The next era of
essential
intelligence
Annual Report 2021
Financial Highlights
Years ended December 31
(in millions, except per share data)
Revenue
2021
2020
% Change
$8,297
$7,442
Adjusted net income (attributable to the Company’s common shareholders)*
3,311 (a)
2,830 (b)
Adjusted diluted earnings per common share*
$13.70 (a)
$11.69 (b)
Dividends per common share (c)
Total assets
Capital expenditures (d)
Total debt
$3.08
$2.68
$15,026
$12,537
35
76
4,114
4,110
Equity (including redeemable noncontrolling interest)
5,536
3,352
11
17
17
15
20
(54)
0
65
* Refer to “Reconciliation of Non-GAAP Financial Information” on page 13 of this report for a discussion of the Company’s non-GAAP financial measures.
(a) Adjusted for the impact of the following items: IHS Markit merger costs of $249 million, employee severance charges of $19 million, gain on dispositions of $11
million, a lease impairment of $3 million, Kensho retention related expense of $2 million, acquisition-related costs of $4 million, recovery of lease-related costs of
$2 million, tax expense associated with the re-valuation of deferred tax liabilities related to a UK income tax rate change of $7 million, tax benefit on a loss on the
extinguishment of debt in the prior year of $7 million, tax benefit related to prior year divestitures of $1 million and amortization of intangibles from acquisitions
of $96 million.
(b) Adjusted for the impact of the following items: loss on the extinguishment of debt of $279 million, lease impairments of $120 million, employee severance charges
of $66 million, IHS Markit merger costs of $24 million, a $16 million gain on dispositions, a technology-related impairment charge of $12 million, lease-related
costs of $11 million, Kensho retention related expense of $11 million, a pension related charge of $3 million, tax benefit related to prior year divestitures of $4
million and amortization of intangibles from acquisitions of $123 million.
(c) Dividends paid were $0.77 per quarter in 2021 and $0.67 per quarter in 2020.
(d)
Includes purchases of property and equipment and additions to technology projects.
The Next Era of Essential Intelligence
At S&P Global, everything we do can be encapsulated in a simple, yet powerful idea we call
essential intelligence. Essential intelligence is the powerful combination of the right data,
technologies and people that enables our customers to make decisions with conviction. Our
combination with IHS Markit unlocks richer content, new modes of delivery, exciting new sector
coverage and multi-disciplinary expertise to create more value for our customers and all our
stakeholders. In essence, the merger represents a new era in our essential intelligence.
Year-End Share Price
Dividends Per Share
Revenue (in millions)
$471.93
$3.08
$2.68
$328.73
$273.05
$169.94
$169.40
$2.28
$2.00
$1.64
$8,297
$7,442
$6,699
$6,258
$6,063
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
Cumulative Total Shareholder Return(e)
500
450
400
350
300
250
200
150
100
SPGI
Peer Group (f)
S&P 500
$460
$390
$213
’16
’17
’18
’19
’20
’21
(e) Assumes $100 invested on December 31, 2016 and total return includes reinvestment of dividends through December 31,
2021.
(f)
The peer group consists of the following companies: Moody’s Corporation, CME Group Inc., MSCI Inc., FactSet Research Systems
Inc., IHS Markit Ltd., Verisk Analytics, Inc., Intercontinental Exchange, Inc.
To experience an
enriched version of this
Annual Report, with
expanded content, visit
spglobal.com/annualreport.
S&P Global 2021 Annual Report 1
Chairman’s
Letter
There’s no doubt 2021 will be
remembered as a year of hard
work, accomplishments and
progress at S&P Global.
Richard E. Thornburgh
Chairman of the Board
Dear Fellow Shareholder:
In early 2021, S&P Global was just beginning the journey toward its merger with IHS Markit. At
the start of 2022, we closed the transaction. Now, we’re one of the largest business information
companies in the world with a stronger portfolio of capabilities, a more diversified revenue base and
higher growth prospects.
Integrating two large organizations is a complex undertaking. The teams have done an outstanding
job to enable a smooth launch. The Board of Directors thanks them for their extraordinary efforts to
combine our two companies. We’re all very proud of the way the integration process was run.
As planned and announced last year, we have expanded the Board to help accelerate our strategic
progress. In June 2021, I was very pleased to welcome Greg Washington as a new Director. At the close
of our merger with IHS Markit, four members of IHS Markit’s Board joined the combined company’s
Board: Jacques Esculier, Gay Huey Evans, Robert P. Kelly and Deborah Doyle McWhinney. Each of our
new Directors brings deep experience, expertise and diverse perspectives, and I look forward to their
advice, counsel and commitment to S&P Global’s governance.
2 S&P Global 2021 Annual Report
I also want to welcome IHS Markit’s shareholders as members of S&P Global’s shareholder base. We
are eager to have you get to know this company and gain a familiarity with our goals and strategies. The
Board is committed to keeping you informed, and we also want to ensure an ongoing dialogue with all
our shareholders.
There’s no doubt 2021 will be remembered as a year of hard work, accomplishments and progress
at S&P Global. Not only did the teams lay the groundwork for the merger to be completed, but they
also continued doing what they do best: serving customers, serving markets and staying true to the
company’s values.
I want to highlight a few of the many awards our company earned last year. S&P Global was once again
named to the Wall Street Journal’s list of Top 250 Best-Managed Companies, coming in at number 30.
Our company also was named to CDP’s (formerly the Carbon Disclosure Project) 2021 Climate “A List.”
Our company ranked second in the Diversified Financials category. For the seventh time, S&P Global
was recognized as one of America’s 50 most community-minded companies by Points of Light, a
volunteer-service organization.
These honors are a tribute to all our employees who continue to do a remarkable job of serving
shareholders, customers and other partners.
Hiring, developing and managing the right people are critical to S&P Global’s ability to
execute its strategy.
To facilitate this, the Board oversees and regularly meets with members of the senior leadership team
about a broad range of topics, including culture, talent and performance management, diversity, equity
and inclusion, and employee engagement and retention.
The excellent results S&P Global produced in 2021 belie what a difficult year it was for so many people.
As the pandemic wore on, and Delta and then Omicron variants emerged, a sense of normalcy in
society was postponed.
As difficult as setbacks can be, and as uneven as the news is on any given day, there are many reasons
to look to the future with confidence. There continue to be remarkable breakthroughs in medicine,
science and technology, and people have shown a great capacity to help one another.
As for S&P Global, I can’t think of a better time to be involved. We have the talent, technology and
capabilities to be highly successful this year and well into the future.
It’s a privilege to chair this Board. I thank my fellow Directors for their ongoing engagement and
guidance, and I thank you for your investment in S&P Global.
Sincerely,
Richard E. Thornburgh
Chairman of the Board
S&P Global 2021 Annual Report 3
CEO’s
Letter
As great as last year was
for our company, in many
ways 2022 is shaping up to
be even better.
Douglas L. Peterson
President and CEO
Dear Fellow Shareholder:
S&P Global continued to thrive in 2021. We delivered outstanding results for our
customers, our partners and our shareholders. And we made important strides to
help our people by enhancing programs and benefits to support them personally
and professionally.
As great as last year was for our company, in many ways 2022 is shaping up to be
even better. In February, we closed a transformative merger with IHS Markit. We
believe combining our two companies will create substantial long-term value for
all our stakeholders.
Since we announced the deal 15 months ago, 2,000 people from both companies,
working across key integration work streams, have spent countless hours getting
us ready so that we hit the ground running as soon as the deal closed. We made
the best use of the merger review period, and I thank our teams for everything
they’ve done to support what has been our most important strategic initiative.
I am also grateful to our Board of Directors. We have a world-class Board.
Throughout this process their independent judgment and expert perspectives
have been a huge benefit to our company and to our shareholders.
4 S&P Global 2021 Annual Report
A Winning Combination: S&P Global and IHS Markit
Our merger with IHS Markit will create exciting new opportunities to deliver
broader, deeper and more interconnected data, benchmarks and workflow tools to
support decision making. We will use the combination of data, technology and the
talents of our 35,000-plus people to offer even more powerful solutions to clients
across the corporate, commodities and financial services sectors—from auto
manufacturers to asset managers.
Our Combined Culture
Immediately after we closed the merger, I welcomed over 15,000 of our new
colleagues from IHS Markit. We have long admired their deep expertise and
capabilities. As we’ve gotten to know them, we found that we have a lot in common.
We share a focus on innovation and customer centricity, we care for our people,
and we’re passionate about serving markets. Over the last several months, the
leaders of both companies have been meeting to ensure our combined culture
embraces the best and most complementary characteristics of each organization.
Our emerging culture is anchored in the core values of discovery, partnership
and integrity, and a unifying purpose to accelerate progress for our customers
and for the world. We play a key role in advancing human progress by providing
the insights that spur business expansion and create economic opportunities
in society. This purpose comes with enormous responsibility. It requires us to do
the right thing. It requires us to continue our pioneering ways of discovering new
solutions. And it requires us to serve the markets and our customers with trusted
information—to be true partners.
Putting our people first is, and will continue to be, very important for our culture.
The merger was an opportunity to harmonize best practices and find new ways
to enhance the people experience. Even before our combination, we continued
investing in our people. For example, we instituted wellness and recharge
days, we increased parental paid leave, and we began piloting a 20-week
“returnship” in India for women in technology who want to re-enter the workforce
after career breaks.
Our emerging culture is anchored in
the core values of discovery, partnership
and integrity, and a unifying purpose
to accelerate progress for our customers
and for the world.
S&P Global 2021 Annual Report 5
Our greatest strength has always been the quality of our people. They are
dedicated. They are diligent. And they are committed to making this fabulous
organization even better. It’s a privilege to work at their side. The Board and
Executive Committee are grateful for their help during another year of uncertainty
created by the pandemic.
I also want to express my deep thanks to Lance Uggla, who founded Markit in
2003, led IHS Markit the last four years as Chairman and CEO, and who has
transitioned to serving as a special advisor for one year after we closed. He
created and built a highly successful company, and his leadership and partnership
have been tremendous. I look forward to working with him over the next year.
Our Growth Strategy and Expanded Capabilities
Our long-term growth strategy is rooted in our vision to power the markets of the
future and is underpinned by our leading franchises, deep sector expertise, and
talent. Our unique and complementary assets enable us to deliver differentiated
customer value propositions and strengthen our core businesses in providing
leading benchmarks, data and analytics, and workflow solutions.
As a result of our merger, S&P Global now has a greater scale, breadth and depth
of capabilities to better serve a global customer base that includes most of the
world’s leading companies.
And we are better positioned to serve fast-growing, emerging segments. We now
offer a more robust, comprehensive set of solutions covering environmental, social
and governance (ESG) factors, climate and energy transition, private assets and
SMEs, counterparty risk management, supply chain, trade, and alternative data
sets. These additional emerging segments together represent a $20 billion total
addressable market, growing at double-digit rates annually.
Continuing to innovate will be critical, which is why we are excited to leverage
our unparalleled data assets, coupled with cutting-edge technology provided by
Kensho, to support fields such as data science and discovery and distribution
platforms, including IHS Markit’s Data Lake.
As we move forward, we plan to invest approximately $130 million in ongoing
organic initiatives in key areas we plan to prioritize in the near term. These
investments align with the strategy to evolve and grow the core business, expand
into transformational adjacencies and build upon our foundational capabilities.
We produced another exceptional year of
earnings and revenue growth in 2021.
6 S&P Global 2021 Annual Report
Financial Profile and Outlook
Our 2022 outlook calls for mid-single-digit revenue growth and double-digit
EPS growth. With our differentiated capabilities in core segments, as well as
high-growth adjacencies, we also have a strong medium-term financial outlook,
targeting 6.5% to 8.0% annual organic revenue growth and 200 basis points of
annual EBITA margin expansion on average through 2023.
Capital Allocation Targets
We have the financial discipline and the flexibility to fund investments to
accelerate growth.
Our balance sheet continues to be strong, and we expect to generate annual
free cash flow exceeding $5 billion in 2023. These factors give us the flexibility to
fund investments to accelerate organic growth, pursue strategic M&A, as well as
support a robust capital return program with a targeted capital return of at least
85% of free cash flow between dividends and share repurchases.
2021 Financial Performance
We produced another exceptional year of earnings and revenue growth in 2021.
We delivered 12% organic revenue growth and a 17% increase in adjusted diluted
earnings per share in 2021. All four legacy S&P Global businesses contributed with
growth in both revenue and adjusted operating profit margin.
We benefited from a resilient global economy and strong equity, bank loan
and oil markets, M&A activity, bond issuance, and an expanding portfolio of
essential new products.
Innovation and Product Launches
New products and investments in organic growth, including in technology and data
projects, were evident across our company.
We unveiled Kensho NERD, or Named Entity Recognition and Disambiguation, a
cutting-edge machine learning system. NERD is the first entity extraction system
on the market specifically optimized for business-related documents and entities.
It unlocks the full potential of textual data by finding organizations, people, places
and events mentioned in documents, newsfeeds or other text and linking each
to a corresponding record in a database. This enables users to perform powerful
analysis on unstructured text.
In 2021, S&P Dow Jones Indices launched a series of cryptocurrency indices, the
S&P Twitter Sentiment Index, and the S&P MAESTRO 5 Index (Multi-Asset Equal
Risk Factor Contribution).
S&P Global 2021 Annual Report 7
Demonstrating the enduring trust markets have in our indices, we marked several
milestones across our index franchise. In 2021, the iconic Dow Jones Industrial
Average celebrated 125 years. Sixty-five years ago, we launched the S&P 500.
Thirty years ago, the S&P GSCI, a pioneering commodity index, made its market
debut. And 10 years ago, we brought together two of the biggest names in business
and indexing with the creation of the S&P Dow Jones Indices joint venture.
Last year also saw the introduction of Platts Dimensions Pro, which provides
users with a seamless one-stop shop experience across Platts’ benchmark price
assessments, news and analytics, spanning 13 commodities. In addition to
desktop and mobile systems, Platts Dimensions Pro content is accessible through
our machine-to-machine delivery channels such as real-time delivery, bulk
delivery, Excel-based solutions and APIs.
At S&P Global Market Intelligence, we launched a refreshed integrated desktop
solution, now called S&P Capital IQ Pro. This is a comprehensive desktop solution
with a vastly expanded range of datasets and content, powered by innovative
functionality and tools.
In China, there is continued momentum and interest in our ratings. We completed
57 domestic ratings in 2021, up over 150% in 2020.
And we keep increasing our ESG offerings. Before highlighting a few of them,
it’s helpful to have context about the market dynamics which are creating
opportunities for us to meet client needs.
Navigating the Transition to a Sustainable Future
The pandemic and last year’s UN climate change conference, COP26, continued to
reinforce the importance of ESG considerations by managers and Boards.
Investors and other members of society are demanding that company leaders
produce better outcomes for people and the planet. Requests are coming from
asset managers, asset owners and from new regulatory frameworks around
the globe. Furthermore, community and business partners want to know how
companies behave and how they treat people, and they want more transparency
about operations.
The good news is there is a growing amount of private capital that is ready, willing
and able to be deployed to produce positive environmental and social outcomes.
The UN-supported Principles for Responsible Investment, which were launched in
2006, have attracted nearly 4,000 signatories representing $121 trillion in assets
under management.
8 S&P Global 2021 Annual Report
Moreover, the Glasgow Financial Alliance for Net Zero, created in April 2021, now
has about 450 firms worldwide pledging more than $130 trillion by 2050 to help
transition to a net-zero economy.
What does all this mean for S&P Global? As we move forward, ESG data and
insights will become even more important to make investment choices. This
information already is critical to investors, risk managers, corporations and
governments to help them make decisions every day. We have the capabilities to
be the premier resource in this category.
Introducing Sustainable1
In 2021, we launched Sustainable1, a single source for essential intelligence,
to help clients successfully navigate the transition to a sustainable future. We
decided to bring together different commercial ESG initiatives from every division
in the company. This gives us one ESG-focused approach with 700 billion ESG
data points. We now have approximately 500 full-time people working across
Sustainable1 and we are growing.
Last year, ESG and climate-related product revenue was $98 million, growing from
$65 million in 2020. We forecast this business to be approximately $600 million in
2025 and will continue to grow quickly from there.
This growth is propelled by strong demand for existing services and an expanding
product portfolio.
In 2021, S&P Global Market Intelligence launched Climate Risk Gauge, a tool to
apply climate scenarios to assess credit impact, and a host of other offerings. The
Sustainable1 team also enhanced ESG Scores available on S&P Capital IQ Pro.
We now have ESG Scores on more than 11,000 companies, up from 8,000
companies last year.
We’re also proud to be an investor in Novata, an innovative new public benefit
corporation and technology platform. Novata was launched last year to provide
the private markets ecosystem with ESG measurement, data collection
and benchmarking.
At S&P Global Ratings, we saw 48% growth in ESG Evaluations and a 79%
increase in Green Evaluations in 2021 compared to 2020. The Ratings team also
launched Second Party Opinions for Sustainability-linked Financings.
In 2021, S&P Dow Jones Indices launched sustainability-focused versions of
its flagship U.S. equity indices. It also introduced a series of S&P ESG Dividend
Aristocrats ESG indices and it strengthened its lineup of climate-focused indices.
S&P Global 2021 Annual Report 9
And at S&P Global Platts, we continue to advance the data intelligence, insights
and analysis needed to bring transparency to stakeholders charting their paths
to a decarbonized energy future. In 2021, S&P Global Platts began publishing
daily carbon credit price assessments, reflecting nature-based carbon credit
and household device carbon credit projects that are intended to bring additional
transparency to carbon prices and carbon trading activity. Furthermore, Platts
launched the world’s first daily carbon-neutral LNG price assessment.
Our ESG Commitments
As a provider of ESG data, analytics and benchmarks, we know as well as anyone
the critical need to have our own best-in-class approach to these issues. We
continue to strengthen our commitment to ESG matters through our strategies,
initiatives and reporting.
For example, last year we were one of the first companies to issue a sustainability-
linked banking facility in the United States tied to climate action goals and the
first such banking facility in the U.S. media and information services sector.
We also announced our plan to achieve net-zero greenhouse gas (GHG)
emissions by 2040.
And we provided ways for our people to support their local communities. In 2021,
employee volunteerism contributed $1.4 million in economic value to nonprofits
around the globe and the S&P Global Foundation distributed $15 million, a 30%
increase over the year before, to organizations that support Covid-19 relief,
diversity, economic inclusion and environmental sustainability. You can find out
more about these programs in our Impact Report.
Harmonizing Global ESG-related Standards
The world of ESG and impact investing is moving fast. In 2021, a number of events
demonstrated there is powerful momentum to build a more transparent and
trustworthy investing ecosystem.
At COP26, the IFRS Foundation announced the formation of the International
Sustainability Standards Board (ISSB). The ISSB will “develop a comprehensive
global baseline of high-quality sustainability disclosure standards.” We
welcomed this news.
In addition, the Impact Taskforce (ITF), a private-sector led, independent body
supported by the UK’s government under its presidency of the G7, released
recommendations focused on driving private financing to promote impact-driven
economies and societies. I was privileged to represent S&P Global as chair of
the ITF workstream dealing with the steps that are needed to produce greater
transparency, harmonized disclosure standards, and better data to facilitate the
flow of capital toward projects with positive impact on people and the planet.
These initiatives, as well as others, are healthy developments to achieve more
transparency and better comparability and standardization of sustainability-
related information.
10 S&P Global 2021 Annual Report
Risk Management
For as much as S&P Global has excelled, the world continues to wrestle with
challenging events and a changing risk landscape. As we enter the third year of a
pandemic, effectively dealing with Covid-19 and its evolving variants will continue
to be an issue for our company, as it will be for other businesses and institutions.
Our responses must continue to be driven by the imperatives of protecting our
people and their families, and supporting our customers, our communities and
our other stakeholders.
In addition to Covid-19, persistently high inflation, fueled by supply-chain
disruption, overly loose monetary policy and soaring energy prices, could create
headwinds for a still fragile economic recovery in 2022. Moreover, we have lowered
our economic forecast to reflect the effects of the Russia-Ukraine conflict. Our
global GDP forecast is for 3.4% expansion this year.
For these issues—as well as cybersecurity, public policy dynamics, and other
major risk categories—the leadership team maintains an open, high-quality
dialogue with our Board of Directors, which has responsibility to exercise effective
and meaningful oversight of the company’s risk management process.
Strong today. Stronger tomorrow.
With an extraordinary 2021 behind us and the rapid progress we’ve made
integrating IHS Markit early this year, I feel incredibly optimistic about our
company. We have market-leading franchises with iconic brands. We have a strong
financial profile. We’re investing on a larger scale than ever to fuel future growth.
We have the talent, technology and data to support the critical decision-making
needed by our customers. And we have a unifying purpose, strategy and culture.
All these things make me very hopeful about the future of S&P Global.
Sincerely,
Douglas L. Peterson
President and CEO
S&P Global 2021 Annual Report 11
Disclaimers
Offer or Solicitation
This document is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or
a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
Important Information About the Transaction and Where to Find It
In connection with the proposed transaction, S&P Global and IHS Markit will file relevant materials with the SEC, including a registration statement on Form S-4 filed
by S&P Global to register the shares of S&P Global common stock to be issued in connection with the proposed transaction. The registration statement will include a
joint proxy statement/prospectus which will be sent to the shareholders of S&P Global and IHS Markit seeking their approval of their respective transaction-related
proposals. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE RELATED JOINT PROXY STATEMENT/
PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR TO BE FILED
WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT S&P GLOBAL, IHS MARKIT AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from S&P Global at its
website, or from IHS Markit at its website. Documents filed with the SEC by S&P Global will be available free of charge by accessing S&P Global’s website at www.spglobal.
com under the heading Investor Relations, or, alternatively, by directing a request by telephone to 866-436-8502 (domestic callers) or 212-438-2192 (international callers)
or by mail to S&P Global at Investor Relations, S&P Global Inc., 55 Water Street, New York, NY 10041, and documents filed with the SEC by IHS Markit will be available free
of charge by accessing IHS Markit’s website at www.ihsmarkit.com under the heading Investor Relations or, alternatively, by directing a request by telephone to
303-790-0600 or by mail to IHS Markit at IHS Markit Investor Relations and Corporate Communications, 15 Inverness Way East, Englewood, CO 80112.
Participants in the Solicitation
S&P Global, IHS Markit and certain of their respective directors and executive officers and other members of management and employees may be deemed to be
participants in the solicitation of proxies from the shareholders of S&P Global and IHS Markit in respect of the proposed transaction under the rules of the SEC.
Information about IHS Markit’s directors and executive officers is available in IHS Markit’s Form 10-K for the year ended November 30, 2019, proxy statement dated
February 28, 2020 for its 2020 Annual General Meeting of Shareholders, and certain of its Current Reports on Form 8-K. Information about S&P Global’s directors and
executive officers is available in S&P Global’s Form 10-K for the year ended December 31, 2019, proxy statement dated March 30, 2020 for its 2020 Annual Meeting of
Shareholders, and certain of its Current Reports on Form 8-K. Additional information regarding the participants in the proxy solicitation and a description of their direct
and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC
regarding the transaction when they become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making
any voting or investment decisions. You may obtain free copies of these documents from S&P Global or IHS Markit using the sources indicated above.
12 S&P Global 2021 Annual Report
Reconciliation of Non-GAAP Financial Information
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”).
The following is provided to supplement certain non-GAAP financial measures discussed in the letter to shareholders and the
financial highlights section of this report (IFC-page 11) both as reported (on a GAAP basis) and as adjusted by excluding certain
items (Non-GAAP) as explained below. The Company’s non-GAAP measures include adjustments that reflect how management views
our businesses. The Company believes these non-GAAP financial measures provide useful supplemental information that enables
investors to better compare the Company’s performance across periods, and management also uses these measures internally to
assess the operating performance of its business, to assess performance for employee compensation purposes and to decide how to
allocate resources. However, investors should not consider any of these non-GAAP measures in isolation from, or as a substitute for,
the financial information that the Company reports.
Reconciliations of certain forward looking non-GAAP financial measures to comparable GAAP measures are not available due to the
challenges and impracticability with estimating some of the items. The Company is not able to provide reconciliations of such forward
looking non-GAAP financial measures because certain items required for such reconciliations are outside of the Company’s control
and/or cannot be reasonably predicted. Because of those challenges, reconciliations of such forward looking non-GAAP financial
measures are not available without unreasonable effort.
S&P Global 2021 Annual Report 13
Operating Results by Segment - Reported vs. Performance
Non-GAAP Financial Information
Years ended December 31, 2021 and 2020
(dollars in millions, except per share amounts)
Adjusted Operating Profit
(unaudited)
Total SPGI
Operating profit
Non-GAAP adjustments (a) (b) (c) (d) (e)
Deal-related amortization
Adjusted operating profit
2021
2020 % Change
$4,221
264
96
$3,617
228
123
17%
$4,581
$3,967
15%
Adjusted Other Income, net
(unaudited)
Other income, net
Non-GAAP adjustments (f)
Adjusted other income, net
Adjusted Provision for Income Taxes
(unaudited)
Provision for income taxes
Non-GAAP adjustments (a) (b) (c) (d) (e) (f) (g)
Deal-related amortization
Adjusted provision for income taxes
Adjusted Effective Tax Rate
(unaudited)
Adjusted operating profit
Adjusted other income, net
Interest expense, net
Adjusted income before taxes on income
Adjusted provision for income taxes
Adjusted effective tax rate 1
2021
$(62)
—
$(62)
2021
$901
50
23
$973
2020 % Change
$(31)
(3)
$(34)
(96)%
(79)%
2020 % Change
$694
109
29
$831
30%
17%
2021
$4,581
(62)
119
4,523
2020 % Change
$3,967
(34)
141
3,861
15%
17%
973
831
21.5%
21.5%
1
The adjusted effective tax rate is calculated by dividing the adjusted provision for income taxes by the adjusted income before taxes on income.
14 S&P Global 2021 Annual Report
Adjusted Net Income attributable to SPGI and Adjusted Diluted EPS
(unaudited)
2021
2020
% Change
As reported
$3,024
$12.51
$2,339
$9.66
29%
29%
Net Income
attributable
to SPGI
Diluted
EPS
Net Income
attributable
to SPGI
Diluted
EPS
Net Income
attributable to
SPGI
Diluted
EPS
Non-GAAP adjustments (a) (b) (c) (d) (e) (f) (g)
Deal-related amortization
Adjusted
Note - Totals presented may not sum due to rounding.
215
73
0.89
0.30
397
94
1.64
0.39
$3,311
$13.70
$2,830
$11.69
17%
17%
Note - Adjusted operating profit margin for the Company was 55% for the year ended December 31, 2021. Adjusted operating profit margin is calculated as adjusted
operating profit divided by revenue.
(a) 2021 includes a gain on disposition of $6 million ($5 million after-tax), recovery of lease-related costs of $4 million ($3 million after-tax) and employee severance
charges of $3 million ($2 million after-tax). 2020 include a technology-related impairment charge of $11 million ($8 million after-tax), lease-related costs of $5
million ($4 million after-tax) and employee severance charges of $4 million ($3 million after-tax).
(b) 2021 includes a gain on disposition of $3 million ($3 million after-tax), employee severance charges of $3 million ($2 million after-tax), acquisition-related costs
of $2 million ($1 million after-tax), and lease-related costs of $1 million ($1 million after-tax). 2020 include employee severance charges of $27 million ($21 million
after-tax), lease-related costs of $3 million ($2 million after-tax) and a gain on dispositions of $12 million ($6 million after-tax).
(c) 2021 includes recovery of lease-related costs of $2 million ($1 million after-tax). 2020 includes employee severance charges of $11 million ($9 million after-tax)
and lease-related costs of $2 million ($1 million after-tax).
(d) 2021 includes recovery of lease-related costs of $1 million ($1 million after-tax). 2020 includes employee severance charges of $5 million ($4 million after-tax),
a lease impairment charge of $4 million ($3 million after-tax), a technology-related impairment of $2 million ($1 million after-tax), and lease-related costs of $1
million ($1 million after-tax).
(e)
2021 includes $249 million ($204 million after-tax) of IHS Markit merger costs, employee severance charges of $13 million ($10 million after-tax), lease-related
costs of $4 million ($2 million after-tax), acquisition-related costs of $2 million ($2 million after-tax), a lease impairment of $3 million ($2 million after-tax), a gain
on disposition of $2 million ($2 million after-tax) and Kensho retention related expense of $2 million ($2 million after-tax). 2020 includes Kensho retention related
expense of $12 million ($9 million after-tax), employee severance charges of $19 million ($15 million after-tax), lease impairments of $116 million ($89 million
after-tax), a gain on disposition of $4 million ($3 million after-tax) and IHS Markit merger costs of $24 million ($21 million after-tax).
(f)
2020 includes a pension related charge of $3 million ($2 million after-tax).
(g)
2021 includes $7 million of tax expense associated with the re-valuation of deferred tax liabilities related to a UK income tax rate change, $1 million of tax benefit
related to prior year divestitures and $7 million of tax benefit on a loss on the extinguishment of debt in the prior year. 2020 include $4 million of tax benefit
related to prior year divestitures and a loss on the extinguishment of debt of $279 million ($223 million after-tax).
