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S&P Global Inc. (NYSE:SPGI)
Q4 2020 Earnings Call
Feb 9, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to S&P Global's First Quarter and Full 2020 Earnings Conference Call. [Operator Instructions].

I'd now like to introduce Mr. Chip Merritt, Senior Vice President of Investor Relations for S&P Global. Sir, you may begin.

Robert S. Merritt -- Senior Vice President, Investor Relations

Thank you for joining today's S&P Global fourth quarter and full-year 2020 earnings call. Presenting on today's call are Doug Peterson, President and CEO; and Ewout Steenbergen, Executive Vice President and Chief Financial Officer.

We issued a news release with our results earlier today. If you need a copy of the release and financial schedules, they can be downloaded at investor.spglobal.com.

Before we begin, I need to provide certain cautionary remarks about forward-looking statements. Except for historical information, the matters discussed in the teleconference may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections, estimates, and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements. In this regard, we direct listeners to the cautionary statements contained in our Form 10-Ks, 10-Qs, and other periodic reports filed with the U.S. Securities and Exchange Commission.

In addition, as announced on November 30th, S&P Global and IHS Markit entered into a definitive merger agreement. This call will touch on the transaction. Please note, this call does not constitute an offer to sell or buy or the solicitation of any offer to buy or sell any securities, nor shall there be any sale of securities in a jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933. In connection with the proposed transaction, S&P Global and IHS Markit have filed a registration statement on Form S-4 with the SEC, which will include a joint proxy statement and a prospectus. S&P Global and IHS Markit will file other documents regarding the proposed transaction with the SEC.

Before making any voting or investment decisions, investors and security holders of S&P Global or IHS Markit stock are encouraged to carefully read this entire registration statement and proxy statement prospectus, which is available on our website and sec.gov.

In today's earnings release and during the conference call, we're providing adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the corporation's operating performance between periods and to view the corporation's business from the same perspective as management's. The earnings release contains exhibits that reconcile the difference between the non-GAAP measures and the comparable financial measures calculated in accordance with U.S. GAAP.

This call, especially discussion of our outlook, contain statements about expected future events that are forward-looking and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from expectations can be found in our filings with the SEC and on our website.

I would also like to call your attention to a European regulation. Any investor who has or expects to obtain ownership of 5% or more of S&P Global should give me a call to better understand the impact of this legislation on the investor and potentially the company.

We're aware that we do have some media representatives with us on the call. However, this call is intended for investors, and we would ask the questions from the media be directed to Dave Guarino at 212-438-1471.

At this time, I'd like to turn the call over to Doug Peterson. Doug.

Douglas L. Peterson -- President and Chief Executive Officer

Thank you, Chip. Welcome to all of you joining today's earnings call. The first thing I'd like to do is think our people at S&P Global for their dedication and commitment throughout 2020. As the pandemic continues to take its toll across the globe, our people remain focused on supporting each other, our customers, and our communities. Together, they continue to provide relevant and timely benchmarks, data, and research to help our clients navigate through this turbulent economy. So to all 23,000 of you let me say thank you.

Now, let me turn to the key financial achievements in 2020. S&P Global delivered 10% organic revenue growth and 23% adjusted diluted earnings-per-share growth. All four businesses contributed with growth in both revenue and adjusted operating profit.

We generated $3.3 billion of free cash flow, excluding certain items, and returned $1.8 billion through share repurchases and dividends. In addition to the very strong financial results, we made significant progress on our key initiatives as well. The expertise in technology that we've developed over a number of years enabled the creation of new products, product enhancements, and productivity improvements. By funding growth investments to leverage our technology, we were able to deliver the largest collection of new product launches I can remember. We also continue to expand our ESG and climate product offerings, including the new S&P Global ESG scores. I'll share more about all of these new products in a moment.

Another highlight was the completion of our Investor Day productivity targets as we surpassed the target and achieved $120 million of annual savings. Upon completion, we then initiated a new $120 million program in October, which is targeted to be completed in two to three years. There are two common questions that investors have been asking for years: what will your results look like in a recession and do you really have any more opportunities to improve margins? I think 2020 went a long way in answering both of those questions.

To recap the financial results for the full-year, organic revenue increased 10% to $7.4 billion. Our adjusted operating profit increased 18%. Our adjusted operating profit margin increased 310 basis points to 53.3%. In addition, shares outstanding decreased 2% over the past year, contributing to the 23% increase in adjusted diluted EPS. Ewout will review our fourth quarter financial performance in a moment.

I'm particularly pleased as all four businesses contributed to the company's overall revenue growth and adjusted operating profit improvement. Ratings led the way with organic revenue up 15%, and its adjusted operating profit margin up 460 basis points to 62.4%. The only business with a decline in its adjusted operating profit margin was S&P Dow Jones Indices at 69.1%. This is primarily due to higher legal expenses, ESG expansion, and incentives.

It's important to remember that our 2020 financial results are part of a solid track record of performance. Over the past four years, we've posted a compound annual growth rate of 7% for revenue, and we have averaged more than 250 basis points per year of adjusted operating profit margin expansion. And this has resulted in more than doubling of our adjusted diluted EPS over that timeframe.

We also made large strides in non-financial metrics in 2020 by enhancing the company's environmental performance and improving our social outreach. We issued our second annual TCFD report featuring 2019 carbon-adjusted EPS. We secured approval from the Science Based Targets Initiative for our new target to reduce absolute scope 1 and 2 greenhouse gas emissions 25% by 2025. This is from a 2019 base. We're targeting to achieve net zero by 2040. We supported work-from-home arrangements with flexibility for those simultaneously caring for children or elderly family. We enhanced benefits for sick leaves, global care leaves, and days off for volunteering efforts and wellness, and the contributions by the S&P Global Foundation increased 170% to $11 million. These donations support COVID-19 relief, racial equity, social justice, economic inclusion, environmental sustainability, and gender equality.

We've also made substantial progress on our external ESG initiatives. ESG revenue reached $65 million in 2020, a 40% increase over 2019. The new product launches in ratings are all gaining momentum with the number of ESG evaluations, Green evaluations, and SAM Benchmark shown here. We also saw an increase of 220 companies completing their Corporate Sustainability Assessments. These assessments are integral to much of our ESG efforts.

Market Intelligence launched numerous products, including S&P Global ESG scores covering 7,300 companies and Trucost Climate Analytics and Environmental data to Environmental Data that contain environmental data on 15,000 companies. These are both available on the Market Intelligence platform or as a data feed.

In Indices, ESG Exchange Traded Funds assets under management increased by more than 200% to $20 billion, and the year was filled with new ESG indices being introduced and our customers creating new ETFs and options.

In Platts, the energy transition is becoming increasingly important. We continue to support the markets with new price assessments for commodities like battery metals and hydrogen. Last year, we told you about the shipping industry moving to low-sulfur and our launch of new low-sulfur fuel marine fuel price assessments. There are now a range of related future contracts based on our prices with open interest growing steadily.

We also continued to advance our China initiatives in 2020. We introduced Mandarin-language versions of both Ratings360 and the Market Intelligence platform. We released a beta version of the China Credit Analytics platform. This is an integrated desktop solution that generates credit insights on public and private companies using unique content and localized analytics aligned with the S&P Global standards.

We completed nine public ratings in the fourth quarter, including the first non-bank corporate rating, bringing the 2020 total to 22 ratings. We completed our registration-enabling ratings in exchange bond market, which accounts for approximately 40% of the total number of bond issuance in China. It is also encouraging that the Chinese bond market continues to develop. We continue to see positive signs from the Chinese regulators who are driving change in the local credit ratings markets. In addition, following several recent high-profile defaults, there's an increased sensitivity and awareness among local market participants to the quality of credit ratings.

