S&P Global Inc. [SPGI] Filings

10-Q 1 spgi-20240630.htm 10-Q spgi-20240630

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 June 30, 2024


☐			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 July 19, 2024 (latest practicable date), 313.0 million shares of the issuer's classes of common stock (par value $1.00 per share) were outstanding excluding 7.2 million outstanding common shares held by the Markit Group Holdings Limited Employee Benefit Trust.

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 and six months ended June 30 , 2024 and 2023			4
Consolidated Statements of Comprehensive Income for the three and six months ended June 30 , 2024 and 2023			5
Consolidated Balance Sheets as of June 30 , 2024 and December 31, 2023			6
Consolidated Statements of Cash Flows for the six months ended June 30 , 2024 and 2023			7
Consolidated Statements of Equity for the three and six months ended June 30 , 2024 and 2023			8
Notes to the Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			30
Item 3. Quantitative and Qualitative Disclosures About Market Risk			59
Item 4. Controls and Procedures			59
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			60
Item 1A. Risk Factors			60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			60
Item 5. Other Information			60
Item 6. Exhibits			63
Signatures			64

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 June 30, 2024, the related consolidated statements of income, comprehensive income, and equity for the three- and six-month periods ended June 30, 2024 and 2023, the related consolidated statements of cash flows for the six-month periods ended June 30, 2024 and 2023, 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, 2023, 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 8, 2024, 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, 2023, 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 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

July 30, 2024

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

S&P Global Inc.

Consolidated Statements of Income

(Unaudited)


(in millions, except per share amounts)	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue	$	3,549	$	3,101	$	7,040	$	6,261
Expenses:
Operating-related expenses	1,085		1,026		2,204		2,114
Selling and general expenses	734		771		1,439		1,476
Depreciation	25		24		48		49
Amortization of intangibles	266		261		531		522
Total expenses	2,110		2,082		4,222		4,161
Loss on dispositions, net	—		119		—		69
Equity in income on unconsolidated subsidiaries	(13)		(11)		(19)		(25)
Operating profit	1,452		911		2,837		2,056
Other income, net	(3)		(11)		(13)		—
Interest expense, net	77		88		156		174

Income before taxes on income	1,378		834		2,694		1,882
Provision for taxes on income	293		259		540		447





Net income	1,085		575		2,154		1,435
Less: net income attributable to noncontrolling interests	(74)		(64)		(152)		(130)

Net income attributable to S&P Global Inc.	$	1,011	$	511	$	2,002	$	1,305






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






Net income:
Basic	$	3.23	$	1.60	$	6.39	$	4.08
Diluted	$	3.23	$	1.60	$	6.38	$	4.07
Weighted-average number of common shares outstanding:
Basic	313.0		319.3		313.3		320.3
Diluted	313.2		319.8		313.6		320.9

Actual shares outstanding at period end					313.0		318.2

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


(in millions)	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income	$	1,085	$	575	$	2,154	$	1,435

Other comprehensive income:
Foreign currency translation adjustments	(6)		30		(78)		73
Income tax effect	(4)		5		(11)		8
	(10)		35		(89)		81

Pension and other postretirement benefit plans	(5)		(12)		(5)		(12)
Income tax effect	2		3		2		4
	(3)		(9)		(3)		(8)

Unrealized gain on cash flow hedges	—		28		20		—
Income tax effect	—		(6)		(4)		—
	—		22		16		—

Comprehensive income	1,072		623		2,078		1,508
Less: comprehensive income attributable to nonredeemable noncontrolling interests	(6)		(6)		(14)		(11)
Less: comprehensive income attributable to redeemable noncontrolling interests	(68)		(58)		(138)		(119)
Comprehensive income attributable to S&P Global Inc.	$	998	$	559	$	1,926	$	1,378

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Balance Sheets


(in millions)	June 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,038	$	1,290
Restricted cash	1		1
Accounts receivable, net of allowance for doubtful accounts: 2024 - $53; 2023 - $54	2,709		2,826

