UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-1023

S&P Global Inc.

(Exact name of registrant as specified in its charter)

New York

13-1026995

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

55 Water Street

New York

10041

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: 212-438-1000

Securities registered pursuant to Section 12(b) of the Act:

Class

Trading Symbol

Name of Exchange on which registered

Common stock (par value $1.00 per share)

SPGI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☑

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☑

As of April ~~24, 2020~~23, 2021 (latest practicable date), 240.9 million shares of the issuer's classes of common stock (par value $1.00 per share) were outstanding.

S&P Global Inc.

INDEX


			Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Report of Independent Registered Public Accounting Firm			3
Consolidated Statements of Income for the three ~~month~~s months ended March 3 1 ~~, 20~~20 31, 2021 and 2 ~~019~~2020			4
Consolidated Statements of Comprehensive Income for the three months ended March 3 1 ~~, 20~~20 31, 2021 and 2 ~~019~~2020			5
Consolidated Balance Sheets as of M ~~arch~~ 3 1 ~~, 20~~20 March 31, 2021 and December 31, 20 192020			6
Consolidated Statements of Cash Flows for the t ~~hree~~ three months ended March 3 1 ~~, 20~~20 31, 2021 and 20 192020			7
Consolidated Statements of ~~(Defici~~t) Equity for the three months ended March 3 1 ~~, 20~~20 31, 2021 and 20 192020			8
Notes to the Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)			3126
Item 3. Quantitative and Qualitative Disclosures About Market Risk			5045
Item 4. Controls and Procedures			5045
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			5146
Item 1A. Risk Factors			5146
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5246
Item 5. Other Information			5346
Item 6. Exhibits			5448
Signatures			5549

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of S&P Global Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of S&P Global Inc. (and subsidiaries) (the “Company”) as of March 31, ~~2020,~~2021, the related consolidated statements of income, comprehensive income, equity (deficit) ~~equity~~ and cash flows for the three-month periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, ~~2019,~~2020, the related consolidated statements of income, comprehensive income, equity and cash flows for the year then ended, and the related notes and schedule (not presented herein); and in our report dated February ~~10, 2020,~~9, 2021, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, ~~2019,~~2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the ~~company~~Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ ERNST & YOUNG LLP

New York, New York

April ~~28, 2020~~29, 2021

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

S&P Global Inc.

Consolidated Statements of Income

(Unaudited)


(in millions, except per share amounts)	(in millions, except per share amounts)	Three Months Ended							(in millions, except per share amounts)	Three Months Ended
		March 31,								March 31,
		2020		2019			2021			2020
Revenue	Revenue	$	1,786	$	1,571	Revenue	$	2,016		$	1,786
Expenses:	Expenses:					Expenses:
Operating-related expenses	Operating-related expenses	521		473		Operating-related expenses	527			518
Selling and general expenses	Selling and general expenses	311		341		Selling and general expenses	360			314
Depreciation	Depreciation	20		20		Depreciation	19			20
Amortization of intangibles	Amortization of intangibles	29		32		Amortization of intangibles	31			29
Total expenses	Total expenses	881		866		Total expenses	937			881
Gain on disposition		(7)		—
Gain on dispositions						Gain on dispositions	(2)			(7)
Operating profit	Operating profit	912		705		Operating profit	1,081			912
Other expense, net		1		103
Other (income) expense, net						Other (income) expense, net	(7)			1
Interest expense, net	Interest expense, net	34		36		Interest expense, net	32			34

Income before taxes on income	Income before taxes on income	877		566		Income before taxes on income	1,056			877
Provision for taxes on income	Provision for taxes on income	188		113		Provision for taxes on income	248			188

Net income	Net income	689		453		Net income	808			689
Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests	(50)		(43)		Less: net income attributable to noncontrolling interests	(53)			(50)

Net income attributable to S&P Global Inc.	Net income attributable to S&P Global Inc.	$	639	$	410	Net income attributable to S&P Global Inc.	$	755		$	639

Earnings per share attributable to S&P Global Inc. common shareholders:	Earnings per share attributable to S&P Global Inc. common shareholders:					Earnings per share attributable to S&P Global Inc. common shareholders:

Net income:	Net income:					Net income:
Basic	Basic	$	2.64	$	1.66	Basic	$	3.14		$	2.64
Diluted	Diluted	$	2.62	$	1.65	Diluted	$	3.12		$	2.62
Weighted-average number of common shares outstanding:	Weighted-average number of common shares outstanding:					Weighted-average number of common shares outstanding:
Basic	Basic	242.1		246.7		Basic	240.6			242.1
Diluted	Diluted	243.3		248.3		Diluted	241.6			243.3

Actual shares outstanding at period end	Actual shares outstanding at period end	240.9		246.1		Actual shares outstanding at period end	240.9			240.9

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


(in millions)	(in millions)	Three Months Ended							(in millions)	Three Months Ended
		March 31,								March 31,
		2020		2019			2021			2020
Net income	Net income	$	689	$	453	Net income	$	808		$	689

Other comprehensive income:	Other comprehensive income:					Other comprehensive income:
Foreign currency translation adjustments	Foreign currency translation adjustments	(37)		17		Foreign currency translation adjustments	(25)			(37)
Income tax effect	Income tax effect	6		2		Income tax effect	(5)			6
		(31)		19			(30)			(31)

Pension and other postretirement benefit plans	Pension and other postretirement benefit plans	3		114		Pension and other postretirement benefit plans	21			3
Income tax effect	Income tax effect	(1)		(28)		Income tax effect	(4)			(1)
		2		86			17			2

Unrealized (loss) gain on forward exchange contracts		(9)		5
Unrealized gain (loss) on cash flow hedges						Unrealized gain (loss) on cash flow hedges	2			(9)
Income tax effect	Income tax effect	2		(1)		Income tax effect	0			2
		(7)		4			2			(7)

Comprehensive income	Comprehensive income	653		562		Comprehensive income	797			653
Less: comprehensive income attributable to nonredeemable noncontrolling interests	Less: comprehensive income attributable to nonredeemable noncontrolling interests	(1)		(3)		Less: comprehensive income attributable to nonredeemable noncontrolling interests	(2)			(1)
Less: comprehensive income attributable to redeemable noncontrolling interests	Less: comprehensive income attributable to redeemable noncontrolling interests	(49)		(40)		Less: comprehensive income attributable to redeemable noncontrolling interests	(51)			(49)
Comprehensive income attributable to S&P Global Inc.	Comprehensive income attributable to S&P Global Inc.	$	603	$	519	Comprehensive income attributable to S&P Global Inc.	$	744		$	603

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Balance Sheets


(in millions)	(in millions)	March 31, 2020		December 31, 2019		(in millions)	March 31, 2021		December 31, 2020
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,932	$	2,866	Cash and cash equivalents	$	4,500	$	4,108
Restricted cash	Restricted cash	20		20		Restricted cash	18		14
Accounts receivable, net of allowance for doubtful accounts: 2020 - $34; 2019 - $34		1,504		1,577
Accounts receivable, net of allowance for doubtful accounts: 2021 - $33; 2020 - $30						Accounts receivable, net of allowance for doubtful accounts: 2021 - $33; 2020 - $30	1,509		1,593

Prepaid and other current assets	Prepaid and other current assets	239		249		Prepaid and other current assets	279		273

Total current assets	Total current assets	3,695		4,712		Total current assets	6,306		5,988
Property and equipment, net of accumulated depreciation: 2020 - $623 ; 2019 - $622		309		320
Property and equipment, net of accumulated depreciation: 2021 - $599; 2020 - $587						Property and equipment, net of accumulated depreciation: 2021 - $599; 2020 - $587	281		284
Right of use assets	Right of use assets	652		676		Right of use assets	479		494
Goodwill	Goodwill	3,703		3,575		Goodwill	3,713		3,735
Other intangible assets, net	Other intangible assets, net	1,439		1,424		Other intangible assets, net	1,332		1,352
Other non-current assets	Other non-current assets	665		641		Other non-current assets	719		684
Total assets	Total assets	$	10,463	$	11,348	Total assets	$	12,830	$	12,537
LIABILITIES AND (DEFICIT) EQUITY
LIABILITIES AND EQUITY						LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	203	$	190	Accounts payable	$	241	$	233
Accrued compensation and contributions to retirement plans	Accrued compensation and contributions to retirement plans	222		446		Accrued compensation and contributions to retirement plans	261		551

Income taxes currently payable	Income taxes currently payable	160		68		Income taxes currently payable	238		84
Unearned revenue	Unearned revenue	1,897		1,928		Unearned revenue	2,111		2,168

Other current liabilities	Other current liabilities	501		461		Other current liabilities	552		551

Total current liabilities	Total current liabilities	2,983		3,093		Total current liabilities	3,403		3,587
Long-term debt	Long-term debt	3,949		3,948		Long-term debt	4,111		4,110
Lease liabilities — non-current	Lease liabilities — non-current	603		620		Lease liabilities — non-current	525		544
Pension and other postretirement benefits	Pension and other postretirement benefits	258		259		Pension and other postretirement benefits	287		291
Other non-current liabilities	Other non-current liabilities	596		624		Other non-current liabilities	598		653
Total liabilities	Total liabilities	8,389		8,544		Total liabilities	8,924		9,185
Redeemable noncontrolling interest (Note 8)	Redeemable noncontrolling interest (Note 8)	2,268		2,268		Redeemable noncontrolling interest (Note 8)	2,808		2,781
Commitments and contingencies (Note 12)	Commitments and contingencies (Note 12)					Commitments and contingencies (Note 12)	0		0
Equity:	Equity:					Equity:
Common stock	Common stock	294		294		Common stock	294		294
Additional paid-in capital	Additional paid-in capital	754		903		Additional paid-in capital	935		946
Retained income	Retained income	12,691		12,205		Retained income	13,920		13,367
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(660)		(624)		Accumulated other comprehensive loss	(648)		(637)
Less: common stock in treasury	Less: common stock in treasury	(13,329)		(12,299)		Less: common stock in treasury	(13,469)		(13,461)
Total (deficit) equity — controlling interests		(250)		479
Total equity — controlling interests						Total equity — controlling interests	1,032		509
Total equity — noncontrolling interests	Total equity — noncontrolling interests	56		57		Total equity — noncontrolling interests	66		62
Total (deficit) equity		(194)		536
Total liabilities and (deficit) equity		$	10,463	$	11,348
Total equity						Total equity	1,098		571
Total liabilities and equity						Total liabilities and equity	$	12,830	$	12,537

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Statements of Cash Flows

(Unaudited)


(in millions)	(in millions)	Three Months Ended							(in millions)	Three Months Ended
		March 31,								March 31,
		2020		2019			2021			2020
Operating Activities:	Operating Activities:					Operating Activities:
Net income	Net income	$	689	$	453	Net income	$	808		$	689

Adjustments to reconcile net income to cash provided by operating activities:	Adjustments to reconcile net income to cash provided by operating activities:					Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	Depreciation	20		20		Depreciation	19			20
Amortization of intangibles	Amortization of intangibles	29		32		Amortization of intangibles	31			29
Provision for losses on accounts receivable	Provision for losses on accounts receivable	10		7		Provision for losses on accounts receivable	10			10
Deferred income taxes	Deferred income taxes	(6)		28		Deferred income taxes	(3)			(6)
Stock-based compensation	Stock-based compensation	11		12		Stock-based compensation	19			11
Gain on disposition		(7)		—
Pension settlement charge, net of taxes		—		85
Gain on dispositions						Gain on dispositions	(2)			(7)

Other	Other	29		8		Other	19			29
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:	Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:					Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	Accounts receivable	76		(87)		Accounts receivable	65			76
Prepaid and other current assets	Prepaid and other current assets	(52)		(34)		Prepaid and other current assets	(56)			(52)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(251)		(161)		Accounts payable and accrued expenses	(239)			(251)
Unearned revenue	Unearned revenue	(12)		(3)		Unearned revenue	(61)			(12)
Accrued legal settlements		—		(1)

Other current liabilities	Other current liabilities	49		(59)		Other current liabilities	25			49
Net change in prepaid/accrued income taxes	Net change in prepaid/accrued income taxes	125		57		Net change in prepaid/accrued income taxes	172			125
Net change in other assets and liabilities	Net change in other assets and liabilities	(30)		(64)		Net change in other assets and liabilities	(39)			(30)
Cash provided by operating activities	Cash provided by operating activities	680		293		Cash provided by operating activities	768			680
Investing Activities:	Investing Activities:					Investing Activities:
Capital expenditures	Capital expenditures	(11)		(20)		Capital expenditures	(18)			(11)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(183)		(1)		Acquisitions, net of cash acquired	(9)			(183)

Proceeds from disposition						Proceeds from disposition	2			0
Changes in short-term investments	Changes in short-term investments	11		—		Changes in short-term investments	1			11
Cash used for investing activities	Cash used for investing activities	(183)		(21)		Cash used for investing activities	(24)			(183)
Financing Activities:	Financing Activities:					Financing Activities:

Dividends paid to shareholders	Dividends paid to shareholders	(161)		(141)		Dividends paid to shareholders	(186)			(161)
Distributions to noncontrolling interest holders, net	Distributions to noncontrolling interest holders, net	(51)		(18)		Distributions to noncontrolling interest holders, net	(69)			(51)

Repurchase of treasury shares	Repurchase of treasury shares	(1,153)		(644)		Repurchase of treasury shares	0			(1,153)
Exercise of stock options	Exercise of stock options	8		23		Exercise of stock options	3			8
Employee withholding tax on share-based payments	Employee withholding tax on share-based payments	(44)		(49)		Employee withholding tax on share-based payments	(41)			(44)
Cash used for financing activities	Cash used for financing activities	(1,401)		(829)		Cash used for financing activities	(293)			(1,401)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(30)		35		Effect of exchange rate changes on cash	(55)			(30)

Net change in cash, cash equivalents, and restricted cash	Net change in cash, cash equivalents, and restricted cash	(934)		(522)		Net change in cash, cash equivalents, and restricted cash	396			(934)
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	2,886		1,958		Cash, cash equivalents, and restricted cash at beginning of period	4,122			2,886
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	1,952	$	1,436	Cash, cash equivalents, and restricted cash at end of period	$	4,518		$	1,952

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Statements of Equity (Deficit) ~~Equity~~

(Unaudited)


Three Months Ended March 31, 2020
Three Months Ended March 31, 2021																		Three Months Ended March 31, 2021
(in millions)	(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI (Deficit) Equity		Noncontrolling Interests		Total (Deficit) Equity		(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2019		$	294	$	903	$	12,205	(624)		$	12,299	$	479	$	57	$	536
Balance as of December 31, 2020																		Balance as of December 31, 2020	$	294	$	946	$	13,367	(637)		$	13,461	$	509	$	62	$	571
Comprehensive income ¹	Comprehensive income ¹					639		(36)				603		1		604		Comprehensive income 1					755		(11)				744		2		746
Dividends (Dividend declared per common share — $0.67 per share)						(161)						(161)				(161)
Share repurchases				(120)						1,033		(1,153)				(1,153)
Dividends (Dividend declared per common share — $0.77 per share)																		Dividends (Dividend declared per common share — $0.77 per share)					(186)						(186)				(186)

Employee stock plans	Employee stock plans			(29)						(3)		(26)				(26)		Employee stock plans			(11)						8		(19)				(19)

Change in redemption value of redeemable noncontrolling interest	Change in redemption value of redeemable noncontrolling interest					11						11				11		Change in redemption value of redeemable noncontrolling interest					(16)						(16)				(16)

Other	Other					(3)						(3)		(2)		(5)		Other											0		2		2
Balance as of March 31, 2020		$	294	$	754	$	12,691	$	(660)	$	13,329	$	(250)	$	56	$	(194)
Balance as of March 31, 2021																		Balance as of March 31, 2021	$	294	$	935	$	13,920	$	(648)	$	13,469	$	1,032	$	66	$	1,098


Three Months Ended March 31, 2019
Three Months Ended March 31, 2020																		Three Months Ended March 31, 2020
(in millions)	(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		(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2018		$	294	$	833	$	11,284	$	(742)	$	11,041	$	628	$	56	$	684
Balance as of December 31, 2019																		Balance as of December 31, 2019	$	294	$	903	$	12,205	$	(624)	$	12,299	$	479	$	57	$	536
Comprehensive income ¹	Comprehensive income ¹					410		109				519		3		522		Comprehensive income 1					639		(36)				603		1		604
Dividends (Dividend declared per common share — $0.57 per share)						(141)						(141)				(141)
Dividends (Dividend declared per common share — $0.67 per share)																		Dividends (Dividend declared per common share — $0.67 per share)					(161)						(161)		0		(161)
Share repurchases	Share repurchases									644		(644)				(644)		Share repurchases			(120)						1,033		(1,153)				(1,153)
Employee stock plans	Employee stock plans			(61)						(47)		(14)				(14)		Employee stock plans			(29)						(3)		(26)				(26)

Capital contribution from noncontrolling interest						(36)						(36)				(36)

Change in redemption value of redeemable noncontrolling interest	Change in redemption value of redeemable noncontrolling interest					15						15				15		Change in redemption value of redeemable noncontrolling interest					11						11				11
Other	Other											—		2		2		Other					(3)						(3)		(2)		(5)
Balance as of March 31, 2019		$	294	$	772	$	11,532	$	(633)	$	11,638	$	327	$	61	$	388
Balance as of March 31, 2020																		Balance as of March 31, 2020	$	294	$	754	$	12,691	$	(660)	$	13,329	$	(250)	$	56	$	(194)

1Excludes comprehensive income of ~~$49~~$51 million and ~~$40~~$49 million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively, attributable to our redeemable noncontrolling interest.

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

1. Nature of Operations and Basis of Presentation

S&P Global Inc. (together with its consolidated subsidiaries, "S&P Global," the “Company,” “we,” “us” or “our”) is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

Our operations consist of 4 reportable segments: S&P Global Ratings ("Ratings"), S&P Global Market Intelligence ("Market Intelligence"), S&P Global Platts ("Platts") and S&P Dow Jones Indices ("Indices").

•Ratings is an independent provider of credit ratings, research, and analytics, offering investors and other market participants information, ratings and benchmarks.

•Market Intelligence is a global provider of multi-asset-class data, research and analytical capabilities, which integrate cross-asset analytics and desktop services.

•Platts is the leading independent provider of information and benchmark prices for the commodity and energy markets.

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

In the first quarter of 2020, we changed our allocation methodology for allocating our centrally managed technology-related expenses to our reportable segments to more accurately reflect each segment's respective usage. Prior-year amounts have been reclassified to conform with current presentation. There was no impact on the Company's consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows as a result of this change.

The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Therefore, the financial statements included herein should be read in conjunction with the financial statements and notes included in our Form 10-K for the year ended December 31, ~~2019~~2020 (our “Form 10-K”). Certain prior-year amounts have been reclassified to conform with current presentation.

In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the interim periods have been included. The operating results for the three months ended March 31, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the full year.

~~Our critical accounting estimates are disclosed in Item 7,~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K.~~ 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. Since the date of our Form 10-K, there have been no material changes to our critical accounting policies and estimates.

Restricted Cash

Restricted cash of ~~$10~~$18 million and ~~$15~~$14 million included in our consolidated balance sheets as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, includes amounts held in escrow accounts in connection with our acquisition of Kensho.

Contract Assets

Contract assets include unbilled amounts from when the Company transfers service to a customer before a customer pays consideration or before payment is due. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, contract assets were ~~$38~~$16 million and ~~$28~~$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 March 31, ~~2020~~2021 compared to December 31, ~~2019~~2020 is primarily driven by ~~$812~~$883 million 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 March 31, ~~2020,~~2021, the aggregate amount of the transaction price allocated to remaining performance obligations was ~~$2.0~~$2.2 billion. We expect to recognize revenue on approximately half and three-quarters of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

We do not disclose the value of unfulfilled performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts where revenue is a usage-based royalty promised in exchange for a license of intellectual property.

Costs to Obtain a Contract

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that the costs associated with certain sales commission programs are incremental to the costs to obtain contracts with customers and therefore meet the criteria to be capitalized. Total capitalized costs to obtain a contract were ~~$112~~$124 million and ~~$115~~$129 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~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. The expense is recorded within selling and general expenses.

We expense sales commissions when incurred if the amortization period is one year or less. These costs are recorded within selling and general expenses.

