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Section 1: 8-K (8-K)

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false0000064040 0000064040 2019-08-01 2019-08-01


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
 
Securities Exchange Act of 1934
 
Date of Report: August 1, 2019
 
 
S&P Global Inc.
 
(Exact Name of Registrant as specified in its charter)
 
New York
1-1023
13-1026995
(State or other jurisdiction of incorporation or organization)
(Commission File No.)
(IRS Employer Identification No.)
 
55 Water Street, New York, New York 10041
(Address of Principal Executive Offices) (Zip Code)
 
(212) 438-1000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Class
Trading Symbol
Name of Exchange on which registered
Common stock (par value $1.00 per share)
SPGI
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company                
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                             





Item 2.02 and 7.01.   Results of Operations and Financial Condition and Regulation FD Disclosure
 
On August 1, 2019, S&P Global Inc. (the “Registrant”) issued an earnings release containing a discussion of the Registrant’s results of operations and financial condition for the second quarter ended June 30, 2019, as well as certain guidance for 2019.
 
The earnings release is attached as Exhibit 99 to this Form 8-K and is incorporated in this Item 2.02 and Item 7.01 by reference. Pursuant to general instruction B.2 to Form 8-K, the information furnished pursuant to Items 2.02 and 7.01, including Exhibit 99, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
 
The information in this Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
 
 
Item 9.01.   Financial Statements and Exhibits.
 
(d) Exhibits. The following exhibit is furnished with this report:
 
(99)       Earnings Release of the Registrant, dated August 1, 2019.







SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 8-K Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
S&P Global Inc.
 
 
 
 
/s/  
Alma Rosa Montanez
 
 
 
By:   
Alma Rosa Montanez
 
 
 
Assistant Corporate Secretary & Associate General Counsel
 
 
 
 
 
 
Dated:  August 1, 2019

 






INDEX TO EXHIBITS
 
 
 
Exhibit Number
 
(99)     Earnings Release of the Registrant, dated August 1, 2019




(Back To Top)

Section 2: EX-99 (EXHIBIT 99)

Exhibit


399001871_spgloballogoforfilingsa01.jpg

    


S&P GLOBAL REPORTS
SECOND QUARTER RESULTS

Revenue Growth and Margin Improvement Across all Four Divisions

Revenue Increased 6%

Diluted EPS Increased 23% to $2.24

Adjusted Diluted EPS Increased 12% to $2.43

Operating Profit Margin Improved 590 Basis Points to 47.7%

Adjusted Operating Profit Margin Improved 220 Basis Points to 51.3%

Advanced Several New Benchmark Initiatives


New York, NY, August 1, 2019 S&P Global (NYSE: SPGI) today reported second quarter 2019 results with revenue of $1,704 million, an increase of 6% compared to the same period last year. Net income increased 21% to $555 million and diluted earnings per share increased 23% to $2.24 primarily due to revenue growth, continued progress toward productivity initiative targets, and because the second quarter of 2018 included an increase in legal reserves. Adjusted net income increased 9% to $601 million and adjusted diluted earnings per share increased 12% to $2.43 due to revenue growth and continued progress toward productivity initiative targets. The adjustments in the second quarter of 2019 were associated with restructurings primarily in Ratings and in corporate functions, a lease impairment associated with exiting office space, deal-related amortization, and Kensho retention-related expenses.

“We are particularly pleased with our second quarter results as all four divisions delivered revenue growth and margin improvement,” said Douglas L. Peterson, President and Chief Executive Officer of S&P Global. “Our new product initiatives advanced as our Ratings business recently published its first ratings in the domestic Chinese bond market and its first Ratings ESG Evaluations. S&P Dow Jones Indices launched ESG versions of 22 well-known regional benchmarks and two of its headline indices, the S&P 500 and Dow Jones Industrial Average, were part of a very successful Micro E-mini futures launch. This is an exciting time for the Company with so many growth opportunities.”

Profit Margin: The Company’s operating profit margin increased 590 basis points to 47.7% with gains in all four divisions and because the second quarter of 2018 included an increase in legal reserves. The adjusted operating profit margin increased 220 basis points to 51.3%.


