What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-10-26 compared with 2021-07-29 · 156 added, 147 removed, 585 unchanged (34% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

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

June 30, June 30,

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

September 30, September 30,

2021 2020 2021 2020

9 unchanged sentences

Interest expense, net 31 35 94 109

Loss on extinguishment of debt — 279 — 279

Income before taxes on income 1,074 636 3,274 2,588

16 unchanged sentences

Consolidated Statements of Comprehensive Income

(in millions) Three Months Ended Six Months Ended

June 30, June 30,

(in millions) Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

5 unchanged sentences

( 6 ) 15 ( 4 ) 15

( 13 ) 14 2 ( 39 )

Pension and other postretirement benefit plans

2 unchanged sentences

( 1 ) ( 1 ) ( 5 ) 8

Unrealized (loss) gain on cash flow hedges ( 216 ) 5 ( 214 ) ( 4 )

4 2 20 ( 22 )

Unrealized gain (loss) on cash flow hedges 31 14 ( 183 ) 10

Income tax effect

11 unchanged sentences

Consolidated Balance Sheets

(in millions) June 30,

(in millions) September 30,

2021 December 31,

40 unchanged sentences

Consolidated Statements of Cash Flows

(in millions) Six Months Ended

(in millions) Nine Months Ended

September 30,

Operating Activities:

7 unchanged sentences

Gain on dispositions ( 5 ) ( 16 )

Pension settlement charges, net of taxes — 2

Loss on extinguishment of debt — 279

Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:

14 unchanged sentences

Financing Activities:

Proceeds from issuance of senior notes, net — 1,276

Payments on senior notes — ( 1,394 )

Dividends paid to shareholders ( 557 ) ( 484 )

11 unchanged sentences

Consolidated Statements of Equity

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less:

Treasury Stock Total SPGI Equity Noncontrolling Interests Total Equity

Balance as of March 31, 2021 $ 294 $ 935 $ 13,920 ( 648 ) $ 13,469 $ 1,032 $ 66 $ 1,098

Balance as of June 30, 2021 $ 294 $ 963 $ 14,237 $ ( 764 ) $ 13,465 $ 1,265 $ 66 $ 1,331

Comprehensive income 1

4 unchanged sentences

Change in redemption value of redeemable noncontrolling interest ( 76 ) ( 76 ) ( 76 )

Other — ( 1 ) ( 1 )

Balance as of June 30, 2021 $ 294 $ 963 $ 14,237 $ ( 764 ) $ 13,465 $ 1,265 $ 66 $ 1,331

Three Months Ended June 30, 2020

Balance as of September 30, 2021 $ 294 $ 1,001 $ 14,772 $ ( 750 ) $ 13,472 $ 1,845 $ 70 $ 1,915

Three Months Ended September 30, 2020

(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, 2020 $ 294 $ 754 $ 12,691 $ ( 660 ) $ 13,329 $ ( 250 ) $ 56 $ ( 194 )

Balance as of June 30, 2020 $ 294 $ 762 $ 13,189 $ ( 704 ) $ 13,331 $ 210 $ 58 $ 268

Comprehensive income 1

2 unchanged sentences

( 161 ) ( 161 ) ( 7 ) ( 168 )

Share repurchases 120 131 ( 11 ) ( 11 )

Employee stock plans 35 ( 2 ) 37 37

Change in redemption value of redeemable noncontrolling interest ( 115 ) ( 115 ) ( 115 )

Balance as of June 30, 2020 $ 294 $ 762 $ 13,189 $ ( 704 ) $ 13,331 $ 210 $ 58 $ 268

Six Months Ended June 30, 2021

Balance as of September 30, 2020 $ 294 $ 917 $ 13,368 $ ( 677 ) $ 13,460 $ 442 $ 56 $ 498

Nine Months Ended September 30, 2021

(in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less:

7 unchanged sentences

Change in redemption value of redeemable noncontrolling interest ( 387 ) ( 387 ) ( 387 )

Balance as of June 30, 2021 $ 294 $ 963 $ 14,237 $ ( 764 ) $ 13,465 $ 1,265 $ 66 $ 1,331

Six Months Ended June 30, 2020

Balance as of September 30, 2021 $ 294 $ 1,001 $ 14,772 $ ( 750 ) $ 13,472 $ 1,845 $ 70 $ 1,915

Nine Months Ended September 30, 2020

(in millions) Common Stock $1 par Additional Paid-in Capital Retained Income Accumulated Other Comprehensive Loss Less:

9 unchanged sentences

Change in redemption value of redeemable noncontrolling interest ( 238 ) ( 238 ) ( 238 )

Other — ( 2 ) ( 2 )

Balance as of June 30, 2020 $ 294 $ 762 $ 13,189 $ ( 704 ) $ 13,331 $ 210 $ 58 $ 268

1 Excludes comprehensive income of $ 51 million and $ 46 million three months ended June 30, 2021 and 2020, respectively, and $ 103 million and $ 95 million for the six months ended June 30, 2021 and 2020, respectively, attributable to our redeemable noncontrolling interest.

