Segment and Related Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment and Related Information

Segment and Related Information

We have four reportable segments: S&P Global Ratings, S&P Global Market Intelligence, S&P DJ Indices and S&P Global Platts. 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 unallocated expense or interest expense as these are costs that do not affect the operating results of our segments.

Changes to Organizational Structure

The segment amounts and discussions included in this Form 10-Q reflect the reportable segments that existed through the end of the third quarter of 2016. Effective beginning with the fourth quarter of 2016, we realigned certain of our reportable segments to be consistent with changes to our organizational structure and how our Chief Executive Officer will evaluate the performance of these segments. As a result, as of the beginning of the fourth quarter of 2016, S&P Global Market Intelligence and S&P Global Platts will be combined into a single reportable segment, Market and Commodities Intelligence. These changes do not impact the constituent components of our S&P Global Ratings and S&P DJ Indices reportable segments. We will begin reporting the financial results of the combined segment in our Form 10-K for the year ended December 31, 2016.

A summary of operating results by segment for the periods ended September 30 is as follows:

Three Months	2016						2015
(in millions)	Revenue			Operating Profit			Revenue			Operating Profit
S&P Global Ratings 1	$	642		$	346		$	587		$	194
S&P Global Market Intelligence 2	429			112			356			53
S&P DJ Indices 3	164			107			156			106
S&P Global Platts 4	229			812			248			93
Intersegment elimination 5	(25		)	—			(23		)	—
Total operating segments	1,439			1,377			1,324			446
Unallocated expense	—			(29		)	—			(36		)
Total	$	1,439		$	1,348		$	1,324		$	410

Nine Months	2016						2015
(in millions)	Revenue			Operating Profit			Revenue			Operating Profit
S&P Global Ratings 1	$	1,877		$	1,004		$	1,851		$	846
S&P Global Market Intelligence 2	1,252			285			1,000			178
S&P DJ Indices 3	468			308			446			297
S&P Global Platts 4	738			1,008			707			265
Intersegment elimination 5	(73		)	—			(66		)	—
Total operating segments	4,262			2,605			3,938			1,586
Unallocated expense 6	—			(93		)	—			(93		)
Total	$	4,262		$	2,512		$	3,938		$	1,493

¹  Operating profit for the three and nine months ended September 30, 2016 primarily includes a benefit related to net legal settlement insurance recoveries of $17 million and $63 million, respectively. Operating profit for the three and nine months ended September 30, 2015 includes legal settlement charges partially offset by a benefit related to legal settlement insurance recoveries of $86 million and $40 million, respectively. Additionally, the nine months ended September 30, 2016 and 2015 include restructuring charges of $6 million and $8 million, respectively. Operating profit also includes amortization of intangibles from acquisitions of $1 million for the three months ended September 30, 2016 and 2015 and $4 million for the nine months ended September 30, 2016 and 2015.

²  Operating profit for the three and nine months ended September 30, 2016 includes disposition-related costs of $5 million and $12 million, respectively, and an acquisition-related cost of $1 million. Operating profit for the nine months ended September 30, 2016 includes a technology related impairment charge of $24 million. Operating profit for the three and nine months ended September 30, 2015 include acquisition-related costs related to the acquisition of SNL of $32 million, and the nine months ended September 30, 2015 include restructuring charges of $12 million. Operating profit also includes amortization of intangibles from acquisitions of $18 million and $54 million for the three and nine months ended September 30, 2016, respectively, and $10 million and $21 million for the three and nine months ended September 30, 2015, respectively.

³  Operating profit includes amortization of intangibles from acquisitions of $1 million for the three months ended September 30, 2016 and 2015 and $4 million for the nine months ended September 30, 2016 and 2015.

⁴  As of September 7, 2016, we completed the sale of J.D. Power and the results are included in S&P Global Platts results through that date. Operating profit for the three and nine months ended September 30, 2016 includes a gain on the sale of J.D. Power of $722 million. Additionally, disposition-related costs of $1 million and $5 million are included for the three and nine months ended September 30, 2016, respectively. Operating profit for the nine months ended September 31, 2015 includes restructuring charges of $1 million. Operating profit also includes amortization of intangibles from acquisitions of $3 million and $9 million for the three and nine months ended September 30, 2016, respectively, and $5 million and $11 million for the three and nine months ended September 30, 2015, respectively.

⁵  Revenue for S&P Global Ratings and expenses for S&P Global Market Intelligence include an intersegment royalty charged to S&P Global Market Intelligence for the rights to use and distribute content and data developed by S&P Global Ratings.

⁶  The nine months ended September 30, 2016 include $3 million from a disposition-related reserve release. The nine months ended September 30, 2015 include a gain of $11 million related to the sale of our interest in a legacy McGraw Hill Construction investment. See Note 2 —Acquisitions and Divestitures for additional information. Additionally, restructuring charges are included for the nine months ended September 30, 2015.

The following provides revenue by geographic region for the periods ended September 30:

(in millions)	Three Months				Nine Months
	2016		2015		2016		2015
U.S.	$	885	$	810	$	2,635	$	2,385
European region	335		311		971		927
Asia	145		137		438		416
Rest of the world	74		66		218		210
Total	$	1,439	$	1,324	$	4,262	$	3,938

See Note 2 —Acquisitions and Divestitures and Note 10 —Restructuring for additional actions that impacted the segment operating results.