Other (Income) Expense, net

The components of other (income) expense, net for the three months ended March 31 are as follows:


(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Other components of net periodic benefit cost ¹		$	(9)	$	103
Other components of net periodic benefit cost						Other components of net periodic benefit cost	$	(11)	$	(9)
Net loss from investments	Net loss from investments	10		—		Net loss from investments	4		10
Other expense, net		$	1	$	103
Other (income) expense, net						Other (income) expense, net	$	(7)	$	1

¹ ~~During the first quarter of 2019, the Company purchased a group annuity contract under which an insurance company assumed a portion of~~

the Company's obligation to pay pension benefits to the plan's beneficiaries. The purchase of this group annuity contract was funded by pension plan assets. The net periodic benefit cost for our retirement and post retirement plans for the three months ended March 31, 2019 includes a non-cash pre-tax settlement charge of $113 million reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.

2. Acquisitions and Divestitures

Acquisitions

Merger Agreement

In November of 2020, S&P Global and IHS Markit Ltd ("IHS Markit") entered into a merger agreement, pursuant to which, among other things, a subsidiary of S&P Global will merge with and into IHS Markit, with IHS Markit surviving the merger as a wholly owned subsidiary of S&P Global. Under the terms of the merger agreement, each share of IHS Markit issued and outstanding (other than excluded shares and dissenting shares) will be converted into the right to receive 0.2838 fully paid and nonassessable shares of S&P Global common stock (and, if applicable, cash in lieu of fractional shares, without interest), less any applicable withholding taxes. As of February 28, 2021, IHS Markit had approximately 398.5 million shares outstanding. On March 11, 2021, S&P Global and IHS Markit shareholders voted to approve the merger agreement. Subject to certain closing conditions, the merger is expected to be completed in the second half of 2021.

2021

During the three months ended March 31, 2021, we did not complete any material acquisitions.

2020

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. The acquisition will complement CRISIL's existing portfolio of products and expand offerings to new segments across financial services including commercial banks and asset and wealth managers. The acquisition of Greenwich is not material to our consolidated financial statements.

In January of 2020, we completed the acquisition of the ESG Ratings Business from RobecoSAM, which includes the widely followed SAM* Corporate Sustainability Assessment, an annual evaluation of companies' sustainability practices. The acquisition will bolster our position as the premier resource for essential environmental, social, and governance ("ESG") insights and product solutions for our customers. Through this acquisition, we will be able to offer our customers even more transparent, robust and comprehensive ESG solutions. The acquisition of the ESG Ratings Business is not material to our consolidated financial statements.

~~2019~~Divestitures

2021

During the three months ended March 31, ~~2019,~~2021, we did not complete any ~~material acquisitions.~~dispositions.

~~Divestitures~~During the three months ended March 31, 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.

2020

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. ("Q4")., a third party provider of investor relations related services. This alliance will integrate 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 months ended March 31, 2020, we recorded a pre-tax gain of $7 million ($7 million after-tax) in Gain on ~~disposition~~dispositions in the consolidated ~~statement~~statements of income related to the sale of IR.

~~2019~~

~~During the three months ended March 31, 2019, we did not complete any dispositions.~~

The operating profit of our businesses that were disposed of for the ~~three months~~periods ending March 31, ~~2020~~2021 and ~~2019~~2020 is as follows:


(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Operating profit ¹	Operating profit ¹	$	—	$	3	Operating profit 1	$	1	$	0

¹ The three months ended March 31, 2021 excludes a pre-tax gain related to the sale of the SPIAS of $2 million. The three months ended March 31, 2020 ~~exclude~~excludes a pre-tax gain on the sale of the IR webhosting business of $7 million.

3. Income Taxes

The effective income tax rate was ~~21.5%~~23.4% and ~~19.9%~~21.5% for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. The increase in ~~2020~~the three months ended March 31, 2021 was primarily due to a decrease in the recognition of excess tax benefits associated with share-based payments and an increase in ~~the statement of income.~~

taxes on foreign operations. At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary quarterly earnings. The tax expense or benefit related to significant unusual or infrequently occurring items that will be separately reported or reported net of their related tax effect, and are individually computed, is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs.

The Company is continuously subject to tax examinations in various jurisdictions. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the total amount of federal, state and local, and foreign unrecognized tax benefits was $126 million and ~~$124~~$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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had ~~$21~~$25 million and ~~$20~~$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 ~~$22~~$18 million in the next twelve months as a result of the resolution of local tax examinations.

4. Debt

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


(in millions)	(in millions)	March 31, 2020	December 31, 2019	(in millions)	March 31, 2021	December 31, 2020
4.0% Senior Notes, due 2025 ¹	4.0% Senior Notes, due 2025 ¹	694	694	4.0% Senior Notes, due 2025 1	695	695
4.4% Senior Notes, due 2026 ²		894	893
2.95% Senior Notes, due 2027 ³		493	493
2.5% Senior Notes, due 2029 ⁴		495	495
2.95% Senior Notes, due 2027 2				2.95% Senior Notes, due 2027 2	495	495
2.5% Senior Notes, due 2029 3				2.5% Senior Notes, due 2029 3	496	495
1.25% Senior Notes, due 2030 4				1.25% Senior Notes, due 2030 4	592	592
6.55% Senior Notes, due 2037 ⁵	6.55% Senior Notes, due 2037 ⁵	294	294	6.55% Senior Notes, due 2037 5	290	290
4.5% Senior Notes, due 2048 ⁶	4.5% Senior Notes, due 2048 ⁶	490	490	4.5% Senior Notes, due 2048 6	273	273
3.25% Senior Notes, due 2049 ⁷	3.25% Senior Notes, due 2049 ⁷	589	589	3.25% Senior Notes, due 2049 7	589	589
2.3% Senior Notes, due 2060 8				2.3% Senior Notes, due 2060 8	681	681

Long-term debt	Long-term debt	3,949	3,948	Long-term debt	4,111	4,110

¹Interest payments are due semiannually on June 15 and December 15, and as of March 31, ~~2020,~~2021, the unamortized debt discount and issuance costs total $6$5 million.

²~~Interest payments are due semiannually on February 15 and August 15, and as of March 31, 2020, the unamortized debt discount and issuance costs total $6 million.~~

³Interest payments are due semiannually on January 22 and July 22, and as of March 31, ~~2020,~~2021, the unamortized debt discount and issuance costs total $7$5 million.

⁴3Interest payments are due semiannually on June 1 and December 1, ~~beginning on June 1, 2020,~~ and as of March 31, ~~2020,~~2021, the unamortized debt discount and issuance costs total $5$4 million.

^{4Interest payments are due semiannually on February 15 and August 15, beginning on February 15, 2021, and as of March 31, 2021, the unamortized debt discount and issuance costs total $8 million.}

5Interest payments are due semiannually on May 15 and November 15, and as of March 31, ~~2020,~~2021, the unamortized debt discount and issuance costs total $3 million.

⁶Interest payments are due semiannually on May 15 and November 15, and as of March 31, ~~2020,~~2021, the unamortized debt discount and issuance costs total $10 million.

⁷Interest payments are due semiannually on June 1 and December 1, ~~beginning on June 1, 2020~~ and as of March 31, ~~2020,~~2021, the unamortized debt discount and issuance costs total $11 million.

8Interest payments are due semiannually on February 15 and August 15, beginning on February 15, 2021, and as of March 31, 2021, the unamortized debt discount and issuance costs total $19 million.

The fair value of our total debt borrowings was ~~$4.5~~$4.3 billion and $4.6 billion as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and was estimated based on quoted market prices.

~~We have~~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. This credit facility replaced our revolving $1.2 billion five-year credit facility (our "previous credit facility") that was scheduled to terminate on June 30, 2022. The previous credit facility was canceled immediately after the new credit facility became effective. There were no outstanding borrowings under the previous credit facility when it was replaced.

As of March 31, 2021 and December 31, 2020, we had the ability to borrow a total of $1.2 billion through our commercial paper program, which iswas supported by our ~~revolving $1.2 billion~~ ~~five-year~~previous credit ~~agreement (our "credit facility")~~facility that we entered into on June 30, 2017. ~~This credit facility will terminate on June 30, 2022.~~ As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, there ~~were~~was 0 commercial paper issued or outstanding, and we similarly did not draw or have any borrowings ~~outstanding.~~outstanding from the previous credit facility during the three months ended March 31, 2021 and 2020.

Depending on our corporate credit rating, we ~~pay~~paid a commitment fee of 8 to 17.5 basis points for our previous credit facility, whether or not amounts have been borrowed. ~~We currently pay~~During the three months ended March 31, 2021, we paid a commitment fee of 10 basis points. The interest rate on borrowings under our previous credit facility ~~is,~~was, at our option, calculated using rates that are primarily based on either the prevailing London Inter-Bank Offer Rate, the prime rate determined by the administrative agent or the Federal Funds Rate. For certain borrowings under this previous credit facility, there iswas also a spread based on our corporate credit rating.

Our previous credit facility ~~contains~~contained certain covenants. The only financial covenant ~~requires~~required that our indebtedness to cash flow ratio, as defined in our previous credit facility, iswas not greater than 4 to 1, and this covenant level has never been exceeded.

5. Derivative Instruments

Our exposure to market risk includes changes in foreign exchange rates and interest rates. We have operations in foreign countries where the functional currency is primarily the local currency. For international operations that are determined to be extensions of the parent company, the U.S. dollar is the functional currency. We typically have naturally hedged positions in most countries from a local currency perspective with offsetting assets and liabilities. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange ~~rates. As of March 31, 2020~~rates and ~~December 31, 2019, we have entered into a~~ cross currency swap ~~contract~~contracts to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates. During the three months ended March 31, 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; therefore, we classify these derivative contracts within Level 2 of the fair value hierarchy. We do not enter into any derivative financial instruments for speculative purposes.

Undesignated Derivative Instruments

During the three months ended March 31, ~~2020~~2021 and twelve months ended December 31, ~~2019,~~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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the aggregate notional value of these outstanding forward contracts was ~~$145~~$178 million and ~~$116~~$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 March 31, 2021 and December 31, 2020 was ~~$7 million.~~$1 million and $2 million, respectively. The amount recorded in selling and general expense ~~for the three months ended March 31, 2020 and 2019~~ related to these contracts was a net loss of $6 million and $11 million for three months ended March 31, 2021 and ~~a net gain of $2 million,~~2020, respectively.

Net Investment ~~Hedge~~Hedges

During the three months ended March 31, ~~2020~~2021 and twelve months ended December 31, ~~2019,~~2020, we entered into a cross currency ~~swap~~swaps to hedge a portion of our net investment in a certain European subsidiary against volatility in the Euro/U.S. dollar exchange rate. ~~This swap is~~These swaps are designated and ~~qualifies~~qualify as a hedge of a net investment in a foreign subsidiary and isare scheduled to mature in ~~2024.~~2024, 2029, 2030 As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the notional value of our outstanding cross currency ~~swap~~swaps designated as a net investment hedge was ~~$400 million.~~$1 billion. The changes in the fair value of ~~this swap~~swaps are recognized in foreign currency translation adjustments, a component of other comprehensive income (loss), and reported in accumulated other comprehensive loss in our consolidated balance sheet. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. We have elected to assess the effectiveness of our net investment ~~hedge~~hedges based on changes in spot exchange rates. Accordingly, amounts related to the cross currency ~~swap~~swaps recognized directly in net income for the three months ended March 31, ~~2020~~2021 represent net periodic interest settlements and accruals, which are recognized in interest expense, net. We recognized net interest income of $5 million and $3 million for the three months ended March 31, ~~2020.~~2021 and 2020, respectively.

Cash Flow Hedges

~~Cash Flow Hedges~~Foreign Exchange Forward Contracts

During the three months ended March 31, ~~2020~~2021 and twelve months ended December 31, ~~2019,~~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 first quarter of ~~2021~~2023 and the fourth quarter of ~~2020, respectively. These~~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 ~~twelve~~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 March 31, ~~2020,~~2021, we estimate that $5$19 million of ~~the net losses~~pre-tax gain related to ~~derivatives~~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~~twenty-four months.

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was ~~$268~~$491 million and ~~$249~~$489 million, respectively.

Interest Rate Swaps

During the three months ended March 31, 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. These interest rate swaps are designated as cash flow hedges. The changes in the fair value of these contracts are initially reported in accumulated other comprehensive loss in our consolidated balance sheet and are subsequently reclassified into Interest expense, net in the same period that the hedged transaction affects earnings.

As of March 31, 2021, we estimate that $2 million of pre-tax gains related to interest rate swaps designated as cash flow hedges recorded in other comprehensive income is expected to be reclassified into earnings within the next twenty-four months.

As of March 31, 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 ~~hedge~~hedges as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:


(in millions)	(in millions)		March 31,		December 31,		(in millions)		March 31,		December 31,
Balance Sheet Location	Balance Sheet Location		2020		2019		Balance Sheet Location		2021		2020
Derivatives designated as cash flow hedges:	Derivatives designated as cash flow hedges:						Derivatives designated as cash flow hedges:
Prepaid and other current assets	Prepaid and other current assets	Foreign exchange forward contracts	$	—	$	1	Prepaid and other current assets	Foreign exchange forward contracts	$	21	$	23
Prepaid and other current assets							Prepaid and other current assets	Interest rate swap contracts	$	2	$	0
Other current liabilities	Other current liabilities	Foreign exchange forward contracts	$	8	$	—	Other current liabilities	Foreign exchange forward contracts	$	0	$	2
Derivative designated as a net investment hedge:
Other non-current assets		Cross currency swap	$	22	$	—

Derivatives designated as net investment hedges :							Derivatives designated as net investment hedges :

Other non-current liabilities	Other non-current liabilities	Cross currency swap	$	—	$	10	Other non-current liabilities	Cross currency swaps	$	89	$	107

The following table provides information on the location and amounts of pre-tax gains (losses) on our cash flow hedges and net investment ~~hedge~~hedges for the three months ended March 31:


(in millions)	(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)							(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)
		2020		2019			2020		2019			2021		2020				2021		2020
Cash flow hedges - designated as hedging instruments	Cash flow hedges - designated as hedging instruments										Cash flow hedges - designated as hedging instruments
Foreign exchange forward contracts	Foreign exchange forward contracts	$	(7)	$	4	Revenue, Selling and general expenses	$	(2)	$	2	Foreign exchange forward contracts	$	0	$	(7)		Revenue, Selling and general expenses	$	5	$	(2)
Net investment hedge - designated as hedging instruments
Cross currency swap		$	32	$	—		$	—	$	—
Interest rate swap contracts											Interest rate swap contracts	$	2	$	0		Interest expense, net	$	0	$	0

Net investment hedges - designated as hedging instruments											Net investment hedges - designated as hedging instruments
Cross currency swaps											Cross currency swaps	$	15	$	32			$	0	$	0

The activity related to the change in unrealized gains (losses) in accumulated other comprehensive loss was as follows for the three months ended March 31:


(in millions)	(in millions)	Three Months							(in millions)	2021		2020
		2020		2019
Cash Flow Hedges	Cash Flow Hedges					Cash Flow Hedges
Foreign exchange forward contracts						Foreign exchange forward contracts
Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of period	Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of period	$	2	$	3	Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of period	$	14		$	2
Change in fair value, net of tax	Change in fair value, net of tax	(9)		6		Change in fair value, net of tax	5			(9)
Reclassification into earnings, net of tax	Reclassification into earnings, net of tax	2		(2)		Reclassification into earnings, net of tax	(5)			2
Net unrealized (losses) gains on cash flow hedges, net of taxes, end of period		$	(5)	$	7
Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period						Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period	$	14		$	(5)

Net Investment Hedge
Net unrealized (losses) gains on net investment hedge, net of taxes, beginning of period		$	(8)	$	—
Interest rate swap contracts						Interest rate swap contracts
Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of period						Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of period	$	0		$	0
Change in fair value, net of tax						Change in fair value, net of tax	2			0
Reclassification into earnings, net of tax						Reclassification into earnings, net of tax	0			0
Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period						Net unrealized gains (losses) on cash flow hedges, net of taxes, end of period	$	2		$	0

Net Investment Hedges						Net Investment Hedges
Net unrealized gains (losses) on net investment hedges, net of taxes, beginning of period						Net unrealized gains (losses) on net investment hedges, net of taxes, beginning of period	$	(81)		$	(8)
Change in fair value, net of tax	Change in fair value, net of tax	24		—		Change in fair value, net of tax	11			24
Reclassification into earnings, net of tax	Reclassification into earnings, net of tax	—		—		Reclassification into earnings, net of tax	0			0
Net unrealized gains (losses) on net investment hedges, net of taxes, end of period	Net unrealized gains (losses) on net investment hedges, net of taxes, end of period	$	16	$	—	Net unrealized gains (losses) on net investment hedges, net of taxes, end of period	$	(70)		$	16

6. Employee Benefits

We maintain a number of active defined contribution retirement plans for our employees. The majority of our defined benefit plans are frozen. As a result, no new employees will be permitted to enter these plans and no additional benefits for current participants in the frozen plans will be accrued.

We also have supplemental benefit plans ~~providing~~that provide senior management with supplemental retirement, disability and death benefits. Certain supplemental retirement benefits are based on final monthly earnings. In addition, we sponsor a voluntary 401(k) plan under which we may match employee contributions up to certain levels of compensation as well as profit-sharing plans under which we contribute a percentage of eligible employees' compensation to the employees' accounts.

We also provide certain medical, dental and life insurance benefits for active and retired employees and eligible dependents. The medical and dental plans and supplemental life insurance plan are contributory, while the basic life insurance plan is noncontributory. We currently do not prefund any of these plans.

We recognize the funded status of our ~~defined benefit~~ retirement and postretirement plans in the consolidated balance sheets, with a corresponding adjustment to accumulated other comprehensive loss, net of taxes. The amounts in accumulated other comprehensive loss represent net unrecognized actuarial losses and unrecognized prior service costs. These amounts will be subsequently recognized as net periodic ~~benefit~~pension cost pursuant to our accounting policy for amortizing such amounts.

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

The components of net periodic benefit cost for our retirement plans and postretirement plans for the three months ended March 31 are as follows:

(in millions) 2020 2019
Service cost $ 1 $ 1
Interest cost 13 19
Expected return on assets (26) (31)
Amortization of prior service credit / actuarial loss 4 2
Net periodic benefit cost (8) (9)
Settlement charge ¹
— 113
Net benefit cost $ (8) $ 104

¹ The Company purchased a group annuity contract under which an insurance company assumed a portion of the Company's obligation to pay pension benefits to the plan's beneficiaries. The purchase of this group annuity contract was funded by pension plan assets. The non-cash pretax settlement charge reflects the accelerated recognition of a portion of unamortized actuarial losses in the plan.



(in millions)	2021		2020
Service cost	$	1	$	1
Interest cost	10		13
Expected return on assets	(26)		(26)
Amortization of prior service credit / actuarial loss	4		4
Net periodic benefit cost	$	(11)	$	(8)

Net periodic benefit cost related to our postretirement plans reflected in the table above was not material for the three months ended March 31, ~~2020~~2021 and ~~2019, respectively.~~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, ~~2020.~~2021. The effect of the assumption changes on retirement and postretirement expense for the three months ended March 31, ~~2020~~2021 did not have a material impact to our financial position, results of operations or cash flows.

In the first three months of ~~2020,~~2021, we contributed $3 million to our retirement plans and expect to make additional required contributions of approximately $8 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 remaining nine months of ~~2020.~~2021.

Financial information shown above is based on market conditions as of December 31, 2019. Significant changes in interest rates, asset values and economic conditions have occurred since then, which could affect the information shown herein, although as of March 31, 2020, market conditions at that time had minimal effect on the funded status of the pension plans due to the plans’ investment policy (primarily fixed income investments intended to track movements in the bonds used to determine the discount rate). Effects of the 2019 novel coronavirus ("COVID-19") on the financial markets, regulations, and plan experience are uncertain and still evolving. The short-term and long-term effects of COVID-19 may have significant effects on future measurements.

7. Stock-Based Compensation

We issue stock-based incentive awards to our eligible employees under the 2019 Stock Incentive Plan ("2019 Plan") and to our eligible non-employee Directors under a Director Deferred Stock Ownership Plan. 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.

For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, total stock-based compensation expense primarily related to restricted stock and unit awards was ~~$11~~$19 million and ~~$12~~$11 million, respectively. Total unrecognized compensation expense related to unvested restricted stock and unit awards as of March 31, ~~2020~~2021 was ~~$72~~$73 million, which is expected to be recognized over a weighted average period of ~~1.8~~1.6 years.