Balance as of September 30, 2020 $ 294 $ 917 $ 13,368 $ ( 677 ) $ 13,460 $ 442 $ 56 $ 498

1 Excludes comprehensive income of $ 58 million and $ 40 million for the three months ended September 30, 2021 and 2020, respectively, and $ 161 million and $ 136 million for the nine months ended September 30, 2021 and 2020, respectively, attributable to our redeemable noncontrolling interest.

See accompanying notes to the unaudited consolidated financial statements.

17 unchanged sentences

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, 2021 are not necessarily indicative of the results that may be expected for the full year.

The operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full year.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, valuation of long-lived assets, goodwill and other intangible assets, pension plans, incentive compensation and stock-based compensation, income taxes, contingencies and redeemable noncontrolling interests.

1 unchanged sentence

Restricted Cash

Restricted cash included in our consolidated balance sheets was $ 8 million and $ 14 million as of June 30, 2021 and December 31, 2020, respectively.

Restricted cash included in our consolidated balance sheets was $ 8 million and $ 14 million as of September 30, 2021 and December 31, 2020, respectively.

Restricted cash primarily consisted of cash required to be on deposit under contractual agreements in connection with certain acquisitions and dispositions.

1 unchanged sentence

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, 2021 and December 31, 2020, contract assets were $ 16 million and $ 7 million, respectively, and are included in accounts receivable in our consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, contract assets were $ 17 million and $ 7 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 decrease in the unearned revenue balance at June 30, 2021 compared to December 31, 2020 is primarily driven by $ 1.5 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.

The decrease in the unearned revenue balance at September 30, 2021 compared to December 31, 2020 is primarily driven by $ 1.9 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 June 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 2.5 billion.

As of September 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 2.5 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.

3 unchanged sentences

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 $ 128 million and $ 129 million as of June 30, 2021 and December 31, 2020, respectively, and are included in prepaid and other current assets and other non-current assets on our consolidated balance sheets.

Total capitalized costs to obtain a contract were $ 127 million and $ 129 million as of September 30, 2021 and December 31, 2020, 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.

3 unchanged sentences

Other Income, net

The components of other income, net for the periods ended June 30 are as follows:

(in millions) Three Months Six Months

The components of other income, net for the periods ended September 30 are as follows:

(in millions) Three Months Nine Months

2021 2020 2021 2020

3 unchanged sentences

Other income, net $ ( 22 ) $ ( 6 ) $ ( 51 ) $ ( 16 )

1 The net periodic benefit cost for our retirement and post retirement plans for the three and six months ended June 30, 2020 includes a non-cash pre-tax settlement charge of $ 3 million.

1 The net periodic benefit cost for our retirement and post retirement plans for the nine months ended September 30, 2020 includes a non-cash pre-tax settlement charge of $ 3 million.

Acquisitions and Divestitures

3 unchanged sentences

On March 11, 2021, S&P Global and IHS Markit shareholders voted to approve the merger agreement.

As of May 31, 2021, IHS Markit had approximately 398.6 million shares outstanding.

Subject to certain closing conditions, the merger is expected to be completed in the fourth quarter of 2021.

During the six months ended June 30, 2021, we did not complete any material acquisitions.

As of August 31, 2021, IHS Markit had approximately 398.8 million shares outstanding.

Subject to certain closing conditions, the merger is expected to be completed in the first quarter of 2022.

During the nine months ended September 30, 2021, we did not complete any material acquisitions.

In February of 2020, CRISIL, included within our Ratings segment, completed the acquisition of Greenwich Associates LLC ("Greenwich"), a leading provider of proprietary benchmarking data, analytics and qualitative, actionable insights that helps financial services firms worldwide measure and improve business performance.

5 unchanged sentences

The acquisition of the ESG Ratings Business is not material to our consolidated financial statements.

During the six months ended June 30, 2021, we did not complete any dispositions.

During the six months ended June 30, 2021, we recorded a pre-tax gain of $ 2 million ($ 2 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of Standard & Poor's Investment Advisory Services LLC ("SPIAS"), a business within our Market Intelligence segment, in July of 2019.

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

During the nine months ended September 30, 2021, we recorded a pre-tax gain of $ 2 million ($ 2 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of Standard & Poor's Investment Advisory Services LLC ("SPIAS"), a business within our Market Intelligence segment, that occurred in July of 2019.

In January of 2020, Market Intelligence entered into a strategic alliance to transition S&P Global Market Intelligence's Investor Relations ("IR") webhosting business to Q4 Inc.

1 unchanged sentence

This alliance integrated Market Intelligence's proprietary data into Q4's portfolio of solutions, enabling further opportunities for commercial collaboration.

In connection with transitioning its IR webhosting business to Q4, Market Intelligence made a minority investment in Q4.