Prepaid and other current assets	832		1,026
Assets of a business held for sale	62		—
Total current assets	5,642		5,143
Property and equipment, net of accumulated depreciation: 2024 - $805; 2023 - $794	248		258
Right of use assets	372		379
Goodwill	34,975		34,850
Other intangible assets, net	17,099		17,398
Equity investments in unconsolidated subsidiaries	1,795		1,787
Other non-current assets	825		774
Total assets	$	60,956	$	60,589
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	477	$	557
Accrued compensation and contributions to retirement plans	583		906
Short-term debt	4		47
Income taxes currently payable	180		121
Unearned revenue	3,406		3,461

Other current liabilities	837		1,033
Liabilities of a business held for sale	13		—
Total current liabilities	5,500		6,125
Long-term debt	11,401		11,412
Lease liabilities — non-current	515		541
Pension and other postretirement benefits	196		199
Deferred tax liability — non-current	3,540		3,690
Other non-current liabilities	820		522
Total liabilities	21,972		22,489
Redeemable noncontrolling interests (Note 8)	4,014		3,800
Commitments and contingencies (Note 12)
Equity:
Common stock, $1 par value: authorized - 600 million shares; issued - 2024 and 2023 415 million shares	415		415
Additional paid-in capital	44,407		44,231
Retained income	19,957		18,728
Accumulated other comprehensive loss	(839)		(763)
Less: common stock in treasury	(29,059)		(28,411)
Total equity — controlling interests	34,881		34,200
Total equity — noncontrolling interests	89		100
Total equity	34,970		34,300
Total liabilities and equity	$	60,956	$	60,589

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Statements of Cash Flows

(Unaudited)


(in millions)	Six Months Ended
	June 30,
	2024		2023
Operating Activities:
Net income	$	2,154	$	1,435


Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	48		49
Amortization of intangibles	531		522
Provision for losses on accounts receivable	29		12
Deferred income taxes	(162)		(384)
Stock-based compensation	82		97
Loss on dispositions, net	—		69



Other	105		44
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	106		(44)
Prepaid and other current assets	(25)		(164)
Accounts payable and accrued expenses	(328)		(93)
Unearned revenue	(74)		39

Other current liabilities	(210)		(305)
Net change in prepaid/accrued income taxes	241		123
Net change in other assets and liabilities	7		(37)
Cash provided by operating activities	2,504		1,363
Investing Activities:
Capital expenditures	(56)		(59)
Acquisitions, net of cash acquired	(261)		(286)
Proceeds from dispositions, net	(4)		1,002
Changes in short-term investments	2		(1)
Cash (used for) provided by investing activities	(319)		656
Financing Activities:
Additions to short-term debt, net	—		552

Payments on senior notes	(47)		—
Dividends paid to shareholders	(572)		(578)

Distributions to noncontrolling interest holders, net	(133)		(140)
Contingent consideration payments	(104)		(8)

Repurchase of treasury shares	(500)		(1,501)
Exercise of stock options	4		7
Employee withholding tax on share-based payments	(53)		(79)
Cash used for financing activities	(1,405)		(1,747)
Effect of exchange rate changes on cash	(32)		3








Net change in cash, cash equivalents, and restricted cash	748		275
Cash, cash equivalents, and restricted cash at beginning of period	1,291		1,287
Cash, cash equivalents, and restricted cash at end of period	$	2,039	$	1,562

See accompanying notes to the unaudited consolidated financial statements.

S&P Global Inc.

Consolidated Statements of Equity

(Unaudited)


Three Months Ended June 30, 2024
(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI Equity		Noncontrolling Interests		Total Equity
Balance as of March 31, 2024	$	415	$	44,295	$	19,433	$	(825)	$	28,991	$	34,327	$	97	$	34,424
Comprehensive income 1					1,011		(13)				998		6		1,004
Dividends (Dividend declared per common share — $0.91 per share)					(286)						(286)		(11)		(297)

Share repurchases			75						75		—				—
Employee stock plans			37						(7)		44				44

Change in redemption value of redeemable noncontrolling interests					(202)						(202)				(202)

Other					1		(1)				—		(3)		(3)
Balance as of June 30, 2024	$	415	$	44,407	$	19,957	$	(839)	$	29,059	$	34,881	$	89	$	34,970


Three Months Ended June 30, 2023
(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI Equity		Noncontrolling Interests		Total Equity
Balance as of March 31, 2023	$	415	$	44,329	$	18,171	$	(861)	$	25,779	$	36,275	$	95	$	36,370
Comprehensive income 1					511		48				559		6		565
Dividends (Dividend declared per common share — $0.90 per share)					(290)						(290)		(9)		(299)

Share repurchases			(50)						951		(1,001)				(1,001)
Employee stock plans			16						(24)		40				40
Change in redemption value of redeemable noncontrolling interests					(117)						(117)				(117)
Adjustment to noncontrolling interest			(2)								(2)				(2)
Other					4						4		(1)		3
Balance as of June 30, 2023	$	415	$	44,293	$	18,279	$	(813)	$	26,706	$	35,468	$	91	$	35,559


Six Months Ended June 30, 2024
(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2023	$	415	$	44,231	$	18,728	$	(763)	$	28,411	$	34,200	$	100	$	34,300
Comprehensive income 1					2,002		(76)				1,926		14		1,940
Dividends (Dividend declared per common share — $1.82 per share)					(572)						(572)		(11)		(583)

Share repurchases			195						695		(500)				(500)
Employee stock plans			(19)						(47)		28				28
Change in redemption value of redeemable noncontrolling interests					(203)						(203)				(203)

Other					2						2		(14)		(12)
Balance as of June 30, 2024	$	415	$	44,407	$	19,957	$	(839)	$	29,059	$	34,881	$	89	$	34,970


Six Months Ended June 30, 2023
(in millions)	Common Stock $1 par		Additional Paid-in Capital		Retained Income		Accumulated Other Comprehensive Loss		Less: Treasury Stock		Total SPGI Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2022	$	415	$	44,422	$	17,784	$	(886)	$	25,347	$	36,388	$	89	$	36,477
Comprehensive income 1					1,305		73				1,378		11		1,389
Dividends (Dividend declared per common share — $1.80 per share)					(578)						(578)		(9)		(587)

Share repurchases									1,501		(1,501)				(1,501)
Employee stock plans			(127)						(142)		15				15
Change in redemption value of redeemable noncontrolling interests					(237)						(237)				(237)
Adjustment to noncontrolling interest			(2)								(2)				(2)
Other					5						5				5
Balance as of June 30, 2023	$	415	$	44,293	$	18,279	$	(813)	$	26,706	$	35,468	$	91	$	35,559

1Excludes comprehensive income of $68 million and $58 million for the three months ended June 30, 2024 and 2023, respectively, and $138 million and $119 million for the six months ended June 30, 2024 and 2023, respectively, attributable to our redeemable noncontrolling interests.

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 provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets.

Our operations consist of five reportable segments: S&P Global Market Intelligence (“Market Intelligence”), S&P Global Ratings (“Ratings”), S&P Global Commodity Insights (“Commodity Insights”), S&P Global Mobility (“Mobility”) and S&P Dow Jones Indices (“Indices”).

•Market Intelligence is a global provider of multi-asset-class data and analytics integrated with purpose-built workflow solutions.

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

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

•Mobility is a leading provider of solutions serving the full automotive value chain including vehicle manufacturers (Original Equipment Manufacturers or OEMs), automotive suppliers, mobility service providers, retailers, consumers, and finance and insurance companies.

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

As of May 2, 2023, we completed the sale of S&P Global Engineering Solutions (“Engineering Solutions”), a provider of engineering standards and related technical knowledge, and the results are included through that date.

The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Therefore, the financial statements included herein should be read in conjunction with the financial statements and notes included in our Form 10-K for the year ended December 31, 2023 (our “Form 10-K”). Certain prior-year amounts have been reclassified to conform with current presentation.

In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the interim periods have been included. The operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, business combinations, allowance for doubtful accounts, valuation of long-lived assets, goodwill and other intangible assets, pension plans, incentive compensation and stock-based compensation, income taxes, contingencies and redeemable noncontrolling interests. Since the date of our Form 10-K, there have been no material changes to our critical accounting policies and estimates.

Restricted Cash

Restricted cash included in our consolidated balance sheets was $1 million as of June 30, 2024 and December 31, 2023.

