What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-10-26 compared with 2021-07-29 · 200 added, 180 removed, 506 unchanged (43% of the section changed)

1 unchanged sentence

The following Management's Discussion and Analysis (“MD&A”) provides a narrative of the results of operations and financial condition of S&P Global Inc.

(together with its consolidated subsidiaries, "S&P Global," the “Company,” “we,” “us” or “our”) for the three and six months ended June 30, 2021.

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

The MD&A should be read in conjunction with the consolidated financial statements, accompanying notes and MD&A included in our Form 10-K for the year ended December 31, 2020 (our “Form 10-K”), which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The MD&A includes the following sections:

• Results of Operations — Comparing the Three and Six Months Ended June 30, 2021 and 2020

• Results of Operations — Comparing the Three and Nine Months Ended September 30, 2021 and 2020

• Liquidity and Capital Resources

12 unchanged sentences

• Indices is a global index provider maintaining a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors.

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

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

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

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

2021 2020 % Change 1

6 unchanged sentences

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

2 Operating profit for the three months ended June 30, 2021 includes IHS Markit merger costs of $50 million and a lease impairment of $3 million.

Operating profit for the six months ended June 30, 2021 includes IHS Markit merger costs of $99 million, a lease impairment of $3 million, Kensho retention related expense of $2 million and a gain on disposition of $2 million.

Operating profit for the three months ended June 30, 2020 includes employee severance charges of $3 million, Kensho retention related expense of $2 million and a gain on disposition of $1 million.

Operating profit for the six months ended June 30, 2020 includes employee severance charges of $12 million, a gain on disposition of $8 million and Kensho retention related expense of $7 million.

Operating profit also includes amortization of intangibles from acquisitions of $22 million and $32 million for the three months ended June 30, 2021 and 2020, respectively, and $53 million and $61 million for the six months ended June 30, 2021 and 2020, respectively.

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

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

Operating profit for the three months ended September 30, 2020 includes a gain on dispositions of $8 million, a technology-related impairment charge of $5 million and Kensho retention related expense of $2 million.

Operating profit for the nine months ended September 30, 2020 includes a gain on dispositions of $16 million, employee severance charges of $12 million, a technology-related impairment charge of $5 million and Kensho retention related expense of $10 million.

Operating profit also includes amortization of intangibles from acquisitions of $21 million and $32 million for the three months ended September 30, 2021 and 2020, respectively, and $74 million and $94 million for the nine months ended September 30, 2021 and 2020, respectively.

Revenue increased 13% driven by increases at all of our reportable segments.

Revenue growth at Ratings was mainly driven by an increase in non-transaction revenue, partially offset by a slight decrease in transaction revenue as an increase in bank loan ratings revenue and higher structured finance revenue were more than offset by a decrease in corporate bond ratings revenue.

Revenue growth at Market Intelligence was driven by subscription revenue growth in Credit Risk Solutions, Data Management Solutions and Market Intelligence Desktop products.

Revenue growth at Indices was due to higher average levels of assets under management for ETFs and mutual funds and higher data subscription revenue, partially offset by lower exchange-traded derivative revenue.

The revenue increase at Platts was primarily due to continued demand for market data and market insights products driving both higher renewal and subscription rates from prior year.

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

Operating profit increased 4%, with a favorable impact from foreign exchange rates of less than 1 percentage point.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 4 percentage points, operating profit increased 8%.

Revenue growth at Ratings was driven by an increase in transaction revenue and non-transaction revenue.

Transaction revenue increased due to higher bank loan ratings revenue and an increase in structured finance revenue, partially offset by a decrease in corporate bond ratings revenue.

Non-transaction revenue increased primarily due to an increase in surveillance, entity credit ratings, revenue at our CRISIL subsidiary and higher Ratings Evaluation Service ("RES") revenue.

Revenue growth at Market Intelligence was driven by subscription revenue growth in Market Intelligence Desktop products, Credit Risk Solutions and Data Management Solutions.

Revenue growth at Indices was due to higher average levels of assets under management for ETFs and mutual funds.

The revenue increase at Platts was primarily due to continued demand for market data and market insights products.

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

Operating profit increased 15%, with a favorable impact from foreign exchange rates of 1 percentage point.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 5 percentage points, partially offset by higher amortization of intangibles from acquisitions in 2020 of 1 percentage point and a technology-related impairment charge in 2020 of 1 percentage point, operating profit increased 18%.

The increase was primarily due to revenue growth at all of our reportable segments, partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

Revenue increased 11% driven by increases at all of our reportable segments.

Revenue growth at Ratings was mainly driven by an increase in transaction revenue due to higher bank loan ratings revenue and structured finance revenue, partially offset by lower corporate bond ratings revenue as well as an increase in non-transaction revenue.

Revenue growth at Market Intelligence was driven by subscription revenue growth in Credit Risk Solutions, Data Management Solutions and Market Intelligence Desktop products.

The revenue increase at Platts was primarily due to continued demand for market data and market insights products driving both higher renewal and subscription rates from prior year.

Revenue growth at Ratings was driven by an increase in transaction revenue and non-transaction revenue.

Transaction revenue increased due to higher bank loan ratings revenue and an increase in structured finance revenue, partially offset by a decrease in corporate bond ratings revenue.

Non-transaction revenue increased primarily due to an increase in entity credit ratings, surveillance, higher RES revenue and an increase in revenue at our CRISIL subsidiary.

Revenue growth at Market Intelligence was driven by subscription revenue growth in Credit Risk Solutions, Market Intelligence Desktop products and Data Management Solutions.

Revenue growth at Indices was due to higher average levels of assets under management for ETFs and mutual funds, partially offset by lower exchange-traded derivative revenue.

The revenue increase at Platts was primarily due to continued demand for market data and market insights products.

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

Operating profit increased 12%, with a favorable impact from foreign exchange rates of 1 percentage point.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 4 percentage points, partially offset by higher employee severance charges in 2020 of 1 percentage point, operating profit increased 14%.