During the three and six months ended June 30, 2020, we recorded a pre-tax gain of $ 1 million ($ 1 million after-tax) and $ 8 million ($ 8 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of IR.

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

In connection with transitioning its IR webhosting business to Q4, Market Intelligence received a minority investment in Q4.

During the three and nine months ended September 30, 2020, we recorded a pre-tax gain of $ 3 million ($ 2 million after-tax) and $ 11 million ($ 10 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of IR.

In September of 2020, we sold our facility at East Windsor, New Jersey.

During the three and nine months ended September 30, 2020, we recorded a pre-tax gain of $ 4 million ($ 3 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of East Windsor.

During the three and nine months ended September 30, 2020, we recorded a pre-tax gain of $ 1 million ($ 1 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of SPIAS within our Market Intelligence segment in that occurred in July of 2019.

The operating profit of our businesses that were disposed of for the periods ended September 30 is as follows:

(in millions) Three Months Nine Months

2021 2020 2021 2020

1 unchanged sentence

$ — $ 1 $ 1 $ 2

1 The six months ended June 30, 2021 excludes a pre-tax gain related to the sale of the SPIAS of $ 2 million.

The three and six months ended June 30, 2020 excludes a pre-tax gain on the sale of the IR webhosting business of $ 1 million and $ 8 million, respectively.

The effective income tax rate was 25.1 % and 24.3 % for the three and six months ended June 30, 2021, respectively, and 21.7 % and 21.6 % for the three and six months ended June 30, 2020, respectively.

The increase in 2021 was primarily due to an increase in taxes on foreign operations, including the re-valuation of deferred tax liabilities related to a UK income tax rate change, certain non-deductible IHS Markit merger costs and the successful resolution of tax examinations in the prior year.

1 Operating profit excludes a pre-tax gain related to the sale of SPIAS of $ 2 million for nine months ended September 30, 2021, and $ 1 million for the three and nine months ended September 30, 2020.

The three and nine months ended September 30, 2020 exclude a pre-tax gain on the sale of the IR webhosting business of $ 3 million and $ 11 million, respectively.

The effective income tax rate was 19.9 % and 22.8 % for the three and nine months ended September 30, 2021, respectively, and 21.7 % and 21.6 % for the three and nine months ended September 30, 2020, respectively.

The decrease in the three months ended September 30, 2021 was primarily due to a refinement in tax accruals on foreign operations related to both a prior and current period, partially offset by the deductible pre-tax loss on extinguishment of debt in the prior year.

The increase in the nine months ended September 30, 2021 was primarily due to the decrease in the recognition of excess tax benefits associated with share-based payments in the statement of income, certain non-deductible IHS Markit merger costs and the deductible pre-tax loss on extinguishment of debt in the prior year.

At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary quarterly earnings.

2 unchanged sentences

The Company is continuously subject to tax examinations in various jurisdictions.

As of June 30, 2021 and December 31, 2020, the total amount of federal, state and local, and foreign unrecognized tax benefits was $ 132 million and $ 121 million, respectively, exclusive of interest and penalties.

As of September 30, 2021 and December 31, 2020, the total amount of federal, state and local, and foreign unrecognized tax benefits was $ 143 million and $ 121 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, 2021 and December 31, 2020, we had $ 26 million and $ 24 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits.

As of September 30, 2021 and December 31, 2020, we had $ 27 million and $ 24 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits.

Based on the current status of income tax audits, we believe that the total amount of unrecognized tax benefits may decrease by approximately $ 18 million in the next twelve months as a result of the resolution of local tax examinations.

A summary of long-term debt outstanding is as follows:

(in millions) June 30,

(in millions) September 30,

2021 December 31,

8 unchanged sentences

Long-term debt $ 4,113 $ 4,110

1 Interest payments are due semiannually on June 15 and December 15, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 5 million.

2 Interest payments are due semiannually on January 22 and July 22, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 5 million.

3 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 4 million.

4 Interest payments are due semiannually on February 15 and August 15, beginning on February 15, 2021, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 7 million.

5 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 3 million.

6 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 10 million.

7 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 11 million.

8 Interest payments are due semiannually on February 15 and August 15, beginning on February 15, 2021, and as of June 30, 2021, the unamortized debt discount and issuance costs total $ 19 million.

The fair value of our total debt borrowings was $ 4.4 billion and $ 4.6 billion as of June 30, 2021 and December 31, 2020, respectively, and was estimated based on quoted market prices.

1 Interest payments are due semiannually on June 15 and December 15, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 4 million.

2 Interest payments are due semiannually on January 22 and July 22, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 5 million.

3 Interest payments are due semiannually on June 1 and December 1, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 4 million.

4 Interest payments are due semiannually on February 15 and August 15, beginning on February 15, 2021, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 7 million.

5 Interest payments are due semiannually on May 15 and November 15, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 3 million.

6 Interest payments are due semiannually on May 15 and November 15, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 10 million.

7 Interest payments are due semiannually on June 1 and December 1, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 11 million.