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Return of Capital: During the second quarter, the Company returned $140 million to shareholders through dividends. While the $500 million ASR that was initiated in early February was still ongoing, there were no open-market share repurchases during the quarter. This ASR was completed in late July. Beginning later this month, the Company expects to initiate a new $500 million ASR program that will conclude no later than December 2019.

Ratings: Revenue increased 3% to $801 million in the second quarter with strong U.S. high-yield issuance as a key contributor. Transaction revenue increased 8% to $429 million as debt rating activity outpaced the decline in bank loan rating activity. Non-transaction revenue decreased 1% to $372 million due to a $6 million decline from changes in foreign exchange rates.

Operating profit increased 23% to $455 million and the operating profit margin improved 920 basis points to 56.8% compared to the second quarter of 2018, which included the increase in legal reserves. Adjusted operating profit increased 5% to $467 million and the adjusted operating profit margin improved 120 basis points to 58.3%.

Market Intelligence: Revenue increased 8% to $487 million in the second quarter of 2019 with more than 10% growth in both Credit Risk Solutions and Data Management Solutions and low single-digit growth in Desktop, excluding acquisitions. Quarterly operating profit increased 15% to $147 million. The operating profit margin improved 180 basis points to 30.2% as revenue gains outpaced expenses. Adjusted operating profit increased 14% to $167 million. Adjusted operating profit margin improved 180 basis points to 34.3%.

S&P Dow Jones Indices: S&P Dow Jones Indices LLC is a majority-owned subsidiary. The consolidated results are included in S&P Global's income statement and the portion related to the 27% noncontrolling interest is removed in net income attributable to noncontrolling interests.

Revenue increased 14% to $235 million in the second quarter of 2019 due primarily to an 18% gain in asset-linked fees and a 21% increase in Data & Custom subscriptions, partially offset by a 6% decline in exchange-traded derivative fees.

Asset-linked fees include fees associated with ETFs, mutual funds, and certain over-the-counter derivatives. Revenue from ETFs is the largest component of asset-linked fees, and average ETF AUM associated with the Company’s indices increased 9% year-over-year.

Operating profit increased 19% to $162 million and the operating profit margin increased 290 basis points to 69.0%. Adjusted operating profit increased 19% to $164 million and the adjusted operating profit margin improved 280 basis points to 69.6%. Operating profit attributable to the Company increased to $118 million. Adjusted operating profit attributable to the Company increased 19% to $120 million.

Platts: Revenue increased 4% to $213 million with growth in both the core subscription business and Global Trading Services. Quarterly operating profit increased 9% to $107 million and the operating profit margin increased 240 basis points to 50.1%. Adjusted operating profit increased 9% to $111 million and adjusted operating profit margin increased 220 basis points to 52.1%.

Corporate Unallocated: Corporate Unallocated includes non-allocated corporate expenses; however, the second quarter of 2018 also includes Kensho revenue, which starting in 2019 is included in Market Intelligence. Corporate Unallocated improved from $59 million in the prior period to $58 million as a reduction in Kensho expenses was largely offset by restructuring expenses and a lease impairment. Adjusted

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Corporate Unallocated improved 10% from $39 million to $35 million due primarily to reduced project spending.

Provision for Income Taxes: The Company’s effective tax rates in the second quarter of 2019 and 2018 were 23.0% and 23.8%, respectively. The Company’s adjusted effective tax rate decreased to 23.1% in the second quarter of 2019 compared to 23.9% in the same period last year.

Balance Sheet and Cash Flow: Cash, cash equivalents, and restricted cash at the end of the second quarter were $1.9 billion. In the first six months of 2019, cash provided by operating activities was $1,010 million, cash used for investing activities was $53 million, and cash used for financing activities was $1,008 million. Free cash flow was $905 million, an increase of $140 million from the same period in 2018 primarily due to higher operating results and lower incentive compensation payments in 2019. Free cash flow, excluding the settlement of prior-year tax audits, was $956 million.

Outlook: The Company’s 2019 GAAP diluted EPS guidance is increased from a range of $8.16 to $8.36 to a new range of $8.20 to $8.35 to reflect lower corporate unallocated expense, interest expense and the tax rate as well as the restructuring and lease impairment charges incurred this quarter. Adjusted diluted EPS guidance is increased from a range of $8.95 to $9.15 to a new range of $9.10 to $9.25.
 
Comparison of Adjusted Information to U.S. GAAP Information: The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company also refers to and presents certain additional non-GAAP financial measures, within the meaning of Regulation G under the Securities Exchange Act of 1934. These measures are: adjusted diluted earnings per share, adjusted net income, adjusted operating profit and margin, organic revenue, adjusted Corporate Unallocated, adjusted effective tax rates, adjusted diluted EPS guidance, free cash flow, and free cash flow excluding certain items. The Company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP on Exhibits 5, 7 and 8. 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, in the case of non-GAAP financial measures other than free cash flow and free cash flow excluding certain items, 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. The Company believes that the presentation of free cash flow and free cash flow excluding certain items allows investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management and that such measures are useful in evaluating the cash available to us to prepay debt, make strategic acquisitions and investments, and repurchase stock. 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.

Conference Call/Webcast Details: The Company’s senior management will review the second quarter 2019 earnings results on a conference call scheduled for today, August 1, at 8:30 a.m. EDT. Additional information presented on the conference call may be made available on the Company’s Investor Relations Website at http://investor.spglobal.com.


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The Webcast will be available live and in replay at http://investor.spglobal.com/CustomPage/Index?KeyGenPage=1073751596&event=22243. (Please copy and paste URL into Web browser.)

Telephone access is available. U.S. participants may call (888) 603-9623; international participants may call +1 (630) 395-0220 (long distance charges will apply). The passcode is “S&P Global” and the conference leader is Douglas Peterson. A recorded telephone replay will be available approximately two hours after the meeting concludes and will remain available until September 1, 2019. U.S. participants may call (800) 945-9371; international participants may call +1 (402) 220-3464 (long distance charges will apply). No passcode is required.

Forward-Looking Statements: This press release contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, 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, including geopolitical uncertainty and conditions that may result from legislative, regulatory, trade and policy changes associated with the current U.S. administration or the United Kingdom’s withdrawal from the European Union;
the rapidly evolving regulatory environment, in Europe, the United States and elsewhere, affecting S&P Global Ratings, S&P Global Platts, S&P Dow Jones Indices, and S&P Global Market Intelligence, including new and amended regulations and the Company’s compliance therewith;
the impact of the recent acquisition of Kensho, including the impact on the Company’s results of operations; any failure to successfully integrate Kensho into the Company’s operations; any failure to attract and retain key employees; and the risk of litigation, unexpected costs, charges or expenses relating to the acquisition;
the Company’s ability to maintain adequate physical, technical and administrative safeguards to protect the security of confidential information and data, and the potential of a system or network disruption that results in regulatory penalties, remedial costs, or improper disclosure of confidential information or data;
our ability to make acquisitions and dispositions and successfully integrate the businesses we acquire;
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 and the potentially adverse impact of increased access to cash resulting from the Tax Cuts and Jobs Act;

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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;
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 of the energy marketplace;
the health of the commodities markets;
our ability to attract, incentivize and retain key employees;
our ability to adjust to changes in European and United Kingdom markets as the United Kingdom leaves the European Union, the impact of the United Kingdom's departure on our offerings in the European Union, and the impact of the United Kingdom’s departure on our credit rating activities and other European and United Kingdom offerings, particularly in the event of the United Kingdom's departure without an agreement on terms with the European Union;
the Company’s ability to successfully recover should it experience a disaster or other business continuity problem from a hurricane, flood, earthquake, terrorist attack, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or man-made event;
changes in applicable tax or accounting requirements, including the impact of the Tax Cuts and Jobs Act in the U.S.;
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; and
the Company’s exposure to potential criminal sanctions or civil penalties if it fails to comply 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 and Syria, 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 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 the “Risk Factors” section in the Company’s most recently filed Annual Report on Form 10-K.

About S&P Global
S&P Global is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. The Company’s divisions include S&P Global Ratings,

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S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts. S&P Global has approximately 21,000 employees in 33 countries. For more information visit www.spglobal.com.

Investor Relations: http://investor.spglobal.com

Get news direct via RSS:
http://investor.spglobal.com/RSS-Feeds/Index?keyGenPage=1073751617

Contact:
Investor Relations:
Chip Merritt
Senior Vice President, Investor Relations
(212) 438-4321 (office)
[email protected]

News Media:
Jason Feuchtwanger
Director, Communications
(212) 438-1247 (office)
[email protected]

Page 6


Exhibit 1

S&P Global
Condensed Consolidated Statements of Income
Three and six months ended June 30, 2019 and 2018
(dollars in millions, except per share data)

(unaudited)
Three Months
Six Months
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
1,704


$
1,609

 
6%
 
 
$
3,275

 
$
3,176

 
3%
 
Expenses
 
891

 
937

 
(5)%
 
 
1,757

 
1,793

 
(2)%
 
Operating profit
 
813

 
672

 
21%
 
 
1,518

 
1,383

 
10%
 
Other (income) expense, net
 
(6
)
 
(11
)
 
45%
 
 
97

 
(16
)
 
N/M
 
Interest expense, net
 
37

 
26

 
41%
 
 
73

 
61

 
21%
 
Income before taxes on income
 
782

 
657

 
19%
 
 
1,348

 
1,338

 
1%
 
Provision for taxes on income
 
180

 
156

 
15%
 
 
293

 
303

 
(4)%
 
Net income
 
602

 
501

 
20%
 
 
1,055

 
1,035

 
2%
 
Less: net income attributable to noncontrolling interests
 
(47
)
 
(40
)
 
(15)%
 
 
(90
)
 
(84
)
 
(7)%
 
Net income attributable to S&P Global Inc.
 
$
555

 
$
461

 
21%
 
 
$
965

 
$
951

 
1%
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to S&P Global Inc. common shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
2.25

 
$
1.83

 
23%
 
 
$
3.92

 
$
3.78

 
4%
 
Diluted
 
$
2.24

 
$
1.82

 
23%
 
 
$
3.89

 
$
3.75

 
4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
246.1

 
251.1

 
 
 
 
246.4

 
251.7

 
 
 
Diluted
 
247.4

 
253.3

 
 
 
 
247.9

 
253.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actual shares outstanding at period end
 
 
 
 
 
 
 
 
246.3

 
251.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

N/M - not meaningful
Note - % change in the tables throughout the exhibits are calculated off of the actual number, not the rounded number presented.








Exhibit 2

S&P Global
Condensed Consolidated Balance Sheets
June 30, 2019 and December 31, 2018
(dollars in millions)
 
(unaudited)
 
June 30,
 
 
December 31,
 
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
Cash, cash equivalents, and restricted cash
 
$
1,920

 
 
$
1,958

 
Other current assets
 
1,774

 
 
1,646

 
Total current assets
 
3,694

 
 
3,604

 
Property and equipment, net
 
280

 
 
270

 
Right of use assets
 
669

 
 

 
Goodwill and other intangible assets, net
 
4,972

 
 
5,059

 
Other non-current assets
 
570

 
 
525

 
Total assets
 
$
10,185

 
 
$
9,458

 
 
 
 

 
 
 

 
Liabilities and Equity:
 
 

 
 
 

 
Unearned revenue
 
1,709

 
 
1,641

 
Other current liabilities
 
990

 
 
988

 
Long-term debt
 
3,664

 
 
3,662

 
Lease liabilities — non-current
 
621

 
 

 
Pension, other postretirement benefits and other non-current liabilities
 
741

 
 
863

 
Total liabilities
 
7,725

 
 
7,154

 
Redeemable noncontrolling interest
 
1,890

 
 
1,620

 
Total equity
 
570

 
 
684

 
Total liabilities and equity
 
$
10,185

 
 
$
9,458

 
 
 
 
 
 
 
 





Exhibit 3

S&P Global
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 2019 and 2018
(dollars in millions)
 
(unaudited)
 
2019
 
 
2018
 
 
 
 
 
 
 
 
Operating Activities:
 
 
 
 
 
 
Net income
 
$
1,055

 
 
$
1,035

 
Adjustments to reconcile net income to cash provided by operating activities:
 
 

 
 
 

 
Depreciation
 
41

 
 
40

 
Amortization of intangibles
 
63

 
 
57

 
Stock-based compensation
 
33

 
 
46

 
Pension settlement charge, net of taxes
 
85

 
 

 
Other
 
62

 
 
112

 
Accrued legal settlements
 
(1
)
 
 
(29
)
 
Net changes in other operating assets and liabilities
 
(328
)
 
 
(358
)
 
Cash provided by operating activities
 
1,010

 
 
903

 
 
 
 
 
 
 
 
Investing Activities:
 
 

 
 
 

 
Capital expenditures
 
(46
)
 
 
(60
)
 
Acquisitions, net of cash acquired
 
(4
)
 
 
(246
)
 
Changes in short-term investments

 
(3
)
 
 
1

 
Cash used for investing activities
 
(53
)
 
 
(305
)
 
 
 
 
 
 
 
 
Financing Activities:
 
 

 
 
 

 
Proceeds from issuance of senior notes, net
 

 
 
489

 
Payments on senior notes
 

 
 
(403
)
 
Dividends paid to shareholders
 
(281
)
 
 
(253
)
 
Distributions to noncontrolling interest holders, net
 
(59
)
 
 
(78
)
 
Repurchase of treasury shares
 
(644
)
 
 
(1,100
)
 
Exercise of stock options, employee withholding tax on share-based payments, and other
 
(24
)
 
 
(59
)
 
Cash used for financing activities
 
(1,008
)
 
 
(1,404
)
 
Effect of exchange rate changes on cash
 
13

 
 
(38
)
 
Net change in cash, cash equivalents, and restricted cash
 
(38
)
 
 
(844
)
 
Cash, cash equivalents, and restricted cash at beginning of period
 
1,958

 
 
2,779

 
Cash, cash equivalents, and restricted cash at end of period
 
$
1,920

 
 
$
1,935

 
 
 
 
 
 
 
 





Exhibit 4


S&P Global
Operating Results by Segment
Three and six months ended June 30, 2019 and 2018
(dollars in millions)
(unaudited)
Three Months
Six Months
 
 
Revenue
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratings
 
$
801

 
$
775

 
3%
 
 
$
1,497

 
$
1,523

 
(2)%
 
Market Intelligence
 
487

 
449

 
8%
 
 
969

 
889

 
9%
 
Platts
 
213

 
205

 
4%
 
 
420

 
401

 
5%
 
Indices
 
235

 
207

 
14%
 
 
452

 
418

 
8%
 
Corporate
 

 
5

 
N/M
 
 

 
5

 
N/M
 
Intersegment Elimination
 
(32
)
 
(32
)
 
(1)%
 
 
(63
)
 
(60
)
 
(4)%
 
Total revenue
 
$
1,704

 
$
1,609

 
6%
 
 
$
3,275

 
$
3,176

 
3%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratings (a)
 
$
346

 
$
406

 
(15)%
 
 
$
679

 
$
746

 
(9)%
 
Market Intelligence (b)
 
340

 
322

 
6%
 
 
677

 
651

 
4%
 
Platts (c)
 
106

 
107

 
(1)%
 
 
219

 
213

 
2%
 
Indices (d)
 
73

 
70

 
4%
 
 
141

 
133

 
5%
 
Corporate Unallocated expense (e)
 
58

 
64

 
(9)%
 
 
104

 
110

 
(5)%
 
Intersegment Elimination
 
(32
)
 
(32
)
 
(1)%
 
 
(63
)
 
(60
)
 
(4)%
 
Total expenses
 
$
891

 
$
937

 
(5)%
 
 
$
1,757

 
$
1,793

 
(2)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit
 
 
Operating Profit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratings (a)
 
$
455

 
$
369

 
23%
 
 
$
818

 
$
777

 
5%
 
Market Intelligence (b)
 
147

 
127

 
15%
 
 
292

 
238

 
22%
 
Platts (c)
 
107

 
98

 
9%
 
 
201

 
188

 
7%
 
Indices (d)
 
162

 
137

 
19%
 
 
311

 
285

 
9%
 
Total reportable segments
 
871

 
731

 
19%
 
 
1,622

 
1,488

 
9%
 
Corporate Unallocated (e)
 
(58
)
 
(59
)
 
1%
 
 
(104
)
 
(105
)
 
—%
 
Total operating profit
 
$
813

 
$
672

 
21%
 
 
$
1,518

 
$
1,383

 
10%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Note - In the fourth quarter of 2018, Trucost was transferred from Indices to Market Intelligence and historical reporting was retroactively revised to reflect the change.
(a)
The three and six months ended June 30, 2019 includes employee severance charges of $11 million and the three and six months ended June 30, 2018 includes legal settlement expenses of $73 million. Additionally, amortization of intangibles from acquisitions of $1 million is included for the three and six months ended June 30, 2019 and 2018.
(b)
The three and six months ended June 30, 2019 includes employee severance charges of $1 million. Additionally, amortization of intangibles from acquisitions of $19 million and $18 million is included for the three months ended June 30, 2019 and 2018, respectively, and $37 million and $36 million for the six months ended June 30, 2019 and 2018, respectively.
(c)
The three and six months ended June 30, 2019 includes employee severance charges of $1 million. Additionally, amortization of intangibles from acquisitions of $3 million and $4 million is included for the three months ended June 30, 2019 and 2018, respectively, and $7 million and $9 million for the six months ended June 30, 2019 and 2018, respectively.
(d)
Amortization of intangibles from acquisitions of $1 million is included for the three months ended June 30, 2019 and 2018, and $3 million for the six months ended June 30, 2019 and 2018.



Exhibit 4


(e)
The three and six months ended June 30, 2019 includes Kensho retention related expense of $5 million and $11 million, respectively, employee severance charges of $7 million, and a lease impairment of $5 million. Additionally, amortization of intangibles from acquisitions of $7 million and $14 million is included for the three and six months ended June 30, 2019. The three and six months ended June 30, 2018 includes Kensho retention related expense of $12 million and amortization of intangibles from acquisitions of $8 million.



Exhibit 5

S&P Global
Operating Results - Reported vs. Adjusted
Non-GAAP Financial Information
Three and six months ended June 30, 2019 and 2018
(dollars in millions, except per share amounts)

Adjusted Operating Profit
(unaudited)
 
 
Three Months
 
 
Six Months
 
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratings
Operating profit
 
$
455

 
$
369

 
23%
 
 
$
818

 
$
777

 
5%
 
Non-GAAP Adjustments (a)
 
11

 
73

 
 
 
 
11

 
73

 
 
 
Deal-related amortization
 
1

 
1

 
 
 
 
1

 
1

 
 
 
Adjusted operating profit
 
$
467

 
$
443

 
5%
 
 
$
830

 
$
851

 
(2)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market Intelligence
Operating profit
 
$
147

 
$
127

 
15%
 
 
$
292

 
$
238

 
22%
 
Non-GAAP Adjustments (b)
 
1

 

 
 
 
 
1

 

 
 
 
Deal-related amortization
 
19

 
18

 
 
 
 
37

 
36

 
 
 
Adjusted operating profit
 
$
167

 
$
146

 
14%
 
 
$
331

 
$
274

 
20%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Platts
Operating profit
 
$
107

 
$
98

 
9%
 
 
$
201

 
$
188

 
7%
 
Non-GAAP Adjustments (c)
 
1

 

 
 
 
 
1

 

 
 
 
Deal-related amortization
 
3

 
4

 
 
 
 
7

 
9

 
 
 
Adjusted operating profit
 
$
111

 
$
102

 
9%
 
 
$
209

 
$
196

 
6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indices
Operating profit
 
$
162

 
$
137

 
19%
 
 
$
311

 
$
285

 
9%
 
Deal-related amortization
 
1

 
1

 
 
 
 
3

 
3

 
 
 
Adjusted operating profit
 
$
164

 
$
138

 
19%
 
 
$
314

 
$
287

 
9%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total segments
Operating profit
 
$
871

 
$
731

 
19%
 
 
$
1,622

 
$
1,488

 
9%
 
Non-GAAP Adjustments (a) (b) (c)
 
14

 
73

 
 
 
 
14

 
73

 
 
 
Deal-related amortization
 
24

 
25

 
 
 
 
48

 
49

 
 
 
Adjusted segment operating profit
 
$
909

 
$
829

 
10%
 
 
$
1,683

 
$
1,609

 
5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Unallocated
Corporate Unallocated
 
$
(58
)
 
$
(59
)
 
1%
 
 
$
(104
)
 
$
(105
)
 
—%
 
Non-GAAP adjustments (d)
 
16

 
12

 
 
 
 
23

 
12

 
 
 
Deal-related amortization
 
7

 
8

 
 
 
 
14

 
8

 
 
 
Adjusted Corporate Unallocated
 
$
(35
)
 
$
(39
)
 
10%
 
 
$
(67
)
 
$
(85
)
 
21%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total SPGI
Operating profit
 
$
813

 
$
672

 
21%
 
 
$
1,518

 
$
1,383

 
10%
 
Non-GAAP adjustments (a) (b) (c) (d)
 
30

 
85

 
 
 
 
37

 
85

 
 
 
Deal-related amortization
 
31

 
33

 
 
 
 
63

 
57

 
 
 
Adjusted operating profit
 
$
874

 
$
790

 
11%
 
 
$
1,617

 
$
1,525

 
6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Exhibit 5

Adjusted Other (Income) Expense, Net
(unaudited)
 
Three Months
 
 
Six Months
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other (income) expense, net
 
$
(6
)
 
$
(11
)
 
45%
 
 
$
97

 
$
(16
)
 
N/M
 
Non-GAAP Adjustments (e)
 

 

 
 
 
 
(113
)
 

 
 
 
Adjusted other income, net
 
$
(6
)
 
$
(11
)
 
45%
 
 
$
(16
)
 
$
(16
)
 
(1)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Adjusted Provision for Income Taxes
(unaudited)
 
Three Months
 
 
Six Months
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for income taxes
 
$
180

 
$
156

 
15%
 
 
$
293

 
$
303

 
(4)%
 
Non-GAAP adjustments (a) (b) (c) (d) (e)
 
7

 
21

 
 
 
 
37

 
21

 
 
 
Deal-related amortization
 
7

 
8

 
 
 
 
15

 
14

 
 
 
Adjusted provision for income taxes
 
$
195

 
$
185

 
5%
 
 
$
345

 
$
338

 
2%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Adjusted Effective Tax Rate
(unaudited)
 
Three Months
 
 
Six Months
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating profit
 
$
874

 
$
790

 
11%
 
 
$
1,617

 
$
1,525

 
6%
 
Adjusted other income, net
 
(6
)
 
(11
)
 
 
 
 
(16
)
 
(16
)
 
 
 
Interest expense, net
 
37

 
26

 
 
 
 
73

 
61

 
 
 
Adjusted income before taxes on income
 
843

 
775

 
9%
 
 
1,560

 
1,480

 
5%
 
Adjusted provision for income taxes
 
195

 
185

 
 
 
 
345

 
338

 
 
 
Adjusted effective tax rate 1
 
23.1
%
 
23.9
%
 
 
 
 
22.1
%
 
22.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1 The adjusted effective tax rate is calculated by dividing the adjusted provision for income taxes by the adjusted income before taxes on income.



Exhibit 5


Adjusted Net Income attributable to SPGI and Adjusted Diluted EPS
(unaudited)
 
2019
 
 
2018
 
 
% Change
 
 
 
Net Income attributable to SPGI
 
Diluted EPS
 
 
Net Income attributable to SPGI
 
Diluted EPS
 
 
Net Income attributable to SPGI
 
Diluted EPS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months
 
 
 
 
 
 
As reported
 
$
555

 
$
2.24

 
 
$
461

 
$
1.82

 
 
21%
 
23%
 
Non-GAAP adjustments (a) (b) (c) (d)
 
23

 
0.09

 
 
63

 
0.25

 
 
 
 
 
 
Deal-related amortization
 
23

 
0.09

 
 
25

 
0.10

 
 
 
 
 
 
Adjusted
 
$
601

 
$
2.43

 
 
$
549

 
$
2.17

 
 
9%
 
12%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months
 
 
 
 
 
 
As Reported
 
$
965

 
$
3.89

 
 
$
951

 
$
3.75

 
 
1%
 
4%
 
Non-GAAP Adjustments (a) (b) (c) (d) (e)
 
113

 
0.45

 
 
64

 
0.25

 
 
 
 
 
 
Deal-Related Amortization
 
47

 
0.19

 
 
44

 
0.17

 
 
 
 
 
 
Adjusted
 
$
1,125

 
$
4.54

 
 
$
1,059

 
$
4.17

 
 
6%
 
9%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

N/M - not meaningful
Note - Totals presented may not sum due to rounding.
Note - Adjusted operating margin for Ratings, Market Intelligence, Platts and Indices was 58%, 34%, 52% and 70% for the three months ended June 30, 2019. Adjusted operating margin for the Company was 51% for the three months ended June 30, 2019. Adjusted operating margin for Ratings, Market Intelligence, Platts and Indices was 56%, 34%, 50%, and 70% for the six months ended June 30, 2019. Adjusted operating margin for the Company was 49% for the six months ended June 30, 2019.

(a)
The three and six months ended June 30, 2019 includes employee severance charges of $11 million ($9 million after-tax) and the three and six months ended June 30, 2018 includes legal settlement expenses of $73 million ($55 million after-tax).
(b)
The three and six months ended June 30, 2019 includes employee severance charges of $1 million ($1 million after-tax).
(c)
The three and six months ended June 30, 2019 includes employee severance charges of $1 million ($1 million after-tax).
(d)
The three and six months ended June 30, 2019 includes Kensho retention related expense of $5 million ($4 million after-tax) and $11 million ($9 million after-tax), respectively, employee severance charges of $7 million ($5 million after-tax), and lease impairments of $5 million ($4 million after-tax). The three and six months ended June 30, 2018 includes Kensho retention related expense of $12 million ($9 million after-tax).
(e)
The six months months ended June 30, 2019 includes a pension related charge of $113 million ($85 million after-tax).








Exhibit 6

S&P Global
Revenue Information
Three and six months ended June 30, 2019 and 2018
(dollars in millions)

Revenue by Type
(unaudited)
 
Three Months
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
Ratings
 
 
Market Intelligence
 
 
Platts
 
Non-Subscription / Transaction (a)
 
$
429

 
$
397

 
8%
 
 
$
12

 
$
13

 
(9)%
 
 
$
3

 
$
4

 
(18)%
 
Non-Transaction (b)
 
372

 
378

 
(1)%
 
 

 

 
N/M
 
 

 

 
N/M
 
Subscription (c)
 

 

 
N/M
 
 
471

 
431

 
9%
 
 
195

 
188

 
4%
 
Asset-Linked Fees (d)
 

 

 
N/M
 
 
4

 
5

 
(18)%
 
 

 

 
N/M
 
Sales Usage-Based Royalties (e)
 

 

 
N/M
 
 

 

 
N/M
 
 
15

 
13

 
12%
 
Total revenue
 
$
801

 
$
775

 
3%
 
 
$
487

 
$
449

 
8%
 
 
$
213

 
$
205

 
4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indices
 
 
Corporate
 
 
Intersegment Elimination
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
Non-Subscription / Transaction (a)
 
$

 
$

 
N/M
 
 
$

 
$

 
N/M
 
 
$

 
$

 
N/M
 
Non-Transaction (b)
 

 

 
N/M
 
 

 

 
N/M
 
 
(32
)
 
(32
)
 
(1)%
 
Subscription (c)
 
40

 
34

 
21%
 
 

 
5

 
N/M
 
 

 

 
N/M
 
Asset-Linked Fees (d)
 
159

 
135

 
18%
 
 

 

 
N/M
 
 

 

 
N/M
 
Sales Usage-Based Royalties (e)
 
36

 
38

 
(6)%
 
 

 

 
N/M
 
 

 

 
N/M
 
Total revenue
 
$
235

 
$
207

 
14%
 
 
$

 
$
5

 
N/M
 
 
$
(32
)
 
$
(32
)
 
(1)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited)
 
Six Months
 
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
2019
 
2018
 
% Change
 
 
 
Ratings
 
 
Market Intelligence
 
 
Platts
 
Non-Subscription / Transaction (a)
 
$
760

 
$
766

 
(1)%
 
 
$
21

 
$
23

 
(5)%
 
 
$
5

 
$
6

 
(15)%
 
Non-Transaction (b)
 
737

 
757

 
(3)%
 
 

 

 
N/M
 
 

 

 
N/M
 
Subscription (c)
 

 

 
N/M
 
 
939

 
856

 
10%
 
 
386

 
369

 
5%
 
Asset-Linked Fees (d)
 

 

 
N/M
 
 
9

 
10

 
(11)%
 
 

 

 
N/M
 
Sales Usage-Based Royalties (e)
 

 

 
N/M
 
 

 

 
N/M
 
 
29

 
26

 
10%
 
Total revenue
 
$
1,497

 
$
1,523

 
(2)%
 
 
$
969

 
$
889

 
9%