Internally, 2020 has been dubbed the year of new product launches. I can't remember a year with so many launches. This was a direct result of the increase in investment spending over the past two years combined with our exceptional technology expertise. The launches included Marketplace, the Snowflake partnership, RiskGauge, ProSpread, and the Platts Platform, all of which we have discussed on previous earnings calls.

There are two new items we haven't discussed yet: the first is the launch of S&P Riskcasting Indices, which use artificial intelligence to adjust the weighting of equity and fixed income positions in response to market signals; the second is the S&P Kensho Moonshots Index, which measures a company's propensity to innovate. The index excludes the mega-cap technology names, instead focusing on the next generation of innovative companies. In addition, Ratings360 launched comprehensive data models and tools for the CLO user base and enhanced content for international and U.S. public finance.

While we included the S&P Kensho Moonshots Index on the last slide, we needed a separate slide to cover all of the new products, product enhancements, and productivity improvements Kensho developed in 2020. These include OmniSearch on the Market Intelligence platform, a high-speed revamp of the Platts Market-on-Close process, utilizing AI, publication times for assessments reduced by an average of 80%. We've converted 66 markets to the Kensho MOC process already, and we will continue to migrate additional markets in 2021.

Kensho Extract, which enables information to be replicated exactly as found in the original document. Kensho's indices have also made great progress with the SPDR S&P Kensho New Economies Composite ETF ending 2020 with over $2.3 billion in AUM, a tenfold increase this year, and we've made several Kensho solutions available in our recently launched Marketplace. The first is Kensho Scribe, a tool that enabled us to create 36,000 transcripts last year, while expanding our corporate coverage by 1,500 companies. This tool is now available for our clients to convert speech to text. The second is Kensho Link, a tool that enabled us to have datasets on 11 million entities from CreditSafe, Preqin, and IPQwery. This tool is also available to our clients to help link datasets. Taken together, cognitive automation from Kensho Link, Kensho Scribe, and several other machine learning tools have delivered an estimated 700,000 hours of savings.

While we have developed exceptional technology capabilities among our IT community, we have also made great strides to expand technological skills of all employees. A great example is robotic process automation or RPA. Employees from around the company have embraced RPA, taken internal classes, and created their own bots, generating an estimated savings of 300,000 hours in 2020. While all of the work that we do internally is what drives much of our success, key industry trends also help.

The shift into passive investing continues. This chart shows the cumulative U.S. equity flows of $1.8 trillion in the past 10 years, and we are prime beneficiary of this trend. If we look at ETF AUM associated with our indices, there's been almost 150% increase over the past five years to $2 trillion. Over the long run, we believe this trend will continue. The increase in global issuance has been another positive trend for the company. While 2020 issuance in aggregate increased 13%, as is often the case, there were pockets of strength and pockets of weakness. Global investment grade and high-yield were the strongest categories, increasing 26% and 27%, respectively. This is due to incredible activity in the U.S., which increased 53% and 66%, respectively.

Meanwhile, both structured and leveraged loans lagged in 2020. The market clearly favored high-yield issuance over leveraged loans in 2020. Besides the decline in leveraged loan issuance in the U.S. and Europe, this slide depicts the percentage of loans that we rated, which was 91% in both the U.S. and Europe.

I'd now like to shift the presentation to our outlook for 2021. Let's start with the latest view from our economists. They're forecasting global GDP growth of 5% in 2021. With growth accelerating during the years, vaccinations proceed and lockdowns recede. They believe fiscal and monetary policy will remain very accommodative and flexible. While the correlation between GDP and issuance was severed by the pandemic, we expect a long-term correlation to remain intact.

The latest global refinancing study was issued early this week. The total amount of global debt maturing in this study is $11.3 trillion over the next five years. This is up 5% from the $10.8 trillion highlighted in last year's study. The chart on the right depicts the global high-yield debt maturing over the next five years. It totals to $3 trillion, up 20% from $2.5 trillion in last year's study. This bodes well for future high-yield issuance. After issuance growth of 15% in 2019 and 17% in 2020, our Ratings Research group anticipates that issuance will decrease 3% in 2021. The forecast calls for gains in financials and structured to 4% and 3%, respectively, and decreases in non-financials and U.S. municipals issuance of 9% and 5%, respectively. Please note that this is an issuance forecast, not a revenue forecast. Despite the forecasted decline, supporting factors in 2021 include favorable financing conditions, increasing amounts of sovereign debt with negative yields, and renewed M&A pipeline for corporations.

On this slide, I want to share some of the key initiatives that we're focused on in 2021. Asia and China in particular continue to be attractive markets for new product development and expanded capabilities. We want to continue to provide customers with new offerings, including the S&P Global platform, additional industry solutions, expanded Platts product, and broadening Ratings360 coverage to additional issuer categories.

We also want to focus on innovation and technology. We will do this by bolstering our data and systems capabilities to support growth, while leveraging technology for new products and improve customer experiences. And we will continue to enhance our data extraction and ingestion capabilities. We're especially pleased to integrate our companywide ESG offerings creating new ESG products and extending our existing ESG coverage universe.

The most important initiative of the year will be our upcoming merger with IHS Markit. This is an incredibly transformative opportunity for our company and our customers. The combination of S&P Global and IHS Markit creates a strong company and will have increased scale and world-class products across numerous core markets with a track record of deploying cutting-edge technology to accelerate our Powering the Markets of the Future strategy.

The pro forma company will serve a global customer base across financial information services, ratings, indices, commodities and energy, and transportation and engineering. Together, we will offer differentiated data analytics, research, and benchmarks important to the workflows of many of the world's leading companies and governments. We expect the combined company to deliver EBITA synergies of approximately $680 million, resulting in a highly profitable combined company with continued opportunity for margin expansion. The acquisition is expected to generate a return on invested capital in excess of our weighted cost of capital after full synergy realization, consistent with our M&A philosophy. For the employees of both companies, we will combine two best-in-class workforces and deep expertise in complementary cultures focused on serving the global needs of our customers. I'm incredibly proud of the team we've built at S&P Global and look forward to welcoming the talented IHS Markit employees to S&P Global.

There are three parallel paths that are under way to close the transaction and prepare for the combination. The first is shareholder approval. The Form S-4 was filed and became effective last month. This enabled us to establish record dates and schedule shareholder meetings. Both shareholder meetings are scheduled for March 11th. The second is regulatory approval. We're working toward regulatory approval in the countries listed. We continue to expect closing in the second half of 2021. The third is pre-close integration planning. We have created integration teams focused on day-one readiness. These teams are developing plans that focus on organizational integration, real estate consolidation, technology scale and efficiency, cross-selling and new product development, and we've created a value capture work stream similar to what we established on our SNL acquisition to pursue and track synergies.

The new company will have six businesses. Martina Cheung will lead Ratings. Martina will also be responsible for leading ESG across the company. Adam Kansler will lead Marketing Intelligence and Financial Services. Saugata Saha will lead Platts and Resources. Dan Draper will lead Indices. Edouard Tavernier will lead transportation. In addition to being CFO, Ewout Steenbergen will lead Consolidated Markets & Solutions. And after the merger is closed, John Berisford will lead all of our integration efforts together with Ewout. I'm optimistic that S&P Global has a great future as a stand-alone company with exceptional assets, technology, and people. Combining our company with IHS Markit makes for an even brighter future.

And now, I'd like to turn the call over to Ewout Steenbergen who is going to provide additional insights into our financial performance and outlook. Ewout.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Thank you, Doug, and welcome to all of you on the call. Let me start with our fourth quarter financial results. Organic revenue increased 6%. Adjusted corporate unallocated expense decreased 21%, primarily due to the timing of charitable contributions, lower professional fees, and a reduction in the company's real estate footprint. Adjusted total expenses increased 11%, and I will come back to this on the next slide.

Adjusted operating profit margin decreased 150 basis points due to the increase in total expenses. The decrease in the effective tax rate was primarily due to the successful resolution of various tax audits and the true-up of prior period taxes. Average diluted shares outstanding declined 2% and adjusted diluted EPS increased 7%. While total adjusted expenses for the full year increased 4%, for the fourth quarter, they increased 11%. This was primarily due to increased incentives as a result of strong 2020 financial performance, expenses related to the acquisitions of Greenwich Associates by CRISIL and the RobecoSAM ESG Data and analytics platform and investments in growth initiatives and productivity programs.

The non-GAAP adjustments this quarter collectively generated a net pre-tax loss of $247 million. They included $138 million associated with office lease equipment and software impairments, $55 million in restructurings across the company, $24 million in IHS Markit merger costs, $2 million for Kensho retention-related expenses, and $29 million in fuel-related amortization. The termination of office and equipment leases, and the restructuring actions will result in annual savings of, approximately, $70 million. Approximately, $20 million of these savings are part of the new $120 million productivity program. The balance is related to separate business efficiency initiatives.

This quarter all four divisions delivered increased revenue, with Indices achieving double-digits growth. As I explained earlier, due to increased costs, adjusted operating profit margins were generally muted. For the full year, Ratings and Platts delivered superior adjusted operating profit margin improvement, Market Intelligence increased slightly with elevated investment spending, and Indices decreased slightly primarily due to higher legal expenses and ESG investments.

Each year on our fourth quarter earnings call, we share changes in our headcount. In 2020, headcount increased 2%. This year we separated enterprise technology headcount from corporate headcount. Corporate was the area with the largest headcount increase at 16%. This was a result of in-sourcing about 130 order-to-cash positions resulting in annual savings of several million dollars. The only other area that had an outsized increase was Platts, which increased headcount 5%. This was due to investment spending to expand their commercial presence in Asia and fund their benchmark acceleration program, as well as insourcing of IT contractors.

Last year we shared this slide and estimated that we would invest $150 million in growth initiatives in 2020. The projects that make up this total are listed on the left. We ended up spending $139 million, which was still an exceptional level of activity for the company. For 2021, we expect investment spending to moderate to $100 million. This activity, coupled with the merger with IHS Markit, should keep the organization fully engaged with exciting new projects and opportunities.

On our third quarter earnings call, we introduced a new $120 million productivity program to be completed over the next two to three years. I'm pleased to report that we are off to a fast start with $49 million of run rate savings already achieved. These were mainly from reduced real estate and changes to IT contracts, as well as investments made to permanently reduce T&E. These run rate savings do not include the $20 million benefit from the impairments and restructurings actions taken at the end of 2020.

Now turning to the balance sheet. Our balance sheet has low leverage and surplus liquidity. We have cash and cash equivalents of $4.1 billion. This is temporarily higher than necessary and will be reduced when we resume share repurchases. Debt of $4.1 billion and undrawn revolver capacity of $1.2 billion, and no commercial paper outstanding. Our adjusted gross debt to adjusted EBITDA is consistent with our current leverage target. Free cash flow, excluding certain items, reached $3.3 billion in 2020, an increase of $714 million or 28% over the prior-year period. In 2020, the company returned $1.2 billion to repurchase 4 million shares and paid dividends of $645 million. In aggregate, we returned 55% of free cash flow, excluding certain items. This falls short of our target for 75% as we had to curtail share repurchases due to the merger. If there is an open window and we have an opportunity, we will repurchase shares before the merger closes. If not, we anticipate resuming share repurchases after the merger is completed.

Now let's turn to the division results, starting with S&P Dow Jones Indices. The segment delivered 10% revenue growth, primarily due to gains in AUM linked to our indices and data subscriptions. In the fourth quarter, we reported an 8% increase in adjusted expenses, primarily due to incentive compensation true-ups, increased headcount, and application development spending, and 11% increase in adjusted segment operating profit and an adjusted segment operating profit margin of 68.5%, an increase of 50 basis points. On a trailing four-quarter basis, the adjusted segment operating profit margin decreased 40 basis points to 69.1%.

S&P Dow Jones Indices delivered growth across all revenue channels this quarter. Asset-linked fees increased 12% with gains in ETFs and mutual funds, exchange-traded derivative revenue increased 3%, data and custom subscriptions increased 7% due to an increase in end of day ACV. Activity at the CBOE decreased in the fourth quarter with S&P 500 index options activity decreasing 13% and fixed futures and options activity decreasing 1%. This was in contrast to increased activity at the CME, where the equity complex volume increased 58%. Almost all of the gain at the CME was due to the successful launch of the Micro E-mini S&P 500 futures. Excluding this product, the volumes at the CME equity complex were essentially flat.

Market Intelligence delivered organic revenue growth of 7% with strength in both renewals and new business. Usage of our key market platforms increased 13% year over year. Adjusted expenses increased 10% due to incentive compensation true-ups and higher commissions and royalties. Adjusted segment operating profit increased 2% and the adjusted segment operating profit margin decreased 160 basis points to 30.7%. On a trailing four-quarter basis, adjusted segment operating profit margin increased 30 basis points to 32.4%.

Looking across the Market Intelligence components, desktop revenue grew 5%, excluding acquisitions and divestments. During 2020 Market Intelligence delivered significant enhancements to the MI platform. These included improved visualization, a customizable dashboard, integration of Kensho OmniSearch, and upgraded mobile experience, and a cloud-based infrastructure for better performance. These enhancements help us meet the needs of many platform users and position us well for continued execution against our integrated desktop roadmap.

Data Management Solutions revenue grew 10% and Credit Risk Solutions revenue grew 8%. Ratings reported revenue increased 7%. Organic revenue increased 5%, excluding the acquisitions of the ESG data and analytics platform from RobecoSAM, and CRISIL's acquisition of Greenwich Associates. Adjusted expenses increased 17%, primarily due to incentive true-ups and acquisitions. This resulted in a 1% increase in adjusted segment operating profit and a 370 basis points decrease in adjusted segment operating profit margin. On a trailing four-quarter basis, adjusted segment operating profit margin increased 460 basis points to 62.4%. Non-transaction revenue increased 15%. Organic non-transaction revenue increased 11%, primarily due to fees associated with surveillance, frequent issuer programs, Rating Evaluation Service on increased M&A activity, and higher new-entity credit ratings activity.

Transaction revenue was relatively flat as increases in bank loan ratings revenue were offset by a decrease in bond issuance compared to a very strong fourth quarter of 2019. As we have seen time and time again, the various parts of the ratings business often move in opposite directions with some up and some down in any given quarter or year. This quarter, non-transaction revenue was strong while transaction revenue was unchanged.

Non-transaction revenue is generally a steady source of growth, but it broke out to the upside in the fourth quarter. About one-third of the organic growth in the fourth quarter was from surveillance fees and frequent issuer programs that are more recurring in nature. About one-third was from large jumps in RES and new entity credit ratings, which we expect to continue to be strong in 2021 and about one-third was from other items. This slide depicts ratings revenue by its end markets. The largest contributor to the increase in ratings revenue was an 8% increase in corporates. In addition, financial services revenue increased 6%, structured finance decreased 6%, governments decreased 3%, and the CRISIL another category increased 8%. On the right side of the slide, you can see the changes in revenue within structured products. The largest change was in CMBS, which was due to a 64% decrease in global CMBS issuance.