8 Interest payments are due semiannually on February 15 and August 15, beginning on February 15, 2021, and as of September 30, 2021, the unamortized debt discount and issuance costs total $ 19 million.

The fair value of our total debt borrowings was $ 4.4 billion and $ 4.6 billion as of September 30, 2021 and December 31, 2020, respectively, and was estimated based on quoted market prices.

On April 26, 2021, we entered into a revolving $ 1.5 billion five-year credit agreement (our "credit facility") that will terminate on April 26, 2026.

2 unchanged sentences

There were no outstanding borrowings under the previous credit facility when it was replaced.

On August 13, 2020, we issued $ 600 million of 1.25 % senior notes due in 2030 and $ 700 million of 2.3 % senior notes due in 2060.

The notes are fully and unconditionally guaranteed by our wholly-owned subsidiary, Standard & Poor's Financial Services LLC.

In the third quarter of 2020, we used the net proceeds to fund the redemption and extinguishment of the $ 900 million outstanding principal amount of our 4.4 % senior notes due in 2026 and a portion of the outstanding principal amount of our 6.55 % senior notes due in 2037 and our 4.5 % senior notes due in 2048.

We have the ability to borrow a total of $ 1.5 billion through our commercial paper program, which is supported by our credit facility.

As of June 30, 2021 and December 31, 2020, there was no commercial paper issued or outstanding, and we similarly did not draw or have any borrowings outstanding from the credit facility or previous credit facility during the three and six months ended June 30, 2021 and 2020.

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.

As of September 30, 2021 and December 31, 2020, there was no commercial paper issued or outstanding, and we similarly did not draw or have any borrowings outstanding from the credit facility or previous credit facility during the three and nine months ended September 30, 2021 and 2020.

We currently pay a commitment fee of 9 basis points.

9 unchanged sentences

We typically have naturally hedged positions in most countries from a local currency perspective with offsetting assets and liabilities.

As of June 30, 2021 and December 31, 2020, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange rates and cross currency swap contracts to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates.

During the six months ended June 30, 2021, we entered into a series of interest rate swaps to mitigate or hedge the adverse fluctuations in interest rates on our future debt refinancing.

As of September 30, 2021 and December 31, 2020, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange rates and cross currency swap contracts to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates.

During the nine months ended September 30, 2021, we entered into a series of interest rate swaps to mitigate or hedge the adverse fluctuations in interest rates on our future debt refinancing.

These contracts are recorded at fair value that is based on foreign currency exchange rates and interest rates in active markets;

2 unchanged sentences

Undesignated Derivative Instruments

During the six months ended June 30, 2021 and twelve months ended December 31, 2020, we entered into foreign exchange forward contracts in order to mitigate the change in fair value of specific assets and liabilities in the consolidated balance sheet.

During the nine months ended September 30, 2021 and twelve months ended December 31, 2020, we entered into foreign exchange forward contracts in order to mitigate the change in fair value of specific assets and liabilities in the consolidated balance sheet.

These forward contracts do not qualify for hedge accounting.

As of June 30, 2021 and December 31, 2020, the aggregate notional value of these outstanding forward contracts was $ 276 million and $ 460 million, respectively.

As of September 30, 2021 and December 31, 2020, the aggregate notional value of these outstanding forward contracts was $ 336 million and $ 460 million, respectively.

The changes in fair value of these forward contracts are recorded in prepaid and other assets or other current liabilities in the consolidated balance sheet with their corresponding change in fair value recognized in selling and general expenses in the consolidated statement of income.

The amount recorded in other current liabilities as of June 30, 2021 and December 31, 2020 was $ 6 million and $ 2 million, respectively.

The amount recorded in selling and general expense related to these contracts was a net gain of $ 3 million and a net loss of $ 3 million for three and six months ended June 30, 2021, respectively, and a net gain of $ 7 million and a net loss of $ 4 million for the three and six months ended June 30, 2020, respectively.

The amount recorded in other current liabilities as of September 30, 2021 and December 31, 2020 was $ 6 million and $ 2 million, respectively.

The amount recorded in selling and general expense related to these contracts was a net loss of $ 6 million and $ 10 million for three and nine months ended September 30, 2021, respectively, and a net gain of $ 5 million and less than $ 1 million for the three and nine months ended September 30, 2020, respectively.

Net Investment Hedges

During the six months ended June 30, 2021 and twelve months ended December 31, 2020, we entered into cross currency swaps to hedge a portion of our net investment in one of our European subsidiaries against volatility in the Euro/U.S.

During the nine months ended September 30, 2021 and twelve months ended December 31, 2020, we entered into cross currency swaps to hedge a portion of our net investment in one of our European subsidiaries against volatility in the Euro/U.S.

dollar exchange rate.

These swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2024, 2029, 2030.

As of June 30, 2021 and December 31, 2020, the notional value of our outstanding cross currency swaps designated as a net investment hedge was $ 1 billion.

As of September 30, 2021 and December 31, 2020, 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 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.