S&P Global Organic Revenue
(unaudited)
Total revenue
Ratings acquisitions
Market Intelligence divestitures
Total adjusted revenue
2021
$8,297
(8)
—
$8,289
2020 % Change
$7,442
(2)
(7)
$7,433
11%
12%
S&P Global 2021 Annual Report 15
18
48
49
50
51
52
53
90
91
94
95
96
Management’s Discussion and Analysis
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Equity
Notes to the Consolidated Financial Statements
Report of Management
Report of Independent Registered Public Accounting Firm
Shareholder Information
Board of Directors
Executive Committee
16 S&P Global 2021 Annual Report
2021
Financial
Performance
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
– 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.
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. On March 11,
2021, S&P Global and IHS Markit shareholders voted to approve
the merger agreement. As of December 31, 2021, IHS Markit
had approximately 399.1 million shares outstanding. Subject
to certain closing conditions, the merger is expected to be
completed in the first quarter of 2022.
Shareholder Return
During the three years ended December 31, 2021, we have
returned approximately $4.3 billion to our shareholders
through a combination of share repurchases and our quarterly
dividends: we completed share repurchases of approximately
$2.4 billion and distributed regular quarterly dividends totaling
approximately $1.9 billion. Also, on January 26, 2022, the Board
of Directors approved a quarterly common stock dividend of
$0.77 per share. Following the expected closing of the merger
with IHS Markit, the Board of Directors will revisit the dividend
policy of the combined Company.
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, the “Company,” “we,” “us” or “our”) for the years
ended December 31, 2021 and 2020, respectively. The MD&A
provides information of factors that we believe are important
in understanding our results of operations and comparability
and certain other factors that may affect our future results.
The MD&A should be read in conjunction with the consolidated
financial statements and accompanying notes included in this
Annual Report on Form 10-K for the year ended December 31,
2021, which have been prepared in accordance with accounting
principles generally accepted in the U.S. (“U.S. GAAP”).
The MD&A includes the following sections:
– Overview
– Results of Operations
– Liquidity and Capital Resources
– Reconciliation of Non-GAAP Financial Information
– Critical Accounting Estimates
– Recent Accounting Standards
Certain of the statements below are forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. In addition, any projections of future results of
operations and cash flows are subject to substantial uncertainty.
See Forward-Looking Statements on page 46 of this report.
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.
18 S&P Global 2021 Annual Report
Key Results
(in millions)
Revenue
Operating profit 2
% Operating margin
Diluted earnings per share from net income
Year ended December 31,
% Change 1
2021
$8,297
$4,221
51%
$12.51
2020
$7,442
3,617
49%
$9.66
2019
’21 vs ’20
’20 vs ’19
$6,699
$3,226
48%
$8.60
11%
17%
29%
11%
12%
12%
1 % changes in the tables throughout the MD&A are calculated off of the actual number, not the rounded number presented.
2
2021 includes IHS Markit merger costs of $249 million, employee severance charges of $19 million, gain on dispositions of $11 million, a lease impairment of $3
million, Kensho retention related expense of $2 million, acquisition-related costs of $4 million and recovery of lease-related costs of $2 million. 2020 includes
lease impairments of $120 million, employee severance charges of $66 million, IHS Markit merger costs of $24 million, a gain on dispositions of $16 million, a
technology-related impairment charge of $12 million, lease-related costs of $11 million and Kensho retention related expense of $11 million. 2019 includes a gain
on the sale of RigData and SPIAS of $27 million and $22 million, respectively, employee severance charges of $25 million, Kensho retention related expense of $21
million, lease impairments of $11 million and acquisition-related costs of $4 million.
2021
Revenue increased 11% with an unfavorable impact of 1
percentage point from the net impact of recent acquisitions
and dispositions, driven by increases at all of our reportable
segments. Revenue growth at Ratings was driven by an increase
in both transaction revenue and non-transaction revenue.
Transaction revenue increased due to higher bank loan ratings
revenue and structured finance revenue. Non-transaction
revenue increased primarily due to an increase in surveillance,
entity credit ratings, an increase in revenue at our CRISIL
subsidiary and higher Ratings Evaluation Service (“RES”)
revenue. Revenue growth at Market Intelligence was driven by
subscription revenue growth in Market Intelligence Desktop
products, Credit Risk Solutions and Data Management Solutions.
Revenue growth at Indices was due to higher average levels of
assets under management for exchange traded funds (“ETFs”)
and mutual funds and higher data subscription revenue, partially
offset by lower exchange-traded derivative revenue. The revenue
increase at Platts was primarily due to continued demand for
market data and market insights products. Foreign exchange
rates had a favorable impact of less than 1 percentage point.
Operating profit increased 17%, with a favorable impact from
foreign exchange rates of 1 percentage point. Excluding the
unfavorable impact of IHS Markit merger costs in 2021 of 31
percentage points, partially offset by higher lease impairment
charges in 2020 of 16 percentage points, higher employee
severance charges in 2020 of 7 percentage points, higher
amortization of intangibles from acquisitions in 2020 of 4
percentage points and higher technology-related impairment
charges in 2020 of 2 percentage points, operating profit
increased 15%. The increase was primarily due to revenue
growth at all of our reportable segments combined with a
decrease in occupancy costs, partially offset by higher incentive
costs and an increase in compensation costs driven by additional
headcount and annual merit increases.
2020
Revenue increased 11%, with a favorable benefit of 1
percentage point from the net impact of recent acquisitions
and dispositions, driven by increases at all of our reportable
segments. Revenue growth at Ratings was mainly driven by
higher corporate bond ratings revenue, partially offset by a
decrease in bank loan ratings revenue and structured finance
transaction revenues. Revenue growth at Market Intelligence
was driven by subscription revenue growth in Market Intelligence
Desktop products, Credit Risk Solutions and Data Management
Solutions. Revenue growth at Indices was due to higher assets
under management for ETFs and mutual funds, an increase
in exchange-traded derivatives revenue and higher data
subscription revenue. The revenue increase at Platts was
primarily due to continued demand for market data, price
assessment and analytics products. Foreign exchange rates had
a favorable impact of less than 1 percentage point.
Operating profit increased 12%, with a favorable impact from
foreign exchange rates of 1 percentage point. Excluding the
impact of a higher lease impairment charges in 2020 of 3
percentage points, higher employee severance charges in 2020
of 1 percentage point, a higher gain on dispositions in 2019 of
1 percentage point primarily related to the sale of RigData and
Standard & Poor’s Investment Advisory Services LLC (“SPIAS”)
and IHS Markit merger costs in 2020 of 1 percentage point,
operating profit increased 18%. The increase was primarily due
to revenue growth at all of our reportable segments combined
with a decrease in travel and entertainment expenses from
non-essential travel restrictions in response to the 2019 novel
coronavirus (“COVID-19”), partially offset by an increase in
incentive costs and higher compensation costs driven by annual
merit increases and additional headcount.
We are continuing to closely monitor the impact of the outbreak
of COVID-19 on all aspects of our business as the pandemic
and associated macroeconomic impacts continue to evolve.
S&P Global 2021 Annual Report 19
While COVID-19 did not have a material adverse effect on our
reported results for the years ended December 31, 2021 and
2020, we are unable to predict the ultimate impact that it may
have on our business, future results of operations, financial
position or cash flows.
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
2022, we will strive to deliver on our strategic priorities in the
following key areas:
Finance
– Meeting or exceeding year 1 cost and revenue synergy targets
from our merger commitments as well as our organic revenue
growth and EBITA margin targets;
– Continuing to fund key growth areas – Environmental, Social
and Governance (“ESG”), Energy Transition, China, Small
and Medium-sized Enterprise/Private Markets, Credit and
Risk Management, Distribution and Multi-asset, Thematic
and Factor Indices – and support with disciplined organic,
inorganic and partnership strategies; and
– Demonstrating active leadership in ESG disclosure
through advocacy, best-in-class SPGI disclosure and
meaningful progress against our stated environmental
sustainability targets.
Customer
– Accelerating Sustainable1’s growth and market position
with a specific focus on Energy transition, Climate and on
improving market share in ESG Data/Scores and ESG Indices;
– Continuing to grow and defend the core and delivering our
key initiatives, while leveraging the combined company’s
extended capabilities; delivering our products across multiple
channels, e.g., feeds and Application Programming Interfaces,
aligned to our customer’s needs;
– Responding to evolving customer needs and driving
innovation leveraging our data, technology and deep
industry expertise by developing a digital ecosystem
strategy with collaboration across customers, vendors and
technology partners;
– Differentiating through innovative solutions including
data science, Artificial Intelligence, Machine Learning
and next generation tools to unlock the power of our data
and insights; and
– Growing S&P Global’s brand through an integrated marketing
and communications strategy while protecting our reputation.
Operations
– Delivering on the key integration projects that help transform
the company and delivering on merger commitments;
– Enhancing the tools and processes our people use to better
service our customers, expand intelligence and analytics
capabilities, support data-driven decisions and improve end-
user productivity;
– Reimagining and implementing the future hybrid office model
by standardizing our technology to reshape where we work,
how we work and how we serve;
– Advancing our technical capabilities, data transformation and
building the next generation of products and services using
the combined entity’s data, technology & expertise; and
– Maintaining our commitment to risk management, control
and compliance and strengthening engagement and
partnership across the company.
People
– Rolling out and embedding our new purpose and values to
unify and combine S&P Global;
– Encouraging career mobility and career development through
career coaching and Thrive;
– Improving diverse representation through hiring,
advancement and retention, while continuing to
raise awareness through Diversity, Equity, and
Inclusion education; and
– Attracting and retaining our people through recognition
programs, learning opportunities and fair compensation.
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 Annual Report on Form 10-K.
Further projections and discussion on our 2022 outlook for our
segments can be found within “ – Results of Operations”.
20 S&P Global 2021 Annual Report
Results of Operations
CONSOLIDATED REVIEW
Year ended December 31,
% Change
2019
’21 vs ’20
’20 vs ’19
(in millions)
Revenue
Expenses:
Operating-related expenses
Selling and general expenses
Depreciation and amortization
Total expenses
Gain on dispositions
Operating profit
Other (income) expense, net
Interest expense, net
Loss on extinguishment of debt
Provision for taxes on income
Net income
Less: net income attributable to
noncontrolling interests
2021
$8,297
2020
$7,442
2,195
1,714
178
4,087
(11)
4,221
(62)
119
—
901
3,263
(239)
2,094
1,541
206
3,841
(16)
3,617
(31)
141
279
694
2,534
(195)
Net income attributable to S&P Global Inc.
$3,024
$2,339
$2,123
N/M- Represents a change equal to or in excess of 100% or not meaningful
Revenue
(in millions)
Subscription revenue
Non-subscription / transaction revenue
Non-transaction revenue
Asset-linked fees
Sales usage-based royalties
% of total revenue:
Subscription revenue
Non-subscription / transaction revenue
Non-transaction revenue
Asset-linked fees
Sales usage-based royalties
U.S. revenue
International revenue:
European region
Asia
Rest of the world
Total international revenue
% of total revenue:
U.S. revenue
International revenue
2021
$3,253
2,322
1,698
800
224
39%
28%
20%
10%
3%
2020
$3,036
2,031
1,500
648
227
41%
27%
20%
9%
3%
$5,012
$4,504
$3,976
1,995
874
416
$3,285
60%
40%
1,769
782
387
$2,938
61%
39%
1,659
710
354
$2,723
59%
41%
$6,699
1,976
1,342
204
3,522
(49)
3,226
98
141
57
627
2,303
(180)
$2,843
1,625
1,408
623
200
43%
24%
21%
9%
3%
11%
5%
11%
(13)%
6%
(30)%
17%
(96)%
(16)%
N/M
30%
29%
(22)%
29%
11%
6%
15%
1%
9%
(67)%
12%
N/M
—%
N/M
11%
10%
(9)%
10%
7%
14%
13%
23%
(1)%
11%
13%
12%
7%
12%
7%
25%
7%
4%
14%
13%
7%
10%
9%
8%
Year ended December 31,
% Change
2019
’21 vs ’20
’20 vs ’19
S&P Global 2021 Annual Report 21
2021 Revenue by Type
2021 Revenue by Geographic Area
Non-subscription /
Transaction
28%
Non-transaction
20%
Asset-linked fees
10%
Sales usage-based
royalties
3%
Rest of the World
5%
Asia
11%
Subscription
39%
European
Region
24%
U.S.
60%
2021
Revenue increased 11% as compared to 2020. Subscription
revenue increased primarily from growth in Market Intelligence’s
average contract values and continued demand for Platts
proprietary content. Higher data subscription revenue at
Indices also contributed to subscription revenue growth.
Non-subscription / transaction revenue increased due to an
increase in bank loan ratings revenue and higher structured
finance revenue at Ratings. Non-transaction revenue increased
primarily due to an increase in surveillance, entity credit ratings,
an increase in revenue at our CRISIL subsidiary and higher
RES revenue at Ratings. Asset linked fees increased reflecting
higher average levels of assets under management for ETFs
and mutual funds at Indices. The decrease in sales usage-
based royalties was primarily driven by lower exchange-traded
derivative revenue at Indices. See “Segment Review” below for
further information.
2020
Revenue increased 11% as compared to 2019. Subscription
revenue increased primarily from growth in Market Intelligence’s
average contract values and continued demand for Platts
proprietary content. Higher data subscription revenue at
Indices also contributed to subscription revenue growth. Non-
subscription / transaction revenue increased due to an increase
in corporate bond ratings revenue, partially offset by a decrease
in bank loan ratings revenue and structured finance transaction
revenues at Ratings. Non-transaction revenue increased
primarily due to an increase in surveillance revenue, royalty
revenue, and higher RES activity. Asset linked fees increased
due to the impact of higher average levels of assets under
management for ETFs and mutual funds at Indices. The increase
in sales-usage based royalties was primarily driven by higher
exchange-traded derivative volumes at Indices. See “Segment
Review” below for further information.
The favorable impact of foreign exchange rates increased
revenue by less than 1 percentage point. This impact refers to
constant currency comparisons estimated by recalculating
current year results of foreign operations using the average
exchange rate from the prior year.
The favorable impact of foreign exchange rates increased
revenue by less than 1 percentage point. This impact refers to
constant currency comparisons estimated by recalculating
current year results of foreign operations using the average
exchange rate from the prior year.
22 S&P Global 2021 Annual Report
Total Expenses
The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the years
ended December 31, 2021 and 2020:
(in millions)
2021
2020
% Change
Ratings 1
Market Intelligence 2
Platts 3
Indices 4
Intersegment eliminations 5
Total segments
Corporate Unallocated expense 6
Operating-
related
expenses
Selling and
general
expenses
Operating-
related
expenses
Selling and
general
expenses
Operating-
related
expenses
Selling and
general
expenses
$995
922
214
173
(146)
2,158
37
$2,195
$433
534
207
168
—
1,342
372
$1,714
$950
905
196
146
(137)
2,060
34
$393
523
207
168
—
1,291
250
$2,094
$1,541
5%
2%
9%
18%
(6)%
5%
7%
5%
10%
2%
—%
—%
N/M
4%
49%
11%
N/M - Represents a change equal to or in excess of 100% or not meaningful
1
2
3
4
In 2021, selling and general expenses include employee severance charges of $3 million and recovery of lease-related costs of $4 million. In 2020, selling and
general expenses include a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million.
In 2021, selling and general expenses include employee severance charges of $3 million, acquisition-related costs of $2 million and lease-related costs of $1
million. In 2020, selling and general expenses include employee severance charges of $27 million and lease-related costs of $3 million.
In 2021, selling and general expenses include recovery of lease-related costs of $2 million. In 2020, selling and general expenses include employee severance
charges of $11 million and lease-related costs of $2 million.
In 2021, selling and general expenses include recovery of lease-related costs of $1 million. In 2020, selling and general expenses include employee severance
charges of $5 million, a lease impairment charge of $4 million, a technology-related impairment charge of $2 million and lease-related costs of $1 million.
5
Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.
6
In 2021, selling and general expenses include IHS Markit merger costs of $249 million, employee severance charges of $13 million, lease-related costs of $4
million, a lease impairment of $3 million, Kensho retention related expenses of $2 million and acquisition-related costs of $2 million. In 2020, selling and general
expenses include lease impairments of $116 million, IHS Markit merger costs of $24 million, employee severance charges of $19 million, Kensho retention related
expense of $12 million and a gain related to an acquisition of $1 million.
Operating-Related Expenses
Operating-related expenses increased by 5% as compared
to 2020. Increases at Ratings, Indices and Platts were
primarily driven by higher incentive costs and an increase in
compensation costs due to additional headcount and annual
merit increases. The increase at Market Intelligence was
primarily due to an increase in intersegment royalties tied to
annualized contract value growth and higher incentive costs.
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 increased 11%. Excluding the
unfavorable impact of IHS Markit merger costs in 2021 of 2
percentage points, offset by higher lease impairments in 2020
of 1 percentage point, higher employee severance charges in
2020 of less than 1 percentage point and higher lease-related
costs in 2020 of less than 1 percentage point, selling and general
expenses increased 11%. Increases at Ratings, Platts and
Indices were primarily driven by higher incentive costs and an
increase in compensation costs due to additional headcount
and annual merit increases. The increase at Market Intelligence
was primarily due to an increase in technology costs and higher
incentive costs, partially offset by a decrease in compensation
costs due to reduced headcount. These increases were partially
offset by lower occupancy costs and a decrease in legal related
costs at Indices.
Depreciation and Amortization
Depreciation and amortization decreased $28 million, or 13%,
compared to 2020 primarily due to a decrease in intangible asset
amortization related to assets that became fully amortized,
partially offset by an increase in amortization expense driven by
the acquisitions of RobecoSAM and Greenwich Associates LLC in
January 2020 and February 2020, respectively.
S&P Global 2021 Annual Report 23
The following tables provide an analysis by segment of our operating-related expenses and selling and general expenses for the years
ended December 31, 2020 and 2019:
(in millions)
2020
2019
% Change
Ratings 1
Market Intelligence 2
Platts 3
Indices 4
Intersegment eliminations 5
Total segments
Corporate Unallocated expense 6
Operating-
related
expenses
Selling and
general
expenses
Operating-
related
expenses
Selling and
general
expenses
Operating-
related
expenses
Selling and
general
expenses
$950
905
196
146
(137)
2,060
34
$2,094
$393
523
207
168
—
1,291
250
$1,541
$897
836
197
138
(128)
1,940
36
$392
480
196
139
—
1,207
135
$1,976
$1,342
6%
8%
(1)%
6%
(7)%
6%
6%
6%
—%
9%
6%
20%
N/M
7%
86%
15%
N/M - Represents a change equal to or in excess of 100% or not meaningful
1
2
3
4
In 2020, selling and general expenses include a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance
charges of $4 million. In 2019, selling and general expenses include employee severance charges of $11 million.
In 2020, selling and general expenses include employee severance charges of $27 million and lease-related costs of $3 million. In 2019, selling and general
expenses include employee severance charges of $6 million and acquisition-related costs of $4 million.
In 2020, selling and general expenses include employee severance charges of $11 million and lease-related costs of $2 million. In 2019, selling and general
expenses include employee severance charges of $1 million.
In 2020, selling and general expenses include employee severance charges of $5 million, a lease impairment charge of $4 million, a technology-related
impairment charge of $2 million and lease-related costs of $1 million.
5
Intersegment eliminations primarily relate to a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.
6
In 2020, selling and general expenses include lease impairments of $116 million, IHS Markit merger costs of $24 million, employee severance charges of $19
million, Kensho retention related expense of $12 million and a gain related to an acquisition of $1 million. In 2019, selling and general expenses include Kensho
retention related expense of $21 million, lease impairments of $11 million and employee severance charges of $7 million.
Operating-Related Expenses
Operating-related expenses increased as compared to 2019
driven by increases at Market Intelligence and Ratings. The
increase at Market Intelligence was primarily due to higher
compensation costs driven by investments in growth initiatives
and the acquisition of 451 Research, LLC, and higher incentive
costs. The increase at Ratings was primarily driven by higher
incentive costs. These increases were partially offset by a
decrease in travel and entertainment expenses from non-
essential travel restrictions in response to 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 increased 15%. Excluding
the impact of higher lease impairment charges in 2020 of 9
percentage points, higher employee severance charges in 2020 of
3 percentage costs, lease-related costs in 2020 of 1 percentage
point, IHS Markit merger costs in 2020 of 1 percentage point
and a technology-related impairment charge of 1 percentage
point, partially offset by higher Kensho related retention expense
in 2019 of 1 percentage point, selling and general expenses
increased 1%. This increase was primarily driven by an increase
at Market Intelligence due to higher compensation costs driven
by investments in growth initiatives and the acquisition of 451
Research, LLC, and higher incentive costs, and an increase
at Indices driven by an increase in legal related costs. These
increases were partially offset by a decrease in travel and
entertainment expenses from non-essential travel restrictions in
response to COVID-19 and lower rental expense from a reduction
in the Company’s real estate footprint.
Depreciation and Amortization
Depreciation and amortization increased $2 million, or 1%,
compared to 2019 due to an increase in depreciation expense
related to assets that began being depreciated in the second
half of 2019 and an increase in amortization expense driven
by the acquisitions of RobecoSAM, Greenwich Associates LLC
and 451 Research, LLC in January 2020, February 2020 and
December 2019, respectively.
24 S&P Global 2021 Annual Report
(in millions)
Market Intelligence 2
Ratings 1
Platts 3
Indices 4
Intersegment eliminations 5
Total segments
Corporate Unallocated expense 6
Operating-
Selling and
Operating-
Selling and
Operating-
Selling and
related
expenses
general
expenses
related
expenses
general
expenses
related
expenses
general
expenses
$950
905
196
146
(137)
2,060
34
$2,094
$393
523
207
168
—
1,291
250
$1,541
$897
836
197
138
(128)
1,940
36
$392
480
196
139
—
1,207
135
$1,976
$1,342
6%
8%
(1)%
6%
(7)%
6%
6%
6%
—%
9%
6%
20%
N/M
7%
86%
15%
Gain on Dispositions
During the year ended December 31, 2021, we completed the
following dispositions that resulted in a pre-tax gain of $11
million, which was included in Gain on dispositions in the
consolidated statements of income:
– During the year ended December 31, 2021, we recorded
a pre-tax gain of $8 million ($6 million after-tax) in Gain
on dispositions in the consolidated statements of income
related to the sale of office facilities in India.
– During the year ended December 31, 2021, we recorded a
pre-tax gain of $3 million ($3 million after-tax) in Gain on
dispositions in the consolidated statements of income related
to the sale of Standard & Poor’s Investment Advisory Services
LLC (“SPIAS”), a business within our Market Intelligence
segment, that occurred in July of 2019.
During the year ended December 31, 2020, we completed the
following dispositions that resulted in a pre-tax gain of $16
million, which was included in Gain on dispositions in the
consolidated statements of income:
– In January of 2020, Market Intelligence entered into
a strategic alliance to transition S&P Global Market
Intelligence’s Investor Relations (“IR”) webhosting business
to Q4 Inc. (“Q4”). This alliance integrated Market Intelligence’s
proprietary data into Q4’s portfolio of solutions, enabling
further opportunities for commercial collaboration. In
connection with transitioning its IR webhosting business to
Q4, Market Intelligence received a minority investment in Q4.
During the year ended December 31, 2020, we recorded a pre-
tax gain of $11 million ($6 million after-tax), respectively, in
Gain on dispositions in the consolidated statement of income
related to the sale of IR.
– In September of 2020, we sold our facility at East Windsor,
New Jersey. During the year ended December 31, 2020, we
recorded a pre-tax gain of $4 million ($3 million after-tax)
in Gain on dispositions in the consolidated statements of
income related to the sale of East Windsor.
– During the year ended December 31, 2020, we recorded
a pre-tax gain of $1 million ($1 million after-tax) in Gain
on dispositions in the consolidated statements of income
related to the sale of SPIAS, a business within our Market
Intelligence segment, in July of 2019.
During the year ended December 31, 2019, we completed the
following dispositions that resulted in a pre-tax gain of $49
million, which was included in Gain on dispositions in the
consolidated statement of income:
– In July of 2019, we completed the sale of RigData, a business
within our Platts segment, to Drilling Info, Inc. RigData is a
provider of daily information on rig activity for the natural
gas and oil markets across North America. During the year
ended December 31, 2019, we recorded a pre-tax gain of
$27 million ($26 million after-tax) in Gain on dispositions
in the consolidated statement of income related to the
sale of RigData.
– In March of 2019, we entered into an agreement to sell
SPIAS to Goldman Sachs Asset Management (“GSAM”).
SPIAS provides non-discretionary investment advice across
institutional sub-advisory and intermediary distribution
channels globally. On July 1, 2019, we completed the sale of
SPIAS to GSAM. During the year ended December 31, 2019,
we recorded a pre-tax gain of $22 million ($12 million after-
tax) in Gain on dispositions in the consolidated statement of
income related to the sale of SPIAS.
S&P Global 2021 Annual Report 25
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
expense. 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.
The table below reconciles segment operating profit to total
operating profit:
(in millions)
Ratings 1
Market Intelligence 2
Platts 3
Indices 4
Total segment operating profit
Corporate Unallocated expense 5
Total operating profit
Year ended December 31,
% Change
2021
$2,629
703
517
798
4,647
(426)
$4,221
2020
$2,223
589
458
666
3,936
(319)
$3,617
2019
$1,783
566
457
632
3,438
(212)
$3,226
’21 vs ’20
’20 vs ’19
18%
19%
13%
20%
18%
(33)%
17%
25%
4%
—%
5%
14%
(50)%
12%
1
2
3
4
5
2021 includes a gain on disposition of $6 million, employee severance charges of $3 million and recovery of lease-related costs of $4 million. 2020 includes a
technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million. 2019 includes employee
severance charges of $11 million. 2021, 2020 and 2019 include amortization of intangibles from acquisitions of $10 million, $7 million and $2 million, respectively.
2021 includes acquisition-related costs of $2 million. 2021 and 2020 include employee severance charges of $3 million and $27 million, respectively, a gain on
dispositions of $3 million and $12 million, respectively, and lease-related costs of $1 million and $3 million, respectively. 2019 includes a gain on the sale of SPIAS
of $22 million, employee severance charges of $6 million and acquisition-related costs of $4 million. 2021, 2020 and 2019 includes amortization of intangibles
from acquisitions of $65 million, $76 million and $75 million, respectively.
2021 includes recovery of lease-related costs of $2 million. 2020 includes employee severance charges of $11 million and lease-related costs of $2 million. 2019
includes a gain on the sale of RigData of $27 million and employee severance charges of $1 million. 2021, 2020 and 2019 includes amortization of intangibles from
acquisitions of $8 million, $9 million, and $12 million.
2021 includes recovery of lease-related costs of $1 million. 2020 includes employee severance charges of $5 million, a lease impairment charge of $4 million,
a technology-related impairment charge of $2 million and lease-related costs of $1 million. 2021, 2020 and 2019 includes amortization of intangibles from
acquisitions of $6 million.
2021 and 2020 includes IHS Markit merger costs of $249 million and $24 million, respectively. 2021, 2020, and 2019 include employee severance charges of $13
million, $19 million and $7 million, respectively, lease impairments of $3 million, $116 million and $11 million, respectively, and Kensho retention related expenses
of $2 million, $12 million, and $21 million, respectively. 2021 includes lease-related costs of $4 million, acquisition-related costs of $2 million and a gain on
disposition of $2 million. 2020 includes a gain related to an acquisition of $1 million. Additionally, 2021, 2020 and 2019 include amortization of intangibles from
acquisitions of $7 million, $26 million, and $28 million.
2021
Segment Operating Profit
Increased $711 million or 18% as compared to 2020. Excluding
the impact of higher employee severance charges in 2020
of 2 percentage points and higher lease-related costs of 1
percentage point in 2020, segment operating profit increased
15%. The increase was primarily due to an increase in revenue
at all of our reportable segments combined with a decrease in
occupancy costs, partially offset by higher incentive costs and an
increase in compensation costs driven by additional headcount
and annual merit increases. 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 33% compared to 2020.
Excluding the unfavorable impact of IHS Markit merger costs
in 2021 of 45 percentage points, higher lease-related costs
in 2021 of 1 percentage point and higher acquisition-related
costs in 2021 of 1 percentage point, partially offset by higher
lease impairments in 2020 of 23 percentage points, higher
amortization of intangibles in 2020 of 4 percentage points, higher
Kensho retention related expense in 2020 of 2 percentage points
and higher employee severance charges in 2020 of 1 percentage
point, Corporate Unallocated expense increased 16% primarily
due to higher incentive costs.
Foreign exchange rates had a favorable impact on operating
profit of 1 percentage point. This impact refers to constant
26 S&P Global 2021 Annual Report
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.