Contract Assets

Contract assets include unbilled amounts from when the Company transfers service to a customer before a customer pays consideration or before payment is due. As of June 30, 2024 and December 31, 2023, contract assets were $83 million and $75 million, respectively, and are included in accounts receivable in our consolidated balance sheets.

Unearned Revenue

We record unearned revenue when cash payments are received in advance of our performance. The decrease in the unearned revenue balance at June 30, 2024 compared to December 31, 2023 is primarily driven by $2.4 billion of revenues recognized that were included in the unearned revenue balance at the beginning of the period, offset by cash payments received in advance of satisfying our performance obligations.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of contracts for work that has not yet been performed. As of June 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $4.1 billion. We expect to recognize revenue on approximately sixty percent and eighty-five percent of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

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

Costs to Obtain Contracts

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that the costs associated with certain sales commission programs are incremental to the costs to obtain contracts with customers and therefore meet the criteria to be capitalized. Total capitalized costs to obtain contracts were $261 million and $234 million as of June 30, 2024 and December 31, 2023, respectively, and are included in prepaid and other current assets and other non-current assets on our consolidated balance sheets. The capitalized asset will be amortized over a period consistent with the transfer to the customer of the goods or services to which the asset relates, calculated based on the customer term and the average life of the products and services underlying the contracts which has been determined to be approximately 5 years. The expense is recorded within selling and general expenses.

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

Equity in Income on Unconsolidated Subsidiaries

The Company holds an investment in a 50/50 joint venture arrangement with shared control with CME Group that combines each company’s post-trade services into a joint venture, OSTTRA. The joint venture provides trade processing and risk mitigation operations and incorporates CME Group’s optimization businesses (Traiana, TriOptima, and Reset) and the Company’s MarkitSERV business. The combination is intended to increase operating efficiencies of both the company's business to more effectively service clients with enhanced platforms and services for OTC markets across interest rate, FX, equity, and credit asset classes. Our share of earnings or losses are recognized in Equity in income on unconsolidated subsidiaries in our consolidated statements of income.

Other Income, net

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


(in millions)	Three Months				Six Months
	2024		2023		2024		2023
Other components of net periodic benefit cost	$	(6)	$	(6)	$	(12)	$	(12)
Net loss (gain) from investments	3		(5)		(1)		12
Other income, net	$	(3)	$	(11)	$	(13)	$	—

2. Acquisitions and Divestitures

Acquisitions

2024

On May 1, 2024, we completed the acquisition of Visible Alpha, the financial technology provider of deep industry and segment consensus data creating a premium offering of fundamental investment research capabilities on Market Intelligence’s Capital IQ Pro platform. The acquisition is part of our Market Intelligence segment and further enhances the depth and breadth of the overall Visible Alpha and S&P Capital IQ Pro offering. The acquisition of Visible Alpha is not material to our consolidated financial statements.

On May 14, 2024, we completed the acquisition of World Hydrogen Leaders, a globally-recognized portfolio of hydrogen-related conferences and events, digital training and market intelligence. The acquisition is part of our Commodity Insight’s segment and complements Commodity Insights global conference business and provides customers with full coverage of the hydrogen and derivative value chain alongside Energy Transition and Sustainability solutions, including hydrogen price assessments, emission factors and market research. The acquisition of World Hydrogen Leaders is not material to our consolidated financial statements.

2023

On February 16, 2023, we completed the acquisition of Market Scan Information Systems, Inc. (“Market Scan”), a leading provider of automotive pricing and incentive intelligence, including Automotive Payments as a ServiceTM and its powerful payment calculation engine. The addition of Market Scan to Mobility enabled the integration of detailed transaction intelligence in areas that are complementary to existing services for dealers, OEMs, lenders, and other market participants. The acquisition of Market Scan is not material to our consolidated financial statements.

On January 3, 2023, we completed the acquisition of ChartIQ, a premier charting provider for the financial services industry. ChartIQ is a professional grade charting solution that allows users to visualize data with a fully interactive web-based library that works seamlessly across web, mobile and desktop. It provides advanced capabilities including trade visualization, options analytics, technical analysis and more. Additionally, ChartIQ allows clients to visualize vendor-supplied data combined with their own proprietary content, alternative datasets or analytics. The acquisition is part of our Market Intelligence segment and further enhances our S&P Capital IQ Pro platform and other workflow solutions to provide the industry with leading visualization capabilities. The acquisition of ChartIQ is not material to our consolidated financial statements.

