta. The significant judgmental assumptions used that incorporate market data, including the relative weighting of market observable information and the comparability of that information in our valuation models, are forward-looking and could be 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 interests during the nine months ended September 30, 2024 were as follows: (in millions) Balance as of December 31, 2023 $ 3,800 Net income attributable to redeemable noncontrolling interests 208 Distributions payable to redeemable noncontrolling interests ( 196 ) Redemption value adjustment 482 Other 1 11 Balance as of September 30, 2024 $ 4,305 1 Includes foreign currency translation adjustments Accumulated Other Comprehensive Loss The following table summarizes the changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2024: (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, 2023 $ ( 487 ) $ ( 362 ) $ 86 $ ( 763 ) Other comprehensive income (loss) before reclassifications 32 1 ( 5 ) 24 51 Reclassifications from accumulated other comprehensive income (loss) to net earnings 3 3 2 ( 8 ) 3 ( 2 ) Net other comprehensive income (loss) 35 ( 2 ) 16 49 Balance as of September 30, 2024 $ ( 452 ) $ ( 364 ) $ 102 $ ( 714 ) 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 nine months ended September 30, 2024. 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. 21 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 restricted performance shares and stock options calculated using the treasury stock method. The calculation of basic and diluted EPS for the periods ended September 30 is as follows: (in millions, except per share amounts) Three Months Nine Months 2024 2023 2024 2023 Amounts attributable to S&P Global Inc. common shareholders: Net income $ 971 $ 742 $ 2,972 $ 2,047 Basic weighted-average number of common shares outstanding 311.2 317.5 312.6 319.4 Effect of dilutive securities 0.3 0.5 0.3 0.5 Diluted weighted-average number of common shares outstanding 311.5 318.0 312.9 319.9 Earnings per share attributable to S&P Global Inc. common shareholders: Net income: Basic $ 3.12 $ 2.34 $ 9.51 $ 6.41 Diluted $ 3.11 $ 2.33 $ 9.50 $ 6.40 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 when the necessary vesting conditions have not been met or when a net loss exists. For the three and nine months ended September 30, 2024 and 2023, there were no stock options excluded. Restricted performance shares outstanding of 0.9 million and 0.8 million as of September 30, 2024 and 2023, respectively, were excluded. 10. Restructuring We continuously evaluate our cost structure to identify cost savings associated with streamlining our management structure. Our 2024 and 2023 restructuring plans consisted of a company-wide workforce reduction of approximately 415 and 1,050 positions, respectively, and are further detailed below. The charges for each restructuring plan 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. 22 The initial restructuring charge recorded and the ending reserve balance as of September 30, 2024 by segment is as follows: 2024 Restructuring Plan 2023 Restructuring Plan (in millions) Initial Charge Recorded Ending Reserve Balance Initial Charge Recorded Ending Reserve Balance Market Intelligence $ 35 $ 11 $ 90 $ 21 Ratings 1 — 10 1 Commodity Insights 4 4 26 4 Mobility 6 4 9 1 Indices 1 1 5 1 Corporate 2 1 43 9 Total $ 49 $ 21 $ 183 $ 37 We recorded a pre-tax restructuring charge of $ 49 million primarily related to employee severance charges for the 2024 restructuring plan during the nine months ended September 30, 2024 and have reduced the reserve by $ 28 million. The ending reserve balance for the 2023 restructuring plan was $ 152 million as of December 31, 2023. For the nine months ended September 30, 2024, we have reduced the reserve for the 2023 restructuring plan by $ 115 million. The reductions primarily related to cash payments for employee severance charges. 11. Segment and Related Information We have five reportable segments: Market Intelligence, Ratings, Commodity Insights, Mobility and Indices. 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 loss (income), net, or interest expense, 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 September 30 is as follows: Revenue Three Months Nine Months (in millions) 2024 2023 2024 2023 Market Intelligence $ 1,162 $ 1,099 $ 3,459 $ 3,249 Ratings 1,110 819 3,307 2,494 Commodity Insights 522 479 1,597 1,450 Mobility 412 379 1,198 1,107 Indices 416 354 1,193 1,042 Engineering Solutions — — — 133 Intersegment elimination 1 ( 47 ) ( 46 ) ( 138 ) ( 130 ) Total revenue $ 3,575 $ 3,084 $ 10,616 $ 9,345 Operating Profit Three Months Nine Months (in millions) 2024 2023 2024 2023 Market Intelligence 2 $ 230 $ 195 $ 649 $ 599 Ratings 3 676 459 2,080 1,422 Commodity Insights 4 211 184 643 527 Mobility 5 97 80 247 213 Indices 6 282 235 816 699 Engineering Solutions 7 — — — 19 Total reportable segments 1,496 1,153 4,435 3,479 Corporate Unallocated expense 8 ( 73 ) ( 87 ) ( 195 ) ( 382 ) Equity in Income on Unconsolidated Subsidiaries 9 11 8 31 33 Total operating profit $ 1,434 $ 1,074 $ 4,271 $ 3,130 23 1 Revenue for Ratings and expenses for Market Intelligence include an intersegment royalty charged to Market Intelligence for the rights to use an d distribute content and data developed by Ratings. 2 Operating profit for the three and nine months ended September 30, 2024 includes a gain on disposition of $ 21 million and IHS Markit merger costs of $ 10 million and $ 30 million, respectively. Operating profit for the nine months ended September 30, 2024 includes employee severance charges of $ 35 million and a net acquisition-related benefit of $ 8 million. Operating profit for the three and nine months ended September 30, 2023 includes employee severance charges of $ 19 million and $ 41 million, respectively, IHS Markit merger costs of $ 11 million and $ 36 million, respectively, and an asset write-off of $ 1 million. Operating profit for the nine months ended September 30, 2023 includes a gain on disposition of $ 46 million and an asset impairment of $ 5 million. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 151 million and $ 140 million for the three months ended September 30, 2024 and 2023, respectively, and $ 439 million and $ 421 million for the nine months ended September 30, 2024 and 2023, respectively. 3 Operating profit for the three and nine months ended September 30, 2024 includes a statutorily required bonus accrual adjustment of $ 6 million. Operating profit for the nine months ended September 30, 2024 includes legal costs of $ 20 million and employee severance charges of $ 2 million. Operating profit for the three and nine months ended September 30, 2023 includes employee severance charges of $ 2 million and $ 8 million, respectively. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 2 million for the three months ended September 30, 2024 and 2023, and $ 11 million and $ 6 million for the nine months ended September 30, 2024 and 2023, respectively. 4 Operating profit for the three and nine months ended September 30, 2024 includes employee severance charges of $ 4 million and IHS Markit merger costs of $ 2 million and $ 12 million, respectively. Operating profit for the nine months ended September 30, 2024 includes an asset write-off of $ 1 million and disposition-related costs of $ 1 million. Operating profit for the three and nine months ended September 30, 2023 includes IHS Markit merger costs of $ 8 million and $ 28 million, respectively, and employee severance charges of $ 7 million and $ 23 million respectively. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 32 million and $ 33 million for the three months ended September 30, 2024 and 2023, respectively, and $ 97 million and $ 99 million for the nine months ended September 30, 2024 and 2023, respectively. 5 Operating profit for the three and nine months ended September 30, 2024 includes IHS Markit merger costs of $ 1 million and $ 2 million, respectively. Operating profit for the nine months ended September 30, 2024 includes employee severance charges of $ 7 million and acquisition-related costs of $ 1 million. Operating profit for the three and nine months ended September 30, 2023 includes employee severance charges of $ 3 million and $ 6 million, respectively, IHS Markit merger costs of $ 1 million and $ 2 million, respectively, and acquisition-related costs of $ 1 million and $ 2 million, respectively. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 76 million for the three months ended September 30, 2024 and 2023, and $ 227 million and $ 226 million for the nine months ended September 30, 2024 and 2023, respectively. 6 Operating profit for the three and nine months ended September 30, 2024 includes IHS Markit merger costs of $ 1 million and $ 4 million, respectively. Operating profit for the nine months ended September 30, 2024 includes a loss on disposition of $ 1 million and employee severance charges of $ 1 million. Operating profit for the three and nine months ended September 30, 2023 includes employee severance charges of $ 1 million and $ 4 million, respectively, and IHS Markit merger costs of $ 1 million and $ 3 million, respectively. Operating profit for the nine months ended September 30, 2023 includes a gain on disposition of $ 4 million. Additionally, operating profit includes amortization of intangibles from acquisitions of $ 9 million for the three months ended September 30, 2024 and 2023, and $ 27 million for the nine months ended September 30, 2024 and 2023. 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 nine months ended September 30, 2023 includes amortization of intangibles from acquisitions of $ 1 million. 8 Corporate Unallocated expense for the three and nine months ended September 30, 2024 includes IHS Markit merger costs of $ 16 million and $ 54 million, respectively, acquisition-related costs of $ 2 million and $ 10 million, respectively, and an asset write-off of $ 1 million. Corporate Unallocated expense for the nine months ended September 30, 2024 includes disposition-related costs of $ 3 million, employee severance charges of $ 2 million, a gain on disposition of $ 2 million and recovery of lease-related costs of $ 1 million. Corporate Unallocated expense for the three and nine months ended September 30, 2023 includes IHS Markit merger costs of $ 37 million and $ 104 million, respectively, employee severance charges of $ 6 million and $ 20 million, respectively, disposition-related costs of $ 3 million and $ 19 million, respectively, and acquisition-related costs of $ 1 million and $ 3 million, respectively. Corporate Unallocated expense for the nine months ended September 30, 2023 includes a loss on disposition of $ 120 million and lease impairments of $ 15 million. Additionally, Corporate Unallocated expense includes amortization of intangibles from acquisitions of $ 1 million for the three months ended September 30, 2024, and $ 2 million for the nine months ended September 30, 2024 and 2023. 9 Equity in Income on Unconsolidated Subsidiaries includes amortization of intangibles from acquisitions of $ 14 million for the three months months ended September 30, 2024 and 2023, and $ 42 million for the nine months ended September 30, 2024 and 2023. 24 The following table presents our revenue disaggregated by revenue type for the periods ended September 30: (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions 1 Intersegment Elimination 2 Total Three Months Ended September 30, 2024 Subscription $ 981 $ — $ 478 $ 331 $ 74 $ — $ — $ 1,864 Non-subscription / Transaction 39 597 18 81 — — — 735 Non-transaction — 513 — — — — ( 47 ) 466 Asset-linked fees — — — — 266 — — 266 Sales usage-based royalties — — 26 — 76 — — 102 Recurring variable revenue 142 — — — — — — 142 Total revenue $ 1,162 $ 1,110 $ 522 $ 412 $ 416 $ — $ ( 47 ) $ 3,575 Timing of revenue recognition Services transferred at a point in time $ 39 $ 597 $ 18 $ 81 $ — $ — $ — $ 735 Services transferred over time 1,123 513 504 331 416 — ( 47 ) 2,840 Total revenue $ 1,162 $ 1,110 $ 522 $ 412 $ 416 $ — $ ( 47 ) $ 3,575 (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions 1 Intersegment Elimination 2 Total Nine Months Ended September 30, 2024 Subscription $ 2,893 $ — $ 1,387 $ 966 $ 218 $ — $ — $ 5,464 Non-subscription / Transaction 136 1,804 133 232 — — — 2,305 Non-transaction — 1,503 — — — — ( 138 ) 1,365 Asset-linked fees — — — — 756 — — 756 Sales usage-based royalties — — 77 — 219 — — 296 Recurring variable revenue 430 — — — — — — 430 Total revenue $ 3,459 $ 3,307 $ 1,597 $ 1,198 $ 1,193 $ — $ ( 138 ) $ 10,616 Timing of revenue recognition Services transferred at a point in time $ 136 $ 1,804 $ 133 $ 232 $ — $ — $ — $ 2,305 Services transferred over time 3,323 1,503 1,464 966 1,193 — ( 138 ) 8,311 Total revenue $ 3,459 $ 3,307 $ 1,597 $ 1,198 $ 1,193 $ — $ ( 138 ) $ 10,616 25 (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions 1 Intersegment Elimination 2 Total Three Months Ended September 30, 2023 Subscription $ 932 $ — $ 432 $ 296 $ 70 $ — $ — $ 1,730 Non-subscription / Transaction 42 326 26 83 — — — 477 Non-transaction — 493 — — — — ( 46 ) 447 Asset-linked fees — — — — 218 — — 218 Sales usage-based royalties — — 21 — 66 — — 87 Recurring variable revenue 125 — — — 125 Total revenue $ 1,099 $ 819 $ 479 $ 379 $ 354 $ — $ ( 46 ) $ 3,084 Timing of revenue recognition Services transferred at a point in time $ 42 $ 326 $ 26 $ 83 $ — $ — $ — $ 477 Services transferred over time 1,057 493 453 296 354 — ( 46 ) 2,607 Total revenue $ 1,099 $ 819 $ 479 $ 379 $ 354 $ — $ ( 46 ) $ 3,084 (in millions) Market Intelligence Ratings Commodity Insights Mobility Indices Engineering Solutions 1 Intersegment Elimination 2 Total Nine Months Ended September 30, 2023 Subscription $ 2,732 $ — $ 1,261 $ 870 $ 206 $ 125 $ — $ 5,194 Non-subscription / Transaction 137 1,088 130 237 — 8 — 1,600 Non-transaction — 1,406 — — — — ( 130 ) 1,276 Asset-linked fees — — — — 638 — — 638 Sales usage-based royalties — — 59 — 198 — — 257 Recurring variable revenue 380 — — — — — — 380 Total revenue $ 3,249 $ 2,494 $ 1,450 $ 1,107 $ 1,042 $ 133 $ ( 130 ) $ 9,345 Timing of revenue recognition Services transferred at a point in time $ 137 $ 1,088 $ 130 $ 237 $ — $ 8 $ — $ 1,600 Services transferred over time 3,112 1,406 1,320 870 1,042 125 ( 130 ) 7,745 Total revenue $ 3,249 $ 2,494 $ 1,450 $ 1,107 $ 1,042 $ 133 $ ( 130 ) $ 9,345 1 As of May 2, 2023, we completed the sale of Engineering Solutions and the results are included through that date. 2 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 September 30: (in millions) Three Months Nine Months 2024 2023 2024 2023 U.S. $ 2,176 $ 1,853 $ 6,478 $ 5,644 European region 802 693 2,407 2,108 Asia 388 344 1,111 1,023 Rest of the world 209 194 620 570 Total $ 3,575 $ 3,084 $ 10,616 $ 9,345 See Note 2 — Acquisitions and Divestitures and Note 10 — Restructuring for additional actions that impacted the segment operating results. 26 12. Commitments and Contingencies Leases We determine whether an arrangement meets the criteria for an operating lease or a finance lease at the inception of the arrangement. We have operating leases for office space and equipment. Our leases have remaining lease terms of 1 year to 11 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within 1 year. We sublease certain real estate leases to third parties which mainly consist of operating leases for space within our offices. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expenses for these leases on a straight line-basis over the lease term in operating-related expenses and selling and general expenses. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. Our future minimum based payments used to determine our lease liabilities include minimum based rent payments and escalations. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The following table provides information on the location and amounts of our leases on our consolidated balance sheets as of September 30, 2024 and December 31, 2023: (in millions) September 30, December 31, Balance Sheet Location 2024 2023 Assets Right of use assets Lease right of use assets $ 390 $ 379 Liabilities Other current liabilities Current lease liabilities 111 105 Lease liabilities — non-current Non-current lease liabilities 527 541 The components of lease expense for the periods ended September 30 are as follows: (in millions) Three Months Nine Months 2024 2023 2024 2023 Operating lease cost $ 32 $ 32 $ 97 $ 98 Sublease income ( 3 ) ( 4 ) ( 10 ) ( 12 ) Total lease cost $ 29 $ 28 $ 87 $ 86 Supplemental information related to leases for the periods ended September 30 are as follows: (in millions) Three Months Nine Months 2024 2023 2024 2023 Cash paid for amounts included in the measurement for operating lease liabilities Operating cash flows for operating leases $ 36 $ 36 $ 105 $ 113 Right of use assets obtained in exchange for lease obligations Operating leases 18 5 60 6 27 Weighted-average remaining lease term and discount rate for our operating leases are as follows: September 30, December 31, 2024 2023 Weighted-average remaining lease term (years) 5.6 6.0 Weighted-average discount rate 3.82 % 3.46 % Maturities of lease liabilities for our operating leases are as follows: (in millions) 2024 (Excluding the nine months ended September 30, 2024) $ 35 2025 127 2026 120 2027 112 2028 89 2029 and beyond 234 Total undiscounted lease payments $ 717 Less: Imputed interest 79 Present value of lease liabilities $ 638 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 nine months ended September 30, 2024, S&P Dow Jones Indices LLC earned $ 50 million and $ 146 million, respectively, of revenue under the terms of the License Agreement. During the three and nine months ended September 30, 2023, S&P Dow Jones Indices LLC earned $ 43 million and $ 132 million, respectively, of revenue under the terms of the License Agreement. The entire amount of this revenue is included in our consolidated statement of income and the portion related to the 27 % noncontrolling interest is removed in net income attributable to noncontrolling interests. Legal and Regulatory Matters In the normal course of business both in the United States and abroad, the Company and its subsidiaries are defendants in a number of legal proceedings and are often subjected to government and regulatory proceedings, investigations and inquiries. 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 ("NRSRO") 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. On September 3, 2024, as part of an industry-wide investigation into off-channel communications by the SEC, S&P Global Ratings, and certain other NRSROs, reached a settlement to resolve violations of recordkeeping rules. This matter was previously disclosed by S&P Global. In the SEC’s 28 order, the SEC recognized S&P Global Ratings’ remedial acts and its cooperation with the SEC staff. As part of the resolution, S&P Global Ratings paid a penalty of $ 20 million. S&P Global previously accrued that amount in its consolidated financial statements for the second quarter of 2024. Although S&P Global seeks to promptly address any compliance issues that it detects or that the staff of the SEC or another regulator raises, there can be no assurance that the SEC or another regulator will not seek remedies against S&P Global for one or more compliance deficiencies. Any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions, which could adversely impact our consolidated financial condition, cash flows, business or competitive position. In view of the uncertainty inherent in litigation and government and regulatory enforcement matters, we cannot predict the eventual outcome of such matters or the timing of their resolution, or in most cases reasonably estimate what the eventual judgments, damages, fines, penalties or impact of activity (if any) restrictions may be. As a result, we cannot provide assurance that such outcomes will not have a material adverse effect on our consolidated financial condition, cash flows, business or competitive position. As litigation or the process to resolve pending matters progresses, as the case may be, we will continue to review the latest information available and assess our ability to predict the outcome of such matters and the effects, if any, on our consolidated financial condition, cash flows, business or competitive position, which may require that we record liabilities in the consolidated financial statements in future periods. 13. Recently Issued or Adopted Accounting Standards In December of 2023, the Financial Accounting Standards Board (“FASB”) issued accounting guidance that expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the impact of this guidance on the Company’s disclosures. In November of 2023, the FASB issued accounting guidance that expands reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of this guidance on the Company’s disclosures. 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. 29