2020
Segment Operating Profit
Increased $498 million, or 14% as compared to 2019. Excluding
the impact of higher employee severance charges in 2020 of
1 percentage point, a higher gain on dispositions in 2019 of 1
percentage point primarily related to the sale of RigData and
SPIAS, a technology-related impairment charge in 2020 of less
than 1 percentage point and lease-related costs in 2020 of less
than 1 percentage point, segment operating profit increased
17%. The increase was primarily due to an increase in revenue
at all of our reportable segments combined with a decrease in
travel and entertainment expenses from non-essential travel
restrictions in response to COVID-19, partially offset by an
increase in incentive costs and higher compensation costs driven
by annual merit increases and additional headcount.
Corporate Unallocated Expense
Corporate Unallocated expense includes costs for corporate
center functions, select initiatives and unoccupied office
space and Kensho, included in selling and general expenses.
Corporate Unallocated expense increased by $107 million
or 50% as compared to 2019. Excluding the impact of higher
lease impairment charges in 2020 of 53 percentage points, IHS
Markit merger costs in 2020 of 12 percentage points and higher
employee severance charges in 2020 of 6 percentage points,
partially offset by lower Kensho retention related expense
in 2020 of 6 percentage points and a gain on disposition in
2020 of 2 percentage points, Corporate Unallocated expense
decreased 12% primarily driven by lower rental expense from
a reduction in the Company’s real estate footprint, a decrease
in travel and entertainment expenses and lower professional
fees, partially offset by contributions to the S&P Global
Foundation made in 2020.
Foreign exchange rates had a favorable impact on operating
profit of 1 percentage point. The foreign exchange rate impact
refers to constant currency comparisons and the remeasurement
of monetary assets and liabilities. Constant currency impacts
are estimated by recalculating 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 monetary assets and liabilities denominated in currencies
other than the individual business’ 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 income, net for 2021 and 2020 was $62 million and $31
million, respectively, and other expense, net for 2019 was $98
million. During the year ended December 31, 2020, lump sum
withdrawals exceeded the combined total anticipated annual
service and interest cost of our U.K. pension plan, triggering
the recognition of a non-cash pre-tax settlement charge of $3
million. During the year ended December 31, 2019, the Company
purchased a group annuity contract under which an insurance
company assumed the Company’s obligation 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, reflecting the accelerated recognition of a portion
of unamortized actuarial losses in the plan. Excluding these
charges, other income, net was $62 million, $34 million and
$14 million for 2021, 2020 and 2019, respectively. The increase
in other (income) expense, net in 2021 compared to 2020 was
primarily due to a higher gain on investments in 2021 and the
increase in 2020 compared to 2019 was primarily due to a higher
loss on investments in 2019.
Interest Expense, net
Net interest expense for 2021 decreased $22 million or 16%
compared to 2020, primarily due to lower interest expense
resulting from the refinancing of a series of our senior notes
in August of 2020. Net interest expense for 2020 remained
relatively unchanged compared to 2019, increasing less than 1%.
Loss on Extinguishment of Debt
The year ended December 31, 2020 includes $279 million related
to the redemption fee on the early retirement of our 4.4% senior
notes due in 2026 and a portion of the 6.55% senior notes due
in 2037 and 4.5% senior notes due in 2048 in the third quarter
of 2020. The year ended December 31, 2019 includes $57 million
of costs associated with the early repayment of our 3.3% Senior
Notes and a portion of our 6.55% Senior Notes.
Provision for Income Taxes
Our effective tax rate was 21.6%, 21.5% and 21.4% for 2021,
2020 and 2019, respectively. The increase in 2021 was primarily
due to a change in the mix of income by jurisdiction. The increase
in 2020 was primarily due to a decrease in the recognition of
excess tax benefits associated with share-based payments in
the statement of income.
S&P Global 2021 Annual Report 27
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.
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 for 2021, 2020 and 2019 was $136
million, $128 million and $118 million, respectively.
The following table provides revenue and segment operating profit information for the years ended December 31:
(in millions)
Revenue
Transaction revenue 1
Non-transaction revenue 1
% of total revenue:
Transaction revenue
Non-transaction revenue
U.S. revenue
International revenue
% of total revenue:
U.S. revenue
International revenue
Operating profit 2
% Operating margin
Year ended December 31,
% Change
2021
$4,097
$2,253
$1,844
55%
45%
$2,398
$1,699
59%
41%
$2,629
64%
2020
$3,606
$1,969
$1,637
55%
45%
$2,110
$1,496
59%
41%
$2,223
62%
2019
$3,106
$1,570
$1,536
51%
49%
$1,745
$1,361
56%
44%
$1,783
57%
’21 vs ’20
’20 vs ’19
14%
14%
13%
14%
14%
16%
25%
7%
21%
10%
18%
25%
1
2
In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction
revenue to non-transaction revenue of $8 million and $7 million for the years ended December 31, 2020 and 2019, respectively.
2021 includes a gain on disposition of $6 million, recovery of lease-related costs of $4 million, and employee severance charges of $3 million. 2020 includes
a technology-related impairment charge of $11 million, lease-related costs of $5 million and employee severance charges of $4 million. 2021, 2020 and 2019
include amortization of intangibles from acquisitions of $10 million, $7 million and $2 million, respectively.
2021
Revenue increased 14%, with a favorable impact from foreign
exchange rates of 1 percentage point. Transaction revenue
increased due to higher bank loan ratings revenue driven by
increased M&A activity and an increase in structured finance
revenue primarily driven by increased issuance of U.S. CLOs.
Non-transaction revenue increased primarily due to an increase
in surveillance, entity credit ratings, an increase in revenue at our
CRISIL subsidiary and higher RES revenue driven by increased
M&A activity. Transaction and non-transaction revenue
also benefited from improved contract terms across
product categories.
Operating profit increased 18%, with a favorable impact from
foreign exchange rates of 1 percentage point. The impact of
revenue growth and lower occupancy costs was partially offset
by an increase in incentive costs and higher compensation costs
due to annual merit increases, additional headcount and human
capital investments, as well as the ramp up of technology and
strategic initiatives.
28 S&P Global 2021 Annual Report
2020
Revenue increased 16% including a favorable benefit of 1
percentage point from the impact of recent acquisitions.
Transaction revenue grew due to an increase in corporate
bond ratings revenue primarily driven by higher corporate
bond issuance in the U.S. mainly resulting from borrowers’
need for increased liquidity in light of the pandemic-related
economic downturn, historically low borrowing costs, and
central bank lending actions initially announced at the end of
the first quarter of 2020, partially offset by a decrease in bank
loan ratings revenue and structured finance revenues. Non-
transaction revenue increased primarily due to an increase in
surveillance revenue, royalty revenue, and higher RES activity
driven by increased M&A activity in the fourth quarter of 2020.
Transaction and non-transaction revenue also benefited from
improved contract terms across product categories. Foreign
exchange rates had a favorable impact of less than 1 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 under Item 8, Consolidated
Financial Statements and Supplementary Data, in this Annual
Report on Form 10-K.
Operating profit increased 25%, with a 2 percentage point
favorable impact from foreign exchange rates. Excluding the
impact of a technology-related impairment charge in 2020 of less
than 1 percentage point, lease-related costs in 2020 of less than
1 percentage point and higher amortization of intangible assets
in 2020 of less than 1 percentage point, partially offset by higher
employee severance charges in 2019 of less than 1 percentage
point, operating profit increased 25%. The impact of revenue
growth was partially offset by an increase in incentive costs and
higher compensation costs due to annual merit increases and
additional headcount, partially offset by a decrease in travel and
entertainment expenses from non-essential travel restrictions in
response to COVID-19.
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.
Corporate Bond Issuance *
High-yield issuance
Investment-grade issuance
Total issuance
2021 Compared to 2020
U.S.
12%
(23)%
(16)%
Europe
Global
37%
(1)%
4%
18%
(2)%
—%
*
Includes Industrials and Financial Services.
– High-yield issuance was up in both the U.S. and Europe as
issuers were taking advantage of historically low borrowing
costs. Investment-grade issuance was down in both the U.S.
and Europe reflecting comparisons against a strong prior
year period as a number of large financing transactions
contributed to the increase in investment-grade issuance in
the U.S. and Europe in 2020.
2021 Compared to 2020
Structured Finance
U.S.
Europe
Global
Asset-backed securities (“ABS”)
43%
22%
43%
Structured credit (primarily
CLOs)
Commercial mortgage-backed
securities (“CMBS”)
Residential mortgage-backed
securities (“RMBS”)
Covered bonds
Total issuance
** Represents no activity in 2021 and 2020.
241%
286%
250%
90%
211%
94%
99%
**
111%
43%
15%
62%
64%
22%
85%
– ABS issuance increased in the U.S. and Europe primarily
driven by growth across all sub asset classes led by Credit
Cards, Student Loans, Autos and Esoterics.
– CLO issuance increased in the U.S. and European structured
credit markets driven by growth in leveraged loans due
to strong M&A activity and investor demand for high risk
adjusted yield.
– CMBS issuance was up in the U.S. reflecting increased
market volume in large single-asset single-borrower (SASB)
as market conditions improved from early in the pandemic.
CMBS issuance in Europe was also up, although from a
low 2020 base.
– RMBS issuance was up in the U.S. and Europe reflecting
increased market volume due to an improved housing market.
– Covered bond (debt securities backed by mortgages or other
high-quality assets that remain on the issuer’s balance sheet)
issuance in Europe increased in 2021 driven by improved
market conditions.
S&P Global 2021 Annual Report 29
Industry Highlights and Outlook
Revenue increased in 2021 primarily driven by an increase
in bank loan ratings revenue, structured finance transaction
revenues and non-transaction revenue. In 2021, Ratings
continued to focus on developing key product offerings in ESG
and launched new Social and Sustainability products. ESG
initiatives and international expansion in China continue to be
areas of focus for Ratings.
CRISIL revenue increased across all segments, primarily driven
by Global Benchmarking Analytics and Global Research & Risk
solutions from the recovery of the banking sector and increased
focus on sustainability, credit risk and model validation projects.
This growth is expected to extend into 2022 led by the financial
research and research & analytics businesses.
Continued focus on maintaining an effective analytical workforce
with targeted hiring and a competitive compensation structure.
Technology investments from the expansion and improvements
in the cloud infrastructure, as well as enhancements to the
delivery and value add of the Ratings content to customers.
Legal and Regulatory Environment
General
Ratings and many of the securities that it rates are subject to
extensive regulation in both the U.S. and in other countries,
and therefore existing and proposed laws and regulations can
impact the Company’s operations and the markets in which it
operates. Additional laws and regulations have been adopted
but not yet implemented or have been proposed or are being
considered. In addition, in certain countries, governments
may provide financial or other support to locally based rating
agencies. For example, governments may from time to time
establish official rating agencies or credit ratings criteria or
procedures for evaluating local issuers. We have reviewed the
new laws, regulations and rules which have been adopted and
we have implemented, or are planning to implement, changes
as required. We do not believe that such new laws, regulations
or rules will have a material adverse effect on our financial
condition or results of operations. Other laws, regulations and
rules relating to credit rating agencies are being considered by
local, national, foreign and multinational bodies and are likely
to continue to be considered in the future, including provisions
seeking to reduce regulatory and investor reliance on credit
ratings, remuneration and rotation of credit rating agencies,
and liability standards applicable to credit rating agencies. The
impact on us of the adoption of any such laws, regulations or
rules remains uncertain, but could increase the costs and legal
risks relating to Ratings’ rating activities, or adversely affect our
ability to compete and/or our remuneration, or result in changes
in the demand for credit ratings.
been brought by purchasers of rated securities. In addition,
various government and self-regulatory agencies frequently
make inquiries and conduct investigations into Ratings’
compliance with applicable laws and regulations. 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.
U.S.
The businesses conducted by our Ratings segment are, in certain
cases, regulated under the Credit Rating Agency Reform Act of
2006 (the “Reform Act”), the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd Frank Act”), the Securities
Exchange Act of 1934 (the “Exchange Act”) and/or the laws of
the states or other jurisdictions in which they conduct business.
The financial services industry is subject to the potential for
increased regulation in the U.S.
S&P Global Ratings is a credit rating agency that is registered
with the SEC as a Nationally Recognized Statistical Rating
Organization (“NRSRO”). The SEC first began informally
designating NRSROs in 1975 for use of their credit ratings in
the determination of capital charges for registered brokers and
dealers under the SEC’s Net Capital Rule. The Reform Act created
a new SEC registration system for rating agencies that choose
to register as NRSROs. Under the Reform Act, the SEC is given
authority and oversight of NRSROs and can censure NRSROs,
revoke their registration or limit or suspend their registration
in certain cases. The rules implemented by the SEC pursuant
to the Reform Act, the Dodd Frank Act and the Exchange Act
address, among other things, prevention or misuse of material
non-public information, conflicts of interest, documentation and
assessment of internal controls, and improving transparency
of ratings performance and methodologies. The public portions
of the current version of S&P Global Ratings’ Form NRSRO are
available on S&P Global Ratings’ website.
European Union
In the European Union (“EU”), the credit rating industry is
registered and supervised through a pan-European regulatory
framework which is a compilation of three sets of legislative
actions. In 2009, the European Parliament passed a regulation
(“CRA1”) that established an oversight regime for the credit
rating industry in the EU, which became effective in 2010.
CRA1 requires the registration, formal regulation and periodic
inspection of credit rating agencies operating in the EU.
Ratings was granted registration in October of 2011. In January
of 2011, the EU established the European Securities and
Markets Authority (“ESMA”), which, among other things, has
direct supervisory responsibility for the registered credit rating
industry throughout the EU.
In the normal course of business both in the U.S. and abroad,
Ratings (or the legal entities comprising Ratings) are defendants
in numerous legal proceedings and are often the subject of
government and regulatory proceedings, investigations and
inquiries. Many of these proceedings, investigations and
inquiries relate to the ratings activity of Ratings and are or have
Additional rules augmenting the supervisory framework for
credit rating agencies went into effect in 2013. Commonly
referred to as CRA3, these rules, among other things:
– impose various additional procedural requirements with
respect to ratings of sovereign issuers;
30 S&P Global 2021 Annual Report
– require member states to adopt laws imposing liability on
credit rating agencies for an intentional or grossly negligent
failure to abide by the applicable regulations;
– impose mandatory rotation requirements on credit rating
agencies hired by issuers of securities for ratings of
resecuritizations, which may limit the number of years a
credit rating agency can issue ratings for such securities of a
particular issuer;
– impose restrictions on credit rating agencies or their
shareholders if certain ownership thresholds are crossed; and
– impose additional procedural and substantive requirements
on the pricing of services.
The financial services industry is subject to the potential for
increased regulation in the EU.
Other Jurisdictions
Outside of the U.S. and the EU, regulators and government
officials have also been implementing formal oversight of credit
rating agencies. Ratings is subject to regulations in most of
the foreign jurisdictions in which it operates and continues
to work closely with regulators globally to promote the global
consistency of regulatory requirements. This includes the UK,
which has established a credit rating agencies oversight regime
similar to that in place in the EU, and where Ratings was granted
registration with the Financial Conduct Authority on January
1, 2021. Regulators in additional countries may introduce new
regulations in the future.
For a further discussion of competitive and other risks inherent
in our Ratings business, see Item 1A, Risk Factors, in this Annual
Report on Form 10-K. For a further discussion of the legal and
regulatory environment in our Ratings business, see Note 13 -
Commitments and Contingencies to the consolidated financial
statements under Item 8, Consolidated Financial Statements
and Supplementary Data, in this Annual Report on Form 10-K.
MARKET INTELLIGENCE
Market Intelligence’s portfolio of capabilities is 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.
In December of 2021, as part of our Sustainable1 investments,
we completed the acquisition of The Climate Service, Inc.
(“TCS”), which has developed a climate risk analytics platform
assisting corporates, investors and governments with
assessing physical climate risks. Sustainable1 is S&P Global’s
single source of essential sustainability intelligence, bringing
together S&P Global’s resources and full product suite of
data, benchmarking, analytics, evaluations and indices that
provide customers with a 360-degree view to help achieve
their sustainability goals. The acquisition will add capabilities
to S&P Global’s leading portfolio of essential ESG insights and
solutions for its customers. Through this acquisition, S&P Global
will be able to offer its clients even more transparent, robust
and comprehensive climate data, models and analytics. We
accounted for the acquisition using the purchase method of
accounting. The acquisition of The Climate Service, Inc. is not
material to our consolidated financial statements.
In December of 2021, S&P Global entered into an agreement
to sell CUSIP Global Services (“CGS”) business, included in our
Market Intelligence segment, to FactSet Research Systems
for $1.925 billion, with the agreement subject to customary
purchase price adjustments. The agreement represents
continued progress toward completing the pending merger of
S&P Global and IHS Markit, and the divestiture is dependent
on expected closing of the merger with IHS Markit and other
customary conditions. We have also pledged to divest our
Leveraged Commentary and Data (“LCD”) business, included in
our Market Intelligence segment, along with a related family of
leveraged loan indices as a condition for regulatory approval.
Under the European Commission’s conditional approval of the
merger of S&P Global and IHS Markit, execution of an agreement
to sell the LCD business can occur after the closing of the merger.
The divestitures remain subject to further review and approval
by antitrust regulators. Subject to certain closing conditions, the
merger is expected to be completed in the first quarter of 2022.
In January of 2020, Market Intelligence entered into a strategic
alliance to transition S&P Global Market Intelligence’s IR
webhosting business to Q4, a third party provider of investor
relations related services. This alliance integrated Market
Intelligence’s proprietary data into Q4’s portfolio of solutions,
enabling further opportunities for commercial collaboration.
In connection with transitioning its IR webhosting business to
Q4, Market Intelligence received a minority investment in Q4.
During the year ended December 31, 2020, we recorded a pre-tax
gain of $11 million ($6 million after-tax), respectively, in Gain on
dispositions in the consolidated statement of income related to
the sale of IR.
In March of 2019, we entered into an agreement to sell SPIAS,
a business within our Market Intelligence segment, to GSAM.
SPIAS provides non-discretionary investment advice across
institutional sub-advisory and intermediary distribution
channels globally. On July 1, 2019, we completed the sale of
SPIAS to GSAM. During 2019, we recorded a pre-tax gain of
$22 million ($12 million after-tax) in Gain on dispositions in
the consolidated statement of income related to the sale of
SPIAS. During the years ended December 31, 2021 and 2020, we
recorded a pre-tax gain of $3 million ($3 million after-tax) and $1
million ($1 million after-tax), respectively, in Gain on dispositions
in the consolidated statement of income related to the sale of
SPIAS in July of 2019.
See Note 2 - Acquisitions and Divestitures to the consolidated
financial statements under Item 8, Consolidated Financial
Statements and Supplementary Data, in this Annual Report on
Form 10-K for further discussion.
S&P Global 2021 Annual Report 31
Market Intelligence includes the following business lines:
– Credit Risk Solutions — commercial arm that sells Ratings’
– 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
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 years ended December 31:
(in millions)
Revenue
Subscription revenue
Non-subscription revenue
Asset-linked fees
% of total revenue:
Subscription revenue
Non-subscription revenue
Asset-linked fees
U.S. revenue
International revenue
% of total revenue:
U.S. revenue
International revenue
Operating profit 1
% Operating margin
Year ended December 31,
% Change
2021
$2,247
$2,191
$56
$—
98%
2%
—%
$1,420
$827
63%
37%
$703
31%
2020
$2,106
$2,050
$55
$1
97%
3%
—%
$1,355
$751
64%
36%
$589
28%
2019
$1,959
$1,904
$45
$10
97%
2%
1%
$1,240
$719
63%
37%
$566
29%
’21 vs ’20
’20 vs ’19
7%
7%
2%
(83)%
8%
8%
21%
(92)%
5%
10%
9%
5%
19%
4%
1
2021 includes employee severance charges of $3 million, a gain on disposition of $3 million, acquisition-related costs of $2 million and lease-related costs of $1
million. 2020 includes employee severance charges of $27 million, a gain on dispositions of $12 million and lease-related costs of $3 million. 2021, 2020 and 2019
includes amortization of intangibles from acquisitions of $65 million, $76 million and $75 million, respectively.
2021
Revenue increased 7% driven by subscription revenue growth
for RatingsXpress®, RatingsDirect®, certain Market Intelligence
Desktop products, and certain data feed products within
Data Management Solutions. Excluding the impact of recent
dispositions favorably impacting Desktop revenue growth
by 1 percentage point, revenue growth at Data Management
Solutions, Credit Risk Solutions and Desktop was 11%, 8% and
5%, respectively. Both U.S. revenue and international revenue
increased compared to 2021. Foreign exchange rates had a
favorable impact of less than 1 percentage point.
Operating profit increased 19%, with an unfavorable impact from
foreign exchange rates of less than 1 percentage point. Excluding
the impact from higher employee severance charges in 2020 of 6
percentage points and higher amortization of intangibles in 2020
of 3 percentage points, partially offset by the impact of a higher
gain on the dispositions in 2020 of 3 percentage points, operating
profit increased 13%. The impact of revenue growth and lower
compensation costs due to reduced headcount was partially
offset by an increase in cost of sales and intersegment royalties
tied to annualized contract value growth, increased technology
costs and higher incentive costs.
32 S&P Global 2021 Annual Report
(meaning that much of the detail of the rules will be set out in
subordinate measures, including some technical standards yet
to be adopted by the European Commission), the introduction
of the MiFID II package may result in changes to the manner in
which Market Intelligence licenses certain products. MiFID II may
impose regulatory burdens on Market Intelligence activities in
the EU, although the exact impact and costs are not yet known.
For a further discussion of competitive and other risks inherent
in our Market Intelligence business, see Item 1A, Risk Factors,
in this Annual Report on Form 10-K. For a further discussion of
the legal and regulatory environment in our Market Intelligence
business, see Note 13 - Commitments and Contingencies to the
consolidated financial statements under Item 8, Consolidated
Financial Statements and Supplementary Data, in this Annual
Report on Form 10-K.
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.
On July 31, 2019, we completed the sale of RigData, a business
within our Platts segment, to Drilling Info, Inc. RigData is a
provider of daily information on rig activity for the natural gas
and oil markets across North America. During the year ended
December 31, 2019, we recorded a pre-tax gain of $27 million
($26 million after-tax) in Gain on dispositions in the consolidated
statement of income related to the sale of RigData. See Note
2 - Acquisitions and Divestitures to the consolidated financial
statements of this Form 10-K for further discussion.
Platts’ revenue is generated primarily through the
following sources:
– Subscription revenue — primarily from subscriptions to our
market data and 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.
2020
Revenue increased 8% and was favorably impacted by 1
percentage point from the net effect of the recent acquisition
of 451 Research, LLC, offset by the disposition of SPIAS
and the IR webhosting business. The increase in revenue
was driven by growth in annualized contract values for
RatingsXpress®, RatingsDirect®, our data feed products
within Data Management Solutions and our Market Intelligence
Desktop products. Excluding the impact of the acquisition and
dispositions favorably impacting Desktop revenue growth by
3 percentage points, revenue growth at Credit Risk Solutions,
Data Management Solutions and Desktop was 9%, 9% and
4%, respectively. Both U.S. revenue and international revenue
increased compared to 2019. Foreign exchange rates had a
favorable impact of 1 percentage point.
Operating profit increased 4%, with a 3 percentage point
favorable impact from foreign exchange rates. Excluding the
impact of higher employee severance charges in 2020 of 3
percentage points and a higher gain on dispositions in 2019 of
2 percentage points, operating profit increased 9%. The impact
of revenue growth was partially offset by higher compensation
costs primarily due to annual merit increases, an increase in
incentive costs and higher technology costs, partially offset by
a decrease in travel and entertainment expenses from non-
essential travel restrictions in response to COVID-19.
Industry Highlights and Outlook
Market Intelligence continues to focus on developing key product
offerings in growth areas such as ESG and growing new products
and product features leveraging technology investments. Product
launches and innovation continued at Market Intelligence
in 2021 with the introduction of several new ESG related
products and new products and product features leveraging
technology investments.
Legal and Regulatory Environment
The market for research services is very competitive. Market
Intelligence competes domestically and internationally on
the basis of a number of factors, including the quality of its
research and advisory services, client service, reputation,
price, geographic scope, range of products and services, and
technological innovation. For a further discussion of competitive
and other risks inherent in our Market Intelligence business, see
Item 1A, Risk Factors, in this Annual Report on Form 10-K.
European Union
The EU enacted a package of legislative measures known as
MiFID II (“MiFID II”), which revises and updates the existing EU
Markets in Financial Instruments Directive framework, and the
substantive provisions became applicable in all EU Member
States as of January 3, 2018. MiFID II includes provisions that,
among other things, require the unbundling of investment
research and direct how asset managers pay for research
either out of a research payment account or from a firm’s
profits. Although the MiFID II package is “framework” legislation
S&P Global 2021 Annual Report 33
The following table provides revenue and segment operating profit information for the years ended December 31:
Year ended December 31,
% Change
(in millions)
Revenue
Subscription revenue
Sales usage-based royalties
Non-subscription revenue
% of total revenue:
Subscription revenue
Sales usage-based royalties
Non-subscription revenue
U.S. revenue
International revenue
% of total revenue:
U.S. revenue
International revenue
Operating profit 1
% Operating margin
2021
$950
$871
$66
$13
92%
7%
1%
$310
$640
33%
67%
$517
54%
2020
$878
$809
$62
$7
92%
7%
1%
$283
$595
32%
68%
$458
52%
2019
$844
$774
$60
$10
92%
7%
1%
$281
$563
33%
67%
$457
54%
’21 vs ’20
’20 vs ’19
8%
8%
7%
N/M
10%
8%
4%
5%
3%
(39)%
–%
6%
13%
–%
N/M- Represents a change equal to or in excess of 100% or not meaningful
1
2021 includes recovery of lease-related costs of $2 million. 2020 includes employee severance charges of $11 million and lease-related costs of $2 million. 2021,
2020 and 2019 includes amortization of intangibles from acquisitions of $8 million, $9 million, and $12 million, respectively.
2021
Revenue increased 8% primarily due to continued demand for
market data and market insights products driven by expanded
product offerings to our existing customers under enterprise
use contracts. An increase in sales usage-based royalties from
the licensing of our proprietary market price data and price
assessments to commodity exchanges mainly due to increased
trading volumes in Petroleum and LNG also contributed to
revenue growth. Both U.S. revenue and international revenue
grew compared to 2021. Petroleum continues to be the most
significant revenue driver, followed by natural gas, power &
renewables, petrochemicals, metals & agriculture, and shipping
also contributing to revenue growth.
Operating profit increased 13% with an unfavorable impact from
foreign exchange rates of less than 1 percentage point. Excluding
the impact of higher employee severance charges in 2020 of 3
percentage points and higher lease-related costs in 2020 of 1%,
operating profit increased 9%. The increase was primarily due
to revenue growth partially offset by an increase in operating
costs to support business initiatives at Platts and an increase in
incentive costs.
2020
Revenue increased 4% and was unfavorably impacted by less
than 1 percentage point from the net effect of recent acquisitions
of Enerdata and Live Rice Index and the disposition of RigData.
Revenue increased primarily due to continued demand for
market data and market insights products driven by both
expanded product offerings to our existing customers combined
with enhanced contract terms. Additionally, an increase in sales
usage-based royalties from the licensing of our proprietary
market price data and price assessments to commodity
exchanges due to increased trading volumes in the first half
of 2020 contributed to revenue growth. These increases were
partially offset by a decrease in conference revenue as a result
of cancellation and postponement of events due to COVID-19.
International revenue grew and U.S. revenue remained relatively
unchanged compared to 2019 with the U.S. revenue growth rate
being unfavorably impacted by the disposition of RigData in July
of 2019. Petroleum continues to be the most significant revenue
driver, followed by natural gas, power & renewables, metals &
agriculture and petrochemicals also contributing to revenue
growth. Foreign exchange rates had a favorable impact of less
than 1 percentage point.
Operating profit remained relatively unchanged with a
favorable impact from foreign exchange rates of less than 1
percentage point. Excluding the unfavorable impact of the gain
on disposition of RigData in 2019 of 6 percentage points and
higher employee severance charges in 2020 of 2 percentage
points, operating profit increased 8%. The increase was primarily
due to revenue growth combined with a reduction in expenses.
Expenses decreased primarily due to 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 postponement of events due to COVID-19 and the favorable
34 S&P Global 2021 Annual Report
(in millions)
Revenue
Subscription revenue
Sales usage-based royalties
Non-subscription revenue
% of total revenue:
Subscription revenue
Sales usage-based royalties
Non-subscription revenue
U.S. revenue
International revenue
% of total revenue:
U.S. revenue
International revenue
Operating profit 1
% Operating margin
Year ended December 31,
% Change
’21 vs ’20
’20 vs ’19
2021
$950
$871
$66
$13
92%
7%
1%
$310
$640
33%
67%
$517
54%
2020
$878
$809
$62
$7
92%
7%
1%
$283
$595
32%
68%
$458
52%
2019
$844
$774
$60
$10
92%
7%
1%
$281
$563
33%
67%
$457
54%
8%
8%
7%
N/M
10%
8%
4%
5%
3%
(39)%
–%
6%
13%
–%
the Market Abuse Regulation (“MAR”) may impose additional
regulatory burdens on Platts activities in the EU over time,
but they have not yet resulted in increased substantive
impact or costs.