8. Equity

Stock Repurchases

On January 29, 2020, the Board of Directors approved a share repurchase program authorizing the purchase of 30 million shares (the "2020 Repurchase Program"), which was approximately 12% of the total shares of our outstanding common stock at that time. On December 4, 2013, the Board of Directors approved a share repurchase program authorizing the purchase of 50 million shares (the "2013 Repurchase Program"), which was approximately 18% of the total shares of our outstanding common stock at that time.

Our purchased shares may be used for general corporate purposes, including the issuance of shares for stock compensation plans and to offset the dilutive effect of the exercise of employee stock options. As of March 31, ~~2020,~~2021, 30 million shares remained available under the 2020 Repurchase Program and ~~1.3~~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.

We have entered into accelerated share repurchase (“ASR”) agreements with financial institutions to initiate share repurchases of our common stock. Under an ASR agreement, we pay a specified amount to the financial institution and receive an initial delivery of shares. This initial delivery of shares represents the minimum number of shares that we may receive under the agreement. Upon settlement of the ASR agreement, the financial institution delivers additional shares. The total number of shares ultimately delivered, and therefore the average price paid per share, is determined at the end of the applicable purchase period of each ASR agreement based on the volume weighted-average share price, less a discount. We account for our ASR agreements as two transactions: a stock purchase transaction and a forward stock purchase contract. The shares delivered under the ASR agreements resulted in a reduction of outstanding shares used to determine our weighted average common shares

outstanding for purposes of calculating basic and diluted earnings per share. The repurchased shares are held in Treasury. The forward stock purchase contracts were classified as equity instruments. The ASR agreements were executed under our 2013 Repurchase Program, approved on December 4, 2013.

The terms of each ASR agreement entered for the three months ended March 31, 2020, ~~and 2019,~~ structured as outlined above, are as follows:


(in millions, except average price)	(in millions, except average price)									(in millions, except average price)
ASR Agreement Initiation Date	ASR Agreement Initiation Date	ASR Agreement Completion Date	Initial Shares Delivered	Additional Shares Delivered	Total Number of Shares Purchased	Average Price Paid Per Share		Total Cash Utilized		ASR Agreement Initiation Date	ASR Agreement Completion Date	Initial Shares Delivered	Additional Shares Delivered	Total Number of Shares Purchased	Average Price Paid Per Share		Total Cash Utilized
February 11, 2020 ¹	February 11, 2020 ¹		1.3	0.2	1.5	$	—	$	500	February 11, 2020 1	July 27, 2020	1.3	0.4	1.7	$	292.13	$	500
February 11, 2020 ²	February 11, 2020 ²		1.4	—	1.4	$	—	$	500	February 11, 2020 2	July 27, 2020	1.4	0.3	1.7	$	292.13	$	500

February 11, 2019 ³		July 31, 2019	2.2	0.1	2.3	$	214.65	$	500

¹The ASR agreement was structured as a capped ASR agreement in which we paid $500 million and received an initial delivery of 1.3 million shares and an additional amount of 0.2 million during the month of February, representing a minimum number of shares of our common stock to be repurchased based on a calculation using a specified capped price per share. We completed the ASR agreement on July 27, 2020 and received an additional 0.2 million shares.

²The ASR agreement was structured as an uncapped ASR agreement in which we paid $500 million and received an initial delivery of 1.4 million shares, representing 85% of the $500 million at a price equal to the then market price of the Company.

³The ASR agreement was structured as an uncapped ASR agreement in which we paid $500 million and received an initial delivery of 2.2 million shares, representing 85% of the $500 million at a price equal to the then market price of the Company. We completed the ASR agreement on July ~~31, 2019~~27, 2020 and received an additional ~~0.1~~0.3 million shares.

Additionally, we purchased shares of our common stock in the open market for the three months ended March 31, 2020 as follows:


(in millions, except average price)
	Total Number of Shares Purchased	Average Price Paid Per Share		Total Cash Utilized


March 31, 2020	0.5	$	291.99	$	150

(in millions, except average price)
Total number of shares purchased
Average price paid per share Total cash utilized
March 31, 2020 0.5 $ 291.99 150
March 31, 2019 0.8 $ 184.51 144

During the three months ended March 31, 2021, we did not use cash to repurchase shares. During the three months ended March 31, 2020, we purchased a total of 3.4 million shares for $1,150 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 $1,153 million of cash used to repurchase shares. During the three months ended March 31, 2019, we received 3.4 million shares, including 0.4 million shares received in January of 2019 related to our October 29, 2018 ASR agreement, resulting in $644 million of cash used to repurchase shares.

Redeemable Noncontrolling Interests

The agreement with the minority partners that own 27% of our S&P Dow Jones Indices LLC joint venture contains redemption features whereby interests held by minority partners are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within our control. Specifically, under the terms of the operating agreement of S&P Dow Jones Indices LLC, CME Group and CME Group Index Services LLC ("CGIS") has the right at any time to sell, and we are obligated to buy, at least 20% of their share in S&P Dow Jones Indices LLC. In addition, in the event there is a change of control of the Company, for the 15 days following a change in control, CME Group and CGIS will have the right to put their interest to us at the then fair value of CME Group's and CGIS' minority interest.

If interests were to be redeemed under this agreement, we would generally be required to purchase the interest at fair value on the date of redemption. This interest is presented on the consolidated balance sheets outside of ~~(deficit)~~ equity under the caption “Redeemable noncontrolling interest” with an initial value based on fair value for the portion attributable to the net assets we acquired, and based on our historical cost for the portion attributable to our S&P Index business. We adjust the redeemable noncontrolling interest each reporting period to its estimated redemption value, but never less than its initial fair value, using both income and market valuation approaches. Our income and market valuation approaches incorporate Level 3 fair value measures for instances when observable inputs are not available. The more significant judgmental assumptions used to estimate the value of the S&P Dow Jones Indices LLC joint venture include an estimated discount rate, a range of assumptions that form the basis of the expected future net cash flows (e.g., the revenue growth rates and operating margins), and a company specific beta. The significant judgmental assumptions used that incorporate market data, including the relative weighting of market observable information and the comparability of that information in our valuation models, are forward-looking and could be affected by future economic and market conditions. Any adjustments to the redemption value will impact retained income.

Noncontrolling interests that do not contain such redemption features are presented in ~~(deficit)~~ equity.

Changes to redeemable noncontrolling interest during the three months ended March 31, ~~2020~~2021 were as follows:


(in millions)
Balance as of December 31, ~~2019~~2020	$	~~2,268~~2,781
Net income attributable to redeemable noncontrolling interest	4951

Distributions payable to redeemable noncontrolling interest	~~(38)~~(40)
Redemption value adjustment	~~(11)~~16

Balance as of March 31, ~~2020~~2021	$	~~2,268~~2,808

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the components of accumulated other comprehensive loss for the three months ended March 31, ~~2020:~~2021:


(in millions)	(in millions)	Foreign Currency Translation Adjustments			Pension and Postretirement Benefit Plans			Unrealized Gain (Loss) on Foreign Forward Exchange Contracts			Accumulated Other Comprehensive Loss		(in millions)	Foreign Currency Translation Adjustments			Pension and Postretirement Benefit Plans			Unrealized Gain (Loss) on Cash Flow hedges			Accumulated Other Comprehensive Loss
Balance as of December 31, 2019		$	(321)		$	(305)		$	2		$	(624)
Balance as of December 31, 2020													Balance as of December 31, 2020	$	(323)		$	(328)		$	14		$	(637)
Other comprehensive (loss) income before reclassifications	Other comprehensive (loss) income before reclassifications	(31)		1	—			(8)			(39)		Other comprehensive (loss) income before reclassifications	(30)		1	13			7			(10)
Reclassifications from accumulated other comprehensive income (loss) to net earnings	Reclassifications from accumulated other comprehensive income (loss) to net earnings	—			2		2	1		3	3		Reclassifications from accumulated other comprehensive income (loss) to net earnings	0			4		2	(5)		3	(1)
Net other comprehensive (loss) income	Net other comprehensive (loss) income	(31)			2			(7)			(36)		Net other comprehensive (loss) income	(30)			17			2			(11)

Balance as of March 31, 2020		$	(352)		$	(303)		$	(5)		$	(660)
Balance as of March 31, 2021													Balance as of March 31, 2021	$	(353)		$	(311)		$	16		$	(648)

1Includes an unrealized gain related to ~~the~~our cross currency ~~swap entered into in December 2019.~~swaps. See note 5 – Derivative Instruments for additional detail of items recognized in accumulated other comprehensive loss.

2Reflects amortization of net actuarial losses and is net of a tax benefit of $1 million for the three months ended March 31, ~~2020.~~2021. See Note 6 — Employee Benefits for additional details of items reclassed from accumulated other comprehensive loss to net earnings.

3See Note 5 — Derivative Instruments for additional details of items reclassified from accumulated other comprehensive loss to net earnings.

9. Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares is increased to include additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Potential common shares consist primarily of stock options and restricted performance shares calculated using the treasury stock method.

The calculation of basic and diluted EPS for the three months ended March 31 is as follows:


(in millions, except per share amounts)	(in millions, except per share amounts)	2020		2019		(in millions, except per share amounts)	2021		2020
Amounts attributable to S&P Global Inc. common shareholders:	Amounts attributable to S&P Global Inc. common shareholders:					Amounts attributable to S&P Global Inc. common shareholders:

Net income	Net income	$	639	$	410	Net income	$	755	$	639

Basic weighted-average number of common shares outstanding	Basic weighted-average number of common shares outstanding	242.1		246.7		Basic weighted-average number of common shares outstanding	240.6		242.1
Effect of stock options and other dilutive securities	Effect of stock options and other dilutive securities	1.2		1.6		Effect of stock options and other dilutive securities	1.0		1.2
Diluted weighted-average number of common shares outstanding	Diluted weighted-average number of common shares outstanding	243.3		248.3		Diluted weighted-average number of common shares outstanding	241.6		243.3

Earnings per share attributable to S&P Global Inc. common shareholders:	Earnings per share attributable to S&P Global Inc. common shareholders:					Earnings per share attributable to S&P Global Inc. common shareholders:

Net income:	Net income:					Net income:
Basic	Basic	$	2.64	$	1.66	Basic	$	3.14	$	2.64
Diluted	Diluted	$	2.62	$	1.65	Diluted	$	3.12	$	2.62

We have certain stock options and restricted performance shares that are potentially excluded from the computation of diluted EPS. The effect of the potential exercise of stock options is excluded when the average market price of our common stock is lower than the exercise price of the related option during the period or when a net loss exists because the effect would have been antidilutive. Additionally, restricted performance shares are excluded because the necessary vesting conditions had not been met or when a net loss exists. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, there were 0 stock options excluded. Restricted performance shares outstanding of 0.4 million as of March 31, 2021 and 2020, ~~and 2019~~respectively, were excluded.

10. Restructuring

We continuously evaluate our cost structure to identify cost savings associated with streamlining our management structure. Our 2020 ~~and 2019~~ restructuring plan consisted of a company-wide workforce reduction of approximately ~~70 and 300~~830 positions, ~~respectively,~~ and are further detailed below. The charges for the restructuring plans are classified as selling and general

expenses within the consolidated statements of income and the reserves are included in other current liabilities in the consolidated balance sheets.

In certain circumstances, reserves are no longer needed because of efficiencies in carrying out the plans or because employees previously identified for separation resigned from the Company and did not receive severance or were reassigned due to circumstances not foreseen when the original plans were initiated. In these cases, we reverse reserves through the consolidated statements of income during the period when it is determined they are no longer needed.

The initial restructuring charge recorded and the ending reserve balance as of March 31, ~~2020~~2021 by segment is as follows:


		2020 Restructuring Plan						2019 Restructuring Plan					2020 Restructuring Plan
(in millions)	(in millions)	Initial Charge Recorded		Ending Reserve Balance		Initial Charge Recorded		Ending Reserve Balance		(in millions)	Initial Charge Recorded		Ending Reserve Balance
Ratings	Ratings	$	—	$	—	$	11	$	4	Ratings	$	4	$	2
Market Intelligence	Market Intelligence	2		1		6		4		Market Intelligence	27		17
Platts	Platts	—		—		1		—		Platts	10		7

Indices										Indices	5		4
Corporate	Corporate	7		6		7		3		Corporate	19		12
Total	Total	$	9	$	7	$	25	$	11	Total	$	65	$	42

We recorded a pre-tax restructuring charge of $9 million primarily related to employee severance charges for the 2020 restructuring plan during the three months ended March 31, 2020 and have reduced the reserve by $2 million. The ending reserve balance for the ~~2019~~2020 restructuring plan was ~~$18~~$58 million as of December 31, ~~2019.~~2020. For the three months ended March 31, ~~2020,~~2021, we have reduced the reserve for the ~~2019~~2020 restructuring plan by $7$16 million. The reductions primarily related to cash payments for employee severance charges.

11. Segment and Related Information

We have 4 reportable segments: Ratings, Market Intelligence, Platts and Indices. Our Chief Executive Officer is our chief operating decision-maker and evaluates performance of our segments and allocates resources based primarily on operating profit. Segment operating profit does not include Corporate Unallocated, 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 three months ended March 31 is as follows:


Revenue	Revenue								Revenue

(in millions)	(in millions)	2020		2019		(in millions)	2021			2020
Ratings	Ratings	$	825	$	696	Ratings	$	1,017		$	825
Market Intelligence	Market Intelligence	519		482		Market Intelligence	539			519
Platts	Platts	215		207		Platts	225			215
Indices	Indices	259		217		Indices	270			259

Intersegment elimination ¹	Intersegment elimination ¹	(32)		(31)		Intersegment elimination 1	(35)			(32)
Total revenue	Total revenue	$	1,786	$	1,571	Total revenue	$	2,016		$	1,786


Operating Profit

(in millions)	2021		2020
Ratings 2	$	681	$	520
Market Intelligence 3	166		147
Platts 4	129		112
Indices 5	191		182

Total reportable segments	1,167		961
Corporate Unallocated expense6	(86)		(49)
Total operating profit	$	1,081	$	912

Operating Profit
(in millions) 2020 2019
Ratings ²
$ 520 $ 368
Market Intelligence ³
147 134
Platts ⁴
112 99
Indices ⁵
182 150
Total reportable segments 961 751
Corporate Unallocated Expense⁶
(49) (46)
Total operating profit $ 912 $ 705

¹Revenue 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 ~~2019~~2021 includes amortization of intangibles from acquisitions of $1$5 million.

³ Operating profit for 2021 includes a gain on disposition of $2 million, and operating profit for 2020 includes a gain on disposition of $7 million and employee severance charges of $2 million. Additionally, operating profit for ~~2020~~2021 and ~~2019~~2020 includes amortization of intangibles from acquisitions of ~~$19~~$16 million and ~~$18~~$19 million, respectively.

⁴ Operating profit for ~~2020~~both 2021 and ~~2019~~2020 includes amortization of intangibles from acquisitions of $2 ~~million and $3 million, respectively.~~million.

⁵ Operating profit for both 2021 and 2020 ~~and 2019 include~~includes amortization of intangibles from acquisitions of $1 million.

⁶ ~~Operating profit~~Corporate Unallocated expense for 2021 includes IHS Markit merger costs of $49 million and Kensho retention related expense of $2 million. Corporate Unallocated expense for 2020 includes employee severance charges of $7 million and Kensho retention related expense of $5 million. ~~2019~~Additionally, Corporate Unallocated expense for both 2021 and 2020 includes ~~Kensho retention related expense of $7 million. Operating profit for 2020 and 2019 also includes and~~ amortization of intangibles from acquisitions of $7 ~~million and $8 million, respectively.~~million.

The following table presents our revenue disaggregated by revenue type for the three months ended March 31:


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

		2020																					2021
Subscription	Subscription	$	—	$	505	$	197	$	46	$	—	$	748	Subscription	$	0	$	527	$	208	$	46	$	0	$	781
Non-subscription / Transaction	Non-subscription / Transaction	432		13		1		—		—		446		Non-subscription / Transaction	582		12		1		0		0		595
Non-transaction	Non-transaction	393		—		—		—		(32)		361		Non-transaction	435		0		0		0		(35)		400
Asset-linked fees	Asset-linked fees	—		1		—		159		—		160		Asset-linked fees	0		0		0		183		0		183
Sales usage-based royalties	Sales usage-based royalties	—		—		17		54		—		71		Sales usage-based royalties	0		0		16		41		0		57

Total revenue	Total revenue	$	825	$	519	$	215	$	259	$	(32)	$	1,786	Total revenue	$	1,017	$	539	$	225	$	270	$	(35)	$	2,016

Timing of revenue recognition	Timing of revenue recognition													Timing of revenue recognition
Services transferred at a point in time	Services transferred at a point in time	$	432	$	13	$	1	$	—	$	—	$	446	Services transferred at a point in time	$	582	$	12	$	1	$	0	$	0	$	595
Services transferred over time	Services transferred over time	393		506		214		259		(32)		1,340		Services transferred over time	435		527		224		270		(35)		1,421
Total revenue	Total revenue	$	825	$	519	$	215	$	259	$	(32)	$	1,786	Total revenue	$	1,017	$	539	$	225	$	270	$	(35)	$	2,016


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

	20202
Subscription	$	0	$	505	$	197	$	46	$	0	$	748
Non-subscription / Transaction	430		13		1		0		0		444
Non-transaction	395		0		0		0		(32)		363
Asset-linked fees	0		1		0		159		0		160
Sales usage-based royalties	0		0		17		54		0		71

Total revenue	$	825	$	519	$	215	$	259	$	(32)	$	1,786

Timing of revenue recognition
Services transferred at a point in time	$	430	$	13	$	1	$	0	$	0	$	444
Services transferred over time	395		506		214		259		(32)		1,342
Total revenue	$	825	$	519	$	215	$	259	$	(32)	$	1,786

(in millions) Ratings Market Intelligence Platts Indices
Intersegment Elimination ¹
Total
2019 ²
Subscription $ — $ 467 $ 191 $ 40 $ — $ 698
Non-subscription / Transaction 324 10 2 — — 336
Non-transaction 372 — — — (31) 341
Asset-linked fees — 5 — 143 — 148
Sales usage-based royalties — — 14 34 — 48
Total revenue $ 696 $ 482 $ 207 $ 217 $ (31) $ 1,571
Timing of revenue recognition
Services transferred at a point in time $ 324 $ 10 $ 2 $ — $ — $ 336
Services transferred over time 372 472 205 217 (31) 1,235
Total revenue $ 696 $ 482 $ 207 $ 217 $ (31) $ 1,571

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 ~~third~~first quarter of ~~2019,~~2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction revenue to non-transaction revenue of $7$2 million for the first quarter of ~~2019.~~2020.

The following provides revenue by geographic region for the three months ended March 31:


(in millions)	(in millions)	2020		2019		(in millions)
							2021		2020
U.S.	U.S.	$	1,108	$	943	U.S.	$	1,238	$	1,108
European region	European region	405		373		European region	473		405
Asia	Asia	184		169		Asia	208		184
Rest of the world	Rest of the world	89		86		Rest of the world	97		89
Total	Total	$	1,786	$	1,571	Total	$	2,016	$	1,786

See Note 2 — Acquisitions and Divestitures and Note 10 — Restructuring for additional actions that impacted the segment operating results.

12. Commitments and Contingencies

Leases

We determine whether an arrangement meets the criteria for an operating lease or a finance lease at the inception of the arrangement. We have operating leases for office space and equipment. Our leases have remaining lease terms of 1 year to 1412 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year. We consider these options in determining the lease term used to establish our ~~right-of~~right of use ("ROU") assets and associated lease liabilities. We sublease certain real estate leases to third parties which mainly consist of operating leases for space within our offices.

Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expenses for these leases on a straight line-basis over the lease term in operating-related expenses and selling and general expenses.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. Our future minimum based payments used to determine our lease liabilities include minimum based rent payments and escalations. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The following table provides information on the location and amounts of our leases on our consolidated balance sheets as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

(in millions)

March 31,

December 31,

(in millions)

March 31,

December 31,

Balance Sheet Location

2020

2019

Balance Sheet Location

2021

2020

Assets

Right of use assets

Lease right-of-use assets

652

676

Right of use assets

Lease right of use assets

479

494

Liabilities

Other current liabilities

Current lease liabilities

104

112

Other current liabilities

Current lease liabilities

100

Lease liabilities — non-current

Noncurrent lease liabilities

603

620

Lease liabilities — non-current

Non-current lease liabilities

525

544

The components of lease expense for the three months ended March 31 are as follows:


(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Operating lease cost	Operating lease cost	$	36	$	37	Operating lease cost	$	33	$	36

Sublease income	Sublease income	(4)		(4)		Sublease income	(1)		(4)
Total lease cost	Total lease cost	$	32	$	33	Total lease cost	$	32	$	32

Supplemental information related to leases for the three months ended March 31 are as follows:


(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Cash paid for amounts included in the measurement for operating lease liabilities	Cash paid for amounts included in the measurement for operating lease liabilities					Cash paid for amounts included in the measurement for operating lease liabilities
Operating cash flows from operating leases		$	39	$	35
Operating cash flows for operating leases						Operating cash flows for operating leases	$	32	$	39

Right-of-use assets obtained in exchange for lease obligations
Right of use assets obtained in exchange for lease obligations						Right of use assets obtained in exchange for lease obligations
Operating leases	Operating leases	6		715		Operating leases	0		6

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


		March 31,		December 31,			March 31,		December 31,
		2020		2019			2021		2020

Weighted-average remaining lease term (years)	Weighted-average remaining lease term (years)	8.9		9.0		Weighted-average remaining lease term (years)	8.4		8.5

Weighted-average discount rate	Weighted-average discount rate	3.85	%	3.93	%	Weighted-average discount rate	3.45	%	3.78	%

Maturities of lease liabilities for our operating leases are as follows:

(in millions)
2020 (Excluding the three months ended March 31, 2020) $ 100
2021 120
2022 105
2023 87
2024 66
2025 and beyond 357
Total undiscounted lease payments $ 835
Less: Imputed interest 128
Present value of lease liabilities $ 707


(in millions)
2021 (Excluding the three months ended March 31, 2021)	$	89
2022	103
2023	85
2024	68
2025	60
2026 and beyond	304
Total undiscounted lease payments	$	709
Less: Imputed interest	84
Present value of lease liabilities	$	625

Related Party Agreements

In June of 2012, we entered into a license agreement (the "License Agreement") with the holder of S&P Dow Jones Indices LLC noncontrolling interest, CME Group, replacing the 2005 license agreement between Indices and CME Group. Under the terms of the License Agreement, S&P Dow Jones Indices LLC receives a share of the profits from the trading and clearing of CME Group's equity index products. During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, S&P Dow Jones Indices LLC earned ~~$47~~$37 million and ~~$29~~$47 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.

In ~~addition,~~the second quarter of 2020, Indices, a joint venture with CME Group controlled by the Company, received a “Wells Notice” from the Staff of the SEC stating that the Staff has made a preliminary determination to recommend that the SEC file an enforcement action against Indices. The proposed action would allege violations of federal securities laws with respect to the absence of disclosure of a quality assurance mechanism and the impact of that mechanism on certain volatility related index values published on one business day in 2018. The Staff’s recommendation may involve a civil injunctive action, a cease and desist proceeding, disgorgement, pre-judgment interest and civil money penalties. The Wells Notice is neither a formal allegation nor a finding of wrongdoing. It allows Indices the opportunity to provide its perspective and to address the issues raised by the Staff before any decision is made by the SEC on whether to authorize the commencement of an enforcement proceeding. Indices has been cooperating with the SEC in this matter and intends to continue to do so.

A class action lawsuit was filed in Australia on August 7, 2020 against the Company and a subsidiary of the Company. A separate lawsuit was filed against the Company and a subsidiary of the Company in Australia on February 2, 2021 by two entities within the Basis Capital investment group. The lawsuits both relate to alleged investment losses in collateralized debt obligations rated by Ratings prior to the financial crisis.

We can provide no assurance that we will not be obligated to pay significant amounts in order to resolve these matters on terms deemed acceptable.

From time to time, the Company receives customer complaints, particularly, though not exclusively, in its Ratings and Indices segments. The Company believes it has strong contractual protections in the terms and conditions included in its arrangements

with customers. Nonetheless, in the interest of managing customer relationships, the Company from time to time engages in dialogue with such customers in an effort to resolve such complaints, and if such complaints cannot be resolved through dialogue, may face litigation regarding such complaints. The Company does not expect to incur material losses as a result of these matters.

Moreover, various government and self-regulatory agencies frequently make inquiries and conduct investigations into our compliance with applicable laws and regulations, including those related to ratings activities and antitrust matters. For example, as a nationally recognized statistical rating organization registered with the SEC under Section 15E of the ~~Securities~~ Exchange Act, ~~of 1934,~~ S&P Global Ratings is in ongoing communication with the staff of the SEC regarding compliance with its extensive obligations under the federal securities laws. Although S&P Global seeks to promptly address any compliance issues that it detects or that the staff of the SEC or another regulator raises, there can be no assurance that the SEC or another regulator will not seek remedies against S&P Global for one or more compliance deficiencies. Any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions, which could adversely impact our consolidated financial condition, cash flows, business or competitive position.

In view of the uncertainty inherent in litigation and government and regulatory enforcement matters, we cannot predict the eventual outcome of such matters or the timing of their resolution, or in most cases reasonably estimate what the eventual judgments, damages, fines, penalties or impact of activity (if any) restrictions may be. As a result, we cannot provide assurance that such outcomes will not have a material adverse effect on our consolidated financial condition, cash flows, business or competitive position. As litigation or the process to resolve pending matters progresses, as the case may be, we will continue to review the latest information available and assess our ability to predict the outcome of such matters and the effects, if any, on our consolidated financial condition, cash flows, business or competitive position, which may require that we record liabilities in the consolidated financial statements in future periods.

13. Recently Issued or Adopted Accounting Standards

In ~~January~~August of 2020, the Financial Accounting Standards Board ("FASB") issued guidance that amends the accounting for convertible instruments and the derivatives scope exception for contracts in an entity's own equity. The guidance was effective on January 1, 2021, and the adoption of this guidance did not have a ~~guidance~~significant impact on our consolidated financial statements.

In January of 2020, the FASB intended to clarify the interaction of the accounting for equity securities under ~~ASC~~Accounting Standards Codification ("ASC") 321, investments accounted for under the equity method of accounting under ASC 323, and the accounting for certain forward contracts and purchased options accounted for under ASC 815. ~~This~~The guidance ~~could change~~clarifies how to account for the ~~Company accounts for an~~transition into and out of the equity ~~security~~method of accounting when considering observable transactions under the measurement alternative. The guidance iswas effective ~~for reporting periods beginning after December 15, 2020; however early adoption is permitted. We are currently evaluating the impact of~~on January 1, 2021, and the adoption of this guidance did not have a significant impact on our consolidated financial statements.

In December of 2019, the FASB issued guidance to simplify the accounting for income ~~taxes. The guidance~~taxes, which eliminates certain

exceptions to the general principles of Topic 740. The guidance is effective for reporting periods after December 15, ~~2020;~~

~~however, early adoption is permitted. We are currently evaluating the impact of the~~2020. Our adoption of this guidance on ~~our~~

~~consolidated financial statements.~~

In November of 2018, the FASB issued guidance that provides clarification on whether certain transactions between collaborative arrangement participants should be accounted for as revenue under Accounting Standards Codification ("ASC") 606. The guidance was effective on January 1, ~~2020, and the adoption of this guidance~~2021 did not have a significant impact on our consolidated financial statements.

In August of 2018, the FASB issued guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance was effective on January 1, 2020, and the adoption of this guidance did not have a significant impact on our consolidated financial statements.

In January of 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance was effective on January 1, 2020, and the adoption of this guidance did not have a significant impact on our consolidated financial statements.

In June of 2016, the FASB issued guidance amending the measurement of credit losses on certain financial instruments by requiring the use of an expected loss methodology, which will result in more timely recognition of credit losses. We adopted this guidance on January 1, 2020. The adoption of this guidance impacted our process for assessing the adequacy of our allowance for doubtful accounts on accounts receivable and contract assets by incorporating data points that provide indicators of future economic conditions including forecasted industry default rates and industry index benchmarks in concert with our historical process contemplating experienced receivable write off rates from past events and current economic conditions. The adoption of this guidance did not have a significant impact on our consolidated financial statements. During the three months ended March 31, 2020, we incorporated the forecasted impact of future economic conditions into our allowance for doubtful accounts measurement process including the expected adverse impact of COVID-19 on the global economy.

~~14. Condensed Consolidating Financial Statements~~

On November 26, 2019, we issued $500 million of 2.5% senior notes due in 2029 and $600 million of 3.25% senior notes due in 2049. In the fourth quarter of 2019, we used the net proceeds to fund the redemption of the $700 million outstanding principal amount of our 3.3% senior notes due in August of 2020 and a portion of the $400 million outstanding principal amount of our 6.55% senior notes due in October of 2037. On May 17, 2018, we issued $500 million of 4.5% notes due in 2048. On September 22, 2016, we issued $500 million of 2.95% senior notes due in 2027. On May 26, 2015, we issued $700 million of 4.0% senior notes due in 2025. On August 18, 2015, we issued $2.0 billion of senior notes, consisting of $400 million of 2.5% senior notes that were repaid in 2018, $700 million of 3.3% senior notes due in 2020 and $900 million of 4.4% senior notes due in 2026. See Note 4 —~~Debt~~ ~~for additional information.~~

The senior notes described above are fully and unconditionally guaranteed by Standard & Poor's Financial Services LLC, a 100% owned subsidiary of the Company. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of S&P Global Inc., Standard & Poor's Financial Services LLC, and the Non-Guarantor Subsidiaries of S&P Global Inc. and Standard & Poor's Financial Services LLC, and the eliminations necessary to arrive at the information for the Company on a consolidated basis.

Statement of Income
Three Months Ended March 31, 2020
(Unaudited)
(in millions) S&P Global Inc. Standard & Poor's Financial Services LLC Non-Guarantor Subsidiaries Eliminations S&P Global Inc. Consolidated
Revenue $ 212 $ 525 $ 1,088 $ (39) $ 1,786
Expenses:
Operating-related expenses 31 117 412 (39) 521
Selling and general expenses 74 27 210 — 311
Depreciation 11 2 7 — 20
Amortization of intangibles — — 29 — 29
Total expenses 116 146 658 (39) 881
Gain on dispositions — — (7) — (7)
Operating profit 96 379 437 — 912
Other (income) expense, net

(5) — 6 — 1
Interest expense (income), net 37 — (3) — 34
Non-operating intercompany transactions 103 (13) (564) 474 —
Income before taxes on income (39) 392 998 (474) 877
Provision for taxes on income 16 91 81 — 188
Equity in net income of subsidiaries 1,168 — — (1,168) —
Net income $ 1,113 $ 301 $ 917 $ (1,642) $ 689
Less: net income attributable to noncontrolling interests — — — (50) (50)
Net income attributable to S&P Global Inc. $ 1,113 $ 301 $ 917 $ (1,692) $ 639
Comprehensive income $ 1,146 $ 301 $ 847 $ (1,641) $ 653

Statement of Income
Three Months Ended March 31, 2019
(Unaudited)
(in millions) S&P Global Inc. Standard & Poor's Financial Services LLC Non-Guarantor Subsidiaries Eliminations S&P Global Inc. Consolidated
Revenue $ 202 $ 436 $ 971 $ (38) $ 1,571
Expenses:
Operating-related expenses 67 117 327 (38) 473
Selling and general expenses (4) 81 264 — 341
Depreciation 11 2 7 — 20
Amortization of intangibles — — 32 — 32
Total expenses 74 200 630 (38) 866
Operating profit 128 236 341 — 705
Other expense (income), net

107 — (4) — 103
Interest expense (income), net 38 — (2) — 36
Non-operating intercompany transactions 96 (16) (103) 23 —
Income before taxes on income (113) 252 450 (23) 566
(Benefit) provision for taxes on income (40) 70 83 — 113
Equity in net income of subsidiaries 506 — — (506) —
Net income $ 433 $ 182 $ 367 $ (529) $ 453
Less: net income attributable to noncontrolling interests — — — (43) (43)
Net income attributable to S&P Global Inc. $ 433 $ 182 $ 367 $ (572) $ 410
Comprehensive income $ 515 $ 182 $ 395 $ (530) $ 562

Balance Sheet
March 31, 2020
(Unaudited)
(in millions) S&P Global Inc. Standard & Poor's Financial Services LLC Non-Guarantor Subsidiaries Eliminations S&P Global Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ 659 $ — $ 1,273 $ — $ 1,932
Restricted cash — — 20 — 20
Accounts receivable, net of allowance for doubtful accounts 235 232 1,037 — 1,504
Intercompany receivable 716 2,831 4,304 (7,851) —
Prepaid and other current assets 84 3 152 — 239
Total current assets 1,694 3,066 6,786 (7,851) 3,695
Property and equipment, net of accumulated depreciation 197 — 112 — 309
Right of use assets 388 2 262 — 652
Goodwill 283 — 3,413 7 3,703
Other intangible assets, net — — 1,439 — 1,439
Investments in subsidiaries 11,985 5 8,075 (20,065) —
Intercompany loans receivable 17 — 1,511 (1,528) —
Other non-current assets 305 35 326 (1) 665
Total assets $ 14,869 $ 3,108 $ 21,924 $ (29,438) $ 10,463
LIABILITIES AND (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 86 $ 10 $ 107 $ — $ 203
Intercompany payable 6,484 92 1,275 (7,851) —
Accrued compensation and contributions to retirement plans 102 10 110 — 222
Income taxes currently payable 99 — 61 — 160
Unearned revenue 314 250 1,333 — 1,897
Other current liabilities 214 14 273 — 501
Total current liabilities 7,299 376 3,159 (7,851) 2,983
Long-term debt 3,949 — — — 3,949
Lease liabilities — non-current 373 1 229 — 603
Intercompany loans payable — — 1,528 (1,528) —
Pension and other postretirement benefits 176 — 82 — 258
Other non-current liabilities 154 74 368 — 596
Total liabilities 11,951 451 5,366 (9,379) 8,389
Redeemable noncontrolling interest — — — 2,268 2,268
Equity:
Common stock 294 — 2,375 (2,375) 294
Additional paid-in capital (46) 633 9,374 (9,207) 754
Retained income 16,139 2,024 5,377 (10,849) 12,691
Accumulated other comprehensive loss (142) — (567) 49 (660)
Less: common stock in treasury (13,327) — (2) — (13,329)
Total (deficit) equity - controlling interests 2,918 2,657 16,557 (22,382) (250)
Total equity - noncontrolling interests — — 1 55 56
Total (deficit) equity 2,918 2,657 16,558 (22,327) (194)
Total liabilities and (deficit) equity $ 14,869 $ 3,108 $ 21,924 $ (29,438) $ 10,463

Balance Sheet
December 31, 2019
(in millions) S&P Global Inc. Standard & Poor's Financial Services LLC Non-Guarantor Subsidiaries Eliminations S&P Global Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ 1,130 $ — $ 1,736 $ — $ 2,866
Restricted cash — — 20 — 20
Accounts receivable, net of allowance for doubtful accounts 229 148 1,200 — 1,577
Intercompany receivable 675 2,855 3,983 (7,513) —
Prepaid and other current assets 102 2 145 — 249
Total current assets 2,136 3,005 7,084 (7,513) 4,712
Property and equipment, net of accumulated depreciation 204 — 116 — 320
Right of use assets 402 1 273 — 676
Goodwill 283 — 3,283 9 3,575
Other intangible assets, net — — 1,424 — 1,424
Investments in subsidiaries 12,134 6 8,088 (20,228) —
Intercompany loans receivable 17 — 1,229 (1,246) —
Other non-current assets 281 37 324 (1) 641
Total assets $ 15,457 $ 3,049 $ 21,821 $ (28,979) $ 11,348
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 80 $ 11 $ 99 $ — $ 190
Intercompany payable 6,288 27 1,198 (7,513) —
Accrued compensation and contributions to retirement plans 148 61 237 — 446
Income taxes currently payable 7 — 61 — 68
Unearned revenue 297 243 1,388 — 1,928
Other current liabilities 187 18 256 — 461
Total current liabilities 7,007 360 3,239 (7,513) 3,093
Long-term debt 3,948 — — — 3,948
Lease liabilities — non-current 383 1 236 — 620
Intercompany loans payable — — 1,246 (1,246) —
Pension and other postretirement benefits 178 — 81 — 259
Other non-current liabilities 171 81 373 (1) 624
Total liabilities 11,687 442 5,175 (8,760) 8,544
Redeemable noncontrolling interest — — — 2,268 2,268
Equity:
Common stock 294 — 2,377 (2,377) 294
Additional paid-in capital 112 632 9,362 (9,203) 903
Retained income 15,836 1,975 5,404 (11,010) 12,205
Accumulated other comprehensive loss (175) — (497) 48 (624)
Less: common stock in treasury (12,297) — (2) — (12,299)
Total equity - controlling interests 3,770 2,607 16,644 (22,542) 479
Total equity - noncontrolling interests — — 2 55 57
Total equity 3,770 2,607 16,646 (22,487) 536
Total liabilities and equity $ 15,457 $ 3,049 $ 21,821 $ (28,979) $ 11,348

Statement of Cash Flows
Three Months Ended March 31, 2020
(Unaudited)
(in millions) S&P Global Inc. Standard & Poor's Financial Services LLC Non-Guarantor Subsidiaries Eliminations S&P Global Inc. Consolidated
Operating Activities:
Net income $ 1,113 $ 301 $ 917 $ (1,642) $ 689
Adjustments to reconcile net income to cash provided by operating activities:
     Depreciation 11 2 7 — 20
     Amortization of intangibles — — 29 — 29
     Provision for losses on accounts receivable 2 3 5 — 10
     Deferred income taxes (5) — (1) — (6)
     Stock-based compensation 4 2 5 — 11
     Gain on disposition — — (7) — (7)
     Other 30 — (1) — 29
Changes in operating assets and liabilities, net of effect of acquisitions:
     Accounts receivable (8) (82) 166 — 76
     Prepaid and other current assets (54) 33 (31) — (52)
     Accounts payable and accrued expenses (42) (64) (145) — (251)
     Unearned revenue 18 7 (37) — (12)
     Other current liabilities 4 21 24 — 49
     Net change in prepaid/accrued income taxes 163 (40) 2 — 125
     Net change in other assets and liabilities 13 (21) (22) — (30)
Cash provided by operating activities 1,249 162 911 (1,642) 680
Investing Activities:
     Capital expenditures (3) (1) (7) — (11)
     Acquisitions, net of cash acquired — — (183) — (183)
     Changes in short-term investments — — 11 — 11
Cash used for investing activities (3) (1) (179) — (183)
Financing Activities:
     Dividends paid to shareholders (161) — — — (161)
Distributions to noncontrolling interest holders, net — — (51) — (51)
     Repurchase of treasury shares (1,153) — — — (1,153)
     Exercise of stock options 5 — 3 — 8
Employee withholding tax on share-based payments (44) — — — (44)
     Intercompany financing activities (359) (161) (1,122) 1,642 —
Cash used for financing activities (1,712) (161) (1,170) 1,642 (1,401)
Effect of exchange rate changes on cash (5) — (25) — (30)
Net change in cash, cash equivalents, and restricted cash (471) — (463) — (934)
Cash, cash equivalents, and restricted cash at beginning of period 1,130 — 1,756 — 2,886
Cash, cash equivalents, and restricted cash at end of period $ 659 $ — $ 1,293 $ — $ 1,952

Statement of Cash Flows
Three Months Ended March 31, 2019
(Unaudited)
(in millions) S&P Global Inc. Standard & Poor's Financial Services LLC Non-Guarantor Subsidiaries Eliminations S&P Global Inc. Consolidated
Operating Activities:
Net income $ 433 $ 182 $ 367 $ (529) $ 453
Adjustments to reconcile net income to cash provided by operating activities:
     Depreciation 11 2 7 — 20
     Amortization of intangibles — — 32 — 32
     Provision for losses on accounts receivable 2 2 3 — 7
     Deferred income taxes 21 — 7 28
     Stock-based compensation 2 1 9 — 12
     Pension settlement charge, net of taxes 85 — — — 85
     Other — — 8 — 8
Changes in operating assets and liabilities, net of effect of acquisitions:
     Accounts receivable (80) (101) 94 — (87)
     Prepaid and other current assets (9) (2) (23) — (34)
     Accounts payable and accrued expenses (45) (18) (98) — (161)
     Unearned revenue 9 23 (35) — (3)
     Accrued legal settlements — (1) — — (1)
     Other current liabilities (54) (1) (4) — (59)
     Net change in prepaid/accrued income taxes 51 — 6 — 57
     Net change in other assets and liabilities (19) (5) (40) — (64)
Cash provided by operating activities 407 82 333 (529) 293
Investing Activities:
     Capital expenditures (8) (4) (8) — (20)
     Acquisitions, net of cash acquired — — (1) — (1)
Cash used for investing activities (8) (4) (9) — (21)
Financing Activities:
     Dividends paid to shareholders (141) — — — (141)
Distributions to noncontrolling interest holders, net — — (18) — (18)
     Repurchase of treasury shares (644) — — — (644)
     Exercise of stock options 23 — — — 23
Employee withholding tax on share-based payments (49) — — — (49)
     Intercompany financing activities (130) (78) (321) 529 —
Cash used for financing activities (941) (78) (339) 529 (829)
Effect of exchange rate changes on cash (6) — 41 — 35
Net change in cash, cash equivalents, and restricted cash (548) — 26 — (522)
Cash, cash equivalents, and restricted cash at beginning of period 694 — 1,264 — 1,958
Cash, cash equivalents, and restricted cash at end of period $ 146 $ — $ 1,290 $ — $ 1,436

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)

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 months ended March 31, ~~2020.~~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, ~~2019~~2020 (our “Form 10-K”), which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The MD&A includes the following sections:

•Overview

•Results of Operations — Comparing the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020

•Liquidity and Capital Resources

•Reconciliation of Non-GAAP Financial Information

•Critical Accounting Estimates

•Recently Issued or Adopted Accounting Standards

•Forward-Looking Statements

OVERVIEW

We are a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. The capital markets include asset managers, investment banks, commercial banks, insurance companies, exchanges, trading firms and issuers; and the commodity markets include producers, traders and intermediaries within energy, petrochemicals, metals and agriculture.

