---

---

---

•	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;

•	the rapidly evolving regulatory environment, in Europe, the United States and elsewhere, affecting Ratings, S&P Global Platts, Indices, and S&P Global Market Intelligence, including new and amended regulations and the Company’s compliance therewith;

•	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;

•	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;

•	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;

•	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 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;

•	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;

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

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

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

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

---

---

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

•	bank loan ratings; and

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

---

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

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

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

•	Subscription revenue — primarily from subscriptions to our real-time news, market data and price assessments, 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.

•	Investment vehicles — asset-linked fees such as exchange traded funds (“ETFs”) and mutual funds, that are based on 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.

---

•	Our business is impacted by general economic conditions and volatility in the United States and world financial markets.

•

Economic conditions and volatility across the globe are generally affected by negative or uncertain economic and political conditions. In addition, natural and man-made disasters as well as the outbreak pandemic or contagious diseases introduce volatility and uncertainty into the global capital and commodities markets and negatively impact general economic conditions. Volatile, negative or uncertain economic and political conditions in our significant markets have undermined and could in the future undermine business confidence in our significant markets or in other markets, which are increasingly interdependent. Because we operate globally and have significant businesses in many markets, increased volatility or an economic slowdown in any of those markets could adversely affect our results of operations.

•

Since a significant component of our credit-rating based revenue is transaction-based, and is essentially dependent on the number and dollar volume of debt securities issued in the capital markets, unfavorable financial or economic conditions that either reduce investor demand for debt securities or reduce issuers’ willingness or ability to issue such securities tend to reduce the number and dollar volume of debt issuances for which Ratings provides credit ratings.

•	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.

•	Increases in interest rates or credit spreads, volatility in financial markets or the interest rate environment, significant political or economic events, defaults of significant issuers and other market and economic factors may negatively impact the general level of debt issuance, the debt issuance plans of certain categories of borrowers, the level of derivatives

---

•

Our Platts business is impacted by volatility in the commodities markets. Weak economic conditions, especially in our key markets, including the energy industry, could reduce demand for our products, impacting our revenues and margins. As a result of volatility in commodity prices and trading activity in physical commodities and commodities derivatives, we may encounter difficulty in achieving sustained market acceptance of past or future contract terms, which could have a material adverse effect on our financial position, results of operations and cash flows.

•	Any weakness in the macroeconomic environment could constrain customer budgets across the markets we serve, potentially leading to a reduction in their employee headcount and a decrease in demand for our subscription-based products.

•	The foregoing factors generally affect our performance and could have a material adverse effect on our business, financial condition or results of operations.

•	Our operations rely on the secure processing, storage and transmission of confidential, sensitive and other types of data and information in our computer systems and networks and those of our third-party vendors.

•

All of our businesses have access to material non-public information concerning the Company’s customers, including sovereigns, corporate issuers and other third parties around the world, the unauthorized disclosure of which could affect the trading markets for such customers’ securities and could damage such customers’ competitive positions. The cyber risks the Company faces range from cyber attacks common to most industries, to more sophisticated and targeted attacks intended to obtain unauthorized access to certain information or systems due in part to our prominence in the global marketplace, such as our ratings on debt issued by sovereigns and corporate issuers, or the composition of our indices. Unauthorized disclosure of this information could cause our customers to lose faith in our ability to protect their confidential information and therefore cause customers to cease doing business with us.

•	We experience cyber attacks of varying degrees on a regular basis. Although there has not been a cyber attack that has had a material adverse effect on the Company to date, there can be no assurance that there will not be a material adverse effect in the future.

•

Breaches of our or our vendors’ systems and networks, whether from circumvention of security systems, denial-of-service attacks or other cyber attacks, hacking, computer viruses or malware, employee error, malfeasance, physical breaches or other actions, may cause material interruptions or malfunctions in our or such vendors’ websites, applications or data processing, or may compromise the confidentiality and integrity of material information regarding us, our business or our customers.

•

Misappropriation, improper modification, destruction, corruption or unavailability of our data and information due to cyber incidents, attacks or other security breaches could damage our brand and reputation, result in litigation and regulatory actions, and lead to loss of customer confidence in our security measures and reliability, which would harm our ability to retain customers and gain new ones.

•

Although we devote significant resources to maintain and regularly update our systems and processes that are designed to protect the security of our computer systems, software, networks and other technology assets and the confidentiality, integrity and availability of information belonging to the enterprise and our customers, clients and employees, there is no assurance that all of our security measures will provide absolute security.

•

Measures that we take to avoid or mitigate material incidents can be expensive, and may be insufficient, circumvented, or become obsolete. While we have not experienced a material incident to date, any material incident could cause us to experience reputational harm, loss of customers, regulatory actions, sanctions or other statutory penalties, litigation or financial losses that are either not insured against or not fully covered through any insurance maintained by us, and increased expenses related to addressing or mitigating the risks associated with any such material incidents.

•

Cyber threats are rapidly evolving and are becoming increasingly sophisticated. Despite our efforts to ensure the integrity of our systems, as cyber threats evolve and become more difficult to detect and successfully defend against, one or more cyber threats might defeat the measures that we or our vendors take to anticipate, detect, avoid or mitigate such threats. Certain techniques used to obtain unauthorized access, introduce malicious software, disable or degrade service, or sabotage systems may be designed to remain dormant until a triggering event and we may be unable to anticipate these techniques or implement adequate preventative measures since techniques change frequently or are not recognized until launched.

•

Given the extent to which our businesses are privy to material non-public information concerning our customers, our data could be improperly used, including for insider trading by our employees and third party vendors with access to key systems. We have experienced insider trading incidents involving employees in the past, and it is not always possible to deter misconduct by employees or third party vendors. We take precautions to detect and prevent such activity, including implementing and training on insider trading policies for our employees and contractual obligations for our third party

---

•	The theft, loss, or misuse of personal data collected, used, stored, or transferred by us to run our business could result in significantly increased security costs or costs related to defending legal claims.

•

An actual or perceived breach of our security may harm the market perception of the effectiveness of our security measures and result in damage to our reputation and a loss of confidence in the security of our products and services. Media or other reports of existing or perceived security vulnerabilities in our systems or those of our third-party business partners or service providers can also adversely impact our brand and reputation and materially impact our business.

•	Any of the foregoing could have a material adverse effect on our business, financial condition or results of operations.

◦

Global privacy legislation, enforcement, and policy activity in this area are rapidly expanding and creating a complex regulatory compliance environment. Costs to comply with and implement these privacy-related and data protection measures could be significant. In addition, if despite our best efforts an inadvertent failure to comply with federal, state, or international privacy-related or data protection laws and regulations should occur, this could result in proceedings against us by governmental entities or others.

◦

Certain types of information we collect, compile, use, and publish, including offerings in all our businesses, and particularly our Market Intelligence business, are subject to regulation by governmental authorities in jurisdictions in which we operate. In addition, there is increasing concern among certain privacy advocates and government regulators regarding marketing and privacy matters, particularly as they relate to individual privacy interests.

◦

There has been increased public attention regarding the use of personal information and data transfer, accompanied by legislation and regulations intended to strengthen data protection, information security and consumer and personal privacy. The law in these areas continues to develop and the changing nature of privacy laws in the U.S., the European Union (“EU”) and elsewhere could impact our processing of personal and sensitive information of our employees, vendors and customers.

◦	The EU's comprehensive General Data Privacy Regulation (the “GDPR”) became fully effective in 2018. GDPR requires companies to satisfy requirements regarding the handling of personal and sensitive data, including its use, protection and the ability of persons whose data is stored to correct or delete such data about themselves.

◦

Failure to comply with GDPR requirements could result in penalties of up to 4% of worldwide revenue. GDPR and other similar laws and regulations, as well as any associated inquiries or investigations or any other government actions, may be costly to comply with, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines or demands or orders that we modify or cease existing business practices.

◦

The California Consumer Privacy Act (“CCPA”) became fully effective January 1, 2020, requiring, among other things, covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt-out of certain sales of personal information. The CCPA provides a new private right of action for data breaches and requires companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices and allow consumers to opt out of certain data sharing with third parties.

◦	Our reputation and brand and our ability to attract new customers could also be adversely impacted if we fail, or are perceived to have failed, to properly respond to security breaches of our or third party’s information technology systems. Such failure to properly respond could also result in similar exposure to liability.

◦

Compliance with the GDPR, the CCPA and other current and future applicable international and U.S. privacy, cybersecurity and related laws can be costly and time-consuming. Significant capital investments and other expenditures could also be required to remedy cybersecurity problems and prevent future breaches, including costs associated with additional security technologies, personnel, experts and credit monitoring services for those whose data has been breached. These costs, which could be material, could adversely impact our results of operations in the period in which they are incurred and may not meaningfully limit the success of future attempts to breach our information technology systems.

◦	In addition, other jurisdictions, including China, are considering imposing or have already imposed additional restrictions. These laws and regulations are increasing in complexity and number, change frequently and increasingly conflict among the various countries in which we operate, which could result in greater compliance risk and cost for us.

◦

Continued privacy concerns may result in new or amended laws and regulations. Future laws and regulations with respect to the collection, compilation, use, and publication of information and consumer privacy could result in limitations on our operations, increased compliance or litigation expense, adverse publicity, or loss of revenue, which could have a material adverse effect on our business, financial condition, and results of operations. It is also possible that we could be prohibited from collecting or disseminating certain types of data, which could affect our ability to meet our customers’ needs.

---

◦	We may also from time to time be subject to, or face assertions that we are subject to, additional obligations relating to personal data by contract or due to assertions that self-regulatory obligations or industry standards apply to our practices.

•

In the normal course of business, both in the United States and abroad, we and our subsidiaries are defendants in numerous legal proceedings and are often the subject of government and regulatory proceedings, investigations and inquiries, as discussed under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Annual Report on Form 10-K and in 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, and we face the risk that additional proceedings, investigations and inquiries will arise in the future.

•	Many of these proceedings, investigations and inquiries relate to the activity of our Ratings, Indices, and Platts businesses. In addition, various government and self-regulatory agencies frequently make inquiries and conduct investigations into our compliance with applicable laws and regulations, including those related to our regulated activities and antitrust matters.

•	Any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions, which could have a material adverse effect on our business, financial condition or results of operations.

•

In view of the uncertainty inherent in litigation and government and regulatory enforcement matters, we cannot predict the eventual outcome of the matters we are currently facing or the timing of their resolution, or in most cases reasonably estimate what the eventual judgments, damages, fines, penalties or impact of activity restrictions may be. As a result, we cannot provide assurance that the outcome of the matters we are currently facing or that we may face in the future will not have a material adverse effect on our business, financial condition or results of operations.

•

As litigation or the process to resolve pending matters progresses, as the case may be, we continuously 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 and competitive position, which may require that we record liabilities in the consolidated financial statements in future periods.

•	Legal proceedings impose additional expenses on the Company and require the attention of senior management to an extent that may significantly reduce their ability to devote time addressing other business issues.

•

Risks relating to legal proceedings may be heightened in foreign jurisdictions that lack the legal protections or liability standards comparable to those that exist in the United States. In addition, new laws and regulations have been and may continue to be enacted that establish lower liability standards, shift the burden of proof or relax pleading requirements, thereby increasing the risk of successful litigations against the Company in the United States and in foreign jurisdictions. These litigation risks are often difficult to assess or quantify and could have a material adverse effect on our business, financial condition or results of operations.

•	We may not have adequate insurance or reserves to cover these risks, and the existence and magnitude of these risks often remains unknown for substantial periods of time and could have a material adverse effect on our business, financial condition or results of operations.

•

The financial services industry is highly regulated, rapidly evolving and subject to the potential for increasing regulation in the United States, Europe and elsewhere. The businesses conducted by Ratings 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 U.S. Securities Exchange Act of 1934 (the “Exchange Act”), and/or the laws of the states or other jurisdictions in which they conduct business.

•

In the past several years, the U.S. Congress, the International Organization of Securities Commissions ("IOSCO"), the SEC and the European Commission, including through the European Securities Market Authority ("ESMA"), as well as regulators in other countries in which Ratings operates, have been reviewing the role of rating agencies and their processes and the need for greater oversight or regulations concerning the issuance of credit ratings or the activities of credit rating agencies. Other laws, regulations and rules relating to credit rating agencies are being considered by local, national 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, and liability standards applicable to credit rating agencies.

•

These laws and regulations, and any future rule-making, could result in reduced demand for credit ratings and increased costs, which we may be unable to pass through to customers. In addition, there may be uncertainty over the scope, interpretation and administration of such laws and regulations. We may be required to incur significant expenses in order to comply with such laws and regulations and to mitigate the risk of fines, penalties or other sanctions. Legal proceedings

---

•	Additional information regarding rating agencies is provided under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Annual Report on Form 10-K.

•	In addition to the extensive and evolving U.S. laws and regulations, foreign jurisdictions have taken measures to increase regulation of the financial services and commodities industries.

•

In October of 2012, IOSCO issued its Principles for Oil Price Reporting Agencies ("PRA Principles"), which IOSCO states are intended to enhance the reliability of oil price assessments that are referenced in derivative contracts subject to regulation by IOSCO members. Platts has taken steps to align 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.

•

In July of 2013, IOSCO issued its Principles for Financial Benchmarks ("Financial Benchmark Principles"), which are intended to promote the reliability of the benchmark determination process by setting standards related to benchmark governance, benchmark quality, transparency and accountability mechanisms, including with regard to the indices and benchmarks published by Indices. Indices has taken steps to align its governance regime, control framework and operations with the Financial Benchmark Principles and engages an independent auditor to perform an annual reasonable assurance review of its adherence to the Financial Benchmark Principles.

•

The benchmark industry is subject to regulation in the EU (the “EU Benchmark Regulation”) as well as potential increased regulation of financial benchmarks in other jurisdictions. The EU Benchmark Regulation was published on June 30, 2016, with provisions applicable to Indices and Platts, effective from January 1, 2018. ESMA has published additional guidance clarifying that existing benchmark administrators such as Indices and Platts may utilize the transitional provisions contained in the EU Benchmark Regulation, which provides them two (2) years to implement and seek authorization by an EU National Competent Authority by January 1, 2020, with their respective benchmark activities in Europe. This legislation will likely cause additional operating obligations, greater compliance risk and costs for Indices and Platts but they are not expected to be material at this time, although the exact impact remains unclear.

•

Indices is subject to the new benchmark regulation in Australia under which it is required to obtain a license from and be subject to the supervision of the Australian Securities and Investment Commission regarding its administration of the S&P ASX 200 index. This legislation will likely cause additional operating obligations, greater compliance risk and costs for Indices but they are not expected to be material at this time, although the exact impact remains unclear.

•

The EU's package of legislative measures called the Markets in Financial Instruments Directive and Regulation (collectively "MiFID II") entered into force in 2014, revising and updating the prior Markets in Financial Instruments Directive (2004) and its associated secondary legislation. The substantive provisions of MiFID II apply in all EU Member States since 2018. MiFID II includes provisions that, among other things: (i) mandate conditions and requirements on the licensing of benchmarks for the purposes of clearing related securities and provide for non-discriminatory access to exchanges and clearing houses for this purpose; (ii) modify the categorization and treatment of certain classes of derivatives; (iii) expand the categories of trading venues that are subject to regulation; (iv) require the unbundling of investment research from other services, including execution services, and direct that investment firms must pay for research either out of a dedicated research payment account which is paid for by clients or from the investment firm’s profits; and (v) provide for the mandatory trading of certain derivatives on exchanges (complementing the mandatory derivative clearing requirements in the EU Market Infrastructure Regulation of 2011, or EMIR). The MiFID II package may result in changes to the manner in which S&P Dow Jones Indices and Platts license their indices and price assessments, respectively, and could also have an indirect impact on the credit ratings and third-party research products offered by other divisions of the Company for use within the EU. MiFID II and the Market Abuse Regulation (“MAR”) may impose

---

•	Market Intelligence operates regulated investment advisory businesses in the United States and the European Union. This business and other Market Intelligence businesses may increasingly become subject to new or more stringent regulations that will increase the cost of doing business, which could have a material adverse effect on our business, financial condition or results of operations.

•	As a global company headquartered in the U.S., we are subject to U.S. laws and regulations, including economic sanction laws. These laws include prohibitions or restrictions on the sale or supply of certain products and services to embargoed or sanctioned countries, regions, governments, persons and entities.

•	Embargoes and sanctions laws are changing rapidly for certain geographies, including with respect to Iran, Russia, and Venezuela. These embargoes and sanctions laws may affect our ability to continue to market and/or sell our products and services into these geographies and in turn adversely impact our revenue from such geographies.

•	Additional international trade restraints may be promulgated at any time and may require changes to our operations and increase our risk of noncompliance.

•	Failure to comply with these laws and regulations can result in significant fines and penalties and related material adverse effects on our reputation, business, financial condition and results of operations.

•	We have made and expect to continue to make acquisitions or enter into other strategic transactions to strengthen our business and grow our Company. Such transactions present significant challenges and risks.

•	The market for acquisition targets and other strategic transactions is highly competitive, especially in light of industry consolidation, which may affect our ability to complete such transactions.

•	If we are unsuccessful in completing such transactions or if such opportunities for expansion do not arise, our business, financial condition or results of operations could be materially adversely affected.

•

If such transactions are completed, the anticipated growth and other strategic objectives of such transactions may not be fully realized or may take longer to realize than expected, and a variety of factors may adversely affect any anticipated benefits from such transactions. For instance, the process of integration may require more resources than anticipated, we may assume unintended liabilities, there may be unexpected regulatory and operating difficulties and expenditures, we may fail to retain key personnel of the acquired business and such transactions may divert management’s focus from other business operations.

•	The failure of acquisitions and other strategic transactions to perform as expected could have a material adverse effect on our business, financial condition or results of operations.

•

Some of our products support the investment processes and other activities of our clients, which, in the aggregate, manage trillions of dollars of assets. Use of our products as part of such activities, including the investment process creates the risk that clients, or the parties whose assets are managed by our clients, may pursue claims against us for very significant dollar amounts, which could have a material adverse effect on our business, financial condition or results of operations.

•

The products we develop or license may contain undetected errors or defects, despite testing and/or other quality assurance practices. Such errors may exist during any part of a product’s life cycle and may persist notwithstanding testing and/or other quality assurance practices. Deploying products containing such errors may damage our reputation and the costs associated with remediating such errors may have an impact on our profitability.

•

Further, certain of our products rely on proprietary methodologies, models and processes that are subject to various internal governance and control frameworks. Despite ongoing review and quality assurance processes, these methodologies, models and processes as well as their respective inputs may also contain undetected errors or defects that may damage our reputation and the costs associated with remediating such errors may have an impact on our profitability.

•	Any claim relating to our products, even if the outcome were to be ultimately favorable to us, would involve a significant commitment of our management, personnel, financial and other resources and could have a negative impact on our reputation. In addition, such claims and lawsuits could have a material adverse effect on our business, financial condition or results of operations.

---

•

The markets for credit ratings, financial research, investment advisory services, market data, index-based products, and commodities price assessments and related news and information about these markets are intensely competitive. Ratings, Market Intelligence, Platts and Indices compete domestically and internationally on the basis of a number of factors, including the quality of their offerings, client service, reputation, price, geographic scope, range of products and technological innovation.

•	While our businesses face competition from traditional content and analytics providers (including exchanges), we also face competition from non-traditional providers, such as asset managers, investment banks and technology-led companies that are adding content and analytics capabilities to their core businesses.

•	In addition, in some of the countries in which Ratings competes, governments may provide financial or other support to locally-based rating agencies and may from time to time establish official credit rating agencies, credit ratings criteria or procedures for evaluating local issuers.

•	Sustained downward pressure on oil and other commodities prices and trading activity in those markets could have a material adverse effect on the rate of growth of Platts’ revenue, including subscription and licensing fees.

•	We operate in highly competitive markets that continue to change to adapt to customer needs.

•	In order to maintain a competitive position, we must continue to invest in new offerings and enhancements, including new ways to deliver our products and services.

•	These new or enhanced offerings resulting from our investments may not achieve market acceptance, may not be profitable or may be less profitable than what we have experienced historically.

•	We could experience threats to our existing businesses from the rise of new competitors due to the rapidly changing environment in which we operate.

•	The rapid change of technology is a key feature of all of the markets in which we operate. To succeed in the future, we will need to deploy improved processes and technology to innovate, design, develop, assemble, test, market, and support new products and enhancements to our existing products in a timely and cost-effective manner.

•	Innovation and constant development in support of new products and enhancements to existing products calls for the implementation of new and improved processes and technologies that require related change management efforts.

•	Our major expenditures include employee compensation and capital investments.

•	We offer competitive salary and benefit packages in order to attract and retain the quality employees required to grow and expand our businesses. Compensation costs are influenced by general economic factors, including those affecting the cost of health insurance and postretirement benefits, and any trends specific to the employee skill sets we require.

•	We make significant investments in information technology data centers and other technology initiatives and we cannot provide assurances that such investments will result in increased revenues.

•	Although we believe we are prudent in our investment strategies and execution of our implementation plans, there is no assurance as to the ultimate recoverability of these investments.

•	In recent years, more public sources of free or relatively inexpensive information have become available, particularly through the Internet, and advances in public cloud computing and open source software may continue.

•	Public sources of free or relatively inexpensive information can reduce demand for our products and services. Demand could also be reduced as a result of cost-cutting initiatives at certain companies and organizations. Although we believe

---

•	Our businesses have a customer base which is largely comprised of members from the corporate, financial services and commodities industries. The consolidation of customers resulting from mergers and acquisitions across these industries can result in reductions in the number of firms and workforce which can impact the size of our customer base.

•	Our customers that strive to reduce their operating costs may seek to reduce their spending on our products and services. If a large number of smaller customers or a critical number of larger customers reduce their spending with us, our business, financial condition or results of operations could be materially and adversely affected.

•

Alternatively, customers may use other strategies to reduce their overall spending on financial and commodity market products and services by consolidating their spending with fewer vendors, including by selecting other vendors with lower-cost offerings, or by self-sourcing their need for financial and commodity market products and services. If customers elect to consolidate their spending on financial and commodity market products and services with other vendors and not us, if we lose business to lower priced competitors, or if customers elect to self-source their product and service needs, our business, financial condition or results of operations could be materially and adversely affected.

•	A material portion of our revenues in our Indices business is concentrated in some of our largest customers, who have significant assets under management in index funds and exchange-traded funds. A loss of a substantial portion of revenue from our largest customers could have a material and adverse effect on our business, financial condition or results of operations.

•	Our ability to produce our products and develop new products is dependent upon the products of other suppliers, including certain data, software and service suppliers. Some of our products and their related value are dependent upon updates from our data suppliers and most of our information and data products are dependent upon continuing access to historical and current data.

•	We utilize certain data provided by third-party data sources in a variety of ways, including large volumes of data from certain stock exchanges around the world.

•	If the data from our suppliers has errors, is delayed, has design defects, is unavailable on acceptable terms or is not available at all, it could have a material adverse effect on our business, financial condition or results of operations.

•

Some of our agreements with data suppliers allow them to cancel on short notice. Termination of one or more of our significant data agreements or exclusion from, or restricted use of, or litigation in connection with, a data provider’s information could decrease the available information for us to use (and offer our clients) and could have a material adverse effect on our business, financial condition or results of operations.

•

We consider many of our products and services to be proprietary. Failure to protect our intellectual property adequately could harm the value of and revenue generated by such assets as well as our reputation and affect our ability to compete effectively. Businesses we acquire may also have intellectual property portfolios which increase the complexity of managing our intellectual property portfolio and protecting our competitive position.

•

Our products contain intellectual property delivered through a variety of digital and other media. Our ability to achieve anticipated results depends in part on our ability to defend our intellectual property rights against infringement and misappropriation. Our business, financial condition or results of operations could be materially and adversely affected by inadequate or changing legal and technological protections for intellectual property and proprietary rights in some jurisdictions and markets. For example, we do business in a number of countries included on the Priority Watch List maintained by the  Office of the United States Trade Representative and which are currently thought to afford less protection to intellectual property rights generally than some other jurisdictions. The lack of strong patent and other intellectual property protection in jurisdictions such as referenced above may significantly increase our vulnerability as regards unauthorized disclosure or use of our intellectual property and undermine our competitive position.

•	Our products also contain intellectual property of third party sources. Any violation by us of the intellectual property rights of such third parties could result in termination of the relevant source agreement, litigation and reputational damage which could materially and adversely affects our business, financial condition or results of operations.

---

•

The Tax Cuts and Jobs Act (the “TCJA”) enacted in 2017 in the United States significantly changed the tax rules applicable to U.S. domiciled corporations. Changes such as lower corporate tax rates, full expensing for qualified property, taxation of offshore earnings, limitations on interest expense deductions, and changes to the municipal bond tax exemption may impact demand for our products and services. While lower than usual issuance following effectiveness of the TCJA initially impacted our business, at this time, we cannot assess what the overall effect of such legislation could be on our results of operations or cash flows over the longer term. In addition, the TCJA is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities, and the TCJA could be subject to amendments and technical corrections, any of which could lessen or increase the impacts of the TCJA.

•

Voters in the United Kingdom ("UK") approved an exit from the EU via a referendum in 2016 and in 2017, the UK invoked Article 50 of the Treaty on the EU, commencing the process to leave the EU (“Brexit”) and on January 31, 2020, the UK formally exited the EU. Negotiations on the terms of the UK’s future relationship with the EU are ongoing. The UK is expected to enter a transition period until December 31, 2020 permitting negotiation of a free trade deal. The consequences for the economies of the UK and EU member states as a result of the UK's withdrawal from the EU remain unknown and unpredictable.

•

Any impact from Brexit on the Company will depend, in part, on the outcome of tariff, trade and other negotiations. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations between the UK and the EU as the UK determines which EU laws to replace or replicate and the EU determines how to treat regulated activities (e.g., the activities of credit rating agencies) originating in the UK. Our businesses are subject to increasing regulation of the financial services and commodities industries in Europe. Potential changes in EU regulation and/or additional regulation in the UK could cause additional operating obligations and increased costs for our businesses. In particular, our Ratings business will, for the first time, be subject to regulation by the Financial Conduct Authority effective January 1, 2021.

•	Changes to UK immigration policy as a result of Brexit could adversely affect our ability to retain talent for our European operations.

•

Any of these effects of Brexit, and others we cannot anticipate, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows. The lack of certainty given the pending negotiations creates the risk that notwithstanding that we have devoted valuable resources to a thorough preparation for the impact of Brexit on our European operations, we may not be adequately prepared for an unforeseen outcome.

•

Should we experience a local or regional disaster or other business continuity problem, such as an earthquake, hurricane, flood, terrorist attack, outbreak of pandemic or contagious diseases (including, but not limited to, 2019 Novel Coronavirus, Ebola, Zika, avian flu, severe acute respiratory syndrome, H1N1 (swine flu) and Middle East Respiratory Syndrome), security breach, cyber attack, power loss, telecommunications failure or other natural or man-made disaster, our ability to continue to operate will depend, in part, on the availability of our personnel, our office facilities and the proper functioning of our computer, telecommunication and other related systems and operations. In such an event, we could experience operational challenges with regard to particular areas of our operations, such as key executive officers or personnel, that could have a material adverse effect on our business.

•	We regularly assess and take steps to improve our existing business continuity plans and key management succession. However, a disaster on a significant scale or affecting certain of our key operating areas within or across regions, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially

---

•

We have outsourced certain functions to third-party service providers to leverage leading specialized capabilities and achieve cost efficiencies. Outsourcing these functions involves the risk that the third-party service providers may not perform to our standards or legal requirements, may not produce reliable results, may not perform in a timely manner, may not maintain the confidentiality of our proprietary information, or may fail to perform at all. Failure of these third parties to meet their contractual, regulatory, confidentiality, or other obligations to us could result in material financial loss, higher costs, regulatory actions and reputational harm.

•

Outsourcing these functions also involves the risk that the third-party service providers may not maintain adequate physical, technical and administrative safeguards to protect the security of our confidential information and data. Failure of these third parties to maintain these safeguards could result in unauthorized access to our systems or a system or network disruption that could lead to improper disclosure of confidential information or data, regulatory penalties and remedial costs.

•

We also rely on the business infrastructure and systems of third parties with whom we do business and to whom we outsource the maintenance and development of operational and technological functionality, including third-party cloud infrastructure. Our cloud infrastructure providers, or other service providers, could experience system breakdowns or failures, outages, downtime, cyber attacks, adverse changes to financial condition, bankruptcy or other adverse conditions, which could have a material adverse effect on our business and reputation. Thus, our plans to increase the amount of our infrastructure that we outsource to “the cloud” or to other third parties may increase our risk exposure.

•	Many of our products and services are delivered electronically, and our customers rely on our ability to process transactions rapidly and deliver substantial quantities of data on computer-based networks. Our customers also depend on the continued capacity, reliability and security of our electronic delivery systems, our websites and the Internet.

•	Our ability to deliver our products and services electronically may be impaired due to infrastructure or network failures, malicious or defective software, human error, natural disasters, service outages at third-party Internet providers or increased government regulation.

•	Delays in our ability to deliver our products and services electronically may harm our reputation and result in the loss of customers. In addition, a number of our customers entrust us with storing and securing their data and information on our servers.

•	Although we have disaster recovery plans that include backup facilities for our primary data centers, our systems are not always fully redundant, and our disaster planning may not always be sufficient or effective. As such, these disruptions may affect our ability to store, handle and secure such data and information.

•	Our ability to conduct business may be materially and adversely impacted by a disruption in the infrastructure that supports our businesses and the communities in which we are located, including New York City, the location of our headquarters, and major cities worldwide in which we have offices.

•

This may include a disruption involving physical or technological infrastructure used by us or third parties with or through whom we conduct business, whether due to human error, natural disasters, power loss, telecommunication failures, break-ins, sabotage, intentional acts of vandalism, acts of terrorism, political unrest, war or otherwise. Our efforts to secure and plan for potential disruptions of our major operating systems may not be successful.

•

We rely on our information technology environment and certain critical databases, systems and applications to support key product and service offerings. We believe we have appropriate policies, processes and internal controls to ensure the stability of our information technology, provide security from unauthorized access to our systems and maintain business continuity, but our business could be subject to significant disruption and our business, financial condition or results of operations could be materially and adversely affected by unanticipated system failures, data corruption or unauthorized access to our systems.

•	We also do not have fully redundant systems for most of our smaller office locations and low-risk systems, and our disaster recovery plan does not include restoration of non-essential services. If a disruption occurs in one of our locations or systems and our personnel in those locations or those who rely on such systems are unable to utilize other systems or

---

•	We cannot predict with certainty all of the adverse effects that could result from our failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. A disruption to our operations or infrastructure could have a material adverse effect on our business, financial condition or results of operations.

•

The development, maintenance and support of our products and services are dependent upon the knowledge, experience and ability of our highly skilled, educated and trained employees. Accordingly, our business is dependent on successfully attracting and retaining talented employees. If the Company is less successful in its recruiting efforts, or if it is unable to retain key employees, its ability to develop and deliver successful products and services or achieve strategic goals may be adversely affected.

•	Our reputation, credibility, and the strength of our brand are key competitive strengths.

•	Given our role in the financial and commodities markets, our ability to attract and retain customers is uniquely affected by external perceptions of our reputation, credibility, and brand.

•	Negative perceptions or publicity could damage our reputation with customers, prospects, regulators, and the public generally, which could negatively impact, among other things, our ability to attract and retain customers, employees and suppliers, as well as suitable candidates for acquisition or other combinations.

•	Damage to our reputation, credibility, and brand could have a material adverse effect on our business and results of operations.

•

We believe there remains significant opportunity to expand our business into major geographic and product markets (including China and ESG) and we are in the process of such expansion efforts. Expansion into new markets requires significant levels of investment and attention from management. There can be no assurance that these markets will develop as anticipated or that we will have success in these markets, and if we do not, we may be unable to recover our investment spent to expand our business into these markets and may forgo opportunities in more lucrative markets, which could adversely impact our business, financial condition and results of operations.

•	The geographic breadth of our activities subjects us to significant legal, economic, operational, market, compliance and reputational risks. These include, among others, risks relating to:

▪	economic and political conditions around the world,

▪	inflation,

▪	fluctuation in interest rates and currency exchange rates,

▪	limitations that foreign governments may impose on the conversion of currency or the payment of dividends or other remittances to us from our non-U.S. subsidiaries,

▪	differing accounting principles and standards,

▪	unexpected increases in taxes or changes in U.S. or foreign tax laws,

▪	potential costs and difficulties in complying with a wide variety of foreign laws and regulations (including tax systems) administered by foreign government agencies, some of which may conflict with U.S. or other sources of law,

▪	changes in applicable laws and regulatory requirements,

▪	the possibility of nationalization, expropriation, price controls and other restrictive governmental actions,

▪	competition with local rating agencies that have greater familiarity, longer operating histories and/or support from local governments or other institutions, and

▪	civil unrest, terrorism, unstable governments and legal systems, and other factors.

---

•

Additionally, we are subject to complex U.S., European and other local laws and regulations that are applicable to our operations abroad, including trade sanctions laws, anti-corruption and anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act 2010, anti-money laundering laws, and other financial crimes laws. Our internal controls, policies and procedures and employee training and compliance programs related to these topics may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies and violating applicable laws and regulations. A determination that we have violated such laws could have a material adverse effect on our reputation, business, financial condition or results of operations.

•

Compliance with international and U.S. laws and regulations that apply to our international operations increases the cost of doing business in foreign jurisdictions. Violations of such laws and regulations may result in fines and penalties, criminal sanctions, administrative remedies, or restrictions on business conduct and could have a material adverse effect on our reputation, our ability to attract and retain employees, our business, financial condition or results of operations.

•

Embargoes and sanctions laws are changing rapidly for certain geographies, including with respect to Russia, Iran, and Venezuela. These embargoes and sanctions laws may affect our ability to continue to market and/or sell our products and services into these geographies. In addition, while we have a compliance program in place designed to reduce the likelihood of potential violations of import and export laws and sanctions, violations of these laws or sanctions could have an adverse effect on our reputation, business, financial condition and results of operations.

---

---

---

---

---

---

---

1

Includes the impact of the following items: a pension related charge of $113 million, costs associated with early repayment of our Senior Notes of $56 million, a $49 million gain on dispositions, employee severance charges of $25 million, Kensho retention related expense of $21 million, lease impairments of $11 million, acquisition-related costs of $4 million and amortization of intangibles from acquisitions of $122 million.

2	Includes the impact of the following items: legal settlement expenses of $74 million, Kensho retention related expense of $31 million, restructuring charges related to a business disposition and employee severance charges of $25 million, lease impairments of $11 million, a pension related charge of $5 million and amortization of intangibles from acquisitions of $122 million.

3	Includes the impact of the following items: legal settlement expenses of $55 million, employee severance charges of $44 million, a charge to exit leased facilities of $25 million, non-cash acquisition and disposition-related adjustments of $15 million, a pension related charge of $8 million, an asset write-off of $2 million and amortization of intangibles from acquisitions of $98 million.

4

Includes the impact of the following items: a $1.1 billion gain from our dispositions, a benefit related to net legal settlement insurance recoveries of $10 million, disposition-related costs of $48 million, a technology-related impairment charge of $24 million, employee severance charges of $6 million, a $3 million disposition-related reserve release, an acquisition-related cost of $1 million and amortization of intangibles from acquisitions of $96 million.

5	Includes the impact of the following items: costs related to identified operating efficiencies primarily related to employee severance charges of $56 million, net legal settlement expenses of $54 million, acquisition-related costs of $37 million, an $11 million gain on dispositions and amortization of intangibles from acquisitions of $67 million.

6	Includes $149 million of tax expense due to U.S. tax reform, primarily associated with the deemed repatriation of foreign earnings, which was partially offset by a $21 million tax benefit related to prior year divestitures.

7	Includes the impact of the $49 million gain on dispositions in 2019 and the $1.1 billion gain on dispositions in 2016.

8	Working capital is calculated as current assets less current liabilities.

9	Includes short-term debt of $399 million and $143 million as of December 31, 2017 and December 31, 2015, respectively.

---

•	Overview

•	Results of Operations

•	Liquidity and Capital Resources

•	Reconciliation of Non-GAAP Financial Information

•	Critical Accounting Estimates

•	Recent Accounting Standards

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

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

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

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

•

In January of 2020, we completed the acquisition of the ESG Ratings Business from RobecoSAM, which includes the widely followed SAM* Corporate Sustainability Assessment, an annual evaluation of companies' sustainability practices. The acquisition will bolster our position as the premier resource for essential environmental, social, and governance ("ESG") insights and product solutions for our customers. Through this acquisition, we will be able to offer our customers even more transparent, robust and comprehensive ESG solutions.

•

In April of 2018, we acquired Kensho Technologies Inc. ("Kensho") for approximately $550 million, net of cash acquired, in a mix of cash and stock. Kensho is a leading-edge provider of next-generation analytics, artificial intelligence, machine learning, and data visualization systems to Wall Street's premier global banks and investment institutions, as well as the National Security community. Beginning in the first quarter of 2019, the contract obligations for revenue from Kensho's major customers were transferred to Market Intelligence for fulfillment.  As a result of this transfer, from January 1, 2019

---

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

2

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. 2018 includes legal settlement expenses of $74 million, Kensho retention related expense of $31 million, restructuring charges related to a business disposition and employee severance charges of $25 million and lease impairments of $11 million. 2017 includes legal settlement expenses of $55 million, employee severance charges of $44 million, a charge to exit leased facilities of $25 million, non-cash acquisition and disposition-related adjustments of $15 million and an asset write-off of $2 million. 2019 and 2018 also includes amortization of intangibles from acquisitions of $122 million and 2017 includes amortization of intangibles from acquisitions of $ $98 million.

---

•	Meeting or exceeding revenue growth and EBITA margin targets and delivering on commitments to return capital to shareholders;

•	Funding organic opportunities with continued productivity gains;

•	Pursuing a disciplined acquisition, investment and partnership strategy to support our strategic initiatives; and

•	Better serving our customers, employees, and the communities in which we operate through our commitment to corporate responsibility and sustainability.

•	Continuing to drive excellence through our core business offerings;

•	Delivering ESG, Small and Medium-sized Enterprise data and Marketplace solutions to market on schedule and with strong commercial traction;

•	Modernizing and enhancing the delivery of our products across multiple channels (e.g., S&P Global Platform, MI Smart move, feeds, application programming interfaces);

•	Providing a superior customer experience through the collective efforts of our divisions and functions; and

•	Accelerating growth in non-U.S. markets with a particular focus on progressing our businesses in China.

•	Modernizing our workplace to improve end-user productivity and experience, enabling our employees to innovate and better serve our customers;

•	Standardizing and simplifying our technology to best support and enable our divisions;

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

---

•	Maintaining our strong commitment to quality, utilizing shared data processes and capabilities; and

•	Continuing to advance a strong Risk, Internal Control, and Compliance environment.

•	Creating an inclusive performance-driven culture that drives employee engagement and aligns with our purpose of accelerating progress in the world;

•	Promoting career mobility and attracting and retaining the best people; and

•	Improving diversity in overall representation through talent acquisition, advancement and retention.

---

---

1	In 2019, selling and general expenses include employee severance charges of $11 million. In 2018, selling and general expenses include legal settlement expenses of $74 million and employee severance charges of $8 million.

2	In 2019, selling and general expenses include employee severance charges of $6 million and acquisition-related costs of $4 million. In 2018, selling and general expenses include restructuring charges related to a business disposition and employee severance charges of $7 million.

---

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

5	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. In 2018, selling and general expenses include Kensho retention related expense of $31 million, lease impairments of $11 million and employee severance charges of $10 million.

1	In 2018, selling and general expenses include legal settlement expenses of $74 million and employee severance charges of $8 million. In 2017, selling and general expenses include legal settlement expenses of $55 million and employee severance charges of $25 million.

2	In 2018, selling and general expenses include restructuring charges related to a business disposition and employee severance charges of $7 million. In 2017, selling and general expenses include employee severance charges of $7 million and a non-cash disposition-related adjustment of $4 million.

3	In 2017, selling and general expenses include a non-cash acquisition-related adjustment of $11 million, a charge to exit a leased facility of $6 million, an asset write-off of $2 million and employee severance charges of $2 million.

---

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

5	In 2018, selling and general expenses include Kensho retention related expense of $31 million, lease impairments of $11 million and employee severance charges of $10 million. In 2017, selling and general expenses include a charge to exit leased facilities of $19 million and employee severance charges of $10 million.

•

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 Standard & Poor's Investment Advisory Services LLC  ("SPIAS"), a business within our Market Intelligence segment, 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.

---

1

2019 includes employee severance charges of $11 million. 2018 includes legal settlement expenses of $74 million and employee severance charges of $8 million. 2017 includes legal settlement expenses of $55 million and employee severance charges of $25 million. 2019 and 2018 includes amortization of intangibles from acquisitions of $2 million and 2017 includes amortization of intangibles from acquisitions of $4 million.

2

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. 2018 includes restructuring charges related to a business disposition and employee severance charges of $7 million. 2017 includes employee severance charges of $7 million and a non-cash disposition-related adjustment of $4 million. 2019, 2018 and 2017 includes amortization of intangibles from acquisitions of $75 million, $73 million and $71 million, respectively.

3

2019 includes a gain on the sale of RigData of $27 million and employee severance charges of $1 million. 2017 includes a non-cash acquisition-related adjustment of $11 million, a charge to exit a leased facility of $6 million, an asset write-off of $2 million and employee severance charges of $2 million. 2019 includes amortization of intangibles from acquisitions of $12 million and both 2018 and 2017 includes amortization of intangibles from acquisitions of $18 million.

4	2019, 2018 and 2017 includes amortization of intangibles from acquisitions of $6 million.

5

2019 includes Kensho retention related expense of $21 million, lease impairments of $11 million and employee severance charges of $7 million. 2018 includes Kensho retention related expense of $31 million, lease impairments of $11 million and employee severance charges of $10 million. 2017 includes a charge to exit leased facilities of $19 million and employee severance charges of $10 million. 2019 and 2018 also includes amortization of intangibles from acquisitions of $28 million and $23 million, respectively.

---

---

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

•	bank loan ratings; and

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

1	In 2019, we reevaluated our transaction and non-transaction revenue presentation which resulted in a reclassification from transaction revenue to non-transaction revenue of $27 million and $25 million for 2018 and 2017, respectively.

2

2019 includes employee severance charges of $11 million. 2018 includes legal settlement expenses of $74 million and employee severance charges of $8 million. 2017 includes legal settlement expenses of $55 million and employee severance charges of $25 million. 2019 and 2018 includes amortization of intangibles from acquisitions of $2 million and 2017 includes amortization of intangibles from acquisitions of $4 million.

---

*	Includes Industrials and Financial Services.

•

Corporate issuance was up in 2019 driven by double-digit increases in both high-yield and investment grade issuance. U.S. high-yield issuance increased as accommodating views from the U.S. Federal Reserve regarding interest rates throughout 2019 moved investors toward more fixed-rate debt. Strength was also seen in U.S. investment grade issuance as issuers were taking advantage of historically low borrowing costs. Increased issuance in Europe was driven by strength in high-yield issuance. Both high-yield and investment grade issuance comparisons also benefited from weakness in 2018 due to market volatility and slowing global economic growth.

---

•	ABS issuance was down slightly in the U.S. reflecting a decline in student loan and credit card transactions and down in Europe primarily in auto transactions reflecting uncertainty caused by regulation introducing a new framework for simple, transparent and standardized ("STS") securitizations effective January 1, 2019.

•	Issuance was down in the U.S and European structured credit markets driven by a decline in CLO transactions.

•	CMBS issuance was up in the U.S. reflecting increased market volume caused by a decline in interest rates. CMBS issuance was also up in Europe driven by increased market volume.

•	RMBS issuance was up in the U.S. reflecting increased market volume primarily driven by nonqualified mortgages. RMBS issuance was also up in Europe reflecting increased market volume in the fourth quarter of 2019.

•	Covered bond (debt securities backed by mortgages or other high-quality assets that remain on the issuer's balance sheet) issuance in Europe was down driven by difficult market conditions in the third and fourth quarters of 2019.

---

•	impose various additional procedural requirements with respect to ratings of sovereign issuers;

•	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.

---

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

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

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

1

2019 includes a gain on the disposition of SPIAS of $22 million, employee severance charges of $6 million and acquisition-related costs of $4 million. 2018 includes restructuring charges related to a business disposition and employee severance charges of $7 million. 2017 includes employee severance charges of $7 million and a non-cash disposition-related adjustment of $4 million. 2019, 2018 and 2017 includes amortization of intangibles from acquisitions of $75 million, $73 million and $71 million, respectively.

---

---

•	Subscription revenue — primarily from subscriptions to our real-time news, market data and price assessments, 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.

---

1

2019 includes a gain on the disposition of RigData of $27 million and employee severance charges of $1 million. 2017 includes a non-cash acquisition-related adjustment of $11 million, a charge to exit a leased facility of $6 million, an asset write-off of $2 million and employee severance charges of $2 million. 2019 includes amortization of intangibles from acquisitions of $12 million and both 2018 and 2017 includes amortization of intangibles from acquisitions of $18 million.

---

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

1	2019, 2018 and 2017 includes amortization of intangibles from acquisitions of $6 million.

---

---

---

---

1	Our debt obligations are described in Note 5 – Debt to our consolidated financial statement.

2	See Note 13 – Commitments and Contingencies to our consolidated financial statements for further discussion on our operating lease obligations.

3	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.

---

---

---

•	Discount rate assumptions are based on current yields on high-grade corporate long-term bonds.

•	Healthcare cost trend assumptions are based on historical market data, the near-term outlook and an assessment of likely long-term trends.

•	The expected return on assets assumption is calculated based on the plan’s asset allocation strategy and projected market returns over the long-term.

---

---

---

---

---

---

---

---

---

---

---

1	Excludes $170 million, $151 million and $129 million in 2019, 2018 and 2017, respectively, attributable to redeemable noncontrolling interest.

2	Includes opening balance sheet adjustments related to the adoption of the new revenue recognition standard and the reclassification of the unrealized loss on investments from Accumulated other comprehensive loss to Retained income.

---

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, metals, petrochemicals 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.

In April of 2018, we acquired Kensho Technologies Inc. ("Kensho") for approximately $550 million, net of cash acquired, in a mix of cash and stock. Beginning in the first quarter of 2019, the contract obligations for revenue from Kensho's major customers were transferred to Market Intelligence for fulfillment.  As a result of this transfer, from January 1, 2019, revenue from contracts with Kensho’s customers is reflected in Market Intelligence’s results.  In 2018, the revenue from contracts with Kensho’s customers was reported in Corporate revenue. Restricted cash of $15 million and $32 million included in our consolidated balance sheets as of December 31, 2019 and 2018, respectively, includes amounts held in escrow accounts in connection with our acquisition of Kensho. See Note 2 — Acquisitions and Divestitures for additional information and Note 12 – Segment and Geographic Information for further discussion on our reportable segments.

Adoption of ASC 842, “Leases”

On January 1, 2019, we adopted Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 842 that requires a lessee to recognize "right of use" assets with offsetting lease liabilities on the balance sheet, with expenses recognized similar to previously issued guidance. We adopted the new lease standard effective January 1, 2019 using the modified retrospective transition method. Under this transition method, the standard was adopted prospectively without restating prior period's financial statements. See Note 13 — Commitments and Contingencies for further details on our leases.

Adoption of ASC 606, “Revenue from Contracts with Customers”

We adopted FASB ASC 606 "Revenue from Contracts with Customers" using the modified retrospective transition method applied to our revenue contracts with customers as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior year amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605 "Revenue Recognition". We recorded a net increase to opening retained earnings of $35 million as of January 1, 2018 due to the cumulative effect of adopting ASC 606, with the impact primarily related to our treatment of costs to obtain a contract and to a lesser extent, changes to the timing of the recognition of our subscription and non-transaction revenues.

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. Under ASC 605, revenue was recognized as it was earned and when services were rendered.

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.

---

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.

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. Non-transaction revenue also includes an intersegment revenue elimination of $128 million, $125 million and $110 million for the years ended December 31, 2019, 2018, and 2017 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 Rating’s 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;

•	bank loan ratings; and

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

Transaction revenue is recognized at the point in time when our performance obligation is satisfied by issuing a rating on our customer's instruments, our customer's creditworthiness, or a counter-party's creditworthiness 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 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 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.

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 are 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, 2019 and 2018, contract assets were $28 million and $26 million, respectively, and are included in accounts receivable in our consolidated balance sheets.

Unearned Revenue

We record unearned revenue when cash payments are received in advance of our performance. The increase in the unearned revenue balance for the year ended December 31, 2019 is primarily driven by cash payments received in advance of satisfying our performance obligations, offset by $1.7 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, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $1.9 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 certain sales commission programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were $115 million and $101 million as of December 31, 2019 and December 31, 2018, respectively, and are included in prepaid and other current assets and other non-current assets on our consolidated balance sheets. The 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. 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.

Other Expense (Income), net

The components of other expense (income), net for the year ended December 31 are as follows: 

(in millions)	2019				2018				2017
Other components of net periodic benefit cost 1	$	79			$	(30	)		$	(27	)
Net loss from investments	19				5				—
Other expense (income), net	$	98			$	(25	)		$	(27	)

¹ During 2019, the Company purchased a group annuity contract under which an insurance company assumed a portion of the Company's obligation to pay pension benefits to the plan's beneficiaries. The purchase of this group annuity contract was funded by pension plan assets. The net periodic benefit cost for our retirement and post retirement plans for 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 $2.9 billion and $1.9 billion as of December 31, 2019 and 2018, 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.

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. 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 $212 million and $205 million as of December 31, 2019 and 2018, respectively. Accumulated amortization of capitalized technology costs was $129 million and $105 million as of December 31, 2019 and 2018, 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 forward exchange contracts and a cross currency swap 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 $3.9 billion and $3.8 billion as of December 31, 2019 and 2018, 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.

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 two-step quantitative impairment test.

When conducting the first step of our two step 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, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the carrying value of the goodwill. The fair value of the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair value of the identifiable assets and liabilities of the reporting unit. If the implied fair value of the goodwill 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, the impairment test is performed by comparing the estimated fair value of the intangible asset to its carrying value. If the indefinite-lived intangible asset carrying value exceeds its fair value, an impairment analysis is performed using the income approach. 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, 2019, 2018 and 2017.

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.

Advertising expense

The cost of advertising is expensed as incurred. We incurred $34 million in advertising costs for the year ended December 31, 2019 and $33 million for the years ended December 31, 2018 and 2017.

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.

We use a lattice-based option-pricing model to estimate the fair value of options granted. The following assumptions were used in valuing the options granted:

		Year Ended
		December 31, 2018
Risk-free average interest rate		2.6 - 2.7%
Dividend yield		1.1		%
Volatility		21.8 - 22.0%
Expected life (years)		5.67 - 6.07
Weighted-average grant-date fair value per option		$	112.98

---

Because lattice-based option-pricing models incorporate ranges of assumptions, those ranges are disclosed. These assumptions are based on multiple factors, including historical exercise patterns, post-vesting termination rates, expected future exercise patterns and the expected volatility of our stock price. The risk-free interest rate is the imputed forward rate based on the U.S. Treasury yield at the date of grant. We use the historical volatility of our stock price over the expected term of the options to estimate the expected volatility. The expected term of options granted is derived from the output of the lattice model and represents the period of time that options granted are expected to be outstanding.

In 2018, we made a one-time issuance of incentive stock options under the 2002 Plan to replace Kensho employees' stock options that were assumed in connection with our acquisition of Kensho in April of 2018. There were no stock options granted in 2019 and 2017.

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, various states, 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 our 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 examinations will be settled prior to December 31, 2020. 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, 2019, we have approximately $3.2 billion of undistributed earnings of our foreign subsidiaries, of which $776 million 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 January 2020, the Financial Accounting Standards Board ("FASB") issued a guidance intended to clarify the interaction of the accounting for equity securities under ASC 321, investments accounted for under the equity method of accounting under ASC 323, and the accounting for certain forward contracts and purchased options accounted for under ASC 815. This guidance could change how the Company accounts for an equity security under the measurement alternative. The guidance is effective for reporting periods beginning after December 15, 2020; however early adoption permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In December of 2019, the FASB issued guidance to simplify the accounting for income taxes. The guidance eliminates certain exceptions to the general principles of Topic 740. The guidance is effective for reporting periods after December 15, 2020; however, early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In November of 2018, the FASB issued guidance that provides clarification on whether certain transactions between collaborative arrangement participants should be accounted for as revenue under Accounting Standards Codification ("ASC") 606. The guidance is effective for reporting periods beginning after December 15, 2019; however early adoption is permitted. We do not expect this guidance to have a significant impact on our consolidated financial statements.

In August of 2018, the FASB issued guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance is effective for reporting periods beginning after December 15, 2019; however early adoption is permitted. We do not expect this guidance to have a significant impact on our consolidated financial statements.

In August of 2017, the FASB issued guidance to enhance the hedge accounting model for both nonfinancial and financial risk components, which includes amendments to address certain aspects of recognition and presentation disclosure. The guidance was effective on January 1, 2019, and the adoption of this guidance did not have a significant impact on our consolidated financial statements.

In January of 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance is effective for reporting periods beginning after December 15, 2019; however, early adoption is permitted. We do not expect this guidance to have a significant impact on our consolidated financial statements.

In June of 2016, the FASB issued guidance that amends the measurement of credit losses on certain financial instruments by requiring the use of an expected loss methodology, which will result in more timely recognition of credit losses. The guidance is effective for reporting periods beginning after December 15, 2019. We have completed our evaluation of changes to our accounting policies, business processes, systems and internal controls to support the recognition and disclosure requirements under the new standard. The adoption of the new standard will impact our process around the assessment of the adequacy of our allowance for doubtful accounts on accounts receivable and contract assets to incorporate the impact of forecasts of future economic conditions, in addition to past events and current economic conditions. Based on our preliminary analysis, we anticipate that following the adoption of the new standard, the Company will recognize an immaterial adjustment to retained earnings as of the date of adoption.

In February of 2016, the FASB issued guidance amending the accounting for leases that requires a lessee to recognize "right of use" assets with offsetting lease liabilities on the balance sheet, with expenses recognized similar to previously issued guidance. This guidance is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. We adopted the new lease standard effective January 1, 2019 using the modified retrospective transition method. In July of 2018, the FASB issued a subsequent update providing entities an additional transition method to adopt the new lease standard, allowing entities to adopt the standard prospectively without restating prior period's financial statements. We have elected this transition method upon adoption on January 1, 2019. We have also elected to apply the "package" of practical expedients permitting entities to forgo reassessment of (1) the lease classification of expired or existing leases, (2) whether any expired or existing contracts contain leases, and (3) the accounting for initial direct costs of existing leases. This standard had a material impact on our consolidated balance sheet, but did not have an impact on our consolidated statements of income or cash flows. As part of our implementation process, we have refined our processes, procedures, and controls to capture the complete population of leases that incorporates a third party software solution to report the financial statement impact of the new standard. See Note 12 — Commitments and Contingencies for further details on our leases.

---

Reclassification

Certain prior year amounts have been reclassified for comparability purposes.

Acquisitions

2020

In December of 2019, CRISIL, included within our Ratings segment, agreed to acquire 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 will account for the acquisition using the purchase method of accounting. The acquisition of Greenwich will not be material to our consolidated financial statements. The completion of this acquisition is subject to certain closing conditions.

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

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 the 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 the 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, will be amortized over their anticipated useful lives between 3 and 10 years which will be determined when we finalize our purchase price allocations. The goodwill for 451 Research and Orion is expected to be deductible for tax purposes.

2018

For the year ended December 31, 2018, we paid for acquisitions in a mix of cash and stock. We paid cash for acquisitions of $401 million, net of cash acquired, funded with cash flows from operations. Additionally, stock consideration was given for our acquisition of Kensho. None of our acquisitions were material either individually or in the aggregate, including the pro forma impact on earnings. All acquisitions were funded with cash flows from operations. Acquisitions completed during the year ended December 31, 2018 included:

•	In December of 2018, Indices purchased the balance of the intellectual property ("IP") rights in a family of indices derived from the S&P 500, solidifying its IP in and to the S&P 500 index family. We accounted for the acquisition on a cost basis. The transaction is not material to our consolidated financial statements.

•

In August of 2018, we acquired a 5.03% investment in FiscalNote, a technology innovator at the intersection of global business and government that provides advanced, data-driven Issues Management solutions. We measured the investment in FiscalNote at cost, less any impairment, and changes resulting from observable price changes will be recorded in the consolidated statements of income. The investment in FiscalNote is not material to our consolidated financial statements.

•

In June of 2018, Market Intelligence acquired the RateWatch business ("RateWatch") from TheStreet, Inc., a B2B data business that offers subscription and custom reports on bank deposits, loans, fees and other product data to the financial services industry. The acquisition will complement and strengthen Market Intelligence's core capabilities of providing differentiated data and analytics solutions for the banking sector. We accounted for the acquisition of RateWatch using the purchase method of accounting. The acquisition of RateWatch is not material to our consolidated financial statements.

•

In April of 2018, we acquired Kensho for approximately $550 million, net of cash acquired, in a mix of cash and stock. Kensho is a leading-edge provider of next-generation analytics, artificial intelligence, machine learning, and data visualization systems to Wall Street's premier global banks and investment institutions, as well as the National Security community. The acquisition will strengthen S&P Global's emerging technology capabilities, enhance our ability to deliver essential, actionable insights that will transform the user experience for our clients, and accelerate efforts to improve efficiency and effectiveness of our core internal operations. We accounted for the acquisition of Kensho using the purchase method of accounting. The acquisition of Kensho is not material to our consolidated financial statements.

•

In February of 2018, Market Intelligence acquired Panjiva, Inc. ("Panjiva"), a privately-held company that provides deep, differentiated, sector-relevant insights on global supply chains, leveraging data science and technology to make sense of large, unstructured datasets. The acquisition will help strengthen the insights, products and data that we provide to our clients throughout the world. We accounted for the acquisition of Panjiva using the purchase method of accounting. The acquisition of Panjiva is not material to our consolidated financial statements.

•

In January of 2018, CRISIL, included within our Ratings segment, acquired a 100% stake in Pragmatix Services Private Limited ("Pragmatix"), a data analytics company focused on delivering cutting edge solutions in the "data to intelligence" life cycle to the Banking, Financial Services and Insurance vertical. The acquisition will strengthen CRISIL's position as an agile, innovative and global analytics company. We accounted for the acquisition of Pragmatix using the purchase method of accounting. The acquisition of Pragmatix is not material to our consolidated financial statements.

---

For acquisitions during 2018 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, will be amortized over their useful lives not exceeding 10 years. The goodwill for RateWatch will continue to be deductible for tax purposes.

2017

For the year ended December 31, 2017, we paid cash for acquisitions, net of cash acquired, totaling $83 million. None of our acquisitions were material either individually or in the aggregate, including the pro forma impact on earnings. All acquisitions were funded with cash flows from operations. Acquisitions completed during the year ended December 31, 2017 included:

•

In August of 2017, we acquired a 6.02% investment in Algomi Limited ("Algomi"), an innovative fintech company focused on providing software-enabled liquidity solutions to both buy-side and sell-side firms within the credit markets. Our investment in Algomi will help facilitate product collaboration and enable future business expansion. We accounted for the investment in Algomi using the cost method of accounting. The investment with Algomi is not material to our consolidated financial statements.

•

In June of 2017, CRISIL, included within our Ratings segment, acquired 8.9% of the outstanding shares of CARE Ratings Limited ("CARE") from Canara Bank. CARE is a Securities and Exchange Board of India registered credit rating agency providing various rating and grading services in India whose shares are publicly traded on both the Bombay Stock Exchange and the National Stock Exchange of India. We accounted for the investment in CARE as available-for-sale using the fair value method of accounting. The investment in CARE is not material to our consolidated financial statements.

Non-cash investing activities

Liabilities assumed in conjunction with our acquisitions are as follows:

(in millions)	Year ended December 31,
	2019				2018				2017
Fair value of assets acquired	$	110			$	857			$	83
Cash and stock consideration (net of cash acquired)	91				803				83
Liabilities assumed	$	19			$	54			$	—

Divestitures

2020

In January of 2020, Market Intelligence entered into a strategic alliance to transition S&P Global Market Intelligence's Investor Relations ("IR") webhosting business to Q4 Inc. ("Q4"). This alliance will integrate Market Intelligence's proprietary data into Q4's portfolio of solutions, enabling further opportunities for commercial collaboration. In connection with transitioning its IR webhosting business to Q4, Market Intelligence has made a minority investment in Q4.

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:

•

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.

•

In March of 2019, we entered into an agreement to sell Standard & Poor's Investment Advisory Services LLC  ("SPIAS"), a business within our Market Intelligence segment, 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.

2018

During the year ended December 31, 2018, we did not complete any material dispositions.

---

2017

In April of 2017, we signed a letter of intent to sell our facility at East Windsor, New Jersey. The fixed assets of the facility of $5 million have been classified as held for sale, which is included in prepaid and other current assets in our consolidated balance sheet as of December 31, 2019 and 2018.

In January of 2017, we completed the sale of Quant House SAS ("QuantHouse"), included in our Market Intelligence segment, to QH Holdco, an independent third party. In November of 2016, we entered into a put option agreement that gave the Company the right, but not the obligation, to put the entire share capital of QuantHouse to QH Holdco. On January 4, 2017, we exercised the put option, thereby entering into a definitive agreement to sell QuantHouse to QH Holdco. On January 9, 2017, we completed the sale of QuantHouse to QH Holdco.

The operating profit of our businesses that were disposed of for the years ending December 31, 2019, 2018, and 2017 is as follows:

(in millions)	Year ended December 31,
	2019				2018				2017
Operating profit 1	$	5			$	8			$	6

¹ The year ended December 31, 2019 excludes a pre-tax gain of $49 million on our dispositions.

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)	Ratings				Market Intelligence				Platts				Indices				Corporate				Total
Balance as of December 31, 2017	$	114			$	1,961			$	523			$	391			$	—			$	2,989
Acquisitions	5				62				—				—				498				565
Other 1	(6		)		6				(7		)		(12		)		—				(19		)
Balance as of December 31, 2018	113				2,029				516				379				498				3,535
Acquisitions	—				44				6				—				—				50
Dispositions	—				(12		)		(3		)		—				—				(15		)
Reclassifications	—				3				—				(3		)		—				—
Other 1	2				(2		)		2				—				3				5
Balance as of December 31, 2019	$	115			$	2,062			$	521			$	376			$	501			$	3,575

1	Primarily relates to the impact of foreign exchange and valuation adjustments for prior period acquisitions. 2018 includes adjustments related to Trucost. 2019 includes adjustments related to Panjiva, Rate Watch and Eclipse.

Goodwill additions and dispositions in the table above relate to transactions discussed in Note 2 – Acquisitions and Divestitures.

Other Intangible Assets

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, 2019 and 2018.

•	2019 and 2018 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.

•	2019 and 2018 both include $185 million within our Market Intelligence segment for the SNL tradename.

•	2019 and 2018 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.

---

•	2019 and 2018 both include $59 million within our Indices segment for the Goldman Sachs Commodity Index intellectual property and the Broad Market Indices intellectual property.

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, 2017	$	554			$	139			$	347			$	50			$	77			$	1,167
Acquisitions	3				—				—				—				123				126
Other (primarily Fx) 1	4				—				(1		)		—				(6		)		(3		)
Balance as of December 31, 2018	561				139				346				50				194				1,290
Acquisitions	—				—				—				—				29				29
Reclassifications	78				—				10				5				(93		)		—
Other 1	(10		)		—				(1		)		(1		)		—				(12		)
Balance as of December 31, 2019	$	629			$	139			$	355			$	54			$	130			$	1,307
Accumulated amortization
Balance as of December 31, 2017	$	187			$	101			$	106			$	42			$	57			$	493
Current year amortization	52				14				21				3				32				122
Reclassifications	1				—				—				—				(1		)		—
Other (primarily Fx) 1	—				—				(1		)		—				(2		)		(3		)
Balance as of December 31, 2018	240				115				126				45				86				612
Current year amortization	73				14				23				3				9				122
Reclassifications	22				—				4				1				(27		)		—
Other 1	(4		)		—				—				(1		)		—				(5		)
Balance as of December 31, 2019	$	331			$	129			$	153			$	48			$	68			$	729
Net definite-lived intangibles:
December 31, 2018	$	321			$	24			$	220			$	5			$	108			$	678
December 31, 2019	$	298			$	10			$	202			$	6			$	62			$	578

1	Primarily relates to the impact of foreign exchange and valuation adjustments for prior period acquisitions. 2019 includes adjustments related to RigData.

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, 2019 is approximately 12 years.

Amortization expense was $122 million for the years ended December 31, 2019 and 2018 and $98 million for the year ended December 31, 2017. 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)	2020				2021				2022				2023				2024
Amortization expense	$	117			$	86			$	78			$	73			$	70

---

Income before taxes on income resulting from domestic and foreign operations is as follows:

(in millions)	Year Ended December 31,
	2019				2018				2017
Domestic operations	$	2,068			$	1,857			$	1,723
Foreign operations	862				824				738
Total income before taxes	$	2,930			$	2,681			$	2,461

The provision for taxes on income consists of the following:

(in millions)	Year Ended December 31,
	2019				2018				2017
Federal:
Current	$	303			$	198			$	489
Deferred	13				53				63
Total federal	316				251				552
Foreign:
Current	201				214				194
Deferred	14				(2		)		(3		)
Total foreign	215				212				191
State and local:
Current	93				84				73
Deferred	3				13				7
Total state and local	96				97				80
Total provision for taxes	$	627			$	560			$	823

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate for financial reporting purposes is as follows: 

	Year Ended December 31,
	2019			2018			2017
U.S. federal statutory income tax rate	21.0	%		21.0	%		35.0	%
State and local income taxes	2.6			2.8			2.5
Foreign operations	(0.3	)		0.2			(3.9	)
TCJA Transition Tax	—			(0.3	)		6.0
Stock-based compensation	(1.4	)		(1.2	)		(2.7	)
S&P Dow Jones Indices LLC joint venture	(1.2	)		(1.2	)		(1.8	)
Tax credits and incentives	(1.7	)		(1.7	)		(2.1	)
Other, net	2.4			1.3			0.4
Effective income tax rate	21.4	%		20.9	%		33.4	%

The increase in the effective income tax rate in 2019 was primarily due to an increase in accruals for potential tax liabilities for prior years in various jurisdictions. The decrease in the effective income tax rate in 2018 was primarily due to the reduction of the U.S. federal corporate tax rate as a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”). Additionally, a one-time transition tax charge of $149 million due to the TCJA was recorded in 2017, which included tax expense of approximately $173 million on the deemed repatriation of foreign earnings and a tax benefit of approximately $24 million in respect of the re-valuation of the net U.S. deferred tax liabilities at the reduced corporate income tax rate.

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: 

(in millions)	December 31,
	2019				2018
Deferred tax assets:
Legal and regulatory settlements	$	2			$	2
Employee compensation	58				57
Accrued expenses	30				36
Postretirement benefits	27				48
Unearned revenue	28				29
Allowance for doubtful accounts	9				8
Loss carryforwards	155				155
Other	24				24
Total deferred tax assets	333				359
Deferred tax liabilities:
Goodwill and intangible assets	(318		)		(295		)
Total deferred tax liabilities	(318		)		(295		)
Net deferred income tax asset before valuation allowance	15				64
Valuation allowance	(163		)		(156		)
Net deferred income tax (liability) asset	$	(148	)		$	(92	)
Reported as:
Non-current deferred tax assets	$	52			$	52
Non-current deferred tax liabilities	(200		)		(144		)
Net deferred income tax (liability) asset	$	(148	)		$	(92	)

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, 2019, we have approximately $3.2 billion of undistributed earnings of our foreign subsidiaries, of which $776 million is reinvested indefinitely in our foreign operations. We have 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 $659 million in 2019, $558 million in 2018, and $709 million in 2017. As of December 31, 2019, we had net operating loss carryforwards of $689 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)	Year ended December 31,
	2019				2018				2017
Balance at beginning of year	$	147			$	212			$	221
Additions based on tax positions related to the current year	21				19				23
Additions for tax positions of prior years	11				2				17
Reduction for tax positions of prior years	(15		)		(21		)		(32		)
Reduction for settlements	(33		)		(65		)		(5		)
Expiration of applicable statutes of limitations	(7		)		—				(12		)
Balance at end of year	$	124			$	147			$	212

---

The total amount of federal, state and local, and foreign unrecognized tax benefits as of December 31, 2019, 2018 and 2017 was $124 million, $147 million and $212 million, respectively, exclusive of interest and penalties. During the period ended December 31, 2019, the change in unrecognized tax benefits resulted in a net increase of tax expense of $10 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 $10 million in the next twelve months as a result of the resolution of local tax examinations. In addition to the unrecognized tax benefits, as of December 31, 2019 and 2018, we had $20 million and $35 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits.

The U.S. federal income tax audit for 2017 and 2018 is in process. During 2019, 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 2019, 2018 and 2017 was not material.

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

(in millions)	December 31,
	2019				2018
3.3% Senior Notes, due 2020 1	$	—			$	698
4.0% Senior Notes, due 2025 2	694				693
4.4% Senior Notes, due 2026 3	893				892
2.95% Senior Notes, due 2027 4	493				493
2.5% Senior Notes, due 2029 5	495				—
6.55% Senior Notes, due 2037 6	294				396
4.5% Senior Notes, due 2048 7	490				490
3.25% Senior Notes, due 2049 8	589				—
Long-term debt	$	3,948			$	3,662

1	We made a $700 million early repayment of our 3.3% senior note in the fourth quarter of 2019.

2	Interest payments are due semiannually on June 15 and December 15, and as of December 31, 2019, the unamortized debt discount and issuance costs total $6 million.

3	Interest payments are due semiannually on February 15 and August 15, and as of December 31, 2019, the unamortized debt discount and issuance costs total $7 million.

4	Interest payments are due semiannually on January 22 and July 22, and as of December 31, 2019, the unamortized debt discount and issuance costs total $7 million.

5	Interest payments are due semiannually on June 1 and December 1, beginning on June 1, 2020, and as of December 31, 2019, the unamortized debt discount and issuance costs total $5 million.

6	We made a $103 million early repayment of a portion of our 6.55% senior note in November of 2019. Interest payments are due semiannually on May 15 and November 15, and as of December 31, 2019, the unamortized debt discount and issuance costs total $3 million.

7	Interest payments are due semiannually on May 15 and November 15, and as of December 31, 2019, the unamortized debt discount and issuance costs total $10 million.

8	Interest payments are due semiannually on June 1 and December 1, beginning on June 1, 2020, and as of December 31, 2019, the unamortized debt discount and issuance costs total $11 million.

Annual debt maturities are scheduled as follows based on book values as of December 31, 2019: no amounts due in 2020, 2021, 2022, 2023, and 2024 and $3.9 billion due thereafter.

---

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.

On May 17, 2018, we issued $500 million of 4.5% senior notes due in 2048. The notes are fully and unconditionally guaranteed by our wholly-owned subsidiary, Standard & Poor's Financial Services LLC. In June of 2018, we used the net proceeds to fund the redemption price of the $400 million outstanding principal amount of our 2.5% senior notes due in August of 2018, and the balance for general corporate purposes.

We have the ability to borrow a total of $1.2 billion through our commercial paper program, which is supported by our revolving $1.2 billion five-year credit agreement (our "credit facility") that we entered into on June 30, 2017. This credit facility will terminate on June 30, 2022. There were no commercial paper borrowings outstanding as of December 31, 2019 and 2018.

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

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

6.	Derivative Instruments

 

Our exposure to market risk includes changes in foreign exchange 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, 2019 and December 31, 2018, we have entered into foreign exchange forward contracts to mitigate or hedge the effect of adverse fluctuations in foreign exchange rates. As of December 31, 2019, we have entered into a cross currency swap contract to hedge a portion of our net investment in a foreign subsidiary against volatility in foreign exchange rates. These contracts are recorded at fair value that is based on foreign currency exchange 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, 2019, 2018 and 2017 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, 2019 and 2018, the aggregate notional value of these outstanding forward contracts was $116 million and $98 million, respectively. The changes in fair value of these forward contracts are recorded in prepaid and other assets in the consolidated balance sheet with their corresponding change in fair value recognized into selling and general expenses in the consolidated statement of income. The amount recorded in selling and general expense for the twelve months ended December 31, 2019 and 2018 related to these contracts was a net gain of $4 million and a net loss of $12 million, respectively.

Net Investment Hedge

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

---

Cash Flow Hedges

 

During the twelve months ended December 31, 2019, 2018 and 2017, 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 2020, 2019 and 2018, respectively. These contracts are intended to offset the impact of movement of exchange rates on future revenue and operating costs and are scheduled to mature within twelve 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, 2019, we estimate that $2 million of the net gains related to derivatives 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, 2019 and December 31, 2018, the aggregate notional value of our outstanding foreign exchange forward contracts designated as cash flow hedges was $249 million and $289 million, respectively.

The following table provides information on the location and fair value amounts of our cash flow hedges and net investment hedge as of December 31, 2019 and December 31, 2018:

(in millions)		December 31,				December 31,
Balance Sheet Location		2019				2018
Derivatives designated as cash flow hedges:
Prepaid and other current assets	Foreign exchange forward contracts	$	1			$	3
Derivative designated as a net investment hedge:
Other non-current liabilities	Cross currency swap	$	10			$	—

 

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

(in millions)	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss (effective portion)												Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (effective portion)		Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (effective portion)
	2019				2018				2017						2019				2018				2017
Cash flow hedges - designated as hedging instruments
Foreign exchange forward contracts	$	(2	)		$	2			$	—			Revenue, Selling and general expenses		$	5			$	(4	)		$	9
Net investment hedge - designated as hedging instrument
Cross currency swap	$	(10	)		$	—			$	—					$	—			$	—			$	—

---

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)	Year ended December 31,
	2019				2018				2017
Cash Flow Hedges
Net unrealized gains (losses) on cash flow hedges, net of taxes, beginning of year	$	4			$	2			$	2
Change in fair value, net of tax	3				(2		)		9
Reclassification into earnings, net of tax	(5		)		4				(9		)
Net unrealized gains (losses) on cash flow hedges, net of taxes, end of year	$	2			$	4			$	2
Net Investment Hedge
Net unrealized gains (losses) on net investment hedge, net of taxes, beginning of year	$	—			$	—			$	—
Change in fair value, net of tax	(10		)		—				—
Reclassification into earnings, net of tax	—				—				—
Net unrealized gains (losses) on net investment hedge, net of taxes, end of year	$	(10	)		$	—			$	—

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 expense (income), net in our consolidated statements of income.

---

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, 2019 and 2018, is as follows (benefits paid in the table below include only those amounts contributed directly to or paid directly from plan assets): 

(in millions)	Retirement Plans								Postretirement Plans
	2019				2018				2019				2018
Net benefit obligation at beginning of year	$	2,076			$	2,329			$	40			$	49
Service cost	3				3				—				—
Interest cost	64				71				1				1
Plan participants’ contributions	—				—				2				3
Actuarial loss (gain)	232				(199		)		1				(4		)
Gross benefits paid	(75		)		(103		)		(6		)		(8		)
Foreign currency effect	13				(26		)		—				—
Other adjustments 1	(368		)		1				—				(1		)
Net benefit obligation at end of year	1,945				2,076				38				40
Fair value of plan assets at beginning of year	1,987				2,219				16				20
Actual return on plan assets	354				(113		)		1				—
Employer contributions	46				9				—				1
Plan participants’ contributions	—				—				3				3
Gross benefits paid	(75		)		(103		)		(7		)		(8		)
Foreign currency effect	16				(25		)		—				—
Other adjustments 1	(368		)		—				—				—
Fair value of plan assets at end of year	1,960				1,987				13				16
Funded status	$	15			$	(89	)		$	(25	)		$	(24	)
Amounts recognized in consolidated balance sheets:
Non-current assets	$	259			$	125			$	—			$	—
Current liabilities	(10		)		(9		)		—				—
Non-current liabilities	(234		)		(205		)		(25		)		(24		)
	$	15			$	(89	)		$	(25	)		$	(24	)
Accumulated benefit obligation	$	1,932			$	2,066
Plans with accumulated benefit obligation in excess of the fair value of plan assets:
Projected benefit obligation	$	244			$	214
Accumulated benefit obligation	$	231			$	204
Fair value of plan assets	$	—			$	—
Amounts recognized in accumulated other comprehensive loss, net of tax:
Net actuarial loss (gain)	$	355			$	460			$	(40	)		$	(41	)
Prior service credit	2				2				(13		)		(14		)
Total recognized	$	357			$	462			$	(53	)		$	(55	)

1	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 actuarial loss included in accumulated other comprehensive loss for our retirement plans and expected to be recognized in net periodic benefit cost during the year ending December 31, 2020 is $15 million. There is an immaterial amount of prior service credit included in accumulated other comprehensive loss for our retirement plans expected to be recognized in net periodic benefit cost during the year ending December 31, 2020.

---

The actuarial gain included in accumulated other comprehensive loss for our postretirement plans and expected to be recognized in net periodic benefit cost during the year ending December 31, 2020 is $2 million. The prior year service credit included in accumulated other comprehensive loss for our postretirement plans and expected to be recognized in net periodic benefit cost during the year ending December 31, 2020 is $1 million.

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.

A summary of net periodic benefit cost for our retirement and postretirement plans for the years ended December 31, is as follows: 

(in millions)	Retirement Plans												Postretirement Plans
	2019				2018				2017				2019				2018				2017
Service cost	$	3			$	3			$	3			$	—			$	—			$	—
Interest cost	64				71				74				1				1				2
Expected return on assets	(108		)		(124		)		(126		)		—				—				—
Amortization of:
Actuarial loss (gain)	12				20				18				(2		)		(2		)		(2		)
Prior service credit	—				—				—				(1		)		(1		)		(2		)
Net periodic benefit cost	(29		)		(30		)		(31		)		(2		)		(2		)		(2		)
Settlement charge	113			1	4			2	8			2	—				—				—
Total net periodic benefit cost	$	84			$	(26	)		$	(23	)		$	(2	)		$	(2	)		$	(2	)

1

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.

2	Represents a charge related to our U.K retirement plan.

Our U.K. retirement plan accounted for a benefit of $14 million in 2019, $10 million in 2018 and $6 million in 2017 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)	Retirement Plans												Postretirement Plans
	2019				2018				2017				2019				2018				2017
Net actuarial (gain) loss	$	(10	)		$	28			$	(20	)		$	—			$	(7	)		$	(3	)
Recognized actuarial (gain) loss	(10		)		(15		)		(12		)		1				1				1
Prior service (credit) cost	—				1				—				1				1				1
Settlement charge	(85		)	1	(4		)	2	(7		)	2	—				—				—
Total recognized	$	(105	)		$	10			$	(39	)		$	2			$	(5	)		$	(1	)

1

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.

2	Represents a charge related to our U.K retirement plan.

The total cost for our retirement plans was $187 million for 2019, $80 million for 2018 and $70 million for 2017. 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 $73 million for 2019, $79 million for 2018 and $70 million for 2017.

---

Assumptions

	Retirement Plans									Postretirement Plans
	2019			2018			2017			2019			2018			2017
Benefit obligation:
Discount rate 2	3.45	%		4.40	%		3.68	%		3.08	%		4.15	%		3.40	%
Net periodic cost:
Weighted-average healthcare cost rate 1										6.50	%		6.50	%		7.00	%
Discount rate - U.S. plan 2	4.40	%		3.68	%		4.13	%		4.15	%		3.40	%		3.69	%
Discount rate - U.K. plan 2	2.72	%		2.41	%		2.58	%
Return on assets 3	6.00	%		6.00	%		6.25	%

1	The assumed weighted-average healthcare cost trend rate will decrease ratably from 6% in 2019 to 5% in 2024 and remain at that level thereafter. Assumed healthcare cost trends have an effect on the amounts reported for the healthcare plans. A one percentage point change in assumed healthcare cost trend creates the following effects:

(in millions)	1% point increase				1% point decrease
Effect on postretirement obligation	$	—			$	—

2	Effective January 1, 2019, we changed our discount rate assumption on our U.S. retirement plans to 4.40% from 3.68% in 2018 and changed our discount rate assumption on our U.K. plan to 2.72% from 2.41% in 2018.

3	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, 2020, our return on assets assumption for the U.S. plan was reduced to 5.50% from 6.00% and the U.K. plan remained unchanged at 6.00%.

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.

Expected employer contributions in 2020 are $11 million and $5 million for our retirement and postretirement plans, respectively. In 2020, we may elect to make additional non-required contributions depending on investment performance and the pension plan status. Information about the expected cash flows for our retirement and postretirement plans and the impact of the Medicare subsidy is as follows: 

(in millions)					Postretirement Plans 2
	Retirement 1 Plans				Gross payments				Retiree contributions				Medicare subsidy 3				Net payments
2020	$	63			$	7			$	(2	)		$	—			$	5
2021	66				6				(2		)		—				4
2022	69				6				(2		)		—				4
2023	72				5				(1		)		—				4
2024	75				5				(1		)		—				4
2025-2029	413				17				(6		)		—				11

1	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.

3	Expected medicare subsidy amounts, for the years presented, are less than $1 million.

---

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, 2019 and 2018, by asset class is as follows:

(in millions)	December 31, 2019
	Total				Level 1				Level 2				Level 3
Cash and short-term investments	$	3			$	3			$	—			$	—
Equities:
U.S. indexes 1	23				23				—				—
U.S. growth and value	56				56				—				—
Fixed income:
Long duration strategy 2	1,078				—				1,078				—
Intermediate duration securities	20				—				20				—
Agency mortgage backed securities	3				—				3				—
Asset backed securities	14				—				14				—
Non-agency mortgage backed securities 3	11				—				11				—
International, excluding U.K.	15				—				15				—
Real Estate:
U.K. 4	39				—				—				39
Total	$	1,262			$	82			$	1,141			$	39
Collective investment funds 5	$	698
Total	$	1,960

---

(in millions)	December 31, 2018
	Total				Level 1				Level 2				Level 3
Cash and short-term investments	$	4			$	4			$	—			$	—
Equities:
U.S. indexes 1	21				21				—				—
U.S. growth and value	69				69				—				—
U.K.	—				—				—				—
International, excluding U.K.	—				—				—				—
Fixed income:
Long duration strategy 2	1,070				—				1,070				—
Intermediate duration securities	35				—				35				—
Agency mortgage backed securities	4				—				4				—
Asset backed securities	18				—				18				—
Non-agency mortgage backed securities 3	13				—				13				—
International, excluding U.K.	18				—				18				—
Real Estate:
U.K. 4	39				—				—				39
Total	$	1,291			$	94			$	1,158			$	39
Collective investment funds 5	$	696
Total	$	1,987

1	Includes securities that are tracked in the S&P Smallcap 600 index.

2	Includes securities that are mainly investment grade obligations of issuers in the U.S.

3	Includes U.S. mortgage-backed securities that are not backed by the U.S. government.

4	Includes a fund which holds real estate properties in the U.K.

5	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.

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)	Level 3
Balance as of December 31, 2018	$	39
Purchases	—
Distributions	—
Gain (loss)	—
Balance as of December 31, 2019	$	39

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 $1,432 million and $1,572 million as of December 31, 2019 and 2018 respectively, and the target allocations in 2019 include 75% fixed income, 16% domestic equities and 9% international equities.

---

•	The U.K. pension trust had assets of $528 million and $415 million as of December 31, 2019 and 2018, respectively, and the target allocations in 2019 include 40% fixed income, 30% diversified growth funds, 20% equities and 10% 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 165,286 shares and sold 333,030 shares of S&P Global Inc. common stock in 2019 and purchased 193,051 shares and sold 205,798 shares of S&P Global Inc. common stock in 2018. The plan held approximately 1.3 million and 1.5 million shares of S&P Global Inc. common stock as of December 31, 2019 and 2018, respectively, with market values of $355 million and $251 million, respectively. The plan received dividends on S&P Global Inc. common stock of $3 million during both the years ended December 31, 2019 and December 31, 2018.

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. The remaining outstanding options under the 2002 Plan will have fully met their maximum term and expire in the second quarter of 2028.

•	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)	December 31,
	2019		2018
Shares available for granting 1	20.0		33.3
Options outstanding	0.7		1.7
Total shares reserved for issuance 2	20.7		35.0

1	Shares available for granting at December 31, 2019 and 2018 are under the 2019 Plan and 2002 Plan, respectively.

2	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 December 31 2019 and 2018, respectively.

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)	Year Ended December 31,
	2019				2018				2017
Stock option expense	$	1			$	5			$	3
Restricted stock and unit awards expense	77				89				96
Total stock-based compensation expense	$	78			$	94			$	99
Tax benefit	$	13			$	19			$	38

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.

We use a lattice-based option-pricing model to estimate the fair value of options granted. The following assumptions were used in valuing the options granted: 

	Year Ended
	December 31, 2018
Risk-free average interest rate	2.6 - 2.7%
Dividend yield	1.1		%
Volatility	21.8 - 22.0%
Expected life (years)	5.67 - 6.07
Weighted-average grant-date fair value per option	$	112.98

Because lattice-based option-pricing models incorporate ranges of assumptions, those ranges are disclosed. These assumptions are based on multiple factors, including historical exercise patterns, post-vesting termination rates, expected future exercise patterns and the expected volatility of our stock price. The risk-free interest rate is the imputed forward rate based on the U.S. Treasury yield at the date of grant. We use the historical volatility of our stock price over the expected term of the options to estimate the expected volatility. The expected term of options granted is derived from the output of the lattice model and represents the period of time that options granted are expected to be outstanding.

In 2018, we made a one-time issuance of incentive stock options under the 2002 Plan to replace Kensho employees' stock options that were assumed in connection with our acquisition of Kensho in April of 2018. There were no stock options granted in 2019 and 2017.

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, 2018	1.7			$	47.92
Exercised	(1.0	)		$	163.99
Forfeited and expired 1	—			$	70.70
Options outstanding as of December 31, 2019	0.7			$	55.73			3.1		$	155
Options exercisable as of December 31, 2019	0.7			$	55.12			3.0		$	151

¹ There are less than 0.1 million shares forfeited and expired.

---

(in millions, except per award amounts)	Shares				Weighted-average grant-date fair value
Nonvested options outstanding as of December 31, 2018	0.1				$	113.02
Vested 1	—				$	113.42
Forfeited	(0.1		)		$	113.17
Nonvested options outstanding as of December 31, 2019 2	—				$	112.68
Total unrecognized compensation expense related to nonvested options	$	0.3
Weighted-average years to be recognized over	0.7

1	There are less than 0.1 million shares vested.

2	There are less than 0.1 million nonvested options outstanding as of December 31, 2019.

The total fair value of our stock options that vested during the years ended December 31, 2019, 2018 and 2017 was $3 million, $5 million and $4 million, respectively.

Information regarding our stock option exercises is as follows: 

(in millions)	Year Ended December 31,
	2019				2018				2017
Net cash proceeds from the exercise of stock options	$	40			$	34			$	75
Total intrinsic value of stock option exercises	$	110			$	77			$	118
Income tax benefit realized from stock option exercises	$	33			$	27			$	64

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, 2018	0.8				$	172.24
Granted	0.5				$	187.40
Vested	(0.6		)		$	144.18
Forfeited	(0.1		)		$	179.76
Nonvested shares as of December 31, 2019	0.6				$	199.93
Total unrecognized compensation expense related to nonvested awards	$	72
Weighted-average years to be recognized over	1.8

	Year Ended December 31,
	2019				2018				2017
Weighted-average grant-date fair value per award	$	187.40			$	182.75			$	147.12
Total fair value of restricted stock and unit awards vested	$	153			$	154			$	147
Tax benefit relating to restricted stock activity	$	29			$	32			$	36

---

Capital Stock

Two million shares of preferred stock, par value $1 per share, are authorized; none have been issued.

On January 29, 2020, the Board of Directors approved an increase in the dividends for 2020 to a quarterly rate of $0.67 per common share. 

	Year Ended December 31,
	2019				2018				2017
Quarterly dividend rate	$	0.57			$	0.50			$	0.41
Annualized dividend rate	$	2.28			$	2.00			$	1.64
Dividends paid (in millions)	$	560			$	503			$	421

Stock Repurchases

On December 4, 2013, the Board of Directors approved a share repurchase program authorizing the purchase of 50 million shares, 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, 2019, 4.7 million shares remained available under our current share repurchase program. Our current share repurchase program has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions.

We have entered into accelerated share repurchase (“ASR”) agreements with financial institutions to initiate share repurchases of our common stock. Under an ASR agreement, we pay a specified amount to the financial institution and receive an initial delivery of shares. This initial delivery of shares represents the minimum number of shares that we may receive under the agreement. Upon settlement of the ASR agreement, the financial institution delivers additional shares. The total number of shares ultimately delivered, and therefore the average price paid per share, is determined at the end of the applicable purchase period of each ASR agreement based on the volume weighted-average share price, less a discount. We account for our ASR agreements as two transactions: a stock purchase transaction and a forward stock purchase contract. The shares delivered under the ASR agreements resulted in a reduction of outstanding shares used to determine our weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share. The repurchased shares are held in Treasury. The forward stock purchase contracts were classified as equity instruments. The ASR agreements were executed under the current share repurchase program, approved on December 4, 2013.

The terms of each ASR agreement entered for the years ended December 31, 2019, 2018 and 2017, 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
August 5, 2019 1		October 1, 2019		1.8			0.1			2.0			$	253.36			$	500
February 11, 2019 2		July 31, 2019		2.2			0.1			2.3			$	214.65			$	500
October 29, 2018 3		January 2, 2019		2.5			0.4			2.9			$	173.80			$	500
March 6, 2018 4		September 25, 2018		4.5			0.6			5.1			$	197.49			$	1,000
August 1, 2017 5		October 31, 2017		2.8			0.5			3.2			$	154.46			$	500

¹ The ASR agreement was structured as a capped ASR agreement in which we paid $500 million and received an initial delivery of 1.8 million shares, representing the minimum number of shares of our common stock to be repurchased based on a calculation using a specified capped price per share.

² 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 million at a price equal to the then market price of the Company.

³ The ASR agreement was structured as an uncapped ASR agreement in which we paid $500 million and received an initial delivery of 2.5 million shares, representing 85% of the $500 million at a price equal to the then market price of the Company.

---

⁴ The ASR agreement was structured as an uncapped ASR agreement in which we paid $1 billion and received an initial delivery of 4.5 million shares, representing 85% of the $1 billion at a price equal to the then market price of the Company.

⁵ The ASR agreement was structured as an uncapped ASR agreement in which we paid $500 million and received an initial delivery of 2.8 million shares, representing 85% of the $500 million at a price equal to the then market price of the Company.

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, 2019		1.2			$	208.83			$	240
December 31, 2018		0.9			$	182.93			$	160
December 31, 2017		3.5			$	141.60			$	501

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. During the years ended December 31, 2018 and 2017, we purchased a total of 8.4 million and 6.8 million shares for cash of $1,660 million and $1,001 million, respectively.

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 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, 2019 were as follows:

(in millions)
Balance as of December 31, 2018	$	1,620
Net income attributable to noncontrolling interest	170
Capital contribution from noncontrolling interest	36
Distributions to noncontrolling interest	(166		)
Redemption value adjustment	608
Balance as of December 31, 2019	$	2,268

---

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the components of accumulated other comprehensive loss for the year ended December 31, 2019:

(in millions)	Foreign Currency Translation Adjustment 1				Pension and Postretirement Benefit Plans 2				Unrealized Gain (Loss) on Forward Exchange Contracts 1				Accumulated Other Comprehensive Loss
Balance as of December 31, 2018	$	(339	)		$	(407	)		$	4			$	(742	)
Other comprehensive gain (loss) before reclassifications	18				9				3				30
Reclassifications from accumulated other comprehensive loss to net earnings	—				93				(5		)		88
Net other comprehensive gain (loss) income	18				102				(2		)		118
Balance as of December 31, 2019	$	(321	)		$	(305	)		$	2			$	(624	)

1	See Note 6 — Derivative Instruments for additional details of gains (losses) included in accumulated other comprehensive loss and items reclassed from accumulated other comprehensive loss to net earnings.

2	Reflects amortization of net actuarial losses and is net of a tax benefit of $39 million for the year ended December 31, 2019. See Note 7 — Employee Benefits for additional details of items reclassed from accumulated other comprehensive loss to net earnings.

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:

(in millions, except per share data)	Year Ended December 31,
	2019				2018				2017
Amount attributable to S&P Global Inc. common shareholders:
Net income	$	2,123			$	1,958			$	1,496
Basic weighted-average number of common shares outstanding	245.4				250.9				256.3
Effect of stock options and other dilutive securities	1.5				2.3				2.6
Diluted weighted-average number of common shares outstanding	246.9				253.2				258.9
Earnings per share attributable to S&P Global Inc. common shareholders:
Net income:
Basic	$	8.65			$	7.80			$	5.84
Diluted	$	8.60			$	7.73			$	5.78

Each period 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, 2019, 2018 and 2017, there were no stock options excluded. Restricted performance shares outstanding of 0.4 million, 0.5 million and 0.6 million as of December 31, 2019, 2018 and 2017, respectively, were excluded.

---

During 2019 and 2018, we continued to evaluate our cost structure and further identified cost savings associated with streamlining our management structure and our decision to exit non-strategic businesses. Our 2019 and 2018 restructuring plans consisted of a company-wide workforce reduction of approximately 300 and 160 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 of efficiencies in carrying out the plans or because employees previously identified for separation resigned from the Company and did not receive severance or were reassigned due to circumstances not foreseen when the original plans were initiated. In these cases, we reverse reserves through the consolidated statements of income during the period when it is determined they are no longer needed. There were approximately $3 million of reserves from the 2018 restructuring plan that we have reversed in 2019, which offset the initial charge of $25 million recorded for the 2018 restructuring plan. There were approximately $6 million of reserves from the 2017 restructuring plan that we have reversed in 2018, which offset the initial charge of $44 million recorded for the 2017 restructuring plan.

The initial restructuring charge recorded and the ending reserve balance as of December 31, 2019 by segment is as follows:

	2019 Restructuring Plan								2018 Restructuring Plan
(in millions)	Initial Charge Recorded				Ending Reserve Balance				Initial Charge Recorded				Ending Reserve Balance
Ratings	$	11			$	7			$	8			$	—
Market Intelligence	6				5				7				1
Platts	1				—				—				—
Corporate	7				6				10				1
Total	$	25			$	18			$	25			$	2

For the year ended December 31, 2019, we have reduced the reserve for the 2019 restructuring plan by $7 million and for the years ended December 31, 2019 and 2018, we have reduced the reserve for the 2018 restructuring plan by $22 million and $1 million, respectively. The reductions primarily related to cash payments for employee severance charges.

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, other income, net, or interest expense, net, as these are costs 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.

Beginning in the first quarter of 2019, the contract obligations for revenue from Kensho's major customers were transferred to Market Intelligence for fulfillment.  As a result of this transfer, from January 1, 2019 revenue from contracts with Kensho’s customers is reflected in Market Intelligence’s results.  In 2018, the revenue from contracts with Kensho’s customers was reported in Corporate revenue. See Note 2 — Acquisitions and Divestitures for additional information.

---

A summary of operating results for the years ended December 31 is as follows:

Revenue
(in millions)	2019				2018				2017
Ratings	$	3,106			$	2,883			$	2,988
Market Intelligence	1,959				1,833				1,683
Platts	844				815				774
Indices	918				837				728
Corporate	—				15				—
Intersegment elimination 1	(128		)		(125		)		(110		)
Total revenue	$	6,699			$	6,258			$	6,063
Operating Profit
(in millions)	2019				2018				2017
Ratings 2	$	1,763			$	1,530			$	1,517
Market Intelligence 3	607				545				457
Platts 4	438				383				326
Indices 5	630				563				478
Total reportable segments	3,438				3,021				2,778
Corporate Unallocated 6	(212		)		(231		)		(195		)
Total operating profit	$	3,226			$	2,790			$	2,583

1	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.

2

Operating profit or the year ended December 31, 2019 includes employee severance charges of $11 million. Operating profit for the year ended December 31, 2018 includes legal settlement expenses of $74 million and employee severance charges of $8 million. Operating profit for the year ended December 31, 2017 includes legal settlement expenses of $55 million and employee severance charges of $25 million. Additionally, operating profit includes amortization of intangibles from acquisitions of $2 million for the years ended December 31, 2019 and 2018 and $4 million for the year ended December 31, 2017.

3

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. Operating profit for the year ended December 31, 2018 includes restructuring charges related to a business disposition and employee severance charges of $7 million. Operating profit for the year ended December 31, 2017 includes employee severance charges of $7 million, and non-cash disposition-related adjustments of $4 million. Additionally, operating profit includes amortization of intangibles from acquisitions of $75 million, $73 million and $71 million for the years ended December 31, 2019, 2018 and 2017, respectively.

4

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. Operating profit for the year ended December 31, 2017 includes non-cash acquisition-related adjustment of $11 million, a charge to exit a leased facility of $6 million, an asset write-off of $2 million, and employee severance charges of $2 million. Additionally, Operating profit includes amortization of intangibles from acquisitions of $12 million for the year ended December 31, 2019 and $18 million for the years ended December 31, 2018 and 2017.

5	Operating profit includes amortization of intangibles from acquisitions of $6 million for the years ended December 31, 2019, 2018 and 2017, respectively.

6

Corporate Unallocated operating loss for the year ended December 31, 2019 includes Kensho retention related expenses $21 million, lease impairments of $11 million and employee severance charges of $7 million. Corporate Unallocated operating loss for the year ended December 31, 2018 includes Kensho retention related expense of $31 million, lease impairments of $11 million and employee severance charges of $10 million. Corporate Unallocated operating loss for the year ended December 31, 2017 includes a charge to exit leased facilities of $19 million and employee severance charges of $10 million. Additionally, Corporate Unallocated operating loss includes amortization of intangibles from acquisitions of $28 million and $23 million for the years ended December 31, 2019 and 2018.

---

The following table presents our revenue disaggregated by revenue type for the years ended December 31:

(in millions)	Ratings				Market Intelligence				Platts				Indices				Corporate				Intersegment Elimination 1				Total
	2019
Subscription	$	—			$	1,904			$	774			$	165			$	—			$	—			$	2,843
Non-subscription / Transaction	1,577				45				10				—				—				—				1,632
Non-transaction	1,529				—				—				—				—				(128		)		1,401
Asset-linked fees	—				10				—				613				—				—				623
Sales usage-based royalties	—				—				60				140				—				—				200
Total revenue	$	3,106			$	1,959			$	844			$	918			$	—			$	(128	)		$	6,699
Timing of revenue recognition
Services transferred at a point in time	1,577				45				10				—				—				—				$	1,632
Services transferred over time	1,529				1,914				834				918				—				(128		)		5,067
Total revenue	$	3,106			$	1,959			$	844			$	918			$	—			$	(128	)		$	6,699

(in millions)	Ratings				Market Intelligence				Platts				Indices				Corporate				Intersegment Elimination 1				Total
	2018 2
Subscription	$	—			$	1,773			$	750			$	144			$	15			$	—			$	2,682
Non-subscription / Transaction	1,350				40				11				—				—				—				1,401
Non-transaction	1,533				—				$	—			—				—				(125		)		1,408
Asset-linked fees	—				20				—				522				—				—				542
Sales usage-based royalties	—				—				54				171				—				—				225
Total revenue	$	2,883			$	1,833			$	815			$	837			$	15			$	(125	)		$	6,258
Timing of revenue recognition
Services transferred at a point in time	$	1,350			$	40			$	11			$	—			$	—			$	—			$	1,401
Services transferred over time	1,533				1,793				804				837				15				(125		)		4,857
Total revenue	$	2,883			$	1,833			$	815			$	837			$	15			$	(125	)		$	6,258

(in millions)	Ratings				Market Intelligence				Platts				Indices				Corporate				Intersegment Elimination 1				Total
	2017 2,3
Subscription	$	—			$	1,614			$	704			$	136			$	—			$	—			$	2,454
Non-subscription / Transaction	1,515				46				13				—				—				—				1,574
Non-transaction	1,473				—				—				—				—				(110		)		1,363
Asset-linked fees	—				23				—				461				—				—				484
Sales usage-based royalties	—				—				57				131				—				—				188
Total revenue	$	2,988			$	1,683			$	774			$	728			$	—			$	(110	)		$	6,063
Timing of revenue recognition
Services transferred at a point in time	$	1,515			$	46			$	13			$	—			$	—			$	—			$	1,574
Services transferred over time	1,473				1,637				761				728				—				(110		)		4,489
Total revenue	$	2,988			$	1,683			$	774			$	728			$	—			$	(110	)		$	6,063

---

1	Intersegment eliminations mainly consists of a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

2	In 2019, we reevaluated our transaction and non-transaction revenue presentation which resulted in a reclassification from transaction revenue to non-transaction revenue of $27 million and $25 million for 2018 and 2017, respectively.

3	Amounts for the year ended December 31, 2017 were not adjusted under the modified retrospective transition method applied to our revenue contracts with customers as of January 1, 2018.

Segment information for the years ended December 31 is as follows:

(in millions)	Depreciation & Amortization												Capital Expenditures
	2019				2018				2017				2019				2018				2017
Ratings	$	34			$	32			$	34			$	41			$	42			$	45
Market Intelligence	99				99				104				44				30				37
Platts	21				27				25				13				9				15
Indices	8				9				8				5				3				3
Total reportable segments	162				167				171				103				84				100
Corporate	42				39				9				12				29				23
Total	$	204			$	206			$	180			$	115			$	113			$	123

Segment information as of December 31 is as follows:

(in millions)	Total Assets
	2019				2018
Ratings	$	963			$	680
Market Intelligence	3,806				3,606
Platts	938				787
Indices	1,492				1,443
Total reportable segments	7,199				6,516
Corporate 1	4,140				2,911
Assets held for sale 2	9				14
Total	$	11,348			$	9,441

1	Corporate assets consist principally of cash and cash equivalents, goodwill and other intangible assets, assets for pension benefits, deferred income taxes and leasehold improvements related to subleased areas.

2	Includes East Windsor and New Jersey facility as of December 31, 2019 and 2018, respectively.

We do not have operations in any foreign country that represent more than 8% 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)	Revenue												Long-lived Assets
	Year ended December 31,												December 31,
	2019				2018				2017				2019				2018
U.S.	$	3,949			$	3,750			$	3,658			$	4,946			$	5,019
European region	1,681				1,543				1,473				323				317
Asia	715				647				594				93				51
Rest of the world	354				318				338				44				42
Total	$	6,699			$	6,258			$	6,063			$	5,406			$	5,429

---

	Revenue									Long-lived Assets
	Year ended December 31,									December 31,
	2019			2018			2017			2019			2018
U.S.	59	%		60	%		60	%		91	%		92	%
European region	25			25			24			6			6
Asia	11			10			10			2			1
Rest of the world	5			5			6			1			1
Total	100	%		100	%		100	%		100	%		100	%

See Note 2 – Acquisitions and Divestitures and Note 11 – Restructuring, for actions that impacted the segment operating results.

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 14 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.

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

The following table provides information on the location and amounts of our leases on our consolidated balance sheet as of December 31, 2019:

(in millions)
Balance Sheet Location		2019
Assets
Right of use assets	Lease right-of-use assets	$	676
Liabilities
Other current liabilities	Current lease liabilities	112
Lease liabilities — non-current	Non-current lease liabilities	620

The components of lease expense for the year ended December 31 are as follows: 

(in millions)	2019
Operating lease cost	$	157
Sublease income	(18		)
Total lease cost	$	139

---

Supplemental information related to leases for the year ended December 31 are as follows:

(in millions)	2019
Cash paid for amounts included in the measurement for operating lease liabilities
Operating cash flows from operating leases	$	146
Right-of-use assets obtained in exchange for lease obligations
Operating leases	777

Weighted-average remaining lease term and discount rate for our operating leases as of December 31 are as follows:

	2019
Weighted-average remaining lease term (years)	8.95
Weighted-average discount rate	3.93	%

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

(in millions)
2020	$	133
2021	113
2022	98
2023	82
2024	65
2025 and beyond	358
Total undiscounted lease payments	$	849
Less: Imputed interest	117
Present value of lease liabilities	$	732

Related Party Agreement

In March of 2018, the Company made a $20 million contribution to the S&P Global Foundation included in selling and general expenses.

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, 2019, 2018 and 2017, S&P Dow Jones Indices LLC earned $114 million, $121 million and $74 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 the subject of government and regulatory proceedings, investigations and inquiries.

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

---

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

 

(in millions, except per share data)	First quarter				Second quarter				Third quarter				Fourth quarter				Total year
2019
Revenue	$	1,571			$	1,704			$	1,689			$	1,735			$	6,699
Operating profit	$	705			$	813			$	891			$	818			$	3,226
Net income	$	453			$	602			$	662			$	585			$	2,303
Net income attributable to S&P Global common shareholders	$	410			$	555			$	617			$	541			$	2,123
Earnings per share attributable to S&P Global Inc. common shareholders:
Net income:
Basic	$	1.66			$	2.25			$	2.52			$	2.22			$	8.65
Diluted	$	1.65			$	2.24			$	2.50			$	2.20			$	8.60
2018
Revenue	$	1,567			$	1,609			$	1,546			$	1,536			$	6,258
Operating profit	$	711			$	672			$	704			$	704			$	2,790
Net income	$	534			$	501			$	535			$	551			$	2,121
Net income attributable to S&P Global common shareholders	$	491			$	461			$	495			$	512			$	1,958
Earnings per share attributable to S&P Global Inc. common shareholders:
Net income:
Basic	$	1.94			$	1.83			$	1.97			2.06				7.80
Diluted	$	1.93			$	1.82			$	1.95			2.03				7.73

Note - Totals presented may not sum due to rounding.

---

On November 26, 2019, we issued $500 million of 2.5% senior notes due in 2029 and $600 million of 3.25% senior notes due in 2049. In the fourth quarter of 2019, we used the net proceeds to fund the redemption of the $700 million outstanding principal amount of our 3.3% senior notes due in August of 2020 and a portion of the $400 million outstanding principal amount of our 6.55% senior notes due in October of 2037. On May 17, 2018, we issued $500 million of 4.5% notes due in 2048. On September 22, 2016, we issued $500 million of 2.95% senior notes due in 2027. On May 26, 2015, we issued $700 million of 4.0% senior notes due in 2025. On August 18, 2015, we issued $2.0 billion of senior notes, consisting of $400 million of 2.5% senior notes that were repaid in 2018, $700 million of 3.3% senior notes due in 2020 and $900 million of 4.4% senior notes due in 2026. See Note 5 — Debt for additional information.

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

	Statement of Income
	Year Ended December 31, 2019
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
Revenue	$	812			$	1,898			$	4,146			$	(157	)		$	6,699
Expenses:
Operating-related expenses	158				440				1,360				(157		)		1,801
Selling and general expenses	133				329				1,055				—				1,517
Depreciation	44				12				26				—				82
Amortization of intangibles	—				—				122				—				122
Total expenses	335				781				2,563				(157		)		3,522
Gain on dispositions	(49		)		—				—				—				(49		)
Operating profit	526				1,117				1,583				—				3,226
Other expense, net	91				—				7				—				98
Interest expense (income), net	213				—				(15		)		—				198
Non-operating intercompany transactions	378				(48		)		(1,530		)		1,200				—
(Loss) income before taxes on income	(156		)		1,165				3,121				(1,200		)		2,930
(Benefit) Provision for taxes on income	(74		)		285				416				—				627
Equity in net income of subsidiaries	3,405				—				—				(3,405		)		—
Net income	3,323				880				2,705				(4,605		)		2,303
Less: net income attributable to noncontrolling interests	—				—				—				(180		)		(180		)
Net income attributable to S&P Global Inc.	$	3,323			$	880			$	2,705			$	(4,785	)		$	2,123
Comprehensive income	$	3,446			$	880			$	2,697			$	(4,602	)		$	2,421

---

	Statement of Income
	Year Ended December 31, 2018
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
Revenue	$	776			$	1,695			$	3,940			$	(153	)		$	6,258
Expenses:
Operating-related expenses	124				434				1,293				(153		)		1,698
Selling and general expenses	177				292				1,095				—				1,564
Depreciation	46				7				31				—				84
Amortization of intangibles	—				—				122				—				122
Total expenses	347				733				2,541				(153		)		3,468
Operating profit	429				962				1,399				—				2,790
Other (income) expense, net	(27		)		—				2				—				(25		)
Interest expense (income), net	143				2				(11		)		—				134
Non-operating intercompany transactions	363				(75		)		(1,872		)		1,584				—
(Loss) income before taxes on income	(50		)		1,035				3,280				(1,584		)		2,681
(Benefit) Provision for taxes on income	(14		)		250				324				—				560
Equity in net income of subsidiaries	3,576				(1		)		—				(3,575		)		—
Net income	3,540				784				2,956				(5,159		)		2,121
Less: net income attributable to noncontrolling interests	—				—				—				(163		)		(163		)
Net income attributable to S&P Global Inc.	$	3,540			$	784			$	2,956			$	(5,322	)		$	1,958
Comprehensive income	$	3,510			$	783			$	2,884			$	(5,159	)		$	2,018

---

	Statement of Income
	Year Ended December 31, 2017
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
Revenue	$	717			$	1,780			$	3,704			$	(138	)		$	6,063
Expenses:
Operating-related expenses	89				482				1,261				(138		)		1,694
Selling and general expenses	197				345				1,064				—				1,606
Depreciation	31				11				40				—				82
Amortization of intangibles	—				—				98				—				98
Total expenses	317				838				2,463				(138		)		3,480
Operating profit	400				942				1,241				—				2,583
Other income, net	(16		)		—				(11		)		—				(27		)
Interest expense (income), net	163				—				(14		)		—				149
Non-operating intercompany transactions	365				(77		)		(2,463		)		2,175				—
Income before taxes on income	(112		)		1,019				3,729				(2,175		)		2,461
Provision for taxes on income	26				370				427				—				823
Equity in net income of subsidiaries	3,808				—				—				(3,808		)		—
Net income	3,670				649				3,302				(5,983		)		1,638
Less: net income attributable to noncontrolling interests	—				—				—				(142		)		(142		)
Net income attributable to S&P Global Inc.	$	3,670			$	649			$	3,302			$	(6,125	)		$	1,496
Comprehensive income	$	3,694			$	649			$	3,401			$	(5,982	)		$	1,762

---

	Balance Sheet
	December 31, 2019
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,130			$	—			$	1,736			$	—			$	2,866
Restricted cash	—				—				20				—				20
Short-term investments	—				—				28				—				28
Accounts receivable, net of allowance for doubtful accounts	229				148				1,200				—				1,577
Intercompany receivable	675				2,855				3,983				(7,513		)		—
Prepaid and other current assets	102				2				117				—				221
Total current assets	2,136				3,005				7,084				(7,513		)		4,712
Property and equipment, net of accumulated depreciation	204				—				116				—				320
Right of use assets	402				1				273				—				676
Goodwill	283				—				3,283				9				3,575
Other intangible assets, net	—				—				1,424				—				1,424
Investments in subsidiaries	12,134				6				8,088				(20,228		)		—
Intercompany loans receivable	17				—				1,229				(1,246		)		—
Other non-current assets	281				37				324				(1		)		641
Total assets	$	15,457			$	3,049			$	21,821			$	(28,979	)		$	11,348
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	80			$	11			$	99			$	—			$	190
Intercompany payable	6,288				27				1,198				(7,513		)		—
Accrued compensation and contributions to retirement plans	148				61				237				—				446
Income taxes currently payable	7				—				61				—				68
Unearned revenue	297				243				1,388				—				1,928
Other current liabilities	187				18				256				—				461
Total current liabilities	7,007				360				3,239				(7,513		)		3,093
Long-term debt	3,948				—				—				—				3,948
Lease liabilities – non-current	383				1				236				—				620
Intercompany loans payable	—				—				1,246				(1,246		)		—
Pension and other postretirement benefits	178				—				81				—				259
Other non-current liabilities	171				81				373				(1		)		624
Total liabilities	11,687				442				5,175				(8,760		)		8,544
Redeemable noncontrolling interest	—				—				—				2,268				2,268
Equity:
Common stock	294				—				2,377				(2,377		)		294
Additional paid-in capital	112				632				9,362				(9,203		)		903
Retained income	15,836				1,975				5,404				(11,010		)		12,205
Accumulated other comprehensive loss	(175		)		—				(497		)		48				(624		)
Less: common stock in treasury	(12,297		)		—				(2		)		—				(12,299		)
Total equity - controlling interests	3,770				2,607				16,644				(22,542		)		479
Total equity - noncontrolling interests	—				—				2				55				57
Total equity	3,770				2,607				16,646				(22,487		)		536
Total liabilities and equity	$	15,457			$	3,049			$	21,821			$	(28,979	)		$	11,348

---

	Balance Sheet
	December 31, 2018
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	694			$	—			$	1,223			$	—			$	1,917
Restricted cash	—				—				41				—				41
Short-term investments	—				—				18				—				18
Accounts receivable, net of allowance for doubtful accounts	163				109				1,177				—				1,449
Intercompany receivable	550				2,138				2,873				(5,561		)		—
Prepaid and other current assets	41				3				118				—				162
Total current assets	1,448				2,250				5,450				(5,561		)		3,587
Property and equipment, net of accumulated depreciation	192				—				78				—				270
Right of use assets	—				—				—				—				—
Goodwill	261				—				3,265				9				3,535
Other intangible assets, net	—				—				1,524				—				1,524
Investments in subsidiaries	8,599				6				8,030				(16,635		)		—
Intercompany loans receivable	130				—				1,643				(1,773		)		—
Other non-current assets	194				45				286				—				525
Total assets	$	10,824			$	2,301			$	20,276			$	(23,960	)		$	9,441
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	89			$	15			$	107			$	—			$	211
Intercompany payable	4,453				32				1,076				(5,561		)		—
Accrued compensation and contributions to retirement plans	125				33				196				—				354
Income taxes currently payable	2				—				71				—				73
Unearned revenue	240				235				1,166				—				1,641
Other current liabilities	180				16				155				—				351
Total current liabilities	5,089				331				2,771				(5,561		)		2,630
Long-term debt	3,662				—				—				—				3,662
Lease liabilities – non-current	—				—				—				—				—
Intercompany loans payable	114				—				1,659				(1,773		)		—
Pension and other postretirement benefits	162				—				67				—				229
Other non-current liabilities	148				75				393				—				616
Total liabilities	9,175				406				4,890				(7,334		)		7,137
Redeemable noncontrolling interest	—				—				—				1,620				1,620
Equity:
Common stock	294				—				2,279				(2,279		)		294
Additional paid-in capital	72				618				9,784				(9,641		)		833
Retained income	12,622				1,277				3,824				(6,439		)		11,284
Accumulated other comprehensive loss	(299		)		—				(489		)		46				(742		)
Less: common stock in treasury	(11,040		)		—				(13		)		12				(11,041		)
Total equity - controlling interests	1,649				1,895				15,385				(18,301		)		628
Total equity - noncontrolling interests	—				—				1				55				56
Total equity	1,649				1,895				15,386				(18,246		)		684
Total liabilities and equity	$	10,824			$	2,301			$	20,276			$	(23,960	)		$	9,441

---

	Statement of Cash Flows
	Year Ended December 31, 2019
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
Operating Activities:
Net income	$	3,323			$	880			$	2,705			$	(4,605	)		$	2,303
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	44				12				26				—				82
Amortization of intangibles	—				—				122				—				122
Provision for losses on accounts receivable	5				4				9				—				18
Deferred income taxes	24				(10		)		32				—				46
Stock-based compensation	27				14				37				—				78
Gain on dispositions	(49		)		—				—				—				(49		)
Pension settlement charge, net of taxes	85				—				—				—				85
Other	64				2				27				—				93
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(72		)		(49		)		(14		)		—				(135		)
Prepaid and other current assets	17				(35		)		(63		)		—				(81		)
Accounts payable and accrued expenses	14				32				27				—				73
Unearned revenue	56				28				172				—				256
Accrued legal settlements	—				(1		)		—				—				(1		)
Other current liabilities	(61		)		1				4				—				(56		)
Net change in prepaid/accrued income taxes	(33		)		(5		)		(3		)		—				(41		)
Net change in other assets and liabilities	(74		)		34				23				—				(17		)
Cash provided by operating activities	3,370				907				3,104				(4,605		)		2,776
Investing Activities:
Capital expenditures	(46		)		(3		)		(66		)		—				(115		)
Acquisitions, net of cash acquired	—				—				(91		)		—				(91		)
Proceeds from dispositions	85				—				—				—				85
Changes in short-term investments	—				—				(10		)		—				(10		)
Cash provided by (used for) investing activities	39				(3		)		(167		)		—				(131		)
Financing Activities:
Proceeds from issuance of senior notes, net	1,086				—				—				—				1,086
Payments on senior notes	(868		)		—				—				—				(868		)
Dividends paid to shareholders	(560		)		—				—				—				(560		)
Distributions to noncontrolling interest holders, net	—				—				(143		)		—				(143		)
Repurchase of treasury shares	(1,240		)		—				—				—				(1,240		)
Exercise of stock options	36				—				4				—				40
Employee withholding tax on share-based payments and other	(64		)		—				(2		)		—				(66		)
Intercompany financing activities	(1,368		)		(904		)		(2,333		)		4,605				—
Cash used for financing activities	(2,978		)		(904		)		(2,474		)		4,605				(1,751		)
Effect of exchange rate changes on cash	5				—				29				—				34
Net change in cash, cash equivalents, and restricted cash	436				—				492				—				928
Cash, cash equivalents, and restricted cash at beginning of year	694				—				1,264				—				1,958
Cash, cash equivalents, and restricted cash at end of year	$	1,130			$	—			$	1,756			$	—			$	2,886

---

	Statement of Cash Flows
	Year Ended December 31, 2018
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
Operating Activities:
Net income	$	3,540			$	784			$	2,956			$	(5,159	)		$	2,121
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	46				7				31				—				84
Amortization of intangibles	—				—				122				—				122
Provision for losses on accounts receivable	3				4				14				—				21
Deferred income taxes	33				10				38				—				81
Stock-based compensation	28				16				50				—				94
Accrued legal settlements	—				1				—				—				1
Other	46				5				1				—				52
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(27		)		39				(176		)		—				(164		)
Prepaid and other current assets	(2		)		(4		)		5				—				(1		)
Accounts payable and accrued expenses	(11		)		(64		)		(31		)		—				(106		)
Unearned revenue	(53		)		13				110				—				70
Accrued legal settlements	—				—				(108		)		—				(108		)
Other current liabilities	(22		)		(11		)		(34		)		—				(67		)
Net change in prepaid/accrued income taxes	2				—				(9		)		—				(7		)
Net change in other assets and liabilities	(128		)		32				(33		)		—				(129		)
Cash provided by operating activities	3,455				832				2,936				(5,159		)		2,064
Investing Activities:
Capital expenditures	(81		)		(16		)		(16		)		—				(113		)
Acquisitions, net of cash acquired	—				—				(401		)		—				(401		)
Proceeds from dispositions	—				—				6				—				6
Changes in short-term investments	—				—				(5		)		—				(5		)
Cash used for investing activities	(81		)		(16		)		(416		)		—				(513		)
Financing Activities:
Proceeds from issuance of senior notes, net	489				—				—				—				489
Payments on senior notes	(403		)		—				—				—				(403		)
Dividends paid to shareholders	(503		)		—				—				—				(503		)
Distributions to noncontrolling interest holders, net	—				—				(154		)		—				(154		)
Repurchase of treasury shares	(1,660		)		—				—				—				(1,660		)
Exercise of stock options	26				—				8				—				34
Purchase of additional CRISIL shares	—				—				(25		)		—				(25		)
Employee withholding tax on share-based payments and other	(66		)		—				—				—				(66		)
Intercompany financing activities	(1,190		)		(816		)		(3,153		)		5,159				—
Cash used for financing activities	(3,307		)		(816		)		(3,324		)		5,159				(2,288		)
Effect of exchange rate changes on cash	(5		)		—				(79		)		—				(84		)
Net change in cash, cash equivalents, and restricted cash	62				—				(883		)		—				(821		)
Cash, cash equivalents, and restricted cash at beginning of year	632				—				2,147				—				2,779
Cash, cash equivalents, and restricted cash at end of year	$	694			$	—			$	1,264			$	—			$	1,958

---

	Statement of Cash Flows
	Year Ended December 31, 2017
(in millions)	S&P Global Inc.				Standard & Poor's Financial Services LLC				Non-Guarantor Subsidiaries				Eliminations				S&P Global Inc. Consolidated
Operating Activities:
Net income	$	3,670			$	649			$	3,302			$	(5,983	)		$	1,638
Adjustments to reconcile net income to cash provided by operating activities
Depreciation	31				11				40				—				82
Amortization of intangibles	—				—				98				—				98
Provision for losses on accounts receivable	2				3				11				—				16
Deferred income taxes	108				(10		)		(98		)		—				—
Stock-based compensation	35				22				42				—				99
Accrued legal settlements	—				—				55				—				55
Other	34				19				43				—				96
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(2		)		(23		)		(171		)		—				(196		)
Prepaid and other current assets	(5		)		3				12				—				10
Accounts payable and accrued expenses	22				97				(44		)		—				75
Unearned revenue	19				2				64				—				85
Accrued legal settlements	—				(1		)		(3		)		—				(4		)
Other current liabilities	(42		)		(12		)		(31		)		—				(85		)
Net change in prepaid/accrued income taxes	41				(18		)		9				—				32
Net change in other assets and liabilities	7				(6		)		14				—				15
Cash provided by operating activities	3,920				736				3,343				(5,983		)		2,016
Investing Activities:
Capital expenditures	(55		)		(32		)		(36		)		—				(123		)
Acquisitions, net of cash acquired	—				—				(83		)		—				(83		)
Proceeds from dispositions	—				—				2				—				2
Changes in short-term investments	—				—				(5		)		—				(5		)
Cash used for investing activities	(55		)		(32		)		(122		)		—				(209		)
Financing Activities:
Dividends paid to shareholders	(421		)		—				—				—				(421		)
Distributions to noncontrolling interest holders, net	—				—				(111		)		—				(111		)
Repurchase of treasury shares	(1,001		)		—				—				—				(1,001		)
Exercise of stock options	68				—				7				—				75
Employee withholding tax on share-based payments	(49		)		—				—				—				(49		)
Intercompany financing activities	(2,546		)		(704		)		(2,733		)		5,983				—
Cash used for financing activities	(3,949		)		(704		)		(2,837		)		5,983				(1,507		)
Effect of exchange rate changes on cash	5				—				82				—				87
Net change in cash, cash equivalents, and restricted cash	(79		)		—				466				—				387
Cash, cash equivalents, and restricted cash at beginning of year	711				—				1,681				—				2,392
Cash, cash equivalents, and restricted cash at end of year	$	632			$	—			$	2,147			$	—			$	2,779

---

1.	Management is responsible for establishing and maintaining adequate internal control over financial reporting.

2.

Management has evaluated the effectiveness of 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 SEC and the Public Company Accounting Oversight Board that is free from bias, permits reasonably consistent qualitative and quantitative measurement of our internal controls, is sufficiently complete so that relevant controls are not omitted and is relevant to an evaluation of internal controls over financial reporting.

3.	Based on management’s evaluation under this framework, management has concluded that our internal controls over financial reporting were effective as of December 31, 2019. There are no material weaknesses in our internal control over financial reporting that have been identified by management.

4.	Our independent registered public accounting firm, Ernst & Young LLP, has audited our consolidated financial statements for the year ended December 31, 2019, and has issued their reports on the financial statements and the effectiveness of our internal control over financial reporting. These reports are located on pages 57, 58 and 59 of this Annual Report on Form 10-K.

---

---

•	Code of Business Ethics for all employees;

•	Code of Business Conduct and Ethics for Directors;

•	Employee Complaint Procedures (Accounting and Auditing Matters);

•	Certificate of Incorporation;

•	By-Laws;

•	Corporate Governance Guidelines;

•	Audit Committee Charter;

•	Compensation and Leadership Development Committee Charter;

•	Nominating and Corporate Governance Committee Charter;

•	Financial Committee Charter; and

•	Executive Committee Charter.

---

1	Shares to be issued upon exercise of outstanding options under our Stock Incentive Plans.

2	Included in this number are 517,917 shares reserved for issuance under the Director Deferred Stock Ownership Plan. The remaining 19,975,311 shares are reserved for issuance under the 2019 Stock Incentive Plan (the “2019 Plan”) for Performance Stock, Restricted Stock, Other Stock-Based Awards, Stock Options and Stock Appreciation Rights.

3	Under the terms of the 2019 Plan, shares subject to an award or shares paid in settlement of a dividend equivalent reduce the number of shares available under the 2019 Plan by one share for each such share granted or paid.

•	forfeited, cancelled, settled in cash or property other than stock, or otherwise not distributable under the 2019 Plan;

•	tendered or withheld to pay the exercise or purchase price of an award under the 2019 Plan or to satisfy applicable wage or other required tax withholding in connection with the exercise, vesting or payment of, or other event related to, an award under the 2019 Plan; or

•	repurchased by us with the option proceeds in respect of the exercise of a stock option under the 2019 Plan.

---

1.	Financial Statements

•	Reports of Independent Registered Public Accounting Firm

•	Consolidated Statements of Income for the three years ended December 31, 2019

•	Consolidated Statements of Comprehensive Income for the three years ended December 31, 2019

•	Consolidated Balance Sheets as of December 31, 2019 and 2018

•	Consolidated Statements of Cash Flows for the three years ended December 31, 2019

•	Consolidated Statements of Equity for the three years ended December 31, 2019

•	Notes to the Consolidated Financial Statements

2.	Financial Schedule

•	Schedule II—Valuation and Qualifying Accounts

3.	Exhibits – The exhibits filed as part of this Annual Report on Form 10-K are listed in the Exhibit Index immediately preceding such Exhibits, and such Exhibit Index is incorporated herein by reference.

---

Schedule II – Valuation and Qualifying Accounts

(in millions)

 

Additions/(deductions)	Balance at beginning of year				Net charges to income				Deductions and other 1				Balance at end of year
Year ended December 31, 2019
Allowance for doubtful accounts	$	34			$	17			$	(17	)		$	34
Year ended December 31, 2018
Allowance for doubtful accounts	$	33			$	21			$	(20	)		$	34
Year ended December 31, 2017
Allowance for doubtful accounts	$	28			$	15			$	(11	)		$	33

1	Primarily includes uncollectible accounts written off, net of recoveries, impact of acquisitions and divestitures and adjustments for foreign currency translation.

---

---

---

---

---

---