And now turning to Platts. Reported revenue increased 5%, with core subscriptions increasing 6% and Global Trading Services decreasing 5%. GTS revenue decreased mainly due to lower natural gas and iron ore volumes, partially offset by increased LNG volumes. Also due to COVID, our conference business revenue was down about $1.5 million in the quarter. Adjusted expenses increased 7% due to incentive true-ups and growth investments. Adjusted segment operating profit margin decreased 100 basis points to 51.7%. The trailing four-quarter adjusted segment operating profit margin increased 230 basis points to 54.7%. The fastest growing categories during the quarter were petrochemicals up 18% and power and gas up 6%. Petrochemicals had a favorable comparison to a weak fourth quarter of 2019.

We recently filed the S-4 and received a handful of questions about the document. They were generally related to the two topics on this slide. The first question was if the 2021 stand-alone adjusted diluted EPS in the S-4 was our guidance. It's not. The $12.36 figure in the S-4 assumes that we will continue to repurchase shares in 2021 as a stand-alone company. However, as we have stated, we think that it is unlikely we will resume share repurchases before the merger with IHS Markit closes. Therefore, our 2021 guidance assumes no share repurchases.

The second difference is that the S-4 figures were based on our October internal forecast. Our initial 2021 guidance is based on our most recent internal forecast, which has improved outlook primarily due to increased growth in ACV and our subscription businesses, and AUM in our Indices business.

The second question was why the cash flow figures in the S-4 differ from the figure stated on the merger conference call and our normal free cash flow reporting. These are two different views of free cash flow. The S-4 provides an unlevered free cash flow forecast typically utilized to value companies via a discounted cash flow analysis. The difference between the unlevered free cash flow in the S-4 and the free cash flow in our guidance and discussed on our merger call is that the S-4 definition includes stock-based compensation expenses and acquisitions and excludes interest payments.

We're not providing 2021 GAAP guidance because given the inherent uncertainty around the merger, management cannot reliably predict all of the necessary components of GAAP measures. And this slide depicts our adjusted guidance. While we expect that the merger will occur in the second half of this year, we're providing adjusted guidance on a stand-alone basis: revenue increasing mid-single digits; corporate unallocated expense in the range of $140 million to $150 million, an increase over the $128 million in 2020 due to some expected normalization of pandemic-related cost savings; deal-related amortization of $95 million to $100 million, a decrease from the $123 million in 2020 as certain assets have been fully amortized; operating profit margin in a range of 53.8% to 54.3%, which is 50 to 100 basis points higher than in 2020; interest expense, net, which includes both interest income and interest expense in the range of $120 million to $125 million. This is lower than the $141 million in 2020 due to the recent refinancing of a large portion of our outstanding debt; a tax rate in the range of 21.5% to 22.5%, which is consistent with the 21.5% reported in 2020; diluted EPS in the range of $12.25 to $12.45, a 5% to 7% increase over 2020. While this growth rate might seem modest, it is 29% to 31% higher than our 2019 EPS. That's an average of about 15% per year. We just happened to achieve most of this increase in 2020. Also, keep in mind that these figures assume no share repurchases in 2021.

And finally, free cash flow generation in a range of $3.3 billion to $3.4 billion, which is flat-to-up $100 million compared to 2020 due to improved business performance, partially offset by normalizing cash collections following a strong year with record low delinquencies in 2020. In addition to the slides that we have reviewed on this call, there is an appendix with additional fourth quarter slides that can be downloaded from the Investor Presentation section of the Investor Relations website.

In conclusion, 2020 was a very strong year for S&P Global. Despite the recession, all of our businesses grew revenue, and we improved our adjusted operating margin by 310 basis points. Year after year, we have demonstrated our ability to grow revenue and adjusted operating margin, and we don't believe that we are close to being done. We remain encouraged about our future and have just introduced 2021 adjusted guidance that reflects our optimism.

Finally, I wanted to echo Doug's comments about our employees. They continue to perform at an exceptional level in difficult circumstances, and Doug, myself, and the rest of the leadership team applaud their tenacity and innovativeness.

And with that, let me turn the call back over to Chip for your questions.

Robert S. Merritt -- Senior Vice President, Investor Relations

Thank you. Just a couple of instructions for our phone participants. To indicate that you wish to ask a question, please press 1 and record your name. To cancel or withdraw your question, simply press 2. Please limit yourself to two questions in order to allow time for other callers during today's Q&A session. If you've been listening through a speaker phone but would now like to ask a question, we ask that you lift your handset prior to pressing star one and remain on the handset until your question has been answered. This will ensure better sound quality. Operator, we will now take our first question.

Questions and Answers:

Operator

Thank you. Our first question comes from Toni Kaplan from Morgan Stanley. You may ask your question.

Douglas L. Peterson -- President and Chief Executive Officer

Toni, you might be on mute.

Operator

Toni, your line is open.

Toni Kaplan -- Morgan Stanley & Co. LLC -- Analyst

... the announcement of buying IHS Markit. What's been the reaction from your largest customers and from your internal business units? Is there anything in particular that they're excited about or conversely concerned about that maybe you weren't expecting initially?

Douglas L. Peterson -- President and Chief Executive Officer

Toni, hi. This is Doug. Let me take that. Well, first of all, thank you for joining the call today. And since we announced the merger with IHS Markit, it's been great excitement from our customers. We have heard in particular from the financial institutions about all of the capabilities we're going to be bringing together from the energy industry. We've also seen a lot of excitement from the people that are interested in ESG.

Our employees are also very excited about that. We know each other. We had worked together before between our index business. Their fixed income index business and our index business, people know each other there. We've had great respect for Lance and for the team at IHS Markit. And so there's excitement across the board, and we see things are very positive.

One final comment, as you saw in the slide we talked about parallel paths. One of those is integration planning. So our teams have started to get to know each other through the integration work that we're planning for. And again, there's a lot of respect for each of the teams and a lot of progress being made there.

Toni Kaplan -- Morgan Stanley & Co. LLC -- Analyst

Great. And wanted to ask about the Market Intelligence strategy going forward. Historically, you've been positioned as the low-price competitor relative to peers. And with all the assets that you've purchased over the years and with the eventual integration of IHS's data, does your strategy change going forward? Would you expect to be at a higher price level, or should we expect your growth to be more driven by adding more customers, or maybe it's both? Just how do we think about this strategy there? Thanks.

Douglas L. Peterson -- President and Chief Executive Officer

Yeah. This is really a little bit premature for me to be giving you the strategy. But if you think about what we're going to be bringing together, Market Intelligence right now has a really strong base of installed customers, hundreds of thousands of users that are already using our information. So you think about that as one distribution channel for all of the very rich IHS Markit data.

On the other hand, IHS Markit also has very powerful tools which include workflow for financial institutions and for corporate and asset management industry, etc. So getting those two together is going to allow us to have a much more comprehensive strategy both looking at the value that we bring, which you talk about is a price strategy, but I think of more as a value strategy that expands that, and then also ability to bring much more -- many more products and services to all of the different kinds of customers that we serve.

Toni Kaplan -- Morgan Stanley & Co. LLC -- Analyst

Thanks a lot.

Douglas L. Peterson -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Alex Kramm with UBS. You may ask your question.

Alex Kramm -- UBS Warburg LLC (US) -- Analyst

Yeah, hey. Good morning. Just going to the base business for a minute here on the rating side. I think you made the comments, Doug, that the 3% issuance forecast we should not take that as an indication of revenue. So can you just flesh out the other pieces we should be thinking about? I mean, clearly there's going to be a much different mix this year. You obviously have some pricing opportunities and then clearly the recurring revenues have been running along very nicely and maybe talk about the sustainability of those. So any anything that can help us bridge that gap to how we should be thinking about revenue there. Thanks.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Yes. Good morning, Alex. This is Ewout. As we have said many times about the ratings business, it doesn't always rain everywhere at the same time. So there are always components that are growing up and several other components that are going down. But in aggregate, the outlook for ratings looks always quite constructive.