The increase was primarily due to revenue growth at all of our reportable segments combined with a decrease in occupancy costs and travel and entertainment expenses from non-essential travel restrictions in response to the 2019 novel coronavirus ("COVID-19"), partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

We are closely monitoring the impact of the outbreak of COVID-19 on all aspects of our business.

While COVID-19 did not have a material adverse effect on our reported results for the three and six months ended June 30, 2021 and 2020, we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

While COVID-19 did not have a material adverse effect on our reported results for the three and nine months ended September 30, 2021 and 2020, we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

We are a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

9 unchanged sentences

building trust and team cohesion with IHS Markit (NYSE:INFO) colleagues;

laying groundwork to set proforma organization up for successful realization of our synergy and strategic goals.

laying groundwork to set the proforma organization up for successful realization of our synergy and strategic goals.

• Continuing to deliver our key initiatives to the market and building them through a customer-first lens;

13 unchanged sentences

See Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

RESULTS OF OPERATIONS — COMPARING THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

RESULTS OF OPERATIONS — COMPARING THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

Consolidated Review

(in millions) Three Months Six Months

(in millions) Three Months Nine Months

2021 2020 % Change 2021 2020 % Change

5 unchanged sentences

Total expenses 1,007 910 11% 2,897 2,631 10%

Gain on dispositions — (1) N/M (2) (8) (76)%

Gain on dispositions (3) (8) (69)% (5) (16) (72)%

Operating profit 1,083 944 15% 3,317 2,960 12%

1 unchanged sentence

Interest expense, net 31 35 (13)% 94 109 (14)%

Loss on extinguishment of debt — 279 N/M — 279 N/M

Provision for taxes on income 213 138 54% 747 559 34%

3 unchanged sentences

$ 797 $ 455 75% $ 2,349 $ 1,885 25%

N/M- not meaningful

The following table provides consolidated revenue information for the three months ended June 30:

(in millions) Three Months Six Months

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

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

(in millions) Three Months Nine Months

2021 2020 % Change 2021 2020 % Change

20 unchanged sentences

International revenue 40 % 42 % 39 % 39 %

Subscription revenue increased primarily from growth in Market Intelligence's Credit Risk Solutions, Data Management Solutions and Market Intelligence Desktop products, and continued demand for Platts proprietary content.

Non-subscription / transaction revenue decreased slightly as an increase in bank loan ratings revenue and higher structured finance revenue were more than offset by a decrease in corporate bond ratings revenue at Ratings.

Non-transaction revenue increased primarily due to an increase in entity credit ratings, surveillance, higher Ratings Evaluation Service revenue driven by increased M&A activity and an increase in revenue at our CRISIL subsidiary.

Subscription revenue increased primarily from growth in Market Intelligence's Desktop products, Credit Risk Solutions and Data Management Solutions, and continued demand for Platts market data and market insights products.

Non-subscription / transaction revenue increased due to an increase in bank loan ratings revenue and higher structured finance revenue, partially offset by a decrease in corporate bond ratings revenue at Ratings.

Non-transaction revenue increased due to an increase in surveillance, entity credit ratings, revenue at our CRISIL subsidiary and higher RES revenue at Ratings.

Asset linked fees increased reflecting higher average levels of assets under management for ETFs and mutual funds at Indices.

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

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

See “Segment Review” below for further information.

The favorable impact of foreign exchange rates increased revenue by 1 percentage point.

The favorable impact of foreign exchange rates increased revenue by less than 1 percentage point.

This impact refers to constant currency comparisons estimated by recalculating current year results of foreign operations using the average exchange rate from the prior year.

Subscription revenue increased primarily from growth in Market Intelligence's Credit Risk Solutions, Data Management Solutions and Market Intelligence Desktop products and continued demand for Platts proprietary content.

Subscription revenue increased primarily from growth in Market Intelligence's Credit Risk Solutions, Market Intelligence Desktop products and Data Management Solutions and continued demand for Platts market data and market insights products.

Non-subscription / transaction revenue increased due to an increase in bank loan ratings revenue and higher structured finance revenue, partially offset by lower corporate bond ratings revenue at Ratings.

Non-transaction revenue increased primarily due to an increase in entity credit ratings, surveillance, higher RES revenue and an increase in revenue at our CRISIL subsidiary at Ratings.

Asset linked fees increased reflecting higher average levels of assets under management for ETFs and mutual funds at Indices.

4 unchanged sentences

Total Expenses

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

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

(in millions) 2021 2020 % Change

5 unchanged sentences

general expenses

Ratings $ 238 $ 93 $ 217 $ 86 10% 8%

$ 245 $ 119 $ 240 $ 98 2% 20%

Market Intelligence

9 unchanged sentences

$ 543 $ 423 $ 517 $ 341 5% 24%

N/M- not meaningful

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

1 In 2020 , selling and general expenses include a technology-related impairment charge of $5 million.

2 Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

2 In 2021, selling and general expenses include IHS Markit merger costs of $50 million and a lease impairment of $3 million.

In 2020 , selling and general expenses include employee severance charges of $3 million and Kensho retention related expense of $2 million.

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

In 2020 , selling and general expenses include Kensho retention related expense of $2 million.

Operating-Related Expenses

Operating-related expenses increased 8% primarily driven by an increase at Ratings driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases.

Operating-related expenses increased 5% primarily driven by higher cost of sales at Indices, an increase in intersegment royalties tied to annualized contract value growth at Market Intelligence and higher compensation costs at Platts and Ratings.

Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

1 unchanged sentence

Selling and general expenses increased 24%.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 17 percentage points and a lease impairment in 2021 of 1 percentage point, partially offset by higher employee severance charges in 2020 of 1 percentage point and higher Kensho related retention expense in 2020 of 1 percentage point, selling and general expenses increased 11%.