In October of 2012, IOSCO issued its Principles for Oil Price
Reporting Agencies (“PRA Principles”), which are intended to
enhance the reliability of oil price assessments referenced in
derivative contracts subject to regulation by IOSCO members.
Platts has aligned its operations with the PRA Principles and, as
recommended by IOSCO in its final report on the PRA Principles,
has aligned to the PRA Principles for other commodities for
which it publishes benchmarks.
For a further discussion of competitive and other risks inherent
in our Platts business, see Item 1A, Risk Factors, in this Annual
Report on Form 10-K. For a further discussion of the legal and
regulatory environment in our Platts business, see Note 13 -
Commitments and Contingencies to the consolidated financial
statements under Item 8, Consolidated Financial Statements
and Supplementary Data, in this Annual Report on Form 10-K.
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.
impact of a benefit resulting from one-time costs related to
the discontinuation of a product line at Platts in 2019. These
decreases were partially offset by an increase in operating
costs to support business initiatives at Platts and higher
incentive costs.
Industry Highlights and Outlook
In 2021, sustained demand for market data and market insight
products, led by petroleum, continued to drive revenue growth.
Platts introduced S&P Platts Dimension Pro in 2021 that
provides a fully integrated user experience connecting pricing,
market commentary, news and analytics. Additionally, Platts
introduced several new ESG related products in 2021. Platts
continues to focus on developing new product and product
features leveraging technology investments and developing key
product offerings in ESG.
Legal and Regulatory Environment
Platts’ commodities price assessment and information business
is subject to increasing regulatory scrutiny. As discussed below
under the heading “Indices-Legal and Regulatory Environment”,
the benchmarks industry is subject to the new regulation in
the EU (the “EU Benchmark Regulation”) as well as potential
increased regulation in other jurisdictions. Platts has obtained
authorization and is now supervised by the Dutch Authority
for the Financial Markets in the Netherlands under the EU
Benchmark Regulation, will likely need to take similar steps
in other jurisdictions including the United Kingdom when the
transitional period under the EU Benchmark Regulation (and
its UK equivalent) ends, as well as in jurisdictions outside of
Europe if they pass similar legislation. For a further discussion of
competitive and other risks inherent in our Platts business, see
Item 1A, Risk Factors, in this Annual Report on Form 10-K.
European Union
The EU has enacted MiFID II, which revise and update the
existing EU Markets in Financial Instruments Directive and the
substantive provisions became applicable in all EU Member
States as of January 3, 2018. MiFID II includes provisions
that, among other things: (i) impose new conditions and
requirements on the licensing of benchmarks and provide for
non-discriminatory access to exchanges and clearing houses;
(ii) modify the categorization and treatment of certain classes of
derivatives; (iii) expand the categories of trading venue that are
subject to regulation; (iv) require the unbundling of investment
research and direct how asset managers pay for research either
out of a research payment account or from a firm’s profits; and
(v) provide for the mandatory trading of certain derivatives on
exchanges (complementing the mandatory derivative clearing
requirements in the E.U. Market Infrastructure Regulation of
2011). Although the MiFID II package is “framework” legislation
(meaning that much of the detail of the rules will be set out in
subordinate measures, including some technical standards yet
to be adopted by the European Commission), the introduction
of the MiFID II package may result in changes to the manner
in which Platts licenses its price assessments. MiFID II and
S&P Global 2021 Annual Report 35
The following table provides revenue and segment operating profit information for the years ended December 31:
Year ended December 31,
% Change
(in millions)
Revenue
Asset-linked fees
Subscription revenue
Sales usage-based royalties
% of total revenue:
Asset-linked fees
Subscription revenue
Sales usage-based royalties
U.S. revenue
International revenue
% of total revenue:
U.S. revenue
International revenue
Operating profit 1
Less: net income attributable
to noncontrolling interests
Net operating profit
% Operating margin
% Net operating margin
2021
$1,149
$800
$191
$158
69%
17%
14%
$959
$190
83%
17%
$798
$215
$583
70%
51%
2020
$989
$647
$177
$165
65%
18%
17%
$826
$163
84%
16%
$666
$181
$485
67%
49%
’21 vs ’20
’20 vs ’19
16%
24%
7%
(4)%
16%
17%
20%
19%
20%
8%
5%
8%
18%
7%
12%
5%
7%
5%
2019
$918
$613
$165
$140
67%
18%
15%
$772
$146
84%
16%
$632
$170
$462
69%
50%
1
2021 includes recovery of lease-related costs of $1 million. 2020 includes employee severance charges of $5 million, a lease impairment charge of $4 million,
a technology-related impairment charge of $2 million and lease-related costs of $1 million. 2021, 2020 and 2019 includes amortization of intangibles from
acquisitions of $6 million.
2021
Revenue at Indices increased 16% primarily due to higher
average levels of assets under management (“AUM”) for ETFs
and mutual funds and higher data subscription revenue, partially
offset by lower exchange-traded derivative revenue. Average
levels of AUM for ETFs increased 44% to $2.419 trillion and
ending AUM for ETFs increased 40% to $2.796 trillion compared
to 2020 while exchange-traded derivative activity was impacted
by both lower average daily trading volume from reduced
volatility and lower rates per trade from a shift in product mix
in the first half of 2021. Foreign exchange rates had a favorable
impact of less than 1 percentage point.
Operating profit increased 20%. Excluding the impact of
employee severance charges in 2020 of 1 percentage point,
a lease impairment charge in 2020 of 1 percentage point and
higher lease-related costs in 2020 of less than 1 percentage
point, operating profit increased 17%. The impact of revenue
growth and lower legal related costs was partially offset by
higher cost of sales, higher incentive costs and an increase in
compensation costs driven by additional headcount and annual
merit increases. Foreign exchange rates had an unfavorable
impact of less than 1 percentage point.
2020
Revenue increased 8% primarily due to higher average levels
of AUM for ETFs and mutual funds, an increase in exchange-
traded derivatives revenue and higher data subscription revenue,
partially offset by lower over-the-counter derivative revenue.
Average levels of AUM for ETFs increased 12% to $1.681 trillion
and ending AUM for ETFs increased 18% to $1.998 trillion
compared to 2019.
Operating profit grew 5%. Excluding the impact of employee
severance charges in 2020 of 1 percentage point and a lease
impairment charge in 2020 of 1 percentage point, operating
profit increased 7%. The impact of revenue growth was partially
offset by an increase in compensation costs due to annual merit
increases and additional headcount as well as professional
costs, higher incentive costs and an increase in legal related
costs, partially offset by a decrease in travel and entertainment
expenses from non-essential travel restrictions in response to
COVID-19 and lower cost of sales. Foreign exchange rates had a
favorable impact of less than 1 percentage point.
Industry Highlights and Outlook
Indices continues to be the leading index provider for the ETF
market space. In 2021, higher average levels of AUM for ETFs
contributed to revenue growth. In 2021, Indices continued to
launch new ESG ETFs and expand innovative index offerings
with key index product launches. Indices continues to focus on
developing key product offerings in ESG, multi-asset-class and
factor indices and developing new product and product features
leveraging technology investments.
36 S&P Global 2021 Annual Report
(in millions)
Revenue
Asset-linked fees
Subscription revenue
Sales usage-based royalties
% of total revenue:
Asset-linked fees
Subscription revenue
Sales usage-based royalties
U.S. revenue
International revenue
% of total revenue:
U.S. revenue
International revenue
Operating profit 1
Less: net income attributable
to noncontrolling interests
Net operating profit
% Operating margin
% Net operating margin
Year ended December 31,
% Change
’21 vs ’20
’20 vs ’19
2021
$1,149
$800
$191
$158
69%
17%
14%
$959
$190
83%
17%
$798
$215
$583
70%
51%
2020
$989
$647
$177
$165
65%
18%
17%
$826
$163
84%
16%
$666
$181
$485
67%
49%
2019
$918
$613
$165
$140
67%
18%
15%
$772
$146
84%
16%
$632
$170
$462
69%
50%
16%
24%
7%
(4)%
16%
17%
20%
19%
20%
8%
5%
8%
18%
7%
12%
5%
7%
5%
Legal and Regulatory Environment
Over the past four years the financial benchmarks industry has
been subject to specific benchmark regulation in the European
Union (the “EU Benchmark Regulation”) and Australia (the
“Australia Benchmark Regulation”). Other jurisdictions are also
considering new regulation for financial benchmarks.
The EU Benchmark Regulation was published June 30, 2016 and
included provisions applicable to Indices and Platts. Both Indices
and Platts have established separate benchmark administrators
in connection with their benchmark activities in Europe. The
Indices and Platts entities are both based in Amsterdam and are
authorized by the Dutch Authority for Financial Markets (AFM).
This legislation will likely cause additional operating obligations
but they are not expected to be material at this time, although
the exact impact remains unclear.
The Australian Benchmark Regulation was enacted in June of
2018 and included provisions applicable to Indices, designating
the S&P ASX 200 a significant financial benchmark and therefore
requiring Indices, as the administrator of the S&P ASX 200, to
obtain a license from the Australian Securities and Investment
Commission (“ASIC”). Indices has obtained the relevant license.
Although narrower in scope, the requirements of the Australian
Benchmark Regulation are similar to those of the EU Benchmark
Regulation. This legislation will likely cause additional operating
obligations but they are not expected to be material at this time,
although the exact impact remains unclear.
In July of 2013, the IOSCO issued Financial Benchmark Principles
(IOSCO Principles), intended to promote the reliability of financial
benchmark determinations. The IOSCO Principles address
governance, benchmark quality and accountability mechanisms,
including with regard to the indices published by Indices. Even
though the IOSCO Principles are not binding law, Indices has
taken steps to align its governance regime and operations
with the IOSCO Principles and engaged an independent
auditor to perform an annual reasonable assurance review of
such alignment.
The markets for index providers are very competitive. Indices
competes domestically and internationally on the basis of a
number of factors, including the quality of its benchmark indices,
client service, reputation, price, range of products and services
(including geographic coverage) and technological innovation.
Our Indices business is impacted by market volatility, asset levels
of investment products tracking indices, and trading volumes of
certain exchange traded derivatives. Volatile capital markets, as
well as changing investment styles, among other factors, may
influence an investor’s decision to invest in and maintain an
investment in an index-linked investment product.
For a further discussion of competitive and other risks inherent
in our Indices business, see Item 1A, Risk Factors, in this Annual
Report on Form 10-K. For a further discussion of the legal and
regulatory environment in our Indices business, see Note 13 -
Commitments and Contingencies to the consolidated financial
statements under Item 8, Consolidated Financial Statements
and Supplementary Data, in this Annual Report on Form 10-K.
Liquidity and Capital Resources
We continue to maintain a strong financial position. Our primary
source of funds for operations is cash from our businesses
and our core businesses have been strong cash generators. In
2022, 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 $6.5 billion as
of December 31, 2021, an increase of $2.4 billion as compared to
December 31, 2020.
Year ended December 31,
(in millions)
2021
2020
2019
Net cash provided by (used for):
Operating activities
Investing activities
Financing activities
$3,598
$3,567
$2,776
(120)
(1,013)
(240)
(2,166)
(131)
(1,751)
In 2021 and 2020, free cash flow remained unchanged at $3.3
billion. 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.
Operating activities
Cash provided by operating activities remained unchanged
at $3.6 billion compared to 2020 as higher operating results
in 2021 were offset by the acceleration of payments to
vendors, higher incentive compensation payments and higher
income tax payments.
Cash provided by operating activities increased to $3.6 billion in
2020 as compared to $2.8 billion in 2019. The increase is mainly
due to higher results from operations in 2020 and improved cash
collections on accounts receivable in 2020.
S&P Global 2021 Annual Report 37
Investing activities
Our cash outflows from investing activities are primarily for
acquisitions and capital expenditures, while cash inflows are
primarily proceeds from dispositions.
an ASR agreement with a financial institution on February 11,
2019 to initiate share repurchases aggregating $500 million.
We repurchased a total of 2.3 million shares under the ASR
agreement for an average purchase price of $214.65 per share.
Cash used for investing activities decreased to $0.1 billion for
2021 as compared to $0.2 billion in 2020, primarily due to higher
cash paid for acquisitions in 2020 for the ESG Ratings Business
from RobecoSAM and Greenwich Associates LLC.
Cash used for investing activities increased to $0.2 billion for
2020 as compared to $0.1 billion in 2019, primarily due to cash
used for the acquisitions of the ESG Ratings Business from
RobecoSAM and Greenwich Associates LLC in 2020.
Refer to Note 2 – Acquisitions and Divestitures to the
Consolidated Financial Statements and Supplementary Data, in
the Annual Report on Form 10-K for further information.
Financing activities
Our cash outflows from financing activities consist primarily of
share repurchases, dividends and repayment of short-term and
long-term debt, while cash inflows are primarily inflows from
long-term and short-term debt borrowings and proceeds from
the exercise of stock options.
Cash used for financing activities decreased to $1.0
billion in 2021 from $2.2 billion in 2020. The decrease is
primarily attributable to a decrease in cash used for share
repurchases in 2021.
Cash used for financing activities increased to $2.2 billion
in 2020 from $1.8 billion in 2019. The increase is primarily
attributable to cash used for the redemption and extinguishment
of the $900 million outstanding principal amount of our 4.4%
senior notes due in 2026 and a portion of the outstanding
principal amounts of our 6.55% senior notes due in 2037 and
our 4.5% senior notes due in 2048 in 2020, partially offset
by proceeds from the issuance of senior notes in 2020. See
Note 5 — Debt to the Consolidated Financial Statements and
Supplementary Data, in the Annual Report on Form 10-K for
further discussion.
During 2021, we did not use cash to purchase any shares. We
expect to resume share repurchases following the expected
closing of the merger with IHS Markit.
During 2020, we used cash to repurchase 4.0 million shares
for $1,164 million. We entered into two accelerated share
repurchase (“ASR”) agreements with a financial institution on
February 11, 2020 to initiate share repurchases aggregating
$500 million each. We repurchased a total of 1.7 million shares
under each ASR agreement for an average purchase price of
$292.13 per share.
During 2019, we received 5.9 million shares, including 0.4 million
shares received in January of 2019 related to our October 29,
2018 ASR agreement, resulting in $1,240 million of cash used
to repurchase shares. We entered into an ASR agreement
with a financial institution on August 5, 2019 to initiate share
repurchases aggregating $500 million. We repurchased a
total of 2.0 million shares under the ASR agreement for an
average purchase price of $253.36 per share. We entered into
38 S&P Global 2021 Annual Report
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
December 31, 2021, 30 million shares remained available under
the 2020 Repurchase Program and 0.8 million shares remained
available under the 2013 repurchase program.
See Note 9 — Equity to the Consolidated Financial Statements
and Supplementary Data, in the Annual Report on Form 10-K for
further discussion related to our ASR agreements.
Additional Financing
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.
We have the ability to borrow a total of $1.5 billion through
our commercial paper program, which is supported by our
credit facility. As of December 31, 2021 and 2020, there was no
commercial paper issued or outstanding, and we similarly did not
draw or have any borrowings outstanding from the credit facility
or the previous credit facility during the years ended December
31, 2021 and 2020.
Commitment fees for the unutilized commitments under the
credit facility and applicable margins for borrowings thereunder
are linked to the Company achieving three environmental
sustainability performance indicators related to emissions,
tested annually. We currently pay a commitment fee of 9 basis
points. The credit facility 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 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 under our credit facility 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.
– 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 in 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”.
Merger-Related Financing
On November 16, 2021, we launched an offer (the “Exchange
Offer”) to exchange outstanding notes issued by IHS Markit
for new notes issued by us and fully and unconditionally
guaranteed by Standard & Poor’s Financial Services LLC with the
same interest rate, interest payment dates, maturity date and
redemption terms as each corresponding series of exchanged
IHS Markit notes and cash. The approximately $4.6 billion in
aggregate principal amount of IHS Markit’s notes subject to
the Exchange Offer range in maturities from 2022 to 2029. The
Exchange Offer is conditioned upon closing of the Merger and we
expect to extend the Exchange Offer until closing of the Merger.
As of January 26, 2022, 95.83% of the IHS Markit notes had
been tendered.
In conjunction with the Exchange Offer, we successfully solicited
consents to amend each of the indentures governing the IHS
Markit notes to, among other things, eliminate certain covenants,
restrictive provisions, events of default and the obligation to
offer to repurchase the IHS Markit notes upon certain change of
control transactions. These amendments become operative upon
the settlement of the Exchange Offer.
Following the Merger, we expect to raise additional capital,
including by issuing new senior notes of various maturities,
potentially ranging from 5 years to 40 years, in an aggregate
principal amount up to $6 billion, portions of which we expect
to use to refinance existing indebtedness. We also expect
to exercise the accordion feature under our existing credit
facility to increase the total commitments thereunder by an
additional $500 million.
Merger-Related Costs
In 2022, we will continue to incur costs associated with the
anticipated merger with IHS Markit including certain transaction
costs upon completion of the merger that is expected to close in
the first quarter of 2022.
Dividends
On January 26, 2022, the Board of Directors approved
a quarterly common stock dividend of $0.77 per share.
Following the expected closing of the merger with IHS Markit,
the Board of Directors will revisit the dividend policy of the
combined Company.
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.
S&P Global 2021 Annual Report 39
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 year ended
December 31 is as follows:
(in millions)
Revenue
Operating Profit
Net Income
Net income attributable to S&P Global Inc.
2021
$3,410
2,079
1,010
1,010
Summarized balance sheet information as of
December 31 is as follows:
(in millions)
Current assets (excluding intercompany
from Non-Obligor Group)
Noncurrent assets
Current liabilities (excluding
intercompany to Non-Obligor Group)
Noncurrent liabilities
Intercompany payables to
Non-Obligor Group
2021
2020
$6,124
$3,093
846
1,055
1,307
1,179
5,242
4,936
4,851
3,893
40 S&P Global 2021 Annual Report
CONTRACTUAL OBLIGATIONS
We typically have various contractual obligations, which are
recorded as liabilities in our consolidated balance sheets, while
other items, such as certain purchase commitments and other
executory contracts, are not recognized, but are disclosed herein.
For example, we are contractually committed to contracts for
information-technology outsourcing, certain enterprise-wide
information-technology software licensing and maintenance.
We believe that the amount of cash and cash equivalents on
hand, cash flows expected from operations and availability
under our credit facility will be adequate for us to execute our
business strategy and meet anticipated requirements for lease
obligations, capital expenditures, working capital and debt
service for 2022.
The following table summarizes our significant contractual
obligations and commercial commitments as of December 31,
2021, over the next several years. Additional details regarding
these obligations are provided in the notes to our consolidated
financial statements, as referenced in the footnotes to the table:
(in millions)
Debt: 1
Principal payments
Interest payments
Operating leases 2
Purchase obligations and other 3
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Total
$—
130
114
131
$—
261
169
116
$696
215
130
54
$3,418
1,765
269
17
$4,114
2,371
682
318
Total contractual cash obligations
$375
$546
$1,095
$5,469
$7,485
1
2
3
Our debt obligations are described in Note 5 – Debt to our consolidated financial statement.
See Note 13 – Commitments and Contingencies to our consolidated financial statements for further discussion on our operating lease obligations.
Other consists primarily of commitments for unconditional purchase obligations in contracts for information-technology outsourcing and certain enterprise-wide
information-technology software licensing and maintenance.
As of December 31, 2021, we had $147 million of liabilities for
unrecognized tax benefits. We have excluded the liabilities for
unrecognized tax benefits from our contractual obligations
table because, until formal resolutions are reached, reasonable
estimates of the timing of cash settlements with the respective
taxing authorities are not practicable.
As of December 31, 2021, we have recorded $3,429 million for
our redeemable noncontrolling interest in our S&P Dow Jones
Indices LLC partnership discussed in Note 9 – Equity to our
consolidated financial statements. Specifically, this amount
relates to the put option under the terms of the operating
agreement of S&P Dow Jones Indices LLC, whereby, after
December 31, 2017, 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.
We have excluded this amount from our contractual obligations
table because we are uncertain as to the timing and the ultimate
amount of the potential payment we may be required to make.
We make contributions to our pension and postretirement plans
in order to satisfy minimum funding requirements as well as
additional contributions that we consider appropriate to improve
the funded status of our plans. During 2021, we contributed $11
million to our retirement plans. Expected employer contributions
in 2022 are $11 million and $3 million for our retirement and
postretirement plans, respectively. In 2022, we may elect to
make additional non-required contributions depending on
investment performance and the pension plan status. See Note
7 – Employee Benefits to our consolidated financial statements
for further discussion.
S&P Global 2021 Annual Report 41
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. 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.
We believe the presentation of free cash flow allows our investors
to evaluate the cash generated from our underlying operations
in a manner similar to the method used by management. We use
free cash flow to conduct and evaluate our business because
we believe it typically presents a more conservative measure
of cash flows since capital expenditures and distributions to
noncontrolling interest holders are considered a necessary
component of ongoing operations. Free cash flow is useful for
management and investors because it allows management
and investors to evaluate the cash available to us to prepay
debt, make strategic acquisitions and investments and
repurchase stock.
The presentation of free cash flow is 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:
(in millions)
Cash provided by operating activities
Capital expenditures
Distributions to noncontrolling
interest holders, net
Free cash flow
(in millions)
Cash used for investing activities
Cash used for financing activities
Year ended December 31,
% Change
2021
$3,598
(35)
(227)
$3,336
2021
(120)
(1,013)
2020
$3,567
(76)
(194)
$3,297
2020
(240)
(2,166)
2019
$2,776
(115)
(143)
$2,518
’21 vs ’20
’20 vs ’19
1%
28%
1%
31%
2019
(131)
(1,751)
’21 vs ’20
’20 vs ’19
(50)%
(53)%
(75)%
(23)%
42 S&P Global 2021 Annual Report
(in millions)
Cash provided by operating activities
Capital expenditures
Distributions to noncontrolling
interest holders, net
Free cash flow
(in millions)
Cash used for investing activities
Cash used for financing activities
Year ended December 31,
% Change
2021
$3,598
(35)
(227)
$3,336
2021
(120)
(1,013)
2020
$3,567
(76)
(194)
$3,297
2020
(240)
(2,166)
2019
$2,776
(115)
(143)
$2,518
’21 vs ’20
’20 vs ’19
1%
28%
1%
31%
2019
(131)
(1,751)
’21 vs ’20
’20 vs ’19
(50)%
(53)%
(75)%
(23)%
Critical Accounting Estimates
Our discussion and analysis of our financial condition and
results of operations is based upon our consolidated financial
statements, which have been prepared in accordance with U.S.
GAAP. The preparation of these financial statements requires
us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities.
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. 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.
Management considers 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. Management has discussed the development
and selection of our critical accounting estimates with the Audit
Committee of our Board of Directors. The Audit Committee has
reviewed our disclosure relating to them in this MD&A.
We believe the following critical accounting policies require us to
make significant judgments and estimates in the preparation of
our consolidated financial statements:
Revenue recognition
Under ASC 606, revenue is recognized when a customer obtains
control of promised goods or services in an amount that reflects
the consideration the entity expects to receive in exchange for
those goods or services. See Note 1 - Accounting Policies to our
consolidated financial statements for further information.
Allowance for doubtful accounts
The allowance for doubtful accounts reserve methodology
is based on historical analysis, a review of outstanding
balances and current conditions, and by incorporating data
points that provide indicators of future economic conditions
including forecasted industry default rates and industry index
benchmarks. In determining these reserves, we consider,
amongst other factors, the financial condition and risk profile
of our customers, areas of specific or concentrated risk as well
as applicable industry trends or market indicators. The impact
on operating profit for a one percentage point change in the
allowance for doubtful accounts is approximately $17 million.
During the year ended December 31, 2021, 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.
Based on our current outlook these assumptions are not
expected to significantly change in 2022.
Accounting for the impairment of long-lived
assets (including other intangible assets)
We evaluate long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Upon such an occurrence,
recoverability of assets to be held and used is measured by
comparing the carrying amount of an asset to current forecasts
of undiscounted future net cash flows expected to be generated
by the asset. If the carrying amount of the asset exceeds its
estimated future cash flows, an impairment charge is recognized
equal to the amount by which the carrying amount of the asset
exceeds the fair value of the asset. For long-lived assets held for
sale, assets are written down to fair value, less cost to sell. Fair
value is determined based on market evidence, discounted cash
flows, appraised values or management’s estimates, depending
upon the nature of the assets.
Goodwill and indefinite-lived intangible assets
Goodwill represents the excess of purchase price and related
costs over the value assigned to the net tangible and identifiable
intangible assets of businesses acquired. As of December
31, 2021 and 2020, the carrying value of goodwill and other
indefinite-lived intangible assets was $4.4 billion and $4.6
billion, respectively. Goodwill and other intangible assets with
indefinite lives are not amortized, but instead are tested for
impairment annually during the fourth quarter each year or more
frequently if events or changes in circumstances indicate that
the asset might be impaired.
Goodwill
As part of our annual impairment test of our four reporting units,
we initially perform a qualitative analysis evaluating whether
any events and circumstances occurred that provide evidence
that it is more likely than not that the fair value of any of our
reporting units is less than its carrying amount. Reporting
units are generally an operating segment or one level below an
operating segment. Our qualitative assessment included, but
was not limited to, consideration of macroeconomic conditions,
industry and market conditions, cost factors, cash flows,
changes in key Company personnel and our share price. If, based
on our evaluation of the events and circumstances that occurred
during the year we do not believe that it is more likely than not
that the fair value of any of our reporting units is less than its
carrying amount, no quantitative impairment test is performed.
Conversely, if the results of our qualitative assessment
determine that it is more likely than not that the fair value of any
of our reporting units is less than its respective carrying amount
we perform a quantitative impairment test. If the fair value of
the reporting unit is less than the carrying value, the difference
is recognized as an impairment charge. For 2021, based on our
qualitative assessments, we determined that it is more likely
than not that our reporting units’ fair values were greater than
their respective carrying amounts.
S&P Global 2021 Annual Report 43
Indefinite-Lived Intangible Assets
We evaluate the recoverability of indefinite-lived intangible
assets by first performing a qualitative analysis evaluating
whether any events and circumstances occurred that provide
evidence that it is more likely than not that the indefinite-lived
asset is impaired. If, based on our evaluation of the events and
circumstances that occurred during the year we do not believe
that it is more likely than not that the indefinite-lived asset
is impaired, no quantitative impairment test is performed.
Conversely, if the results of our qualitative assessment
determine that it is more likely than not that the indefinite-lived
asset is impaired, a quantitative impairment test is performed.
If necessary, an impairment analysis is performed using the
income approach to estimate the fair value of the indefinite-lived
intangible asset. If the intangible asset carrying value exceeds
its fair value, an impairment charge is recognized in an amount
equal to that excess. Significant judgments inherent in these
analyses include estimating the amount and timing of future
cash flows and the selection of appropriate discount rates,
royalty rates and long-term growth rate assumptions. Changes
in these estimates and assumptions could materially affect the
determination of fair value for this indefinite-lived intangible
asset and could result in an impairment charge, which could be
material to our financial position and results of operations.
We performed our impairment assessment of goodwill and
indefinite-lived intangible assets and concluded that no
impairment existed for the years ended December 31, 2021,
2020 and 2019.
Retirement plans and postretirement
healthcare and other benefits
Our employee pension and other postretirement benefit costs
and obligations are dependent on assumptions concerning
the outcome of future events and circumstances, including
compensation increases, long-term return on pension plan
assets, discount rates and other factors. In determining such
assumptions, we consult with outside actuaries and other
advisors where deemed appropriate. In accordance with
relevant accounting standards, if actual results differ from our
assumptions, such differences are deferred and amortized over
the estimated remaining lifetime of the plan participants. While
we believe that the assumptions used in these calculations
are reasonable, differences in actual experience or changes in
assumptions could affect the expense and liabilities related to
our pension and other postretirement benefits.
The following is a discussion of some significant assumptions
that we make in determining costs and obligations for pension
and other postretirement benefits:
– Discount rate assumptions are based on current yields on
high-grade corporate long-term bonds.
– The expected return on assets assumption is calculated
based on the plan’s asset allocation strategy and projected
market returns over the long-term.
Our discount rate and return on asset assumptions used to determine the net periodic pension and postretirement benefit cost on
our U.S. retirement plans are as follows:
January 1
Discount rate
Return on assets
Retirement Plans
Postretirement Plans
2022
2021
2020
2022
2021
2020
3.05%
4.00%
2.75%
5.00%
3.45%
5.50%
2.72%
2.20%
3.08%
As of December 31, 2021, the Company had $1.5 billion in
pension benefit obligation. A 0.25 percentage point increase
or decrease in the discount rate would result in an estimated
decrease or increase to the accumulated benefit obligation
of approximately $50 million and an increase or decrease in
2022 pension expense of approximately $1 million. An increase
or decrease of 1 percentage point in the expected rate of
return on plan assets would result in a decrease or increase of
approximately $15 million to 2022 pension expense.