1 unchanged sentence

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, 2021 represent net periodic interest settlements and accruals, which are recognized in interest expense, net.

We recognized net interest income of $ 5 million and $ 9 million for the three and six months ended June 30, 2021, respectively, and $ 2 million and $ 5 million for the three and six months ended June 30, 2020, respectively.

Accordingly, amounts related to the cross currency swaps recognized directly in net income for the three and nine months ended September 30, 2021 represent net periodic interest settlements and accruals, which are recognized in interest expense, net.

We recognized net interest income of $ 5 million and $ 14 million for the three and nine months ended September 30, 2021, respectively, and $ 3 million and $ 7 million for the three and nine months ended September 30, 2020, respectively.

Cash Flow Hedges

Foreign Exchange Forward Contracts

During the six months ended June 30, 2021 and twelve months ended December 31, 2020, 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 2023 and the fourth quarter of 2022, respectively.

During the nine months ended September 30, 2021 and twelve months ended December 31, 2020, 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 2023 and the fourth quarter of 2022, 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, 2021, we estimate that $ 13 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, 2021 and December 31, 2020, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $ 480 million and $ 489 million, respectively.

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, 2021, we estimate that $ 8 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, 2021 and December 31, 2020, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $ 520 million and $ 489 million, respectively.

Interest Rate Swaps

During the six months ended June 30, 2021, we entered into a series of interest rate swaps.

During the nine months ended September 30, 2021, we entered into a series of interest rate swaps.

These contracts are intended to mitigate or hedge the adverse fluctuations in interest rates on our future debt refinancing and are scheduled to mature beginning in the first quarter of 2027.

1 unchanged sentence

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, 2021, the aggregate notional value of our outstanding interest rate swaps designated as cash flow hedges was $ 2.3 billion.

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, 2021 and December 31, 2020:

(in millions) June 30, December 31,

As of September 30, 2021, the aggregate notional value of our outstanding interest rate swaps designated as cash flow hedges was $ 2.3 billion.

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, 2021 and December 31, 2020:

(in millions) September 30, December 31,

Balance Sheet Location 2021 2020

5 unchanged sentences

Other non-current liabilities Cross currency swaps $ 43 $ 107

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:

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:

(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)

12 unchanged sentences

Cross currency swaps $ 59 $ ( 38 ) Interest expense, net $ ( 4 ) $ —

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

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

2021 2020 2021 2020

4 unchanged sentences

Reclassification into earnings, net of tax ( 5 ) ( 2 ) ( 15 ) 2

Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period $ 12 $ ( 1 ) $ 12 $ ( 1 )

Net unrealized gains on cash flow hedges, net of taxes, end of period $ 7 $ 10 $ 7 $ 10

Interest rate swap contracts

2 unchanged sentences

Reclassification into earnings, net of tax — — — —

Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period $ ( 155 ) $ — $ ( 155 ) $ —

Net unrealized losses on cash flow hedges, net of taxes, end of period $ ( 128 ) $ — $ ( 128 ) $ —

Net Investment Hedges

17 unchanged sentences

Net periodic benefit cost for our retirement and postretirement plans other than the service cost component are included in other income, net in our consolidated statements of income.

The components of net periodic benefit cost for our retirement plans and postretirement plans for the periods ended June 30 are as follows:

(in millions) Three Months Six Months

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

2021 2020 2021 2020

6 unchanged sentences

Net benefit cost $ ( 10 ) $ ( 8 ) $ ( 31 ) $ ( 21 )

1 During the three and six months ended June 30, 2020, lump sum withdrawals exceeded the combined total anticipated annual service and interest cost of our UK pension plan, triggering the recognition of a non-cash pre-tax settlement charge of $ 3 million.

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, 2021 and 2020.

1 During the nine months ended September 30, 2020, lump sum withdrawals exceeded the combined total anticipated annual service and interest cost of our UK pension plan, triggering the recognition of a non-cash pre-tax settlement charge of $ 3 million.

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, 2021 and 2020.

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, 2021.

The effect of the assumption changes on retirement and postretirement expense for the three and six months ended June 30, 2021 did not have a material impact to our financial position, results of operations or cash flows.

In the first six months of 2021, we contributed $ 5 million to our retirement plans and expect to make additional required contributions of approximately $ 6 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 2021.

The effect of the assumption changes on retirement and postretirement expense for the three and nine months ended September 30, 2021 did not have a material impact to our financial position, results of operations or cash flows.

In the first nine months of 2021, 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 2021.

Stock-Based Compensation

1 unchanged sentence

The 2019 Plan permits the granting of incentive stock options, nonqualified stock options, stock appreciation rights, performance stock, restricted stock and other stock-based awards.

Total stock-based compensation expense primarily related to restricted stock and unit awards was $ 31 million and $ 50 million for the three and six months ended June 30, 2021, respectively, and $ 11 million and $ 22 million, for the three and six months

ended June 30, 2020, respectively.