Our operations consist of four reportable segments: S&P Global Ratings ("Ratings"), S&P Global Market Intelligence ("Market Intelligence"), S&P Global Platts ("Platts") and S&P Dow Jones Indices ("Indices").

•Ratings is an independent provider of credit ratings, research, and analytics, offering investors and other market participants information, ratings and benchmarks.

•Market Intelligence is a global provider of multi-asset-class data, research and analytical capabilities, which integrate cross-asset analytics and desktop services.

•Platts is the leading independent provider of information and benchmark prices for the commodity and energy markets.

•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 three months ended March 31 are as follows:


(in millions, except per share amounts)	(in millions, except per share amounts)	2020			2019			% Change ¹	(in millions, except per share amounts)	2021			2020			% Change 1
Revenue	Revenue	$	1,786		$	1,571		14%	Revenue	$	2,016		$	1,786		13%
Operating profit ²	Operating profit ²	$	912		$	705		29%	Operating profit 2	$	1,081		$	912		19%
Operating margin %	Operating margin %	51		%	45		%		Operating margin %	54		%	51		%
Diluted earnings per share from net income	Diluted earnings per share from net income	$	2.62		$	1.65		59%	Diluted earnings per share from net income	$	3.12		$	2.62		19%

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

²2021 includes IHS Markit merger costs of $49 million, Kensho retention related expense of $2 million and a gain on disposition of $2 million. 2020 includes employee severance charges of $9 million, a gain on disposition of $7 million and Kensho retention related expense of $5 million. ~~2019~~2021 and 2020 also includes ~~Kensho retention related expense of $7 million. 2020 and 2019 include~~ amortization of intangibles from acquisitions of ~~$29~~$31 million and ~~$32~~$29 million, respectively.

Revenue increased ~~14%~~13% 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 corporate bond ratings revenue, ~~primarily driven by higher corporate bond issuance~~an increase in ~~the U.S., and higher~~ bank loan ratings ~~revenue.~~revenue and higher structured finance revenues. 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 exchange-traded derivatives trading volumes and~~ higher average levels of assets under management ("AUM") for ETFs and mutual ~~funds. Revenue growth at Market Intelligence was driven~~funds, partially offset by ~~annualized contract value growth in Market Intelligence Desktop products, Credit Risk Solutions and Data Management Solutions.~~lower exchange-

traded derivative revenue. The revenue increase at Platts was primarily due to continued

demand for market data and ~~price assessment~~market insights products. Foreign exchange rates had ~~an unfavorable~~a favorable impact of ~~less than~~ 1 percentage point.

Operating profit increased ~~29%~~19%, with a favorable impact from foreign exchange rates of 2 percentage points. Excluding the ~~favorable~~unfavorable impact of ~~a gain on disposition~~IHS Markit merger costs in 2021 of 64 percentage points and ~~lower amortization of intangibles~~a higher gain on dispositions in 2020 of 21 percentage ~~points,~~point, partially offset by higher employee severance charges in 2020 of 71 percentage ~~points,~~point, operating profit increased ~~28%~~23%. The increase was primarily due to revenue growth at all of our reportable segments combined with ~~a reduction in expenses at Ratings driven by the favorable impact of foreign exchange rates, lower professional fees from increased leverage from the Global Technology Center and~~ a decrease in travel and entertainment expenses from non-essential travel restrictions in response to the 2019 novel coronavirus ("COVID-19")~~. These increases were~~, partially offset by higher compensation costs driven by annual merit increases and additional headcount.

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 ~~our first quarter,~~the three months ended March 31, 2021, 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 we have modeled the financial implications of three, six, and nine month recovery scenarios, factoring in data points from both internal and external economists and a range of observable market sources and incorporated the impact into our 2020 guidance expectations, the extent to which our results of operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are uncertain and cannot be accurately predicted.

Our Strategy

We are a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. Our purpose is to provide the intelligence that is essential for companies, governments and individuals to make decisions with conviction. We seek to deliver on this purpose in line with our core values of integrity, excellence and relevance.

In 2018, we announced the launch of Powering the Markets of the Future to provide a framework for our forward-looking business strategy. Through this framework, we seek to deliver an exceptional, differentiated customer experience by enhancing our foundational capabilities, evolving and growing our core businesses, and pursuing growth via adjacencies. In ~~2020,~~2021, we will strive to deliver on our strategic priorities in the following key areas:

Finance

•Meeting or exceeding revenue growth and EBITA margin targets ~~and delivering~~with particular focus on ~~commitments to return capital to shareholders;~~accelerating growth in the greater Asia Pacific region;

•Funding organic opportunities ~~with continued productivity gains;~~and pursuing disciplined acquisitions, investments and partnerships to support our key growth areas;

•~~Pursuing~~Taking a ~~disciplined acquisition, investment~~lead role in the market regarding ESG disclosures and ~~partnership strategy to support~~achieving our ~~strategic initiatives;~~stated environmental sustainability targets; and

•~~Better serving~~Executing against Integration Management Office ("IMO") and regulatory milestones; building trust and team cohesion with IHS Markit (NYSE:INFO) colleagues; laying groundwork to set proforma organization up for successful realization of our ~~customers, employees,~~synergy and ~~the communities in which we operate through our commitment to corporate responsibility and sustainability.~~strategic goals.

Customer

•Continuing to ~~drive excellence~~deliver our key initiatives to the market and building them through ~~our core business offerings;~~a customer-first lens;

•~~Delivering ESG, Small~~Prioritizing customer preferences, while enhancing and ~~Medium-sized Enterprise data and Marketplace solutions to market on schedule and with strong commercial traction;~~

•~~Modernizing and enhancing~~adjusting the delivery of our products across multiple channels ~~(e.g.,~~such as feeds and APIs; and delivering on S&P Global Platform ~~MI Smart move, feeds, application programming interfaces);~~initiatives;

•~~Providing~~Incorporating a ~~superior~~ customer ~~experience through~~perspective in all divisions and functions, including the ~~collective efforts~~reimagining of our ~~divisions~~customer's work environments and ~~functions;~~how best to serve them; pursuing partnerships to meet customers where they are; and

•~~Accelerating growth in non-U.S. markets~~Nurturing and protecting the core franchise, while growing brand equity with ~~a particular focus on progressing our businesses in China.~~the appropriate investments.

Operations

•~~Modernizing our workplace to improve~~Improving end-user productivity and experience ~~enabling~~by providing our employees with the tools and processes to ~~innovate and~~ better serve our customers;

•~~Standardizing and simplifying~~Reimagining our work environment by continuing to standardize our technology ~~to best support~~ and ~~enable our divisions;~~encouraging employee participation in the reshaping of where we work, how we work and how we serve;

•~~Reducing our Cyber Security risk while augmenting process maturity and producing outcomes commensurate with~~Advancing our risk ~~appetite;~~

•~~Maintaining our strong commitment to quality, utilizing shared data~~culture by maturing risk management & compliance processes and ~~capabilities;~~our cyber security posture; and

•~~Continuing~~Utilizing our innovation teams and latest technology to ~~advance a strong Risk, Internal Control,~~maintain our commitment to advancing our shared data processes and ~~Compliance environment.~~technical capabilities.

People

•~~Creating an inclusive performance-driven culture that drives employee engagement and aligns with our purpose~~Continuing to foster a people first environment, while maintaining existing levels of ~~accelerating progress in the world;~~engagement;

•~~Promoting~~Encouraging career mobility ~~and~~through career coaching, while attracting and retaining the best people; and

•Improving ~~diversity in overall~~diverse representation through talent acquisition, advancement and ~~retention.~~retention, while continuing to raise awareness of racial education.

There can be no assurance that we will achieve success in implementing any one or more of these strategies as a variety of factors could unfavorably impact operating results, including prolonged difficulties in the global credit markets and a change in the regulatory environment affecting our businesses. See Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K.

3328

RESULTS OF OPERATIONS — COMPARING THE THREE MONTHS ENDED MARCH 31, ~~2020~~2021 AND ~~2019~~2020

Consolidated Review


(in millions)	(in millions)	2020		2019		% Change	(in millions)	2021		2020		% Change
Revenue	Revenue	$	1,786	$	1,571	14%	Revenue	$	2,016	$	1,786	13%
Total Expenses:	Total Expenses:						Total Expenses:
Operating-related expenses	Operating-related expenses	521		473		10%	Operating-related expenses	527		518		2%
Selling and general expenses	Selling and general expenses	311		341		(9)%	Selling and general expenses	360		314		15%
Depreciation and amortization	Depreciation and amortization	49		52		(4)%	Depreciation and amortization	50		49		—%
Total expenses	Total expenses	881		866		2%	Total expenses	937		881		6%
Gain on disposition		(7)		—		N/M
Gain on dispositions							Gain on dispositions	(2)		(7)		(71)%
Operating profit	Operating profit	912		705		29%	Operating profit	1,081		912		19%
Other expense, net		1		103		(99)%
Other (income) expense, net							Other (income) expense, net	(7)		1		N/M
Interest expense, net	Interest expense, net	34		36		(6)%	Interest expense, net	32		34		(7)%

Provision for taxes on income	Provision for taxes on income	188		113		67%	Provision for taxes on income	248		188		32%
Net income	Net income	689		453		52%	Net income	808		689		17%

Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests	(50)		(43)		(16)%	Less: net income attributable to noncontrolling interests	(53)		(50)		(7)%

Net income attributable to S&P Global Inc.	Net income attributable to S&P Global Inc.	639		410		56%	Net income attributable to S&P Global Inc.	$	755	$	639	18%

N/M- not meaningful

Revenue

The following table provides consolidated revenue information for the three months ended March 31:

(in millions) 2020 2019 % Change
Revenue $ 1,786 $ 1,571 14%
Subscription revenue $ 748 $ 698 7%
Non-subscription / transaction revenue 446 336 33%
Non-transaction revenue 361 341 6%
Asset-linked fees 160 148 8%
Sales usage-based royalties 71 48 47%
% of total revenue:
     Subscription revenue 42 % 45 %
     Non-subscription / transaction revenue 25 % 21 %
     Non-transaction revenue 20 % 22 %
     Asset-linked fees 9 % 9 %
     Sales usage-based royalties 4 % 3 %
U.S. revenue $ 1,108 $ 943 18%
International revenue:
     European region 405 373 9%
     Asia 184 169 8%
     Rest of the world 89 86 4%
Total international revenue $ 678 $ 628 8%
% of total revenue:
     U.S. revenue 62 % 60 %
     International revenue 38 % 40 %



(in millions)	2021			2020			% Change
Revenue	$	2,016		$	1,786		13%

Subscription revenue	$	781		$	748		5%
Non-subscription / transaction revenue	595			444			34%
Non-transaction revenue	400			363			10%
Asset-linked fees	183			160			14%
Sales usage-based royalties	57			71			(19)%

% of total revenue:
Subscription revenue	39		%	42		%
Non-subscription / transaction revenue	29		%	25		%
Non-transaction revenue	20		%	20		%
Asset-linked fees	9		%	9		%
Sales usage-based royalties	3		%	4		%

U.S. revenue	$	1,238		$	1,108		12%
International revenue:
European region	473			405			17%
Asia	208			184			13%
Rest of the world	97			89			8%
Total international revenue	$	778		$	678		15%
% of total revenue:
U.S. revenue	61		%	62		%
International revenue	39		%	38		%

3429

Subscription revenue increased primarily from growth in Market Intelligence's ~~average contract values~~Credit Risk Solutions, Data Management Solutions and Market Intelligence Desktop products and continued demand for Platts proprietary content. Higher data subscription revenue at Indices also contributed to subscription revenue growth. Non-transaction revenue increased primarily due to higher surveillance revenue as well as higher Ratings Evaluation Service activity. Non-subscription / transaction revenue increased due to ~~an increase in~~higher corporate bond ratings revenue, ~~primarily driven by higher corporate bond issuance~~an increase in ~~the U.S., and higher~~ bank loan ratings revenue ~~at Ratings.~~and higher structured finance revenues. Non-transaction revenue increased primarily due to an increase in surveillance revenue, an increase in entity credit ratings revenue, higher Ratings Evaluation Service ("RES") revenue driven by increased M&A activity and an increase in CRISIL revenue. Asset linked fees increased ~~due to the impact of~~reflecting higher average levels of assets under management for ETFs and mutual funds at Indices. The ~~increase~~decrease in sales-usage based royalties was primarily driven by ~~higher~~lower exchange-traded derivative ~~volumes~~revenue at Indices. See “Segment Review” below for further information.

The ~~unfavorable~~favorable impact of foreign exchange rates ~~reduced~~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.

Total Expenses

The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the three months ended March 31:


(in millions)	(in millions)	2020						2019						% Change					(in millions)	2021			2020	% Change
		Operating- related expenses		Selling and general expenses		Operating- related expenses		Selling and general expenses		Operating- related expenses	Selling and general expenses		Operating- related expenses		Selling and general expenses		Operating- related expenses			Selling and general expenses		Operating- related expenses	Selling and general expenses
Ratings	Ratings	$	222	$	75	$	229	$	96	(3)%	(22)%	Ratings	$	232	$	91	$	223		$	73	4%	25%
Market Intelligence ¹	Market Intelligence ¹	227		126		169		144		34%	(12)%	Market Intelligence 1	230		122		228			125		1%	(2)%
Platts	Platts	50		49		56		50		(9)%	(4)%	Platts	50		44		50			49		(1)%	(11)%
Indices	Indices	44		32		39		27		14%	17%	Indices	41		35		39			38		9%	(6)%
Intersegment eliminations ²	Intersegment eliminations ²	(32)		—		(31)		—		(5)%	NM	Intersegment eliminations 2	(35)		—		(32)			—		(9)%	-
Total segments	Total segments	511		282		462		317		11%	(11)%	Total segments	518		292		508			285		2%	3%
Corporate Unallocated expense ³	Corporate Unallocated expense ³	10		29		11		24		(7)%	22%	Corporate Unallocated expense 3	9		68		10			29		(8)%	N/M
Total	Total	$	521	$	311	$	473	$	341	10%	(9)%	Total	$	527	$	360	$	518		$	314	2%	15%

N/~~M -~~M- not meaningful

¹ In 2020, selling and general expenses include employee severance charges of $2 million.

3530

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

³In 2021, selling and general expenses include IHS Markit merger costs of $49 million. In 2020, selling and general expenses include employee severance charges of $7 million. In 2021 and 2020, ~~and 2019~~, selling and general expenses include Kensho retention related expense of $5$2 million and $7$5 million, respectively.

Operating-Related Expenses

Operating-related expenses increased ~~10%~~2% primarily driven by ~~increases at Market Intelligence and Indices. The~~an increase at ~~Market Intelligence was primarily due to~~Ratings driven by higher compensation costs ~~and an increase in intersegment royalties tied to annualized contract value growth. The increase at Indices was~~ due to ~~increased data distribution costs, higher royalties due~~annual merit increases and additional headcount, partially offset by a decrease in travel and entertainment expenses from non-essential travel restrictions in response to ~~increased traction of royalty-based products, and higher compensation costs.~~COVID-19.

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

Selling and General Expenses

Selling and general expenses ~~decreased 9%~~increased 15%. Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 15 percentage points, partially offset by higher employee severance charges in 2020 of 2 percentage points and higher Kensho related retention expense in 2020 of 1 percentage point, selling and general expenses ~~decreased 11%~~increased 3%. This ~~decrease~~increase was primarily driven by ~~decreases~~an increase at Ratings ~~and Market Intelligence. The decrease in Ratings was primarily~~ driven by ~~the favorable impact of foreign exchange rates~~higher compensation costs due to annual merit increases and additional headcount, partially offset by a decrease in ~~technology costs. Market Intelligence decreased due~~travel and entertainment expenses from non-essential travel restrictions in response to ~~a decrease in technology costs.~~COVID-19.

Depreciation and Amortization

Depreciation and amortization ~~decreased $2 million or 4% due to~~remained relatively unchanged as an increase in amortization expense driven by the acquisitions of RobecoSAM and Greenwich Associates LLC in January 2020 and February 2020, respectively, was offset by a decrease in ~~amortization expense primarily related to assets being fully amortized at Platts and a decrease in amortization expense at Kensho.~~depreciation expense.

Gain on ~~Disposition~~Dispositions

During the three months ended March 31, 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 months ended March 31, 2020, we completed the following disposition that resulted in a pre-tax gain of $7 million ($7 million after-tax), which was included in Gain on ~~disposition~~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. ("Q4"). This alliance will integrate 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 months ended March 31, 2020, we recorded a pre-tax gain of $7 million ($7 million after-tax) in Gain on disposition in the consolidated statement of income related to the sale of IR.

Operating Profit

We consider operating profit to be an important measure for evaluating our operating performance and we evaluate operating profit for each of the reportable business segments in which we operate.

We internally manage our operations by reference to operating profit with economic resources allocated primarily based on each segment's contribution to operating profit. Segment operating profit is defined as operating profit before Corporate Unallocated. Segment operating profit is not, however, a measure of financial performance under U.S. GAAP, and may not be defined and calculated by other companies in the same manner.

3631

The ~~table~~tables below ~~reconciles~~reconcile segment operating profit to total operating profit for the three months ended March 31:


(in millions)	(in millions)	2020		2019		% Change	(in millions)	2021		2020		% Change
Ratings ¹	Ratings ¹	$	520	$	368	41%	Ratings 1	$	681	$	520	31%
Market Intelligence ²	Market Intelligence ²	147		134		10%	Market Intelligence 2	166		147		13%
Platts ³	Platts ³	112		99		13%	Platts 3	129		112		15%
Indices ⁴	Indices ⁴	182		150		21%	Indices 4	191		182		5%
Total segment operating profit	Total segment operating profit	961		751		28%	Total segment operating profit	1,167		961		22%
Corporate Unallocated expense ⁵	Corporate Unallocated expense ⁵	(49)		(46)		(5)%	Corporate Unallocated expense 5	(86)		(49)		(77)%
Total operating profit	Total operating profit	$	912	$	705	29%	Total operating profit	$	1,081	$	912	19%

¹~~2019 include~~2021 includes amortization of intangibles from acquisitions of $1$5 million.

² 2021 includes a gain on disposition of $2 million. 2020 includes a gain on disposition related to the ~~disposition~~sale of Investor Relations of $7 million and employee severance charges of $2 million. 2020 and 2019 includes amortization of intangibles from acquisitions of ~~$19~~$16 million and ~~$18~~$19 million, respectively.

³ ~~2020~~2021 and ~~2019~~2020 include amortization of intangibles from acquisitions of $2 ~~million~~million.

4 2021 and ~~$3 million, respectively.~~

⁴2020 ~~and 2019~~ include amortization of intangibles from acquisitions of $1 million.

⁵ 2021 includes IHS Markit merger costs of $49 million. 2020 includes employee severance charges of $7 ~~million,~~million. 2021 and 2020 include Kensho retention related expense of $2 million and $5 million, respectively. 2021 and 2020 include amortization of intangibles from acquisitions of $7 ~~million. 2019 includes Kensho retention related expense of $7 million and amortization of intangibles from acquisitions of $8~~ million.

Segment Operating Profit — Increased ~~28%~~22% as compared to ~~2019.~~2020. Excluding the ~~favorable~~unfavorable impact of a higher gain on dispositions in 2020 of 2less than 1 percentage ~~points,~~point and higher amortization of intangibles in 2021 of less than 1 percentage point, partially offset by higher employee severance charges in 2020 of less than 1 percentage point, operating profit increased ~~26%~~22%. The increase was primarily due to an increase in revenue at all of our reportable segments combined with a ~~reduction~~decrease in travel and entertainment expenses ~~at Ratings. These increases were~~from non-essential travel restrictions in response to COVID-19, partially offset by higher compensation costs driven by annual merit increases and additional headcount. See “Segment Review” below for further information.

Corporate Unallocated Expense— Corporate Unallocated expense includes costs for corporate functions, select initiatives, unoccupied office space and Kensho, included in selling and general expenses. Corporate Unallocated expense increased 5%77% compared to ~~2019.~~2020. Excluding the unfavorable impact of IHS Markit merger costs in 2021 of 104 percentage points, partially offset by higher employee severance charges in 2020 of 1815 percentage points ~~partially offset by lower~~and higher Kensho retention related expense in 2020 of ~~4 percentage points and lower deal-related amortization in 2020 of 4~~5 percentage points, Corporate Unallocated expense decreased ~~5% driven by~~6% from lower ~~rental expense from~~professional fees and a ~~reduction~~decrease in ~~the Company's real estate footprint.~~travel and entertainment expenses.

Foreign exchange rates had a favorable impact on operating profit of 2 percentage points. 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. 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) Expense, net

Other (income) expense, net primarily includes the net periodic benefit cost for our retirement and post retirement plans. Other ~~expense,~~income, net was ~~$1 million and $103~~$7 million for the three months ended March 31, ~~2020 and 2019, respectively. During the first quarter of 2019, the Company purchased a group annuity contract under which an insurance company assumed the Company’s obligation~~2021 compared to pay pension benefits to approximately 4,600 retirees and beneficiaries. This purchase eliminates all future investment or mortality risk associated with these retirees. The purchase of this group annuity contract was funded with pension plan assets. As a result, the Company’s outstanding pension benefit obligation was reduced by approximately $370 million, representing approximately 24% of the total obligations of the Company’s qualified pension plans. In connection with this transaction, the Company recorded a pre-tax settlement charge of $113 million for the three months ended March 31, 2019, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Excluding this pension settlement charge, other expense, net ~~was~~of $1 million for the three months ended March 31, 2020 ~~compared to other income, net of $10 million for the three months ended March 31, 2019~~primarily due to a higher loss on investments for the three months ended March 31, 2020.

Interest Expense, net

Net interest expense decreased 6%$2 million or 7% compared ~~driven by~~to the ~~impact~~three months ended March 31, 2020, respectively, primarily due to lower interest expense resulting from the refinancing of ~~$3 million~~a series of ~~net interest income recognized~~our senior notes in ~~2020 in connection with the cross currency swap entered into in the fourth quarter~~August of ~~2019.~~2020.

Provision for Income Taxes

Segment Review

Ratings

Ratings is an independent provider of credit ratings, research, and analytics to investors, issuers and other market participants. Credit ratings are one of several tools investors can use when making decisions about purchasing bonds and other fixed income investments. They are opinions about credit risk and our ratings express our opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Our credit ratings can also relate to the credit quality of an individual debt issue, such as a corporate or municipal bond, and the relative likelihood that the issue may default.

Ratings disaggregates its revenue between transaction and non-transaction. Transaction revenue primarily includes fees associated with:

•ratings related to new issuance of corporate and government debt instruments, as well as structured finance debt instruments; and

•bank loan ~~ratings; and~~ratings.

•corporate credit estimates, which are intended, based on an abbreviated analysis, to provide an indication of our opinion regarding creditworthiness of a company which does not currently have a Ratings credit rating.

Non-transaction revenue primarily includes fees for surveillance of a credit rating, annual fees for customer relationship-based pricing programs, fees for entity credit ratings and global research and analytics at CRISIL. 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 ~~$31~~$33 million and ~~$29~~$31 million for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively.

The following table provides revenue and segment operating profit information for the three months ended March 31:


(in millions)	(in millions)	2020			2019			% Change	(in millions)	2021			2020			% Change
Revenue	Revenue	$	825		$	696		19%	Revenue	$	1,017		$	825		23%

Transaction revenue	Transaction revenue	$	432		$	324		33%	Transaction revenue	$	582		$	430		35%
Non-transaction revenue	Non-transaction revenue	$	393		$	372		6%	Non-transaction revenue	$	435		$	395		10%
% of total revenue:	% of total revenue:								% of total revenue:
Transaction revenue¹	Transaction revenue¹	52		%	47		%		Transaction revenue 1	57		%	52		%
Non-transaction revenue ¹	Non-transaction revenue ¹	48		%	53		%		Non-transaction revenue 1	43		%	48		%

U.S. revenue	U.S. revenue	$	494		$	398		24%	U.S. revenue	$	612		$	494		24%
International revenue	International revenue	$	331		$	298		11%	International revenue	$	405		$	331		22%
% of total revenue:	% of total revenue:								% of total revenue:
U.S. revenue	U.S. revenue	60		%	57		%		U.S. revenue	60		%	60		%
International revenue	International revenue	40		%	43		%		International revenue	40		%	40		%

Operating profit ²	Operating profit ²	$	520		$	368		41%	Operating profit 2	$	681		$	520		31%
Operating margin %	Operating margin %	63		%	53		%		Operating margin %	67		%	63		%

¹In the ~~third~~first quarter of ~~2019,~~2021, we reevaluated our transaction and non-transaction presentation which resulted in a reclassification from transaction revenue to non-transaction revenue of $7$2 million for the first quarter of ~~2019.~~2020.

² ~~2019~~2021 includes amortization of intangibles from acquisitions of $1$5 million.

Revenue increased ~~19%~~23% and ~~was favorably impacted by~~benefited less than 1 percentage point from the impact of recent acquisitions. ~~The increase in revenue was primarily driven by an increase in transaction revenue.~~ Transaction revenue grew due to an increase in corporate bond ratings revenue primarily in the U.S. and Europe and higher bank loan ratings revenue. The increase in corporate bond ratings revenue was primarily driven by higher ~~corporate bond~~U.S. high-yield issuance ~~in the U.S.~~volumes mainly resulting from historically low borrowing costs and higher ~~bank~~structured finance revenues primarily driven by increased issuance of U.S. collateralized loan obligations ("CLOs") as demand for leveraged loans increased. Bank loan ratings revenue ~~due to~~growth was also primarily driven by increased U.S. issuance volumes. ~~An increase in both structured finance revenue and public finance revenue due to increased issuance also contributed to transaction revenue growth.~~ Non-transaction revenue increased primarily due to an increase in surveillance revenue, ~~and~~an increase in entity credit ratings revenue, higher Ratings Evaluation Service ~~activity.~~("RES") revenue driven by increased M&A activity and an increase in CRISIL revenue. Transaction and non-transaction revenue also benefited from improved contract terms across product categories. Foreign exchange rates had ~~an unfavorable~~a favorable impact of ~~less than 1~~2 percentage ~~point. Revenue was favorably impacted by the acquisitions of the ESG Ratings Business from RobecoSAM and Greenwich Associates LLC in January of 2020 and February of 2020, respectively. See Note 2 -~~ ~~Acquisitions and Divestitures~~ ~~to the consolidated financial statements of this Form 10-Q for further discussion.~~points.

Operating profit increased ~~41%~~31%, with a 32 percentage point favorable impact from foreign exchange ~~rates driven by transaction gains from U.S. Dollar, Euro, and GBP appreciation. The~~rates. Excluding the impact of higher amortization of intangibles in 2021 of 1 percentage point, operating profit increased 32%. The increase was primarily due to ~~the increase in~~ revenue discussed above combined with a reduction in expenses. Expenses decreased primarily due to the favorable impact of foreign exchange rates, lower professional fees from increased leverage from the Global Technology Center and a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19,growth partially offset by higher compensation costs due to annual merit increases and additional ~~headcount.~~headcount and higher incentive costs.

Market Issuance Volumes

We monitor market issuance volumes regularly within Ratings. Market issuance volumes noted within the discussion that follows are based on where an issuer is located or where the assets associated with an issue are located. Structured Finance issuance includes amounts when a transaction closes, not when initially priced and excludes domestically-rated Chinese issuance. 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.


		First Quarter Compared to Prior Year						First Quarter Compared to Prior Year
Corporate Bond Issuance *	Corporate Bond Issuance *	U.S.	Europe	Global	Corporate Bond Issuance *	U.S.	Europe	Global
High-yield issuance	High-yield issuance	9%	20%	10%	High-yield issuance	111%	53%	60%
Investment-grade issuance	Investment-grade issuance	54%	(17)%	13%	Investment-grade issuance	(17)%	22%	3%
Total issuance	Total issuance	47%	(13)%	12%	Total issuance	(1)%	26%	9%

* Includes Industrials and Financial Services.

•~~Corporate~~High-yield issuance was up insignificantly in the U.S. ~~driven by increases in both high-yield~~ and ~~investment grade issuance~~Europe for the quarter as issuers ~~were taking~~continued to take advantage of historically low borrowing costs. ~~Decreased~~Corporate issuance in ~~Europe~~the U.S. was down slightly for the quarter driven by weakness in investment-grade issuance. ~~Both high-yield and investment grade~~A number of large financing transactions contributed to the increase in investment-grade issuance ~~comparisons also benefited from weakness~~ in ~~2019 issuance volumes.~~Europe for the quarter.


		First Quarter Compared to Prior Year						First Quarter Compared to Prior Year
Structured Finance Issuance	Structured Finance Issuance	U.S.	Europe	Global	Structured Finance Issuance	U.S.	Europe	Global
Asset-backed securities (“ABS”)	Asset-backed securities (“ABS”)	(6)%	15%	1%	Asset-backed securities (“ABS”)	11%	18%	12%
Structured credit (primarily CLOs)	Structured credit (primarily CLOs)	37%	(36)%	20%	Structured credit (primarily CLOs)	63%	334%	92%
Commercial mortgage-backed securities (“CMBS”)	Commercial mortgage-backed securities (“CMBS”)	58%	*	72%	Commercial mortgage-backed securities (“CMBS”)	(45)%	26%	(41)%
Residential mortgage-backed securities (“RMBS”)	Residential mortgage-backed securities (“RMBS”)	11%	658%	59%	Residential mortgage-backed securities (“RMBS”)	(3)%	32%	9%
Covered bonds	Covered bonds	**	(44)%	(30)%	Covered bonds	*	(40)%	(54)%
Total issuance	Total issuance	16%	(20)%	5%	Total issuance	17%	6%	5%

* Represents no activity in ~~2020.~~

** ~~Represents no activity in 2020~~2021 and ~~2019.~~2020.

•ABS issuance ~~was down~~increased in the quarter in the U.S. ~~primarily~~and Europe driven by an increase in ~~credit card transactions while Europe's increase was primarily in~~certain asset lease deals and auto transactions.

•Issuance was up in the U.S. and European structured credit markets driven by an increase in CLO ~~refinancing drove U.S. issuance increase while a decrease in new CLO issuance drove the decline in Europe.~~transactions as demand for leveraged loans increased.

•CMBS issuance ~~increased~~was down in the U.S. reflecting ~~an increase in conduit transactions.~~decreased market volume due to the poor market environment and the impact of the COVID-19 crisis limiting third party site inspections and appraisal reports. European CMBS issuance was up, although from a low 2020 base.

•RMBS issuance was updown in the U.S. reflecting decreased market volume in Non-Performing Loans due to the impact of the COVID-19 crisis and the uncertainty on collateral performance. RMBS issuance increased in Europe reflecting ~~increased market volume primarily driven by prime~~a number of large jumbo ~~mortgages.~~deals in the quarter.

•Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe decreased due to ~~a fall in~~inexpensive central bank funding ~~requirements and countries impacted by COVID-19.~~with TLTRO III.

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. For a further discussion of the legal and regulatory ~~environment~~matters see Note 12 – Commitments and Contingencies to the consolidated financial statements of this Form 10-Q.

Market Intelligence

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 three months ended March 31, 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 Standard & Poor's Investment Advisory Services LLC ("SPIAS") 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.~~Q4, a third party provider of investor relations related services. This alliance will integrate 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 months ended March 31, 2020, we recorded a pre-tax gain of $7 million ($7 million after-tax) in Gain on ~~disposition~~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; and

•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.

Subscription revenue at Market Intelligence is primarily derived from distribution of data, analytics, third party research, and credit ratings-related information primarily through web-based channels, including Market Intelligence Desktop, RatingsDirect®, RatingsXpress®, and Credit Analytics. 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 three months ended March 31:


(in millions)	(in millions)	2020			2019			% Change	(in millions)	2021			2020			% Change
Revenue	Revenue	$	519		$	482		8%	Revenue	$	539		$	519		4%

Subscription revenue	Subscription revenue	$	505		$	467		8%	Subscription revenue	$	527		$	505		4%
Non-subscription revenue	Non-subscription revenue	$	13		$	10		41%	Non-subscription revenue	$	12		$	13		(11)%
Asset-linked fees	Asset-linked fees	$	1		$	5		(89)%	Asset-linked fees	$	—		$	1		(84)%
% of total revenue:	% of total revenue:								% of total revenue:
Subscription revenue	Subscription revenue	97		%	97		%		Subscription revenue	98		%	97		%
Non-subscription revenue	Non-subscription revenue	3		%	2		%		Non-subscription revenue	2		%	3		%
Asset-linked fees	Asset-linked fees	—		%	1		%		Asset-linked fees	—		%	—		%

U.S. revenue	U.S. revenue	$	339		$	308		10%	U.S. revenue	$	346		$	339		2%
International revenue	International revenue	$	180		$	174		3%	International revenue	$	193		$	180		7%
% of total revenue:	% of total revenue:								% of total revenue:
U.S. revenue	U.S. revenue	65		%	64		%		U.S. revenue	64		%	65		%
International revenue	International revenue	35		%	36		%		International revenue	36		%	35		%

Operating profit¹	Operating profit¹	$	147		$	134		10%	Operating profit 1	$	166		$	147		13%
Operating margin %	Operating margin %	28		%	28		%		Operating margin %	31		%	28		%

¹ 2021 includes a gain on disposition of $2 million. 2020 includes a gain on ~~disposition~~the sale of Investor Relations of $7 million and employee severance charges of $2 million. ~~2020~~2021 and ~~2019~~2020 includes amortization of intangibles from acquisitions of ~~$19~~$16 million and ~~$18~~$19 million, respectively.

Revenue increased 8%4% and was ~~favorably~~unfavorably impacted by less than 1 percentage point from the ~~net impact~~effect of ~~the~~a recent ~~acquisition of 451 Research, LLC, offset by the disposition of Standard & Poor's Investment Advisory Services LLC and the IR webhosting business.~~disposition. The increase ~~in revenue~~ was primarily driven by subscription revenue growth ~~in annualized contract values~~ for ~~our Market Intelligence Desktop products, RatingsXpress®, RatingsDirect®, CUSIP and our~~certain data feed products within Data Management ~~Solutions.~~Solutions, CUSIP, RatingsXpress® and certain Market Intelligence Desktop products. Excluding the impact of ~~the acquisition and dispositions~~a recent disposition favorably impacting Desktop revenue growth by 1 percentage point, revenue growth at Credit Risk Solutions, Data Management ~~Solutions, Credit Risk~~ Solutions, and Desktop was ~~10%~~6%, ~~10%~~9% and 4%2%, respectively. Both U.S. revenue and international revenue increased compared to ~~2019.~~2020. Foreign exchange rates had ~~an unfavorable~~a favorable impact of less than one percentage point.

Operating profit increased ~~10%~~13%, with a 21 percentage point favorable impact from foreign exchange rates. Excluding the ~~favorable~~unfavorable impact of a higher gain on the ~~disposition~~dispositions in 2020 of 63 percentage points, partially offset by the favorable impact of higher amortization of intangibles in 2020 of 2 percentage points and higher employee severance charges in 2020 of 1 percentage point, operating profit increased ~~5%. The increase was~~13% primarily due to revenue growth ~~partially~~while increased technology expenses were largely offset by ~~higher compensation costs primarily driven by additional headcount and an increase~~reductions in ~~intersegment royalties tied to annualized contract value growth, partially offset by a decrease in Travel and Entertainment~~travel expenses from ~~non-essential travel~~COVID 19 restrictions ~~in response to COVID-19.~~and lower bad debt provisions.

For a further discussion of competitive and other risks inherent in our Market Intelligence business, see Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K. For a further discussion of the legal and regulatory ~~environment~~matters see Note 12 – Commitments and Contingencies to the consolidated financial statements of this Form 10-Q.

Platts

Platts is the leading independent provider of information and benchmark prices for the commodity and energy markets. Platts provides essential price data, analytics, and industry insight enabling the commodity and energy markets to perform with greater transparency and efficiency.

Platts' revenue is generated primarily through the following sources:

•Subscription revenue — primarily from subscriptions to our ~~real-time news,~~ market data and ~~price~~market insights (price assessments, market reports and commentary and analytics) along with other information products;

•Sales usage-based royalties — primarily from licensing of our proprietary market price data and price assessments to commodity exchanges; and

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

The following table provides revenue and segment operating profit information for the three months ended March 31:


(in millions)	(in millions)	2020			2019			% Change	(in millions)	2021			2020			% Change
Revenue	Revenue	$	215		$	207		4%	Revenue	$	225		$	215		5%

Subscription revenue	Subscription revenue	$	197		$	191		4%	Subscription revenue	$	208		$	197		6%
Sales usage-based royalties	Sales usage-based royalties	$	17		$	14		18%	Sales usage-based royalties	$	16		$	17		(4)%
Non-subscription revenue	Non-subscription revenue	$	1		$	2		(30)%	Non-subscription revenue	$	1		$	1		(23)%
% of total revenue:	% of total revenue:								% of total revenue:
Subscription revenue	Subscription revenue	92		%	92		%		Subscription revenue	92		%	92		%
Sales usage-based royalties	Sales usage-based royalties	8		%	7		%		Sales usage-based royalties	7		%	8		%
Non-subscription revenue	Non-subscription revenue	—		%	1		%		Non-subscription revenue	1		%	—		%

U.S. revenue	U.S. revenue	$	70		$	69		2%	U.S. revenue	$	72		$	70		2%
International revenue	International revenue	$	145		$	138		5%	International revenue	$	153		$	145		6%
% of total revenue:	% of total revenue:								% of total revenue:
U.S. revenue	U.S. revenue	33		%	34		%		U.S. revenue	32		%	33		%
International revenue	International revenue	67		%	66		%		International revenue	68		%	67		%

Operating profit¹	Operating profit¹	$	112		$	99		13%	Operating profit 1	$	129		$	112		15%
Operating margin %	Operating margin %	52		%	48		%		Operating margin %	57		%	52		%

¹2021 and 2020 ~~and 2019 includes~~both include amortization of intangibles from acquisitions of $2 ~~million and $3 million, respectively.~~million.