44 S&P Global 2021 Annual Report
Stock-based compensation
Stock-based compensation expense is measured at the grant
date based on the fair value of the award and is recognized over
the requisite service period, which typically is the vesting period.
Stock-based compensation is classified as both operating-
related expense and selling and general expense in our
consolidated statements of income. There were no stock options
granted in 2021, 2020 and 2019.
Income taxes
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to be applied to
taxable income in the years in which those temporary differences
are expected to be recovered or settled. We recognize liabilities
for uncertain tax positions taken or expected to be taken in
income tax returns. Accrued interest and penalties related to
unrecognized tax benefits are recognized in interest expense and
operating expense, respectively.
Judgment is required in determining our provision for income
taxes, deferred tax assets and liabilities and unrecognized tax
benefits. In determining the need for a valuation allowance, the
historical and projected financial performance of the operation
that is recording a net deferred tax asset is considered along
with any other pertinent information.
We file income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions, and we are routinely
under audit by many different tax authorities. We believe that
our accrual for tax liabilities is adequate for all open audit
years based on an assessment of many factors including past
experience and interpretations of tax law. This assessment
relies on estimates and assumptions and may involve a series
of complex judgments about future events. It is possible that
tax examinations will be settled prior to December 31, 2022. If
any of these tax audit settlements do occur within that period,
we would make any necessary adjustments to the accrual for
unrecognized tax benefits.
As of December 31, 2021, we have approximately $2.9 billion of
undistributed earnings of our foreign subsidiaries, of which $0.8
billion is reinvested indefinitely in our foreign operations.
Contingencies
We are subject to a number of lawsuits and claims that arise
in the ordinary course of business. We recognize a liability for
such contingencies when both (a) information available prior to
issuance of the financial statements indicates that it is probable
that a liability had been incurred at the date of the financial
statements and (b) the amount of loss can reasonably be
estimated. We continually assess the likelihood of any adverse
judgments or outcomes to our contingencies, as well as potential
amounts or ranges of probable losses, and recognize a liability, if
any, for these contingencies based on an analysis of each matter
with the assistance of outside legal counsel and, if applicable,
other experts. Because many of these matters are resolved
over long periods of time, our estimate of liabilities may change
due to new developments, changes in assumptions or changes
in our strategy related to the matter. When we accrue for loss
contingencies and the reasonable estimate of the loss is within a
range, we record its best estimate within the range. We disclose
an estimated possible loss or a range of loss when it is at least
reasonably possible that a loss may have been incurred.
Redeemable Noncontrolling Interest
The fair value component of the redeemable noncontrolling
interest in Indices business is based on a combination of
an income and market valuation approach. Our income and
market valuation approaches may 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.
As of December 31, 2021, the Company had $3.4 billion in
redeemable noncontrolling interest on the Consolidated
Balance Sheet. The ultimate amount paid for the redeemable
noncontrolling interest in Indices business could be significantly
different because the redemption amount depends on the future
results of operations of the business.
As of December 31, 2021, the weighted average cost of capital
used in the Company’s income analysis to estimate the fair
value of the redeemable noncontrolling interest was 9%. A 0.25
percentage point increase or decrease in the weighted average
cost of capital would decrease or increase the redemption value
by approximately $80 million. As of December 31, 2021, the
terminal growth rate used in the Company’s income analysis to
estimate the fair value of the redeemable noncontrolling interest
was 2.2%. A 0.25 percentage point increase or decrease in the
terminal growth rate would increase or decrease the redemption
value by approximately $50 million.
Recent Accounting Standards
See Note 1 – Accounting Policies to our consolidated financial
statements for a detailed description of recent accounting
standards. We do not expect these recent accounting standards
to have a material impact on our results of operations, financial
condition or liquidity in future periods.
S&P Global 2021 Annual Report 45
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
merger (the “Merger”) between a subsidiary of 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, natural and man-made disasters, civil unrest,
pandemics (e.g., COVID-19 and its variants), 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 and consummate related dispositions on the terms
expected at all or in a timely manner;
– the occurrence of events that may give rise to a right of one or
both of the parties to terminate the merger agreement;
– uncertainty relating to the impact of the Merger, divestitures
and liability management transactions on the businesses
of the Company and IHS Markit, including potential adverse
reactions or changes to the market price of the Company’s
common stock and IHS Markit shares resulting from the
announcement or completion of the Merger and changes to
existing business relationships and increased cyber risks
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 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, data breach,
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 around the globe, affecting
S&P Global Ratings, S&P Global Platts, S&P Dow Jones
Indices, S&P Global Market Intelligence and the products
those business divisions offer including our ESG products,
and the Company’s compliance therewith;
46 S&P Global 2021 Annual Report
– 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 and
commodities markets;
– our ability to attract, incentivize and retain key employees,
especially in today’s competitive business environment;
– 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 following the United Kingdom’s
departure from the European Union, and the impact of such
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 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 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 this Annual
Report on Form 10-K.
S&P Global 2021 Annual Report 47
Consolidated Statements of Income
(in millions, except per share data)
Revenue
Expenses:
Operating-related expenses
Selling and general expenses
Depreciation
Amortization of intangibles
Total expenses
Gain on dispositions
Operating profit
Other (income) expense, net
Interest expense, net
Loss on extinguishment of debt
Income before taxes on income
Provision for taxes on income
Net income
Less: net income attributable to noncontrolling interests
Year Ended December 31,
2021
$8,297
2020
$7,442
2019
$6,699
2,195
1,714
82
96
4,087
(11)
4,221
(62)
119
—
4,164
901
3,263
(239)
2,094
1,541
83
123
3,841
(16)
3,617
(31)
141
279
3,228
694
2,534
(195)
1,976
1,342
82
122
3,522
(49)
3,226
98
141
57
2,930
627
2,303
(180)
Net income attributable to S&P Global Inc.
$3,024
$2,339
$2,123
Earnings per share attributable to S&P Global Inc. common shareholders:
Net income:
Basic
Diluted
Weighted-average number of common shares outstanding:
Basic
Diluted
Actual shares outstanding at year end
See accompanying notes to the consolidated financial statements.
$12.56
$12.51
240.8
241.8
241.0
$9.71
$9.66
241.0
242.1
240.6
$8.65
$8.60
245.4
246.9
244.0
48 S&P Global 2021 Annual Report
(in millions, except per share data)
Revenue
Expenses:
Operating-related expenses
Selling and general expenses
Depreciation
Amortization of intangibles
Total expenses
Gain on dispositions
Operating profit
Other (income) expense, net
Interest expense, net
Loss on extinguishment of debt
Income before taxes on income
Provision for taxes on income
Net income
Year Ended December 31,
2021
$8,297
2020
$7,442
2019
$6,699
2,195
1,714
82
96
4,087
(11)
4,221
(62)
119
—
4,164
901
3,263
(239)
$12.56
$12.51
240.8
241.8
241.0
2,094
1,541
83
123
3,841
(16)
3,617
(31)
141
279
3,228
694
2,534
(195)
$9.71
$9.66
241.0
242.1
240.6
1,976
1,342
82
122
3,522
(49)
3,226
98
141
57
2,930
627
2,303
(180)
$8.65
$8.60
245.4
246.9
244.0
Less: net income attributable to noncontrolling interests
Net income attributable to S&P Global Inc.
$3,024
$2,339
$2,123
Earnings per share attributable to S&P Global Inc. common shareholders:
Net income:
Basic
Diluted
Basic
Diluted
Weighted-average number of common shares outstanding:
Actual shares outstanding at year end
Consolidated Statements of Comprehensive Income
(in millions)
Net income
Other comprehensive income:
Foreign currency translation adjustments
Income tax effect
Pension and other postretirement benefit plans
Income tax effect
Unrealized (loss) gain on cash flow hedges
Income tax effect
Comprehensive income
Less: comprehensive income attributable to
nonredeemable noncontrolling interests
Less: comprehensive income attributable to
redeemable noncontrolling interests
Year Ended December 31,
2021
$3,263
2020
$2,534
2019
$2,303
11
(24)
(13)
33
(10)
23
(282)
68
(214)
3,059
(24)
(24)
22
(2)
(31)
8
(23)
17
(5)
12
2,521
(14)
10
8
18
141
(39)
102
(2)
—
(2)
2,421
(10)
(215)
(181)
(170)
Comprehensive income attributable to S&P Global Inc.
$2,820
$2,326
$2,241
See accompanying notes to the consolidated financial statements.
S&P Global 2021 Annual Report 49
Consolidated Balance Sheets
(in millions)
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Short-term investments
Accounts receivable, net of allowance for doubtful accounts: 2021- $26 ; 2020 - $30
Prepaid and other current assets
Assets held for sale
Total current assets
Property and equipment:
Buildings and leasehold improvements
Equipment and furniture
Total property and equipment
Less: accumulated depreciation
Property and equipment, net
Right of use assets
Goodwill
Other intangible assets, net
Asset for pension benefits
Other non-current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
Accrued compensation and contributions to retirement plans
Income taxes currently payable
Unearned revenue
Other current liabilities
Liabilities held for sale
Total current liabilities
Long-term debt
Lease liabilities – non-current
Pension and other postretirement benefits
Other non-current liabilities
Total liabilities
Redeemable noncontrolling interest
Commitments and contingencies (Note 13)
Equity:
Common stock, $1 par value: authorized - 600 million shares; issued:
294 million shares in 2021 and 2020
Additional paid-in capital
Retained income
Accumulated other comprehensive loss
December 31,
2021
2020
$6,497
8
11
1,650
323
321
8,810
346
515
861
(620)
241
426
3,506
1,285
359
399
$4,108
14
9
1,593
264
—
5,988
364
507
871
(587)
284
494
3,735
1,352
297
387
$15,026
$12,537
$205
607
90
2,217
547
149
3,815
4,114
492
262
807
9,490
3,429
294
1,031
15,017
(841)
$233
551
84
2,168
551
—
3,587
4,110
544
291
653
9,185
2,781
294
946
13,367
(637)
Less: common stock in treasury - at cost: 53 million shares in 2021 and 2020
(13,469)
(13,461)
Total equity – controlling interests
Total equity – noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to the consolidated financial statements.
50 S&P Global 2021 Annual Report
2,032
75
2,107
509
62
571
$15,026
$12,537
Consolidated Statements of Cash Flows
(in millions)
Operating Activities:
Net income
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation
Amortization of intangibles
Provision for losses on accounts receivable
Deferred income taxes
Stock-based compensation
Gain on dispositions
Accrued legal settlements
Pension settlement charge, net of taxes
Loss on extinguishment of debt
Lease impairment charges
Other
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable
Prepaid and other current assets
Accounts payable and accrued expenses
Unearned revenue
Other current liabilities
Net change in prepaid/accrued income taxes
Net change in other assets and liabilities
Cash provided by operating activities
Investing Activities:
Capital expenditures
Acquisitions, net of cash acquired
Proceeds from dispositions
Changes in short-term investments
Cash used for investing activities
Financing Activities:
Proceeds from issuance of senior notes, net
Payments on senior notes
Dividends paid to shareholders
Distributions to noncontrolling interest holders, net
Repurchase of treasury shares
Exercise of stock options
Employee withholding tax on share-based payments and other
Cash used for financing activities
Effect of exchange rate changes on cash
Net change in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
Cash, cash equivalents, and restricted cash at end of year
Cash paid during the year for:
Interest
Income taxes
See accompanying notes to the consolidated financial statements.
Year Ended December 31,
2021
2020
2019
$3,263
$2,534
$2,303
82
96
14
13
122
(11)
—
—
—
31
58
(144)
(86)
38
198
(45)
(36)
5
83
123
17
(31)
90
(16)
9
2
279
120
110
18
(85)
132
220
(15)
(2)
(21)
82
122
18
46
78
(49)
—
85
57
11
25
(135)
(81)
73
256
(57)
(41)
(17)
3,598
3,567
2,776
(35)
(99)
16
(2)
(120)
—
—
(743)
(227)
—
13
(56)
(1,013)
(82)
2,383
4,122
$6,505
$130
$883
(76)
(201)
18
19
(240)
1,276
(1,394)
(645)
(194)
(1,164)
16
(61)
(2,166)
75
1,236
2,886
$4,122
$159
$683
(115)
(91)
85
(10)
(131)
1,086
(868)
(560)
(143)
(1,240)
40
(66)
(1,751)
34
928
1,958
$2,886
$162
$659
S&P Global 2021 Annual Report 51
Consolidated Statements of Equity
(in millions)
Common
Stock
$1 par
Additional
Paid-in
Capital
Retained
Income
Accumulated
Other
Comprehensive
Loss
Less:
Treasury
Stock
Total
SPGI
Equity
Non-
controlling
Interests
Balance as of December 31, 2018
$294
$833
$11,284
$(742)
$11,041
$628
$56
10
(10)
1
$57
14
(11)
2
$62
24
(13)
Total
Equity
$684
2,251
(570)
(1,240)
52
(36)
(608)
3
$536
2,340
(656)
(1,164)
45
(532)
2
$571
2,844
(756)
77
(631)
Comprehensive income ¹
Dividends (Dividend declared per
common share — $2.28 per share)
Share repurchases
Employee stock plans
Capital contribution from
noncontrolling interest
Change in redemption value of
redeemable noncontrolling interest
Other
75
(5)
2,123
(560)
(36)
(608)
2
118
2,241
(560)
1,315 (1,240)
(57)
52
(36)
(608)
2
$479
2,326
(645)
Balance as of December 31, 2019
$294
$903
$12,205
$(624)
$12,299
Comprehensive income ¹
Dividends (Dividend declared per
common share — $2.68 per share)
Share repurchases
Employee stock plans
Change in redemption value of
redeemable noncontrolling interest
Other
(13)
2,339
(645)
(532)
43
1,164
(1,164)
(2)
45
(532)
—
Balance as of December 31, 2020
$294
$946
$13,367
$(637)
$13,461
$509
Comprehensive income 1
Dividends (Dividend declared per
common share — $3.08 per share)
Employee stock plans
Change in redemption value of
redeemable noncontrolling interest
Other
(204)
3,024
(743)
(631)
85
2,820
(743)
8
77
(631)
—
2
2
Balance as of December 31, 2021
$294
$1,031
$15,017
(841)
$13,469 $2,032
$75
$2,107
1
Excludes $215 million, $181 million and $170 million in 2021, 2020 and 2019, respectively, attributable to redeemable noncontrolling interest.
See accompanying notes to the consolidated financial statements.
52 S&P Global 2021 Annual Report
Notes to the Consolidated Financial Statements
1. Accounting Policies
Nature of operations
S&P Global Inc. (together with its consolidated subsidiaries,
the “Company,” the “Registrant,” “we,” “us” or “our”) is 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 that maintains a wide variety
of valuation and index benchmarks for investment advisors,
wealth managers and institutional investors.
Revenue Recognition
Under ASC 606, revenue is recognized when a customer obtains
control of promised goods or services in an amount that reflects
the consideration the entity expects to receive in exchange for
those goods or services.
Subscription revenue
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. Subscription revenue at
Platts is generated by providing customers access to commodity
and energy-related price assessments, market data, and real-
time news, along with other information services. Subscription
revenue at Indices is derived from the contracts for underlying
data of our indexes to support our customers’ management of
index funds, portfolio analytics, and research.
Non-transaction revenue
Non-transaction revenue at Ratings is primarily related
to 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 revenue
elimination of $146 million, $137 million and $128 million
for the years ended December 31, 2021, 2020, and 2019
respectively, mainly consisting of the royalty charged to Market
Intelligence for the rights to use and distribute content and data
developed by Ratings.
For non-transaction revenue related to Ratings’ surveillance
services, we continuously monitor factors that impact the
creditworthiness of an issuer over the contractual term with
revenue recognized to the extent that our performance obligation
is progressively fulfilled over the term contract. Because
surveillance services are continuously provided throughout
the term of the contract, our measure of progress towards
fulfillment of our obligation to monitor a rating is a time-based
output measure with revenue recognized ratably over the term
of the contract.
Non-subscription / Transaction revenue
Transaction revenue at our Ratings segment primarily includes
fees associated with:
– ratings related to new issuance of corporate and
government debt instruments; as well as structured finance
instruments; and
– bank loan ratings.
Transaction revenue is recognized at the point in time when our
performance obligation is satisfied by issuing a rating on our
customer’s instruments and when we have a right to payment
and the customer can benefit from the significant risks and
rewards of ownership.
Non-subscription revenue at Market Intelligence is primarily
related to certain advisory, pricing and analytical services. Non-
subscription revenue at Platts is primarily related to conference
sponsorship, consulting engagements and events.
Asset-linked fees
Asset-linked fees at Indices and Market Intelligence are primarily
related to royalties payments based on the value of assets
under management in our customers exchange-traded funds
and mutual funds.
For subscription products and services, we generally provide
continuous access to dynamic data sets and analytics for
a defined period, with revenue recognized ratably as our
performance obligation to provide access to our data and
analytics is progressively fulfilled over the stated term
of the contract.
For asset-linked products and services, we provide licenses
conveying continuous access to our index and benchmark-
related intellectual property during a specified contract term.
Revenue is recognized when the extent that our customers
have used our licensed intellectual property can be quantified.
Recognition of revenue for our asset-linked fee arrangements is
S&P Global 2021 Annual Report 53
subject to the “recognition constraint” for usage-based royalty
payments because we cannot reasonably predict the value of
the assets that will be invested in index funds structured using
our intellectual property until it is either publicly available or
when we are notified by our customers. Revenue derived from an
asset-linked fee arrangement is measured and recognized when
the certainty of the extent of its utilization of our index products
by our customers is known.
Unearned Revenue
We record unearned revenue when cash payments are received
in advance of our performance. The increase in the unearned
revenue balance for the year ended December 31, 2021 is
primarily driven by cash payments received in advance of
satisfying our performance obligations, offset by $2.1 billion of
revenues recognized that were included in the unearned revenue
balance at the beginning of the period.
Remaining Performance Obligations
Remaining performance obligations represent the transaction
price of contracts for work that has not yet been performed. As
of December 31, 2021, the aggregate amount of the transaction
price allocated to remaining performance obligations was $2.7
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 $137 million and $129 million
as of December 31, 2021 and December 31, 2020, respectively,
and are included in prepaid and other current assets and other
non-current assets on our consolidated balance sheets. The
capitalized asset will be amortized over a period consistent
with the transfer to the customer of the goods or services to
which the asset relates, calculated based on the customer
term and the average life of the products and services
underlying the contracts which has been determined to be
approximately 5 years. The expense is recorded within selling and
general expenses.
We expense sales commissions when incurred if the
amortization period would have been one year or less. These
costs are recorded within selling and general expenses.
Sales usage-based royalties
Sales usage-based royalty revenue at our Indices segment is
primarily related to trading based fees from exchange-traded
derivatives. Sales and usage-based royalty revenue at our Platts
segment is primarily related to licensing of its proprietary market
price data and price assessments to commodity exchanges.
For sales usage-based royalty products and services, we
provide licenses conveying the right to continuous access to
our intellectual property over the contract term, with revenue
recognized when the extent of our license’s utilization can be
quantified, or more specifically, when trading volumes are known
and publicly available to us or when we are notified by our
customers. Recognition of revenue of fees tied to trading volumes
is subject to the recognition constraint for a usage-based royalty
promised by our customers in exchange for the license of our
intellectual property, with revenue recognized when trading
volumes are known.
Arrangements with Multiple Performance Obligations
Our contracts with customers may include multiple performance
obligations. Revenue relating to agreements that provide for
more than one performance obligation is recognized based upon
the relative fair value to the customer of each service component
as each component is earned. The fair value of the service
components is determined using an analysis that considers
cash consideration that would be received for instances when
the service components are sold separately. If the fair value to
the customer for each service is not objectively determinable, we
make our best estimate of the services’ stand-alone selling price
and record revenue as it is earned over the service period.
Receivables
We record a receivable when a customer is billed or when
revenue is recognized prior to billing a customer. For multi-year
agreements, we generally invoice customers annually at the
beginning of each annual period.
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 December 31,
2021 and 2020, contract assets were $9 million and $7 million,
respectively, and are included in accounts receivable in our
consolidated balance sheets.
54 S&P Global 2021 Annual Report
Other (Income) Expense, net
The components of other (income) expense, net for the year
ended December 31 are as follows:
(in millions)
2021
2020
2019
Other components of net
periodic benefit cost1
Net (income) loss from
investments
$(45)
$(32)
(17)
1
Other (income) expense, net
$(62)
$(31)
$79
19
$98
1
The net periodic benefit cost for our retirement and post retirement
plans for the year ended December 31, 2020 includes a non-cash pre-tax
settlement charge of $3 million. During the year ended December 31,
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 net periodic benefit
cost for our retirement and post retirement plans for the year ended
December 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.
Assets and Liabilities Held for Sale
and Discontinued Operations
Assets and Liabilities Held for Sale
We classify a disposal group to be sold as held for sale in the
period in which all of the following criteria are met: management,
having the authority to approve the action, commits to a plan
to sell the disposal group; the disposal group is available for
immediate sale in its present condition subject only to terms
that are usual and customary for sales of such disposal group;
an active program to locate a buyer and other actions required
to complete the plan to sell the disposal group have been
initiated; the sale of the disposal group is probable, and transfer
of the disposal group is expected to qualify for recognition as a
completed sale within one year, except if events or circumstances
beyond our control extend the period of time required to sell
the disposal group beyond one year; the disposal group is being
actively marketed for sale at a price that is reasonable in relation
to its current fair value; and actions required to complete the
plan indicate that it is unlikely that significant changes to the
plan will be made or that the plan will be withdrawn.
A disposal group that is classified as held for sale is initially
measured at the lower of its carrying value or fair value less
any costs to sell. Any loss resulting from this measurement
is recognized in the period in which the held for sale criteria
are met. Conversely, gains are not recognized on the sale of a
disposal group until the date of sale.
The fair value of a disposal group less any costs to sell is
assessed each reporting period it remains classified as held for
sale and any subsequent changes are reported as an adjustment
to the carrying value of the disposal group, as long as the new
carrying value does not exceed the carrying value of the disposal
group at the time it was initially classified as held for sale.
Upon determining that a disposal group meets the criteria to be
classified as held for sale, the Company reports the assets and
liabilities of the disposal group as held for sale in the current
period in our consolidated balance sheets.
Discontinued Operations
In determining whether a disposal of a component of an entity or
a group of components of an entity is required to be presented
as a discontinued operation, we make a determination whether
the disposal represents a strategic shift that had, or will
have, a major effect on our operations and financial results. A
component of an entity comprises operations and cash flows
that can be clearly distinguished both operationally and for
financial reporting purposes. If we conclude that the disposal
represents a strategic shift, then the results of operations of
the group of assets being disposed of (as well as any gain or
loss on the disposal transaction) are aggregated for separate
presentation apart from our continuing operating results in the
consolidated financial statements.
Principles of consolidation
The consolidated financial statements include the accounts
of all subsidiaries and our share of earnings or losses of joint
ventures and affiliated companies under the equity method
of accounting. All significant intercompany accounts and
transactions have been eliminated.
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles in the United States
of America requires management to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ
from those estimates.
Cash and cash equivalents
Cash and cash equivalents include ordinary bank deposits
and highly liquid investments with original maturities of three
months or less that consist primarily of money market funds
with unrestricted daily liquidity and fixed term time deposits.
Such investments and bank deposits are stated at cost, which
approximates market value, and were $6.5 billion and $4.1
billion as of December 31, 2021 and 2020, respectively. These
investments are not subject to significant market risk.
Restricted cash
Cash that is subject to legal restrictions or is unavailable
for general operating purposes is classified as restricted
cash. Restricted cash included in our consolidated balance
sheets was $8 million and $14 million as of December 31,
2021 and December 31, 2020, respectively. Restricted cash
primarily consisted of cash required to be on deposit under
contractual agreements in connection with certain acquisitions
and dispositions.
S&P Global 2021 Annual Report 55
Short-term investments
Short-term investments are securities with original maturities
greater than 90 days that are available for use in our operations
in the next twelve months. The short-term investments, primarily
consisting of certificates of deposit and mutual funds, are
classified as held-to-maturity and therefore are carried at cost.
Interest and dividends are recorded in income when earned.
Accounts receivable
Credit is extended to customers based upon an evaluation
of the customer’s financial condition. Accounts receivable,
which include billings consistent with terms of contractual
arrangements, are recorded at net realizable value.
Allowance for doubtful accounts
The allowance for doubtful accounts reserve methodology
is based on historical analysis, a review of outstanding
balances and current conditions, and by incorporating data
points that provide indicators of future economic conditions
including forecasted industry default rates and industry index
benchmarks. In determining these reserves, we consider,
amongst other factors, the financial condition and risk profile of
our customers, areas of specific or concentrated risk as well as
applicable industry trends or market indicators.
Capitalized technology costs
We capitalize certain software development and website
implementation costs. Capitalized costs only include
incremental, direct costs of materials and services incurred
to develop the software after the preliminary project stage is
completed, funding has been committed and it is probable that
the project will be completed and used to perform the function
intended. Incremental costs are expenditures that are out-of-
pocket to us and are not part of an allocation or existing expense
base. Software development and website implementation costs
are expensed as incurred during the preliminary project stage.
Capitalized costs are amortized from the year the software is
ready for its intended use over its estimated useful life, three
to seven years, using the straight-line method. Periodically,
we evaluate the amortization methods, remaining lives and
recoverability of such costs. Capitalized software development
and website implementation costs are included in other
non-current assets and are presented net of accumulated
amortization. Gross capitalized technology costs were $216
million and $209 million as of December 31, 2021 and 2020,
respectively. Accumulated amortization of capitalized technology
costs was $173 million and $150 million as of December 31, 2021
and 2020, respectively.
Fair Value
Certain assets and liabilities are required to be recorded at fair
value and classified within a fair value hierarchy based on inputs
used when measuring fair value. We have foreign exchange
forward contracts, cross currency and interest rate swaps that
are adjusted to fair value on a recurring basis.
Other financial instruments, including cash and cash equivalents
and short-term investments, are recorded at cost, which
approximates fair value because of the short-term maturity and
highly liquid nature of these instruments. The fair value of our
long-term debt borrowings were $4.4 billion and $4.6 billion as
of December 31, 2021 and 2020, respectively, and was estimated
based on quoted market prices.
Accounting for the impairment of long-lived
assets (including other intangible assets)
We evaluate long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Upon such an occurrence,
recoverability of assets to be held and used is measured by
comparing the carrying amount of an asset to current forecasts
of undiscounted future net cash flows expected to be generated
by the asset. If the carrying amount of the asset exceeds its
estimated future cash flows, an impairment charge is recognized
equal to the amount by which the carrying amount of the asset
exceeds the fair value of the asset. For long-lived assets held for
sale, assets are written down to fair value, less cost to sell. Fair
value is determined based on market evidence, discounted cash
flows, appraised values or management’s estimates, depending
upon the nature of the assets.
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 12
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-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.
56 S&P Global 2021 Annual Report
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.
Goodwill and other indefinite-lived intangible assets
Goodwill represents the excess of purchase price and related
costs over the value assigned to the net tangible and identifiable
intangible assets of businesses acquired. Goodwill and other
intangible assets with indefinite lives are not amortized, but
instead are tested for impairment annually during the fourth
quarter each year, or more frequently if events or changes
in circumstances indicate that the asset might be impaired.
We have four reporting units with goodwill that are evaluated
for impairment.
We initially perform a qualitative analysis evaluating whether
any events and circumstances occurred or exist that provide
evidence that it is more likely than not that the fair value of any
of our reporting units is less than its carrying amount. If, based
on our evaluation we do not believe that it is more likely than not
that the fair value of any of our reporting units is less than its
carrying amount, no quantitative impairment test is performed.
Conversely, if the results of our qualitative assessment
determine that it is more likely than not that the fair value of
any of our reporting units is less than their respective carrying
amounts, we perform a quantitative impairment test.
When conducting our impairment test to evaluate the
recoverability of goodwill at the reporting unit level, the
estimated fair value of the reporting unit is compared to its
carrying value including goodwill. Fair value of the reporting units
are estimated using the income approach, which incorporates
the use of the discounted free cash flow (“DCF”) analyses and are
corroborated using the market approach, which incorporates the
use of revenue and earnings multiples based on market data. The
DCF analyses are based on the current operating budgets and
estimated long-term growth projections for each reporting unit.
Future cash flows are discounted based on a market comparable
weighted average cost of capital rate for each reporting unit,
adjusted for market and other risks where appropriate. In
addition, we analyze any difference between the sum of the fair
values of the reporting units and our total market capitalization
for reasonableness, taking into account certain factors including
control premiums. If the fair value of the reporting unit is less
than the carrying value, the difference is recognized as an
impairment charge.
We evaluate the recoverability of indefinite-lived intangible
assets by first performing a qualitative analysis evaluating
whether any events and circumstances occurred that provide
evidence that it is more likely than not that the indefinite-lived
asset is impaired. If, based on our evaluation of the events and
circumstances that occurred during the year we do not believe
that it is more likely than not that the indefinite-lived asset
is impaired, no quantitative impairment test is performed.
Conversely, if the results of our qualitative assessment
determine that it is more likely than not that the indefinite-lived
asset is impaired, a quantitative impairment test is performed.