Total unrecognized compensation expense related to unvested restricted stock and unit awards as of June 30, 2021 was $ 135 million, which is expected to be recognized over a weighted average period of 2 years.

Total stock-based compensation expense primarily related to restricted stock and unit awards was $ 40 million and $ 90 million for the three and nine months ended September 30, 2021, respectively, and $ 38 million and $ 60 million, for the three and nine

months ended September 30, 2020, respectively.

Total unrecognized compensation expense related to unvested restricted stock and unit awards as of September 30, 2021 was $ 122 million, which is expected to be recognized over a weighted average period of 1.8 years.

Stock Repurchases

2 unchanged sentences

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, 2021, 30 million shares remained available under the 2020 Repurchase Program and 0.8 million shares remained available under the 2013 repurchase program.

As of September 30, 2021, 30 million shares remained available under the 2020 Repurchase Program and 0.8 million shares remained available under the 2013 repurchase program.

Our 2020 Repurchase Program and 2013 Repurchase Program have no expiration date and purchases under these programs may be made from time to time on the open market and in private transactions, depending on market conditions.

10 unchanged sentences

The ASR agreements were executed under our 2013 Repurchase Program, approved on December 4, 2013.

The terms of each ASR agreement entered for the six months ended June 30, 2020, structured as outlined above, are as follows:

The terms of each ASR agreement entered for the period ended September 30, 2021, structured as outlined above, are as follows:

(in millions, except average price)

9 unchanged sentences

We completed the ASR agreement on July 27, 2020 and received an additional 0.3 million shares.

Additionally, we purchased shares of our common stock in the open market for the six months ended June 30, 2020 as follows:

Additionally, we purchased shares of our common stock in the open market for the periods ended September 30, 2020 as follows:

(in millions, except average price)

1 unchanged sentence

Purchased Average Price Paid Per Share Total Cash Utilized

June 30, 2020 0.5 $ 291.99 $ 150

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

During the six months ended June 30, 2020, we purchased a total of 3.4 million shares for $ 1,150 million of cash.

September 30, 2020 — $ 351.77 $ 11

September 30, 2020 0.5 $ 295.40 $ 161

During the nine months ended September 30, 2021, we did not use cash to repurchase shares.

During the nine months ended September 30, 2020, we purchased a total of 4.0 million shares for $ 1,161 million of cash.

During the fourth quarter of 2019, we repurchased shares for $ 3 million, which settled in the first quarter of 2020, resulting in $ 1,164 million of cash used to repurchase shares.

11 unchanged sentences

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, 2021 were as follows:

Changes to redeemable noncontrolling interest during the nine months ended September 30, 2021 were as follows:

(in millions)

3 unchanged sentences

Redemption value adjustment 387

Balance as of June 30, 2021

Balance as of September 30, 2021

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, 2021:

The following table summarizes the changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2021:

(in millions) Foreign Currency Translation Adjustments Pension and Postretirement Benefit Plans Unrealized Gain (Loss) on Cash Flow Hedges Accumulated Other Comprehensive Loss

5 unchanged sentences

Net other comprehensive (loss) income 2 20 ( 135 ) ( 113 )

Balance as of June 30, 2021

Balance as of September 30, 2021

$ ( 321 ) $ ( 308 ) $ ( 121 ) $ ( 750 )

1 unchanged sentence

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 $ 2 million for the six months ended June 30, 2021.

2 Reflects amortization of net actuarial losses and is net of a tax benefit of $ 3 million for the nine months ended September 30, 2021.

See Note 6 — Employee Benefits for additional details of items reclassed from accumulated other comprehensive loss to net earnings.

4 unchanged sentences

Potential common shares consist primarily of stock options and restricted performance shares calculated using the treasury stock method.

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

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

2021 2020 2021 2020

14 unchanged sentences

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, 2021 and 2020, there were no stock options excluded.

Restricted performance shares outstanding of 0.5 million and 0.6 million as of June 30, 2021 and 2020, respectively, were excluded.

For the three and nine months ended September 30, 2021 and 2020, there were no stock options excluded.

Restricted performance shares outstanding of 0.5 million and 0.6 million as of September 30, 2021 and 2020, respectively, were excluded.

Restructuring

We continuously evaluate our cost structure to identify cost savings associated with streamlining our management structure.

Our 2020 restructuring plan consisted of a company-wide workforce reduction of approximately 830 positions, and are further detailed below.

Our 2020 restructuring plan consisted of a company-wide workforce reduction of approximately 830 positions, and is further detailed below.

The charges for the restructuring plans are classified as selling and general expenses within the consolidated statements of income and the reserves are included in other current liabilities in the consolidated balance sheets.

1 unchanged sentence

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, 2021 by segment is as follows:

The initial restructuring charge recorded and the ending reserve balance as of September 30, 2021 by segment is as follows:

2020 Restructuring Plan

5 unchanged sentences

The ending reserve balance for the 2020 restructuring plan was $ 58 million as of December 31, 2020.