Revenue increased ~~4% and was unfavorably impacted by 1 percentage point from the net impact of recent acquisitions of Enerdata and Live Rice Index and the disposition of RigData. Revenue increased~~5% primarily due to continued demand for market data and ~~price assessment~~market insights products driven by ~~both~~ expanded product offerings to our existing customers ~~combined with enhanced contract terms. Additionally, revenue growth~~under enterprise use contracts. This increase was ~~driven~~partially offset by ~~an increase~~a decrease in sales usage-based royalties from the licensing of our proprietary market price data and price assessments to commodity exchanges mainly due to ~~increased~~decreased trading volumes in Petroleum ~~LNG~~ and ~~Iron Ore.~~Gas and a decrease in conference revenue as a result of the loss of physical events due to COVID-19. Demand for market data and ~~price assessment~~market insights products was driven by international customers. ~~International and~~Both U.S. revenue ~~both~~and international revenue grew compared to ~~2019 with the U.S revenue growth rate being unfavorably impacted by the disposition of RigData in July of 2019.~~2020. Petroleum continues to be the most significant revenue driver, followed by petrochemicals, natural gas, power & ~~gas,~~renewables, metals & agriculture, and ~~petrochemicals~~shipping also contributing to revenue growth. ~~Foreign exchange rates had a favorable impact of less than 1 percentage point.~~

Operating profit increased ~~13%~~15% with a ~~2 percentage point~~ favorable impact from foreign exchange ~~rates. Excluding the favorable impact~~rates of ~~lower amortization of intangibles in 2020 of 2~~less than 1 percentage ~~points, operating profit increased 11%.~~point. The

increase was primarily due to revenue growth combined with a reduction in expenses. Expenses decreased primarily due to ~~lower operating costs driven by lower royalties,~~ a decrease in travel and entertainment expenses from non-essential travel restrictions in response to COVID-19, lower costs as a result of cancellation and ~~the favorable impact~~postponement of events due to COVID-19, a ~~benefit~~reduction in the ~~current year resulting from one-time costs related to the discontinuation of~~Company's real estate footprint and a ~~product line at Platts~~decrease in ~~2019. These decreases were~~bad debt expense, partially offset by an increase in operating costs to support business initiatives at Platts and higher ~~compensation costs due to annual merit increases and additional headcount.~~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. For a further discussion of the legal and regulatory ~~environment~~matters see Note 12 – Commitments and Contingencies to the consolidated financial statements of this Form 10-Q.

Indices

Indices is a global index provider maintaining a wide variety of indices to meet an array of investor needs. Indices’ mission is to provide transparent benchmarks to help with decision making, collaborate with the financial community to create innovative products, and provide investors with tools to monitor world markets.

Indices derives revenue from asset-linked fees when investors direct funds into its proprietary designed or owned indexes, sales-usage based royalties of its indices, and to a lesser extent data subscription arrangements. Specifically, Indices generates revenue from the following sources:

•Investment vehicles — asset-linked fees such as ETFs and mutual funds, that are based on the S&P Dow Jones Indices' benchmarks that generate revenue through fees based on assets and underlying funds;

•Exchange traded derivatives — generate sales usage-based royalties based on trading volumes of derivatives contracts listed on various exchanges;

•Index-related licensing fees — fixed or variable annual and per-issue asset-linked fees for over-the-counter derivatives and retail-structured products; and

•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 three months ended March 31:


(in millions)	(in millions)	2020			2019			% Change	(in millions)	2021			2020			% Change
Revenue	Revenue	$	259		$	217		20%	Revenue	$	270		$	259		4%

Asset-linked fees	Asset-linked fees	$	159		$	143		11%	Asset-linked fees	$	183		$	159		15%
Subscription revenue									Subscription revenue	$	46		$	46		1%
Sales usage-based royalties	Sales usage-based royalties	$	54		$	34		59%	Sales usage-based royalties	$	41		$	54		(24)%
Subscription revenue		$	46		$	40		15%
% of total revenue:	% of total revenue:								% of total revenue:
Asset-linked fees	Asset-linked fees	61		%	66		%		Asset-linked fees	68		%	61		%
Subscription revenue									Subscription revenue	17		%	18		%
Sales usage-based royalties	Sales usage-based royalties	21		%	16		%		Sales usage-based royalties	15		%	21		%
Subscription revenue		18		%	18		%

U.S. revenue	U.S. revenue	$	222		$	183		22%	U.S. revenue	$	227		$	222		2%
International revenue	International revenue	$	37		$	34		8%	International revenue	$	43		$	37		17%
% of total revenue:	% of total revenue:								% of total revenue:
U.S. revenue	U.S. revenue	86		%	84		%		U.S. revenue	84		%	86		%
International revenue	International revenue	14		%	16		%		International revenue	16		%	14		%

Operating profit ¹	Operating profit ¹	$	182		$	150		21%	Operating profit 1	$	191		$	182		5%
Less: net operating profit attributable to noncontrolling interests	Less: net operating profit attributable to noncontrolling interests	49			40				Less: net operating profit attributable to noncontrolling interests	51			49
Net operating profit	Net operating profit	$	133		$	110		21%	Net operating profit	$	140		$	133		5%
Operating margin %	Operating margin %	70		%	69		%		Operating margin %	71		%	70		%
Net operating margin %	Net operating margin %	51		%	50		%		Net operating margin %	52		%	51		%

¹ ~~2020~~2021 and ~~2019~~2020 both include amortization of intangibles from acquisitions of $1 million.

Revenue at Indices increased ~~20%~~4% primarily due to ~~higher exchange-traded derivative trading volumes from market volatility and~~ higher average levels of assets under management ("AUM") for ETFs and mutual ~~funds.~~funds, partially offset by lower exchange-traded derivative revenue. Average levels of AUM for ETFs increased ~~17%~~30% to ~~$1.633~~$2.115 trillion and ending AUM for ETFs increased 65% to $2.214 trillion compared to the ~~first quarter of 2019. Ending AUM for ETFs decreased 8%~~three months ended March 31, 2020 while exchange-traded derivative activity was impacted by both lower average daily trading volume from reduced volatility and ~~21% compared to the first quarter of 2019 and fourth quarter of 2019, respectively, to $1.345 trillion driven by the impact of market depreciation~~lower rates per trade from a shift in ~~the first quarter of 2020.~~product mix from a year ago. Foreign exchange rates had ~~an unfavorable~~a favorable impact of less than 1 percentage point.

Operating profit increased ~~21%. The impact of~~5% due to revenue growth ~~was~~ partially offset by higher ~~operating~~compensation costs from ~~increased data distribution costs, higher royalties due to increased traction of royalty-based products, and increased compensation costs driven by~~ annual merit increases and additional headcount. Foreign exchange rates had a favorable impact of less than 1 percentage point.

For a further discussion of competitive and other risks inherent in our Indices business, see Item 1A, Risk Factors in this Form 10-Q and our most recently filed Annual Report on Form 10-K. For a further discussion of the legal and regulatory ~~environment~~matters see Note 12 – Commitments and Contingencies to the consolidated financial statements of this Form 10-Q.

LIQUIDITY AND CAPITAL RESOURCES

We continue to maintain a strong financial position. Our primary source of funds for operations is cash from our businesses. Cash on hand, cash flows from operations and availability under our existing credit facility are expected to be sufficient to meet any additional operating and recurring cash needs into the foreseeable future. We use our cash for a variety of needs, including but not limited to: ongoing investments in our businesses, strategic acquisitions, share repurchases, dividends, repayment of debt, capital expenditures and investment in our infrastructure.

Cash Flow Overview

Cash, cash equivalents, and restricted cash were ~~$1,952~~$4,518 million as of March 31, ~~2020, a decrease~~2021, an increase of ~~$934~~$396 million from December 31, ~~2019.~~2020.

The following table provides cash flow information for the three months ended March 31:


(in millions)	(in millions)	2020		2019		% Change	(in millions)	2021		2020		% Change
Net cash provided by (used for):	Net cash provided by (used for):						Net cash provided by (used for):
Operating activities	Operating activities	$	680	$	293	N/M	Operating activities	$	768	$	680	13%
Investing activities	Investing activities	$	(183)	$	(21)	N/M	Investing activities	$	(24)	$	(183)	(87)%
Financing activities	Financing activities	$	(1,401)	$	(829)	69%	Financing activities	$	(293)	$	(1,401)	(79)%

In the first three months of ~~2020,~~2021, free cash flow increased $63 million to ~~$618~~$681 million compared to ~~$255~~$618 million in the first three months of ~~2019.~~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. See “Reconciliation of Non-GAAP Financial Information” below for a reconciliation of cash flow provided by operating activities, the most directly comparable U.S. GAAP financial measure, to free cash flow and free cash flow excluding certain items.

Operating activities

Cash provided by operating activities increased ~~$387~~$88 million to ~~$680~~$768 million for the first three months of ~~2020.~~2021. The increase is mainly due to higher operating results in 2020, improved cash collections on accounts receivable in 2020 and higher settlement payments following the resolution of tax audits in 2019, partially offset by higher incentive compensation payments in 2020.2021.

Investing activities

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 ~~increased~~decreased to ~~$183~~$24 million for the first three months of ~~2020~~2021 compared to ~~$21~~$183 million in the first three months of ~~2019,~~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.

Financing activities

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

Cash used for financing activities ~~increased $572~~decreased $1,108 million to ~~$1,401~~$293 million for the first three months of ~~2020.~~2021. The ~~increase~~decrease is primarily attributable to ~~an increase~~a decrease in cash used for share repurchases in ~~2020.~~2021. During the three months ended March 31, 2021, we did not use cash to repurchase shares. During the three months ended March 31, 2020, we purchased a total of 3.4 million shares for $1,150 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 $1,153 million of cash used to repurchase shares. During the three months ended March 31, 2019, we received 3.4 million shares, including 0.4 million shares received in January of 2019 related to our October 29, 2018 ASR agreement, resulting in $644 million of cash used to repurchase shares. See Note 8 — Equity to the consolidated financial statements of this Form 10-Q for further discussion.

Additional Financing

As of March 31, 2021 and December 31, 2020, we had the ability to borrow a total of $1.2 billion through our commercial paper program, which iswas supported by our ~~revolving $1.2 billion five-year~~previous credit ~~agreement (our "credit facility")~~facility that we entered into on June 30, 2017. ~~This credit facility will terminate on June 30, 2022.~~ As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, there ~~were~~was no commercial paper issued or outstanding, and we similarly did not draw or have any borrowings ~~outstanding.~~outstanding from the previous credit facility during the three months ended March 31, 2021 and 2020.

Dividends

On January ~~29, 2020,~~27, 2021, the Board of Directors approved an increase in the quarterly common stock dividend from ~~$0.57~~$0.67 per share to ~~$0.67~~$0.77 per share.

Supplemental Guarantor Financial Information

The senior notes described below were issued by S&P Global Inc. and are fully and unconditionally guaranteed by Standard & Poor's Financial Services LLC, a 100% owned subsidiary of the Company. All senior notes have been registered with the SEC.

•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.

•On November 26, 2019, we issued $500 million of 2.5% senior notes due in 2029 and $600 million of 3.25% senior notes due in 2049.

•On May 17, 2018, we issued $500 million of 4.5% senior notes due in 2048.

•On September 22, 2016, we issued $500 million of 2.95% senior notes due in 2027.

•On May 26, 2015, we issued $700 million of 4.0% senior notes due in 2025.

•On November 2, 2007 we issued $400 million of 6.55% Senior Notes due 2037.

The notes above are unsecured and unsubordinated and rank equally and ratably with all of our existing and future unsecured and unsubordinated debt. The guarantees are the subsidiary guarantor’s unsecured and unsubordinated debt and rank equally and ratably with all of the subsidiary guarantor’s existing and future unsecured and unsubordinated debt.

The guarantees of the subsidiary guarantor may be released and discharged upon (i) a sale or other disposition (including by way of consolidation or merger) of the subsidiary guarantor or the sale or disposition of all or substantially all the assets of the subsidiary guarantor (in each case other than to the Company or a person who, prior to such sale or other disposition, is an affiliate of the Company); (ii) upon defeasance or discharge of any applicable series of the notes, as described above; or (iii) at such time as the subsidiary guarantor ceases to guarantee indebtedness for borrowed money, other than a discharge through payment thereon, under any Credit Facility of the Company, other than any such Credit Facility of the Company the guarantee of which by the subsidiary guarantor will be released concurrently with the release of the subsidiary guarantor’s guarantees of the notes.

Other subsidiaries of the Company do not guarantee the registered debt securities of either S&P Global Inc. or Standard & Poor's Financial Services LLC (the "Obligor Group") which are referred to as the “Non-Obligor Group”.

The following tables set forth the summarized financial information of the Obligor Group on a combined basis. This summarized financial information excludes the Non-Obligor Group. Intercompany balances and transactions between members of the Obligor Group have been eliminated. This information is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S. GAAP.

Summarized results of operations for the three months ended March 31 are as follows:



(in millions)	2021
Revenue	$	862
Operating Profit	567
Net Income	115
Net income attributable to S&P Global Inc.	115

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


(in millions)	March 31,		December 31,
	2021		2020
Current assets (excluding intercompany from Non-Obligor Group)	$	3,501	$	3,093
Noncurrent assets	1,070		1,055

Current liabilities (excluding intercompany to Non-Obligor Group)	1,357		1,179
Noncurrent liabilities	4,930		4,936
Intercompany payables to Non-Obligor Group	4,163		3,893

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

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, net. Capital expenditures include purchases of property and equipment and additions to technology projects. Our cash flow provided by operating activities is the most directly comparable U.S. 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 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. GAAP. 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 three months ended March 31:

(in millions) 2020 2019 % Change
Cash provided by operating activities $ 680 $ 293 N/M
Capital expenditures (11) (20)
Distributions to noncontrolling interest holders, net¹
(51) (18)
Free cash flow 618 255 N/M
Settlement of prior-year tax audits — 50
Payment of legal settlements — 1
Free cash flow excluding certain items $ 618 $ 306 N/M

¹~~Distributions to noncontrolling interest holders is net of amounts owed to the S&P Dow Jones Indices joint venture by the noncontrolling interest holders~~_.


(in millions)	2021		2020		% Change
Cash provided by operating activities	$	768	$	680	13	%
Capital expenditures	(18)		(11)
Distributions to noncontrolling interest holders, net	(69)		(51)
Free cash flow	681		618		10	%
IHS Markit merger costs	37		—



Free cash flow excluding certain items	$	718	$	618	16	%


(in millions)	(in millions)	2020	2019	% Change		(in millions)	2021	2020	% Change
Cash used for investing activities	Cash used for investing activities	(183)	(21)	N/M		Cash used for investing activities	(24)	(183)	(87)	%
Cash used for financing activities	Cash used for financing activities	(1,401)	(829)	69	%	Cash used for financing activities	(293)	(1,401)	(79)	%

~~N/M - not meaningful~~

CRITICAL ACCOUNTING ESTIMATES

Our accounting policies are described in Note 1 — Accounting Policies to the consolidated financial statements in our most recent Form 10-K. As discussed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our most recent Form 10-K, we consider an accounting estimate to be critical if it required assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate or different estimates could have a material effect on our results of operations. These critical estimates include 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 non-controlling interests. We base our estimates on historical experience, current developments and on various other assumptions that we believe to be reasonable under these circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that cannot readily be determined from other sources. There can be no assurance that actual results will not differ from those estimates. Since the date of our Form 10-K, there have been no material changes to our critical accounting estimates.

RECENTLY ISSUED OR ADOPTED ACCOUNTING STANDARDS

See Note 13 – Recently Issued or Adopted Accounting Standards to the consolidated financial statements of this Form 10-Q for further information.

4742

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, including statements about COVID-19 and the ~~scenarios we are using to project the impact~~merger (the “Merger”) between a subsidiary of the ~~pandemic on the~~ Company and IHS Markit Ltd. (“IHS Markit”), which express management’s current views concerning future events, trends, contingencies or results, appear at various places in this report and use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would.” For example, management may use forward-looking statements when addressing topics such as: the outcome of contingencies; future actions by regulators; changes in the Company’s business strategies and methods of generating revenue; the development and performance of the Company’s services and products; the expected impact of acquisitions and dispositions; the Company’s effective tax rates; and the Company’s cost structure, dividend policy, cash flows or liquidity.

Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements include, among other things:

•worldwide economic, financial, political and regulatory conditions, and factors that contribute to uncertainty and volatility, ~~including~~ 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 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 ~~associated~~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;

•the ability of the Company to successfully integrate IHS Markit’s operations and retain and hire key personnel of both companies;

•the ability of the Company to retain customers and to implement its plans, forecasts and other expectations with respect to IHS Markit’s business after the ~~current U.S. administration;~~consummation of the Merger and realize expected synergies;

•business disruption following the Merger;

•the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

•the Company’s and IHS Markit’s ability to meet expectations regarding the accounting and tax treatments of the Merger;

•the Company’s ability to successfully recover should it experience a disaster or other business continuity problem from a hurricane, flood, earthquake, terrorist attack, pandemic, security breach, cyber attack, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the ongoing COVID-19 pandemic;

•the Company’s ability to maintain adequate physical, technical and administrative safeguards to protect the security of confidential information and data, and the potential for a system or network disruption that results in regulatory penalties and remedial costs or improper disclosure of confidential information or data;

•the outcome of litigation, government and regulatory proceedings, investigations and inquiries;

•the health of debt and equity markets, including credit quality and spreads, the level of liquidity and future debt issuances, demand for investment products that track indices and assessments and trading volumes of certain exchange traded derivatives;

•the demand and market for credit ratings in and across the sectors and geographies where the Company operates;

•concerns in the marketplace affecting the Company’s credibility or otherwise affecting market perceptions of the integrity or utility of independent credit ratings, benchmarks and indices;

•the effect of competitive products and pricing, including the level of success of new product developments and global expansion;

•the Company’s exposure to potential criminal sanctions or civil penalties for noncompliance with foreign and U.S. laws and regulations that are applicable in the domestic and international jurisdictions in which it operates, including sanctions laws relating to countries such as Iran, Russia, Sudan, Syria and Venezuela, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. 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, ~~and~~ S&P Global Market Intelligence and the products those business divisions offer including ~~new and amended regulations~~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;

•consolidation in the Company’s end-customer markets;

•the introduction of competing products or technologies by other companies;

•the impact of customer cost-cutting pressures, including in the financial services industry and the commodities markets;

•a decline in the demand for credit risk management tools by financial institutions;

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

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

•our ability to attract, incentivize and retain key employees;

•the level of the Company’s future cash flows and capital investments;

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

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

•the impact of changes in applicable tax or accounting requirements ~~including the Tax Cuts and Jobs Act~~ on the Company.

The factors noted above are not exhaustive. The Company and its subsidiaries operate in a dynamic business environment in which new risks emerge frequently. Accordingly, the Company cautions readers not to place undue reliance on any ~~forward-~~

~~looking~~forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made, except as required by applicable law. Further information about the Company’s businesses, including information about factors that could materially affect its results of operations and financial condition, is contained in the Company’s filings with the SEC, including Item 1A, Risk Factors,, in our most recently filed Annual Report on Form ~~10-K and Item 1A,~~ ~~Risk Factors~~ ~~in this Form 10-Q.~~10-K.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk includes changes in foreign exchange rates and interest rates. We have operations in foreign countries where the functional currency is primarily the local currency. For international operations that are determined to be extensions of the parent company, the U.S. dollar is the functional currency. We typically have naturally hedged positions in most countries from a local currency perspective with offsetting assets and liabilities. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~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 are not designated as hedges and do not qualify for hedge accounting. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we entered into foreign exchange forward contracts to hedge the effect of adverse fluctuations in foreign exchange rates and a cross-currency swap ~~contract~~contracts to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates. During the three months ended March 31, 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. We have not entered into any derivative financial instruments for speculative purposes. See Note 5 - Derivative Instruments to the consolidated financial statements of this Form 10-Q for further discussion.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed so that information required to be disclosed in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

As of March 31, ~~2020,~~2021, an evaluation was performed under the supervision and with the participation of management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 31, ~~2020.~~2021.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As a result of the COVID-19 pandemic, the majority of our workforce began working remotely in March 2020. These changes to the working environment did not have a material effect on our internal controls over financial reporting during the most recent quarter.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

See Note 12 – Commitments and Contingencies - Legal & Regulatory Matters to the consolidated financial statements of this Form 10-Q for information on our legal proceedings.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in our most recently filed Annual Report on Form 10-K which could materially affect our business, financial condition or future results. The COVID-19 pandemic has heightened, and in some cases manifested, certain of the risks we normally face in operating our business, including those disclosed in our most recently filed Annual Report on Form 10-K, and the risk factor disclosure in the Form 10-K is qualified by the information relating to COVID-19 that is described in this Quarterly Report on Form 10-Q, including the new risk factor set forth below.There have been no material changes to the risk factors we have previously disclosed in Item 1A, Risk Factors, in our most recent Form ~~10-K, except as follows:~~10-K.

~~The COVID-19 pandemic and its effects may have a material adverse effect on our results of operations.~~

Following the outbreak of an infectious respiratory illness caused by the 2019 novel coronavirus (“COVID-19”), the World Health Organization declared a global emergency on January 30, 2020 and subsequently declared COVID-19 as a pandemic on March 11, 2020.

