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S&P Global (SPGI -2.81%)
Q1 2022 Earnings Call
May 03, 2022, 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 2022 earnings conference call. I'd like to inform you that this call is being recorded for broadcast. [Operator instructions] To access the webcast and slides, go to investor.spglobal.com. [Operator instructions] I would now like to introduce Mr.

Mark Grant, senior vice president of investor relations for S&P Global. Sir, you may begin.

Mark Grant -- Senior Vice President, Investor Relations

Thank you for joining today's S&P Global first quarter 2022 earnings call. Presenting on today's call are Doug Peterson, president and chief executive officer; and Ewout Steenbergen, executive vice president and chief financial officer. We issued a press 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.

The matters discussed in today's conference call 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. A discussion of these risks and uncertainties can be found in our Forms 10-K, 10-Q and other periodic reports filed with the U.S. Securities and Exchange Commission.

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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. 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.

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 contact investor relations to better understand the potential impact of this legislation on the investor and the company. We are aware that we have some media representatives with us on the call. However, this call is intended for investors, and we would ask that questions from the media be directed to our Media Relations team, whose contact information can be found in the press release.

At this time, I would like to turn the call over to Doug Peterson. Doug?

Doug Peterson -- President and Chief Executive Officer

Thank you, Mark. Welcome to today's first quarter earnings call. I'd like to start by highlighting the historic event that occurred in the first quarter of 2022. We completed our merger with IHS Markit, and I'm incredibly excited to be joining you for our first quarterly earnings call as a combined company.

The promise of the merger has already begun to manifest itself in our culture and our financial performance. Beginning with a few financial highlights. We reported strong financial results with adjusted pro forma revenue increasing 2% and adjusted pro forma diluted EPS increasing $0.01 year over year despite one of the most challenging issuance environments in recent history. We saw positive revenue growth in five of our six divisions, including double-digit growth in three of them.

Adjusted pro forma expenses increased 8% as we continue to invest in events, people and technology, though much of this expense growth is nonrecurring as we'll discuss later on. We're updating our guidance to reflect the increased uncertainty caused by the macroeconomic and geopolitical landscape. And Ewout will walk through these details in a moment. I'd also like to share a few highlights from the first quarter.

As I mentioned, we completed the merger with IHS Markit and had a number of exciting achievements. We announced a $12 billion accelerated share repurchase, or ASR, and launched the first tranche of $7 billion in March with the remainder to be executed by the end of the year. We took advantage of this still historically low interest rate environment to optimize our capital structure and lower our average cost of debt. And we had strong attendance at some of the industry's most important conferences, including CERAWeek, World Petrochemical Conference and TPM22.

While we've only been together for two months, we're already starting to see validation of our investment thesis, and the results of our comprehensive planning are paying off. We've begun leveraging technology like Kensho across the broader organization to automate processes and increase efficiencies. We've begun development of several new products and features across the divisions. We're integrating our divisional commercial teams, and we've already closed synergy deals in multiple divisions.

I want to take a moment to touch on culture and leadership. We brought our combined leadership team together in person for the first time in March. We were thrilled to see so many of our colleagues brainstorming, planning, working and functioning as if they had already been together for years. We saw the free exchange of ideas, strong proposals for new growth engines and clear alignment on our strategy, purpose and values.

We also heard a unified voice among our leadership in support of our People First initiatives and our commitment to diversity, equity and inclusion. We came away energized and full of confidence that we'll be able to take the absolute best, not only from each company but from each person in the organization and create something exceptional at S&P Global. I have never been more inspired by our people. And I'm more excited than ever to work with them to drive sustainable, profitable growth.

When we announced the merger in November 2020, we noted that we needed regulatory approval in multiple jurisdictions. We received final regulatory approval on February 25, 2022, and officially closed the merger three days later on February 28. We immediately went to work optimizing the capital structure, issuing $5.5 billion in new debt, most of which was used to refinance existing debt at lower rates. We completed that refinancing in April 2022.

In order to secure regulatory approval for the merger, we were required to divest a number of businesses. The table on this slide lays out the details of those divestitures. As we have shared with you before, the aggregate revenue from all of the businesses being divested is approximately $425 million, and the margins for each of these businesses are higher than the margins for each of the divisions they were in. We're confident that we negotiated well on behalf of our shareholders in these transactions, evidenced by the approximately 9.5 times revenue multiple paid by the acquirers of these businesses in aggregate.

Net after-tax proceeds will total $2.85 billion. Now, to recap the financial results for the first quarter. Revenue increased 2% to $3.1 billion. Our adjusted operating profit decreased 6% to $1.4 billion.

Our adjusted pro forma operating profit margin decreased approximately 340 basis points to 45% as both profits and margin were negatively impacted by the decrease in Ratings transaction revenue and the expense growth I mentioned earlier. As you know, we measure and track adjusted segment operating profit margin on a trailing 12-month basis, which decreased 60 basis points to 47%. In addition to our strong overall revenue performance and continued expense management, we launched a $7 billion ASR and began optimizing our capital structure. Combined with tax effects of merger-related synergies and prudent investment, we increased adjusted pro forma diluted EPS year over year.

Looking across the six divisions, I'm encouraged by the fact that even in a challenging macroeconomic environment, we were able to deliver strong revenue across five of our six divisions, including double-digit growth in commodity insights, mobility and indices. In line with the expectations we laid out on our call in March, we did see a year-over-year decrease in Ratings, driven by an exceptionally soft issuance environment. During the first quarter, global bond issuance decreased 12%. This understates the impact to our business, however, as high-yield issuance declined far more dramatically.

In the U.S., issuance in aggregate decreased 25% as investment-grade decreased 19%, high-yield decreased 75%, public finance decreased 15%, structured finance increased 9% due to large increases in mortgage-backed securities, offset by declines in structured credit. Bank loan ratings declined 35% year over year. European issuance decreased 14% as investment-grade decreased 11%, high-yield decreased 54% and structured finance increased 27% due to increases in RMBS and covered bonds, partially offset by declines in ABS, CMBS and structured credit. In Asia, issuance was flat.

The next two slides look at the difference we saw in the quarter between investment-grade issuance and the issuance of high-yield and leveraged loans. This slide shows that investment-grade issuance is resilient relative to other categories, decreasing only 5% year over year. This slide depicts the combination of high-yield issuance and leveraged loan volume. This quarter, we saw a decrease of over 50% from the incredible levels in the year-ago period.

High-yield was particularly impacted by the uncertainty in the market, with issuance decreasing 68% year over year. While difficult to pinpoint exact causes, issuance in the first quarter was impacted, both by the pull-forward we witnessed and discussed last year, as well as the intentional delay we're hearing from customers, as many issuers wait for clearer signs of stability before reentering the market. Now, turning to some of the factors that made this quarter successful for S&P Global. We saw significant increases in engagement and usage of our products and our content this quarter.

The metrics on this slide are clear evidence that in periods of increased uncertainty, whether that's in the macroeconomic picture, market volatility or geopolitical tensions, our customers turn to us. They turn to us for the insights, data and tools that they need to make well-informed business and investment decisions. It's also important to remember that S&P Global's stronger, more diverse product portfolio allows areas of the business to thrive in times of elevated volatility and uncertainty. Within the S&P Dow Jones indices business, we saw more than 20% growth in revenue from our exchange-traded derivatives, whose volumes are directly correlated with market volatility.

In the commodities markets, our global trading services business within commodity insights grew 17% year over year. During the first quarter, we held a number of premier conferences, attracting thousands of leaders from multiple industries. Several of these conferences returned to being in-person events for the first time in three years. One of these was CERAWeek.

For some S&P global investors, CERAWeek may be unfamiliar. CERAWeek is the world's leading event for the energy industry, taking place in the first quarter each year and hosted in Houston, Texas. We were thrilled to welcome attendees back in person, and it was clear that all of the factors impacting the energy industry right now, industry and government leaders wanted to be there. We had record attendance with over 5,200 delegates, 900 speakers and 50 senior government officials.