This increase was primarily driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 16 percentage points, partially offset by a technology-related impairment charge in 2020 of 2 percentage points and higher Kensho related retention expense in 2020 of 1 percentage point, selling and general expenses increased 11%.

The increase was primarily driven by an increase at Ratings due to higher incentive costs and an increase in compensation costs, partially offset by a decrease in legal related costs at Indices.

Depreciation and Amortization

Depreciation and amortization decreased $6 million or 13% driven by a decrease in intangible asset amortization related to assets that became fully amortized, partially offset by an increase in depreciation expense.

Depreciation and amortization decreased $11 million or 20% driven by a decrease in intangible asset amortization related to assets that became fully amortized.

(in millions) 2021 2020 % Change

5 unchanged sentences

general expenses

Ratings $ 470 $ 184 $ 441 $ 159 7% 16%

$ 715 $ 303 $ 681 $ 257 5% 18%

Market Intelligence 2

7 unchanged sentences

Corporate Unallocated expense 3

18 143 18 54 (1)% NM

27 221 26 76 3% N/M

$ 1,603 $ 1,157 $ 1,527 $ 949 5% 22%

N/M- not meaningful

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

1 In 2020 , selling and general expenses include a technology-related impairment charge of $5 million.

2 In 2020, selling and general expenses include employee severance charges of $2 million.

4 unchanged sentences

Operating-Related Expenses

Operating-related expenses increased 5% primarily driven by an increase at Ratings driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases, partially offset by lower occupancy costs and a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19.

Operating-related expenses increased 5%.

Increases at Ratings, Indices and Platts were primarily driven by higher incentive costs and an increase in compensation costs.

The increase at Market Intelligence was primarily due to an increase in intersegment royalties tied to annualized contract value growth.

Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

1 unchanged sentence

Selling and general expenses increased 22%.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 16 percentage points, partially offset by higher employee severance charges in 2020 of 2 percentage points, selling and general expenses increased 7%.

This increase was primarily driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases, partially offset by lower occupancy costs and a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 16 percentage points, partially offset by higher employee severance charges in 2020 of 1 percentage points and higher Kensho retention related expense in 2020, selling and general expenses increased 8%.

This increase was primarily driven by higher incentive costs and an increase in compensation costs due to additional headcount and annual merit increases, partially offset by lower occupancy costs, a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19 and a decrease in legal related costs at Indices.

Depreciation and Amortization

Depreciation and amortization decreased $7 million or 6% driven by a decrease in intangible asset amortization related to assets that became fully amortized, partially offset by an increase in depreciation expense.

Depreciation and amortization decreased $17 million or 11% driven by a decrease in intangible asset amortization related to assets that became fully amortized.

Gain on 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 SPIAS within our Market Intelligence segment in July of 2019.

During the three and six months ended June 30, 2020, we completed the following disposition that resulted in a pre-tax gain of $1 million ($1 million after-tax) and $8 million ($8 million after-tax), respectively, which was included in Gain on dispositions in the consolidated statements of income:

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

• During the three and nine months ended September 30, 2021, we recorded a pre-tax gain of $3 million ($2 million after-tax) in 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 ("SPIAS") within our Market Intelligence segment that occurred in July of 2019.

During the three and nine months ended September 30, 2020, we completed the following dispositions that resulted in a pre-tax gain of $8 million and $16 million, respectively, which was included in Gain on dispositions in the consolidated statements of income:

• 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.

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.

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 that occurred in July of 2019.

Operating Profit

4 unchanged sentences

GAAP, and may not be defined and calculated by other companies in the same manner.

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

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

(in millions) 2021 2020 % Change

5 unchanged sentences

Total operating profit $ 1,083 $ 944 15%

1 2021 and 2020 include amortization of intangibles from acquisitions of $2 million.

2 2020 includes a gain on disposition of $1 million.

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

1 2020 includes a technology-related impairment charge of $5 million.

2021 and 2020 include amortization of intangibles from acquisitions of $2 million and $3 million, respectively.

2 2020 includes a gain on dispositions of $4 million.

2021 and 2020 includes amortization of intangibles from acquisitions of $16 million and $19 million, respectively.

1 unchanged sentence

4 2021 and 2020 include amortization of intangibles from acquisitions of $1 million.

5 2021 includes IHS Markit merger costs of $50 million and a lease impairment of $3 million.

2020 includes employee severance charges of $3 million, and Kensho retention related expense of $2 million and amortization of intangibles from acquisitions of $7 million.

5 2021 includes IHS Markit merger costs of $54 million and a gain on disposition of $3 million.

2020 includes a gain on disposition of $4 million, Kensho retention related expense of $2 million and amortization of intangibles from acquisitions of $7 million.

Segment Operating Profit — Increased 20% as compared to 2020.

Excluding the impact of a higher gain on dispositions in 2020 of less than 1 percentage point, partially offset by higher amortization of intangibles in 2020 of less than 1 percentage point and higher employee severance charges in 2020 of less than 1 percentage point, operating profit increased 8%.

Excluding the impact of a technology-related impairment charge in 2020, operating profit increased 18%.

The increase was primarily due to an increase in revenue at all of our reportable segments, partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

2 unchanged sentences

Corporate Unallocated expense increased 146% compared to 2020.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 115 percentage points and a lease impairment in 2021 of 7 percentage points, partially offset by higher amortization of intangibles in 2020 of 14 percentage points, higher employee severance charges in 2020 of 7 percentage points and higher Kensho retention related expense in 2020 of 6 percentage points, Corporate Unallocated expense increased 11% primarily due to higher incentive costs.

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

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 147 percentage points and a higher gain on dispositions in 2020 of 5 percentage points, partially offset by higher amortization of intangibles in 2020 of 17 percentage points and higher Kensho retention related expense in 2020 of 7 percentage points, Corporate Unallocated expense increased 18% primarily due to proceeds from a Company-owned life insurance policy in 2020.

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

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

6 unchanged sentences

Corporate Unallocated expense 5

(173) (91) (90)%

(262) (128) N/M

Total operating profit $ 3,317 $ 2,960 12%

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

1 2020 includes a technology-related impairment charge of $5 million.

2021 and 2020 include amortization of intangibles from acquisitions of $8 million and $5 million, respectively.

1 unchanged sentence

2021 and 2020 include amortization of intangibles from acquisitions of $49 million and $58 million, respectively.

3 2021 and 2020 include amortization of intangibles from acquisitions of $4 million.

3 2021 and 2020 include amortization of intangibles from acquisitions of $6 million and $7 million, respectively.

4 2021 and 2020 include amortization of intangibles from acquisitions of $4 million.

5 2021 includes IHS Markit merger costs of $99 million and a lease impairment of $3 million.

2020 includes employee severance charges of $10 million.

5 2021 includes IHS Markit merger costs of $153 million, a gain on disposition of $3 million and a lease impairment of $3 million.

2020 includes employee severance charges of $10 million and a gain on disposition of $4 million.

2021 and 2020 include Kensho retention related expense of $2 million and $10 million, respectively.

1 unchanged sentence

Segment Operating Profit — Increased 16% as compared to 2020.

Excluding the impact of a higher gain on dispositions in 2020 of 1 percentage point, operating profit increased 15%.

The increase was primarily due to an increase in revenue at all of our reportable segments combined with a decrease in occupancy costs and travel and entertainment expenses from non-essential travel restrictions in response to COVID-19, partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

2 unchanged sentences

Corporate Unallocated expense increased 106% compared to 2020.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 108 percentage points and a lease impairment in 2021 of 3 percentage points, partially offset by higher employee severance charges in 2020 of 11 percentage points, higher amortization of intangibles in 2020 of 7 percentage points and higher Kensho retention related expense in 2020 of 5 percentage points, Corporate Unallocated expense increased 2% primarily due to higher incentive costs.

Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 118 percentage points and a lease impairment in 2021 of 2 percentage points, partially offset by higher amortization of intangibles in 2020 of 9 percentage points, higher employee severance charges in 2020 of 8 percentage points, and higher Kensho retention related expense in 2020 of 5 percentage points, Corporate Unallocated expense increased 8% primarily due to higher incentive costs.

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

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

Constant currency impacts are estimated by re-calculating current year results of foreign operations using the average exchange rate from the prior year.

Constant currency impacts are estimated by re-

calculating current year results of foreign operations using the average exchange rate from the prior year.

Remeasurement impacts are based on the variance between current-year and prior-year foreign exchange rate fluctuations on assets and liabilities denominated in currencies other than the individual businesses functional currency.

Other Income, net

Other income, net primarily includes the net periodic benefit cost for our retirement and post retirement plans.

Other income, net was $22 million for the three months ended June 30, 2021 compared to $10 million for the three months ended June 30, 2020 and $29 million for the six months ended June 30, 2021 compared to $9 million for the six months ended June 30, 2020.

Excluding a pension settlement charge of $3 million, other income, net was $13 million and $12 million for the three and six months ended June 30, 2020, respectively.

The increase in other income, net for the three and six months ended June 30, 2021 was primarily due to higher gains on our mark-to-market investments in 2021.

Other income, includes the net periodic benefit cost for our retirement and post retirement plans and gains and losses on our mark-to-market investments.

Other income, net was $22 million for the three months ended September 30, 2021 compared to $6 million for the three months ended September 30, 2020 and $51 million for the nine months ended September 30, 2021 compared to $16 million for the nine months ended September 30, 2020.

Excluding a pension settlement charge of $3 million, other income, net was $19 million for the nine months ended September 30, 2020.

The increase in other income, net for the three and nine months ended September 30, 2021 was primarily due to higher gains on our mark-to-market investments in 2021.

Interest Expense, net

Net interest expense decreased $8 million or 20% compared to the three months ended June 30, 2020 and $11 million or 14% compared to the six months ended June 30, 2020, primarily due to lower interest expense resulting from the refinancing of a series of our senior notes in August of 2020.

Net interest expense decreased $4 million or 13% compared to the three months ended September 30, 2020 and $15 million or 14% compared to the nine months ended September 30, 2020, primarily due to lower interest expense resulting from the refinancing of a series of our senior notes in August of 2020.

Loss on Extinguishment of Debt

The three and nine months ended September 30, 2020 includes $279 million related to the redemption fee on the early retirement of our 4.4% senior notes due in 2026 and a portion of the 6.55% senior notes due in 2048 in the third quarter of 2020.

Provision for Income Taxes

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

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.

Segment Review

9 unchanged sentences

Non-transaction revenue also includes an intersegment royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

Royalty revenue was $34 million and $67 million for the three and six months ended June 30, 2021 and $31 million and $63 million for the three and six months ended June 30, 2020, respectively.

The following table provides revenue and segment operating profit information for the three months ended June 30:

(in millions) Three Months Six Months

Royalty revenue was $34 million and $101 million for the three and nine months ended September 30, 2021 and $32 million and $95 million for the three and nine months ended September 30, 2020, respectively.

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

(in millions) Three Months Nine Months

2021 2020 % Change 2021 2020 % Change

15 unchanged sentences

Operating margin % 63 % 61 % 66 % 65 %

1 In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation 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.

2 Operating profit includes amortization of intangibles from acquisitions of $2 million and $7 million for the three and six months ended June 30, 2021, respectively, and $2 million for the three and six month ended June 30, 2020.

Revenue increased 7% due to an increase in non-transaction revenue, partially offset by a slight decrease in transaction revenue.

Non-transaction revenue increased primarily due to an increase in entity credit ratings, surveillance, higher Ratings Evaluation Service ("RES") revenue driven by increased M&A activity and an increase in revenue at our CRISIL subsidiary.

Transaction revenue decreased slightly as an increase in bank loan ratings revenue driven by increased M&A activity and higher structured finance revenue primarily driven by increased issuance of U.S.

collateralized loan obligations ("CLOs") were more than offset by a decrease in corporate bond ratings revenue driven by decreased investment-grade issuance volumes.

1 In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation 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.

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

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

Revenue increased 14%, with a favorable impact from foreign exchange rates of 1 percentage point.

Transaction revenue increased due to higher bank loan ratings revenue driven by increased M&A activity and an increase in structured finance revenue primarily driven by increased issuance of U.S.

collateralized loan obligations ("CLOs"), partially offset by a decrease in corporate bond ratings revenue driven by decreased investment-grade issuance volumes.

and Europe investment-grade bond issuance volumes and U.S.

high-yield corporate bond issuance volumes were particularly elevated in 2020 mainly resulting from historically low borrowing costs and central bank lending actions in response COVID-19.

Non-transaction revenue increased primarily due to an increase in surveillance, entity credit ratings, revenue at our CRISIL subsidiary and higher Ratings Evaluation Service ("RES") revenue driven by increased M&A activity.

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

Foreign exchange rates had a favorable impact of 3 percentage points.

Operating profit increased 5%, with a 2 percentage point favorable impact from foreign exchange rates.

The increase was primarily due to revenue growth partially offset by an increase in compensation costs due to annual merit increases and additional headcount, and higher incentive costs.

Revenue increased 14% and benefited less than 1 percentage point from the impact of recent acquisitions.

Transaction revenue increased due to an increase in bank loan ratings revenue driven by increased M&A activity and an increase in structured finance revenue primarily driven by increased issuance of U.S.

Operating profit increased 18%, with a favorable impact from foreign exchange rates of 1 percentage point.

Excluding the impact of a technology-related impairment charge in 2020 of 1 percentage point, operating profit increased 17%.

The impact of revenue growth and lower occupancy costs was partially offset by higher compensation costs due to annual merit increases and additional headcount and an increase in incentive costs.

Revenue increased 14%, with a favorable impact from foreign exchange rates of 2 percentage points.

Transaction revenue increased due to higher bank loan ratings revenue driven by increased M&A activity and an increase in structured finance revenue primarily driven by increased issuance of U.S.

CLOs, partially offset by a decrease in corporate bond ratings revenue driven by decreased investment-grade issuance volumes.

1 unchanged sentence

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

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

Operating profit increased 16%, with a 2 percentage point favorable impact from foreign exchange rates.

Excluding the impact of higher amortization of intangibles in 2021 of 1 percentage point, operating profit increased 17%.

The increase was primarily due to revenue growth partially offset by higher compensation costs due to annual merit increases and additional headcount, and higher incentive costs.

Operating profit increased 17%, with a favorable impact from foreign exchange rates of 2 percentage points.

The impact of revenue growth and lower occupancy costs was partially offset by higher compensation costs due to annual merit increases and additional headcount and an increase in incentive costs.

Market Issuance Volumes

3 unchanged sentences

The following tables depict changes in issuance levels as compared to the prior year based on data from SDC Platinum for Corporate bond issuance and based on a composite of external data feeds and Ratings' internal estimates for Structured Finance issuance.

Second Quarter

Third Quarter

Compared to Prior Year Year-to-Date

8 unchanged sentences

• Corporate issuance was down in the U.S.

and Europe for the quarter primarily driven by weakness in investment-grade issuance reflecting comparisons against a strong prior year period.

High-yield issuance in Europe increased for the quarter as issuers continued to take advantage of historically low borrowing costs.

Second Quarter Compared to Prior Year Year-to-Date Compared to Prior Year

and Europe for the quarter driven by weakness in high-yield and investment-grade issuance reflecting comparisons against a strong prior year period.

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

Structured Finance Issuance U.S.

9 unchanged sentences

• ABS issuance increased in the U.S.

driven by an increase in certain asset lease deals, auto transactions and student loans.

• Issuance was up in the U.S.

and European structured credit markets driven by an increase in CLO transactions as demand for leveraged loans increased.

and Europe primarily driven by an increase in auto and credit card transactions, partially offset a decrease in student loans.

• CLO issuance was up driving increases in the U.S.

and European structured credit markets as demand for leveraged loans increased.

• CMBS issuance was up in the U.S.

reflecting increased market volume due to improved market conditions.

European CMBS issuance was up, although from a low 2020 base.

CMBS issuance in Europe was also up, although from a low 2020 base.

• RMBS issuance was up in the U.S.

and Europe reflecting increased market volume due to improved market conditions.

• Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe increased in the quarter.

Covered bond issuance in Europe was down in the first half of the year reflecting inexpensive central bank funding with TLTRO III in the first quarter of 2021.

reflecting increased market volume due to improved market conditions.

RMBS issuance decreased in Europe in the quarter reflecting a decrease in large jumbo deals.

• Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe increased in the quarter driven by improved market conditions.

For a further discussion of competitive and other risks inherent in our Ratings business, see Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

2 unchanged sentences

Market Intelligence's portfolio of capabilities are designed to help investment professionals, government agencies, corporations and universities track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform valuations and assess credit risk.

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 statement of income related to the sale of SPIAS in July of 2019.

During the nine months ended September 30, 2021 and during the three and nine months ended September 30, 2020, we recorded a pre-tax gain of $2 million ($2 million after-tax) and $1 million ($1 million after-tax), respectively, in Gain on dispositions in the consolidated statement of income related to the sale of SPIAS 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 IR webhosting business to Q4, a third party provider of investor relations related services.

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), respectively, in Gain on dispositions in the consolidated statement of income related to the sale of IR.

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), respectively, in Gain on dispositions in the consolidated statement of income related to the sale of IR.

Market Intelligence includes the following business lines:

• Desktop — a product suite that provides data, analytics and third-party research for global finance professionals, which includes the Market Intelligence Desktop (which are inclusive of the S&P Capital IQ and SNL Desktop products);

• Data Management Solutions — integrated bulk data feeds and application programming interfaces that can be customized, which includes Compustat, GICS, Point In Time Financials and CUSIP;

• Data Management Solutions — integrated bulk data feeds and application programming interfaces that can be customized, which includes Compustat, GICS, and Point In Time Financials;

• Credit Risk Solutions — commercial arm that sells Ratings' credit ratings and related data, analytics and research, which includes subscription-based offerings, RatingsDirect® and RatingsXpress®, and Credit Analytics.

1 unchanged sentence

Non-subscription revenue at Market Intelligence is primarily related to certain advisory, pricing and analytical services.

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

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2021 2020 % Change 2021 2020 % Change

15 unchanged sentences

Operating margin % 33 % 31 % 32 % 30 %

N/M- not meaningful

1 Operating profit for the six months ended June 30, 2021 includes a gain on disposition of $2 million.

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

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

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

Revenue increased 8% and was unfavorably impacted by less than 1 percentage point from the effect of a recent disposition.

The increase was primarily driven by subscription revenue growth for RatingsXpress®, RatingsDirect®, certain data feed products within Data Management Solutions, CUSIP, and certain Market Intelligence Desktop products.

Excluding the impact of a recent disposition favorably impacting Desktop revenue growth by 1 percentage point, revenue growth at Data Management Solutions, Credit Risk Solutions and Desktop was 13%, 10% and 5%, respectively.

revenue and international revenue increased compared to the three months ended June 30, 2020.

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

Operating profit increased 13%, with an unfavorable impact from foreign exchange rates of 3 percentage points.

Excluding the favorable impact of higher amortization of intangibles in 2020 of 4 percentage points, partially offset by the unfavorable impact of a gain disposition in 2020 of 2 percentage points, operating profit increased 11% primarily due to revenue growth partially offset by an increase in intersegment royalties tied to annualized contract value growth, increased technology expenses and higher incentive costs.

Revenue increased 6% and was unfavorably impacted by less than 1 percentage point from the effect of a recent disposition.

revenue and international revenue increased compared to the six months ended June 30, 2020.

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

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

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

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 the nine months ended September 30, 2020 also includes employee severance charges of $2 million.

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

Revenue increased 7% and was unfavorably impacted by 1 percentage point from the effect of a recent disposition.

The increase was primarily driven by subscription revenue growth for certain Market Intelligence Desktop products, RatingsXpress®, RatingsDirect®, and certain data feed products within Data Management Solutions.

Excluding the impact of a recent disposition favorably impacting Desktop revenue growth by less than 1 percentage point, revenue growth at Data Management Solutions, Credit Risk Solutions and Desktop was 12%, 7% and 6%, respectively.

revenue and international revenue increased compared to the three months ended September 30, 2020.

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

Operating profit increased 14%, with an unfavorable impact from foreign exchange rates of 1 percentage point.

Excluding the favorable impact from higher amortization of intangibles in 2020 of 7 percentage points and higher employee severance charges in 2020 of 2 percentage points, partially offset by the unfavorable impact of a higher gain on the dispositions in 2020 of 8 percentage points, operating profit increased 12% primarily due to revenue growth, partially offset by an increase in expenses.

Expenses increased primarily due to increased technology expenses, higher incentive costs and an increase in intersegment royalties tied to annualized contract value growth, partially offset by reductions in travel expenses from COVID-19 restrictions, a reduction in occupancy costs and lower bad debt provisions.

Excluding the impact of a gain dispositions in 2020 of 13 percentage points, partially offset by higher amortization of intangibles in 2020 of 12 percentage points, operating profit increased 13% primarily due to revenue growth partially offset by an increase in intersegment royalties tied to annualized contract value growth and increased technology expenses.

Revenue increased 6% and was unfavorably impacted by 1 percentage point from the effect of recent dispositions.

The increase was primarily driven by subscription revenue growth for RatingsXpress®, RatingsDirect®, certain Market Intelligence Desktop products, and certain data feed products within Data Management Solutions.

Excluding the impact of recent dispositions favorably impacting Desktop revenue growth by 1 percentage point, revenue growth at Data Management Solutions, Credit Risk Solutions and Desktop was 10%, 8% and 5%, respectively.

revenue and international revenue increased compared to the nine months ended September 30, 2020.

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

Operating profit increased 14%, with an unfavorable impact from foreign exchange rates of less than 1 percentage point.

Excluding the impact from higher amortization of intangibles in 2020 of 14 percentage points and higher employee severance charges in 2020 of 2 percentage points, partially offset by the impact of a higher gain on the dispositions in 2020 of 14 percentage points, operating profit increased 12% primarily due to revenue growth partially offset by increased technology expenses and an increase in intersegment royalties tied to annualized contract value growth.

For a further discussion of competitive and other risks inherent in our Market Intelligence business, see Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

6 unchanged sentences

• Non-subscription revenue — conference sponsorship, consulting engagements, and events.

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

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2021 2020 % Change 2021 2020 % Change

2 unchanged sentences

Sales usage-based royalties $ 17 $ 15 14% $ 49 $ 47 4%

Non-subscription revenue $ 3 $ 1 N/M $ 4 $ 3 43%

Non-subscription revenue $ 2 $ 2 20% $ 6 $ 4 37%

% of total revenue:

10 unchanged sentences

Operating margin % 54 % 55 % 56 % 55 %

N/M- not meaningful

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

1 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.

Revenue increased 8% primarily due to continued demand for market data and market insights products driven by expanded product offerings to our existing customers under enterprise use contracts.

An increase in sales usage-based royalties from the licensing of our proprietary market price data and price assessments to commodity exchanges mainly due to increased trading volumes in LNG and Petroleum also contributed to revenue growth.

Demand for market data and market insights products was driven by international customers.

revenue and international revenue grew compared to the three months ended June 30, 2020.

Petroleum continues to be the most significant revenue driver, followed by natural gas, power & renewables, petrochemicals, metals & agriculture, and shipping also contributing to revenue growth.

Operating profit increased 8% with an unfavorable impact from foreign exchange rates of 1 percentage point.

The increase was primarily due to revenue growth partially offset by increased technology expenses, higher incentive costs and an increase in operating costs to support business initiatives at Platts.

revenue and international revenue grew compared to the three months ended September 30, 2020.

Petroleum continues to be the most significant revenue driver, followed by natural gas, power & renewables, petrochemicals, shipping and metals & agriculture also contributing to revenue growth.

Operating profit increased 6% with an unfavorable impact from foreign exchange rates of less than 1 percentage point.

Excluding the impact of amortization of intangibles from acquisitions of 1 percentage point, operating profit increased 5%.

The increase was primarily due to revenue growth partially offset by an increase in operating costs to support business initiatives at Platts, higher compensation costs and increased technology expenses.

Revenue increased 7% primarily due to continued demand for market data and market insights products driven by expanded product offerings to our existing customers under enterprise use contracts.

Demand for market data and market insights products was driven by international customers.

revenue and international revenue grew compared to the six months ended June 30, 2020.

revenue and international revenue grew compared to the nine months ended September 30, 2020.

Petroleum continues to be the most significant revenue driver, followed by natural gas, power & renewables, petrochemicals, metals & agriculture, and shipping also contributing to revenue growth.

Operating profit increased 10% with an unfavorable impact from foreign exchange rates of less than 1 percentage point.

The increase was primarily due to revenue growth.

Expenses increased less than 1% as an increase in technology expenses, higher operating costs to support business initiatives at Platts and higher incentive costs were largely offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19, lower bad debt provisions, reduced legal fees, lower depreciation expense and a reduction in occupancy costs.

Excluding the impact of amortization of intangibles from acquisitions of 1 percentage point, operating profit increased 9%.

The increase was primarily due to revenue growth partially offset by an increase in operating costs to support business initiatives at Platts, increased technology expenses, higher compensation costs and increased incentive costs.

For a further discussion of competitive and other risks inherent in our Platts business, see Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

8 unchanged sentences

• Data and customized index subscription fees — fees from supporting index fund management, portfolio analytics and research.

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

(in millions) Three Months Six Months

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

(in millions) Three Months Nine Months

2021 2020 % Change 2021 2020 % Change

18 unchanged sentences

Net operating margin % 52 % 47 % 52 % 50 %

1 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.

Revenue at Indices increased 16% primarily due to higher average levels of assets under management ("AUM") for ETFs and mutual funds and higher data subscription revenue, partially offset by lower exchange-traded derivative revenue.

Average levels of AUM for ETFs increased 56% to $2.360 trillion and ending AUM for ETFs increased 51% to $2.435 trillion compared to the three months ended June 30, 2020 while exchange-traded derivative activity was impacted by both lower average daily trading volume from reduced volatility and lower rates per trade from a shift in product mix from a year ago.

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

Operating profit increased 15% due to revenue growth partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

1 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.

Revenue at Indices increased 28% primarily due to higher average levels of assets under management ("AUM") for ETFs and mutual funds.

Average levels of AUM for ETFs increased 48% to $2.528 trillion and ending AUM for ETFs increased 43% to $2.474 trillion compared to the three months ended September 30, 2020.

ETF revenue was impacted by a $5 million breakup fee associated with the termination of several ETF funds.

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

Operating profit increased 41%.

Excluding the impact of amortization of intangibles from acquisitions of 1 percentage point, operating profit increased 40%.

The impact of revenue growth and lower legal related costs was partially offset by higher cost of sales, an increase in compensation costs driven by additional headcount and annual merit increases and higher incentive costs.

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

Revenue at Indices increased 10% primarily due to higher average levels of AUM for ETFs and mutual funds and higher data subscription revenue, partially offset by lower exchange-traded derivative revenue.

Average levels of AUM for ETFs increased 42% to $2.237 trillion and ending AUM for ETFs increased 51% to $2.435 trillion compared to the six months ended June 30, 2020 while exchange-traded derivative activity was impacted by both lower average daily trading volume from reduced volatility and lower rates per trade from a shift in product mix from a year ago.

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

Operating profit increased 10% due to revenue growth partially offset by higher incentive costs and an increase in compensation costs driven by additional headcount and annual merit increases.

Revenue at Indices increased 16% primarily due to higher average levels of AUM for ETFs and mutual funds, partially offset by lower exchange-traded derivative revenue.

Average levels of AUM for ETFs increased 44% to $2.334 trillion and ending AUM for ETFs increased 43% to $2.474 trillion compared to the nine months ended September 30, 2020 while exchange-traded derivative activity was impacted by both lower average daily trading volume from reduced volatility and lower rates per trade from a shift in product mix in the first half of 2021.

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

Operating profit increased 19%.

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

8 unchanged sentences

Cash Flow Overview

Cash, cash equivalents, and restricted cash were $5,221 million as of June 30, 2021, an increase of $1,099 million from December 31, 2020.

The following table provides cash flow information for the six months ended June 30:

Cash, cash equivalents, and restricted cash were $5,907 million as of September 30, 2021, an increase of $1,785 million from December 31, 2020.

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

(in millions) 2021 2020 % Change

3 unchanged sentences

Financing activities $ (772) $ (1,950) (60)%

In the first six months of 2021, free cash flow increased $41 million to $1,548 million compared to $1,507 million in the first six months of 2020.

In the first nine months of 2021, free cash flow increased $214 million to $2,454 million compared to $2,240 million in the first nine months of 2020.

The increase is primarily due to an increase in cash provided by operating activities as discussed below.

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

Capital expenditures include purchases of property and

equipment and additions to technology projects.

Capital expenditures include purchases of property and equipment and additions to technology projects.

See “Reconciliation of Non-GAAP Financial Information” below for a reconciliation of cash flow provided by operating activities, the most directly comparable U.S.

1 unchanged sentence

Operating activities

Cash provided by operating activities increased $74 million to $1,691 million for the first six months of 2021.

Cash provided by operating activities increased $232 million to $2,658 million for the first nine months of 2021.

The increase is mainly due to higher operating results in 2021.

1 unchanged sentence

Our cash outflows from investing activities are primarily for acquisitions and capital expenditures, while cash inflows are primarily proceeds from dispositions.

Cash used for investing activities decreased to $33 million for the first six months of 2021 compared to $186 million in the first six months of 2020, primarily due to cash used for the acquisitions of the ESG Ratings Business from RobecoSAM and Greenwich Associates LLC in 2020.

Cash used for investing activities decreased to $42 million for the first nine months of 2021 compared to $204 million in the first nine months of 2020, primarily due to cash used for the acquisitions of the ESG Ratings Business from RobecoSAM and Greenwich Associates LLC in 2020.

See Note 2 — Acquisitions and Divestitures to the consolidated financial statements of this Form 10-Q for further discussion.

1 unchanged sentence

Our cash outflows from financing activities consist primarily of share repurchases, dividends to shareholders and repayments of short-term and long-term debt, while cash inflows are primarily attributable to the borrowing of short-term and long-term debt and proceeds from the exercise of stock options.

Cash used for financing activities decreased $1,084 million to $526 million for the first six months of 2021.

Cash used for financing activities decreased $1,178 million to $772 million for the first nine months of 2021.

The decrease is primarily attributable to a decrease in cash used for share repurchases in 2021.

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.

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.

6 unchanged sentences

We have the ability to borrow a total of $1.5 billion through our commercial paper program, which is supported by our credit facility that we entered into on April 26, 2021.

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.

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.

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.

26 unchanged sentences

This information is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S.

Summarized results of operations for the periods ended June 30, 2021 are as follows:

(in millions) Three Months Six Months

Summarized results of operations for the periods ended September 30, 2021 are as follows:

(in millions) Three Months Nine Months

Revenue $ 856 $ 2,597

2 unchanged sentences

Net income attributable to S&P Global Inc.

Summarized balance sheet information as of June 30, 2021 and December 31, 2020 is as follows:

(in millions) June 30, December 31,

Summarized balance sheet information as of September 30, 2021 and December 31, 2020 is as follows:

(in millions) September 30, December 31,

Current assets (excluding intercompany from Non-Obligor Group) $ 5,091 $ 3,093

8 unchanged sentences

GAAP financial measure to free cash flow.

Additionally, we have considered certain items in evaluating free cash flow, which are included in the table below.

We believe the presentation of free cash flow and free cash flow excluding certain items allows our investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management.

We believe the presentation of free cash flow allows our investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management.

We use free cash flow to conduct and evaluate our business because we believe it typically presents a more conservative measure of cash flows since capital expenditures and distributions to noncontrolling interest holders are considered a necessary component of ongoing operations.

Free cash flow is useful for management and investors because it allows management and investors to evaluate the cash available to us to prepay debt, make strategic acquisitions and investments and repurchase stock.

The presentation of free cash flow and free cash flow excluding certain items are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S.

The presentation of free cash flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S.

Free cash flow, as we calculate it, may not be comparable to similarly titled measures employed by other companies.

The following table presents a reconciliation of our cash flow provided by operating activities to free cash flow excluding the impact of the item below for the six months ended June 30:

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

(in millions) 2021 2020 % Change

3 unchanged sentences

Free cash flow $ 2,454 $ 2,240 10 %

IHS Markit merger costs 77 —

Free cash flow excluding certain items $ 1,625 $ 1,507 8 %

(in millions) 2021 2020 % Change

24 unchanged sentences

• worldwide economic, financial, political and regulatory conditions, and factors that contribute to uncertainty and volatility, natural and man-made disasters, civil unrest, pandemics (e.g., COVID-19), geopolitical uncertainty, and conditions that may result from legislative, regulatory, trade and policy changes;

• the satisfaction of the conditions precedent to consummation of the Merger, including the ability to secure regulatory approvals on the terms expected at all or in a timely manner;

• the satisfaction of the conditions precedent to consummation of the Merger, including the ability to secure regulatory approvals and consummate related dispositions on the terms expected at all or in a timely manner;

• the occurrence of events that may give rise to a right of one or both of the parties to terminate the merger agreement;

• uncertainty relating to the impact of the Merger on the businesses of the Company and IHS Markit, including potential adverse reactions or changes to the market price of the Company’s common stock and IHS Markit shares resulting from the announcement or completion of the Merger and changes to existing business relationships during the pendency of the acquisition that could affect the Company’s and/or IHS Markit’s financial performance;

• uncertainty relating to the impact of the Merger, divestitures and liability management transactions on the businesses of the Company and IHS Markit, including potential adverse reactions or changes to the market price of the Company’s common stock and IHS Markit shares resulting from the announcement or completion of the Merger and changes to existing business relationships during the pendency of the acquisition that could affect the Company’s and/or IHS Markit’s financial performance;

• risks relating to the value of the Company’s stock to be issued in the Merger, significant transaction costs and/or unknown liabilities;

15 unchanged sentences

Bribery Act of 2010, and local laws prohibiting corrupt payments to government officials, as well as import and export restrictions;

• the continuously evolving regulatory environment, in Europe, the United States and elsewhere, affecting S&P Global Ratings, S&P Global Platts, S&P Dow Jones Indices, S&P Global Market Intelligence and the products those business divisions offer including our ESG products, and the Company’s compliance therewith;

• the continuously evolving regulatory environment, in Europe, the United States and elsewhere around the globe, affecting S&P Global Ratings, S&P Global Platts, S&P Dow Jones Indices, S&P Global Market Intelligence and the products those business divisions offer including our ESG products, and the Company’s compliance therewith;

• the Company’s ability to make acquisitions and dispositions and successfully integrate the businesses we acquire;

16 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 2. Management’s Discussion and Analysis