S&P GLOBAL REPORTS 4th QUARTER AND FULL-YEAR 2022 RESULTS
S&P Global (NYSE: SPGI) reported strong fourth-quarter and full-year 2022 results, highlighting a 41% revenue increase in Q4 to $2.94 billion, though GAAP net income fell 36% to $433 million. For the year, total revenue was $11.18 billion, a 35% increase, while GAAP net income rose 7% to $3.25 billion. The company met merger-related synergy targets ahead of schedule, divested Engineering Solutions, and initiated a $12 billion share repurchase. However, challenges in Ratings revenue persisted, with a 29% decline in Q4 revenue to $705 million. A new financial target model was introduced during the 2022 Investor Day, paving the way for future growth.
- Fourth-quarter revenue increased 41% to $2.94 billion.
- Achieved 2022 merger-related synergy targets ahead of schedule.
- Returned over $13 billion to shareholders through a combination of share repurchases and dividends.
- Full-year reported revenue increased 35% to $11.18 billion.
- GAAP net income decreased 36% to $433 million in Q4 2022.
- GAAP diluted earnings per share decreased 52% to $1.33.
- Ratings revenue declined 29% to $705 million in Q4.
- Operating profit margin decreased by 670 basis points to 44.2% for the full year.
S&P Global Demonstrated Resilience in both the 4th Quarter, and the Full-Year 2022
Completed Merger with IHS Markit
Achieved 2022 Merger-Related Synergy Targets Ahead of Schedule
Announced Divestiture of Engineering Solutions
Completed
Introduced New Strategic Vision and Multi-Year Financial Target Model at the 2022 Investor Day
Fourth quarter GAAP net income decreased
Adjusted revenue decreased
For the full year, reported revenue increased
"During 2022 we began a new transformation of
Important note on the presentation of financial results and guidance: GAAP financials and guidance are presented to reflect the close of the merger with IHS Markit, and the inclusion of its financial results, as of
Profit Margin: For the full year, the Company's reported operating profit margin decreased by 670 basis points to
Return of Capital: In 2022, the Company returned more than
Dividend: On
Upcoming Disclosures: Beginning with results in 2023,
Market Intelligence:
4th Quarter, 2022: Reported revenue increased
Ratings:
4th Quarter, 2022: Reported revenue decreased
Reported operating profit decreased
Commodity Insights:
4th Quarter, 2022: Reported revenue increased
Mobility:
4th Quarter, 2022: Reported revenue was
Year-end 2022 ETF AUM based on our indices decreased
4th Quarter, 2022: Reported revenue increased
Reported operating profit decreased
Engineering Solutions:
4th Quarter, 2022: Reported revenue was
On
Corporate Unallocated Expense:
4th Quarter, 2022: Reported Corporate Unallocated Expense of
2022: Reported Corporate Unallocated Expense of
Provision for Income Taxes: The Company's effective tax rate increased to
Balance Sheet and Cash Flow: Cash, cash equivalents, and restricted cash at the end of 2022 were
Outlook: We are not providing 2023 GAAP guidance because, given the inherent uncertainty around the timing of the divestiture of Engineering Solutions, management cannot reliably predict all of the necessary components of GAAP measures. The Company expects non-GAAP adjusted diluted EPS in the range of
Comparison of Adjusted Information to
The Company's non-GAAP measures include adjustments that reflect how management views our businesses. The Company believes these non-GAAP financial measures provide useful supplemental information that, in the case of non-GAAP financial measures other than free cash flow and non-GAAP pro forma adjusted free cash flow excluding certain items, enables investors to better compare the Company's performance across periods, and management also uses these measures internally to assess the operating performance of its business, to assess performance for employee compensation purposes and to decide how to allocate resources. The Company believes that the presentation of free cash flow and non-GAAP pro forma adjusted free cash flow excluding certain items allows investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management and that such measures are useful in evaluating the cash available to us to prepay debt, make strategic acquisitions and investments, and repurchase stock. However, investors should not consider any of these non-GAAP measures in isolation from, or as a substitute for, the financial information that the Company reports.
Conference Call/Webcast Details: The Company's senior management will review the fourth quarter and full-year 2022 earnings results on a conference call scheduled for today,
The Webcast will be available live and in replay at http://investor.spglobal.com/Quarterly-Earnings. (Please copy and paste URL into Web browser.)
Telephone access is available.
Forward-Looking Statements: This press release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, including statements about the merger (the "Merger") between a subsidiary of the Company and IHS Markit Ltd. ("IHS Markit"), which express management's current views concerning future events, trends, contingencies or results, appear at various places in this report and use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would." For example, management may use forward-looking statements when addressing topics such as: the outcome of contingencies; future actions by regulators; changes in the Company's business strategies and methods of generating revenue; the development and performance of the Company's services and products; the expected impact of acquisitions and dispositions; the Company's effective tax rates; and the Company's cost structure, dividend policy, cash flows or liquidity.
Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements include, among other things:
- worldwide economic, financial, political and regulatory conditions, and factors that contribute to uncertainty and volatility, natural and man-made disasters, civil unrest, pandemics (e.g., COVID-19), geopolitical uncertainty (including military conflict), and conditions that may result from legislative, regulatory, trade and policy changes;
- the volatility and health of debt, equity, commodities and energy markets, including credit quality and spreads, the level of liquidity and future debt issuances, demand for investment products that track indices and assessments and trading volumes of certain exchange-traded derivatives;
- the demand and market for credit ratings in and across the sectors and geographies where the Company operates;
- the Company's ability to maintain adequate physical, technical and administrative safeguards to protect the security of confidential information and data, and the potential for a system or network disruption that results in regulatory penalties and remedial costs or improper disclosure of confidential information or data;
- the outcome of litigation, government and regulatory proceedings, investigations and inquiries;
- concerns in the marketplace affecting the Company's credibility or otherwise affecting market perceptions of the integrity or utility of independent credit ratings, benchmarks, indices and other services;
- our ability to attract, incentivize and retain key employees, especially in a competitive business environment;
- 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 jurisdictions in which it operates, including sanctions laws relating to countries such asIran ,Russia ,Sudan ,Syria andVenezuela , anti-corruption laws such as theU.S. Foreign Corrupt Practices Act and theU.K. Bribery Act of 2010, and local laws prohibiting corrupt payments to government officials, as well as import and export restrictions; - the continuously evolving regulatory environment in
Europe ,the United States and elsewhere around the globe affecting each of our business divisions and the products our business divisions offer, and our compliance therewith; - the ability of the Company to implement its plans, forecasts and other expectations with respect to IHS Markit's business and realize expected synergies;
- business disruption following the Merger;
- the Company's ability to meet expectations regarding the accounting and tax treatments of the Merger;
- the Company's ability to make acquisitions and dispositions and successfully integrate the businesses we acquire;
- consolidation of the Company's customers, suppliers or competitors;
- the introduction of competing products or technologies by other companies;
- the effect of competitive products and pricing, including the level of success of new product developments and global expansion;
- the impact of customer cost-cutting pressures;
- a decline in the demand for our products and services by our customers and other market participants;
- the ability of the Company, and its third-party service providers, to maintain adequate physical and technological infrastructure;
- the Company's ability to successfully recover from a disaster or other business continuity problem, such as an earthquake, hurricane, flood, civil unrest, protests, military conflict, terrorist attack, outbreak of pandemic or contagious diseases, security breach, cyber attack, data breach, power loss, telecommunications failure or other natural or man-made event;
- the level of merger and acquisition activity in
the United States and abroad; - the level of the Company's future cash flows and capital investments;
- the impact on the Company's revenue and net income caused by fluctuations in foreign currency exchange rates; and
- the impact of changes in applicable tax or accounting requirements on the Company.
The factors noted above are not exhaustive. The Company and its subsidiaries operate in a dynamic business environment in which new risks emerge frequently. Accordingly, the Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made, except as required by applicable law. Further information about the Company's businesses, including information about factors that could materially affect its results of operations and financial condition, is contained in the Company's filings with the
About
We are widely sought after by many of the world's leading organizations to provide credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help the world's leading organizations plan for tomorrow, today.
Investor Relations: http://investor.spglobal.com
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Contact:
Investor Relations:
Senior Vice President, Investor Relations
Tel: +1 (347) 640-1521
mark.grant@spglobal.com
Media:
Communications
Tel: +1 (332) 210-9935
ola.fadahunsi@spglobal.com
Communications
Tel: +44 7976 632 638
christopher.krantz@spglobal.com
Exhibit 1 | ||||||||||||||
Condensed Consolidated Statements of Income Periods ended (dollars in millions, except per share data)
| ||||||||||||||
(unaudited) | Three Months | Twelve Months | ||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||
Revenue | $ 2,937 | $ 2,088 | 41 % | $ 11,181 | $ 8,297 | 35 % | ||||||||
Expenses | 2,227 | 1,191 | 87 % | 8,162 | 4,087 | N/M | ||||||||
Gain on dispositions | (1) | (7) | (89) % | (1,898) | (11) | N/M | ||||||||
Equity in income on unconsolidated subsidiaries | (6) | — | N/M | (27) | — | N/M | ||||||||
Operating profit | 717 | 904 | (21) % | 4,944 | 4,221 | 17 % | ||||||||
Other expense (income), net | 17 | (11) | N/M | (70) | (62) | (14) % | ||||||||
Interest expense, net | 86 | 25 | N/M | 304 | 119 | N/M | ||||||||
(Gain) loss on extinguishment of debt, net | (7) | — | N/M | 8 | — | N/M | ||||||||
Income before taxes on income | 621 | 890 | (30) % | 4,702 | 4,164 | 13 % | ||||||||
Provision for taxes on income | 127 | 153 | (17) % | 1,180 | 901 | 31 % | ||||||||
Net income | 494 | 737 | (33) % | 3,522 | 3,263 | 8 % | ||||||||
Less: net income attributable to noncontrolling interests | (61) | (62) | 1 % | (274) | (239) | (15) % | ||||||||
Net income attributable to | $ 433 | $ 675 | (36) % | $ 3,248 | $ 3,024 | 7 % | ||||||||
Earnings per share attributable to S&P | ||||||||||||||
Net income: | ||||||||||||||
Basic | $ 1.34 | $ 2.80 | (52) % | $ 10.25 | $ 12.56 | (18) % | ||||||||
Diluted | $ 1.33 | $ 2.79 | (52) % | $ 10.20 | $ 12.51 | (18) % | ||||||||
Weighted-average number of common shares outstanding: | ||||||||||||||
Basic | 323.9 | 241.0 | 316.9 | 240.8 | ||||||||||
Diluted | 325.2 | 242.1 | 318.5 | 241.8 | ||||||||||
Actual shares outstanding at year end | 321.9 | 241.0 | ||||||||||||
N/M - Represents a change equal to or in excess of |
Note - % change in the tables throughout the exhibits are calculated off of the actual number, not the rounded number presented. |
Note - |
Exhibit 2 | ||||||
Condensed Consolidated Balance Sheets (dollars in millions)
| ||||||
(unaudited) | 2022 | 2021 | ||||
Assets: | ||||||
Cash, cash equivalents, and restricted cash | $ 1,287 | $ 6,505 | ||||
Other current assets | 3,082 | 1,984 | ||||
Assets of businesses held for sale 1 | 1,298 | 321 | ||||
Total current assets | 5,667 | 8,810 | ||||
Property and equipment, net | 297 | 241 | ||||
Right of use assets | 423 | 426 | ||||
52,851 | 4,791 | |||||
Equity investments in unconsolidated subsidiaries | 1,752 | 165 | ||||
Other non-current assets | 794 | 593 | ||||
Total assets | $ 61,784 | $ 15,026 | ||||
Liabilities and Equity: | ||||||
Short-term debt | $ 226 | $ — | ||||
Unearned revenue | 3,126 | 2,217 | ||||
Other current liabilities | 2,413 | 1,449 | ||||
Liabilities of businesses held for sale 1 | 234 | 149 | ||||
Long-term debt | 10,730 | 4,114 | ||||
Lease liabilities — non-current | 577 | 492 | ||||
Deferred tax liability — non-current | 4,065 | 147 | ||||
Pension, other postretirement benefits and other non-current liabilities | 669 | 922 | ||||
Total liabilities | 22,040 | 9,490 | ||||
Redeemable noncontrolling interest | 3,267 | 3,429 | ||||
Total equity | 36,477 | 2,107 | ||||
Total liabilities and equity | $ 61,784 | $ 15,026 | ||||
Note - |
1 Includes Engineering Solutions as of |
Exhibit 3 | ||||||
Condensed Consolidated Statements of Cash Flows Years ended (dollars in millions)
| ||||||
(unaudited) | 2022 | 2021 | ||||
Operating Activities: | ||||||
Net income | $ 3,522 | $ 3,263 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||
Depreciation | 108 | 82 | ||||
Amortization of intangibles | 905 | 96 | ||||
Deferred income taxes | (353) | 13 | ||||
Stock-based compensation | 214 | 122 | ||||
Gain on dispositions | (1,898) | (11) | ||||
Lease impairment charges | 132 | 31 | ||||
Other | 47 | 72 | ||||
Net changes in other operating assets and liabilities | (74) | (70) | ||||
Cash provided by operating activities | 2,603 | 3,598 | ||||
Investing Activities: | ||||||
Capital expenditures | (89) | (35) | ||||
Acquisitions, net of cash acquired | 210 | (99) | ||||
Proceeds from dispositions | 3,509 | 16 | ||||
Changes in short-term investments | (2) | (2) | ||||
Cash provided by (used for) investing activities | 3,628 | (120) | ||||
Financing Activities: | ||||||
Payments on short-term debt, net | (32) | — | ||||
Proceeds from issuance of senior notes, net | 5,395 | — | ||||
Payments on senior notes | (3,698) | — | ||||
Dividends paid to shareholders | (1,024) | (743) | ||||
Distributions to noncontrolling interest holders | (270) | (227) | ||||
Proceeds from noncontrolling interest holders | 410 | — | ||||
Repurchase of treasury shares | (12,004) | — | ||||
Exercise of stock options and employee withholding tax on share-based payments | (103) | (43) | ||||
Cash used for financing activities | (11,326) | (1,013) | ||||
Effect of exchange rate changes on cash | (123) | (82) | ||||
Net change in cash, cash equivalents, and restricted cash | (5,218) | 2,383 | ||||
Cash, cash equivalents, and restricted cash at beginning of year | 6,505 | 4,122 | ||||
Cash, cash equivalents, and restricted cash at end of year | $ 1,287 | $ 6,505 | ||||
Exhibit 4 | ||||||||||||||
Operating Results by Segment Periods ended | ||||||||||||||
(dollars in millions) | ||||||||||||||
(unaudited) | Three Months | Twelve Months | ||||||||||||
Revenue | Revenue | |||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||
Market Intelligence | $ 1,037 | $ 568 | 83 % | $ 3,811 | $ 2,185 | 74 % | ||||||||
Ratings | 705 | 989 | (29) % | 3,050 | 4,097 | (26) % | ||||||||
Commodity Insights | 451 | 265 | 70 % | 1,685 | 1,012 | 66 % | ||||||||
Mobility | 345 | — | N/M | 1,142 | — | N/M | ||||||||
Indices | 344 | 303 | 14 % | 1,339 | 1,149 | 17 % | ||||||||
Engineering Solutions | 99 | — | N/M | 323 | — | N/M | ||||||||
Intersegment Elimination | (44) | (37) | (18) % | (169) | (146) | (16) % | ||||||||
Total revenue | $ 2,937 | $ 2,088 | 41 % | $ 11,181 | $ 8,297 | 35 % | ||||||||
Expenses | Expenses | |||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||
Market Intelligence (a) | $ 915 | $ 407 | N/M | $ 1,323 | $ 1,509 | (12) % | ||||||||
Ratings (b) | 385 | 414 | (7) % | 1,378 | 1,468 | (6) % | ||||||||
Commodity Insights (c) | 301 | 132 | N/M | 1,094 | 468 | N/M | ||||||||
Mobility (d) | 297 | — | N/M | 929 | — | N/M | ||||||||
Indices (e) | 149 | 104 | 43 % | 412 | 351 | 18 % | ||||||||
Engineering Solutions (f) | 86 | — | N/M | 308 | — | N/M | ||||||||
Corporate Unallocated expense (g) | 137 | 164 | (16) % | 989 | 426 | NM | ||||||||
Equity in Income on Unconsolidated Subsidiaries (h) | (6) | — | N/M | (27) | — | N/M | ||||||||
Intersegment Elimination | (44) | (37) | (18) % | (169) | (146) | (16) % | ||||||||
Total expenses | $ 2,220 | $ 1,184 | 88 % | $ 6,237 | $ 4,076 | 53 % | ||||||||
Operating Profit | Operating Profit | |||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||
Market Intelligence (a) | $ 122 | $ 161 | (24) % | $ 2,488 | $ 676 | N/M | ||||||||
Ratings (b) | 320 | 575 | (44) % | 1,672 | 2,629 | (36) % | ||||||||
Commodity Insights (c) | 150 | 133 | 13 % | 591 | 544 | 9 % | ||||||||
Mobility (d) | 48 | — | N/M | 213 | — | N/M | ||||||||
Indices (e) | 195 | 199 | (2) % | 927 | 798 | 16 % | ||||||||
Engineering Solutions (f) | 13 | — | N/M | 15 | — | N/M | ||||||||
Total reportable segments | 848 | 1,068 | (21) % | 5,906 | 4,647 | 27 % | ||||||||
Corporate Unallocated expense (g) | (137) | (164) | 16 % | (989) | (426) | N/M | ||||||||
Equity in Income on Unconsolidated Subsidiaries (h) | 6 | — | N/M | 27 | — | N/M | ||||||||
Total operating profit | $ 717 | $ 904 | (21) % | $ 4,944 | $ 4,221 | 17 % | ||||||||
N/M - Represents a change equal to or in excess of | |
Note - | |
(a) | The three and twelve months ended |
(b) | The three and twelve months ended |
(c) | The three and twelve months ended |
(d) | The three and twelve months ended |
(e) | The three and twelve months ended |
(f) | The twelve months ended |
(g) | The three and twelve months ended |
(h) | Amortization of intangibles from acquisitions of |
Exhibit 5 | |||||||||||||||
Operating Results - Non-GAAP Financial Information Three and twelve months ended (dollars in millions, except per share amounts) Adjusted Revenue/Non-GAAP Pro Forma Adjusted Revenue
| |||||||||||||||
(unaudited) | Three Months | Twelve Months | |||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||
Market | Revenue/Pro forma revenue * | $ 1,037 | $ 1,003 | 3 % | $ 4,102 | $ 3,976 | 3 % | ||||||||
Pro forma non-GAAP adjustments | — | 9 | — | (73) | |||||||||||
Fiscal period alignment adjustment | — | (3) | — | (13) | |||||||||||
Divestitures | — | — | (9) | — | |||||||||||
Adjusted revenue/Non-GAAP pro forma | $ 1,037 | $ 1,009 | 3 % | $ 4,093 | $ 3,890 | 5 % | |||||||||
Ratings | Revenue/Pro forma revenue * | $ 705 | $ 990 | (29) % | $ 3,050 | $ 4,097 | (26) % | ||||||||
Adjusted revenue/Non-GAAP pro forma | $ 705 | $ 990 | (29) % | $ 3,050 | $ 4,097 | (26) % | |||||||||
Commodity | Revenue/Pro forma revenue * | $ 451 | $ 428 | 5 % | $ 1,788 | $ 1,652 | 8 % | ||||||||
Pro forma non-GAAP adjustments | — | 4 | — | 16 | |||||||||||
Fiscal period alignment adjustment | — | 1 | — | 1 | |||||||||||
Divestitures | — | — | (12) | — | |||||||||||
Adjusted revenue/Non-GAAP pro forma | $ 451 | $ 433 | 4 % | $ 1,776 | $ 1,669 | 6 % | |||||||||
Mobility | Revenue/Pro forma revenue * | $ 345 | $ 314 | 10 % | $ 1,351 | $ 1,209 | 12 % | ||||||||
Pro forma non-GAAP adjustments | — | 6 | — | 26 | |||||||||||
Fiscal period alignment adjustment | — | (4) | — | 11 | |||||||||||
Adjusted revenue/Non-GAAP pro forma | $ 345 | $ 316 | 9 % | $ 1,351 | $ 1,246 | 8 % | |||||||||
Indices | Revenue/Pro forma revenue * | $ 344 | $ 330 | 4 % | $ 1,356 | $ 1,253 | 8 % | ||||||||
Divestitures | — | — | (1) | — | |||||||||||
Adjusted revenue/Non-GAAP pro forma | $ 344 | $ 330 | 4 % | $ 1,355 | $ 1,253 | 8 % | |||||||||
Engineering | Revenue/Pro forma revenue * | $ 99 | $ 102 | (3) % | $ 389 | $ 380 | 2 % | ||||||||
Pro forma non-GAAP adjustments | — | 3 | — | 10 | |||||||||||
Fiscal period alignment adjustment | — | (2) | — | 1 | |||||||||||
Adjusted revenue/Non-GAAP pro forma | $ 99 | $ 103 | (4) % | $ 389 | $ 391 | (1) % | |||||||||
Intersegment | Revenue/Pro forma revenue * | $ (44) | $ (43) | — % | $ (171) | $ (164) | (5) % | ||||||||
Adjusted revenue/Non-GAAP pro forma | $ (44) | $ (43) | — % | $ (171) | $ (164) | (5) % | |||||||||
Total SPGI | Revenue/Pro forma revenue * | $ 2,937 | $ 3,124 | (6) % | $ 11,864 | $ 12,403 | (4) % | ||||||||
Pro forma non-GAAP adjustments | — | 22 | — | (21) | |||||||||||
Fiscal period alignment adjustment | — | (8) | — | — | |||||||||||
Divestitures | — | — | (22) | — | |||||||||||
Adjusted revenue/Non-GAAP pro forma | $ 2,937 | $ 3,138 | (6) % | $ 11,842 | $ 12,382 | (4) % | |||||||||
Adjusted Operating Profit/Non-GAAP Pro Forma Adjusted Operating Profit | |||||||||||||||
(unaudited) | Three Months | Twelve Months | |||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||
Market | Operating profit/Pro forma operating | $ 122 | $ 642 | (81) % | $ 2,471 | $ 1,217 | N/M | ||||||||
Non-GAAP adjustments/Pro forma | 59 | 119 | (1,638) | (61) | |||||||||||
Deal-related amortization/Pro forma | 144 | 16 | 475 | 65 | |||||||||||
Fiscal period alignment adjustment | — | (497) | — | (43) | |||||||||||
Divestitures | 1 | — | (6) | — | |||||||||||
Adjusted operating profit/Non- | $ 326 | $ 280 | 16 % | $ 1,302 | $ 1,178 | 11 % | |||||||||
Ratings | Operating profit/Pro forma operating | $ 320 | $ 571 | (44) % | $ 1,667 | $ 2,619 | (36) % | ||||||||
Non-GAAP adjustments/Pro forma | 16 | (7) | 30 | (6) | |||||||||||
Deal-related amortization/Pro forma deal-related amortization | 2 | 1 | 8 | 10 | |||||||||||
Adjusted operating profit/Non- | $ 338 | $ 565 | (40) % | $ 1,705 | $ 2,623 | (35) % | |||||||||
Commodity | Operating profit/Pro forma operating profit * | $ 150 | $ 153 | (2) % | $ 595 | $ 574 | 4 % | ||||||||
Non-GAAP adjustments/Pro forma | 17 | 30 | 87 | 153 | |||||||||||
Deal-related amortization/Pro forma | 34 | 2 | 111 | 8 | |||||||||||
Fiscal period alignment adjustment | — | (2) | — | (2) | |||||||||||
Divestitures | — | — | (7) | — | |||||||||||
Adjusted operating profit/Non- | $ 201 | $ 183 | 10 % | $ 787 | $ 733 | 7 % | |||||||||
Mobility | Operating profit/Pro forma operating | $ 48 | $ 42 | 14 % | $ 250 | $ 150 | 67 % | ||||||||
Non-GAAP adjustments/Pro forma | 5 | 80 | 36 | 335 | |||||||||||
Deal-related amortization/Pro forma | 65 | — | 242 | — | |||||||||||
Fiscal period alignment adjustment | — | (3) | — | 7 | |||||||||||
Adjusted operating profit/Non- | $ 117 | $ 119 | (2) % | $ 527 | $ 492 | 7 % | |||||||||
Indices | Operating profit/Pro forma operating | $ 195 | $ 200 | (3) % | $ 927 | $ 808 | 15 % | ||||||||
Non-GAAP adjustments/Pro forma | 10 | 8 | (30) | 31 | |||||||||||
Deal-related amortization/Pro forma | 9 | 2 | 31 | 6 | |||||||||||
Adjusted operating profit/Non- | $ 214 | $ 210 | 2 % | $ 927 | $ 845 | 10 % | |||||||||
Engineering | Operating profit/Pro forma operating | $ 13 | $ 53 | (75) % | $ 21 | $ 62 | (66) % | ||||||||
Non-GAAP adjustments/Pro forma | — | (15) | 12 | 27 | |||||||||||
Deal-related amortization | 2 | — | 35 | — | |||||||||||
Fiscal period alignment adjustment | — | (15) | — | (14) | |||||||||||
Adjusted operating profit/Non- | $ 15 | $ 23 | (34) % | $ 67 | $ 75 | (11) % | |||||||||
Total | Operating profit/Pro forma operating | $ 848 | $ 1,661 | (49) % | $ 5,931 | $ 5,430 | 9 % | ||||||||
Non-GAAP adjustments/Pro forma | 107 | 215 | (1,503) | 479 | |||||||||||
Deal-related amortization | 256 | 21 | 902 | 89 | |||||||||||
Fiscal period alignment adjustment | — | (517) | — | (52) | |||||||||||
Divestitures | 1 | — | (13) | — | |||||||||||
Adjusted operating profit/Non- operating profit * | $ 1,212 | $ 1,380 | (12) % | $ 5,315 | $ 5,946 | (11) % | |||||||||
Corporate | Operating profit/Pro forma operating | $ (137) | $ (187) | 27 % | $ (655) | $ (653) | — % | ||||||||
Non-GAAP adjustments/Pro forma | 114 | 145 | 564 | 486 | |||||||||||
Deal-related amortization | 3 | — | 3 | 7 | |||||||||||
Fiscal period alignment adjustment | — | (16) | — | (13) | |||||||||||
Adjusted operating profit/Non- | $ (20) | $ (58) | 65 % | $ (86) | $ (173) | 50 % | |||||||||
Equity in | Operating profit/Pro forma operating | $ 6 | $ (33) | N/M | $ 35 | $ (41) | N/M | ||||||||
Non-GAAP adjustments/Pro forma | — | 62 | — | 130 | |||||||||||
Deal-related amortization | 13 | — | 54 | — | |||||||||||
Fiscal period alignment adjustment | — | (7) | — | 1 | |||||||||||
Adjusted operating profit/Non- operating profit * | $ 19 | $ 22 | (13) % | $ 90 | $ 90 | — % | |||||||||
Total SPGI | Operating profit/Pro forma operating | $ 717 | $ 1,441 | (50) % | $ 5,311 | $ 4,736 | 12 % | ||||||||
Non-GAAP adjustments/Pro forma (a) (b) (c)(d) (e) (f) (g) | 221 | 422 | (938) | 1,095 | |||||||||||
Deal-related amortization | 272 | 21 | 959 | 96 | |||||||||||
Fiscal period alignment adjustment | — | (540) | — | (64) | |||||||||||
Divestitures | 1 | — | (13) | — | |||||||||||
Adjusted operating profit/Non- | $ 1,211 | $ 1,344 | (10) % | $ 5,319 | $ 5,863 | (9) % | |||||||||
Adjusted Other Expense (Income), Net/Non-GAAP Pro Forma Adjusted Other Expense (Income), Net | ||||||||||||||
Three Months | Twelve Months | |||||||||||||
(unaudited) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||
Adjusted other expense (income), net/Pro forma other | $ 17 | $ (11) | N/M | $ (67) | $ (64) | (5) % | ||||||||
Non-GAAP adjustments/Pro forma non-GAAP | (13) | — | (13) | — | ||||||||||
Fiscal period alignment adjustment | — | — | — | (2) | ||||||||||
Adjusted other expense (income), net/Non- GAAP pro forma adjusted other expense (income), net * | $ 3 | $ (11) | N/M | $ (80) | $ (66) | (22) % | ||||||||
Interest Expense, Net/Non-GAAP Pro Forma Adjusted Interest Expense, Net | ||||||||||||||
Three Months | Twelve Months | |||||||||||||
(unaudited) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||
Interest expense, net/Pro forma interest expense, net * | $ 86 | $ 86 | — % | $ 369 | $ 261 | 41 % | ||||||||
Pro forma non-GAAP adjustments | — | (8) | (31) | 78 | ||||||||||
Fiscal period alignment adjustment | — | — | — | (1) | ||||||||||
Interest expense, net/Non-GAAP pro forma | $ 86 | $ 78 | 9 % | $ 339 | $ 338 | — % | ||||||||
Adjusted Provision for Income Taxes/Non-GAAP Pro Forma Adjusted Provision for Income Taxes | ||||||||||||||
Three Months | Twelve Months | |||||||||||||
(unaudited) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||
Provision for income taxes/Pro forma provision for income taxes * | $ 127 | $ 276 | (54) % | $ 1,201 | $ 918 | 31 % | ||||||||
Pro forma non-GAAP adjustments (a) (b) (c)(d) (e) (f) (g) (h) (i) | 44 | (106) | (382) | 221 | ||||||||||
Deal-related amortization | 62 | 7 | 219 | 23 | ||||||||||
Fiscal period alignment adjustment | — | 87 | — | 51 | ||||||||||
Divestitures | — | — | (4) | — | ||||||||||
Adjusted provision for income taxes/Non-GAAP | $ 234 | $ 264 | (12) % | $ 1,036 | $ 1,213 | (15) % | ||||||||
Adjusted Effective Tax Rate/Non-GAAP Pro Forma Adjusted Effective Tax Rate | ||||||||||||||
Three Months | Twelve Months | |||||||||||||
(unaudited) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||
Adjusted operating profit/Non-GAAP pro forma | $ 1,211 | $ 1,344 | (10) % | $ 5,319 | $ 5,863 | (9) % | ||||||||
Other expense (income), net/Non-GAAP pro forma | 3 | (11) | (80) | (66) | ||||||||||
Interest expense, net/Non-GAAP pro forma adjusted | 86 | 78 | 339 | 338 | ||||||||||
Adjusted income before taxes on income/Non- | $ 1,122 | $ 1,277 | (12) % | $ 5,060 | $ 5,591 | (9) % | ||||||||
Adjusted provision for income taxes/Non- | $ 234 | $ 264 | $ 1,036 | $ 1,213 | ||||||||||
Adjusted effective tax rate/Non-GAAP pro | 20.8 % | 20.7 % | 20.5 % | 21.7 % | ||||||||||
1 | The adjusted effective tax rate is calculated by dividing provision for income taxes by the adjusted income before taxes, which includes income from unconsolidated subsidiaries. The adjusted effective tax rate excluding income from unconsolidated subsidiaries for the three months ended |
Adjusted Net Income Attributable to Noncontrolling Interests/Non-GAAP Pro Forma Adjusted Net Income Attributable to | ||||||||||||||
Three Months | Twelve Months | |||||||||||||
(unaudited) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||
Net income attributable to noncontrolling interests/Non- | $ 61 | $ 63 | (3) % | $ 274 | $ 238 | 15 % | ||||||||
Non-GAAP adjustments (j) | — | — | (14) | — | ||||||||||
Fiscal period alignment adjustment | — | (1) | — | 3 | ||||||||||
Adjusted net income attributable to noncontrolling interests * | $ 61 | $ 62 | (2) % | $ 260 | $ 241 | 8 % | ||||||||
Adjusted Net Income attributable to SPGI and Diluted EPS/Non-GAAP Pro Forma Adjusted Net Income attributable to SPGI and Diluted EPS | |||||||||||||||
2022 | 2021 | % Change | |||||||||||||
(unaudited) | Net Income | Diluted | Net Income | Diluted | Net Income | Diluted EPS | |||||||||
Three Months | |||||||||||||||
Reported/Pro forma * | $ 433 | $ 1.33 | $ 1,033 | $ 2.90 | (58) % | (54) % | |||||||||
Adjusted non-GAAP adjustments/Pro forma non- | 184 | 0.56 | 536 | 1.51 | |||||||||||
Adjusted deal-related amortization/Pro forma deal- | 210 | 0.64 | 14 | 0.04 | |||||||||||
Fiscal period alignment adjustment | — | — | (632) | (1.78) | |||||||||||
Divestitures | 1 | — | — | — | |||||||||||
Adjusted/Non-GAAP pro forma adjusted * | $ 827 | $ 2.54 | $ 951 | $ 2.67 | (13) % | (5) % | |||||||||
Twelve Months | |||||||||||||||
Reported/Pro forma * | $ 3,543 | $ 10.53 | $ 3,383 | $ 9.51 | 5 % | 11 % | |||||||||
Adjusted non-GAAP adjustments/Pro forma non- | (507) | (1.51) | 796 | 2.24 | |||||||||||
Adjusted deal-related amortization/Pro forma deal- | 740 | 2.20 | 73 | 0.21 | |||||||||||
Fiscal period alignment adjustment | — | — | (115) | (0.33) | |||||||||||
Divestitures | (9) | (0.03) | — | — | |||||||||||
Adjusted/Non-GAAP pro forma adjusted * | $ 3,765 | $ 11.19 | $ 4,137 | $ 11.63 | (9) % | (4) % | |||||||||
N/M - Represents a change equal to or in excess of | |
* - The three months ended | |
Note - Totals presented may not sum due to rounding. | |
Note - Adjusted operating profit margin for Market Intelligence, Ratings, Commodity Insights, Mobility, Indices, and Engineering Solutions was | |
Note - Divestitures include pro forma adjustments assuming the dispositions required to obtain regulatory approval to complete the merger took place on | |
(a) | The three and twelve months ended |
(b) | The three and twelve months ended |
(c) | The three and twelve months ended |
(d) | The three and twelve months ended |
(e) | The three and twelve months ended |
(f) | The twelve months ended |
(g) | The three and twelve months ended |
(h) | The three and twelve months ended |
(i) | The three months ended |
(j) | The twelve months ended |
Exhibit 6 | |||||||||||||||||||||
Revenue Information Three and twelve months ended (dollars in millions) Adjusted Revenue/Non-GAAP Pro Forma Adjusted Revenue by Type | |||||||||||||||||||||
Three Months | |||||||||||||||||||||
(unaudited) | Subscription (a) | Non-subscription / | Non-transaction (c) | ||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||
Market Intelligence | $ 876 | $ 833 | 5 % | $ 52 | $ 45 | 16 % | $ — | $ — | N/M | ||||||||||||
Ratings | — | — | N/M | 249 | 504 | (51) % | 456 | 486 | (6) % | ||||||||||||
Commodity Insights | 404 | 382 | 6 % | 31 | 35 | (12) % | — | — | N/M | ||||||||||||
Mobility | 270 | 246 | 10 % | 75 | 70 | 5 % | — | — | N/M | ||||||||||||
Indices | 68 | 64 | 6 % | — | — | N/M | — | — | N/M | ||||||||||||
Engineering Solutions | 91 | 89 | 2 % | 8 | 14 | (43) % | — | — | N/M | ||||||||||||
Intersegment elimination | — | — | N/M | — | — | N/M | (44) | (43) | — % | ||||||||||||
Adjusted revenue/Non-GAAP pro forma adjusted | $ 1,709 | $ 1,614 | 6 % | $ 415 | $ 668 | (38) % | $ 412 | $ 443 | (7) % | ||||||||||||
Asset-linked fees (d) | Sales usage-based royalties (e) | Recurring variable (f) | |||||||||||||||||||
Market Intelligence | $ — | $ — | N/M | $ — | $ — | N/M | $ 109 | $ 131 | (17) % | ||||||||||||
Ratings | — | — | N/M | — | — | N/M | — | — | N/M | ||||||||||||
Commodity Insights | — | — | N/M | 16 | 16 | 1 % | — | — | N/M | ||||||||||||
Mobility | — | — | N/M | — | — | N/M | — | — | N/M | ||||||||||||
Indices | 220 | 224 | (2) % | 56 | 42 | 34 % | — | — | N/M | ||||||||||||
Engineering Solutions | — | — | N/M | — | — | N/M | — | — | N/M | ||||||||||||
Adjusted revenue/Non-GAAP pro forma adjusted | $ 220 | $ 224 | (2) % | $ 72 | $ 58 | 24 % | $ 109 | $ 131 | (17) % | ||||||||||||
Twelve Months | |||||||||||||||||||||
Subscription (a) | Non-subscription / Transaction (b) | Non-transaction (c) | |||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||
Market Intelligence | $ 3,443 | $ 3,188 | 8 % | $ 183 | $ 166 | 10 % | $ — | $ — | N/M | ||||||||||||
Ratings | — | — | N/M | 1,241 | 2,253 | (45) % | 1,809 | 1,844 | (2) % | ||||||||||||
Commodity Insights | 1,569 | 1,486 | 6 % | 140 | 117 | 19 % | — | — | N/M | ||||||||||||
Mobility | 1,055 | 953 | 11 % | 296 | 293 | 1 % | — | — | N/M | ||||||||||||
Indices | 274 | 253 | 9 % | — | — | N/M | — | — | N/M | ||||||||||||
Engineering Solutions | 359 | 349 | 3 % | 30 | 42 | (29) % | — | — | N/M | ||||||||||||
Intersegment elimination | — | — | N/M | — | — | N/M | (171) | (164) | (5) % | ||||||||||||
Adjusted revenue/Non-GAAP pro forma adjusted | $ 6,700 | $ 6,229 | 8 % | $ 1,890 | $ 2,871 | (34) % | $ 1,638 | $ 1,680 | (3) % | ||||||||||||
Asset-linked fees (d) | Sales usage-based royalties (e) | Recurring variable (f) | |||||||||||||||||||
Market Intelligence | $ — | $ — | N/M | $ — | $ — | N/M | $ 467 | $ 536 | (13) % | ||||||||||||
Ratings | — | — | N/M | — | — | N/M | — | — | N/M | ||||||||||||
Commodity Insights | — | — | N/M | 67 | 66 | 2 % | — | — | N/M | ||||||||||||
Mobility | — | — | N/M | — | — | N/M | — | — | N/M | ||||||||||||
Indices | 862 | 842 | 2 % | 219 | 158 | 38 % | — | — | N/M | ||||||||||||
Engineering Solutions | — | — | N/M | — | — | N/M | — | — | N/M | ||||||||||||
Adjusted revenue/Non-GAAP pro forma adjusted | $ 862 | $ 842 | 2 % | $ 286 | $ 224 | 28 % | $ 467 | $ 536 | (13) % | ||||||||||||
N/M - Represents a change equal to or in excess of | |
* - The three months ended | |
(a) | Subscription revenue is primarily derived from distribution of data, valuation services, analytics, third party research, and credit ratings-related information through both feed and web-based channels, market data and market insights along with other information products and software term licenses, and Mobility's core information products. |
(b) | Non-subscription / transaction revenue is primarily related to ratings of publicly-issued debt and bank loan ratings. |
(c) | Non-transaction revenue is primarily related to surveillance of a credit rating, annual fees for customer relationship-based pricing programs, fees for entity credit ratings and global research and analytics at CRISIL. Non-transaction revenue also includes an intersegment revenue elimination charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings. |
(d) | Asset-linked fees is primarily related to fees based on assets underlying exchange-traded funds, mutual funds and insurance products. |
(e) | Sales usage-based royalty revenue is primarily related to trading based fees from exchange-traded derivatives and licensing proprietary market price data and price assessments to commodity exchanges. |
(f) | Recurring variable revenue represents revenue from contracts for services that specify a fee based on, among other factors, the number of trades processed, assets under management, or the number of positions valued. |
Exhibit 7 | |||||
Non-GAAP Financial Information Three and twelve months ended (dollars in millions)
| |||||
Computation of Free Cash Flow and Non-GAAP Pro Forma Adjusted Free Cash Flow Excluding Certain Items | |||||
(unaudited) | Twelve Months | ||||
2022 | 2021 | ||||
Cash provided by operating activities | $ 2,603 | $ 3,598 | |||
Capital expenditures | (89) | (35) | |||
Distributions to noncontrolling interest holders | (270) | (227) | |||
Free cash flow | $ 2,244 | $ 3,336 | |||
IHS Markit merger costs | 727 | 178 | |||
Tax on gain from sale of divestitures | 704 | — | |||
200 | — | ||||
Debt financing derivative | 85 | — | |||
IHS Markit operating cash outflow prior to acquisition | (15) | — | |||
10 | — | ||||
Non-GAAP pro forma adjusted free cash flow excluding certain items | $ 3,955 | $ 3,514 | |||
Adjusted Indices Net Operating Profit/Non-GAAP Pro Forma Adjusted Indices Net Operating Profit | ||||||||||||||
(unaudited) | Three Months | Twelve Months | ||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||
Adjusted Indices operating profit/Non-GAAP | $ 214 | $ 210 | 2 % | $ 927 | $ 845 | 10 % | ||||||||
Less: adjusted income attributable to NCI (a) | 55 | 54 | 235 | 215 | ||||||||||
Adjusted Indices net operating | $ 159 | $ 156 | 2 % | $ 692 | $ 630 | 10 % | ||||||||
* - The three months ended | |
(a) | The twelve months ended |
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