For 2021, overall, from a revenue perspective, we expect low-to-mid single-digits growth for ratings and that is particularly helped by non-transaction revenue. Non-transaction revenue we're currently estimating to grow at the mid-to-high single-digit level in 2021. That is being helped by higher surveillance fees based on more bonds outstanding, based on the issuance levels last year, frequent issuer programs, rating evaluation services, which we expect to continue to be helped by the M&A environment. And then in terms of a mix, there's always some elements that are going up and down. And then in addition to that, we should also see some benefits from new products. So overall, I think a very constructive outlook for ratings, and again, overall from a revenue perspective, for the full year, low-to-mid single-digit revenue growth.

Alex Kramm -- UBS Warburg LLC (US) -- Analyst

Excellent, thank you. And then secondarily, Ewout, you made this this comment briefly that in terms of share repurchases, you could be doing something before the deal closes if there was an open window. So maybe just flesh out what an open window means. And then related to that, what are your minimum cash requirements on a stand-alone and combined company, so we can dimensionalize it a little bit here? Thanks.

Douglas L. Peterson -- President and Chief Executive Officer

Yes. Alex, we would love to do share buybacks, but there are certain regulatory limitations that we are facing this year. I think, for example, about the current periods where the shareholders' vote is under way. So we would not be able to do share buybacks until the shareholders meeting on March the 11th. Of course, we have also closed windows with respect to our quarterly results, and then we should not be in possession of material, non-public information.

So a combination of those elements might make the windows that we can do buybacks quite limited, and therefore, we think it is unlikely we can do buybacks. But if there is an opportunity from a legal perspective, we should be clear, we definitely would like to restart some of the buybacks.

Otherwise, we will do that post-close of the merger. There's definitely going to be at that point in time some catch-up buybacks because, of course, we're falling short toward our return targets at this point in time. And then as we have stated at the merger call, in terms of our new financial targets, we're expecting to return at least 85% of free cash flow going forward for the combined company. And the combined company from a free cash flow perspective should have a very strong profile, north of $4 billion out of the gates in terms of free cash flow and growing to about $5 billion or north of $5 billion in a few years' time.

From a balance sheet perspective, we will have a very robust balance sheet in the future with a leverage ratio in a range of 2% to 2.5%. Of course, we will have some minimum cash, but absolutely we have currently excess cash, surplus cash that we will return to shareholders once we have the opportunity to do so.

Alex Kramm -- UBS Warburg LLC (US) -- Analyst

Fantastic. Thank you.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Alex.

Operator

Thank you. Our next question comes from Ashish Sabadra from Deutsche Bank. You may ask your question.

Ashish Sabadra -- Deutsche Bank Securities, Inc. -- Analyst

Thanks for taking my question. So just on -- as you've comments integration planning activities, obviously, you've given a pretty robust cost synergy targets as part of the merger, but are there areas that you've identified that could be potential incremental opportunities as you go through this integration planning? Thanks.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

At this moment, the expense synergies of $480 million is still our best estimate at this point in time. Please keep in mind, we're still in the planning phase and both companies are run separately and independently. You know us as management, you know our management philosophy and approach. We will always look for further opportunities, but the $480 million of expense synergies is the number we are committed to right now.

Ashish Sabadra -- Deutsche Bank Securities, Inc. -- Analyst

That's very helpful. And maybe just a quick follow-up to earlier question Toni asked just around the data as well as the potential data science. I was wondering how do you think about opportunities to further enhance the Data Lake that IHS Markit has, combining the data that S&P has, but more importantly applying Kensho's data science on top of it, wondering if you could share any incremental thoughts on that front.

Douglas L. Peterson -- President and Chief Executive Officer

Yes. Thank you, Ashish, and welcome to the calls. I think this is the first time we've had you on the call. Well, first of all, this is one of the areas that we've got a lot of excitement about. If you think about what it's like to have the amount of data across both companies and you see the success we've had with Kensho the last few years, today we highlighted many of the new areas that they've been providing a great success.

When we think about the data that IHS Markit brings, just as an example, there's 50,000 customers in 140 countries. They're serving 80% of the global Fortune 500, 94 of the largest companies in the U.S., and then on top of that, with the pricing data, the reference data, the private market solutions, the fixed income benchmarks and indices, and then all of that put together in a comprehensive data strategy with the Data Lake, that's going to give us an ability to take the Kensho capabilities and develop all types of new products and services.

If you think about that, though, in addition, IHS Markit also brings its own high-quality data sciences teams. And across S&P Global, we also have other high-quality data sciences team. So this is one of the areas of the merger that we're most excited about. And we've got teams that have already started looking at what some of those possibilities are.

Ashish Sabadra -- Deutsche Bank Securities, Inc. -- Analyst

Thanks, Doug. That was very helpful color.

Douglas L. Peterson -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Andrew Nicholas from William Blair. You may ask your question.

Andrew Nicholas -- William Blair & Company LLC -- Analyst

Hi, good morning. Just wanted to ask maybe a bigger picture question. Just wondering how you as a management team manage the different investment opportunities, growth initiatives, hiring plans for the stand-alone business with such a major merger, expected to close later in the year. Are you a bit more hesitant to commit to multiyear projects, again, for the stand-alone business knowing that there could be higher ROI opportunities that present themselves as a combined entity? Or do you just kind of keep your head down and run the existing business and address those opportunities when the time comes? I'm just curious. Any insight on how you plan to manage that during the waiting period would be helpful.

Douglas L. Peterson -- President and Chief Executive Officer

Andrew, this is Doug. I'm going to start and then hand it off to Ewout. When we've been -- as you've seen earlier, we spent $139 million last year on a budget of $150 million of a target, and this year we've targeted $100 million for our incremental growth expenses. We have a process around that. I'm going to hand that off to Ewout to talk more about that. But what's important for us is that we are managing the company for the long run. We think that there are opportunities for us to continue to grow in the Ratings business and Platts, Market Intelligence, and Indices, very specifically with the capabilities that we have today expanding into new markets like we've mentioned Asia or China, new product capabilities, or customer experience that we think are very important to continue with our differentiation that drives our growth.

So we're committed to all of those organic investments that we see internally and to keep driving those. But as I just mentioned, there's also so many possibilities of bringing the two companies together. It's too early for us to plan those. As Ewout mentioned, we're two separate companies, we're managed separately, but we can start dimensioning those and working together to identify what those could be. That's one of the reasons we pulled back the investment from $150 million to $100 million this year, because we didn't want to overextend people on areas that they might not be able to deliver once we start focusing on the integration. Ewout, do you want to talk a little bit more about our investment planning.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Andrew, the way how we operate here is we have a committee -- an investment committee that is built up by the business presidents and myself, and we're looking at all the growth initiatives that are being put forward. These are initiatives that should drive revenue growth going forward and should have a minimum level of investments, because we don't want to look at all the small investments. So these should be larger growth initiatives for the company that should help with revenue growth in the future. And we make selections, which of those are the most interesting, where we would allocate our resources. It's not only financial resources. More often, of course, product development resources, technology resources might be limiting factors there as well.

And then ultimately, we allocate funding to those initiatives. And we are very encouraged about the growth of those initiatives. As Doug has mentioned during the prepared remarks, we have seen a lot of product launches in 2020. We're seeing good traction of those initiatives. So we're very encouraged at the level of innovation and new business development that we're having within the company. And we're continuing with that as well in 2021. Please keep in mind that although the overall investment number is dropping, doesn't mean that those costs are going away, because after two years when an initiative is funded for a period of two years, it goes to a business as usual situation, and those costs will become part of the normal business as usual budget of the division.

So it is not really a total expense drop, but the investments, the new investments in the first two years is going to be about $100 million in 2021. So still I think a very good number, a strong number, and all of these initiatives from our perspective make sense independently of the merger, because they all are good initiatives that will help also the combined company in the future.

Andrew Nicholas -- William Blair & Company LLC -- Analyst

Great, thank you. That's helpful. And then as my follow-up, in the index business, I know you're still six, nine months away from closing, but I am curious if you have any initial thoughts on kind of the strategy or change in kind of distribution approach that might be required as you kind of focus on building out fixed income and multi-asset ETF products. Just trying to figure out how those businesses might differ from equity ETFs and that kind of ecosystem if at all. Thank you.

Douglas L. Peterson -- President and Chief Executive Officer

Thank you. And there's not a major change in the distribution strategy. Dan Draper, who joined us middle of the year last year, has put in place an excellent strategy to look across all of the different types of asset classes we want to be covering, which include multi-asset classes, looking at what's all of the major trends in the ETF markets, the mutual fund industry, as well as private investors, and finding ways for us to bring the solutions that they need.

As you can see from the growth in the markets, the growth is coming across many, many different types of asset classes, including fixed income and equities, global equities, commodities, real estate, etc. And so we want to be able to approach all of the different channels that we have with this broader set of capabilities and broader set of indices. And so it's not going to be so much a change in distribution strategy. It's a change in the capabilities and the breadth of the different kinds of products we'll be able to provide.

Andrew Nicholas -- William Blair & Company LLC -- Analyst

Got it. Makes sense. Thanks a lot.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Andrew.

Operator

Thank you. Our next question comes from Jeff Silber from BMO Capital Markets. You may ask your question.

Jeffrey Silber -- BMO Capital Markets Corp. (Canada) -- Analyst

Thanks so much. Ewout, you were kind enough earlier to give us a little bit of color on the revenue guidance for the Ratings segment. I was wondering if we can get similar comments on your other three segments. Thanks.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Of course, Jeff. Mid-single digit growth is the expectation for Market Intelligence and Platts, and a mid-to-high single-digit revenue growth expectation for the index business. And then on an enterprise basis, mid-single digit for this year.

Jeffrey Silber -- BMO Capital Markets Corp. (Canada) -- Analyst

All right, great. Sounds like you were prepared to answer that question. I appreciate that. Moving back to your slide presentation. I think it was slide 19 where you talked about the shift in global issuance among the different aspects. I'm just wondering, is there a meaningful impact either on your revenues or margins because of this shift. Thanks.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Let me take that one, Jeff. Well, first of all, as you know, there's always a lot of shifts around the different kinds of issuance. And just a couple of examples. In the fourth quarter, while the corporates were only up 2.7% in the U.S., financial institutions were up almost 27%, and at the same time structured finance was down 27% globally. So you always see this kind of a mix in the aspects of the Ratings business.

We see, generally speaking, fees based on the size of a transaction for structured finance based on the complexity and size of structured loans. If you look at leveraged transactions, high-yield bonds, etc., generally speaking, we do get higher fees from those types of asset classes.

Jeffrey Silber -- BMO Capital Markets Corp. (Canada) -- Analyst

Okay, great. That's really helpful. Thanks so much.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Jeff

Operator

Thank you. Our next question comes from Owen Lau from Oppenheimer. You may ask your question.

Owen Lau -- Oppenheimer & Co., Inc. -- Analyst

Good morning. Thank you for taking my question. Doug, you mentioned that there have been some high-profile defaults in China, and there's an increased sensitivity in the quality of local rating. Could you please talk about your recent conversation with China on this topic is any short-term solution and does it accelerate the timeline for China to open up its capital markets? Thank you.

Douglas L. Peterson -- President and Chief Executive Officer

Well, as you know, we've been encouraged as the China bond market continues to develop. This is something that despite me saying that there have been some defaults, it's not that I'm encouraged about the defaults, but what you see now is the regulators are really starting to pay attention to the quality of the ratings in the markets as well as the market participants.

We have seen recently that the regulators have started to put in place some new discussions around eliminating the AA floor for the insurance industry. They're also looking at seeing if they're going to have a new approach to regulating the ratings industry. So there's also been some interest among specific market participants at a recent report we put out, which showed what the spread would be of different bonds that you compare them to a rating scales.

So we're very encouraged with the Chinese bond market. It continues to develop, the regulators are focused on it, and most importantly, investors themselves are looking at seeing how they can drive a much higher quality credit ratings industry.

Owen Lau -- Oppenheimer & Co., Inc. -- Analyst

Got it. That's very helpful. And then in terms of your blockchain initiatives, I think, Doug, you also mentioned Distro previously for the renewable energy. Could you please give us an update on that project? And then also I remember like two or three years ago you also mentioned a project at the Port of Fujairah. Could you please also give us an update as well? Thank you.

Douglas L. Peterson -- President and Chief Executive Officer

Yeah. We think that blockchain is one of the areas that will continue to develop in financial markets from the point of view of contracts, specialized contracts, ability to gather data in a way that becomes reliable, and it becomes unchangeable. And so the place we've been working on this in the company is through Platts. The first application was in the Fujairah Port where now all of the participants in that major port provide all of their data through a blockchain application that goes to the regulators, and then we have access to that to be able to use it for pricing, for references, as well as for news.

And then we recently worked on the Distro project which allows us to also get that same kind of information in another market. As we advance this, it's something that we're learning across the company. We think blockchain will be an area that with IHS Markit we can advance our work, and we're very pleased that we're able to have some initial wins, and especially with Fujairah and then in Rotterdam.

Owen Lau -- Oppenheimer & Co., Inc. -- Analyst

Got it. Thank you very much.

Douglas L. Peterson -- President and Chief Executive Officer

Thank you, Owen.

Operator

Thank you. Our next question comes from Craig Huber with Huber Research Partners. You may ask your question.

Craig Huber -- Huber Research Partners LLC -- Analyst

Oh, great. Thank you. Two questions. Maybe I'll start with Ewout or Doug. Maybe talk about this merger. The playbook or the similarities you guys are going to put in place here, I'm trying to think about this versus where your company was at versus say three, four, five years ago, and all the changes you guys put in place to raise margins, increase the efficiency at S&P legacy and what you've learned there and you plan on applying on that side of the business for IHS going forward? Can you touch on that briefly please, the playbook?

Douglas L. Peterson -- President and Chief Executive Officer

Yeah. So, Craig, let me start. This is something that we've thought a lot about. And when we were working on this idea with our management team and our board of directors, one of the most important questions that I asked, and we had a good discussion with the board is, do we have the capacity to undertake a transaction like this. And that includes our management capacity, our people, our team, our technology, what are the lessons learned we've had, do we have in particular the ability to undertake an integration like this. And one of the other questions that we asked is, and what kind of talent will IHS Markit bring as well.

And as we did our due diligence, and we already knew the team, but as we got to know them better, we were impressed that they were also going to bring a really high-quality management team that would be complementary to ours and that together we could actually undertake something like this. But one thing that we've done over the past five years is we've put in place a very disciplined approach to managing the company and it starts with an annual plan that we look at with the board of directors, we agree on, it then leads to goals and objectives which feed into our own performance, individual performance goals as well as our divisional and functional performance goals. Those include areas that are customer, operations, people. So it's not only driven by financial performance. We also include operational targets, which includes risk management targets.

So we've put in place a management system, which we think will work very well with the IHS Markit team. And if we wouldn't have had the confidence that we had that process in place now for many years that we had been delivering and that we had the capacity to do something like this, and along with the quality of the teams coming along, we would not have undertaken something like this.

Craig Huber -- Huber Research Partners LLC -- Analyst

And then my follow-on question is more of a nitpick here. The non-transaction line within Ratings, you touched on this briefly. That obviously was up 15% or so year over year. It was also up 15% coincidentally versus the average of the first three quarters as you know. You talked about guidance for this new year I think of up mid-to-high single digits for non-transaction ratings for the new year, which is higher than generally runs at. But if you just annualized that $451 million you had for non-transaction ratings and you apply that for all of the next year, on a year-over-year basis that would be up about 11%. So clearly there must be something sort of one-time in nature that would benefit you guys in non-transaction ratings in 4Q. Maybe if you just touch on that, I'm just trying to understand that great increase you had there. Thank you.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Okay, Craig. That's a great observation. 15% is the non-transaction reported revenue growth. 11% is the organic non-transaction revenue growth. The difference of the 4% is driven mostly by CRISIL and CRISIL's acquisition of Greenwich Associates.

Greenwich Associates has a certain pattern in terms of recognizing revenues and expenses that is mostly in the fourth quarter of every year, given their level of activity. So that's why that difference between organic and reported non-transaction was a bit larger than normally you would see in a particular quarter. But that was driven by that particular acquisition. Therefore, 11% is more what you should look at from an ongoing basis, organically, and then we said those one-thirds is coming from the non-transaction revenues from surveillance and another one-third from rating evaluation services that we also expect to be strong in 2021. So, therefore, the mid-to-high single-digit growth outlook for non-transaction this year.

Craig Huber -- Huber Research Partners LLC -- Analyst

Thank you.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Craig.

Operator

Thank you. Our next question comes from Hamzah Mazari from Jefferies. You may ask your question.

Hamzah Mazari -- Jefferies LLC -- Analyst

Hey, good morning. Thank you. My first question is just on Market Intelligence margins. Could you maybe talk about how you're thinking about margins here? Is this sort of a trough margin and we build from here just given some of the investment spend and just given your longer-term target for this segment being I guess mid-to-high 30s?

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Good morning, Hamzah. If you look at Market Intelligence margins for 2020, they were for the full year up 30 basis points, and what you see is underlying growth from operations and normal operating leverage that the business is having, but then the offsets were some of the acquisitions that were margin dilutive, for example, the 451 Research acquisition as well as the investment spend.

The investment spend should translate in 2021 to additional revenue growth. So we should start to see the benefits of those investment spend in 2021, and also overall the investment spent for Market Intelligence will come down a bit. So overall, we should expect that the operating leverage will be stronger, and therefore, also, the margin expansion will be stronger for Market Intelligence in 2021. So what we overall expect is Market Intelligence margins to see quite a nice increase during this year.

Hamzah Mazari -- Jefferies LLC -- Analyst

Great. And then just a question on the deal. Is it fair to say that don't expect any new information until the deal closes around sort of synergies, revenue synergies, cost synergies, cash integration costs, or do you expect to sort of release information as you're going through this pre-planning phase?

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Hamzah, of course, we are going through the planning phase, a lot of work is under way, more work to be done up to the point that we will close. At this moment, this is the information that we can provide to you. As you know, the S-4 is now effective. We would expect some updates closer to the close of the merger itself or post the merger itself. So we are not really planning to give any changes in updates between now and the close.

Hamzah Mazari -- Jefferies LLC -- Analyst

Got it. Thank you so much.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Hamzah.

Hamzah Mazari -- Jefferies LLC -- Analyst

Yes.

Operator

Thank you. Our next question comes from Simon Clinch with Atlantic Equities. You may ask your question.

Simon Clinch -- Atlantic Equities LLP -- Analyst

Hi, everyone. Thanks for taking my question. I was wondering if I could just going back to the fantastic sort of innovations products that you outlined from your Kensho capabilities. Could you just talk about how those kinds of new innovations feed through to actual incremental revenue opportunities for you over time in terms of the sort of process of distributing them to customers and when you actually start monetizing them? And then are these the kinds of things that are built into your expectations for revenue synergies in part for the IHS merger as well?

Douglas L. Peterson -- President and Chief Executive Officer

Yeah. Well, first of all, let me mention that when we talked earlier about some of the growth that we've seen in the Kensho indices where we grew 10 times in the SPDR Kensho New Economies indices. That's something that directly drives revenue. We have other areas where something like our OmniSearch, which is a ability to have an intuitive search tool on our Market Intelligence platform, that's something that drives traffic and it drives retention. It gives you a superior ability to gather data from the markets and to link it. And so that again is something that drives retention. And another example would be something like we talked before about being able to ingest 11 million new company data from groups like Preqin into our private capital information. And something like that drives the ability for us to have unique data faster than any other organization.

Another example of that would be something like Market-on-Close in Platts where we started off with one pilot, and now we're up to 80 different commodities that are using a new process that gets our information in the market 80% faster. So we think that all of these, whether it's efficiency, it's data linking, its actual products themselves that are being delivered by Kensho, all of those at the end of the day help drive customer experience or directly drive revenue.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

And Simon, if I may build on Doug's answer. The revenue benefit from Kensho you see now within the division, so it's all recognized within the divisions. I think over time you would see more also external revenue coming from Kensho again. Some of Kensho capabilities are now offered on the marketplace or sold directly to certain customers. So that's a benefit that will come in. So Kensho was pivoted more internally for the first period, but we see a little bit of change more pivot to an external focus again over the next period.

And then to the last part of your question, what could this do for the merger. At this moment, in terms of the merger synergies, we had not contemplated any benefits from Kensho. So we're actually all so excited to see what Kensho can do, and I cannot wait to see if we can unleash Kensho, and we have had some first-planning meetings around that as well. So Kensho is definitely going to be a very interesting element to the merger and some of the upsides of the merger going forward.

Simon Clinch -- Atlantic Equities LLP -- Analyst

That's really useful. Thank you very much. And I guess my follow-up question [Indecipherable] the ESG business and I guess what I'm thinking about is obviously the evolution of your business particularly with the RobecoSAM survey asset that you have and involving that over time to become something more nimble and more flexible as opposed to just an annual survey and how you might be able to use that to really service and leverage that into servicing the corporate clients for their ESG needs over time, perhaps you could talk about that opportunity?

Douglas L. Peterson -- President and Chief Executive Officer

Yeah. This ESG is definitely one of the most exciting areas for us at the company. As you saw, we had $65 million of revenues last year, which had been growing at a 40% pace. And when you bring the capabilities of IHS Markit together, we're going to have scores and time-series, workflow platforms, we're going to bring emissions data from IHS Markit. IHS Markit also has the fixed income indices, and they've got information about plastics and other sorts of metals that are used in batteries.

So bringing these together are going to be something that are really new for us. And let me give you a couple examples. Just imagine if you were a Chief Sustainability Officer. You met you mentioned the corporate clients. Corporate clients are increasingly, either through their treasurer or directly a sustainability officer, looking at how their own company is going to perform and what is their own individual approach to running their sustainability programs. We're going to have the tools to provide them a rating. We're going to build them -- they're going to have the CSA. We're going to have the ability to provide them with more data to have benchmark against other third parties.

And then when you think about IHS Markit's ESG reporting repository, the carbon data that they bring, it will allow them to have the workflow tools. We think that this is one of the areas that will actually allow us on our own and then together with IHS Markit to be really building a very relevant, very powerful ESG model.

One thing I would end with is that we just launched a new ESG website. I would recommend that everybody go look at it. You can immediately look for ESG scores of companies on it, and then it has tiles of all of the different capabilities that we have. And so this is something for us you're going to see a lot of investment here, a lot of focus on ESG. It's one of the most exciting growth areas in the company.

Simon Clinch -- Atlantic Equities LLP -- Analyst

Great. Thanks so much.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Simon.

Operator

Thank you. Our next question comes from George Tong from Goldman Sachs. You may ask your question.

George Tong -- Goldman Sachs & Co. LLC -- Analyst

Hi, thanks. Good morning. You expect global debt issuance to be up 3% in 2021. Can you elaborate on how you expect individual debt categories to perform, including investment grade, high-yield loans, and structured?

Douglas L. Peterson -- President and Chief Executive Officer

Sure, George. This is Doug. I'm not quite sure if I can give you all of those categories. But what we've looked at in 2020 is, as I mentioned earlier, it's about a 2.7% or let's say a little bit close to 3% decrease for the year. But that includes financial services that we think will be up 3.5%, structured finance up 2.5%, offset by corporates which would be down a little bit over 8%, and U.S. public finance down about 5%.

We do see a lot of demand coming from the M&A area. We think that between SPACs and what we see there the activity from SPACs and other general M&A that pipeline is growing. And typically, a lot of that is more in the high-yield area. But in terms of high-yield versus other types, I don't really have anything further on that, but we do see that this year there should be a very different mix than we've seen in prior years.

George Tong -- Goldman Sachs & Co. LLC -- Analyst

Got it. That's helpful. And Doug, it's been two months since you announced merger with IHS Markit. What additional findings have you had on the strategic opportunity during the course of due diligence would you like to call out?

Douglas L. Peterson -- President and Chief Executive Officer

Well, there's a couple I would call out that are maybe beyond what we'd originally thought. One of them is what I'd call private assets or being able to support the private equity industry. When we originally looked at this, we started looking at areas that were maybe a little bit more obvious in financial institutions and what we could do for debt capital markets, for corporate treasures.

One of the areas that I see a lot of upside is in what we call private markets, private equity. You think about how much longer assets are staying private before they go public or the information that people would like to look at for their supply chain. And when you put the two companies together, you have tools at IHS Markit, which for valuation, iVAL and QVAL, they've got portfolio monitoring tools, iLEVEL. As you've heard me talk about earlier, we've been ingesting data from people like Preqin into our tools, and then we've got the information from 451 Research, from money market directories, our Market Intelligence platform.

And you put all these together and it's going to be a very complete set of services of workflow tools, valuation tools, reference data, fundamental data about corporations that we wouldn't have been able to do alone. And so that's one of the areas that I was quite excited about. I also mentioned what we'll be able to do with ESG. That's another area. The upside I think there is higher than what I originally would have thought.

And then finally when we look at energy transition, which sometimes I think of energy transition as part of ESG, but for climate change and the interest that this is generating, it's not always directly the same thing as ESG. This is another area that between what we've got in Market Intelligence and Ratings, but add that in with what we have between Platts and the resources business at IHS Markit, there's going to be a lot of opportunities in new energy, new energy investments, all of the things that are involved in EV, which also will bring some of the capacities from the transportation business at IHS Markit.

So on energy transition, I think this is also another area that is well beyond what I probably originally contemplated.

George Tong -- Goldman Sachs & Co. LLC -- Analyst

Very helpful. Thank you.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, George.

Operator

We will now take our final questions from Manav Patnaik with Barclays. You may ask your question.

Manav Patnaik -- Barclays Capital, Inc. -- Analyst

Good morning. Thanks for squeezing me in here, guys. Just to follow up on the ESG. I apologize if I missed this earlier, but the $65 million of revenue for the year, how do you break that down between your research and data and perhaps in the Indices and just some thoughts on the growth rates and the potential mix changes you anticipate as that portfolio evolves.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Good morning, Manav. If you look at this $65 million, which is 47% over 2019, we're not really breaking it out for each of the divisions and initiatives, but directionally how you should look at it is the Platts energy transition initiatives are a significant part of the revenues today. But what we are seeing is particularly high growth of new initiative, the ESG scores, Green Evaluations, ESG Indices, fees. So particularly all the new initiatives are growing very fast and all of that together is driving this revenue growth up going forward. And Doug has given you some of the statistics and data, for example, underneath some of the ETF AUMs that are using our ESG Indices. So overall, I think it's really across the board, but at the current macro level, I think Platts is a significant component of the overall revenues.

Manav Patnaik -- Barclays Capital, Inc. -- Analyst

Got it. That's helpful. And then I guess just staying on track, mid-single-digit growth I guess estimated for '21. Platts has historically always been pretty resilient to what happens in the energy markets, but the IHS asset has been much more sensitive. I was just curious how you guys look at '21 and perhaps even beyond in terms of how that energy market fits into your strategy.

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Yeah. We are very encouraged about the opportunities to bring the Resources business of IHS Markit and Platts together. I think it's very complementary. I think that will be a very large benefit for our customers with Platts having particularly a focus on price reporting, as you know, and that is quite steady and stable. The Resources business of IHS Markit that is going through a transition from more upstream to more downstream. The upstream business has seen some headwinds and might continue for a shorter period of time, but particularly downstream analytics is doing very well.

So the opportunities to bring that together and to look at the commercial opportunities for the combined company is actually very attractive. Think about what we can do with respect to metals and mining, think about what we can do with respect to the analytics platforms bringing that together for our customers, think about what we can do with the Data Lake and Platts Analytics growth by unlocking the value of the data of IHS Markit Resources.

So we're actually very encouraged, and we think despite some of the changes, structural changes in the industry that we can help our customers, particularly also with energy transition.

Manav Patnaik -- Barclays Capital, Inc. -- Analyst

All right, thanks a lot.

Douglas L. Peterson -- President and Chief Executive Officer

Thanks, Manav. Thank you very much. I'd like to just provide a couple of closing comments. So I want to thank everybody for joining our call this morning and for all your questions and your support, as always. As you saw, 2020 was a very strong year for us during difficult circumstances. We made a lot of significant progress along the way with areas that we've been investing in over the last few years. As you know, we had put in place investment programs, and we started seeing them pay off as we called it the year of the product launch. And it has to do with our technology, our innovation, productivity programs we've put in place. We're very proud about what we're doing in China and the progress and advances that we're making there. Our ESG program is starting to really take off, and we think we're very well positioned. And then our own internal environmental performance and social outreach and our own ESG approach we think is something that's very important for our company.

And, of course, what is really most important for us this year is to continue to stay focused on the IHS Markit merger. We're so excited about that. We're always impressed with the people we meet, with the capabilities, with the products, with the reach that they have, and we think that that's going to allow us to have a very strong opportunity in 2021 and beyond.

And as I've said all along, during last year and before, we could have never made this progress without our people and the talented people that we have that are working very hard, especially in 2020 during uncertain and difficult circumstances. I want to thank all of our people again. Everyone's done a fantastic job.

So thank you everyone for joining us again today, and we look forward to continuing to talk to you throughout the year. Thank you very much.

Operator

That concludes this morning's call. A PDF version of our presenters' slides is available now for downloading from investor.spglobal.com. Replays of the entire call will be available in about two hours. The webcast with audio and slides will be maintained on S&P Global's website for one year. The audio-only telephone replay will be maintained for one month. [Operator Closing Remarks]

Duration: 84 minutes

Call participants:

Robert S. Merritt -- Senior Vice President, Investor Relations

Douglas L. Peterson -- President and Chief Executive Officer

Ewout Steenbergen -- Executive Vice President, Chief Financial Officer

Toni Kaplan -- Morgan Stanley & Co. LLC -- Analyst

Alex Kramm -- UBS Warburg LLC (US) -- Analyst

Ashish Sabadra -- Deutsche Bank Securities, Inc. -- Analyst

Andrew Nicholas -- William Blair & Company LLC -- Analyst

Jeffrey Silber -- BMO Capital Markets Corp. (Canada) -- Analyst

Owen Lau -- Oppenheimer & Co., Inc. -- Analyst

Craig Huber -- Huber Research Partners LLC -- Analyst

Hamzah Mazari -- Jefferies LLC -- Analyst

Simon Clinch -- Atlantic Equities LLP -- Analyst

George Tong -- Goldman Sachs & Co. LLC -- Analyst

Manav Patnaik -- Barclays Capital, Inc. -- Analyst

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