With the combined resources of S&P Global Platts and IHS Markit, we're confident that CERAWeek will continue to grow and set itself apart as the must-attend event for energy industry leaders. We also hosted the Annual World Petrochemical Conference and the TPM conference in the first quarter. Both conferences aim to help industry leaders navigate some of the most pressing challenges facing our global economy. WPC convened this year to discuss how the chemical industry can help facilitate and thrive in a world progressing toward more sustainable operations, including net-zero emissions targets.

Our conferences bring people together to drive innovation and growth in different industries, but they also demonstrate the strength of S&P Global as a source and a destination for global leadership. We're thrilled with the progress we've made as we celebrate the first anniversary of Sustainable1. ESG revenue growth accelerated on both a reported and organic basis in the first quarter, growing 57% year over year to reach nearly $50 million. We continue to introduce new ESG-related products and product enhancements at a rapid pace.

In the first quarter, we saw the launch of 17 ESG ETFs based on our indices. And we ended the first quarter with AUM in ESG ETFs growing 28% to surpass $33 billion. Our indices and commodity insights teams collaborated to launch the S&P GSCI Electric Vehicle Metals Index, and we continue to enhance ESG scores made available through our Capital IQ Pro platform. One of the greatest advantages we have in ESG is the robust set of data that comes to us through the active participation of covered companies.

Our 2021 corporate sustainability assessment saw a 64% increase in the number of companies working with us directly to ensure the data sets behind our ESG scores are robust, accurate and comprehensive. Our coverage of more than 11,000 companies includes approximately 2,300 which provide data sets and disclosure directly to CSA. Our commitment to active partnership with covered companies ensures our ESG scores are informed by the best data available. Now, turning to our outlook.

We have updated our bond issuance forecast for the year to reflect the decrease seen in the first quarter, as well as to better reflect the ongoing impact of macroeconomic uncertainty and the ongoing conflict in Ukraine. We now expect Global issuance to decline approximately 5% year over year within a range of down 14% to flat in 2022. We expect corporates to see a 12% decrease in issuance, partially offset by a 2% increase in financial services issuance. We expect U.S.

public finance and structured finance to each soften by 7% and international public finance to shrink by about 1.5%. As we evaluate the remainder of the year, we wanted to discuss some of the assumptions that underpin our guidance. Let me start with our response to the tragic events taking place in Ukraine and the impact on our business. As we've shared with you previously, combined revenue from Russia and Belarus is less than 1% of our total revenue.

We have suspended commercial operations in Russia and Belarus, including all customer contracts. We've suspended ratings of Russian entities and removed stocks and bonds listed or domiciled in Russia from our indices. While the direct financial impact on our business is not material, we acknowledge the indirect impact on the issuance environment and market volatility. We also wanted to illustrate some of the changes in the macroeconomic environment that inform our financial outlook for the company.

In addition to lower debt issuance, we now expect slightly lower global GDP growth. Inflation is also likely to have a greater impact on our business and economy as a whole relative to our expectations earlier this year. We're seeing some upward pressure on compensation expense that we expect to continue throughout the rest of the year. Commodities prices remain elevated relative to our early expectations as well.

To be clear, this is not meant to be a comprehensive list of all metrics that inform our outlook, but we wanted to help investors understand the changes in some of the assumptions we make about the global economy when formulating guidance. Before handing it over to Ewout, I'd like to reiterate how pleased we are with the execution and success we've seen in a challenging quarter. Our ability to drive positive growth in both revenue and adjusted pro forma earnings per share in a quarter like this would have been much more challenging before our merger with IHS Markit. The strength, stability and scale of our businesses gives us great confidence to invest for future growth and be optimistic about the years ahead.

We remain committed to our strategic organic investments, as illustrated on this slide, and we remain confident these investments will power significant future growth and profitability for the company. With that, I'll turn it over to Ewout to walk through our results and guidance. Ewout?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thank you, Doug. I want to start by emphasizing the successful execution we saw this quarter. With five of our six divisions posting pro forma revenue growth, it's already clear that we are more resilient, both operationally and financially as a combined company. With our larger scale and more diversified revenue streams, we're more insulated to volatility in the debt issuance market.

As such, we were able to grow pro forma revenue and adjusted EPS year over year even during a period of sharp decreases in issuance. Doug highlighted the headline financial results. I will take a moment to cover a few other items. But as a reminder, when we discuss financial results from operations and cash flows, we're discussing those results on an adjusted pro forma basis as if S&P Global and IHS Markit were combined for the entirety of all periods presented, unless explicitly called out as GAAP.

Adjusted results also exclude the contribution from divested businesses in all periods. We have also made minor refinements to the recast pro forma financials for all four quarters of 2021, which can be found in the amended 8-K filed today. Adjusted corporate unallocated expenses declined from a year ago, caused by a combination of reduced incentive and fringe costs, as well as the release of certain benefits accruals. Our net interest expense increased 5% as we increased gross debt, partially offset by lower average rates due to refinancings.

The decrease in adjusted effective tax rate was primarily due to tax deductions related to stock-based compensation and merger-related optimization of capital and liquidity structure. As we introduced last year, we'll continue to disclose these three categories of non-GAAP adjustments to provide insights into the type of expenses that we are incurring related to the merger and the synergies we have discussed. Transaction costs in the quarter were $281 million. These are costs related to completing the merger.

They include legal fees, investment banking fees and filing fees. Integration costs in the quarter were $58 million. These are costs to operationalize the integration. They include consulting, infrastructure and retention cost.

Cost to achieve synergies amounted to $88 million in the quarter. These are costs needed to enable expense and revenue synergies. They include lease terminations, severance, contract exit fees and investments related to product development, marketing and distribution enhancements. During the first quarter, the non-GAAP operating adjustments collectively totaled to $504 million, including a $1.3 billion gain on the sale of businesses and a $200 million contribution to the S&P Global Foundation, in addition to the merger-related items I mentioned.

Given the growth in expenses this quarter, we wanted to provide some insight into the drivers, many of which are transitional. Importantly, we expect expense growth to moderate as we progress through the year, even excluding the impact of cost synergies. In the first quarter, we recognized $8 million in additional T&E expenses as we saw a limited resumption of travel relative to the last two years. We also saw a $10 million increase in advertising expense associated with our mobility division.

Investments in growth initiatives contributed $28 million of the increase. We're specifically disclosing the increase from what we are calling a step-up impact in the quarter. This relates to increases in expenses that we view as a reestablishment of baseline cost. The return of in-person events included several major conferences in the first quarter, as Doug mentioned.

Together, these live events added more than $20 million of incremental expense relative to last year when these events were still virtual. Step-up costs also incorporate a comprehensive process to align compensation practices across our employee base. One of these changes is to harmonize the timing of annual merit increases to March from April. The pull-forward of the merit increase caused one month of impact in the first quarter that did not occur in the year-ago period.

We also recognized $15 million in additional expense related to the ongoing cloud transition. Free cash flow, excluding certain items, was $701 million in the first three months of 2022. Note that this is meant to reflect the estimated free cash flow of the combined company as if the merger were closed on January 1, 2022. We will provide some additional color on the drivers of our cash balance and our gross debt in the next few slides.

Now, turning to the balance sheet. Our balance sheet continues to be very strong, with ample liquidity. As of the end of the first quarter, we had cash and cash equivalents of $4.4 billion and debt of $11.4 billion. Our adjusted gross debt to adjusted EBITDA at the end of the first quarter was 2.57 times.

As you can see, our cash balance declined sequentially to $4.4 billion. The single largest driver in the reduction was the $7 billion in cash paid to fund the first tranche of our 2022 $12 billion accelerated share repurchase program. We also received net proceeds from divestitures of $2.6 billion and net proceeds of $2.3 billion from the issuance of debt. Now, to gross debt.

We issued $5.5 billion of new debt in the first quarter, $3.5 billion of which has been allocated to refinancing existing debt. After the quarter closed, we also made a final debt redemption payment of $600 million, which brought our adjusted gross debt leverage down to 2.47 times. Now, I'd like to provide an update on our synergy progress. In the first quarter, we have achieved $23 million in cost synergies, and our current annualized run rate is $135 million.

While we are already seeing significant progress in pipeline and customer conversations with only one month as a combined company, revenue synergies are negligible. The cumulative integration and cost to achieve synergies through the end of the first quarter is $365 million. Now, let's turn to the division results and begin with Market Intelligence. Market Intelligence delivered revenue growth of 7%, with growth across all product lines.

Expenses increased 8%, primarily due to factors I mentioned earlier: investments in technology, especially cloud transition costs, and continued investment in strategic initiatives like ESG. Segment operating profit increased 5%, and the segment operating profit margin decreased 60 basis points to 29%. On a trailing 12-month basis, adjusted segment operating profit margin decreased 60 basis points to 30%. You can see on the slide our operating profit from the OSTTRA joint venture that complements the operations of our Market Intelligence division.

The JV contributed $26 million in adjusted operating profit to the company. Because the JV is a 50%-owned joint venture operating independent of the company, we do not include the financial results of OSTTRA in the Market Intelligence division. Looking across Market Intelligence, there was solid growth in each category. And on a pro forma basis, desktop revenue grew 7%, data and advisory solutions revenue grew 12%, enterprise solutions revenue grew 2% and credit and risk solutions revenue grew 8%.

As Doug discussed at length, Ratings faced a challenging issuance environment in the first quarter, with revenue declining 15% year over year. Expenses increased 7%, primarily due to compensation expense and information service costs, partially offset by lower occupancy costs. This resulted in a 25% decrease in segment operating profit and 820 basis points decrease in segment operating profit margin. On a trailing 12-month basis, adjusted segment operating profit margin decreased approximately 105 basis points to 62%.

Non-transaction revenue increased 7%, primarily due to growth in fees associated with Surveillance and growth in CRISIL revenue. Transaction revenue decreased 31% on the soft issuance already discussed. This slide depicts Ratings revenue by its end markets. The largest contributors to the decrease in Ratings revenue were a 21% decrease in corporates and a 12% decrease in structured finance, driven predominantly by structured credit.

In addition, financial services decreased 9%, governments decreased 11% and the CRISIL and other category increased 12%. And now turning to commodity insights. Revenue increased 14%. The return of in-person conferences, most notably CERAWeek and World Petrochemical Conference, drove 70% year-over-year growth in advisory and transactional services revenue.

Excluding the impact of CERAWeek, revenue growth would have been 8% year over year. Global trading services had a great quarter, increasing 17%, mainly due to strong fuel oil and iron ore volumes. As Doug noted earlier, GTS revenue often picks up when commodity prices become more volatile, which we certainly witnessed in the first quarter. Expenses increased 18%, primarily due to cost associated with the return of in-person conferences and headcount and compensation expense.

Excluding the impact of CERAWeek, expenses would have increased 10% year over year. Segment operating profit increased 8%, and the segment operating profit margin decreased 210 basis points to 43%. The trailing 12-month adjusted segment operating profit margin decreased approximately 200 basis points to 43%. In addition to the exceptional quarter in advisory and transactional services, we saw strong demand driving growth in price assessments and energy and resources data  and Insights.

Growth was partially offset by a modest decrease in upstream data and insights, though we note positive signs of inflection in the upstream business. But for the suspension of commercial operations in Russia, upstream would have had its second consecutive quarter of positive ACV growth, which is a leading indicator for revenue. We also saw a dramatic improvement in retention in the Upstream business as retention rates improved by more than 10 full percentage points over the last 12 months. In our mobility division, revenue increased 10% year over year, driven primarily by strength in planning solutions and used car offerings.

Expenses grew 11% on increased advertising expense in the quarter and headcount growth in 2021 as the business restores capacity to better align with strong growth over the past 18 months. This resulted in an 8% growth in adjusted operating profit and 80 basis points of margin contraction year over year. On a trailing 12-month basis, the adjusted segment operating profit margin increased approximately 400 basis points to 39%. Dealer revenue increased to 12% year over year, benefiting from successful prior-year-period promotions and from retention rates that remain above pre-COVID levels.

Growth in manufacturing was 3% year over year related to the well-publicized supply chain challenges faced by automotive OEMs. Financials and Other increased 12%, driven primarily by strength in our insurance underwriting products. S&P Dow Jones indices delivered strong revenue growth of 14% year over year, primarily due to gains in AUM linked to our indices. During the quarter, expenses increased 9%, largely due to strategic investments, increased compensation and IT costs.

Segment operating profit increased 16%, and the segment operating profit margin increased 130 basis points to 69.3%. On a trailing 12-month basis, the adjusted segment operating profit margin increased approximately 10 basis points to 68%. Every category increased revenue this quarter. Asset-linked fees increased 15%, primarily from AUM-driven gains in ETFs, mutual funds and insurance.

Exchange-traded Derivative revenue increased 22% on increased trading volumes. Data and custom subscriptions increased 4%. Over the past year, ETF net inflows were $286 billion, and market appreciation totaled $244 billion. This resulted in quarter-ending ETF AUM of $2.9 trillion, which is 22% higher compared to one year ago.

Our ETF revenue is based on average AUM, which increased 24% year over year. Sequentially, versus the end of the fourth quarter, ETF net inflows associated with our indices totaled $68 billion, and market depreciation totaled $123 billion. Within our engineering solutions division, we saw 7% revenue growth, driven primarily by growth in non-subscription offerings, most notably the Boiler Pressure Vessel Code, or BPVC, which was last released in August of 2021. Investment in growth initiatives and an increase in royalty expense led to a 5% increase in adjusted expenses.

This resulted in segment operating profit growth of 17% and 160 basis points of year-over-year margin expansion. On a trailing 12-month basis, the adjusted segment operating profit margin contracted approximately 115 basis points to 20%. Subscription revenue in engineering solutions increased 3% year over year, while non-subscription revenue increased 60% over the same period. Now, moving to our guidance.

This slide depicts our new GAAP guidance, and this slide depicts our updated 2022 adjusted pro forma guidance. For revenue, we now expect a low single-digit increase year over year, reflecting the issuance environment, partially offset by the strength we are seeing in our non-Ratings businesses. We now expect corporate unallocated expense between $85 million and $95 million, approximately $30 million lower than our previous guidance on lower forecast incentive compensation and professional fees. Interest expense is expected in the range of $360 million to $370 million, down $10 million from prior guidance.

This is due to a slightly lower average cost of debt than we initially expected. We expect capital expenditures of approximately $165 million and free cash flow, excluding certain items, in the range of $4.8 billion to $4.9 billion. There is no change to our expectations for deal-related amortization, operating profit margin expansion or tax rate. This slide illustrates our guidance by division.

For Ratings, we now expect revenue to decline low to mid-single digits and for margins to be in the low to mid-60s. This compares to previous guidance calling for low single-digit revenue growth and margins in the mid-60s. Our outlook for other segments is unchanged from previous guidance. Overall, we are incredibly encouraged by the team's ability to execute so well even in the current macro environment.

We're focused on the enormous long-term opportunity ahead of us as a combined company, and we are more confident than ever in our ability to execute against that opportunity. Our differentiated data, insights, analytics and services help our customers to thrive and accelerate progress. And with that, let me turn the call back over to Mark for your questions.

Mark Grant -- Senior Vice President, Investor Relations

Thank you, Ewout. [Operator instructions] Operator, we'll now take our first question.

Questions & Answers:


Operator

Our first question comes from George Tong with Goldman Sachs. Your line is open.

George Tong -- Goldman Sachs -- Analyst

Hi. Thanks. Good morning. You've updated your full year outlook for debt issuance.

Can you discuss what your expectations are for issuance on a quarterly basis directionally? And how much of your guidance increase or guidance update reflects performance in the quarter compared to performance over the rest of the year?

Doug Peterson -- President and Chief Executive Officer

Thanks for that question. This is Doug. Let me start with that. Well, knowing that issuance is going to be one of the key questions that we're going to be talking about, let me just review a little bit what we saw during the quarter and then some of the expectations for the rest of the year.

As you know, it was a very weak quarter for issuance. We saw that the total global issuance was down 9%, excluding bank loan ratings; and 12%, including bank loan ratings. We saw, as an example, U.S. bonds were down 22%, U.S.

corporates were down almost 50%, and high-yield globally was down 68%, and the U.S. was down 75%. So with that backdrop, as you see, we've looked toward the rest of the year. We expect that issuance during the second quarter will be recovering, but not necessarily to the full extent that it would have been compared to last year.

And the second half of the year, the comparables are not quite as difficult as they were earlier in the year. And we do believe that there will be a rebound in issuance given the situation and current positioning in the market. But let me hand it over to Ewout, who will provide some more color.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Good morning, George. Indeed, as Doug said, we're expecting still the second quarter to see some impact with respect to our quarterly expectations, but then to see some improvement in the second half of this year, and particularly also because the comps will get easier during the second half of this year. I also would like to point out, of course, the benefits we have of the broader company we are at this point in time because five of our -- the six divisions are performing in line or better than expectations. We will see during the course of this year coming in the benefits from our cost synergies, the benefits from our buyback program and so on.

So that should help drive the earnings-per-share growth in a very strong way during the rest of the year. Hence, that we're still guiding to double-digit EPS growth for the full year. So definitely, those elements will help to strengthen the performance of the company during the course of 2022.

George Tong -- Goldman Sachs -- Analyst

Got it. That's helpful. And just to follow-up on that point. You mentioned that five of the six divisions are performing in line or better than expectations.

Can you elaborate on which of the segments actually outperformed your initial expectations heading into the quarter? And what were the key factors driving the upside performance?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

 Yes. Let me give you a quick overview for each of the divisions, and happy to go deeper in some of the next questions. But for example, Market Intelligence, we're incredibly excited about the opportunity. The first conversations we're having with customers are really showing the benefit of the combined company.

And we saw actually the subscription revenue going up in a very strong way, actually growing more in the double-digit space. commodity insights, very strong commercial momentum. The main issue with respect to the Russian revenue impact will be in commodity insights. But we expect to be able to offset a significant part of that based on the very strong commercial momentum we are seeing, and also very excited about what we can offer our customers on a combined basis.

mobility, clearly, some positive trends as well, as we have pointed out, particularly because we see higher retention of our customers. The Index business, a strong AUM growth. Keep in mind, we are looking at this year over year. And of course, we started at much lower AUM levels at the beginning of 2021.

And then, also, the derivative activity and volumes are much higher. And then, you also saw Engineering Solutions growing in a healthy way during the quarter. So overall, we think that our businesses are very well positioned, five of the six, and that the issues with respect to the debt issuance environment are very isolated within the Ratings divisions itself. And also, keep in mind that we have a significant component in Ratings with respect to non-transaction revenue.

So that is clearly also an element of stability and offset for the overall transactional revenue.

George Tong -- Goldman Sachs -- Analyst

Very helpful. Thank you.

Operator

Our next question comes from Manav Patnaik with Barclays. Your line is open.

Manav Patnaik -- Barclays -- Analyst

Thank you. So in the negative 5% issuance forecast obviously is much different than what Moody's reported yesterday. And I was just hoping for -- is there some sensitivity perhaps you can provide us in terms of, if things get worse, how that would impact your guidance? Or does the EPS range account for that flat to down 14% that you talked about earlier?

Doug Peterson -- President and Chief Executive Officer

 Yes. Well, first of all, let me share with you a little bit more about what our outlook is for the full year and what some of the sensitivities are in that forecast. As you know, we're expecting that the overall issuance of bonds will be down 5% for 2022. But if you look at what the components are in the corporates, we already saw very weak issuance in the first quarter.

And so, we've forecasted to be a 12% decline for the full year, with a downside of up to 25%. And it could recover and have a 5% -- down 5% for full year. We do see strength in financial services. They continue to outpace the issuance last year.

We expect it for the full year will be up 2%. But again, with the current environment, that could drop to up to 5% down. Structured finance and U.S. public finance could be down at 7% this year.

That's what our current forecast is, and they could also see downside up to 12%. And then, there's other factors, such as international public finance, that as well would be down 2%. But as you know, we're very close to the markets. We watch what's happening.

Our forecast is based on many, many different factors. We look at what is the current situation of maturing bonds in the market, whether it's on people's balance sheets. As you know, there was very little -- hardly any issuance at all of either loans, high-yield loans or high-yield bonds, during the first quarter. There's a pipeline out there that still wants to go to the markets.

We also know that there is a set of M&A transactions which have not been completed. There's $1 trillion of private equity capital on the sideline that still has not been deployed. So we look at all of these factors and weigh them together to come up with our estimate for the year of 5% down. So this isn't just one single factor that goes into it.

We're looking across many, many different factors. And as Ewout just said, we also expect that through the year, there will be recovery in issuance as we keep going deeper into the year.

Manav Patnaik -- Barclays -- Analyst

Got it. And then, maybe somewhat similarly, just on the indices side of the business, what's embedded in the assumption in terms of at least the asset-linked fees portion of the business?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Yes, we are also always looking, Manav, at the actual asset levels. And then, we are assuming, with respect to the growth and market appreciation, a very modest development for the remainder of the year. But keep in mind that this is a business where we have the natural offset, the partial hedge, because if the asset levels will come down, we see the derivative trading activity going up and the other way around. And as you have seen this quarter, actually, the Index business has performed very well based on those kind of dynamics.

So if you look at it historically, the Index business actually has been growing revenues for many, many years in a row in very volatile market circumstances, very different circumstances over the years. And that is exactly due to the dynamics of the business and the business model that we have, the different revenue streams in the Index business.

Manav Patnaik -- Barclays -- Analyst

Got it. Thank you.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Manav.

Operator

Our next question comes from Toni Kaplan with Morgan Stanley. Your line is open.

Toni Kaplan -- Morgan Stanley -- Analyst

Thanks so much. I wanted to ask about the margins. You kept the adjusted pro forma operating margin flat. Obviously, there'll be some Ratings weakness.

I'm imagining that's maybe offset by some of the other segments. But just talk about anything sort of on the cost side, maybe labor inflation, how that's trending? Just what are the risks to the margin guide? And what gives you the sort of confidence to stay at that level despite the Ratings weakness? Thanks.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Good morning, Toni. You're right. There are many different elements that go in the mix with respect to our margin expectation. But let me first reemphasize our margin expectations.

So what we are guiding to is still 130 basis points margin expansion during 2022. And the reason is we will see some natural growth in our businesses. We, of course, have our business-as-usual expense growth based on the activities of the business. We, of course, have some impact of the overall compensation environment.

We have done some targeted increases in certain job groups. We have raised the merit in certain jurisdictions a bit higher than we have done in previous years. But then, at the same time, we also have several management actions that we are taking. Definitely, in the current environment, we're, of course, very careful from an expense perspective.

So we will see benefits from some of those management actions. We also have the benefit of some of our variable expenses that will come down during the course of this year. And then, if you layer on top of that the cost synergies, that will be very meaningful and significant. We're actually very pleased that in an environment -- macro environment where we are today, that we, as a company, still can improve our margins, increase our margins in a very significant way.

Toni Kaplan -- Morgan Stanley -- Analyst

That's great. And then, just on the revenue side, I'm sure you mentioned it. I just happened to miss it. The organic growth expectation for the year, are you still sort of expecting the same six and a half to eight for the next two years? Just any update on overall organic growth.

And maybe just how the different levers -- is pricing easier this year because of the rising cost environment, etc.? Thanks.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Yes. Toni, with respect to our own effort, 6.5% to 8% revenue growth for '22 and then '23 combined, we have no reason to back away from that at this point in time. But obviously, we will continue to monitor that very closely. And the reason is that, as we mentioned, five of our six divisions are performing in line or better than expected.

So the main question is, when is the issuance environment coming back? And we have been in that movie many times before. If you look back for the last decade, there's maybe three situations where the issuance environment was negative, and there were impacts on the Ratings revenue. But what we usually have seen then is after one or a few quarters, that came back in a very strong way. So it is really the matter of the uncertainty about the timing when that is coming back.

So for that reason, we have no reason at this moment to back away from our revenue expectations for '22 and '23 combined.

Toni Kaplan -- Morgan Stanley -- Analyst

Thanks very much.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Toni.

Operator

Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.

Ashish Sabadra -- RBC Capital Markets -- Analyst

Thanks for taking my question. So first, on the cost synergies, pretty good progress in the quarter itself. So I was wondering if you could drill down further on how the -- what kind of traction you're seeing on that front. How should we think about the quarterly cadence this year? And any initial feedback from the cost takeout? Thanks.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Yes. Thank you, Ashish. I think it's important, first, to point out that we are in these results only one month in as a combined company. So in that context that we're already being able to report $123 million of cost synergies on an annualized basis, we think, actually, that's already a very strong indicator.

With respect to the absolute number and the phasing of our cost synergies, nothing has changed compared to our information that we provided on March 1 during the merger call. But what is important to point out is that we made good progress. We are very comfortable and confident that we can hit those numbers. And you recall that we said that we will be able to achieve about $600 million of cost synergies in total, and that we expect something like 35% to 40% in 2022.

So realized in this year. And as I said, we are very confident that we're on track to hit those numbers.

Ashish Sabadra -- RBC Capital Markets -- Analyst

That's great color. And then, maybe a follow-up question on the revenue synergies. Again, there was a reference to Kensho being used across the broader organization to automate processes, and then also the strength in subscription on the MI front. So question there was, any initial feedback from your customers as you started integrating some of the IHS Markit data into the global marketplaces, and traction or ability to cross-sell, upsell those INFO products into SMB customer base than the other way around? Thanks.

Doug Peterson -- President and Chief Executive Officer

Let me start with that. We've been thrilled with the response we've been getting from our customers as we started being -- the merger and working together. We've been able to get all of our teams merged within the division's commercial team. So they're out listening to customers.

Ewout and I have been out listening to customers and hearing what they talk about. They're talking a lot about ESG, about energy transition, about some of the key thesis of this deal where we began with. In addition, they're interested in data and AI and machine learning, how they can link their data with ours. And we've seen that our commercial organizations have already been out in the market.

We have strong pipelines of cross-sell within all the divisions. We also have a set of products that we'll be looking at over time. As you know, the merger will be very powerful for us, but the main synergies coming from the revenue side are built toward the back end. But we're already seeing very, very strong relationships with customers, very good dialogue, and with all of the different areas that were the core thesis of the deal itself.

Ashish Sabadra -- RBC Capital Markets -- Analyst

That's great color, Doug. Congrats on solid results. Thank you.

Doug Peterson -- President and Chief Executive Officer

Thanks, Ashish.

Operator

Our next question comes from Alex Kramm with UBS. Your line is open.

Alex Kramm -- UBS -- Analyst

Yeah. Good morning, everyone. Maybe just as a follow-up to what you just talked about on the Market Intelligence commercial opportunities. Can you maybe give a little bit more detail how exactly you've integrated the sales force? I think historically speaking, S&P, over the last few years, has moved to a very enterprise license approach.

I think IHS Markit was very product specialist-focused. So just wondering what exactly commercially you've made changes on already. And if there's opportunity to maybe, as you align things, to pick up a little incremental revenue synergies quickly.

Doug Peterson -- President and Chief Executive Officer

Yes. So thank you for that. As you pointed out, we had really two different approaches. At Market Intelligence at S&P Global, we generally had more of an approach that was an enterprise model.

It gave us an opportunity for customers to have all of the users having access to the products and services, where financial services comes in with an approach where some of their products are priced more on a per user basis or a volume basis. There are some of the products within the new Market Intelligence, which came from IHS Markit, that are going to be priced differently because they're installed software, which, for us, is an exciting new area, also some of the enterprise services that are provided as well. So some of those are not going to necessarily fit within the product merger. But there are a lot of opportunities that we've seen of moving data, which is within the IHS Markit, things like bond pricing, reference pricing, moving that into the desktop.

In addition, there's data that we have for even something that we've had as long as Compustat, where some of that data can be moved into the products and services that are software solutions. So the commercial teams have been brought together. There's been immediate cross-training so that every single person from both of the two companies understand the products of each other. We've also seen opportunities for the traditional cross-sell customers that don't have products on one side or the other that we started servicing.

And as I mentioned, some of the biggest themes in ESG. We have the new scores, which we have 11,000 scores, which we've taken and put them into the desktop. We can put those into many other areas. So we see ESG as a theme, data is a theme.

There's a lot of interest in credit risk. Private markets is another area. So it's only been one month for this quarter since we closed. It's been two months since we closed, but the enthusiasm, the momentum is excellent.

Alex Kramm -- UBS -- Analyst

Thanks for the color. Thank you there. And maybe a direct follow-up standing or keeping it on Market Intelligence. Still a very large portion of the combined business seems to be true subscription-based, but just wondering if you could talk about the cyclicality in this business a little bit more.

When I look at your press release, recurring variable fees were down 13% year over year. And I guess that hit the Enterprise Solutions revenue only up 2%. So maybe just flesh out what exactly those variable components are that were impacting you on a year-over-year basis. And as you think about the remainder of the year with capital markets a little bit choppy, what the impacts could be here on the Market Intelligence side that we should be thinking about as this business seems a little bit more cyclical than maybe the core Market Intelligence previously.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Alex, yes, let me give you a bit of the breakdown and explanation what is happening exactly in recurring variable. You're right. If you look at MI as a whole, approximately 83% is subscription-based, 5% is non-subscription. And then, you have that category in between that is subscription variable at approximately 12%.

There, you see a bit more impact from market fluctuations, capital market fluctuations, because that's the business that has some of those capital markets platforms, some of the origination platforms, some of the equity platforms. And that is being impacted by some of the general M&A and capital market activity and issuance environment that we are seeing, both in fixed income and equity in the markets. And yes, that is a market and a business where you see a bit of that impact. But overall, you see that the Market Intelligence, nevertheless, was growing in a very strong way.

And when we see more stability in the markets over time, when we see the M&A environment coming back, we would also expect to see the subscription variable component growing faster again. So that's the underlying dynamic that is happening in the MI business.

Alex Kramm -- UBS -- Analyst

All right. Very helpful. Thanks again.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Alex.

Operator

Our next question comes from Andrew Nicholas with William Blair. Your line is open.

Andrew Nicholas -- William Blair and Company -- Analyst

Hi. Good morning. Thanks for taking my question.  I wanted to start with issuance or drilling to the issuance expectations a bit further. I realized that it was a really tough first quarter on that front.

But I'm curious, when you gave your guidance on March 1 with the merger call, I think you had some sense of at least February weakness in high-yield. Could you spend some time talking about maybe what specifically changed in the outlook over the past two months? Has it been a weaker-than-expected April? Or are there certain subsegments or asset classes that have deteriorated more quickly than you expected? That would be helpful.

Doug Peterson -- President and Chief Executive Officer

Well, first of all, thank you for the question. And drilling down a little bit more, there's really two key factors. First of all, if you looked at the high-yield issuance in February then into March and into April, it has been quite weak. There's times when we've gone an entire week and even longer without even one issuer coming to market.

Given the external environment, that's also had a change. If you go back to the beginning of March, the last time we spoke, there had -- the invasion of Ukraine had just started. We hadn't seen yet the major impact on the markets, the volatility of the energy markets and commodity markets. And we also, at the time, didn't have any clear guidance yet from the Fed what they were going to be doing on interest rates.

So if I take a step back and look at very specific dynamics in the high-yield market itself, when will that be coming back and what are our expectations, and then second, the overall macroeconomic geopolitical environment, and then more specifically in the U.S., we're just starting to get a window into what will be the programs that the Fed is going to institute to try to combat inflation and the timing of some of their interest rate increases.

Andrew Nicholas -- William Blair and Company -- Analyst

Makes sense. And then, sticking with Ratings for my follow-up. Obviously, transaction revenue has had headwinds we've talked about. Can you talk a little bit about your expectations for non-transaction revenue growth, if I didn't miss that.

Obviously, a really strong year last year on that front. I think there were some onetime items in 2021. But if you could talk about your expectations for non-transaction revenue in that segment, that would be helpful. Thanks again.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

If you look at non-transaction, there is a bit of a mix of elements that go into that bucket. What we see is particularly strength in annual fees. So for example, that is surveillance. And of course, with more bonds and loans outstanding after the very strong issuance environment over the last two years, we see some benefit from that.

Also, frequent issuer fees are going in that category, so that is also very stable. And at the same time, we see also the CRISIL performance that goes in nontransaction being very strong. So CRISIL is growing very rapidly, both on the domestic Indian Ratings business, as well as in the global research, risk and benchmarking business. Where we see in the nontransaction bucket the revenue are not moving up, it's mostly Rating Evaluation Services, less M&A activity.

So that is impacting rating evaluation service. And also, New Issuer Credit Ratings, given the current environment, we also see less activity there. Nevertheless, of course, 7% is a nice growth for nontransaction. We would probably see that slowing down that growth a little bit for the remainder of the year, but I would expect it still to be in a positive territory.

Operator

Thank you. Our next question comes from Andrew Steinerman with J.P. Morgan. Your line is open.

Andrew Steinerman -- J.P. Morgan -- Analyst

Hi. I also wanted to ask about issuance. When looking at slide 18, the minus 5% forecast, I just wanted to know if that issuance forecast is for all credit issuance or just rated issuance? I know usually they're similar. But in this case, my question is, is there a large difference between the minus 5%? And if I ask you just for kind of rated issuances, and I don't quite get that footnote, like is China included in credit for the minus 5% or not?

Doug Peterson -- President and Chief Executive Officer

Yes. Take this as an estimate for global issuance. This is what our team looks at. It includes all markets and all types of issuance.

It's the exact same base that we use when we talk about what the overall issuance has been quarter-by-quarter.

Andrew Steinerman -- J.P. Morgan -- Analyst

And would rated issuance be much different than minus 5%?

Doug Peterson -- President and Chief Executive Officer

Yes. Rated issuance would be -- if you look at -- you could adjust a little bit for Asia, where the fees are not quite the same. And there's issuance in China, still a different kind of a market, but that's the forecast that we use. It's the basis we use for the guidance that we've provided.

Andrew Steinerman -- J.P. Morgan -- Analyst

OK. Thank you.

Operator

Thank you. Our next question comes from Hamzah Mazari with Jefferies. Your line is open.

Hans Hoffman -- Jefferies -- Analyst

Hi. This is Hans Hoffman filling in for Hamzah. Could you just comment a bit on what you're seeing across your European revenue base? And how that region did relative to your expectations, either by segment or overall?

Doug Peterson -- President and Chief Executive Officer

Yes. When we look at Europe, there's a couple of different factors. First of all, on the Rating side, it was similar to the rest of the world. The issuance levels were down.

We saw that in Europe itself that, for the quarter, the corporate issuance was down about 25%, financial services was down 13%. That compares to, in the U.S., corporates are down almost 50%, financial services were down less in the U.S., 5% versus the 13% in Europe. But in addition, Europe did have some strong structured finance issuance. But overall, Europe continues to be a market that we're quite interested in because we see the transformation from a banking market to a capital market.

There's also very strong growth in ESG. Europe is one of the sectors and one of the regions of the world that's really setting the fastest pace on ESG. We see a lot of interest there for the different ESG funds we've launched. We've seen fastest growth for S&P 500 ESG and Dow Jones Sustainable indices that have been launched.

Europe is the pacesetter there. And we also know that in Europe, there's been a slower uptake of inflation. Right now, inflation is not quite as high as it is in the U.S. The ECB has not moved as fast when they are looking at increasing the core rates.

So right now, the negative side of Europe is clearly that you've got the Ukraine invasion and that horrific war that's going on there. And we'll have to see what kind of impact that has on Europe. Europe is also impacted potentially by the energy markets. But net-net, our European businesses have been on the same pace as the rest that we've seen in the U.S.

But there are a few downsides, but we also see a lot of upsides as the market doesn't have the same inflation impacts, as well as the opportunities for the capital markets to play a much larger role.

Hans Hoffman -- Jefferies -- Analyst

OK. Thank you. That was helpful. And then, just for my follow-up, could you just -- in terms of the portfolio post the deal, can you just comment on whether there are any further noncore assets that you're looking to prune? Or is sort of most of that behind you now? And any update on your view and how you're thinking about where your long-term leverage should be given the combined portfolio?  Thank you.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Yes. First, on the portfolio, we are very committed on driving growth and success of each of our businesses at this point in time. We see multiple opportunities, as we mentioned during the prepared remarks, of value creation across the enterprise. There's a lot of cross-links we are seeing with respect to revenue synergies.

And I think it's really exciting to see what we can do altogether. Having said that, you know us, and our management style and philosophy will always be very disciplined portfolio managers. And we will always determine, ultimately, over time, if we are the best owners of certain assets, but at this moment, really, are focused on driving the economic value generation of the portfolio of businesses we have at S&P Global.

Hans Hoffman -- Jefferies -- Analyst

OK. Thanks so very much.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Tom.

Operator

Our next question comes from Owen Lau with Oppenheimer. Your line is open.

Owen Lau -- Oppenheimer and Company -- Analyst

Good morning and thank you for taking my questions. So energy companies have been doing very well this year. Could you please remind us the competitive advantage of the Commodity Insight business? I mean, the demand of your offerings during this volatile period and how investors can understand better this business, given that revenue is up 14% year over year. Thank you.

Doug Peterson -- President and Chief Executive Officer

Thanks, Owen. Well, first of all, in this environment, the combination of Platts and IHS, the energy, natural resources business is providing the knowledge and the resources that the markets look to in a volatile environment like this. Clearly, there's a combination of volatility in the energy markets, both with gas and in oil. You see the commodities related to agriculture also going -- undergoing a lot of volatility.

And we have a combination of the benchmarks, which are embedded in people's contracts, in the research and the analytics. We have advisory services. We also have the energy transition that people are looking to. We have a combination of new products and services that were coming together with IHS Markit in carbon markets, in battery metals, in things that are the transition energy economy.

So we think that the two, together, really bring a powerful voice that people are looking to. And let me just end with something we talked about on the earnings -- on the prepared transcript, which was related to CERAWeek. CERAWeek is the premier conference for the energy industry. And this year, there are over 5,000 participants.

And it was a very, very lively dialogue, including government officials talking about what's the future of commodities. And we're really at the center of that dialogue and think that it's one of the best times for us and one of the most exciting things about the combination.

Owen Lau -- Oppenheimer and Company -- Analyst

Got it. And I have two quick follow-up. One is cloud. You mentioned some of the cloud initiatives and investments.

Could you please talk about some of your near-term and long-term goal of this initiative? And then another quick one is on buyback. Should we expect -- from a modeling perspective, should we expect you would start the second tranche of the $5 billion remaining in the third quarter? Or not the right way to think about that? Thanks.

Doug Peterson -- President and Chief Executive Officer

Let me start with the question about cloud. And one of the -- another one of the exciting things about the transformation with the merger is that we have an opportunity to have scale in all of our negotiations and discussions with our providers when it comes to cloud and our digital transformation. Both S&P Global and IHS Markit were far advanced on cloud transformation. We're able to bring those two programs together and get scale.

In addition, we have really interesting opportunities in data and data sciences that you'll be hearing much more about in the future. But I'll let Ewout answer the other part of your question.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

And maybe one quick addition on cloud. There is a bit of a bubble cost, mostly in Market Intelligence, because we are still in the transition there in that particular segment from on-prem to the cloud. So we would expect, over time, to see that expense growth to go away. So it's more transitional in terms of the expense impact on the Market Intelligence segment.

With respect to the buyback question, Owen, we expect that the current $7 billion ASR program will be completed at the beginning of August. And then, we are ready to enter into the next phase of our buyback program to complete the full $12 billion at the end of 2022.

Owen Lau -- Oppenheimer and Company -- Analyst

Got it. Thank you very much.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Owen.

Operator

Our next question comes from Craig Huber with Huber Research Partners. Your line is open.

Craig Huber -- Huber Research Partners -- Analyst

Great. Thank you. My first question, historically, you guys have generally raised prices in your legacy portfolio, call it, 3% to 4%. How are you thinking about pricing this year, particularly with the new IHS assets? Or just the pricing would be up, similar in that part of the portfolio this year?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

 I think if you look at that, Craig, we always start with what is the added value we deliver for our customers. What will contribute in terms of usage? What kind of data sets are these, proprietary data sets, hard-to-achieve data sets? How are we embedded in workflows and processes? That is the starting point. And then, we look at the overall value we generate for the enterprise and think about what is appropriate in terms of pricing and price increases for such a contract going forward. So we don't just look at that simply by a percentage.

We always look at, first, what do we deliver to the customers, and then reason back to what is appropriate in terms of the economic level of the fee that we will charge to the customer.

Craig Huber -- Huber Research Partners -- Analyst

And then also on the cost synergy side, as you think out here longer term, if there's going to be any upside to your cost synergy target, what segment or segments do you guys think it most likely would come in?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

 Yes, that is a bit speculative, Craig, as you understand. So I have to be careful, answer that question in a too specific way. But you know our management philosophy and approach. We always will be looking to raise the bar, to find new opportunities, to leave no stone unturned.

We will be looking across the whole company about what we can do better, more efficient, where we can integrate, where we have opportunities to automate, where we can use AI and Kensho across the board. So that is what we are planning to do. I think you know that the biggest areas of integration will be in Market Intelligence, commodity insights and in corporate. So if we will find upside ultimately in synergies, most likely, it's in those areas.

But again, we will be continuing to look for opportunities across the board.

Craig Huber -- Huber Research Partners -- Analyst

Thank you.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Craig.

Operator

Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open.

Jeff Silber -- BMO Capital Markets -- Analyst

Thanks so much. I know it's late. I'll just ask one and forgive me if you covered this already. I know you've talked about some of the cost synergies, but I want to just focus specifically on Ratings, where there probably won't be a lot of cost synergies given the merger.

How quickly can you adjust your expenses in that division when we see a kind of Ratings drop that we saw in the first quarter and something that you're expecting in the second quarter? Thanks.

Doug Peterson -- President and Chief Executive Officer

Well, first of all, clearly, Ratings has different levers they can pull. If we need to, we could move costs. When it comes to compensation, we could slow down hiring, we could slow down investments. But at the same time, as Ewout mentioned earlier, there are times where there's variability in the issuance environment where you've seen big drops.

We've always mentioned that you could see a quarter or two quarters with very weak issuance. So we also want to make sure that we don't cut too quickly, too fast. We think that the markets are complex. There is growing.

People want to see a variety of opinions. We're also investing in ESG across the Ratings team. We have a specialized unit within the Ratings business that is doing sustainability analytics. We're seeing high growth there.

We want to make sure that all of our analysts are ready to provide any type of support for those markets. So clearly, there's a lot of levers we can pull, and we will already do some of those. But at the same time, we want to make sure that we keep investing in that business because it's so critical to our overall franchise.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

And one quick addition to Doug's answer. Although you're right, Jeff, that the direct cost synergies in Ratings will be relatively small, Ratings will be a beneficiary of cost synergies in the corporates segment that is being allocated to all divisions. And because Ratings has a very large base in revenues and employees based on those allocation keys, Ratings will be, in the end, also significant beneficiary from the corporate cost synergies that we will accomplish.

Jeff Silber -- BMO Capital Markets -- Analyst

OK. That's really helpful. Thanks so much.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Jeff.

Operator

Our next question comes from Jeff Meuler with Baird. Your line is open.

Jeff Meuler -- Robert W. Baird and Company -- Analyst

Thank you. On mobility, you stressed that the retention rate is up relative to pre-pandemic. Just curious if you have the root cause analysis or have the thesis as to why? I guess, my concern would be cyclically used car sales are great, maybe unsustainably so right now. But I know there's other things in there, the CARFAX for Life initiative, automotiveMastermind, whatnot.

So curious as to why it's up and if you think it's sustainable?

Doug Peterson -- President and Chief Executive Officer

Yes. There's a couple of opportunities there. One of them is that the overall mobility industry itself, the automotive industry is going through a lot of change. And this is a time when dealers, OEMs, as well as suppliers to the OEMs are looking for more and more information about the supply chain, about the supply chain disruption.

They wanted to understand more about what's happening at the dealer level, who's walking in the cars, who's walking into the dealership. In addition, there's been a lot of changes in the financing environment. As you know, the dealers, as well as the OEMs have been using a lot of information in the last few years with different types of rebates, with low interest rate loans, low interest rate leases. And so, the market is really going through a lot of changes, in addition to electric vehicles and autonomous vehicles.

And with all of that, there is a value in having this data and analytics that come from the mobility division embedded in people's workflow. And we just see that there's a high need for it right now in this disruptive environment and a lot of change going on. So this is an area that we're pleased to see that -- this kind of stickiness, especially in this kind of an environment.

Jeff Meuler -- Robert W. Baird and Company -- Analyst

Got it. And then, apologies if you gave this in response to Manav's question. I missed it. But the revenue and EPS guidance ranges, do they embed the issuance forecast range? Or do you use the minus 5% point estimate?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

It's based on management's best estimates, our own internal forecasting models, which is the midpoint, the best estimate point that the Ratings Research Group has put out in terms of the issuance outlook. So that is that minus 5% level.

Jeff Meuler -- Robert W. Baird and Company -- Analyst

Got it. Thank you.

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Thanks, Jeff.

Operator

Thank you. Our next question comes from Faiza Alwy with Deutsche Bank. Your line is open.

Faiza Alwy -- Deutsche Bank -- Analyst

Yes. Hi, good morning. Just a couple of clarifying questions, I guess. The first one on the commodity business.

I understand that growth was particularly strong this quarter because of the advisory and transactional services. But it does seem like you're calling for some deceleration in the back half, just in the -- or in the rest of the year in the underlying business. So I'm curious if you could just talk about some of the drivers in that business? Like how correlated is it to oil prices or other commodities? Or are you just being conservative on that business?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Yes, Faiza. First of all, welcome to the call, and we are very happy that you're part of the analyst group now covering us as a company. So first, on commodity insights, in terms of the expectation in terms of revenue growth for the year, we have said mid-single digits. And then, in terms of margins, mid- to high 40s.

And nothing has changed there compared to what we said to you a few months ago. And what you see is, maybe, first, I should speak about the impact of the Russian situation and the fact that we have suspended our commercial activities with Russian customers. Overall, not material for the company as a whole, but the largest impact is in commodity insights. But as I said at the answer of a previous question, we are very pleased to see the commercial momentum in the commodity insights business.

And we expect that they are able to make up a significant part of that during the course of this year. So that's clearly a positive. You're right that revenues looked a bit high during the quarter, 14%. But take into account that we had that CERAWeek event that had a significant impact on revenues during the first quarter.

If you take CERAWeek out, the revenue increase was approximately 8% during the quarter. So still strong, but definitely at a different level. Final commentary is we are really excited to see what is happening in that business because you could say there is, in fact, really, a benefit of two trends at the same time. Traditional energy doing well, of course.

With the current commodity prices, you see that producers are in a healthy situation. And then, there is so much focus, at the same time, on energy transition that we will have a benefit of helping our customers on both angles. And that's clearly driving some of the underlying growth in this division, and therefore, we are overall very, very optimistic and positive about the outlook for commodity insights.

Faiza Alwy -- Deutsche Bank -- Analyst

Great. Thank you. And then, just on the Ratings margins, specifically, if we assume like a downside scenario, where maybe issuance volumes are at the low end of what you've talked about, which is, I believe, it was down 13%. Like is it fair to think about Ratings margins sort of in line with what you did this quarter, like around 59%? Is that the right way to think about those margins?

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

Well, we're not giving any particular guidance on a downside scenario in a quantitative way. So I would like to be careful to answer your question in too much specifics. I think the overall perspective that we have on the Ratings business is that, at some point, we will see the issuance environment coming back. We have seen this in many times in the past.

At some point, this will improve. And we really think that we should lower the level of anxiety around all of this because there is uncertainty around timing. But ultimately, we have always said there could be one or a few quarters where Ratings revenue will be under pressure. But if you are having a mid- to long-term perspective of the company, nothing has changed with respect to outstanding debt.

Nothing has changed with respect to overall trends and correlations with GDP and other growth drivers. So the secular trends in this business are still there. Maybe short term, there could be some fluctuations. But if the perspective is more mid to long term, I think nothing is different with respect to the overall activity of the markets, and also the economics of the business, both the top line growth and the margin expectations for the Ratings business.

Faiza Alwy -- Deutsche Bank -- Analyst

Understood. Thank you so much.

Operator

Our next question comes from Simon Clinch with Atlantic Equities. Your line is open.

Simon Clinch -- Atlantic Equities -- Analyst

Hi. Thanks for taking my question. Just quickly on the Rating side. I was wondering if you could help me just reconcile how to think about the transactional revenue streams relative to our own assumptions around the global issuance growth? Because clearly, in the first quarter, the transaction revenues a lot more than the issuance due to mix, I presume.

I'm just wondering, as the growth comes back, do we -- should we anticipate growth to far outpace issuance on the upside? And what are the nuances that we need to consider?

Doug Peterson -- President and Chief Executive Officer

Yes. Well, first of all, you're right that there's a different kind of mix and different sort of revenue profile. This last quarter, we did have many of the issuers that were out in the market, which were the frequent issuers that have a different pricing profile than those which are more transactional. So we do look carefully at the mix.

The more high-yield, sometimes there's a higher volumes, higher pricing there as opposed to some of the frequent issuers. So it's something to watch, but there's no necessary -- no specific guideline, but mix is important when you look at the transaction revenues.

Simon Clinch -- Atlantic Equities -- Analyst

OK. That's great. And just as a follow-up to the question about commodity insights. I was kind of curious, as you get the conference business coming back, as we had in the first quarter, does that typically lead to better growth, organic growth, when you strip away the conference benefit in the first quarter.

Does that generally lead to better growth in the future quarters versus environments where you just don't have that conference business?

Doug Peterson -- President and Chief Executive Officer

Yes. The conferences are clearly a critical part of our brand-building and relationship-building. As you know, across all of our businesses, we think about our relationships as long-term professional relationships that we manage in a way that we always want to bring the best products and best services. And our conferences serve as a way to convene thought leadership.

They allow us to convene the leaders across industries. And that always gives us opportunities to improve our ACV, improve our relationships, improve our access to clients. So it's not -- you can't find necessarily a direct relationship. But there's definitely an indirect relationship over time that allows us to build our customer revenues and ensure that we are really relevant to the markets.

Simon Clinch -- Atlantic Equities -- Analyst

That's really helpful. Thanks so much.

Doug Peterson -- President and Chief Executive Officer

Thanks, Simon.

Operator

Our last question comes from Shlomo Rosenbaum with Stifel. Your line is open.

Shlomo Rosenbaum -- Stifel Financial Corp. -- Analyst

Hi. Thank you very much for squeezing me in. I just want to start just on the energy side, Doug, maybe you could talk a little bit. The legacy INFO assets took a little bit of time to turn whenever there was an upturn in the energy markets, but we used to get some good indications in terms of accelerated consulting business and other things that were kind of a precursor to things getting a lot better.

I was wondering if you're seeing the same things in the business right now. Is the fact that some of the energy prices spiking have to do with the war, making it that it's not the same kind of demand that we would have normally seen? Just a little bit of context around that. And then, I have a quick follow-up.

Doug Peterson -- President and Chief Executive Officer

Yes. I think there's three factors I'd like to mention. One of them, and you talked about, which is the war and the very specific environment right now with the volatility of energy prices as other commodity prices, including metals and agriculture. This is creating a lot of demand for knowledge, for thought leadership, for opening up stronger relationships.

And the second, I would say, really relates to energy transition, which is a longer-term view that companies and governments are very interested in what will be the long-term impact of the shift to cleaner and renewable energy environment. And there's a lot of discussion going on right now about transition energy, what's the future of natural gas. These also open up opportunities for all of the businesses. And then, the third is, it relates to the -- all of this together is the Upstream business.

As Ewout talked about earlier, the Upstream business had been -- really had been decreasing over the last few years. And it seems as if in this current environment and with all of the investments that have been made that that business is now going to be seeing a bottom and starting to grow again. So we think that net-net, all of the businesses together position us very well to be able to address all of the needs and the opportunities in the future of the energy and commodities businesses.

Shlomo Rosenbaum -- Stifel Financial Corp. -- Analyst

OK. Great. Thank you. And then, a quick question.

Just -- you talked about targeted merit increases and increased retention. What has retention been since the acquisition closed a couple of months ago? Just the overall level of people that are -- you really want to retain to really drive this business forward. On the fringes, is it a little bit more challenging? Are you happy with the way that you're retaining the people? It really is key for the deal, so I wanted to just hear how you're doing two months in.

Doug Peterson -- President and Chief Executive Officer

Yes. Thank you for that. And two months in, we're thrilled with the results. Our people are excited.

They're motivated. One of the key indicators we look at is people changing their LinkedIn profile to say S&P Global, which is very high. We find that the people have been motivated by the vision, the purpose and the values of S&P Global as we've come together. And it's too early.

It's just really one month in, two months in for us to give you any trends. But all of the informal indicators are very strong, that we've been able to bring the team together that's very motivated, and people want to ensure that we have a successful future. Thanks, Shlomo. Well, let me finish and thank everyone for joining the call.

And I want to elaborate on the question that Shlomo just asked, which is about how things are going. We're thrilled that we were able to close this quarter and be able to have that merger come together after 15 months. All of the teams have come together so well, as you've heard us discuss during this call, the ability to find opportunities, from what we're hearing from our customers to bring our organization together at every single level, including our commercial teams that are out there, looking for ways to sell and to innovate and bring new products to the market. In addition, we think that we're off to a great start on integration, and the ability to bring the two teams together in a way that not only do we create value through cost synergies, but that we're also positioning ourselves for growth for the future.

The more we get to know about IHS Markit and S&P Global together, the more we know that we validated that this was the right thing to do, that the two companies together are stronger than either would have been alone. And finally, when it comes to what Shlomo just asked about our people, we're very excited to see the way that our people have come together with a strong executive committee that's developed a set of visions and purposes and values that, across the company, we're all talking about, we're committed to. And we think that we're off to a fantastic start. And we appreciate all of the questions today and all the support from the analysts, as well as our shareholders, and very importantly, our people.

So again, thank you very much for the call today.

Operator

[Operator signoff]

Duration: 87 minutes

Call participants:

Mark Grant -- Senior Vice President, Investor Relations

Doug Peterson -- President and Chief Executive Officer

Ewout Steenbergen -- Executive Vice President and Chief Financial Officer

George Tong -- Goldman Sachs -- Analyst

Manav Patnaik -- Barclays -- Analyst

Toni Kaplan -- Morgan Stanley -- Analyst

Ashish Sabadra -- RBC Capital Markets -- Analyst

Alex Kramm -- UBS -- Analyst

Andrew Nicholas -- William Blair and Company -- Analyst

Andrew Steinerman -- J.P. Morgan -- Analyst

Hans Hoffman -- Jefferies -- Analyst

Owen Lau -- Oppenheimer and Company -- Analyst

Craig Huber -- Huber Research Partners -- Analyst

Jeff Silber -- BMO Capital Markets -- Analyst

Jeff Meuler -- Robert W. Baird and Company -- Analyst

Faiza Alwy -- Deutsche Bank -- Analyst

Simon Clinch -- Atlantic Equities -- Analyst

Shlomo Rosenbaum -- Stifel Financial Corp. -- Analyst

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