Segment and Related Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment and Related Information

Segment and Related Information

We have four reportable segments: Ratings, Market Intelligence, Platts and Indices. 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 Corporate Unallocated, other (income) expense, net, or interest expense, net, as these are amounts that do not affect the operating results of our reportable segments.

A summary of operating results for the three months ended March 31 is as follows: 

Revenue
(in millions)	2021		2020
Ratings	$	1,017	$	825
Market Intelligence	539		519
Platts	225		215
Indices	270		259
Intersegment elimination 1	(35)		(32)
Total revenue	$	2,016	$	1,786

Operating Profit
(in millions)	2021		2020
Ratings 2	$	681	$	520
Market Intelligence 3	166		147
Platts 4	129		112
Indices 5	191		182
Total reportable segments	1,167		961
Corporate Unallocated expense6	(86)		(49)
Total operating profit	$	1,081	$	912

1Revenue for Ratings and expenses for Market Intelligence include an intersegment royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

2 Operating profit for 2021 includes amortization of intangibles from acquisitions of $5 million.

3 Operating profit for 2021 includes a gain on disposition of $2 million, and operating profit for 2020 includes a gain on disposition of $7 million and employee severance charges of $2 million. Additionally, operating profit for 2021 and 2020 includes amortization of intangibles from acquisitions of $16 million and $19 million, respectively.

4 Operating profit for both 2021 and 2020 includes amortization of intangibles from acquisitions of $2 million.

5 Operating profit for both 2021 and 2020 includes amortization of intangibles from acquisitions of $1 million.

6 Corporate Unallocated expense for 2021 includes IHS Markit merger costs of $49 million and Kensho retention related expense of $2 million. Corporate Unallocated expense for 2020 includes employee severance charges of $7 million and Kensho retention related expense of $5 million. Additionally, Corporate Unallocated expense for both 2021 and 2020 includes amortization of intangibles from acquisitions of $7 million.

The following table presents our revenue disaggregated by revenue type for the three months ended March 31:

(in millions)	Ratings		Market Intelligence		Platts		Indices		Intersegment Elimination 1		Total
	2021
Subscription	$	—	$	527	$	208	$	46	$	—	$	781
Non-subscription / Transaction	582		12		1		—		—		595
Non-transaction	435		—		—		—		(35)		400
Asset-linked fees	—		—		—		183		—		183
Sales usage-based royalties	—		—		16		41		—		57
Total revenue	$	1,017	$	539	$	225	$	270	$	(35)	$	2,016
Timing of revenue recognition
Services transferred at a point in time	$	582	$	12	$	1	$	—	$	—	$	595
Services transferred over time	435		527		224		270		(35)		1,421
Total revenue	$	1,017	$	539	$	225	$	270	$	(35)	$	2,016

(in millions)	Ratings		Market Intelligence		Platts		Indices		Intersegment Elimination 1		Total
	20202
Subscription	$	—	$	505	$	197	$	46	$	—	$	748
Non-subscription / Transaction	430		13		1		—		—		444
Non-transaction	395		—		—		—		(32)		363
Asset-linked fees	—		1		—		159		—		160
Sales usage-based royalties	—		—		17		54		—		71
Total revenue	$	825	$	519	$	215	$	259	$	(32)	$	1,786
Timing of revenue recognition
Services transferred at a point in time	$	430	$	13	$	1	$	—	$	—	$	444
Services transferred over time	395		506		214		259		(32)		1,342
Total revenue	$	825	$	519	$	215	$	259	$	(32)	$	1,786

1 Intersegment eliminations primarily consists of a royalty charged to Market Intelligence for the rights to use and distribute content and data developed by Ratings.

2 In the first quarter of 2021, we reevaluated our transaction and non-transaction presentation for Ratings which resulted in a reclassification from transaction revenue to non-transaction revenue of $2 million for the first quarter of 2020.

The following provides revenue by geographic region for the three months ended March 31:

(in millions)
	2021		2020
U.S.	$	1,238	$	1,108
European region	473		405
Asia	208		184
Rest of the world	97		89
Total	$	2,016	$	1,786

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