If necessary, an impairment analysis is performed using the
income approach to estimate the fair value of the indefinite-lived
intangible asset. If the intangible asset carrying value exceeds
its fair value, an impairment charge is recognized in an amount
equal to that excess.
Significant judgments inherent in these analyses include
estimating the amount and timing of future cash flows and
the selection of appropriate discount rates, royalty rates and
long-term growth rate assumptions. Changes in these estimates
and assumptions could materially affect the determination of
fair value for each reporting unit and indefinite-lived intangible
asset and could result in an impairment charge, which could be
material to our financial position and results of operations.
We performed our impairment assessment of goodwill
and indefinite-lived intangible assets and concluded that
no impairment existed for the years ended December 31,
2021, 2020 and 2019.
Foreign currency translation
We have operations in many foreign countries. For most
international operations, the local currency is the functional
currency. For international operations that are determined to
be extensions of the parent company, the United States (“U.S.”)
dollar is the functional currency. For local currency operations,
assets and liabilities are translated into U.S. dollars using end of
period exchange rates, and revenue and expenses are translated
into U.S. dollars using weighted-average exchange rates. Foreign
currency translation adjustments are accumulated in a separate
component of equity.
Depreciation
The costs of property and equipment are depreciated using
the straight-line method based upon the following estimated
useful lives: buildings and improvements from 15 to 40 years
and equipment and furniture from 2 to 10 years. The costs of
leasehold improvements are amortized over the lesser of the
useful lives or the terms of the respective leases.
S&P Global 2021 Annual Report 57
Advertising expense
The cost of advertising is expensed as incurred. We incurred $39
million, $29 million and $34 million in advertising costs for the
years ended December 31, 2021, 2020 and 2019, respectively.
Stock-based compensation
Stock-based compensation expense is measured at the grant
date based on the fair value of the award and is recognized over
the requisite service period, which typically is the vesting period.
Stock-based compensation is classified as both operating-
related expense and selling and general expense in the
consolidated statements of income. There were no stock options
granted in 2021, 2020 and 2019.
Income taxes
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to be applied to
taxable income in the years in which those temporary differences
are expected to be recovered or settled. We recognize liabilities
for uncertain tax positions taken or expected to be taken in
income tax returns. Accrued interest and penalties related to
unrecognized tax benefits are recognized in interest expense and
operating expense, respectively.
Judgment is required in determining our provision for income
taxes, deferred tax assets and liabilities and unrecognized tax
benefits. In determining the need for a valuation allowance, the
historical and projected financial performance of the operation
that is recording a net deferred tax asset is considered along
with any other pertinent information.
We file income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions, and we are routinely
under audit by many different tax authorities. We believe that
our accrual for tax liabilities is adequate for all open audit
years based on an assessment of many factors including past
experience and interpretations of tax law. This assessment
relies on estimates and assumptions and may involve a series
of complex judgments about future events. It is possible that
tax examinations will be settled prior to December 31, 2022. If
any of these tax audit settlements do occur within that period
we would make any necessary adjustments to the accrual for
unrecognized tax benefits.
As of December 31, 2021, we have approximately $2.9 billion of
undistributed earnings of our foreign subsidiaries, of which $0.8
billion is reinvested indefinitely in our foreign operations.
Redeemable Noncontrolling Interest
The agreement with the minority partners of our S&P Dow Jones
Indices LLC joint venture contains redemption features whereby
interests held by our 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. Since redemption of the
noncontrolling interest is outside of our control, this interest is
presented on our consolidated balance sheets under the caption
“Redeemable noncontrolling interest.” If the interest were to
be redeemed, we would generally be required to purchase the
interest at fair value on the date of redemption. 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 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. See Note 9 – Equity for further detail.
Contingencies
We accrue for loss contingencies when both (a) information
available prior to issuance of the consolidated financial
statements indicates that it is probable that a liability had been
incurred at the date of the financial statements and (b) the
amount of loss can reasonably be estimated. We continually
assess the likelihood of any adverse judgments or outcomes
to our contingencies, as well as potential amounts or ranges
of probable losses, and recognize a liability, if any, for these
contingencies based on an analysis of each matter with the
assistance of outside legal counsel and, if applicable, other
experts. Because many of these matters are resolved over long
periods of time, our estimate of liabilities may change due to
new developments, changes in assumptions or changes in
our strategy related to the matter. When we accrue for loss
contingencies and the reasonable estimate of the loss is within a
range, we record our best estimate within the range. We disclose
an estimated possible loss or a range of loss when it is at least
reasonably possible that a loss may be incurred.
Recent Accounting Standards
In October of 2021, the Financial Accounting Standards Board
(“FASB”) issued guidance that amends the acquirer’s accounting
for contract assets and contract liabilities from contracts with
customers in a business combination in accordance with Topic
606. The guidance is effective for reporting periods beginning
after December 15, 2022; however, early adoption is permitted.
We do not expect this guidance to have a significant impact on
our consolidated financial statements.
In August of 2020, the 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 significant impact on our consolidated
financial statements.
58 S&P Global 2021 Annual Report
In March of 2020, the FASB issued accounting guidance to
provide temporary optional expedients and exceptions to the
current contract modifications and hedge accounting guidance
in light of the expected market transition from London Interbank
Offered Rate (“LIBOR”) to alternative rates. The new guidance
provides optional expedients and exceptions to transactions
affected by reference rate reform if certain criteria are met. The
transactions primarily include (1) contract modifications, (2)
hedging relationships, and (3) sale or transfer of debt securities
classified as held-to-maturity. The amendments were effective
immediately upon issuance of the update. The Company may
elect to adopt the amendments prospectively to transactions
existing as of or entered into from the date of adoption through
December 31, 2022. The FASB further issued guidance in January
of 2021, to clarify the scope of Topic 848. We do not expect
this guidance to have a 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 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. The guidance clarifies how to account for the
transition into and out of the equity method of accounting when
considering observable transactions under the measurement
alternative. The guidance was effective 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, which eliminates certain exceptions
to the general principles of Topic 740. The guidance is effective
for reporting periods after December 15, 2020. Our adoption
of this guidance on January 1, 2021 did not have a significant
impact on our consolidated financial statements.
Reclassification
Certain prior year amounts have been reclassified for
comparability purposes.
S&P Global 2021 Annual Report 59
growth opportunities as a result of the acquisition. The intangible
assets, excluding goodwill and indefinite-lived intangibles, will
be amortized over their anticipated useful lives between 3 and
5 years which will be determined when we finalize our purchase
price allocations.
2020
For the year ended December 31, 2020, we paid cash for
acquisitions of $201 million, net of cash acquired, funded with
cash from operations. None of our acquisitions were material
either individually or in the aggregate, including the pro forma
impact on earnings. Acquisitions completed during the year
ended December 31, 2020 included:
– 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.
We accounted for this acquisition using the purchase method
of accounting. 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 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. We accounted for this acquisition using
the purchase method of accounting. The acquisition of the
ESG Ratings Business is not material to our consolidated
financial statements.
For acquisitions during 2020 that were accounted for using the
purchase method, the excess of the purchase price over the fair
value of the net assets acquired is allocated to goodwill and
other intangibles. The goodwill recognized on our acquisitions
is largely attributable to anticipated operational synergies and
growth opportunities as a result of the acquisition. The intangible
assets, excluding goodwill and indefinite-lived intangibles, are
being amortized over their anticipated useful lives between 3 and
10 years. The goodwill for Greenwich and ESG Ratings Business
is deductible for tax purposes.
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. On March 11,
2021, S&P Global and IHS Markit shareholders voted to approve
the merger agreement. As of December 31, 2021, IHS Markit
had approximately 399.1 million shares outstanding. Subject
to certain closing conditions, the merger is expected to be
completed in the first quarter of 2022.
2021
For the year ended December 31, 2021, we paid cash for
acquisitions of $99 million, net of cash acquired, funded with
cash from operations. None of our acquisitions were material
either individually or in the aggregate, including the pro forma
impact on earnings. Acquisitions completed during the year
ended December 31, 2021 included:
– In December of 2021, as part of our Sustainable1
investments, we completed the acquisition of The Climate
Service, Inc. (“TCS”), which has developed a climate risk
analytics platform assisting corporates, investors and
governments with assessing physical climate risks.
Sustainable1 is S&P Global’s single source of essential
sustainability intelligence, bringing together S&P Global’s
resources and full product suite of data, benchmarking,
analytics, evaluations and indices that provide customers
with a 360-degree view to help achieve their sustainability
goals. The acquisition will add capabilities to S&P Global’s
leading portfolio of essential environmental, social, and
governance (“ESG”) insights and solutions for its customers.
Through this acquisition, S&P Global will be able to offer its
clients even more transparent, robust and comprehensive
climate data, models and analytics. We accounted for the
acquisition using the purchase method of accounting. The
acquisition of The Climate Service, Inc. is not material to our
consolidated financial statements.
For acquisitions during 2021 that were accounted for using the
purchase method, the excess of the purchase price over the fair
value of the net assets acquired is allocated to goodwill and
other intangibles. The goodwill recognized on our acquisitions is
largely attributable to anticipated operational synergies and
60 S&P Global 2021 Annual Report
2019
For the year ended December 31, 2019, we paid cash for
acquisitions of $91 million, net of cash acquired, funded with
cash from operations. None of our acquisitions were material
either individually or in aggregate, including the pro forma impact
on earnings. Acquisitions completed during the year ended
December 31, 2019 included:
– In December of 2019, Market Intelligence acquired 451
Research, LLC (“451 Research”), a privately-held research and
advisory firm that provides intelligence, expertise and data
covering high-growth emerging technology segments. This
acquisition will expand and strengthen Market Intelligence’s
research coverage, adding differentiated expertise and
intelligence with comprehensive offerings in technologies. We
accounted for this acquisition using the purchase method of
accounting. The acquisition of 451 Research is not material to
our consolidated financial statements.
– In September of 2019, Platts acquired Canadian Enerdata
Ltd. (“Enerdata”), an independent provider of energy data
and information in Canada, to further enhance Platts’
North American natural gas offering. We accounted for the
acquisition using the purchase method of accounting. The
acquisition of Enerdata is not material to our consolidated
financial statements.
– In August of 2019, Platts acquired Live Rice Index (“LRI”),
a global provider of information and benchmark price
assessments for the rice industry. The purchase expands
Platts portfolio of agricultural price assessments while
extending its data and news coverage in key export regions for
international grains. We accounted for the acquisition using
the purchase method of accounting. The acquisition of LRI is
not material to our consolidated financial statements.
– In July of 2019, we completed the acquisition of the Orion
technology center from Ness Technologies. Orion was
developed to become our center of excellence for technology
talent to focus on innovation by providing employees with
access to the latest technologies and global communications
infrastructure, as well as physical spaces that enable highly
collaborative teams. We accounted for the acquisition using
the purchase method of accounting. The acquisition of Orion
is not material to our consolidated financial statements.
For acquisitions during 2019 that were accounted for using the
purchase method, the excess of the purchase price over the fair
value of the net assets acquired is allocated to goodwill and
other intangibles. The goodwill recognized on our acquisitions
is largely attributable to anticipated operational synergies and
growth opportunities as a result of the acquisition. The intangible
assets, excluding goodwill and indefinite-lived intangibles, are
being amortized over their anticipated useful lives between 3 and
10 years. The goodwill for 451 Research and Orion is deductible
for tax purposes.
Non-cash investing activities
Liabilities assumed in conjunction with our acquisitions
are as follows:
(in millions)
Fair value of assets acquired
Cash paid (net of cash
acquired)
Liabilities assumed
Year ended December 31,
2021
$110
99
$11
2020
$219
201
$18
2019
$110
91
$19
DIVESTITURES
2021
In December of 2021, S&P Global entered into an agreement
to sell CUSIP Global Services (“CGS”) business, included in our
Market Intelligence segment, to FactSet Research Systems
for $1.925 billion, with the agreement subject to customary
purchase price adjustments. The agreement represents
continued progress toward completing the pending merger of
S&P Global and IHS Markit, and the divestiture is dependent
on expected closing of the merger with IHS Markit and other
customary conditions. We have also pledged to divest our
Leveraged Commentary and Data (“LCD”) business, included in
our Market Intelligence segment, along with a related family of
leveraged loan indices as a condition for regulatory approval.
Under the European Commission’s conditional approval of the
merger of S&P Global and IHS Markit, execution of an agreement
to sell the LCD business can occur after the closing of the merger.
The divestitures remain subject to further review and approval
by antitrust regulators. Subject to certain closing conditions, the
merger is expected to be completed in the first quarter of 2022.
During the year ended December 31, 2021, we completed the
following dispositions that resulted in a pre-tax gain of $11
million, which was included in Gain on dispositions in the
consolidated statement of income:
– During the year ended December 31, 2021, we recorded
a pre-tax gain of $8 million ($6 million after-tax) in Gain
on dispositions in the consolidated statements of income
related to the sale of office facilities in India.
– During the year ended December 31, 2021, we recorded a
pre-tax gain of $3 million ($3 million after-tax) in Gain on
dispositions in the consolidated statements of income related
to the sale of Standard & Poor’s Investment Advisory Services
LLC (“SPIAS”), a business within our Market Intelligence
segment, that occurred in July of 2019.
S&P Global 2021 Annual Report 61
– In March of 2019, we entered into an agreement to sell
SPIAS to Goldman Sachs Asset Management (“GSAM”).
SPIAS provides non-discretionary investment advice across
institutional sub-advisory and intermediary distribution
channels globally. On July 1, 2019, we completed the sale of
SPIAS to GSAM. During the year ended December 31, 2019,
we recorded a pre-tax gain of $22 million ($12 million after-
tax) in Gain on dispositions in the consolidated statement of
income related to the sale of SPIAS.
The components of assets and liabilities held for sale in the
consolidated balance sheet consist of the following:
(in millions)
Accounts Receivable, net
Goodwill
Other assets
Assets of businesses held for sale
Accounts payable and accrued expenses
Unearned revenue
Liabilities of businesses held for sale
December 31,
2021 1
$59
255
7
$321
$11
138
$149
1
Assets and liabilities held for sale as of December 31, 2021 relate
to CGS and LCD.
The operating profit of our businesses that were held for sale or
disposed of for the years ending December 31, 2021, 2020, and
2019 is as follows:
Operating profit 1
Year ended December 31,
2021
$172
2020
$162
2019
$162
1
The operating profit presented includes the revenue and recurring direct
expenses associated with businesses held for sale. The year ended
December 31, 2021 excludes a pre-tax gain on the sale of SPIAS of $3 million.
The year ended December 31, 2020 excludes a pre-tax gain on the sale of the
IR webhosting business of $11 million. The year ended December 31, 2019
excludes a pre-tax gain on the sale of RigData and SPIAS of $27 million and
$22 million, respectively.
2020
During the year ended December 31, 2020, we completed the
following dispositions that resulted in a pre-tax gain of $16
million, which was included in Gain on dispositions in the
consolidated statement 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 integrated Market Intelligence’s
proprietary data into Q4’s portfolio of solutions, enabling
further opportunities for commercial collaboration. In
connection with transitioning its IR webhosting business to
Q4, Market Intelligence received a minority investment in
Q4. During the year ended December 31, 2020, we recorded
a pre-tax gain of $11 million ($6 million after-tax) in Gain
on dispositions in the consolidated statements of income
related to the sale of IR.
– In September of 2020, we sold our facility at East Windsor,
New Jersey. During the year ended December 31, 2020, we
recorded a pre-tax gain of $4 million ($3 million after-tax)
in Gain on dispositions in the consolidated statements of
income related to the sale of East Windsor.
– During the year ended December 31, 2020, we recorded a
pre-tax gain of $1 million ($1 million after-tax) in Gain on
dispositions in the consolidated statements of income related
to the sale of Standard & Poor’s Investment Advisory Services
LLC (“SPIAS”), a business within our Market Intelligence
segment, in July of 2019.
2019
During the year ended December 31, 2019, we completed the
following dispositions that resulted in a pre-tax gain of $49
million, which was included in Gain on dispositions in the
consolidated statement of income:
business within our Platts segment, to Drilling Info, Inc.
RigData is a provider of daily information on rig activity for the
natural gas and oil markets across North America. During the
year ended December 31, 2019, we recorded a pre-tax gain
of $27 million ($26 million after-tax) in Gain on dispositions
in the consolidated statement of income related to the
sale of RigData.
62 S&P Global 2021 Annual Report
– On July 31, 2019, we completed the sale of RigData, a
(in millions)
3. Goodwill and Other
Intangible Assets
GOODWILL
Goodwill represents the excess of purchase price and related
costs over the value assigned to the net tangible and identifiable
intangible assets of businesses acquired.
The change in the carrying amount of goodwill by segment is shown below:
(in millions)
Balance as of December 31, 2019
Acquisitions
Dispositions
Other ¹
Balance as of December 31, 2020
Acquisitions
Reclassifications 2
Other ¹
Ratings
Market
Intelligence
Platts
Indices
Corporate
Total
$115
138
—
10
263
—
—
(18)
$2,062
—
(2)
11
2,071
—
(255)
(8)
$521
—
—
6
527
—
—
(2)
$376
—
—
—
376
—
—
—
$501
—
—
(3)
498
54
—
—
$3,575
138
(2)
24
3,735
54
(255)
(28)
Balance as of December 31, 2021
$245
$1,808
$525
$376
$552
$3,506
1
Primarily relates to the impact of foreign exchange and valuation adjustments for prior period acquisitions. 2021 includes adjustments related to RobecoSAM and
2020 includes adjustments related to Investor Relations.
2
Relates to CGS and LCD, which are classified as assets held for sale in our consolidated balance sheet as of December 31, 2021.
Goodwill additions and dispositions in the table above relate to
transactions discussed in Note 2 – Acquisitions and Divestitures.
– 2021 and 2020 both include $185 million within our Market
Intelligence segment for the SNL tradename.
OTHER INTANGIBLE ASSET
Other intangible assets include both indefinite-lived assets
not subject to amortization and definite-lived assets subject
to amortization. We have indefinite-lived assets with a carrying
value of $846 million as of December 31, 2021 and 2020.
– 2021 and 2020 both include $380 million and $90 million for
Dow Jones Indices intellectual property and the Dow Jones
tradename, respectively, that we recorded as part of the
transaction to form S&P Dow Jones Indices LLC in 2012.
– 2021 and 2020 both include $132 million within our Indices
segment for the balance of the IP rights in a family of indices
derived from the S&P 500, solidifying Indices IP in and to the
S&P 500 index family.
– 2021 and 2020 both include $59 million within our Indices
segment for the Goldman Sachs Commodity Index intellectual
property and the Broad Market Indices intellectual property.
S&P Global 2021 Annual Report 63
The following table summarizes our definite-lived intangible assets:
(in millions)
COST
Databases
and software
Content
Customer
relationships
Tradenames
Other
intangibles
Total
Balance as of December 31, 2019
$629
$139
$355
$54
$130
$1,307
Acquisitions
Other (primarily Fx) 1
Balance as of December 31, 2020
Acquisitions
Other 1
14
2
645
—
—
—
—
139
—
—
—
1
356
—
(1)
—
1
55
—
—
40
7
177
18
11
54
11
1,372
18
10
Balance as of December 31, 2021
$645
$139
$355
$55
$206
$1,400
ACCUMULATED AMORTIZATION
Balance as of December 31, 2019
$331
$129
$153
$48
$68
Current year amortization
Acquisitions
Other (primarily Fx) 1
Balance as of December 31, 2020
Current year amortization
Reclassifications 2
Other 1
73
—
2
406
52
8
1
10
—
—
139
—
—
—
21
—
1
175
21
—
—
2
—
—
50
2
—
—
17
10
1
96
21
(8)
(2)
$729
123
10
4
866
96
—
(1)
Balance as of December 31, 2021
$467
$139
$196
$52
$107
$961
NET DEFINITE-LIVED INTANGIBLES:
December 31, 2020
December 31, 2021
$239
$178
—
—
$181
$159
$5
$3
$81
$99
$506
$439
1
Primarily relates to the impact of foreign exchange and valuation adjustments for prior period acquisitions. 2021 includes adjustments related to RobecoSAM and
2020 includes adjustments related to 451 Research.
2
The reclassification in 2021 is related to RobecoSAM.
Definite-lived intangible assets are being amortized on a
straight-line basis over periods of up to 21 years. The weighted-
average life of the intangible assets as of December 31, 2021 is
approximately 12 years.
Amortization expense was $96 million, $123 million and $122
million for the years ended December 31, 2021, 2020 and 2019,
respectively. Expected amortization expense for intangible
assets over the next five years for the years ended December 31,
assuming no further acquisitions or dispositions, is as follows:
(in millions)
Amortization expense 1
2022
$91
2023
$85
2024
$82
2025
$65
2026
$34
1
Amortization expense does not include the expected merger with IHS Markit which is expected to be completed in the first quarter of 2022.
64 S&P Global 2021 Annual Report
4. Taxes on Income
Income before taxes on income resulting from domestic and
foreign operations is as follows:
(in millions)
Domestic operations
Foreign operations
Year ended December 31,
2021
$2,874
1,290
2020
2019
$2,226
1,002
$2,068
862
Total income before taxes
$4,164
$3,228
$2,930
The increase in the effective income tax rate in 2021 was
primarily due to a change in the mix of income by jurisdiction.
The increase in the effective income tax rate in 2020 was
primarily due to a decrease in the recognition of excess
tax benefits associated with share-based payments in the
statement of income.
We have elected to recognize the tax on Global Intangible Low
Taxed Income (“GILTI”) as a period expense in the year the tax is
incurred. GILTI expense is included in Other, net above.
The principal temporary differences between the accounting
for income and expenses for financial reporting and income tax
purposes are as follows:
The provision for taxes on income consists of the following:
(in millions)
Federal:
Current
Deferred
Total federal
Foreign:
Current
Deferred
Total foreign
State and local:
Current
Deferred
Total state and local
Year ended December 31,
2021
2020
2019
$438
$349
$303
(9)
429
295
23
318
153
1
154
1
350
246
(9)
237
111
(4)
107
13
316
201
14
215
93
3
96
Total provision for taxes
$901
$694
$627
A reconciliation of the U.S. federal statutory income tax
rate to our effective income tax rate for financial reporting
purposes is as follows:
(in millions)
Deferred tax assets:
Employee compensation
Accrued expenses
Postretirement benefits
Unearned revenue
Forward exchange contracts
Loss carryforwards
Lease liabilities
Other
Total deferred tax assets
Deferred tax liabilities:
Goodwill and intangible assets
Right of use asset
Postretirement benefits
Fixed assets
Total deferred tax liabilities
Net deferred income tax asset
before valuation allowance
Valuation allowance
Net deferred income tax liability
Year ended December 31,
Reported as:
December 31,
2021
2020
$57
54
28
74
71
204
142
32
662
(394)
(101)
(46)
(6)
(547)
115
(206)
$(91)
$56
(147)
$(91)
64
41
12
28
—
217
186
53
601
(347)
(138)
—
(7)
(492)
109
(219)
$(110)
$67
(177)
$(110)
U.S. federal statutory income
tax rate
State and local income taxes
Foreign operations
Stock-based compensation
S&P Dow Jones Indices LLC
joint venture
Tax credits and incentives
Other, net
2021
2020
2019
21.0% 21.0% 21.0%
3.3
(0.2)
(0.8)
(1.1)
(2.3)
1.7
3.0
(0.3)
(0.7)
(1.2)
(2.2)
1.9
2.6
(0.3)
(1.4)
(1.2)
(1.7)
2.4
Effective income tax rate
21.6% 21.5% 21.4%
Non-current deferred tax assets
Non-current deferred tax liabilities
Net deferred income tax liability
We record valuation allowances against deferred income tax
assets when we determine that it is more likely than not that
such deferred income tax assets will not be realized based upon
all the available evidence. The valuation allowance is primarily
related to operating losses.
As of December 31, 2021, we have approximately $2.9 billion of
undistributed earnings of our foreign subsidiaries, of which $0.8
billion is reinvested indefinitely in our foreign operations. We have
S&P Global 2021 Annual Report 65
our accrual for tax liabilities is adequate for all open audit
years based on an assessment of many factors including past
experience and interpretations of tax law. This assessment
relies on estimates and assumptions and may involve a series
of complex judgments about future events. It is possible that
tax examinations will be settled prior to December 31, 2022. If
any of these tax audit settlements do occur within that period,
we would make any necessary adjustments to the accrual for
unrecognized tax benefits.
5. Debt
A summary of long-term debt outstanding is as follows:
(in millions)
4.0% Senior Notes, due 2025 1
2.95% Senior Notes, due 2027 2
2.5% Senior Notes, due 2029 3
1.25% Senior Notes, due 2030 4
6.55% Senior Notes, due 2037 5
4.5% Senior Notes, due 2048 6
3.25% Senior Notes, due 2049 7
2.3% Senior Notes, due 2060 8
December 31,
2021
$696
496
496
593
290
273
589
681
2020
$695
495
495
592
290
273
589
681
Long-term debt
$4,114
$4,110
1
2
3
4
5
6
7
8
Interest payments are due semiannually on June 15 and December 15, and
as of December 31, 2021, the unamortized debt discount and issuance costs
total $4 million.
Interest payments are due semiannually on January 22 and July 22, and as
of December 31, 2021, the unamortized debt discount and issuance costs
total $4 million.
Interest payments are due semiannually on June 1 and December 1, and as
of December 31, 2021, the unamortized debt discount and issuance costs
total $4 million.
Interest payments are due semiannually on February 15 and August 15, and
as of December 31, 2021, the unamortized debt discount and issuance costs
total $7 million.
Interest payments are due semiannually on May 15 and November 15, and
as of December 31, 2021, the unamortized debt discount and issuance costs
total $3 million.
Interest payments are due semiannually on May 15 and November 15, and
as of December 31, 2021, the unamortized debt discount and issuance costs
total $10 million.
Interest payments are due semiannually on June 1 and December 1, and as
of December 31, 2021, the unamortized debt discount and issuance costs
total $11 million.
Interest payments are due semiannually on February 15 and August 15, and
as of December 31, 2021, the unamortized debt discount and issuance costs
total $19 million.
not recorded deferred income taxes applicable to undistributed
earnings of foreign subsidiaries that are indefinitely reinvested
in foreign operations. Quantification of the deferred tax liability,
if any, associated with indefinitely reinvested earnings is
not practicable.
We made net income tax payments totaling $883 million in 2021,
$683 million in 2020, and $659 million in 2019. As of December
31, 2021, we had net operating loss carryforwards of $761
million, of which a significant portion has an unlimited carryover
period under current law.
A reconciliation of the beginning and ending amount of
unrecognized tax benefits is as follows:
(in millions)
Balance at beginning of year
Additions based on tax
positions related to the
current year
Additions for tax positions
of prior years
Reduction for tax positions
of prior years
Reduction for settlements
Expiration of applicable
statutes of limitations
Year ended December 31,
2021
$121
2020
$124
2019
$147
35
9
—
(8)
(10)
24
1
(13)
(4)
(11)
21
11
(15)
(33)
(7)
Balance at end of year
$147
$121
$124
The total amount of federal, state and local, and foreign
unrecognized tax benefits as of December 31, 2021, 2020
and 2019 was $147 million, $121 million and $124 million,
respectively, exclusive of interest and penalties. During the
year ended December 31, 2021, the change in unrecognized tax
benefits resulted in a net increase of tax expense of $31 million.
We recognize accrued interest and penalties related to
unrecognized tax benefits in interest expense and operating-
related expense, respectively. Based on the current status
of income tax audits, we believe that the total amount of
unrecognized tax benefits on the balance sheet may be reduced
by up to approximately $16 million in the next twelve months as
a result of the resolution of local tax examinations. In addition
to the unrecognized tax benefits, we had $24 million as of both
December 31, 2021 and 2020 of accrued interest and penalties
associated with unrecognized tax benefits.
The U.S. federal income tax audits for 2017 through 2021 are in
process. During 2021, we completed state and foreign tax audits
and, with few exceptions, we are no longer subject to federal,
state, or foreign income tax examinations by tax authorities for
the years before 2013. The impact to tax expense in 2021, 2020
and 2019 was not material.
We file income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions, and we are routinely
under audit by many different tax authorities. We believe that
66 S&P Global 2021 Annual Report
Annual debt maturities are scheduled as follows based on book
values as of December 31, 2021: no amounts due in 2022, 2023,
or 2024; $696 million due in 2025; no amounts due in 2026; and
$3.4 billion due thereafter.
The only financial covenant required under our credit facility 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.
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.
On August 13, 2020, we issued $600 million of 1.25% senior notes
due in 2030 and $700 million of 2.3% senior notes due in 2060.
The notes are fully and unconditionally guaranteed by our wholly-
owned subsidiary, Standard & Poor’s Financial Services LLC. In
the third quarter of 2020, we used the net proceeds to fund the
redemption and extinguishment of the $900 million outstanding
principal amount of our 4.4% senior notes due in 2026 and a
portion of the outstanding principal amount of our 6.55% senior
notes due in 2037 and our 4.5% senior notes due in 2048.
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. The notes are fully and unconditionally guaranteed by our
wholly-owned subsidiary, Standard & Poor’s Financial Services
LLC. 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.
We have the ability to borrow a total of $1.5 billion through
our commercial paper program, which is supported by our
credit facility. As of December 31, 2021 and 2020, there was no
commercial paper issued or outstanding, and we similarly did not
draw or have any borrowings outstanding from the credit facility
or the previous credit facility during the years ended December
31, 2021 and 2020.
Commitment fees for the unutilized commitments under the
credit facility and applicable margins for borrowings thereunder
are linked to the Company achieving three environmental
sustainability performance indicators related to emissions,
tested annually. We currently pay a commitment fee of 9 basis
points. The credit facility 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 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.
6. 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 December 31, 2021
and December 31, 2020, we have entered into foreign exchange
forward contracts to mitigate or hedge the effect of adverse
fluctuations in foreign exchange rates and cross currency swap
contracts to hedge a portion of our net investment in a foreign
subsidiary against volatility in foreign exchange rates. During
the twelve months ended December 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 twelve months ended December 31, 2021, 2020
and 2019 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 December
31, 2021 and 2020, the aggregate notional value of these
outstanding forward contracts was $376 million and $460
million, respectively. The changes in fair value of these forward
contracts are recorded in prepaid and other assets or other
current liabilities in the consolidated balance sheet with their
corresponding change in fair value recognized in selling and
general expenses in the consolidated statement of income.
The amount recorded in prepaid and other current assets as
of December 31, 2021 and 2020 was $5 million and $2 million,
respectively. The amount recorded in other current liabilities was
less than $1 million as of December 31, 2021 and $2 million as of
December 31, 2020. The amount recorded in selling and general
expense for the twelve months ended December 31, 2021 and
2020 related to these contracts was a net loss of $9 million and a
net gain of $9 million, respectively.
S&P Global 2021 Annual Report 67
Net Investment Hedges
During the twelve months ended December 31, 2021 and 2020, we
entered into cross currency swaps to hedge a portion of our net
investment in one of our European subsidiaries against volatility
in the Euro/U.S. dollar exchange rate. These swaps are designated
and qualify as a hedge of a net investment in a foreign subsidiary
and are scheduled to mature in 2024, 2029, 2030. The notional
value of our outstanding cross currency swaps designated as a
net investment hedge was $1 billion as of December 31, 2021
and 2020, respectively. The changes in the fair value of swaps
are recognized in foreign currency translation adjustments, a
component of other comprehensive income (loss), and reported
in accumulated other comprehensive loss in our consolidated
balance sheet. 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 represent net
periodic interest settlements and accruals, which are recognized
in interest expense, net. We recognized net interest income of $20
million and $10 million during the twelve months ended December
31, 2021 and 2020, respectively.
Cash Flow Hedges
Foreign Exchange Forward Contracts
During the twelve months ended December 31, 2021, 2020
and 2019, 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 fourth quarter of 2023, 2022
and 2020 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 December 31, 2021, we estimate that $6 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 December 31, 2021 and December 31, 2020, the aggregate
notional value of our outstanding foreign exchange forward
contracts designated as cash flow hedges was $498 million and
$489 million, respectively.
Interest Rate Swaps
During the twelve months ended December 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 will
be subsequently reclassified into interest expense, net in the
same period that the hedged transaction affects earnings.
As of December 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 hedges
as of December 31, 2021 and December 31, 2020:
(in millions)
Balance Sheet Location
Derivatives designated as cash flow hedges:
Prepaid and other current assets
Foreign exchange forward contracts
Other current liabilities
Foreign exchange forward contracts
Other non-current liabilities
Interest rate swap contracts
Derivatives designated as net investment hedges:
Other non-current liabilities
Cross currency swaps
December 31,
2021
2020
$7
$—
$270
$23
$2
$—
$17
$107
68 S&P Global 2021 Annual Report
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 years ended December 31:
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)
2021
2020
2019
2021
2020
2019
Cash flow hedges - designated as
hedging instruments
Foreign exchange forward contracts
$(11)
$17
$(2)
Revenue, Selling and
general expenses
Interest rate swap contracts
$(270)
$—
$—
Interest expense, net
$19
$—
$2
$5
$—
$—
Net investment hedges - designated as
hedging instruments
Cross currency swaps
$84
$97
$(10)
Interest expense, net
$(5)
$—
$—
The activity related to the change in unrealized gains (losses) in accumulated other comprehensive loss was as follows for the years
ended December 31:
(in millions)
Cash Flow Hedges
Foreign exchange forward contracts
Net unrealized gains on cash flow hedges, net of taxes, beginning of period
Change in fair value, net of tax
Reclassification into earnings, net of tax
Net unrealized gains on cash flow hedges, net of taxes, end of period
Interest rate swap contracts
Net unrealized losses on cash flow hedges, net of taxes, beginning of period
Change in fair value, net of tax
Reclassification into earnings, net of tax
Net unrealized losses on cash flow hedges, net of taxes, end of period
$(203)
$—
Net Investment Hedges
Net unrealized losses on net investment hedges, net of taxes, beginning of period
Change in fair value, net of tax
Reclassification into earnings, net of tax
$(81)
59
5
$(8)
(73)
—
Net unrealized losses on net investment hedges, net of taxes, end of period
$(17)
$(81)
Year ended December 31,
2021
2020
2019
$14
11
(19)
$6
$—
(203)
—
$2
14
(2)
$14
$—
—
—
$4
3
(5)
$2
$—
—
—
$—
$—
(8)
—
$(8)
S&P Global 2021 Annual Report 69
7. Employee Benefits
We maintain a number of active defined contribution retirement
plans for our employees. The majority of our defined benefit
plans are frozen. As a result, no new employees will be permitted
to enter these plans and no additional benefits for current
participants in the frozen plans will be accrued.
We also have supplemental benefit plans that provide senior
management with supplemental retirement, disability and death
benefits. Certain supplemental retirement benefits are based on
final monthly earnings. In addition, we sponsor a voluntary 401(k)
plan under which we may match employee contributions up to
certain levels of compensation as well as profit-sharing plans
under which we contribute a percentage of eligible employees’
compensation to the employees’ accounts.
We also provide certain medical, dental and life insurance
benefits for active 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 retirement and
postretirement plans in the consolidated balance sheets, with a
corresponding adjustment to accumulated other comprehensive
loss, net of taxes. The amounts in accumulated other
comprehensive loss represent net unrecognized actuarial losses
and unrecognized prior service costs. These amounts will be
subsequently recognized as net periodic pension cost pursuant
to our accounting policy for amortizing such amounts.
Net periodic benefit cost for our retirement and postretirement
plans other than the service cost component are included
in other (income) expense, net in our consolidated
statements of income.
70 S&P Global 2021 Annual Report
Benefit Obligation
A summary of the benefit obligation and the fair value of plan
assets, as well as the funded status for the retirement and
postretirement plans as of December 31, 2021 and
2020, is as follows (benefits paid in the table below include
only those amounts contributed directly to or paid directly
from plan assets):
(in millions)
Net benefit obligation at beginning of year
Service cost
Interest cost
Plan participants’ contributions
Actuarial (gain) loss 1
Gross benefits paid
Foreign currency effect
Other adjustments 2
Net benefit obligation at end of year
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Plan participants’ contributions
Gross benefits paid
Foreign currency effect
Fair value of plan assets at end of year
Funded status
Amounts recognized in consolidated balance sheets:
Non-current assets
Current liabilities
Non-current liabilities
RETIREMENT PLANS
POSTRETIREMENT PLANS
2021
$2,220
4
2020
$1,945
4
2021
$36
—
2020
$38
—
40
—
(55)
(77)
(10)
—
2,122
2,243
58
11
—
(77)
(4)
2,231
$109
$359
(10)
(240)
$109
52
—
269
(76)
26
—
2,220
1,960
327
12
—
(76)
20
2,243
$23
$297
(10)
(264)
$23
1
2
(2)
(5)
—
(4)
28
9
—
—
2
(5)
—
6
1
2
1
(6)
—
—
36
13
—
—
2
(6)
—
9
$(22)
$(27)
$—
—
(22)
$(22)
$—
—
(27)
$(27)
Accumulated benefit obligation
$2,110
$2,204
Plans with accumulated benefit obligation in excess of the
fair value of plan assets:
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Amounts recognized in accumulated other comprehensive loss,
net of tax:
Net actuarial loss (gain)
Prior service credit
Total recognized
$250
$238
$—
$350
2
$352
$274
$258
$—
$373
2
$375
$(36)
(14)
$(50)
$(37)
(12)
$(49)
1
2
The actuarial gain in 2021 compared to the actuarial loss in 2020 was primarily due to an increase in the discount rate.
Relates to the impact of a plan amendment in 2021.
S&P Global 2021 Annual Report 71
Net Periodic Benefit Cost
For purposes of determining annual pension cost, prior service
costs are being amortized straight-line over the average
expected remaining lifetime of plan participants expected to
receive benefits.
(in millions)
Service cost
Interest cost
Expected return on assets
Amortization of:
Actuarial loss (gain)
Prior service credit
Net periodic benefit cost
Settlement charge
Total net periodic benefit cost
A summary of net periodic benefit cost for our retirement
and postretirement plans for the years ended December
31, is as follows:
RETIREMENT PLANS
POSTRETIREMENT PLANS
2021
2020
2019
2021
2020
2019
$4
40
$4
52
$3
64
(104)
(102)
(108)
21
—
(39)
31
$(36)
17
—
(29)
31
(26)
12
—
(29)
1132
$84
$—
1
—
(2)
(1)
(2)
—
$—
1
—
(2)
(1)
(2)
—
$—
1
—
(2)
(1)
(2)
—
$(2)
$(2)
$(2)
1
2
During the years ended December 31, 2021 and 2020, lump sum withdrawals exceeded the combined total anticipated annual service and interest cost of our U.K.
pension plan, triggering the recognition of non-cash pre-tax settlement charges of $3 million.
Relates to the impact of a retiree annuity purchase in 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 non-cash pretax settlement charge reflects the accelerated recognition of a portion of unamortized actuarial losses in the plan.
Our U.K. retirement plan accounted for a benefit of $22 million
in 2021, $17 million in 2020 and $14 million in 2019 of the net
periodic benefit cost attributable to the funded plans.
Other changes in plan assets and benefit obligations recognized
in other comprehensive income, net of tax for the years ended
December 31, are as follows:
(in millions)
Net actuarial loss (gain)
Recognized actuarial (gain) loss
Prior service cost
Settlement charge
Total recognized
RETIREMENT PLANS
POSTRETIREMENT PLANS
2021
2020
$(6)
(15)
—
(2)1
$28
(9)
—
(2)1
2019
$(10)
(10)
—
(85)2
$(23)
$17
$(105)
2021
2020
2019
$(1)
1
(1)
—
$(1)
$1
2
1
—
$4
$—
1
1
—
$2
1
2
During the years ended December 31, 2021 and 2020, lump sum withdrawals exceeded the combined total anticipated annual service and interest cost of our U.K.
pension plan, triggering the recognition of non-cash pre-tax settlement charges of $3 million.
Relates to the impact of a retiree annuity purchase in 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 non-cash after tax settlement charge reflects the accelerated recognition of a portion of unamortized actuarial losses in the plan.
72 S&P Global 2021 Annual Report
The total cost for our retirement plans was $93 million for
2021, $91 million for 2020 and $187 million for 2019. The total
cost for our retirement plans in 2019 includes the $113 million
settlement charge related to the retiree annuity purchase in
2019. Included in the total retirement plans cost are defined
contribution plans cost of $86 million for 2021, $80 million for
2020 and $73 million for 2019.
Assumptions
Benefit obligation:
Discount rate 2
Net periodic cost:
Weighted-average healthcare cost rate 1
Discount rate - U.S. plan 2
Discount rate - U.K. plan 2
Return on assets 3
RETIREMENT PLANS
POSTRETIREMENT PLANS
2021
2020
2019
2021
2020
2019
3.05%
2.75%
3.45%
2.72% 2.20% 3.08%
2.75%
1.36%
5.00%
3.45%
1.92%
5.50%
4.40%
2.72%
6.00%
N/A
2.20% 3.08%
6.00% 6.50%
4.15%
1
2
3
The health care cost trend rate no longer applies since all subsidized benefits subject to trend were eliminated in 2021.
Effective January 1, 2021, we changed our discount rate assumption on our U.S. retirement plans to 2.75% from 3.45% in 2020 and changed our discount rate
assumption on our U.K. plan to 1.36% from 1.92% in 2020.
The expected return on assets assumption is calculated based on the plan’s asset allocation strategy and projected market returns over the long-term. Effective
January 1, 2022, our return on assets assumption for the U.S. plan was reduced to 4.00% from 5.00% and the U.K. plan was reduced to 5.00% from 5.50%.
Cash Flows
In December of 2003, the Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (the “Act”) was
enacted. The Act established a prescription drug benefit under
Medicare, known as “Medicare Part D”, and a federal subsidy
to sponsors of retiree healthcare benefit plans that provide a
benefit that is at least actuarially equivalent to Medicare Part
D. Our benefits provided to certain participants are at least
actuarially equivalent to Medicare Part D, and, accordingly, we
are entitled to a subsidy. Effective January 1, 2021, we elected to
no longer file for Medicare Part D subsidy.
(in millions)
2022
2023
2024
2025
2026
2027-2031
Retirement
Plans 1
Postretirement
Plans 2
$70
73
75
79
82
447
3
3
3
3
2
8
Expected employer contributions in 2022 are $11 million and $3
million for our retirement and postretirement plans, respectively.
1
In 2022, we may elect to make non-required contributions
depending on investment performance and the pension plan
status. Information about the expected cash flows for our
retirement and postretirement plans is as follows:
Reflects the total benefits expected to be paid from the plans or from our
assets including both our share of the benefit cost and the participants’
share of the cost.
2
Reflects the total benefits expected to be paid from our assets.
S&P Global 2021 Annual Report 73
Fair Value of Plan Assets
In accordance with authoritative guidance for fair value
measurements certain assets and liabilities are required to
be recorded at fair value. Fair value is defined as the amount
that would be received for selling an asset or paid to transfer a
liability in an orderly transaction between market participants.
A fair value hierarchy has been established which requires us to
maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. The three levels
of inputs used to measure fair value are as follows:
– Level 1 - Unadjusted quoted prices in active markets for
identical assets or liabilities.
– Level 2 - Observable inputs other than Level 1 prices, such
as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data
for substantially the full term of the assets or liabilities.
– Level 3 - Unobservable inputs that are supported by little or
no market activity and that are significant to the fair value of
the assets or liabilities.
The fair value of our defined benefit plans assets as of December 31, 2021 and 2020, by asset class is as follows:
(in millions)
Cash and short-term investments
Equities:
U.S. indexes 1
Fixed income:
Long duration strategy 2
Intermediate duration securities
Real Estate:
U.K. 3
Infrastructure:
U.K. 4
Total
Common collective trust funds measured at net asset value
as a practical expedient
Collective investment funds 5
Total
December 31, 2021
Total
Level 1
Level 2
$6
6
—
—
—
—
$12
$—
—
1,376
59
—
81
$1,516
$6
6
1,376
59
44
81
$1,572
$659
$2,231
Level 3
$—
—
—
—
44
—
$44
74 S&P Global 2021 Annual Report
(in millions)
Cash and short-term investments
Equities:
U.S. indexes 1
U.S. growth and value
Fixed income:
Long duration strategy 2
Intermediate duration securities
Real Estate:
U.K. 3
Infrastructure:
U.K. 4
Total
Common collective trust funds measured at net asset value
as a practical expedient:
Collective investment funds 5
Total
December 31, 2020
Level 2
$—
Level 3
$—
—
—
1,339
57
—
$78
$1,474
—
—
—
—
38
—
$38
Total
Level 1
$4
9
41
—
—
—
$—
$54
$4
9
41
1,339
57
38
$78
$1,566
$677
$2,243
1
2
3
4
5
Includes securities that are tracked in the S&P Smallcap 600 index.
Includes securities that are mainly investment grade obligations of issuers in the U.S.
Includes a fund which holds real estate properties in the U.K.
Includes funds that invest in global infrastructure for the U.K. Pension.
Includes the Standard & Poor’s 500 Composite Stock Index, the Standard & Poor’s MidCap 400 Composite Stock Index, a short-term investment fund which is a
common collective trust vehicle, and other various asset classes.
S&P Global 2021 Annual Report 75
For securities that are quoted in active markets, the trustee/
custodian determines fair value by applying securities’ prices
obtained from its pricing vendors. For commingled funds that
are not actively traded, the trustee applies pricing information
provided by investment management firms to the unit quantities
of such funds. Investment management firms employ their
own pricing vendors to value the securities underlying each
commingled fund. Underlying securities that are not actively
traded derive their prices from investment managers, which in
turn, employ vendors that use pricing models (e.g., discounted
cash flow, comparables). The domestic defined benefit plans
have no investment in our stock, except through the S&P 500
commingled trust index fund.
The trustee obtains estimated prices from vendors for securities
that are not easily quotable and they are categorized accordingly
as Level 3. The following table details further information on our
plan assets where we have used significant unobservable inputs:
(in millions)
Balance as of December 31, 2020
Distributions
Gain (loss)
Balance as of December 31, 2021
Level 3
$38
(2)
8
$44
Pension Trusts’ Asset Allocations
There are two pension trusts, one in the U.S. and one in the U.K.
– The U.S. pension trust had assets of $1,600 million
and $1,630 million as of December 31, 2021 and 2020
respectively, and the target allocations in 2021 include 92%
fixed income, 4% domestic equities, 2% international equities
and 2% cash and cash equivalents.
– The U.K. pension trust had assets of $631 million and $613
million as of December 31, 2021 and 2020, respectively, and
the target allocations in 2021 include 55% fixed income, 15%
diversified growth funds, 15% infrastructure, 8% equities and
7% real estate.
The pension assets are invested with the goal of producing a
combination of capital growth, income and a liability hedge. The
mix of assets is established after consideration of the long-
term performance and risk characteristics of asset classes.
Investments are selected based on their potential to enhance
returns, preserve capital and reduce overall volatility. Holdings
are diversified within each asset class. The portfolios employ
a mix of index and actively managed equity strategies by
market capitalization, style, geographic regions and economic
sectors. The fixed income strategies include U.S. long duration
securities, opportunistic fixed income securities and U.K. debt
instruments. The short-term portfolio, whose primary goal
is capital preservation for liquidity purposes, is composed of
government and government-agency securities, uninvested
cash, receivables and payables. The portfolios do not employ any
financial leverage.
U.S. Defined Contribution Plan
Assets of the defined contribution plan in the U.S. consist
primarily of investment options, which include actively managed
equity, indexed equity, actively managed equity/bond funds,
target date funds, S&P Global Inc. common stock, stable value
and money market strategies. There is also a self-directed
mutual fund investment option. The plan purchased 107,651
shares and sold 160,415 shares of S&P Global Inc. common
stock in 2021 and purchased 296,921 shares and sold 331,088
shares of S&P Global Inc. common stock in 2020. The plan held
approximately 1.2 million and 1.3 million shares of S&P Global
Inc. common stock as of December 31, 2021 and 2020,
respectively, with market values of $567 million and $414 million,
respectively. The plan received dividends on S&P Global Inc.
common stock of $3.8 million and $3 million during the years
ended December 31, 2021 and December 31, 2020, respectively.
76 S&P Global 2021 Annual Report
8. Stock-Based Compensation
We issue stock-based incentive awards to our eligible employees
under the 2019 Employee Stock Incentive Plan and to our
eligible non-employee Directors under a Director Deferred Stock
Ownership Plan. No further awards may be granted under the
2002 Employee Stock Incentive Plan (the “2002 Plan”), although
awards granted under the 2002 Plan prior to the adoption of the
new 2019 Plan in June of 2019 remain outstanding in accordance
with their terms.
– 2019 Employee Stock Incentive Plan (the “2019 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.
– Director Deferred Stock Ownership Plan
Under this plan, common stock reserved may be credited
to deferred stock accounts for eligible Directors. In general,
the plan requires that 50% of eligible Directors’ annual
compensation plus dividend equivalents be credited to
deferred stock accounts. Each Director may also elect to
defer all or a portion of the remaining compensation and
have an equivalent number of shares credited to the deferred
stock account. Recipients under this plan are not required
to provide consideration to us other than rendering service.
Shares will be delivered as of the date a recipient ceases to
be a member of the Board of Directors or within five years
thereafter, if so elected. The plan will remain in effect until
terminated by the Board of Directors or until no shares of
stock remain available under the plan.
The number of common shares reserved for issuance
are as follows:
(in millions)
Shares available for granting 1
Options outstanding
Total shares reserved for issuance 2
December 31,
2021
2020
19.5
0.3
19.8
19.7
0.5
20.2
1
2
Shares available for granting at December 31, 2021 and 2020 are
under the 2019 Plan.
Shares reserved for issuance under the Director Deferred Stock Ownership
Plan are not included in the total, but are less than 1.0 million at both
December 31, 2021 and 2020.
We issue treasury shares upon exercise of stock options and
the issuance of restricted stock and unit awards. To offset
the dilutive effect of the exercise of employee stock options,
we periodically repurchase shares. See Note 9 – Equity for
further discussion.
Stock-based compensation expense and the corresponding tax
benefit are as follows:
(in millions)
Stock option expense
Restricted stock and
unit awards expense
Total stock-based
compensation expense
Tax benefit
Year ended December 31,
2021
$—
122
$122
$20
2020
2019
$—
90
$90
$15
$1
77
$78
$13
Stock Options
Stock options may not be granted at a price less than the fair
market value of our common stock on the date of grant. Stock
options granted vest over a four year service period and have a
maximum term of 10 years. Stock option compensation costs are
recognized from the date of grant, utilizing a four-year graded
vesting method. Under this method, more than half of the costs
are recognized over the first twelve months, approximately
one-quarter of the costs are recognized over a twenty-four
month period starting from the date of grant, approximately
one-tenth of the costs are recognized over a thirty-six month
period starting from the date of grant, and the remaining costs
recognized over a forty-eight month period starting from the
date of grant.
There were no stock options granted in 2021, 2020, and 2019.
S&P Global 2021 Annual Report 77
Stock option activity is as follows:
(in millions, except per award amounts)
Shares
Weighted-
average
exercise price
Weighted-average
remaining years of
contractual term
Aggregate
intrinsic value
Options outstanding as of December 31, 2020
Exercised
Forfeited and expired 1
Options outstanding as of December 31, 2021
Options exercisable as of December 31, 2021
1
There are less than 0.1 million shares forfeited and expired.
0.5
(0.2)
—
0.3
0.3
$60.46
$283.56
$39.94
$67.14
$67.14
1.99
1.99
$113
$113
Shares
Weighted-average
grant-date fair value
$111.96
$111.96
—
—
—
—
$—
0.0
Year ended December 31,
2021
$13
$41
$11
2020
$16
$60
$13
2019
$40
$110
$33
(in millions, except per award amounts)
Nonvested options outstanding as of December 31, 2020
Vested 1
Nonvested options outstanding as of December 31, 2021 ²
Total unrecognized compensation expense related to nonvested options
Weighted-average years to be recognized over
1
2
There are less than 0.1 million shares vested.
There are no nonvested options outstanding as of December 31, 2021.
The total fair value of our stock options that vested during the
years ended December 31, 2021, 2020 and 2019 was less than $1
million, $2 million and $3 million, respectively.
Information regarding our stock option exercises is as follows:
(in millions)
Net cash proceeds from the exercise of stock options
Total intrinsic value of stock option exercises
Income tax benefit realized from stock option exercises
78 S&P Global 2021 Annual Report
Restricted Stock and Unit Awards
Restricted stock and unit awards (performance and non-
performance) have been granted under the 2002 Plan and 2019
Plan. Performance unit awards will vest only if we achieve certain
financial goals over the performance period. Restricted stock
non-performance awards have various vesting periods (generally
three years), with vesting beginning on the first anniversary
of the awards. Recipients of restricted stock and unit awards
are not required to provide consideration to us other than
rendering service.
The stock-based compensation expense for restricted stock
and unit awards is determined based on the market price of our
stock at the grant date of the award applied to the total number
of awards that are anticipated to fully vest. For performance
unit awards, adjustments are made to expense dependent upon
financial goals achieved.
Restricted stock and unit activity for performance and non-
performance awards is as follows:
(in millions, except per award
amounts)
Shares
Weighted-
average grant-
date fair value
Nonvested shares as of
December 31, 2020
Granted
Vested
Forfeited
Nonvested shares as of
December 31, 2021
Total unrecognized
compensation expense
related to nonvested awards
Weighted-average years
to be recognized over
0.6
0.4
(0.5)
—
0.5
$101
1.7
$227.67
$296.49
$219.85
$263.18
$299.28
Weighted-average grant-
date fair value per award
Total fair value of restricted
stock and unit awards
vested
Tax benefit relating to
restricted stock activity
Year ended December 31,
2021
2020
2019
$296.49
$232.92
$187.40
$243
$134
$153
$48
$26
$29
9. Equity
Capital Stock
Two million shares of preferred stock, par value $1 per share, are
authorized; none have been issued.
On January 26, 2022, the Board of Directors approved
a quarterly common stock dividend of $0.77 per share.
Following the expected closing of the merger with IHS Markit,
the Board of Directors will revisit the dividend policy of the
combined Company.
Quarterly dividend rate
Annualized dividend rate
Dividends paid (in millions)
Year ended December
2021
$0.77
$3.08
$743
2020
$0.67
$2.68
$645
2019
$0.57
$2.28
$560
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 December 31, 2021, 30
million shares remained available under the 2020 Repurchase
Program and 0.8 million shares remained available under the
2013 repurchase program. Our 2020 Repurchase Program
and 2013 Repurchase Program have no expiration date and
purchases under these programs may be made from time to time
on the open market and in private transactions, depending on
market conditions.
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
S&P Global 2021 Annual Report 79
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 into for the years
ended December 31, 2021, 2020 and 2019, structured as outlined
above, are as follows:
(in millions, except average price)
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 2
July 27, 2020
July 27, 2020
August 5, 2019 3
October 1, 2019
February 11, 2019 4
July 31, 2019
1.3
1.4
1.7
2.2
0.4
0.3
0.3
0.1
1.7
1.7
2.0
2.3
$292.13
$292.13
$253.36
$214.65
$500
$500
$500
$500
1
2
3
4
The 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 in February 2020, 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.
The 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 at a price equal to the then market price of the Company. We completed the ASR agreement on July 27, 2020 and received an
additional 0.3 million shares.
The ASR agreement was structured as a capped ASR agreement in which we paid $500 million and received an initial delivery of 1.7 million shares, and an
additional amount of 0.2 million in August 2019, 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 October 1, 2019 and received an additional 0.1 million shares.
The 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 at a price equal to the then market price of the Company. We completed the ASR agreement on July 31, 2019 and received an
additional 0.1 million shares.
Additionally, we purchased shares of our common stock in the open market as follows:
(in millions, except average price)
Year Ended
Total number of shares
purchased
Average price paid per
share
Total cash utilized
December 31, 2020
December 31, 2019
0.5
1.2
$295.40
$208.83
$161
$240
During the year ended December 31, 2021, we did not use cash to
purchase any shares. During the year ended December 31, 2020,
we purchased a total of 4.0 million shares for $1,161 million of
cash. During the fourth quarter of 2019, we repurchased shares
for $3 million, which settled in the first quarter of 2020, resulting
in $1,164 million of cash used to repurchase shares. During the
year ended December 31, 2019, we received 5.9 million shares,
including 0.4 million shares received in January of 2019 related
to our October 29, 2018 ASR agreement, resulting in $1,240
million of cash used to repurchase shares.
80 S&P Global 2021 Annual Report
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 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
(in millions)
Balance as of December 31, 2020
Net income attributable to redeemable noncontrolling interest
Distributions to noncontrolling interest
Redemption value adjustment
Balance as of December 31, 2021
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 may incorporate Level
3 fair value measures for instances when observable inputs are
not available. The more significant judgmental assumptions
used to estimate the value of the S&P Dow Jones Indices LLC
joint venture include an estimated discount rate, a range of
assumptions that form the basis of the expected future net cash
flows (e.g., the revenue growth rates and operating margins),
and a company specific beta. The significant judgmental
assumptions used that incorporate market data, including the
relative weighting of market observable information and the
comparability of that information in our valuation models, are
forward-looking and could be affected by future economic and
market conditions. Any adjustments to the redemption value will
impact retained income.
Noncontrolling interests that do not contain such redemption
features are presented in equity.
Changes to redeemable noncontrolling interest during the year
ended December 31, 2021 were as follows:
$2,781
215
(198)
631
$3,429
Accumulated Other Comprehensive Loss
The following table summarizes the changes in the components of accumulated other comprehensive loss for the year ended
December 31, 2021:
(in millions)
Foreign
Currency
Translation
Adjustments 1, 3
Pension and
Postretirement
Benefit
Plans 2
Unrealized Gain
(Loss) on Cash
Flow Hedges 3
Accumulated
Other
Comprehensive
Loss
Balance as of December 31, 2020
$(323)
$(328)
Other comprehensive (loss) income before
reclassifications
Reclassifications from accumulated other
comprehensive income (loss) to net earnings
Net other comprehensive gain (loss) income
(18)
5
(13)
8
15
23
Balance as of December 31, 2021
$(336)
$(305)
$14
(195)
(19)
(214)
$(200)
$(637)
(205)
1
(204)
$(841)
1
2
Includes an unrealized gain related to our cross currency swaps. See note 6 – Derivative Instruments for additional detail of items recognized in accumulated
other comprehensive loss.
Reflects amortization of net actuarial losses and is net of a tax benefit of $3 million for the year ended December 31, 2021. See Note 7 — Employee Benefits for
additional details of items reclassed from accumulated other comprehensive loss to net earnings.
3
See Note 6 – Derivative Instruments for additional details of items reclassified from accumulated other comprehensive loss to net earnings.
S&P Global 2021 Annual Report 81
10. 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 for basic and diluted EPS is as follows:
Year ended December 31,
(in millions, except per share data)
2021
2020
2019
Amount attributable to S&P Global Inc. common shareholders:
Net income
Basic weighted-average number of common shares outstanding
Effect of stock options and other dilutive securities
Diluted weighted-average number of common shares outstanding
Earnings per share attributable to S&P Global Inc. common shareholders:
Net income:
Basic
Diluted
$3,024
240.8
1.0
241.8
$2,339
241.0
1.1
242.1
$12.56
$12.51
$9.71
$9.66
$2,123
245.4
1.5
246.9
$8.65
$8.60
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. As of December 31, 2021,
2020 and 2019, there were no stock options excluded. Restricted
performance shares outstanding of 0.5 million as of December
31, 2021 and 0.4 million as of December 31, 2020 and 2019,
respectively, were excluded.
82 S&P Global 2021 Annual Report
11. Restructuring
We continuously evaluate our cost structure to identify cost
savings associated with streamlining our management
structure. Our 2021 and 2020 restructuring plans consisted of
company-wide workforce reductions of approximately 30 and
830 positions, respectively, and are further detailed below. The
charges for each restructuring plan are classified as selling and
general expenses within the consolidated statements of income
and the reserves are included in other current liabilities in the
consolidated balance sheets.
In certain circumstances, reserves are no longer needed because
employees previously identified for separation resigned from
the Company and did not receive severance or were reassigned
due to circumstances not foreseen when the original plans
were initiated. In these cases, we reverse reserves through the
consolidated statements of income during the period when it is
determined they are no longer needed. There were approximately
$8 million of reserves from the 2020 restructuring plan that
we have reversed in 2021, which offset the initial charge of $65
million recorded for the 2020 restructuring plan. There were
approximately $7 million of reserves from the 2019 restructuring
plan that we reversed in 2020, which offset the initial charge of
$25 million recorded for the 2019 restructuring plan.
The initial restructuring charge recorded and the ending reserve
balance as of December 31, 2021 by segment are as follows:
(in millions)
Ratings
Market Intelligence
Platts
Indices
Corporate
Total
2021 Restructuring Plan
2020 Restructuring Plan
Initial Charge
Recorded
Ending Reserve
Balance
Initial Charge
Recorded
Ending Reserve
Balance
$3
3
—
—
13
$19
$3
3
—
—
13
$19
$4
27
10
5
19
$65
$1
4
4
—
4
$13
For the year ended December 31, 2021, we have made no
reductions to the reserve for the 2021 restructuring plan. For
the years ended December 31, 2021 and 2020, we have reduced
the reserve for the 2020 restructuring plan by $45 million and
$7 million, respectively. The reductions primarily related to cash
payments for employee severance charges.
S&P Global 2021 Annual Report 83
12. Segment and
Geographic Information
As discussed in Note 1 – Accounting Policies, we have
four 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 expense,
other (income) expense, net, interest expense, net, or loss on
extinguishment of debt as these are amounts that do not affect
the operating results of our reportable segments. We use the
same accounting policies for our segments as those described in
Note 1 – Accounting Policies.
A summary of operating results for the years ended December
31 is as follows:
Revenue
(in millions)
Ratings
Market Intelligence
Platts
Indices
Intersegment elimination 1
2021
2020
2019
$4,097
$3,606
$3,106
2,247
950
1,149
(146)
2,106
1,959
878
989
(137)
844
918
(128)
Total revenue
$8,297
$7,442
$6,699
Operating Profit
(in millions)
Ratings 2
Market Intelligence 3
Platts 4
Indices 5
2021
2020
2019
$2,629
$2,223
$1,783
703
517
798
589
458
666
566
457
632
Total reportable segments
4,647
3,936
3,438
Corporate Unallocated expenses 6
(426)
(319)
(212)
Total operating profit
$4,221
$3,617
$3,226
1
2
3
4
5
6
Revenue for Ratings and expenses for Market Intelligence include an
intersegment royalty charged to Market Intelligence for the rights to use and
distribute content and data developed by Ratings.
Operating profit for the year ended December 31, 2021 includes a gain on
disposition of $6 million, recovery of lease-related costs of $4 million and
employee severance charges of $3 million. Operating profit for the year
ended December 31, 2020 includes a technology-related impairment charge
of $11 million, lease-related costs of $5 million and employee severance
charges of $4 million. Operating profit for the year ended December 31, 2019
includes employee severance charges of $11 million. Additionally, operating
profit includes amortization of intangibles from acquisitions of $10 million,
$7 million and $2 million for the years ended December 31, 2021, 2020 and
2019, respectively.
Operating profit for the year ended December 31, 2021 includes employee
severance charges of $3 million, a gain on disposition of $3 million,
acquisition-related costs of $2 million and lease-related costs of $1 million.
Operating profit for the year ended December 31, 2020 includes employee
severance charges of $27 million, a gain on dispositions of $12 million and
lease-related costs of $3 million. As of July 1, 2019, we completed the sale
of SPIAS and the results are included in Market Intelligence results through
that date. Operating profit for the year ended December 31, 2019 includes a
gain on the sale of SPIAS of $22 million, employee severance charges of $6
million and acquisition-related costs of $4 million. Additionally, operating
profit includes amortization of intangibles from acquisitions of $65 million,
$76 million, and $75 million for the years ended December 31, 2021, 2020,
and 2019, respectively.
Operating profit for the year ended December 31, 2021 includes recovery
of lease-related costs of $2 million. Operating profit for the year ended
December 31, 2020 includes severance charges of $11 million and lease-
related costs of $2 million. As of July 31, 2019, we completed the sale of
RigData and the results are included in Platts results through that date.
Operating profit for the year ended December 31, 2019 includes a gain on the
sale of RigData of $27 million and employee severance charges of $1 million.
Additionally, Operating profit includes amortization of intangibles from
acquisitions of $8 million, $9 million, and $12 million for the years ended
December 31, 2021, 2020, and 2019, respectively.
Operating profit for the year ended December 31, 2021 includes recovery
of lease-related costs of $1 million. Operating profit for the year ended
December 31, 2020 includes employee severance charges of $5 million, a
lease impairment charge of $4 million, a technology-related impairment
charge of $2 million and lease-related costs of $1 million. Operating profit
includes amortization of intangibles from acquisitions of $6 million for the
years ended December 31, 2021, 2020, and 2019.
Corporate Unallocated expense for the year ended December 31, 2021
includes IHS Markit merger costs of $249 million, employee severance
charges of $13 million, lease-related costs of $4 million, a lease impairment
of $3 million, Kensho retention related expenses of $2 million, acquisition-
related costs of $2 million and a gain on disposition of $2 million.
Corporate Unallocated expense for the year ended December 31, 2020
includes lease impairments of $116 million, IHS Markit merger costs of
$24 million, employee severance charges of $19 million, Kensho retention
related expense of $12 million and a gain related to an acquisition of $1
million. Corporate Unallocated expense for the year ended December 31,
2019 includes Kensho retention related expenses of $21 million, lease
impairments of $11 million and employee severance charges of $7 million.
Additionally, Corporate Unallocated expense includes amortization of
intangibles from acquisitions of $7 million, $26 million, and $28 million for
the years ended December 31, 2021, 2020, and 2019, respectively.
84 S&P Global 2021 Annual Report
The following table presents our revenue disaggregated by revenue type for the years ended December 31:
(in millions)
Ratings
Market
Intelligence
Platts
Indices
Intersegment
Elimination 1
Total
Subscription
Non-subscription / Transaction
Non-transaction
Asset-linked fees
Sales usage-based royalties
Total revenue
Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
Total revenue
2021
$2,191
56
—
—
—
$2,247
$56
2,191
$871
13
—
—
66
$950
$13
937
$191
—
—
800
158
$1,149
$—
1,149
$— $3,253
2,322
—
(146)
—
—
$(146)
1,698
800
224
$8,297
$— $2,322
(146)
5,975
$2,247
$950
$1,149
$(146)
$8,297
$—
2,253
1,844
—
—
$4,097
$2,253
1,844
$4,097
(in millions)
Ratings
Market
Intelligence
Platts
Indices
Intersegment
Elimination 1
Total
Subscription
Non-subscription / Transaction
Non-transaction
Asset-linked fees
Sales usage-based royalties
Total revenue
Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
Total revenue
2020 2
$—
1,969
1,637
—
—
$3,606
$1,969
1,637
$3,606
$2,050
55
—
1
—
$2,106
$55
2,051
$2,106
$809
7
—
—
62
$878
$7
871
$878
$177
—
—
647
165
$989
$—
989
$989
$— $3,036
2,031
—
(137)
—
—
$(137)
1,500
648
227
$7,442
$— $2,031
(137)
5,411
$(137)
$7,442
(in millions)
Ratings
Market
Intelligence
Platts
Indices
Intersegment
Elimination 1
Total
Subscription
Non-subscription / Transaction
Non-transaction
Asset-linked fees
Sales usage-based royalties
Total revenue
Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
Total revenue
2019 2
$—
1,570
1,536
—
—
$3,106
$1,570
1,536
$3,106
$1,904
45
—
10
—
$1,959
$45
1,914
$1,959
$774
10
—
—
60
$844
$10
834
$844
$165
—
—
613
140
$918
$—
918
$918
$— $2,843
1,625
—
(128)
—
—
$(128)
1,408
623
200
$6,699
$— $1,625
(128)
5,074
$(128)
$6,699
1
2
Intersegment eliminations mainly consists of a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.
In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction
revenue to non-transaction revenue of $8 million and $7 million for the years ended December 31, 2020 and 2019, respectively.
S&P Global 2021 Annual Report 85
Segment information for the years ended December 31 is as follows:
(in millions)
Ratings
Market Intelligence
Platts
Indices
Total reportable segments
Corporate
Total
Segment information as of December 31 is as follows:
(in millions)
Ratings
Market Intelligence
Platts
Indices
Total reportable segments
Corporate 1
Assets of businesses held for sale 2
Total
Depreciation & Amortization
Capital Expenditures
2021
2020
2019
2021
2020
2019
$46
91
12
10
159
19
$178
$40
101
17
9
167
39
$206
$34
99
21
8
162
42
$204
$18
12
2
2
34
1
$35
$33
28
7
4
72
4
$76
$41
44
13
5
103
12
$115
Total Assets
2021
2020
$1,248
3,368
891
1,501
7,008
7,697
321
$15,026
$1,088
3,762
913
1,443
7,206
5,331
—
$12,537
1
2
Corporate assets consist principally of cash and cash equivalents, goodwill and other intangible assets, assets for pension benefits and deferred income taxes.
Includes CGS and LCD as of December 31, 2021. See Note 2 – Acquisitions and Divestitures for further discussion.
86 S&P Global 2021 Annual Report
We do not have operations in any foreign country that represent more than 7% of our consolidated revenue. Transfers between
geographic areas are recorded at agreed upon prices and intercompany revenue and profit are eliminated. No single customer
accounted for more than 10% of our consolidated revenue.
The following provides revenue and long-lived assets by geographic region:
(in millions)
U.S.
European region
Asia
Rest of the world
Total
(in millions)
U.S.
European region
Asia
Rest of the world
Total
REVENUE
LONG-LIVED ASSETS
Year ended December 31,
2021
2020
2019
$5,012
1,995
874
416
$8,297
$4,504
1,769
782
387
$7,442
$3,976
1,659
710
354
$6,699
December 31,
2021
2020
$4,733
463
85
42
$5,323
$4,787
496
102
44
$5,429
REVENUE
LONG-LIVED ASSETS
Year ended December 31,
December 31,
2021
60%
24
11
5
100%
2020
61%
24
10
5
100%
2019
59%
25
11
5
100%
2021
89%
9
2
—
100%
2020
88%
9
2
1
100%
See Note 2 – Acquisitions and Divestitures and Note 11 – Restructuring, for actions that impacted the segment operating results.
S&P Global 2021 Annual Report 87
13. Commitments
and Contingencies
Leases
During the years ended December 31, 2021 and 2020, we
recorded a pre-tax impairment charge of $31 million and $120
million, respectively, related to the impairment and abandonment
of operating lease related ROU assets. The pre-tax impairment
charge recorded during the year ended December 31, 2021
is associated with consolidating our real estate facilities
following the expected merger with IHS Markit. The impairment
charges are included in selling and general expenses within the
consolidated statements of income.
The following table provides information on the location and
amounts of our leases on our consolidated balance sheets as of
December 31, 2021 and 2020:
Supplemental information related to leases for the years ended
December 31 are as follows:
(in millions)
2021
2020
Cash paid for amounts included in the
measurement for operating lease liabilities
Operating cash flows for operating leases
$127
$137
Right of use assets obtained in exchange for
lease obligations
Operating leases
29
8
Weighted-average remaining lease term and discount rate for our
operating leases as of December 31 are as follows:
(in millions)
Balance Sheet Location
Assets
Right of use assets
Liabilities
2021
2020
Weighted-average remaining lease
term (years)
2021
2020
8.3
8.5
Weighted-average discount rate
3.59% 3.78%
Lease right-of-use
assets
$426
$494
Other current liabilities Current lease
96
100
liabilities
Maturities of lease liabilities for our operating leases
are as follows:
Lease liabilities —
non-current
Non-current lease
liabilities
492
544
(in millions)
2022
2023
2024
2025
2026
2027 and beyond
Total undiscounted lease payments
Less: Imputed interest
2020
$144
(6)
$138
Present value of lease liabilities
$114
94
75
67
63
269
$682
94
$588
The components of lease expense for the years ended December
31 are as follows:
(in millions)
Operating lease cost
Sublease income
Total lease cost
2021
$124
(2)
$122
88 S&P Global 2021 Annual Report
Related Party Agreement
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, which replaced 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 years ended
December 31, 2021, 2020 and 2019, S&P Dow Jones Indices LLC
earned $139 million, $149 million and $114 million of revenue
under the terms of the License Agreement, respectively. 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 & Regulatory Matters
In the normal course of business both in the United
States and abroad, the Company and its subsidiaries are
defendants in a number of legal proceedings and are often
subjected to government and regulatory proceedings,
investigations and inquiries.
S&P Global Ratings has been cooperating with an SEC
investigation into possible violations of Section 15E of the
Exchange Act and Rule 17g-5(c)(8) thereunder in connection with
a 2017 credit rating analysis by S&P Global Ratings. S&P Global
Ratings is currently in active discussions to resolve the SEC’s
inquiry. S&P Global Ratings has not yet reached a definitive
settlement agreement with the SEC on this matter but in the
fourth quarter of 2021, accrued for potential monetary penalties
based on discussions to date. While we cannot predict with
certainty whether we will reach agreement, or the terms of
any such agreement, at this time, we do not believe that the
resolution of this matter will have a material adverse effect on
our business, financial condition or results of operations.
On May 17, 2021, Indices reached a settlement with the SEC
relating to the operation of a then undisclosed quality assurance
mechanism and its impact on certain real-time values of the S&P
500 VIX Short-Term Futures Index ER on a single business day,
February 5, 2018 (the “VIX Matter”), which was the subject of a
previously disclosed Wells Notice. Indices neither admitted nor
denied the SEC’s allegations. The SEC found that Indices acted
negligently in violation of Section 17(a)(3) of the Securities Act
of 1933 with respect to the VIX Matter. The SEC acknowledged
Indices’ cooperation with the SEC staff. The Company agreed to
pay a penalty of $9 million that was previously reserved for in
2020 and to cease and desist from committing or causing any
violations and any future violations of Section 17(a)(3) of the
Securities Act of 1933.
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 Exchange Act,
S&P Global Ratings is in ongoing communication with the staff
of the SEC regarding compliance with its extensive obligations
under the federal securities laws. 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.
S&P Global 2021 Annual Report 89
Report of Management
To the Shareholders of S&P Global Inc.
Management’s Annual Report on Its Responsibility for the Company’s
Financial Statements and Internal Control Over Financial Reporting
The financial statements in this report were prepared by the management of S&P Global Inc., which is
responsible for their integrity and objectivity.
These statements, prepared in conformity with accounting principles generally accepted in the United States
and including amounts based on management’s best estimates and judgments, present fairly S&P Global
Inc.’s financial condition and the results of the Company’s operations. Other financial information given in this
report is consistent with these statements.
The Company’s management is responsible for establishing and maintaining adequate internal control
over financial reporting for the Company as defined under the U.S. Securities Exchange Act of 1934. It
further assures the quality of the financial records in several ways: a program of internal audits, the careful
selection and training of management personnel, maintaining an organizational structure that provides an
appropriate division of financial responsibilities, and communicating financial and other relevant policies
throughout the Company.
S&P Global Inc.’s Board of Directors, through its Audit Committee, composed entirely of outside directors, is
responsible for reviewing and monitoring the Company’s financial reporting and accounting practices. The
Audit Committee meets periodically with management, the Company’s internal auditors and the independent
registered public accounting firm to ensure that each group is carrying out its respective responsibilities. In
addition, the independent registered public accounting firm has full and free access to the Audit Committee
and meet with it with no representatives from management present.
Management’s Report on Internal Control Over Financial Reporting
As stated above, the Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s management has evaluated the system of internal
control using the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework
(“COSO 2013 framework”). Management has selected the COSO 2013 framework for its evaluation as it
is a control framework recognized by the Securities and Exchange Commission and the Public Company
Accounting Oversight Board that is free from bias, permits reasonably consistent qualitative and quantitative
measurement of the Company’s internal controls, is sufficiently complete so that relevant controls are not
omitted and is relevant to an evaluation of internal controls over financial reporting.
Based on management’s evaluation under this framework, we have concluded that the Company’s internal
controls over financial reporting were effective as of December 31, 2021. There are no material weaknesses in
the Company’s internal control over financial reporting that have been identified by management.
The Company’s independent registered public accounting firm, Ernst & Young LLP, has audited the
consolidated financial statements of the Company for the year ended December 31, 2021, and has issued
their reports on the financial statements and the effectiveness of internal controls over financial reporting.
Other Matters
There have been no changes in the Company’s internal controls over financial reporting during the most
recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.
Douglas L. Peterson
President and Chief Executive Officer
Ewout L. Steenbergen
Executive Vice President and Chief Financial Officer
90 S&P Global 2021 Annual Report
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of
Directors of S&P Global Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance
sheets of S&P Global Inc. (the Company) as of December 31,
2021 and 2020, the related consolidated statements of income,
comprehensive income, equity and cash flows for each of the
three years in the period ended December 31, 2021, and the
related notes (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial
position of the Company at December 31, 2021 and 2020, and the
results of its operations and its cash flows for each of the three
years in the period ended December 31, 2021, in conformity with
U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting
as of December 31, 2021, based on criteria established in
Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (2013
framework), and our report dated February 8, 2022 expressed an
unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our
audits. 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 Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of
the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether
due to error or fraud. Our audits included performing procedures
to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the
amounts and disclosures in the financial statements. Our
audits also included evaluating the accounting principles used
and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis
for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising
from the current period audit of the financial statements that
was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our
especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any
way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit
matter or on the account or disclosures to which it relates.
S&P Global 2021 Annual Report 91
Valuation of redeemable noncontrolling interest in S&P Dow Jones Indices LLC
DESCRIPTION
OF THE
MATTER
As described in Notes 1 and 9 to the financial statements, the Company has an agreement with the minority
partners of its S&P Dow Jones Indices LLC joint venture that contains redemption features outside of the control
of the Company. This arrangement is reported as a redeemable noncontrolling interest at fair value of $3,429
million at December 31, 2021. The Company adjusts 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.
Auditing the Company’s valuation of its redeemable noncontrolling interest was complex due to the estimation
uncertainty in determining the fair value. The estimation uncertainty was primarily due to the sensitivity of
the fair value to underlying assumptions about the future performance of the business. 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., revenue growth rates and operating margins), a company specific beta and earnings and transaction
multiples for comparable companies and similar acquisitions, respectively. These significant judgmental
assumptions that incorporate market data are forward-looking and could be affected by future economic and
market conditions.
HOW WE
ADDRESSED
THE MATTER
IN OUR AUDIT
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s
controls over the accounting for its redeemable noncontrolling interest, including controls over management’s
judgments and evaluation of the underlying assumptions with regard to the valuation models applied and the
estimation process supporting the determination of the fair value of S&P Dow Jones Indices LLC joint venture.
To test the valuation of redeemable noncontrolling interest, we evaluated the Company’s selection of the
valuation methodology and the methods and significant assumptions used by inspecting available market data
and performing sensitivity analyses. For example, when evaluating the assumptions related to the revenue
growth rate and operating profit margins, we compared the assumptions to the past performance of S&P Dow
Jones Indices LLC joint venture in addition to current observable industry, market and economic trends. We
involved valuation specialists to assist in our evaluation of the methodology and significant assumptions used
by the Company, including the discount rate, company specific beta and earnings for comparable companies
and transaction multiples for similar acquisitions. We also tested the completeness and accuracy of the
underlying data supporting the significant assumptions and estimates.
/s/ ERNST & YOUNG LLP
We have served as the Company’s auditor since 1969.
New York, New York
February 8, 2022
92 S&P Global 2021 Annual Report
Report of Independent Registered Public Accounting Firm
Definition and Limitations of Internal
Control Over Financial Reporting
A company’s internal control over financial reporting is a process
designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in
accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/ ERNST & YOUNG LLP
New York, New York
February 8, 2022
To the Shareholders and the Board of
Directors of S&P Global Inc.
Opinion on Internal Control Over Financial Reporting
We have audited S&P Global Inc.’s internal control over
financial reporting as of December 31, 2021, based on criteria
established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework), (the COSO criteria). In our opinion,
S&P Global Inc. (the Company) maintained, in all material
respects, effective internal control over financial reporting as of
December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company
as of December 31, 2021 and 2020, the related consolidated
statements of income, comprehensive income, equity and cash
flows for each of the three years in the period ended December
31, 2021, and the related notes and our report dated February 8,
2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining
effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over
financial reporting included in the accompanying Management’s
Annual Report on Internal Control Over Financial Reporting.
Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. 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 Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
S&P Global 2021 Annual Report 93
Shareholder Information
Annual Meeting of Shareholders
The 2022 annual meeting will be held at 11 a.m. EDT on
Wednesday, May 4th in a virtual-only online meeting.
Shareholders and guests may access the meeting online at
www.meetnow.global/MWPYYP5. Meeting access details for
shareholders and guests, and proxy voting information are
available at www.spglobal.com/proxy.
Stock Exchange Listing
Shares of our common stock are traded primarily on the
New York Stock Exchange. SPGI is the ticker symbol for
our common stock.
Investor Relations Web Site
Go to http://investor.spglobal.com to find:
• Management presentations
• Financial news releases
• Financial reports, including the annual report,
proxy statement and SEC filings
• Investor Fact Book
• Executive Committee
• Corporate governance documents
• Dividend and stock split history
• Stock quotes and charts
• Investor e-mail alerts
• RSS news feeds
Investor Kit
The Company’s investor kit includes the most recent Annual
Report, Proxy Statement, Form 10-Q, Form 10-K, and earnings
release. These documents can be downloaded from the SEC
Filings & Reports section of the Company’s Investor Relations
Website at http://investor.spglobal.com.
Requests for printed copies, free of charge, can be e-mailed
to investor.relations@spglobal.com or mailed to Investor
Relations, S&P Global Inc., 55 Water Street, New York, NY
10041. Interested parties can also call Investor Relations
toll-free at 866-436-8502 (domestic callers) or 212-438-2192
(international callers).
Transfer Agent and Registrar for Common Stock
Computershare is the transfer agent for S&P Global Inc.
Computershare maintains the records for the Company’s
registered shareholders and can assist with a variety of
shareholder related services.
Shareholder correspondence should be mailed to:
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
Overnight correspondence should be mailed to:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Investor Center™ website to view and
manage shareholder account online:
www.computershare.com/investor
For shareholder assistance by telephone:
In the U.S. and Canada: 888-201-5538
Outside the U.S. and Canada: 201-680-6578
TDD for the hearing impaired: 800-490-1493
TDD outside the U.S. and Canada: 781-575-4592
E-mail address:
web.queries@computershare.com
Shareholder online inquiries:
https://www-us.computershare.com/investor/Contact
Direct Stock Purchase and Dividend Reinvestment Plan
This program offers a convenient, low-cost way to invest
in S&P Global’s common stock. Participants can purchase
and sell shares directly through the program, make optional
cash investments weekly, reinvest dividends, and send
certificates to the transfer agent for safekeeping. Interested
investors can view the prospectus and enroll online at
www.computershare.com/investor. To receive the materials
by mail, contact Computershare as noted above.
News Media Inquiries
Go to www.spglobal.com/press to view the latest Company
news and information or to submit an e-mail inquiry.
Certifications and S&P Global Inc. Form 10-K
We have filed the required certifications under Sections 302
and 906 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1,
31.2 and 32 to our Form 10-K for the year ended
December 31, 2021.
The financial information included in this report was
excerpted from the Company’s Form 10-K for the year
ended December 31, 2021, filed with the Securities and
Exchange Commission on February 8, 2022. Shareholders
may access a complete copy of the 10-K from the SEC
Filings & Reports section of the Company’s Investor
Relations Website at http://investor.spglobal.com.
94
S&P Global 2021 Annual Report
Board of Directors
Richard E. Thornburgh (E, F, N)
Non-Executive Chairman
of the Board
S&P Global Inc.
Marco Alverà (E, F, N)
Chief Executive Officer
Snam S.p.A.
William “Bill” J. Amelio (A, F)
Co-Chief Executive Officer
and Executive Chairman
DoubleCheck
Jacques Esculier (A, F)
Former Chairman & CEO
WABCO Holdings Inc.
Gay Huey Evans (A, C)
Chairman
London Metal Exchange
William D. Green (C, E, N)
Former CEO and Chairman
Accenture Plc
Stephanie C. Hill (A, C)
Executive Vice President,
Rotary and Mission
Systems
Lockheed Martin Corp.
Rebecca Jacoby (F, N)
Former Senior Vice
President, Operations
Cisco Systems, Inc.
Robert P. Kelly (C, E, N)
Former Chairman and CEO
The Bank of New York Mellon
Monique F. Leroux (A, C)
Former Chief Executive
Officer and Chair
Desjardins Group
Ian Paul Livingston (A, C)
Non-Executive Director
and Chairman
Currys
Deborah D. McWhinney (A, F)
Former Chief Executive Officer
of Global Enterprise Payments
Citigroup Inc.
Maria R. Morris (A, E, F)
Former Executive
Vice President,
Global Employee Benefits
MetLife, Inc.
Douglas L. Peterson (E)
President and Chief
Executive Officer
S&P Global Inc.
Edward B. Rust, Jr. (C, E, N)
Former Chairman and Chief
Executive Officer
State Farm Mutual
Automobile Insurance
Company
Kurt L. Schmoke (C, N)
President
University of Baltimore
Gregory Washington (C, N)
President
George Mason University
A – Audit Committee
C – Compensation & Leadership Development Committee
E – Executive Committee
F – Finance Committee
N – Nominating & Corporate Governance Committee
Committee assignments as of March 1, 2022
S&P Global 2021 Annual Report 95
Executive Committee
Douglas L. Peterson
President and Chief
Executive Officer
Ewout Steenbergen
Executive Vice President,
Chief Financial Officer
President,
S&P Global Engineering Solutions
Martina L. Cheung
President, S&P Global Ratings
Executive Sponsor,
Sustainable1
Dan Draper
Chief Executive Officer,
S&P Dow Jones Indices
Adam Kansler
President,
S&P Global Market
Intelligence
Steven Kemps
Executive Vice President,
Chief Legal Officer
Swamy Kocherlakota
Executive Vice President,
Chief Information Officer
Nancy J. Luquette
Executive Vice President,
Chief Risk & Compliance
Officer
Dimitra Manis
Executive Vice President,
Chief Purpose Officer
Sally Moore
Executive Vice President,
Global Head of Strategy,
M&A and Partnerships
Saugata Saha
President,
S&P Global Commodity
Insights
Edouard Tavernier
President,
S&P Global Mobility
96 S&P Global 2021 Annual Report
55 Water Street
New York, NY 10041
spglobal.com