On January 4, 2023, we completed the acquisition of TruSight Solutions LLC (“TruSight”) a provider of third-party vendor risk assessments. The acquisition was integrated into our Market Intelligence segment and further expanded the breadth and depth of S&P Global’s third party vendor risk management solutions by offering high-quality validated assessment data to clients designed to reduce further the vendor due diligence burden on service providers to the financial services industry. The acquisition of TruSight is not material to our consolidated financial statements.

Divestitures

2024

On July 26, 2024, we entered into an agreement to sell Fincentric, formerly known as Markit Digital. This agreement follows our announced intent to explore strategic opportunities for Fincentric in February of 2024. Fincentric is S&P Global’s premier digital solutions provider focused on developing mobile applications and websites for retail brokerages and other financial institutions. Fincentric specializes in designing cutting-edge financial data visualizations, interfaces and investor experiences. Fincentric joined S&P Global through the merger with IHS Markit and is part of our Market Intelligence segment. The assets and liabilities of Fincentric were classified as held for sale in our consolidated balance sheet as of June 30, 2024. This transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the third quarter of 2024. The anticipated divestiture of Fincentric is not expected to be material to our consolidated financial statements.

2023

On May 2, 2023, we completed the sale of Engineering Solutions to Allium Buyer LLC, a Delaware limited liability company controlled by funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”). We received the full proceeds from the sale of $975 million in cash, subject to purchase price adjustments, which resulted in approximately $750 million in after-tax proceeds. During the three months ended June 30, 2023, we recorded a pre-tax loss of $120 million in Loss on dispositions, net and disposition-related costs of $3 million in selling and general expenses in the consolidated statement of income ($189 million after-tax, net of a release of a deferred tax liability of $101 million) related to the sale of Engineering Solutions. During the six months ended June 30, 2023, we recorded a pre-tax loss of $120 million in Loss on dispositions, net and disposition-related costs of $16 million in selling and general expenses in the consolidated statement of income ($182 million after-tax, net of a release of a deferred tax liability of $157 million) related to the sale of Engineering Solutions. The transaction followed our announced intent in November of 2022 to divest the business. Engineering Solutions became part of the Company following our merger with IHS Markit.

In the first quarter of 2023, we received a contingent payment following the sale of Leveraged Commentary and Data (“LCD”) along with a related family of leveraged loan indices in June of 2022. The contingent payment was payable six months following the closing upon the achievement of certain conditions related to the transition of LCD customer relationships. During the three months ended March 31, 2023, the contingent payment resulted in a pre-tax gain of $46 million ($34 million after-tax) related to the sale of LCD in our Market Intelligence segment and $4 million ($3 million after-tax) in Loss on dispositions, net related to the sale of a family of leveraged loan indices in our Indices segment.

Assets and Liabilities Held for Sale

The components of assets and liabilities held for sale in the consolidated balance sheets consist of the following:


(in millions)	June 30		December 31,
	2024 1		2023
Accounts Receivable, net	$	14	$	—
Goodwill	46		—

Other assets	1		—
Deferred tax asset	1
Assets of a business held for sale	$	62	$	—

Accounts payable and accrued expenses	$	10	$	—

Unearned revenue	3		—
Liabilities of a business held for sale	$	13	$	—

1 Assets and liabilities held for sale as of June 30, 2024 relate to Fincentric.

The operating profit (loss) of our businesses that were held for sale or disposed of for the periods ended June 30 is as follows:


(in millions)	Three Months				Six Months
	2024		2023		2024		2023
Operating profit (loss) 2	$	(1)	$	3	$	(4)	$	19

2 The operating profit (loss) presented includes the revenue and recurring direct expenses associated with businesses disposed of or held for sale. The three and six months ended June 30, 2023 excludes a pre-tax loss related to the sale of Engineering Solutions of $120 million.

3. Income Taxes

The effective income tax rate was 21.3% and 20.1% for the three and six months ended June 30, 2024, respectively, and 31.1% and 23.8% for the three and six months ended June 30, 2023, respectively. The higher 2023 rates are primarily due to the tax charge on divestitures and change in mix of income by jurisdiction.

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 subject to tax examinations in various jurisdictions. As of June 30, 2024 and December 31, 2023, the total amount of federal, state and local, and foreign unrecognized tax benefits was $255 million and $230 million, respectively, exclusive of interest and penalties. We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating-related expense, respectively. As of June 30, 2024 and December 31, 2023, we had $58 million and $50 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits. Based on the current status of income tax audits, we believe that the total amount of unrecognized tax benefits may decrease by approximately $12 million in the next twelve months as a result of the resolution of local tax examinations.

The Organization for Economic Co-operation and Development (“OECD”) introduced an international tax framework under Pillar Two which includes a global minimum tax of 15%. This framework has been implemented by several jurisdictions, including jurisdictions in which we operate, with effect from January 1, 2024, and many other jurisdictions, including jurisdictions in which we operate, are in the process of implementing it. The effect of enacted Pillar Two taxes has been included in the results disclosed and did not have a significant impact on our consolidated financial statements. The Company continues to monitor jurisdictions that are expected to implement Pillar Two in the future, and it is in the process of evaluating the potential impact of the enactment of Pillar Two by such jurisdictions on its consolidated financial statements.

4. Debt

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


(in millions)	June 30, 2024		December 31, 2023

3.625% Senior Notes, due 2024 1	—		47
4.75% Senior Notes, due 2025 2	4		4
4.0% Senior Notes, due 2026 3	3		3
2.95% Senior Notes, due 2027 4	498		497
2.45% Senior Notes, due 2027 5	1,241		1,240
4.75% Senior Notes, due 2028 6	804		810
4.25% Senior Notes, due 2029 7	1,010		1,016
2.5% Senior Notes, due 2029 8	497		497
2.70% Sustainability-Linked Senior Notes, due 2029 9	1,237		1,236
1.25% Senior Notes, due 2030 10	595		595
2.90% Senior Notes, due 2032 11	1,476		1,474
5.25% Senior Notes, due 2033 12	743		743
6.55% Senior Notes, due 2037 13	291		291
4.5% Senior Notes, due 2048 14	272		272
3.25% Senior Notes, due 2049 15	590		590
3.70% Senior Notes, due 2052 16	975		975
2.3% Senior Notes, due 2060 17	683		683
3.9% Senior Notes, due 2062 18	486		486




Total debt	11,405		11,459
Less: short-term debt including current maturities	4		47
Long-term debt	$	11,401	$	11,412

1 We made a $47 million repayment of our 3.625% senior note in the second quarter of 2024.

2 Interest payments are due semiannually on February 15 and August 15.

3 Interest payments are due semiannually on March 1 and September 1.

4 Interest payments are due semiannually on January 22 and July 22, and as of June 30, 2024, the unamortized debt discount and issuance costs total $2 million.

5 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2024, the unamortized debt discount and issuance costs total $9 million.

6 Interest payments are due semiannually on February 1 and August 1.

7 Interest payments are due semiannually on May 1 and November 1.

8 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2024, the unamortized debt discount and issuance costs total $3 million.

9 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2024, the unamortized debt discount and issuance costs total $13 million.

10 Interest payments are due semiannually on February 15 and August 15, and as of June 30, 2024, the unamortized debt discount and issuance costs total $5 million.

11 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2024, the unamortized debt discount and issuance costs total $24 million.

12 Interest payments are due semiannually on March 15 and September 15, beginning on March 15, 2024, and as of June 30, 2024, the unamortized debt discount and issuance costs total $7 million.

13 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2024, the unamortized debt discount and issuance costs total $2 million.

14 Interest payments are due semiannually on May 15 and November 15, and as of June 30, 2024, the unamortized debt discount and issuance costs total $11 million.

15 Interest payments are due semiannually on June 1 and December 1, and as of June 30, 2024, the unamortized debt discount and issuance costs total $10 million.

16 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2024, the unamortized debt discount and issuance costs total $25 million.

17 Interest payments are due semiannually on February 15 and August 15, and as of June 30, 2024, the unamortized debt discount and issuance costs total $17 million.

18 Interest payments are due semiannually on March 1 and September 1 and as of June 30, 2024, the unamortized debt discount and issuance costs total $14 million.

The fair value of our total debt borrowings was $9.9 billion and $10.3 billion as of June 30, 2024 and December 31, 2023, respectively, and was estimated based on quoted market prices.

We have the ability to borrow a total of $2.0 billion through our commercial paper program, which is supported by our $2.0 billion five-year credit agreement (our “credit facility”) that will terminate on April 26, 2026. As of June 30, 2024 and December 31, 2023, we had no outstanding commercial paper.

Commitment fees for the unutilized commitments under the credit facility and applicable margins for borrowings thereunder are linked to the Company achieving three environmental sustainability performance indicators related to emissions, tested annually. We currently pay a commitment fee of 8 basis points. The credit facility contains customary affirmative and negative covenants and customary events of default. The occurrence of an event of default could result in an acceleration of the obligations under the credit facility.

The only financial covenant required is that our indebtedness to cash flow ratio, as defined in our credit facility, was not greater than 4 to 1, and this covenant level has never been exceeded.

5. Derivative Instruments

Our exposure to market risk includes changes in foreign exchange rates and interest rates. We have operations in foreign countries where the functional currency is primarily the local currency. For international operations that are determined to be extensions of the parent company, the U.S. dollar is the functional currency. We typically have naturally hedged positions in most countries from a local currency perspective with offsetting assets and liabilities. As of June 30, 2024 and December 31, 2023, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange rates and held cross currency swap contracts to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates. As of December 31, 2023, we held a series of interest rate swaps to mitigate or hedge the adverse fluctuations in interest rates on our future debt refinancing. These contracts are recorded at fair value that is based on foreign currency exchange rates and interest rates in active markets; therefore, we classify these derivative contracts within Level 2 of the fair value hierarchy. We do not enter into any derivative financial instruments for speculative purposes.

Undesignated Derivative Instruments

During the six months ended June 30, 2024 and twelve months ended December 31, 2023, we entered into foreign exchange forward contracts in order to mitigate the change in fair value of specific assets and liabilities in the consolidated balance sheets. These forward contracts do not qualify for hedge accounting. As of June 30, 2024 and December 31, 2023, the aggregate notional value of these outstanding forward contracts was $2.2 billion and $2.6 billion, respectively. The changes in fair value of these forward contracts are recorded in prepaid and other current assets or other current liabilities in the consolidated balance sheets with their corresponding change in fair value recognized in selling and general expenses in the consolidated statements of income. The amount recorded in prepaid and other current assets as of June 30, 2024 and December 31, 2023 was $10 million and $69 million, respectively. The amount recorded in other current liabilities as of June 30, 2024 and December 31, 2023 was $22 million and $1 million, respectively. The amount recorded in selling and general expense related to these contracts was a net loss of $9 million and $46 million for the three and six months ended June 30, 2024, respectively, and a net gain of $29 million and $58 million for the three and six months ended June 30, 2023, respectively.

Net Investment Hedges

As of June 30, 2024 and December 31, 2023, we held cross currency swaps to hedge a portion of our net investment in one of our European subsidiaries against volatility in the Euro/U.S. dollar exchange rate. These swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2024, 2029 and 2030. The notional value of our outstanding cross currency swaps designated as a net investment hedge was $1.5 billion as of June 30, 2024 and December 31, 2023. The changes in the fair value of these swaps are recognized in foreign currency translation adjustments, a component of other comprehensive income (loss), and reported in accumulated other comprehensive loss in our consolidated balance sheet. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. We have elected to assess the effectiveness of our net investment hedges based on changes in spot exchange rates. Accordingly, amounts related to the cross currency swaps recognized directly in net income for the three and six months ended June 30, 2024 represent net periodic interest settlements and accruals, which are recognized in interest expense, net. We recognized net interest income of $8 million and $15 million for the three and six months ended June 30, 2024, respectively, and net interest income of $6 million and $12 million for the three and six months ended June 30, 2023, respectively.

Cash Flow Hedges

Foreign Exchange Forward Contracts

During the six months ended June 30, 2024 and the twelve months ended December 31, 2023, we entered into a series of foreign exchange forward contracts to hedge a portion of the Indian rupee, British pound, and Euro exposures through the second quarter of 2026 and the fourth quarter of 2025, respectively. These contracts are intended to offset the impact of movement of exchange rates on future revenue and operating costs and are scheduled to mature within twenty-four months. The changes in the fair value of these contracts are initially reported in accumulated other comprehensive loss in our consolidated balance sheet and are subsequently reclassified into revenue and selling and general expenses in the same period that the hedged transaction affects earnings.

As of June 30, 2024, we estimate that $5 million of pre-tax gain related to foreign exchange forward contracts designated as cash flow hedges recorded in other comprehensive income is expected to be reclassified into earnings within the next twelve months.

As of June 30, 2024 and December 31, 2023, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $547 million and $529 million, respectively.

Interest Rate Swaps

In the first quarter of 2023, we terminated our interest rate swap contracts with an aggregate notional value of $813 million and received net proceeds of $155 million upon termination. These contracts were designated as cash flow hedges and were scheduled to mature beginning in the first quarter of 2027. We performed a final effectiveness test upon the termination of each swap, and the effective portion of the gain of $155 million was recorded in accumulated other comprehensive loss in our consolidated balance sheet. The gain will be recognized into interest expense, net over the term which related interest payments will be made when we enter into anticipated future debt refinancing.

The following table provides information on the location and fair value amounts of our cash flow hedges and net investment hedges as of June 30, 2024 and December 31, 2023:


(in millions)		June 30,		December 31
Balance Sheet Location		2024		2023
Derivatives designated as cash flow hedges:
Prepaid and other current assets	Foreign exchange forward contracts	$	6	$	9

Other current liabilities	Foreign exchange forward contracts	$	—	$	2
Other non-current assets	Interest rate swap contracts	$	—	$	134

Derivatives designated as net investment hedges:
Other non-current assets	Cross currency swaps	$	133	$	—
Other non-current liabilities	Cross currency swaps	$	100	$	14

The following table provides information on the location and amounts of pre-tax gains (losses) on our cash flow hedges and net investment hedges for the periods ended June 30:

Three Months


(in millions)	Gain (Loss) recognized in Accumulated Other Comprehensive Loss (effective portion)				Location of Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion)	Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion)
	2024		2023			2024		2023
Cash flow hedges - designated as hedging instruments
Foreign exchange forward contracts	$	—	$	4	Revenue, Selling and general expenses	$	2	$	2
Interest rate swap contracts	$	—	$	25	Interest expense, net	$	—	$	(1)

Net investment hedges - designated as hedging instruments
Cross currency swaps	$	16	$	(22)	Interest expense, net	$	(1)	$	(1)

Six Months


(in millions)	Gain (Loss) recognized in Accumulated Other Comprehensive Loss (effective portion)				Location of Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion)	Gain (Loss) reclassified from Accumulated Other Comprehensive Loss into Income (effective portion)
	2024		2023			2024		2023
Cash flow hedges - designated as hedging instruments
Foreign exchange forward contracts	$	(1)	$	9	Revenue, Selling and general expenses	$	4	$	3
Interest rate swap contracts	$	21	$	(9)	Interest expense, net	$	—	$	(2)

Net investment hedges - designated as hedging instruments
Cross currency swaps	$	46	$	(31)	Interest expense, net	$	(2)	$	(2)

The activity related to the change in unrealized gains (losses) in accumulated other comprehensive loss was as follows for the periods ended June 30:


(in millions)	Three Months				Six Months
	2024		2023		2024		2023
Cash Flow Hedges
Foreign exchange forward contracts
Net unrealized gains on cash flow hedges, net of taxes, beginning of period	$	5	$	4	$	5	$	—
Change in fair value, net of tax	2		5		4		10
Reclassification into earnings, net of tax	(2)		(2)		(4)		(3)
Net unrealized gains on cash flow hedges, net of taxes, end of period	$	5