COVID-19 has spread globally, including in the United States, the United Kingdom, the European Union and other jurisdictions in which we operate. As its impacts have become more severe, governments across the world have taken steps to contain the virus by restricting human movement through numerous measures including travel bans and restrictions, social distancing, quarantines, shelter in place orders, enhanced health screenings at ports of entry and elsewhere, and business shutdowns. These measures have resulted in an unprecedented near halt of the global economy. Such measures may remain in place for a significant period of time and they are likely to continue to adversely affect the global economy.

While the initial economic disruption was triggered by non-economic factors, continuation of the shutdown of businesses and entire industries, increases in unemployment, implementation of furloughs, lost wages across populations and a significant drop in consumer and business spending, are expected to result in a recession, the duration and gravity of which is unknown and cannot be known at this time. A return to more ordinary course economic activity is dependent on the duration and severity of the COVID-19 pandemic, which are in turn dependent on a series of evolving factors, including the severity and transmission rate of the virus, the extent and effectiveness of containment efforts, and policy decisions made by governments across the globe as they react to evolving local and global conditions. There are no comparable recent events that can provide guidance as to the effect of the COVID-19 global pandemic, and, as a result, the ultimate impact of the coronavirus outbreak or a similar health epidemic is highly uncertain. The extent of the pandemic’s impact on the global economy, our business and our results of operations is not yet known. However, the effects of COVID-19 have impacted our operations and may ultimately have a material adverse impact on our results of operations in the future, particularly in the event of a severe recession.

~~Increased volatility and uncertainty in the global economy, and the financial and commodities markets~~ The global economy has been disrupted as a result of the ongoing health crisis and the financial and commodities markets have reacted with unprecedented volatility. Because there are no comparable recent events that can provide guidance on the impact to the global economy, we cannot predict the extent to which our business may be impacted. Risks posed to our business, financial condition and results of operations from volatility in the financial and commodities markets are described in our risk factor entitled, “Changes in the volume of securities issued and traded in domestic and/or global capital markets, asset levels and flows into investment products, changes in interest rates and volatility in the financial markets, and volatility in the commodities markets impact our business, financial condition or results of operations”, in our most recently filed Annual Report on Form 10-K.

~~Decreased demand for our subscription services~~ Our clients are being impacted to varying degrees. Some may no longer be in business by the time the COVID-19 crisis comes to an end, others will face significant spending constraints in order to continue to operate, and others may reduce their workforces permanently. As a result of the impact on our clients, our subscription services may face pricing pressure on renewals, delayed renewals, and challenges to new sales which would in turn reduce revenue, ultimately impacting our results of operations. Limited human mobility has, among other things, significantly reduced demand for energy for transportation and the decrease in demand has been and continues to be exacerbated by political tensions between large oil producing countries.

This could put additional pressure on Platts clients and translate into further reduced demand for our subscription and related products and services. Moreover, while our business continuity program has been effective to date, the current restrictions on human mobility limit our ability to interact with subscribers and effectively demonstrate new products and may have a negative effect on our ability to secure new subscriptions and renewals.

~~Our businesses assess and analyze the impact of economic events~~ Our divisions are all actively engaged in analyzing and providing views on the quickly evolving economic conditions. We are publishing articles and research pieces that attempt to assess the impact of the COVID-19 pandemic on the world economy and its components, both geographic and sectoral. In addition, we are taking actions (including, but not limited to rating actions, revising the composition of our indices, etc.), consistent with our business procedures, in response to the evolving conditions. Notwithstanding the care we take in carrying out our work, the views and assumptions we express, the conclusions we draw, the actions we take, and the work our divisions are producing today are likely to be heavily scrutinized with the benefit of hindsight. We have faced significant regulatory and media scrutiny following prior periods of volatility and economic uncertainty. Such scrutiny has in the past and may in the future impact our reputation, brand and credibility and result in government and regulatory proceedings, investigations, inquiries and litigation. See our risk factors entitled “Exposure to litigation and government and regulatory proceedings, investigations and inquiries could have a material adverse effect on our business, financial condition or results of operations” and “Our reputation, credibility, and brand are key assets and competitive advantages of our Company and our business may be affected by how we are perceived in the marketplace” in our most recently filed Annual Report on Form 10-K.

~~Business continuity~~

Our business continuity program has been effective to date. Some portion of our employee population has been working remotely since January, and by mid-March nearly our entire employee population was working remotely. While we have been able to continue our operations during this time, maintaining remote work environment for an extended period of time may have a material adverse effect on our productivity and our ability to meet the needs of our clients and exposes us to operational risks. See our risk factor entitled “Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability” in our most recently filed Annual Report on Form 10-K. In addition, a portion of our information technology resources have been diverted to establishing and maintaining an infrastructure that supports a sustained remote working environment. Such efforts limit the resources available for improvement and innovation projects. Moreover, given the extent to which we are utilizing a remote working environment, we face increased vulnerability. Although there has not been a cyber attack that has had a material adverse effect on the Company to date, we have noted an increase in cyber threats targeted at our remote work environment and there can be no assurance that there will not be a material adverse effect in the future. See our risk factor entitled “We are exposed to risks related to cybersecurity and protection of confidential information” in our most recently filed Annual Report on Form 10-K. In addition, while our employee base currently has adequate resources to pursue new clients or expand existing relationships, we have no control over the business continuity resources available to our clients. As a result, our ability to maintain, expand, or establish new client relationships may be limited.

~~Return of capital~~

While our capital position has not been materially affected by the COVID-19 pandemic, there can be no assurance that a recession triggered by the pandemic will not have a material negative impact on our capital position. Our Board of Directors has determined that, in these unprecedented times, it is prudent that the Company not initiate any new share repurchase plan at this time. While the Board has made no changes to the dividend guidance, there can be no assurance that our dividend will remain unchanged.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 29, 2020, the Board of Directors approved a share repurchase program authorizing the purchase of 30 million shares (the "2020 Repurchase Program"), which was approximately 12% of the total shares of our outstanding common stock at that time. During the first quarter of ~~2020,~~2021, we did not repurchase any shares under the 2020 Repurchase Program and, as of March 31, ~~2020,~~2021, 30 million shares remained under the 2020 Repurchase Program.

On December 4, 2013, the Board of Directors approved a share repurchase program authorizing the purchase of up to 50 million shares (the "2013 Repurchase Program"), which was approximately 18% of the Company's outstanding shares at that time. During the first quarter of ~~2020,~~2021, we ~~repurchased 3.4 million~~did not repurchase any shares under our 2013 Repurchase Program which included 2.9 million shares received from the initiation of our accelerated share repurchase ("ASR") agreements that we entered into on February 11, 2020. Further discussion relating to our ASR agreements can be found in Note 8 - ~~Equity. As~~and as of March 31, ~~2020, 1.3~~2021, 0.8 million shares remained under the 2013 Repurchase Program.

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

The following table provides information on our purchases of our outstanding common stock during the first quarter of ~~2020~~2021 pursuant to our 2013 and 2020 Repurchase Programs (column c). In addition to these purchases, the number of shares in column (a) include shares of common stock that are tendered to us to satisfy our employees’ tax withholding obligations in connection with the vesting of awards of restricted shares (we repurchase such shares based on their fair market value on the vesting date).

There were no other share repurchases during the quarter outside the repurchases noted below.

Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as
Part of Publicly Announced Programs (d) Maximum Number of Shares that may yet be Purchased Under the Programs
January 1 — January 31, 2020
460,784 $ 289.64 423,196 34.3 million
February 1 — February 29, 2020 ^{1, 2}
3,033,464 296.22 3,032,158 31.3 million
March 1 — March 31, 2020 1,564 263.88 — 31.3 million
Total — Quarter ²
3,495,812 $ 290.66 3,455,354 31.3 million


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Programs	(d) Maximum Number of Shares that may yet be Purchased Under the Programs
January 1 — January 31, 2021	33,690	$	328.45	—	30.8 million
February 1 — February 28, 2021	1,834	326.74		—	30.8 million
March 1 — March 31, 2021	1,598	336.35		—	30.8 million
Total — Quarter	37,122	$	328.70	—	30.8 million

¹~~Includes 2.9 million shares received from the initiation of our ASR agreements that we entered into on February 11, 2020.~~

²~~Average price paid per share information does not include the accelerated share repurchase transactions as discussed in more detail above.~~

Item 5. Other Information

IRAN THREAT REDUCTION AND SYRIA HUMAN RIGHTS ACT DISCLOSURE

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which amended the Securities Exchange Act of 1934, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether, during the reporting period, it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure is generally required even where the activities, transactions or dealings were conducted in compliance with applicable laws and regulations.

Revenue ~~during~~in the first quarter of ~~2020~~2021 attributable to the transactions or dealings by the Company described below was approximately ~~$29,000~~$309 with net profit from such sales being a fraction of the revenues. ~~The amount recorded in connection with the foregoing reflects the uncertainty of collection.~~

During the first quarter of ~~2020,~~2021, Platts, a division of the Company that provides energy-related information in over 150 countries, sold information and informational materials, which are generally exempt from U.S. economic sanctions, to subscribers that are owned or controlled, or appear to be owned or controlled, by the Government of ~~Iran.~~Iran or are otherwise subject to disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012. Platts provided such subscribers access to proprietary data, analytics, and industry information that enable commodities markets to perform with greater transparency and efficiency, generating revenue that was a de minimis portion of both the division's and the Company’s revenue. The Company will continue to monitor its provision of products and services to such subscribers.

ENTRY INTO CREDIT AGREEMENT

On April 26, 2021, the Company entered into a revolving $1.5 billion Five-Year Credit Agreement (the “Credit Agreement”), by and among the Company, Standard & Poor’s Financial Services LLC, a wholly-owned subsidiary of the Company, as guarantor, the lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent. The Credit Agreement replaces the Company’s existing $1.2 billion Five-Year Credit Agreement, dated as of June 30, 2017.

Commitment fees for the unutilized commitments under the Credit Agreement and applicable margins for borrowings thereunder are linked to the Company achieving three environmental sustainability performance indicators related to emissions, tested annually. The Credit Agreement also includes an accordion feature which allows the Company to increase the total commitments thereunder by up to an additional $500 million, subject to certain customary terms and conditions. The Credit Agreement contains customary affirmative and negative covenants and customary events of default. The occurrence of an event of default could result in an acceleration of the obligations under the Credit Agreement.

Item 6. Exhibits


(10.1)	*	Terms and Conditions of ~~2020~~2021 Performance Share Unit Award

(10.2)	*	Terms and Conditions of ~~2020~~2021 Restricted Stock Unit Award

(10.3)	*	S&P Dow Jones Indices ~~2020~~2021 Long-Term Cash Incentive Compensation Plan

~~(15)~~(10.4)*	Terms and Conditions of 2021 Cliff Vest Restricted Stock Unit Award

(15)	Letter on Unaudited Interim Financials

(31.1)		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

(31.2)			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

(32)		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(101.INS)			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

(101.SCH)			Inline XBRL Taxonomy Extension Schema

(101.CAL)		Inline XBRL Taxonomy Extension Calculation Linkbase

(101.LAB)		Inline XBRL Taxonomy Extension Label Linkbase

(101.PRE)	Inline XBRL Taxonomy Extension Presentation Linkbase

(101.DEF)	Inline XBRL Taxonomy Extension Definition Linkbase

(104)	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibit 101)

			* These exhibits relate to management contracts or compensatory plan arrangements.

5448

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


			S&P Global Inc.
			Registrant

Date:	April ~~28, 2020~~29, 2021	By:	/s/ Ewout L. Steenbergen
			Ewout L. Steenbergen
			Executive Vice President and Chief Financial Officer

Date:	April ~~28, 2020~~29, 2021	By:	/s/ Christopher F. Craig
			Christopher F. Craig
			Senior Vice President, Controller and Chief Accounting Officer

5549


(in millions, except average price)
	Total number of shares purchased	Average price paid per share		Total cash utilized
March 31, 2020	0.5	$	291.99	150
March 31, 2019	0.8	$	184.51	144


(in millions)
2020 (Excluding the three months ended March 31, 2020)	$	100
2021	120
2022	105
2023	87
2024	66
2025 and beyond	357
Total undiscounted lease payments	$	835
Less: Imputed interest	128
Present value of lease liabilities	$	707


	Statement of Income
	Three Months Ended March 31, 2020
	(Unaudited)
(in millions)	S&P Global Inc.		Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries		Eliminations		S&P Global Inc. Consolidated
Revenue	$	212	$	525	$	1,088	$	(39)	$	1,786
Expenses:
Operating-related expenses	31		117		412		(39)		521
Selling and general expenses	74		27		210		—		311
Depreciation	11		2		7		—		20
Amortization of intangibles	—		—		29		—		29
Total expenses	116		146		658		(39)		881
Gain on dispositions	—		—		(7)		—		(7)
Operating profit	96		379		437		—		912
Other (income) expense, net	(5)		—		6		—		1
Interest expense (income), net	37		—		(3)		—		34
Non-operating intercompany transactions	103		(13)		(564)		474		—
Income before taxes on income	(39)		392		998		(474)		877
Provision for taxes on income	16		91		81		—		188
Equity in net income of subsidiaries	1,168		—		—		(1,168)		—
Net income	$	1,113	$	301	$	917	$	(1,642)	$	689
Less: net income attributable to noncontrolling interests	—		—		—		(50)		(50)
Net income attributable to S&P Global Inc.	$	1,113	$	301	$	917	$	(1,692)	$	639
Comprehensive income	$	1,146	$	301	$	847	$	(1,641)	$	653


	Balance Sheet
	March 31, 2020
	(Unaudited)
(in millions)	S&P Global Inc.		Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries		Eliminations		S&P Global Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	659	$	—	$	1,273	$	—	$	1,932
Restricted cash	—		—		20		—		20
Accounts receivable, net of allowance for doubtful accounts	235		232		1,037		—		1,504
Intercompany receivable	716		2,831		4,304		(7,851)		—

Prepaid and other current assets	84		3		152		—		239

Total current assets	1,694		3,066		6,786		(7,851)		3,695
Property and equipment, net of accumulated depreciation	197		—		112		—		309
Right of use assets	388		2		262		—		652
Goodwill	283		—		3,413		7		3,703
Other intangible assets, net	—		—		1,439		—		1,439
Investments in subsidiaries	11,985		5		8,075		(20,065)		—
Intercompany loans receivable	17		—		1,511		(1,528)		—
Other non-current assets	305		35		326		(1)		665
Total assets	$	14,869	$	3,108	$	21,924	$	(29,438)	$	10,463
LIABILITIES AND (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	86	$	10	$	107	$	—	$	203
Intercompany payable	6,484		92		1,275		(7,851)		—
Accrued compensation and contributions to retirement plans	102		10		110		—		222

Income taxes currently payable	99		—		61		—		160
Unearned revenue	314		250		1,333		—		1,897

Other current liabilities	214		14		273		—		501

Total current liabilities	7,299		376		3,159		(7,851)		2,983
Long-term debt	3,949		—		—		—		3,949
Lease liabilities — non-current	373		1		229		—		603
Intercompany loans payable	—		—		1,528		(1,528)		—
Pension and other postretirement benefits	176		—		82		—		258
Other non-current liabilities	154		74		368		—		596
Total liabilities	11,951		451		5,366		(9,379)		8,389
Redeemable noncontrolling interest	—		—		—		2,268		2,268
Equity:
Common stock	294		—		2,375		(2,375)		294
Additional paid-in capital	(46)		633		9,374		(9,207)		754
Retained income	16,139		2,024		5,377		(10,849)		12,691
Accumulated other comprehensive loss	(142)		—		(567)		49		(660)
Less: common stock in treasury	(13,327)		—		(2)		—		(13,329)
Total (deficit) equity - controlling interests	2,918		2,657		16,557		(22,382)		(250)
Total equity - noncontrolling interests	—		—		1		55		56
Total (deficit) equity	2,918		2,657		16,558		(22,327)		(194)
Total liabilities and (deficit) equity	$	14,869	$	3,108	$	21,924	$	(29,438)	$	10,463


	Balance Sheet
	December 31, 2019
(in millions)	S&P Global Inc.		Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries		Eliminations		S&P Global Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,130	$	—	$	1,736	$	—	$	2,866
Restricted cash	—		—		20		—		20
Accounts receivable, net of allowance for doubtful accounts	229		148		1,200		—		1,577
Intercompany receivable	675		2,855		3,983		(7,513)		—

Prepaid and other current assets	102		2		145		—		249

Total current assets	2,136		3,005		7,084		(7,513)		4,712
Property and equipment, net of accumulated depreciation	204		—		116		—		320
Right of use assets	402		1		273		—		676
Goodwill	283		—		3,283		9		3,575
Other intangible assets, net	—		—		1,424		—		1,424
Investments in subsidiaries	12,134		6		8,088		(20,228)		—
Intercompany loans receivable	17		—		1,229		(1,246)		—
Other non-current assets	281		37		324		(1)		641
Total assets	$	15,457	$	3,049	$	21,821	$	(28,979)	$	11,348
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	80	$	11	$	99	$	—	$	190
Intercompany payable	6,288		27		1,198		(7,513)		—
Accrued compensation and contributions to retirement plans	148		61		237		—		446

Income taxes currently payable	7		—		61		—		68
Unearned revenue	297		243		1,388		—		1,928

Other current liabilities	187		18		256		—		461

Total current liabilities	7,007		360		3,239		(7,513)		3,093
Long-term debt	3,948		—		—		—		3,948
Lease liabilities — non-current	383		1		236		—		620
Intercompany loans payable	—		—		1,246		(1,246)		—
Pension and other postretirement benefits	178		—		81		—		259
Other non-current liabilities	171		81		373		(1)		624
Total liabilities	11,687		442		5,175		(8,760)		8,544
Redeemable noncontrolling interest	—		—		—		2,268		2,268
Equity:
Common stock	294		—		2,377		(2,377)		294
Additional paid-in capital	112		632		9,362		(9,203)		903
Retained income	15,836		1,975		5,404		(11,010)		12,205
Accumulated other comprehensive loss	(175)		—		(497)		48		(624)
Less: common stock in treasury	(12,297)		—		(2)		—		(12,299)
Total equity - controlling interests	3,770		2,607		16,644		(22,542)		479
Total equity - noncontrolling interests	—		—		2		55		57
Total equity	3,770		2,607		16,646		(22,487)		536
Total liabilities and equity	$	15,457	$	3,049	$	21,821	$	(28,979)	$	11,348


	Statement of Cash Flows
	Three Months Ended March 31, 2020
	(Unaudited)
(in millions)	S&P Global Inc.		Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries		Eliminations		S&P Global Inc. Consolidated
Operating Activities:
Net income	$	1,113	$	301	$	917	$	(1,642)	$	689
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	11		2		7		—		20
Amortization of intangibles	—		—		29		—		29
Provision for losses on accounts receivable	2		3		5		—		10
Deferred income taxes	(5)		—		(1)		—		(6)
Stock-based compensation	4		2		5		—		11
Gain on disposition	—		—		(7)		—		(7)

Other	30		—		(1)		—		29
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(8)		(82)		166		—		76
Prepaid and other current assets	(54)		33		(31)		—		(52)
Accounts payable and accrued expenses	(42)		(64)		(145)		—		(251)
Unearned revenue	18		7		(37)		—		(12)

Other current liabilities	4		21		24		—		49
Net change in prepaid/accrued income taxes	163		(40)		2		—		125
Net change in other assets and liabilities	13		(21)		(22)		—		(30)
Cash provided by operating activities	1,249		162		911		(1,642)		680
Investing Activities:
Capital expenditures	(3)		(1)		(7)		—		(11)
Acquisitions, net of cash acquired	—		—		(183)		—		(183)

Changes in short-term investments	—		—		11		—		11
Cash used for investing activities	(3)		(1)		(179)		—		(183)
Financing Activities:



Dividends paid to shareholders	(161)		—		—		—		(161)
Distributions to noncontrolling interest holders, net	—		—		(51)		—		(51)


Repurchase of treasury shares	(1,153)		—		—		—		(1,153)
Exercise of stock options	5		—		3		—		8
Employee withholding tax on share-based payments	(44)		—		—		—		(44)
Intercompany financing activities	(359)		(161)		(1,122)		1,642		—
Cash used for financing activities	(1,712)		(161)		(1,170)		1,642		(1,401)
Effect of exchange rate changes on cash	(5)		—		(25)		—		(30)




Net change in cash, cash equivalents, and restricted cash	(471)		—		(463)		—		(934)
Cash, cash equivalents, and restricted cash at beginning of period	1,130		—		1,756		—		2,886
Cash, cash equivalents, and restricted cash at end of period	$	659	$	—	$	1,293	$	—	$	1,952