S&P Global(US:SPGI)2025-07-31 21:36PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) S&P Global Inc.'s unaudited consolidated financial statements as of June 30, 2025, show overall growth in revenue and net income, with stable assets and a slight decrease in operating cash flow Consolidated Statements of Income Consolidated Income Statement Highlights (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | YoY Change | Six Months 2025 | Six Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,755 | $3,549 | +5.8% | $7,532 | $7,040 | +7.0% | | Operating Profit | $1,551 | $1,452 | +6.8% | $3,129 | $2,837 | +10.3% | | Net Income Attributable to S&P Global | $1,072 | $1,011 | +6.0% | $2,161 | $2,002 | +7.9% | | Diluted EPS | $3.50 | $3.23 | +8.4% | $7.04 | $6.38 | +10.3% | Consolidated Balance Sheets Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $60,395 | $60,221 | | Cash and cash equivalents | $1,847 | $1,666 | | Goodwill | $35,072 | $34,917 | | Total Liabilities | $22,434 | $22,713 | | Long-term debt | $11,385 | $11,394 | | Total Equity | $33,496 | $33,256 | Consolidated Statements of Cash Flows Six Months Ended June 30 Cash Flow Summary (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Operating Activities | $2,398 | $2,504 | | Investing Activities | ($131) | ($319) | | Financing Activities | ($2,162) | ($1,405) | | Effect of exchange rate changes | $76 | ($32) | | Net Change in Cash | $181 | $748 | - Cash used for financing activities increased significantly in the first six months of 2025, primarily due to a large increase in share repurchases ($1,301 million in 2025 vs. $500 million in 2024)22 Notes to the Consolidated Financial Statements The notes detail key accounting policies and significant events, including the planned Mobility segment spin-off, OSTTRA sale, tax rate changes, debt, derivatives, and share repurchases - On April 29, 2025, the Board of Directors decided to pursue a full separation of the Mobility segment into a new publicly traded company via a tax-free spin-off, expected to be completed in 12 to 18 months28 - The company and CME Group have agreed to sell their 50/50 joint venture, OSTTRA, to KKR for an enterprise value of $3.1 billion; S&P Global anticipates a pre-tax gain of $220 million from the sale, expected to close in 202541 - The effective income tax rate for the first six months of 2025 was 22.2%, up from 20.1% in the same period of 2024, due to a change in the mix of income by jurisdiction and discrete benefits in 202450 - During the first six months of 2025, the company repurchased a total of 2.4 million shares for $1.3 billion through Accelerated Share Repurchase (ASR) agreements87 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management reports strong first-half 2025 financial performance with increased revenue and operating profit across all segments, driven by strategic initiatives including the Mobility segment spin-off, while maintaining strong liquidity Overview - S&P Global is a provider of credit ratings, benchmarks, analytics, and workflow solutions across global capital, commodity, and automotive markets, operating through five segments: Market Intelligence, Ratings, Commodity Insights, Mobility, and Indices125126 - The company announced a plan to separate its Mobility segment into a new, publicly traded company via a tax-free spin-off to shareholders, expected to be completed within 12 to 18 months from the April 29, 2025 announcement127 - The company's 2025 strategy, 'Powering Global Markets,' focuses on five key areas: Financial performance, Customer experience, Growth and Innovation (including AI integration), Data and Technology, and Leadership and Culture136137138 Results of Operations — Consolidated Review Consolidated Results - Q2 & Six Months 2025 (in millions) | Period | Revenue | % Change | Operating Profit | % Change | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $3,755 | 6% | $1,551 | 7% | | Six Months 2025 | $7,532 | 7% | $3,129 | 10% | - For Q2 2025, revenue growth was driven by all reportable segments; for the six-month period, growth was similarly broad-based, with notable contributions from higher asset-linked fees at Indices and subscription growth at Market Intelligence130131133142 - Operating profit for the first six months of 2025 increased 10% to $3.1 billion, primarily due to revenue growth, partially offset by higher compensation costs and strategic investments; excluding certain items like severance charges and prior-year merger costs, operating profit increased 9%134 Segment Review All five segments reported revenue growth in the first half of 2025, with strong performance across Market Intelligence, Ratings, Commodity Insights, Mobility, and Indices driven by diverse factors Segment Revenue & Operating Profit - Six Months Ended June 30, 2025 (in millions) | Segment | Revenue | YoY Change | Operating Profit | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Market Intelligence | $2,416 | 5% | $479 | 14% | | Ratings | $2,297 | 5% | $1,471 | 5% | | Commodity Insights | $1,167 | 9% | $488 | 13% | | Mobility | $858 | 9% | $190 | 26% | | Indices | $891 | 15% | $624 | 17% | Liquidity and Capital Resources - Cash and cash equivalents increased by $181 million in the first six months of 2025 to $1.85 billion230 - Free cash flow for the first six months of 2025 was $2.13 billion, a decrease from $2.32 billion in the prior year, primarily due to lower cash from operating activities and higher capital expenditures231252 - The company significantly increased share repurchases, spending $1.3 billion in the first six months of 2025 compared to $500 million in the same period of 2024236237 - The company maintains a $2.0 billion commercial paper program supported by a credit facility expiring in December 2029, with no outstanding commercial paper as of June 30, 2025238 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from changes in foreign exchange rates and interest rates, utilizing derivative instruments to hedge these exposures without speculative intent - Primary market risks are changes in foreign exchange rates and interest rates260 - The company uses foreign exchange forward contracts and cross-currency swaps to mitigate the effect of adverse fluctuations in foreign exchange rates, including hedging a portion of its net investment in European subsidiaries260 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - An evaluation of disclosure controls and procedures concluded that they were effective as of June 30, 2025262 - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting263 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal and regulatory proceedings in the normal course of business; for detailed information, refer to Note 12 of the consolidated financial statements - Information on legal proceedings is detailed in Note 12 – Commitments and Contingencies - Legal & Regulatory Matters to the consolidated financial statements265 Item 1A. Risk Factors A new risk factor has been added concerning the planned separation of the Mobility business, which is subject to various conditions and may not be completed or achieve the intended benefits, potentially leading to significant expenses, management distraction, and adverse market reactions - A key risk factor is the planned separation of the Mobility business, which is contingent on satisfying numerous conditions and may not be completed on the expected timeline or at all267 - Potential negative outcomes of the separation include not achieving the intended strategic and financial benefits, incurring significant expenses even if not completed, and the combined value of the two new companies being less than the current value267 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Under its 2022 Share Repurchase Program, the company repurchased 1.4 million shares during the second quarter of 2025, with 9.3 million shares remaining available for repurchase as of June 30, 2025 - During Q2 2025, the company repurchased 1.4 million shares under its 2022 Repurchase Program, primarily through Accelerated Share Repurchase (ASR) agreements268272 - As of June 30, 2025, 9.3 million shares remained available for purchase under the 2022 Repurchase Program268 Item 5. Other Information The company disclosed limited, exempt transactions related to the purchase and sale of informational materials involving entities potentially owned or controlled by the Government of Iran, with no revenue or net profit recorded, and no directors or officers entered into or terminated Rule 10b5-1 trading plans during the second quarter of 2025 - The company disclosed limited dealings related to Iran for the purchase/sale of information and data, which are generally exempt from U.S. sanctions; no revenue or net profit was recorded from these transactions in Q2 2025273274 - No directors or officers entered into or terminated any Rule 10b5-1 trading arrangements during the second quarter of 2025275 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, a separation agreement, letters from auditors, and certifications from the CEO and CFO - Key exhibits filed include the CEO and CFO certifications (31.1, 31.2, 32) and a letter on unaudited interim financials (15)277