For the six months ended June 30, 2021, we have reduced the reserve for the 2020 restructuring plan by $ 30 million.

For the nine months ended September 30, 2021, we have reduced the reserve for the 2020 restructuring plan by $ 41 million.

The reductions primarily related to cash payments for employee severance charges.

3 unchanged sentences

Our Chief Executive Officer is our chief operating decision-maker and evaluates performance of our segments and allocates resources based primarily on operating profit.

Segment operating profit does not include Corporate Unallocated expense, other (income) expense, net, or interest expense, net, as these are amounts that do not affect the operating results of our reportable segments.

A summary of operating results for the periods ended June 30 is as follows:

Revenue Three Months Six Months

Segment operating profit does not include Corporate Unallocated expense, other income, net, interest expense, net, or loss on extinguishment of debt as these are amounts that do not affect the operating results of our reportable segments.

A summary of operating results for the periods ended September 30 is as follows:

Revenue Three Months Nine Months

(in millions) 2021 2020 2021 2020

6 unchanged sentences

Total revenue $ 2,087 $ 1,846 $ 6,209 $ 5,575

Operating Profit Three Months Six Months

Operating Profit Three Months Nine Months

(in millions) 2021 2020 2021 2020

9 unchanged sentences

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 three and six months ended June 30, 2021 includes amortization of intangibles from acquisitions of $ 2 million and $ 7 million, respectively.

Operating profit includes amortization of intangibles from acquisitions of $ 2 million for the three and six months ended June 30, 2020.

3 Operating profit for six months ended June 30, 2021 includes a gain on disposition of $ 2 million, and operating profit for three and six months ended June 30, 2020 includes a gain on disposition of $ 1 million and $ 8 million, respectively.

Operating profit for six months ended June 30, 2020 includes employee severance charges of $ 2 million.

Additionally, operating profit includes amortization of intangibles from acquisitions of $ 16 million and $ 20 million for three months ended June 30, 2021 and 2020, respectively, and $ 33 million and $ 39 million for six months ended June 30, 2021 and 2020, respectively.

4 Operating profit includes amortization of intangibles from acquisitions of $ 2 million for the three months ended June 30, 2021 and 2020, respectively, and $ 4 million for the six months ended June 30, 2021 and 2020.

5 Operating profit includes amortization of intangibles from acquisitions of $ 1 million for the three months ended June 30, 2021 and 2020, and $ 3 million for the six months ended June 30, 2021 and 2020.

6 Corporate Unallocated expense for the three and six months ended June 30, 2021 includes IHS Markit merger costs of $ 50 million and $ 99 million, respectively, a lease impairment of $ 3 million, and for six months ended June 30, 2021 includes Kensho retention related expense of $ 2 million.

Corporate Unallocated expense for the three and six months ended June 30, 2020 includes employee severance charges of $ 3 million and $ 10 million, respectively, and Kensho retention related expense of $ 2 million and $ 7 million, respectively.

Corporate Unallocated expense also includes amortization of intangibles from acquisitions of $ 7 million for the six months ended June 30, 2021, and $ 7 million and $ 13 million for the three and six months ended June 30, 2020, respectively.

The following table presents our revenue disaggregated by revenue type for the periods ended June 30:

2 Operating profit for the three and nine months ended September 30, 2020 include a technology-related impairment charge of $ 5 million.

Operating profit for three and nine months ended September 30, 2021 includes amortization of intangibles from acquisitions of $ 2 million and $ 8 million, respectively, and $ 3 million and $ 5 million for the three and nine months ended September 30, 2020, respectively.

3 Operating profit for nine months ended September 30, 2021 includes a gain on disposition of $ 2 million, and operating profit for the three and nine months ended September 30, 2020 includes a gain on dispositions of $ 4 million and $ 12 million, respectively.

Operating profit for nine months ended September 30, 2020 includes employee severance charges of $ 2 million.

Additionally, operating profit includes amortization of intangibles from acquisitions of $ 16 million and $ 49 million for three and nine months ended September 30, 2021, respectively, and $ 19 million and $ 58 million for three and nine months ended September 30, 2020, respectively.

4 Operating profit includes amortization of intangibles from acquisitions of $ 2 million for the three months ended September 30, 2021 and 2020, and $ 6 million and $ 7 million for the nine months ended September 30, 2021 and 2020, respectively.

5 Operating profit includes amortization of intangibles from acquisitions of $ 1 million for the three months ended September 30, 2021 and 2020, and $ 4 million for the nine months ended September 30, 2021 and 2020.

6 Corporate Unallocated expense for the three and nine months ended September 30, 2021 includes IHS Markit merger costs of $ 54 million and $ 153 million, respectively, and a gain on disposition of $ 3 million, and for nine months ended September 30, 2021 includes a lease impairment of $ 3 million and Kensho retention related expense of $ 2 million.

Corporate Unallocated expense for the three and nine months ended September 30, 2020 includes a gain on disposition of $ 4 million, Kensho retention related expense of $ 2 million and $ 10 million, respectively, and employee severance charges of $ 10 million for the nine months ended September 30, 2020.

Corporate Unallocated expense also includes amortization of intangibles from acquisitions of $ 7 million for the nine months ended September 30, 2021, and $ 7 million and $ 20 million for the three and nine months ended September 30, 2020, respectively.

The following table presents our revenue disaggregated by revenue type for the periods ended September 30:

(in millions) Ratings Market Intelligence Platts Indices Intersegment Elimination 1

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Subscription $ — $ 557 $ 220 $ 47 $ — $ 824

10 unchanged sentences

Total revenue $ 1,017 $ 570 $ 239 $ 298 $ ( 37 ) $ 2,087

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Subscription $ — $ 1,624 $ 645 $ 140 $ — $ 2,409

12 unchanged sentences

(in millions) Ratings Market Intelligence Platts Indices Intersegment Elimination 1

Three Months Ended June 30, 2020 2

Three Months Ended September 30, 2020 2

Subscription $ — $ 517 $ 205 $ 43 $ — $ 765

8 unchanged sentences

Total revenue $ 894 $ 530 $ 222 $ 234 $ ( 34 ) $ 1,846

Six Months Ended June 30, 2020 2

Nine Months Ended September 30, 2020 2

Subscription $ — $ 1,525 $ 603 $ 132 $ — $ 2,260

11 unchanged sentences

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.

2 In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction revenue to non-transaction revenue of $ 2 million and $ 4 million for the three and six months ended June 30, 2020, respectively.

The following provides revenue by geographic region for the periods ended June 30:

(in millions) Three Months Six Months

2 In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction revenue to non-transaction revenue of $ 2 million and $ 6 million for the three and nine months ended September 30, 2020, respectively.

The following provides revenue by geographic region for the periods ended September 30:

(in millions) Three Months Nine Months

2021 2020 2021 2020

16 unchanged sentences

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 ending June 30, 2021, we recorded a pre-tax impairment charge of $ 3 million related to the impairment and abandonment of operating lease related ROU assets.

During the nine months ending September 30, 2021, we recorded a pre-tax impairment charge of $ 3 million related to the impairment and abandonment of operating lease related ROU assets.

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, 2021 and December 31, 2020:

(in millions) June 30, December 31,

The following table provides information on the location and amounts of our leases on our consolidated balance sheets as of September 30, 2021 and December 31, 2020:

(in millions) September 30, December 31,

Balance Sheet Location 2021 2020

2 unchanged sentences

Lease liabilities — non-current Non-current lease liabilities 508 544

The components of lease expense for the periods ended June 30 are as follows:

(in millions) Three Months Six Months

The components of lease expense for the periods ended September 30 are as follows:

(in millions) Three Months Nine Months

2021 2020 2021 2020

2 unchanged sentences

Total lease cost $ 32 $ 35 $ 96 $ 105

Supplemental information related to leases for the periods ended June 30 are as follows:

(in millions) Three Months Six Months

Supplemental information related to leases for the periods ended September 30 are as follows:

(in millions) Three Months Nine Months

2021 2020 2021 2020

4 unchanged sentences

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

June 30, December 31,

September 30, December 31,

Weighted-average remaining lease term (years) 8.4 8.5

2 unchanged sentences

(in millions)

2021 (Excluding the six months ended June 30, 2021)

2021 (Excluding the nine months ended September 30, 2021)

2026 and beyond 332

5 unchanged sentences

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, 2021, S&P Dow Jones Indices LLC earned $ 31 million and $ 67 million, respectively, of revenue under the terms of the License Agreement.

During the three and six months ended June 30, 2020, S&P Dow Jones Indices LLC earned $ 40 million and $ 87 million, respectively, of revenue under the terms of the License Agreement.

During the three and nine months ended September 30, 2021, S&P Dow Jones Indices LLC earned $ 34 million and $ 102 million, respectively, of revenue under the terms of the License Agreement.

During the three and nine months ended September 30, 2020, S&P Dow Jones Indices LLC earned $ 32 million and $ 119 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 the subject of government and regulatory proceedings, investigations and inquiries.

On May 17, 2021, Indices reached a settlement with the SEC relating to the operation of a then undisclosed quality assurance mechanism and its impact on certain real-time values of the S&P 500 VIX Short-Term Futures Index ER on a single business day, February 5, 2018 (the “VIX Matter”), which was the subject of a previously disclosed Wells Notice.

Indices neither admitted nor denied the SEC's allegations.

The SEC found that Indices acted negligently in violation of Section 17(a)(3) of the Securities Act of 1933 with respect to the VIX Matter.

The SEC acknowledged Indices’ cooperation with the SEC staff.

The Company agreed to pay a penalty of $ 9 million that was previously reserved for in 2020 and to cease and desist from committing or causing any violations and any future violations of Section 17(a)(3) of the Securities Act of 1933.

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.

23 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements