Condensed Consolidating Financial Statements |
Condensed Consolidating Financial Statements
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 due 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 4 — 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 | | Three Months Ended March 31, 2017 | | (Unaudited) | (in millions) | S&P Global Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | S&P Global Inc. Consolidated | Revenue | $ | 180 |
| | $ | 438 |
| | $ | 867 |
| | $ | (32 | ) | | $ | 1,453 |
| Expenses: | | | | | | | | | | Operating-related expenses | 31 |
| | 119 |
| | 293 |
| | (32 | ) | | 411 |
| Selling and general expenses | 20 |
| | 88 |
| | 243 |
| | — |
| | 351 |
| Depreciation | 7 |
| | 3 |
| | 9 |
| | — |
| | 19 |
| Amortization of intangibles | — |
| | — |
| | 24 |
| | — |
| | 24 |
| Total expenses | 58 |
| | 210 |
| | 569 |
| | (32 | ) | | 805 |
| Operating profit | 122 |
| | 228 |
| | 298 |
| | — |
| | 648 |
| Interest expense (income), net | 39 |
| | — |
| | (2 | ) | | — |
| | 37 |
| Non-operating intercompany transactions | 82 |
| | (19 | ) | | (901 | ) | | 838 |
| | — |
| Income before taxes on income | 1 |
| | 247 |
| | 1,201 |
| | (838 | ) | | 611 |
| (Benefit) provision for taxes on income | (11 | ) | | 99 |
| | 93 |
| | — |
| | 181 |
| Equity in net income of subsidiaries | 1,224 |
| | — |
| | — |
| | (1,224 | ) | | — |
| Net income | $ | 1,236 |
| | $ | 148 |
| | $ | 1,108 |
| | $ | (2,062 | ) | | $ | 430 |
| Less: net income attributable to noncontrolling interests | — |
| | — |
| | — |
| | (31 | ) | | (31 | ) | Net income attributable to S&P Global Inc. | $ | 1,236 |
| | $ | 148 |
| | $ | 1,108 |
| | $ | (2,093 | ) | | $ | 399 |
| Comprehensive income | $ | 1,238 |
| | $ | 147 |
| | $ | 1,147 |
| | $ | (2,064 | ) | | $ | 468 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Three Months Ended March 31, 2016 | | (Unaudited) | (in millions) | S&P Global Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | S&P Global Inc. Consolidated | Revenue | $ | 171 |
| | $ | 342 |
| | $ | 859 |
| | $ | (31 | ) | | $ | 1,341 |
| Expenses: | | | | | | | | | | Operating-related expenses | 22 |
| | 139 |
| | 323 |
| | (31 | ) | | 453 |
| Selling and general expenses | 21 |
| | 35 |
| | 278 |
| | — |
| | 334 |
| Depreciation | 9 |
| | 2 |
| | 7 |
| | — |
| | 18 |
| Amortization of intangibles | — |
| | — |
| | 24 |
| | — |
| | 24 |
| Total expenses | 52 |
| | 176 |
| | 632 |
| | (31 | ) | | 829 |
| Operating profit | 119 |
| | 166 |
| | 227 |
| | — |
| | 512 |
| Interest expense (income), net | 42 |
| | — |
| | (2 | ) | | — |
| | 40 |
| Non-operating intercompany transactions | 74 |
| | (5 | ) | | (497 | ) | | 428 |
| | — |
| Income before taxes on income | 3 |
| | 171 |
| | 726 |
| | (428 | ) | | 472 |
| Provision for taxes on income | — |
| | 57 |
| | 92 |
| | — |
| | 149 |
| Equity in net income of subsidiaries | 791 |
| | 71 |
| | — |
| | (862 | ) | | — |
| Net income | $ | 794 |
| | $ | 185 |
| | $ | 634 |
| | $ | (1,290 | ) | | $ | 323 |
| Less: net income attributable to noncontrolling interests | — |
| | — |
| | — |
| | (29 | ) | | (29 | ) | Net income attributable to S&P Global Inc. | $ | 794 |
| | $ | 185 |
| | $ | 634 |
| | $ | (1,319 | ) | | $ | 294 |
| Comprehensive income | $ | 802 |
| | $ | 185 |
| | $ | 646 |
| | $ | (1,290 | ) | | $ | 343 |
|
| | | | | | | | | | | | | | | | | | | | | | Balance Sheet | | March 31, 2017 | | (Unaudited) | (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 | $ | 627 |
| | $ | — |
| | $ | 1,784 |
| | $ | — |
| | $ | 2,411 |
| Accounts receivable, net of allowance for doubtful accounts | 129 |
| | 188 |
| | 791 |
| | — |
| | 1,108 |
| Intercompany receivable | 2,737 |
| | 3,287 |
| | 1,913 |
| | (7,937 | ) | | — |
| Prepaid and other current assets | 63 |
| | (1 | ) | | 83 |
| | (1 | ) | | 144 |
| Total current assets | 3,556 |
| | 3,474 |
| | 4,571 |
| | (7,938 | ) | | 3,663 |
| Property and equipment, net of accumulated depreciation | 150 |
| | 1 |
| | 114 |
| | — |
| | 265 |
| Goodwill | 261 |
| | — |
| | 2,690 |
| | 9 |
| | 2,960 |
| Other intangible assets, net | — |
| | — |
| | 1,474 |
| | — |
| | 1,474 |
| Investments in subsidiaries | 5,970 |
| | 5 |
| | 8,663 |
| | (14,638 | ) | | — |
| Intercompany loans receivable | 17 |
| | — |
| | 1,503 |
| | (1,520 | ) | | — |
| Other non-current assets | 148 |
| | 26 |
| | 118 |
| | — |
| | 292 |
| Total assets | $ | 10,102 |
| | $ | 3,506 |
| | $ | 19,133 |
| | $ | (24,087 | ) | | $ | 8,654 |
| LIABILITIES AND EQUITY | | | | | | | | | | Current liabilities: | | | | | | | | | | Accounts payable | $ | 56 |
| | $ | 14 |
| | $ | 92 |
| | $ | — |
| | $ | 162 |
| Intercompany payable | 4,379 |
| | 2,392 |
| | 1,166 |
| | (7,937 | ) | | — |
| Accrued compensation and contributions to retirement plans | 86 |
| | 22 |
| | 97 |
| | — |
| | 205 |
| Income taxes currently payable | 163 |
| | — |
| | 80 |
| | — |
| | 243 |
| Unearned revenue | 279 |
| | 215 |
| | 1,016 |
| | — |
| | 1,510 |
| Other current liabilities | 129 |
| | 12 |
| | 208 |
| |
| | 349 |
| Total current liabilities | 5,092 |
| | 2,655 |
| | 2,659 |
| | (7,937 | ) | | 2,469 |
| Long-term debt | 3,565 |
| | — |
| | — |
| | — |
| | 3,565 |
| Intercompany loans payable | 11 |
| | — |
| | 1,509 |
| | (1,520 | ) | | — |
| Pension and other postretirement benefits | 194 |
| | — |
| | 77 |
| | — |
| | 271 |
| Other non-current liabilities | 56 |
| | 71 |
| | 299 |
| | (1 | ) | | 425 |
| Total liabilities | 8,918 |
| | 2,726 |
| | 4,544 |
| | (9,458 | ) | | 6,730 |
| Redeemable noncontrolling interest | — |
| | — |
| | — |
| | 1,080 |
| | 1,080 |
| Equity: | | | | | | | | | | Common stock | 412 |
| | — |
| | 2,386 |
| | (2,386 | ) | | 412 |
| Additional paid-in capital | (218 | ) | | 583 |
| | 11,308 |
| | (11,203 | ) | | 470 |
| Retained income | 10,148 |
| | 197 |
| | 1,388 |
| | (2,224 | ) | | 9,509 |
| Accumulated other comprehensive loss | (291 | ) | | — |
| | (486 | ) | | 42 |
| | (735 | ) | Less: common stock in treasury | (8,867 | ) | | — |
| | (8 | ) | | 8 |
| | (8,867 | ) | Total equity - controlling interests | 1,184 |
| | 780 |
| | 14,588 |
| | (15,763 | ) | | 789 |
| Total equity - noncontrolling interests | — |
| | — |
| | 1 |
| | 54 |
| | 55 |
| Total equity | 1,184 |
| | 780 |
| | 14,589 |
| | (15,709 | ) | | 844 |
| Total liabilities and equity | $ | 10,102 |
| | $ | 3,506 |
| | $ | 19,133 |
| | $ | (24,087 | ) | | $ | 8,654 |
|
| | | | | | | | | | | | | | | | | | | | | | Balance Sheet | | December 31, 2016 | (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 | $ | 711 |
| | $ | — |
| | $ | 1,681 |
| | $ | — |
| | $ | 2,392 |
| Accounts receivable, net of allowance for doubtful accounts | 138 |
| | 131 |
| | 853 |
| | — |
| | 1,122 |
| Intercompany receivable | (165 | ) | | 837 |
| | 870 |
| | (1,542 | ) | | — |
| Prepaid and other current assets | 77 |
| | 2 |
| | 79 |
| | (1 | ) | | 157 |
| Total current assets | 761 |
| | 970 |
| | 3,483 |
| | (1,543 | ) | | 3,671 |
| Property and equipment, net of accumulated depreciation | 159 |
| | 1 |
| | 111 |
| | — |
| | 271 |
| Goodwill | 261 |
| | — |
| | 2,679 |
| | 9 |
| | 2,949 |
| Other intangible assets, net | — |
| | — |
| | 1,506 |
| | — |
| | 1,506 |
| Investments in subsidiaries | 5,464 |
| | 680 |
| | 7,826 |
| | (13,970 | ) | | — |
| Intercompany loans receivable | 17 |
| | — |
| | 1,354 |
| | (1,371 | ) | | — |
| Other non-current assets | 134 |
| | 24 |
| | 114 |
| | — |
| | 272 |
| Total assets | $ | 6,796 |
| | $ | 1,675 |
| | $ | 17,073 |
| | $ | (16,875 | ) | | $ | 8,669 |
| LIABILITIES AND EQUITY | | | | | | | | | | Current liabilities: | | | | | | | | | | Accounts payable | $ | 73 |
| | $ | 22 |
| | $ | 88 |
| | $ | — |
| | $ | 183 |
| Intercompany payable | 1,324 |
| | 40 |
| | 177 |
| | (1,541 | ) | | — |
| Accrued compensation and contributions to retirement plans | 129 |
| | 69 |
| | 211 |
| | — |
| | 409 |
| Income taxes currently payable | 43 |
| | — |
| | 52 |
| | — |
| | 95 |
| Unearned revenue | 273 |
| | 191 |
| | 1,045 |
| | — |
| | 1,509 |
| Other current liabilities | 165 |
| | (51 | ) | | 301 |
| | — |
| | 415 |
| Total current liabilities | 2,007 |
| | 271 |
| | 1,874 |
| | (1,541 | ) | | 2,611 |
| Long-term debt | 3,564 |
| | — |
| | — |
| | — |
| | 3,564 |
| Intercompany loans payable | 11 |
| | — |
| | 1,360 |
| | (1,371 | ) | | — |
| Pension and other postretirement benefits | 196 |
| | — |
| | 78 |
| | — |
| | 274 |
| Other non-current liabilities | 52 |
| | 74 |
| | 314 |
| | (1 | ) | | 439 |
| Total liabilities | 5,830 |
| | 345 |
| | 3,626 |
| | (2,913 | ) | | 6,888 |
| Redeemable noncontrolling interest | — |
| | — |
| | — |
| | 1,080 |
| | 1,080 |
| Equity: | | | | | | | | | | Common stock | 412 |
| | — |
| | 2,460 |
| | (2,460 | ) | | 412 |
| Additional paid-in capital | (174 | ) | | 1,154 |
| | 10,485 |
| | (10,963 | ) | | 502 |
| Retained income | 9,721 |
| | 176 |
| | 1,034 |
| | (1,721 | ) | | 9,210 |
| Accumulated other comprehensive loss | (292 | ) | | — |
| | (525 | ) | | 44 |
| | (773 | ) | Less: common stock in treasury | (8,701 | ) | | — |
| | (7 | ) | | 7 |
| | (8,701 | ) | Total equity - controlling interests | 966 |
| | 1,330 |
| | 13,447 |
| | (15,093 | ) | | 650 |
| Total equity - noncontrolling interests | — |
| | — |
| | — |
| | 51 |
| | 51 |
| Total equity | 966 |
| | 1,330 |
| | 13,447 |
| | (15,042 | ) | | 701 |
| Total liabilities and equity | $ | 6,796 |
| | $ | 1,675 |
| | $ | 17,073 |
| | $ | (16,875 | ) | | $ | 8,669 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Three Months Ended March 31, 2017 | | (Unaudited) | (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 | $ | 1,236 |
| | $ | 148 |
| | $ | 1,108 |
| | $ | (2,062 | ) | | $ | 430 |
| Adjustments to reconcile net income to cash provided by operating activities: | | | | | | | | | | Depreciation | 7 |
| | 3 |
| | 9 |
| | — |
| | 19 |
| Amortization of intangibles | — |
| | — |
| | 24 |
| | — |
| | 24 |
| Provision for losses on accounts receivable | 1 |
| | 1 |
| | 3 |
| | — |
| | 5 |
| Deferred income taxes | (1 | ) | | — |
| | — |
| | — |
| | (1 | ) | Stock-based compensation | 7 |
| | 4 |
| | 8 |
| | — |
| | 19 |
| Other | 6 |
| | — |
| | 8 |
| | — |
| | 14 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | 8 |
| | (59 | ) | | 63 |
| | — |
| | 12 |
| Prepaid and other current assets | 8 |
| | 3 |
| | (2 | ) | | — |
| | 9 |
| Accounts payable and accrued expenses | (61 | ) | | 12 |
| | (186 | ) | | — |
| | (235 | ) | Unearned revenue | 5 |
| | 25 |
| | (36 | ) | | — |
| | (6 | ) | Accrued legal settlements | — |
| | (1 | ) | | — |
| | — |
| | (1 | ) | Other current liabilities | (35 | ) | | (3 | ) | | (20 | ) | | — |
| | (58 | ) | Net change in prepaid/accrued income taxes | 123 |
| | — |
| | 23 |
| | — |
| | 146 |
| Net change in other assets and liabilities | (6 | ) | | (4 | ) | | (14 | ) | | — |
| | (24 | ) | Cash provided by operating activities | 1,298 |
| | 129 |
| | 988 |
| | (2,062 | ) | | 353 |
| Investing Activities: | | | | | | | | | | Capital expenditures | (4 | ) | | (4 | ) | | (15 | ) | | — |
| | (23 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (1 | ) | | — |
| | (1 | ) | Proceeds from dispositions | — |
| | — |
| | 2 |
| | — |
| | 2 |
| Cash used for investing activities | (4 | ) | | (4 | ) | | (14 | ) | | — |
| | (22 | ) | Financing Activities: | | | | | | | | | | Dividends paid to shareholders | (106 | ) | | — |
| | — |
| | — |
| | (106 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (24 | ) | | — |
| | (24 | ) | Repurchase of treasury shares | (201 | ) | | — |
| | — |
| | — |
| | (201 | ) | Exercise of stock options | 29 |
| | — |
| |
| | — |
| | 29 |
| Employee withholding tax on share-based payments | (44 | ) | | — |
| |
| | — |
| | (44 | ) | Intercompany financing activities | (1,056 | ) | | (125 | ) | | (881 | ) | | 2,062 |
| | — |
| Cash used for financing activities | (1,378 | ) | | (125 | ) | | (905 | ) | | 2,062 |
| | (346 | ) | Effect of exchange rate changes on cash from continuing operations | — |
| | — |
| | 34 |
| | — |
| | 34 |
| Net change in cash and cash equivalents | (84 | ) | | — |
| | 103 |
| | — |
| | 19 |
| Cash and cash equivalents at beginning of period | 711 |
| | — |
| | 1,681 |
| | — |
| | 2,392 |
| Cash and cash equivalents at end of period | $ | 627 |
| | $ | — |
| | $ | 1,784 |
| | $ | — |
| | $ | 2,411 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Three Months Ended March 31, 2016 | | (Unaudited) | (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 | $ | 794 |
| | $ | 185 |
| | $ | 634 |
| | $ | (1,290 | ) | | $ | 323 |
| Adjustments to reconcile net income to cash provided by (used for) operating activities: | | | | | | | | | | Depreciation | 9 |
| | 2 |
| | 7 |
| | — |
| | 18 |
| Amortization of intangibles | — |
| | — |
| | 24 |
| | — |
| | 24 |
| Provision for losses on accounts receivable | — |
| | 1 |
| | 2 |
| | — |
| | 3 |
| Deferred income taxes | (1 | ) | | — |
| | — |
| | — |
| | (1 | ) | Stock-based compensation | 4 |
| | 3 |
| | 7 |
| | — |
| | 14 |
| Other | 3 |
| | 3 |
| | 25 |
| | — |
| | 31 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | (7 | ) | | 153 |
| | (153 | ) | | — |
| | (7 | ) | Prepaid and other current assets | 5 |
| | (3 | ) | | (14 | ) | | — |
| | (12 | ) | Accounts payable and accrued expenses | (52 | ) | | (89 | ) | | (96 | ) | | — |
| | (237 | ) | Unearned revenue | 15 |
| | (374 | ) | | 398 |
| | — |
| | 39 |
| Accrued legal settlements | — |
| | (108 | ) | | — |
| | — |
| | (108 | ) | Other current liabilities | (10 | ) | | (19 | ) | | 53 |
| | — |
| | 24 |
| Net change in prepaid/accrued income taxes | 104 |
| | — |
| | 1 |
| | — |
| | 105 |
| Net change in other assets and liabilities | (17 | ) | | 30 |
| | (44 | ) | | — |
| | (31 | ) | Cash provided by (used for) operating activities | 847 |
| | (216 | ) | | 844 |
| | (1,290 | ) | | 185 |
| Investing Activities: | | | | | | | | | | Capital expenditures | (4 | ) | | (4 | ) | | (8 | ) | | — |
| | (16 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (7 | ) | | — |
| | (7 | ) | Changes in short-term investments | — |
| | — |
| | (1 | ) | | — |
| | (1 | ) | Cash used for investing activities | (4 | ) | | (4 | ) | | (16 | ) | | — |
| | (24 | ) | Financing Activities: | | | | | | | | | | Additions to short-term debt, net | 329 |
| | — |
| | — |
| | — |
| | 329 |
| Dividends paid to shareholders | (96 | ) | | — |
| | — |
| | — |
| | (96 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (33 | ) | | — |
| | (33 | ) | Repurchase of treasury shares | (226 | ) | | — |
| | — |
| | — |
| | (226 | ) | Exercise of stock options | 31 |
| | — |
| | — |
| | — |
| | 31 |
| Employee withholding tax on share-based payments | (46 | ) | | — |
| | — |
| | — |
| | (46 | ) | Intercompany financing activities | (838 | ) | | 220 |
| | (672 | ) | | 1,290 |
| | — |
| Cash (used for) provided by financing activities | (846 | ) | | 220 |
| | (705 | ) | | 1,290 |
| | (41 | ) | Effect of exchange rate changes on cash from continuing operations | 7 |
| | — |
| | (8 | ) | | — |
| | (1 | ) | Net change in cash and cash equivalents | 4 |
| | — |
| | 115 |
| | — |
| | 119 |
| Cash and cash equivalents at beginning of period | 167 |
| | — |
| | 1,314 |
| | — |
| | 1,481 |
| Cash and cash equivalents at end of period | $ | 171 |
| | $ | — |
| | $ | 1,429 |
| | $ | — |
| | $ | 1,600 |
|
|