XML 42 R10.htm IDEA: XBRL DOCUMENT
v3.22.2

Acquisitions and Divestitures | 6 Months Ended
--- | ---
Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions 2022 Merger with IHS Markit On February 28, 2022, we completed the merger with IHS Markit by acquiring 100% of the IHS Markit common stock that was issued and outstanding as of the date of acquisition, and as a result, IHS Markit and its subsidiaries became wholly owned consolidated subsidiaries of S&P Global. Upon completion of the merger with IHS Markit, IHS Markit stockholders received 113.8 million shares of S&P Global’s common stock, at an exchange ratio of 0.2838 S&P Global shares for each share of IHS Markit common stock, with cash paid in lieu of fractional shares. The Company also issued approximately 0.9 million replacement equity award shares for IHS Markit equity awards that were assumed pursuant to the merger agreement. The preliminary estimated fair value of the consideration transferred for IHS Markit was approximately $43.5 billion as of the merger date, which consisted of the following:
(in millions, except for share and per share data) | February 28, 2022
Number of shares IHS Markit issued and outstanding* | 400,988,207 |
Exchange ratio | 0.2838
Number of S&P Global common stock transferred to IHS Markit stockholders | 113,800,453 |
Closing price per share of S&P Global common stock** | $ | 380.89 |
Fair value of S&P Global common stock transferred IHS Markit stockholders | $ | 43,345 |
Fair value of S&P Global replacement equity awards attributable to pre-combination service | $ | 191 |
Total equity consideration | $ | 43,536 |
*Excludes 25,219,470 IHS Markit shares held by the Markit Group Holdings Limited Employee Benefit Trust ("EBT"). The shares held by the EBT were converted in the merger into S&P Global shares at the exchange ratio of 0.2838 and will continue to be held by the trustee in the EBT. **Based on S&P Global's closing stock price on February 25, 2022. Preliminary Allocation of Purchase Price The merger with IHS Markit was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”). The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, of which $699 million is expected to be deductible for tax purposes. Goodwill is primarily attributed to synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from duplicative overhead, streamlined operations and enhanced operational efficiency. Goodwill associated with the merger has not yet been assigned to the Company’s reportable segments. The June 30, 2022 consolidated balance sheet includes the assets and liabilities of IHS Markit, which have been measured at fair value as of the acquisition date. The preliminary allocation of purchase price recorded for IHS Markit was as follows:
(in millions) | February 28, 2022
Assets acquired |
Cash and cash equivalents | $ | 310 |
Accounts receivable, net | 968 |
Prepaid and other current assets | 242 |
Assets of a business held for sale | 1,519 |
Property and equipment | 122 |
Right of use assets | 240 |
Goodwill | 30,986 |
Other intangible assets | 19,162 |
Equity investment in unconsolidated subsidiaries | 1,644 |
Other non-current assets | 86 |
Total assets acquired | $ | 55,279 |
Liabilities assumed |
Account payable | $ | 174 |
Accrued compensation | 81 |
Short-term debt | 968 |
Unearned revenue | 1,053 |
Other current liabilities | 584 |
Liabilities of a business held for sale | 72 |
Long-term debt | 4,191 |
Lease liabilities - non-current | 231 |
Deferred tax liability - non-current | 4,333 |
Other non-current liabilities | 56 |
Total liabilities assumed | $ | 11,743 |
Total consideration transferred | $ | 43,536 |
The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The fair values of the assets acquired and liabilities assumed, including the identifiable assets acquired, have been preliminarily determined using the income and cost approaches, and are partially based on inputs that are unobservable. For intangible assets, these inputs include forecasted future cash flows, revenue growth rates, customer attrition rates and discount rates that require judgement and are subject to change. Differences between the preliminary estimates and final accounting will occur, and those differences could be material. The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company’s continuing review of matters related to the acquisition. The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. Acquired Identifiable Intangible Assets The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired and their estimated useful lives:
(in millions) | Fair Value | Weighted Average Useful Lives
Customer relationships | $ | 14,082 |  | 25 years
Trade names and trademarks | 1,459 |  | 14 years
Developed technology | 1,042 |  | 10 years
Databases | 2,579 |  | 12 years
Total Identified Intangible Assets | $ | 19,162 |  | 21 years
Expected Amortization Expense Expected amortization expense for the Company's intangible assets over the next five years for the years ended December 31 is as follows:
(in millions) | 2022 | 2023 | 2024 | 2025 | 2026
Amortization expense | $ | 926 |  | $ | 1,090 |  | $ | 1,089 |  | $ | 1,053 |  | $ | 1,038 |
Acquisition-Related Expenses The Company incurred acquisition-related costs of $135 million and $379 million related to the IHS Markit merger for the three and six months ended June 30, 2022, respectively, and $50 million and $99 million for the three and six months ended June 30, 2021, respectively. These costs were included in selling and general expenses within the Company’s consolidated statements of income for the three and six months ended June 30, 2022, and June 30, 2021, respectively. Pro forma information Since the acquisition date, the results of operations for IHS Markit of $1.122 billion of revenue and $196 million of operating profit for the three months ended June 30, 2022, and $1.548 billion of revenue and $249 million of operating profit for the six months ended June 30, 2022, respectively, have been included within the accompanying consolidate d statements of income. The following unaudited supplemental pro forma combined financial information presents the Company’s results of operations for the three and six months ended June 30, 2022 and 2021 as if the acquisition of IHS Markit had occurred on January 1, 2021. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the Company’s operating results that may have actually occurred had the acquisition of IHS Markit been completed on January 1, 2021. The pro forma results do not include anticipated synergies or other expected benefits of the acquisition.
| Three months ended June 30 | Six months ended June 30
(in millions) | 2022 | 2021 | 2022 | 2021
Revenue | $ | 2,970 |  | $ | 3,113 |  | $ | 6,042 |  | $ | 6,135 |
Net income | $ | 961 |  | $ | 865 |  | $ | 2,491 |  | $ | 1,539 |
The unaudited pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the acquisition had occurred on January 1, 2021 to give effect to certain events the Company believes to be directly attributable to the acquisition. 2021 During the three and six months ended June 30, 2021, we did not complete any material acquisitions. Divestitures 2022 As a condition of securing regulatory approval for the merger, S&P Global and IHS Markit agreed to divest of certain of their businesses. S&P Global’s divestitures include CUSIP Global Services, its Leveraged Commentary and Data (“LCD”) business and a related family of leveraged loan indices while IHS Markit’s divestitures include Oil Price Information Services (“OPIS”); Coal, Metals and Mining; and PetroChem Wire businesses and its Base Chemicals business. In June of 2022, we completed the previously announced sale of LCD along with a related family of leveraged loan indices, within our Market Intelligence and Indices segments, respectively, to Morningstar for a purchase price of $600 million in cash, subject to customary adjustments, and a contingent payment of up to $50 million which is payable six months following the closing upon the achievement of certain conditions related to the transition of LCD customer relationships. During the three and six months ended June 30, 2022, we recorded a pre-tax gain of $518 million ($396 million after tax) for the sale of LCD and $38 million ($31 million after tax) for the sale of a family of leveraged loan indices in Gain on dispositions in the consolidated statements of income. In June of 2022, we completed the previously announced sale of the Base Chemicals business to News Corp for $295 million in cash. We did not recognize a gain on the sale of the Base Chemicals business. In March of 2022, we completed the previously announced sale of CUSIP Global Services (“CGS”), a business within our Market Intelligence segment, to FactSet Research Systems Inc. for a purchase price of $1.925 billion in cash, subject to customary adjustment s. During the six months ended June 30, 2022, we recorded a pre-tax gain of $1.344 billion ($1.006 billion after tax) in Gain on dispositions in the consolidated statements of income related to the sale of CGS. In February 2022, we completed the previously announced sale of OPIS to News Corp for $1.150 billion in cash. We did not recognize a gain on the sale of OPIS. 2021 During the six months ended June 30, 2021, we did not complete any dispositions. During the six months ended June 30, 2021, we recorded a pre-tax gain of $2 million ($2 million after-tax) in Gain on dispositions in the consolidated statements of income related to the sale of Standard & Poor's Investment Advisory Services LLC ("SPIAS"), a business within our Market Intelligence segment, in July of 2019. Assets and Liabilities Held for Sale The components of assets and liabilities held for sale in the consolidated balance sheet consist of the following:
(in millions) | June 30, | December 31,
| 2022 | 2021 1
Accounts Receivable, net | $ | — |  | $ | 59 |
Goodwill | — |  | 255 |
Other assets | — |  | 7 |
Assets of businesses held for sale | $ | — |  | $ | 321 |
Accounts payable and accrued expenses | $ | — |  | $ | 11 |
Unearned revenue | — |  | 138 |
Liabilities of businesses held for sale | $ | — |  | $ | 149 |
1 Assets and liabilities held for sale as of December 31, 2021 relate to CGS and LCD. The operating profit of our businesses that were disposed of for the periods ended June 30 is as follows:
(in millions) | Three Months |  | Six Months
| 2022 |  | 2021 |  | 2022 |  | 2021
Operating profit 2 | $ | 15 |  |  | $ | 42 |  |  | $ | 48 |  |  | $ | 84 |
2 The operating profit presented includes the revenue and recurring direct expenses associated with businesses disposed of or held for sale. The three and six months ended June 30, 2022 excludes pre-tax gains related to the sale LCD and a related family of leveraged loan indices of $518 million and $38 million, respectively. The six months ended June 30, 2022 also excludes a pre-tax gain related to the sale of CGS of $1.3 billion. The six months ended June 30, 2021 excludes a pre-tax gain related to the sale of SPIAS of $2 million.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration