Earnings performance has been resilient over the past two years, although growth has been lackluster since third-quarter 2021 (see tables 4a, 4b, 4c). However, the trend of slowing growth ended in third-quarter 2023, when the median EBITDA growth rate for the last 12 months (LTM) slightly increased to 0.8% from 0.5% in second-quarter 2023. Although a single quarter cannot be used to predict a trend, this increase is a potential step toward future earnings growth. Our analysts expect EBITDA growth to improve to the mid-single-digit percentage in 2024.

S&P Global Ratings has observed that credit metrics vary widely within and across rating categories, so statistical measures such as averages and medians provide only a partial picture. Accordingly, in this report we focus on our rated entity (issuer) counts to analyze the third-quarter 2023 earnings growth improvement. Additionally, we delve deeper into industries experiencing the most earnings pressure or improvement. We focus on EBITDA and EBITDA margins as our earnings proxies.

For our earnings review, we used a sample portfolio representing roughly two-thirds of our speculative-grade portfolio (see Data Used In This Report). We then track the credit trends and quality of speculative-grade borrowers in North America through four key credit metrics: median EBITDA interest coverage, FOCF to debt, gross leverage, and EBITDA growth. FOCF to debt has improved for four consecutive quarters (see tables 2a, 2b, 2c), but cash flow generation shortfalls remain elevated for many issuers (table 3).

We expect the federal funds rate to fall 80 basis points (bps) in 2024 and about 260 bps by the end of 2025. While lower rates will help many issuers, a reduction in interest rates may not be enough for the large percentage (21%) of issuers with FOCF to debt of less than -3%. They will likely require a significant increase in earnings, sharp cuts in capital investments, or a recapitalization.

Lastly, we look at the latest trends in recovery ratings on newly issued first-lien debt, which fell in the quarter.

We conclude that we were in the late stages of the credit cycle in the third quarter of 2023, as many of our cyclical-rated companies saw poor earnings growth momentum; and that the road back to improving rating trends may be long and bumpy, especially for highly leveraged, low-rated issuers.

Here, access many of the charts and tables in an interactive format.

Growth And Profitability Measures Slowly Return To Normal

The number of issuers experiencing EBITDA, revenue, or EBITDA margin growth is returning to their long-term historical averages after two macroeconomic shocks (COVID-19 lockdowns and surging inflation). Despite the large increase in issuers reporting revenue declines--jumping to 47% in third-quarter 2023 from 14% in first-quarter 2022--volatility is broadly trending lower. In the quarter, 54% of our issuers reported EBITDA growth and 53% reported revenue growth, which is below the five-year average of about 60%.

Furthermore, 70%-80% of issuers have recovered from the sharp revenue and EBITDA declines during COVID-19 lockdowns. About 80% have higher revenue as of the third quarter of 2023, and 72% have higher reported EBITDA. Additionally, EBITDA margin, which has historically been the most challenging profitability measure to improve, grew to a median of 15.1% from 14.6% pre-COVID-19, with 54% of issuers reporting higher EBITDA margins. Nevertheless, industries have a broad dispersion, with many still struggling to recover.

Table 1

Speculative-grade issuers by industry
Percent of issuers with higher revenue, EBITDA margin, EBITDA, or FOCF to debt at Q3 2023 vs. Q4 2019 (pre-COVID-19)
Industry	% with revenue higher than pre-COVID-19	% with EBITDA margin higher than pre-COVID-19	% with EBITDA higher than pre-COVID-19	% with FOCF to debt higher than pre-COVID-19
Homebuilders & Developers	86%	100%	100%	86%
Environmental Services	88%	88%	100%	75%
Capital Goods	88%	63%	92%	46%
Oil & Gas Drilling, Equipment & Services	75%	88%	88%	63%
Oil & Gas Integrated, Exploration & Production	95%	67%	87%	85%
Healthcare Equipment	83%	50%	83%	58%
Building Materials	97%	74%	82%	82%
Technology - Software & Services	90%	63%	82%	42%
Containers & Packaging	85%	54%	81%	50%
Business & Consumer Services	88%	49%	81%	50%
Operating Leasing	75%	50%	75%	75%
Engineering & Construction	75%	69%	75%	63%
Metals & Mining Downstream	85%	50%	75%	60%
Metals & Mining Upstream	87%	52%	74%	57%
Leisure & Sports	75%	65%	73%	54%
Specialty Chemicals	73%	64%	73%	45%
Technology - Hardware & Semiconductors	65%	65%	71%	39%
Consumer Durables	80%	50%	70%	45%
Forest & Paper Products	83%	67%	67%	50%
Pharmaceuticals	78%	56%	67%	33%
Retail & Restaurants	77%	56%	66%	55%
Healthcare Services	89%	50%	63%	37%
Telecom & Cable	61%	45%	61%	35%
Auto Suppliers	82%	35%	59%	35%
Branded Nondurables	75%	43%	56%	59%
Aerospace & Defense	59%	50%	55%	36%
Commodity Chemicals	75%	33%	50%	50%
Media & Entertainment	58%	41%	49%	37%
Transportation Cyclical	75%	25%	42%	33%
Total	80%	54%	72%	51%
Reflects GAAP reported last twelve months (LTM) at quarter end. Excludes subsectors with less than five issuers and real estate investment trusts. The total row reflects all the issuers within the sample portfolio. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Below The Surface, The Business Environment Remains Challenging

In third-quarter 2023, EBITDA fell for 46% of issuers, while 28% witnessed declines in all three of our key earnings measures (revenue, EBITDA, and EBITDA margin), which is nearly the highest in the past two years (31% at second-quarter 2023).

More concerning, issuers with consecutive quarters of EBITDA declines are trending higher. In Q3 2023, 23% of issuers reported three consecutive quarters of EBITDA declines, an increase from 20% in Q2 2023. Issuers that saw EBITDA fall for four consecutive quarters increased to 14% from 12%. Retail & restaurants, branded nondurables, business & consumer services, commodity chemicals, and metals & mining downstream had the most issuers with four consecutive quarters of EBITDA declines.

Cyclical Issuers Face Earnings Growth Challenges; Service & Product Issuers Prove Resilient

Across industries, cyclical issuers are most challenged. 58% of issuers with a commodity focus experienced a decline in LTM quarter-over-quarter (QoQ) EBITDA, compared to 43% with a capital or assets focus and 42% with a product and service focus.

We provide the percentage of issuers within each industry that saw EBITDA decline in Q3 2023, the median percent that LTM EBITDA fell QoQ in that quarter only if EBITDA fell, and the median ratings for issuers that saw EBITDA fall (table 2). We also indicate industries that have seen a weakening or improving shift in the momentum of issuers reporting EBITDA declines.

Table 2

Speculative-grade issuers reporting EBITDA declines by industry & group profile at Q3 2023
% of issuers reporting EBITDA declines	Group profile	Industry	Q3 2023 LTM QoQ EBITDA Decline§	Median issuer rating†	Over 1 standard deviation of change
92%	Commodity Focus/Cost Driven	Commodity Chemicals*	-21%	B	Weakened
85%	Commodity Focus/Scale Driven	Oil & Gas Integrated, Exploration & Production*	-14%	B+	--
83%	Commodity Focus/Cost Driven	Forest & Paper Products	-12%	B	Weakened
71%	Capital or Asset Focused	Homebuilders & Developers	-3%	B	Weakened
65%	Commodity Focus/Scale Driven	Metals & Mining Downstream	-12%	BB-	--
63%	Commodity Focus/Scale Driven or Capital or Asset Focused	Oil & Gas Drilling, Equipment & Services	-3%	BB	Weakened
63%	Services and Product Focus	Environmental Services	-7%	B+	--
61%	Capital or Asset Focused	Technology - Hardware & Semiconductors*	-11%	BB-	Weakened
59%	Services and Product Focus	Retail & Restaurants*	-6%	BB-	Weakened
58%	Capital or Asset Focused	Transportation Cyclical	-31%	B+	--
51%	Services and Product Focus	Media & Entertainment*	-8%	B+	--
50%	Other	Operating Leasing	-9%	BB-/B+	--
50%	Commodity Focus/Scale Driven or Product Focus/Scale Driven	Healthcare Equipment	-14%	CCC+/B-	--
48%	Services and Product Focus	Leisure & Sports*	-7%	B+	--
46%	Capital or Asset Focused	Containers & Packaging*	-5%	B	--
43%	Commodity Focus/Cost Driven	Metals & Mining Upstream	-12%	B	Strengthened
43%	Services and Product Focus	Business & Consumer Services*	-5%	B-	--
43%	Services and Product Focus	Branded Nondurables*	-8%	B	Strengthened
41%	Services and Product Focus	Aerospace & Defense	-6%	B-	--
40%	Services and Product Focus	Consumer Durables	-5%	BB/BB-	--
39%	Services and Product Focus	Telecom & Cable*	-5%	B/B-	Strengthened
38%	Capital or Asset Focused	Building Materials*	-4%	B+	--
36%	Capital or Asset Focused	Specialty Chemicals	-3%	BB-	--
32%	Capital or Asset Focused	Capital Goods*	-5%	B	--
28%	Commodity Focus/Scale Driven	Health care Services*	-4%	B-	Strengthened
25%	Services and Product Focus	Engineering & Construction	-12%	B/B-	--
24%	Capital or Asset Focused	Auto Suppliers	-9%	BB-/B+	Strengthened
22%	Services and Product Focus	Pharmaceuticals	-15%	B	Strengthened
19%	Services and Product Focus	Technology - Software & Services*	-6%	B-	Strengthened
The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. *Top 15 subsectors by count of issuers with EBITDA declines. The last column reflects the momentum of issuers reporting EBITDA declines or increases. We use the trailing 6-quarter (which includes the current quarter) z-score of the percentage of issuers with EBITDA declines or increases. Weakened industries demonstrated a one-standard-deviation increase in the percentage of issuers with EBITDA declines. In contrast, strengthened industries demonstrated a one-standard deviation decrease. Excludes subsectors with less than five issuers and REITS. §Median Q3 2023 LTM QoQ EBITDA decline percent reflects reported GAAP financials without S&P Global Ratings' adjustments. †Median issuer rating for issuers reporting EBITDA declines. LTM--Last 12 months. QoQ--Quarter over quarter. Source: S&P Global Ratings.

Commodity-focused issuers

Commodity-focused issuers often compete on cost efficiency, price, and availability, with little product differentiation. Factors such as higher costs, price volatility, persistent customer destocking, macroeconomic-driven softness, some challenged key end markets (such as housing), and slower-than-expected growth in China have hampered earnings growth. For example, in third-quarter 2023, about 92% of commodity chemical and 83% of forest and paper issuers saw EBITDA decline. Adverse operating conditions due to weak end-market demand, volatile prices, and channel destocking resulted in depressed earnings. Additionally, higher borrowing costs and cash flow stress resulted in many downgrades of commodity chemical issuers in 2023. We expect soft demand fundamentals for these two industries to continue in 2024.

Alternatively, the health care services industry has experienced a steady demand for its services, and its EBITDA level remained steady throughout 2023. However, despite an improving labor situation, the industry's profitability is still lagging behind pre-pandemic levels. We expect the challenge of managing labor costs and high interest expenses to continue to weigh down cash flows despite expected earnings improvements.

Capital- and asset-focused issuers

The current financing and economic environment poses significant challenges for issuers focused on capital or assets, which often require substantial investments. Factors such as high interest rates, lower customer investment spending, and supply chain disruptions have hurt demand.

For instance, the health care equipment industry saw half of its issuers reporting EBITDA declines, with a median of -14% in the quarter. The median rating for issuers that saw EBITDA decline was low in the 'B-' to 'CCC+' range, highlighting the industry's high credit risks.

However, there are a few bright spots despite the negative earnings trends. For instance, although homebuilders and developers saw 71% of their issuers report EBITDA declines in third-quarter 2023, we expect resilient demand to spur their recovery. Tight supply, low existing home inventory, and prudent capital allocation are all factors that we believe will benefit this sector in the long term. Additionally, although the technology hardware and semiconductor industry saw 61% of issuers report EBITDA declines, we anticipate that technology hardware spending will improve in 2024, with growth across segments such as PC and smartphone shipments, servers, storage, and semiconductors.

Service- and product-focused issuers

Service- and product-focused issuers often rely on their brands, product quality or technology, and service reputation to differentiate their offerings. Wage inflation, rising costs, and shifting consumer spending have impaired demand and earnings. Retail and restaurants remain one of the most challenged, with 59% experiencing EBITDA decline in third-quarter 2023 and only 66% with higher EBITDA since before the COVID-19 pandemic. Furthermore, we expect rating trends will remain on a negative trajectory due to slowing consumer spending. Increasing household financial pressure, including multiple years of high inflation, depleted excess savings, reinstated student loan obligations, and higher interest rates, are pressuring demand.

Still, the momentum of issuers reporting EBITDA declines has broadly remained stable or improved in third-quarter 2023. Favorable expectations for industries such as software and services could see improved earnings as they benefit from solid demand for digital transformation, public cloud, and automation solutions.

For the media and entertainment industry, 2024 could be the year when the sector begins to turn the corner as political advertising returns and the impact of the writers strikes fade. Nevertheless, secular challenges as consumers change media consumption patterns continue to pressure some issuers, and less than half have recovered their pre-COVID-19 EBITDA or EBITDA margins.

Improved Earnings Growth Doesn't Always Correlate To Improved FOCF To Debt

S&P Global Ratings expects the federal funds rate to fall about 80 bps in 2024 and about 260 bps by the end of 2025, which we expect to improve EBITDA cash conversion. However, in third-quarter 2023, only 68% of issuers with positive EBITDA growth saw FOCF to debt improve.

The table below displays the number of issuers with free operating cash flow (FOCF) to debt deficits by quarter. The highest rate recorded within our sample was third-quarter 2022, when 39.6% reported cash flow deficits, but it has since fallen to 32.5%. While lower rates will help many issuers, interest rate cuts may not be enough for the large percentage (21%) of issuers with FOCF to debt of less than -300 bps.

Table 3

FOCF to debt by deficit bands
Quarter	<=(10%)	>(10%) to (5%)%	>(5%) to (4)%	>(4%) to (3)%	>(3%) to (2)%	>(2%) to (1)%	>(1%) to 0%	Less than 0%
Q4 2019	7.9%	5.5%	1.9%	1.7%	2.3%	2.9%	5.6%	27.8%
Q4 2020	8.0%	5.0%	1.1%	1.2%	2.5%	1.8%	2.7%	22.3%
Q1 2021	7.5%	5.2%	0.9%	0.9%	2.0%	2.5%	2.4%	21.4%
Q2 2021	8.0%	5.7%	1.6%	1.5%	1.9%	1.8%	3.5%	23.9%
Q3 2021	8.4%	6.9%	2.6%	2.1%	2.2%	1.5%	3.4%	27.0%
Q4 2021	8.7%	7.9%	2.7%	3.0%	2.9%	3.0%	3.5%	31.8%
Q1 2022	10.6%	9.5%	2.2%	2.7%	3.4%	4.1%	3.8%	36.3%
Q2 2022	12.7%	10.8%	3.4%	2.0%	2.9%	3.6%	2.7%	38.1%
Q3 2022	15.2%	8.4%	3.3%	2.3%	3.8%	4.2%	2.4%	39.6%
Q4 2022	12.9%	9.6%	2.3%	2.9%	3.2%	2.7%	4.7%	38.3%
Q1 2023	11.4%	8.9%	1.7%	3.3%	2.7%	3.1%	4.2%	35.3%
Q2 2023	10.8%	7.6%	2.2%	3.0%	3.3%	3.5%	3.8%	34.3%
Q3 2023	8.9%	7.6%	2.6%	2.3%	2.1%	4.6%	4.5%	32.5%
Credit measures reflect GAAP reported numbers, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

First-lien New Issue Recovery Prospects

During fourth-quarter 2023, investor appetite rose further for debt rated 'B' or lower, with the share of new issues 5% higher than the previous quarter (chart 3). The average recovery estimate for new issues inched down to 61% in the fourth quarter from nearly 64% over the past few quarters, primarily due to multiple new issues from a distressed issuer.

Meanwhile, issues with '3' recovery ratings (which implies 50%-70% recovery in the event of payment default) stood at 60% compared to 65% during the last quarter (chart 4). This decrease corresponded to a commensurate increase in lower recovery assessments of '4' (30%-50%) and '6' (0%-10%), which, combined, accounted for a 10% share versus 6% in the third quarter.

Appendix

Table 1a

Median EBITDA interest coverage by industry
		Reported last-12-months period (x)
Industry	Entity count	Dec. 31, 2019	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
Aerospace/Defense	22	3.3	2.2	2.0	1.8	1.8	1.9	2.0	2.0	2.1	2.0	2.0	2.1	2.1
Auto/Trucks	28	3.5	2.9	3.2	4.4	4.4	4.1	3.8	3.6	4.0	4.0	3.5	2.9	2.6
Business and Consumer Services	76	2.1	2.4	2.6	2.7	2.7	2.8	3.2	3.1	3.0	2.4	2.1	1.9	1.8
Cap Goods/Machine&Equip	103	3.0	2.9	3.1	3.2	3.2	3.5	3.6	3.4	3.5	3.2	3.0	2.9	2.8
Chemicals	25	3.4	3.0	3.3	3.7	4.8	5.0	5.2	5.3	5.1	4.3	4.2	3.2	1.9
Consumer Products	92	2.5	2.7	3.1	3.3	2.9	2.8	2.9	2.8	2.8	2.8	2.4	2.1	2.0
Forest Prod/Bldg Mat/Packaging	45	3.0	4.0	4.0	4.8	4.7	5.1	4.8	4.8	4.7	4.9	4.3	3.8	3.9
Healthcare	93	1.8	1.8	2.0	2.2	2.3	2.2	2.1	2.0	1.7	1.6	1.4	1.5	1.5
Media, Entertainment & Leisure	132	3.2	1.8	1.8	2.2	2.4	2.5	2.9	2.9	2.7	2.8	2.9	2.6	2.4
Mining & Minerals	44	4.8	3.8	4.3	5.3	6.5	7.6	9.2	8.5	6.7	7.3	7.0	5.5	4.4
Oil & Gas	58	5.6	2.6	2.7	4.1	4.9	6.8	7.7	10.8	14.1	15.8	14.3	12.4	10.6
Restaurants/Retailing	77	3.4	2.3	3.0	3.9	4.0	4.1	4.5	4.5	4.5	4.4	3.8	3.4	3.0
Real Estate	18	3.6	3.3	3.3	3.4	3.2	3.5	3.8	3.6	3.7	3.9	3.9	3.8	3.3
Technology	86	2.0	2.3	2.4	2.4	2.5	2.4	2.7	2.4	2.3	2.2	2.2	1.9	1.9
Telecommunications	40	2.8	3.5	3.9	3.7	4.2	4.6	4.5	4.1	4.0	4.0	3.9	3.8	3.4
Transportation	23	5.3	2.2	1.8	2.4	3.4	3.0	4.3	4.1	4.3	4.5	3.6	3.7	3.5
Total	962	2.9	2.5	2.7	3.1	3.3	3.5	3.6	3.6	3.5	3.3	3.1	2.8	2.6
Footnote: *Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Coverage calculated as reported EBITDA over reported interest expense, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 1b

Median EBITDA interest coverage by issuer credit rating
		Reported last-12-months period (x)
Issuer credit rating*	Entity count	Dec. 31, 2019	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
BB+	100	6.3	5.7	6.6	7.5	8.5	8.4	9.1	9.3	9.5	9.1	8.7	7.9	7.4
BB	106	5.5	5.2	6.0	6.4	7.1	7.4	7.9	8.3	7.9	6.4	5.9	5.5	5.5
BB-	111	4.4	3.6	3.8	4.8	5.2	6.0	6.1	6.3	6.3	5.8	5.3	4.8	4.5
B+	128	3.4	2.9	3.0	3.5	3.9	4.2	4.1	4.3	4.3	4.2	3.8	3.4	3.3
B	184	2.5	2.4	2.5	2.8	2.8	3.0	3.2	3.3	3.3	3.0	2.8	2.6	2.4
B-	198	1.7	1.7	1.8	2.0	1.9	1.9	1.8	1.7	1.7	1.6	1.5	1.4	1.4
CCC+	99	1.8	1.4	1.4	1.7	1.5	1.4	1.2	1.2	1.4	1.2	1.2	1.1	1.0
CCC	26	1.5	1.7	1.7	1.7	1.7	1.7	1.6	1.3	1.1	1.0	0.9	0.9	0.8
CCC-	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
CC	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
Total	962	2.9	2.5	2.7	3.1	3.3	3.5	3.6	3.6	3.5	3.3	3.1	2.8	2.6
*Rating as of Jan. 5, 2024. Coverage calculated as reported EBITDA over reported interest expense, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. n.m. = not meaningful due to small sample size. Source: S&P Global Ratings.

Table 1c

Median EBITDA interest coverage by company size
		reported last-12-months period (x)
Entity size (measured by EBITDA)	Entity Count	Dec. 31, 2019	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
<50	103	1.5	1.4	1.6	1.7	1.7	1.4	1.1	1.2	1.1	0.9	0.7	0.6	0.6
50-100	115	1.8	1.9	2.0	2.1	2.3	2.0	2.0	2.0	1.9	1.8	1.7	1.5	1.5
100-200	192	2.4	2.3	2.4	2.6	2.4	2.5	2.8	2.7	2.9	2.6	2.4	2.3	2.1
200-300	127	2.8	2.8	3.0	3.5	3.5	3.5	3.5	3.4	3.4	3.2	3.2	3.0	2.7
300-500	146	3.4	3.2	3.5	3.9	4.1	4.5	4.5	4.8	4.8	4.6	4.0	3.8	3.7
500-1000	140	4.5	3.2	3.3	4.6	5.4	6.1	6.9	6.4	5.9	5.7	5.3	5.1	4.6
>1000	139	5.1	3.8	4.1	5.2	5.4	6.3	6.9	7.7	7.3	6.5	5.9	5.5	5.4
Total	962	2.9	2.5	2.7	3.1	3.3	3.5	3.6	3.6	3.5	3.3	3.1	2.8	2.6
Coverage calculated as reported EBITDA over reported interest expense, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 2a

Median FOCF to debt by industry
		Reported last-12-months period (%)
Industry	Entity count	Dec. 31, 2019	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
Aerospace/Defense	22	5.2	4.2	3.6	3.2	2.4	3.4	1.5	2.6	4.6	0.9	(1.5)	(3.8)	(2.5)
Auto/Trucks	28	7.0	9.1	9.2	11.8	0.1	(0.2)	(0.9)	0.9	1.1	2.4	4.0	5.2	3.8
Business and Consumer Services	76	4.6	7.9	9.1	7.7	7.8	5.0	3.8	3.1	2.4	2.5	2.9	2.9	3.5
Cap Goods/Machine&Equip	103	3.1	8.5	9.7	6.8	3.6	1.5	(0.4)	(1.2)	(2.0)	0.6	1.3	2.7	3.9
Chemicals	25	6.0	5.5	6.6	6.9	9.5	7.3	7.7	5.8	5.4	5.6	5.5	5.8	4.4
Consumer Products	92	7.0	9.9	8.4	6.2	4.6	3.0	0.8	(0.0)	(0.5)	0.5	2.2	5.1	7.8
Forest Prod/Bldg Mat/Packaging	45	8.8	14.1	14.6	10.2	4.0	3.1	0.5	0.2	0.9	4.7	7.2	8.2	10.2
Healthcare	93	2.1	6.4	6.4	4.3	2.8	2.0	1.0	0.5	0.0	(0.5)	(0.9)	(0.8)	0.7
Media, Entertainment & Leisure	132	7.1	5.4	4.9	8.2	6.4	5.7	5.4	6.2	5.4	5.5	5.3	5.6	5.3
Mining & Minerals	44	5.1	7.9	11.8	11.3	9.3	10.4	11.7	8.6	7.7	5.6	6.8	3.9	4.5
Oil & Gas	58	0.0	1.3	4.2	6.7	6.8	12.5	13.9	27.2	35.5	41.5	35.1	27.0	19.7
Restaurants/Retailing	77	5.6	13.3	16.4	16.5	13.6	9.6	7.2	3.3	1.8	1.4	4.0	6.2	6.8
Real Estate	18	5.8	6.8	10.7	6.9	3.7	(1.0)	(0.3)	2.0	2.4	6.6	6.4	7.2	7.9
Technology	86	4.3	7.5	9.5	9.2	10.1	10.3	8.2	6.4	5.0	3.8	3.5	3.2	3.8
Telecommunications	40	3.3	4.5	6.6	5.5	5.5	3.9	3.0	2.1	1.1	1.1	0.0	(1.3)	(0.0)
Transportation	23	0.5	(8.4)	(2.5)	1.2	0.4	2.8	3.2	1.0	1.6	(2.1)	0.9	(2.3)	(2.5)
Total	962	4.8	7.3	7.9	7.3	5.9	5.0	3.8	2.9	2.2	2.7	3.3	4.1	4.6
*Rating as of Jan. 5, 2024; n.m. = not meaningful due to small sample size. FOCF: free operating cash flow, as reported and without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings

Table 2b

Median FOCF to debt by issuer credit rating
		Reported last-12-months period (%)
Issuer credit rating*	Entity count	Dec. 31, 2019	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
BB+	100	12.0	18.4	22.2	20.8	22.9	20.4	17.4	15.5	14.3	14.7	11.9	11.7	12.5
BB	106	12.9	16.6	17.3	18.0	16.4	14.4	12.6	12.2	9.5	9.3	9.2	12.1	14.0
BB-	111	8.0	10.8	15.3	13.1	13.1	11.6	10.5	11.5	8.1	9.5	12.4	14.5	14.8
B+	128	7.0	8.3	8.1	8.6	7.4	6.0	5.1	3.7	3.7	5.6	7.0	7.8	8.8
B	184	3.5	7.1	7.3	6.2	3.8	4.7	3.4	2.7	2.7	3.2	3.9	3.8	4.1
B-	198	1.5	4.4	4.6	2.8	1.2	0.1	(0.8)	(1.0)	(1.2)	(0.4)	(0.4)	(0.2)	0.1
CCC+	99	0.6	1.5	2.6	(0.0)	(1.1)	(2.8)	(4.6)	(5.1)	(4.9)	(4.1)	(3.9)	(3.1)	(1.9)
CCC	26	1.5	3.7	5.3	2.7	0.5	(0.1)	(1.4)	(3.8)	(5.6)	(5.1)	(3.7)	(3.5)	(3.5)
CCC-	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
CC	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
Total	962	4.8	7.3	7.9	7.3	5.9	5.0	3.8	2.9	2.2	2.7	3.3	4.1	4.6
Free operating cash flow (FOCF), as reported and without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 2c

Median FOCF to debt by company size
		Reported last-12-months period (%)
Entity size (measured by EBITDA)	Entity count	Dec. 31, 2019	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
<50	103	0.7	3.4	3.0	1.3	(0.5)	(1.6)	(2.4)	(4.9)	(4.8)	(5.0)	(6.6)	(6.4)	(3.5)
50-100	115	2.7	5.3	4.9	3.2	1.6	0.2	(1.5)	(2.3)	(2.4)	(0.5)	1.2	(0.2)	1.0
100-200	192	2.4	6.0	6.3	5.5	3.5	3.2	0.8	0.2	0.0	(0.1)	0.6	1.7	2.5
200-300	127	4.8	8.3	9.3	8.9	7.5	5.6	5.4	3.9	3.2	4.0	4.5	6.5	7.0
300-500	146	6.7	11.0	13.2	12.3	7.7	6.9	6.0	4.9	4.4	4.4	4.6	5.7	7.0
500-1000	140	8.1	8.9	9.3	10.3	11.5	9.9	9.7	8.6	7.7	8.0	7.6	8.0	9.2
>1000	139	7.4	7.9	11.3	11.5	12.8	11.0	10.8	11.2	11.5	10.8	10.5	11.1	10.3
Total	962	4.8	7.3	7.9	7.3	5.9	5.0	3.8	2.9	2.2	2.7	3.3	4.1	4.6
Free operating cash flow (FOCF), as reported and without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 3a

Median gross leverage by industry
		Reported last-12-months period (x)
Industry	Entity count	Dec. 31, 2019	Mar. 31, 2020	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
Better: Improved or deleveraged compared to year-end 2022 levels
Aerospace/Defense	20	4.2	5.7	7.0	7.7	6.4	8.7	7.6	5.9	6.6	7.7	8.1	6.8	6.7	6.6	6.2	6.5
Business and Consumer Services	81	6.4	7.1	6.8	6.7	6.3	6.7	6.8	7.2	6.4	6.7	6.5	6.5	6.6	6.5	6.5	5.9
Cap Goods/Machine&Equip	99	5.9	6.4	6.4	6.2	5.4	5.8	5.4	5.4	6.0	6.1	6.4	6.3	6.1	5.9	5.3	5.1
Healthcare	95	7.0	7.6	8.1	7.9	8.4	8.2	6.8	7.0	7.5	8.2	8.8	9.8	9.4	8.7	8.0	7.7
Technology	93	7.6	7.4	7.3	7.1	6.9	7.6	7.6	7.4	7.3	7.2	7.5	7.7	7.7	8.0	7.6	7.4
Transportation	26	4.5	4.6	6.7	8.7	8.2	9.0	6.7	6.5	6.0	5.5	5.8	5.9	5.6	5.0	4.5	4.8
Worse: Leverage increased from year-end 2022 levels
Chemicals	26		5.5	5.8	6.4	6.8	5.4	4.2	4.1	3.9	4.1	4.1	4.1	4.2	4.4	5.5	6.1
Mining & Minerals	45	2.7	2.9	3.3	3.6	4.2	3.7	2.8	2.4	2.0	1.8	1.6	1.8	1.8	2.2	2.4	2.1
Oil & Gas	72	2.9	3.2	4.5	5.3	5.2	5.1	4.1	3.1	2.1	1.9	1.2	0.9	0.9	1.0	1.2	1.3
Telecommunications	42	5.2	5.1	4.8	4.9	4.7	4.6	4.7	4.4	4.8	5.2	5.3	5.2	5.0	5.0	5.2	5.3
Leverage remained relatively flat since year-end 2022
Auto/Trucks	29	3.8	4.3	6.8	6.0	5.6	5.1	4.0	3.9	4.0	4.1	4.3	4.0	4.0	4.1	3.7	4.1
Consumer Products	81	6.3	6.3	6.0	6.1	6.2	5.8	5.7	6.2	6.6	6.9	6.8	6.7	5.9	6.5	6.4	5.9
Forest Prod/Bldg Mat/Packaging	41	5.2	5.5	4.4	4.4	4.4	4.0	4.0	3.9	4.6	4.9	4.5	4.2	3.4	4.0	4.1	3.5
Media, Entertainment & Leisure	134	4.8	6.3	8.0	8.2	8.3	9.1	6.9	6.4	6.6	5.8	5.5	5.2	5.0	5.0	5.2	5.0
Restaurants/Retailing	74	4.6	4.8	6.4	5.4	5.4	4.5	3.8	3.7	3.6	3.7	3.6	3.8	3.7	3.7	3.7	3.7
Real Estate	33	7.2	8.8	7.9	8.3	7.8	8.1	7.4	6.6	6.8	6.3	6.3	6.5	6.5	5.8	6.7	6.5
Total	991	5.4	6.0	6.5	6.3	6.3	6.2	5.5	5.5	5.6	5.7	5.5	5.4	5.4	5.2	5.2	5.2
Leverage calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 3b

Median gross leverage by issuer credit rating
		Reported last-12-months period (x)
Issuer cedit rating*	Entity count	Dec. 31, 2019	Mar. 31, 2020	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
BB+	96	3.3	3.5	4.5	3.9	3.6	3.7	3.0	2.7	3.1	2.9	2.7	2.5	2.5	2.7	2.8	2.8
BB	108	3.5	3.9	4.0	3.9	3.7	3.7	3.2	3.1	3.1	3.1	2.9	3.4	3.3	3.5	3.3	3.3
BB-	116	4.1	4.3	4.8	4.8	4.8	4.5	3.4	3.2	3.3	3.4	3.3	3.3	3.2	3.3	3.5	3.3
B+	129	4.6	5.1	5.5	5.6	5.4	5.5	5.0	4.4	4.3	4.6	4.6	4.4	4.2	4.3	4.1	4.2
B	177	5.9	6.7	7.2	6.8	6.9	6.7	6.1	5.6	5.3	5.3	5.0	4.9	4.8	4.7	5.0	4.9
B-	222	7.2	7.9	7.8	7.6	8.3	8.4	8.1	8.5	9.2	9.2	8.9	8.9	8.6	8.3	8.2	8.0
CCC+	105	7.9	8.3	8.5	8.3	9.6	9.5	9.9	9.2	10.8	11.4	11.2	11.0	11.1	10.2	9.9	10.3
CCC	30	8.1	9.2	9.4	9.3	8.4	8.5	7.7	8.7	9.6	9.6	13.8	16.8	16.9	16.9	14.5	15.2
CCC-	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
CC	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
Total	991	5.4	6.0	6.5	6.3	6.3	6.2	5.5	5.5	5.6	5.7	5.5	5.4	5.4	5.2	5.2	5.2
*Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Leverage calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 3c

Median gross leverage by company size
		Reported last-12-months period (x)
Entity size (measured by EBITDA)	Entity count	Dec. 31, 2019	Mar. 31, 2020	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
<50	112	7.8	8.2	9.0	9.0	9.2	9.2	8.7	8.8	10.9	13.4	14.2	15.1	18.2	18.8	19.3	18.2
50-100	121	6.7	7.6	7.4	7.1	7.2	6.9	7.4	7.3	7.5	7.7	7.8	7.5	7.4	7.3	7.0	6.9
100-200	199	6.3	7.0	7.3	6.7	6.9	7.0	6.4	6.4	6.4	6.1	6.1	5.9	6.0	5.7	5.7	5.9
200-300	133	5.6	6.1	6.4	6.1	5.7	5.8	5.7	5.5	5.6	5.8	5.6	5.7	5.5	5.4	5.2	5.2
300-500	141	4.9	5.3	5.6	5.3	5.4	5.3	4.7	4.5	4.5	4.4	4.3	4.3	3.9	3.9	4.0	4.2
500-1000	146	3.8	4.4	5.1	5.8	5.4	5.0	4.2	3.7	3.7	3.6	3.6	3.6	3.6	3.6	3.6	3.5
>1000	139	3.8	4.3	5.3	5.0	4.7	4.3	3.7	3.4	3.5	3.6	3.4	3.2	3.3	3.2	3.1	3.1
Total	991	5.4	6.0	6.5	6.3	6.3	6.2	5.5	5.5	5.6	5.7	5.5	5.4	5.4	5.2	5.2	5.2
Leverage calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 4a

Median EBITDA growth by industry
		Reported last-12-months period quarter over quarter (%)
Industry	Entity count	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
Aerospace/Defense	22	1.6	10.9	4.1	4.3	(2.1)	0.1	1.5	2.5	4.7	2.8	0.9
Auto/Trucks	28	15.3	32.7	1.7	2.6	(2.5)	0.3	1.2	4.3	(0.6)	6.1	2.1
Business and Consumer Services	76	3.0	7.0	2.5	2.5	3.1	3.3	4.0	2.6	1.6	1.9	2.0
Cap Goods/Machine&Equip	103	3.9	5.5	1.9	0.8	3.4	3.4	5.6	5.2	4.0	3.1	2.5
Chemicals	25	5.8	13.1	9.7	4.9	5.5	4.3	(1.3)	(2.1)	(6.5)	(13.0)	(1.6)
Consumer Products	92	8.6	9.2	2.4	(0.9)	(0.8)	1.7	(1.0)	0.5	(1.4)	(0.6)	1.4
Forest Prod/Bldg Mat/Packaging	45	7.8	11.2	1.0	1.2	7.4	6.1	3.9	0.8	(1.0)	(0.8)	0.1
Healthcare	93	9.1	9.1	3.3	0.9	0.1	(2.1)	(1.8)	(0.2)	0.6	5.3	3.4
Media, Entertainment & Leisure	132	2.4	25.8	9.1	5.4	5.0	1.7	1.4	2.8	0.1	(0.1)	0.0
Mining & Minerals	44	7.0	20.6	15.4	9.5	10.1	6.1	(0.9)	(9.0)	(3.3)	(5.9)	(1.1)
Oil & Gas	58	6.1	38.0	27.6	36.3	19.0	27.8	17.8	4.9	2.4	(10.3)	(4.6)
Restaurants/Retailing	77	9.8	30.2	2.2	5.4	1.6	(0.6)	(0.9)	0.0	(0.3)	(0.1)	(1.7)
Real Estate	18	2.5	6.8	4.6	5.2	2.7	3.6	5.3	3.4	(0.5)	(1.5)	(0.6)
Technology	86	6.7	5.2	4.8	3.4	2.2	0.2	1.2	1.3	2.7	2.6	3.2
Telecommunications	40	2.0	2.7	1.2	0.0	(1.2)	(2.7)	(0.9)	(0.4)	(1.9)	(0.2)	0.5
Transportation	23	(2.9)	30.8	18.7	21.0	2.7	3.4	5.5	3.8	5.6	6.2	(2.8)
Total	962	5.3	11.6	4.5	3.4	2.8	2.0	1.7	1.3	0.7	0.5	0.8
Reported EBITDA without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 4b

Median EBITDA growth by issuer credit rating
	Reported last-12-months period quarter over quarter (%)
Issuer Credit Rating*	Entity Count	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
BB+	100	5.1	11.3	4.7	4.4	4.9	2.6	2.0	0.4	(1.3)	(0.3)	(0.3)
BB	106	6.2	11.4	6.0	2.3	1.9	2.2	1.1	1.1	(0.9)	(0.6)	0.7
BB-	111	5.6	20.9	7.4	6.7	5.3	2.1	3.2	2.3	1.0	(0.5)	1.3
B+	128	4.6	10.4	6.4	5.3	2.7	1.7	1.1	2.2	1.4	(0.4)	(1.6)
B	184	6.4	14.6	5.9	4.3	4.0	4.8	3.1	2.2	0.9	0.1	0.5
B-	198	5.2	7.1	1.2	0.0	2.5	0.0	2.4	2.1	1.6	3.7	3.8
CCC+	99	3.7	7.4	1.9	(0.9)	(2.7)	(3.1)	(2.9)	(2.7)	3.5	0.8	(0.1)
CCC	26	3.8	2.9	(0.2)	(0.5)	(6.8)	(5.6)	(8.9)	(5.3)	(4.5)	(0.8)	(3.2)
CCC-	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
CC	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
Total	962	5.3	11.6	4.5	3.4	2.8	2.0	1.7	1.3	0.7	0.5	0.8
*Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Reported EBITDA without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 4c

Median EBITDA growth by company size
	Reported last-12-months period quarter over quarter (%)
Entity size (measured by EBITDA)	Entity count	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
<50	103	5.6	12.5	1.5	(2.9)	(4.8)	(4.8)	(8.4)	(13.6)	(4.1)	(0.7)	1.9
50-100	115	7.9	7.4	3.2	0.8	0.3	0.5	1.0	0.5	1.4	3.1	0.5
100-200	192	4.0	11.5	3.3	1.8	2.5	0.2	1.7	1.9	0.6	0.8	2.3
200-300	127	5.7	12.7	3.1	2.7	2.7	2.0	1.2	1.5	0.4	1.3	1.0
300-500	146	3.7	10.4	3.5	3.1	2.9	2.6	2.0	2.2	1.6	0.6	1.1
500-1000	140	6.2	13.7	8.3	6.6	5.1	3.4	2.4	1.3	1.7	0.1	0.6
>1000	139	6.3	15.0	8.1	7.6	5.9	5.9	4.4	2.3	(0.6)	(0.4)	(0.4)
Total	962	5.3	11.6	4.5	3.4	2.8	2.0	1.7	1.3	0.7	0.5	0.8
Reported EBITDA without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 5a

Median capex growth by industry
		Reported last-12-months period quarter over quarter (%)
Industry	Entity count	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
Aerospace/Defense	24	1.3	9.2	(1.4)	(2.9)	6.3	0.1
Auto/Trucks	32	3.7	(2.6)	0.8	(1.9)	1.0	4.1
Business and Consumer Services	90	7.3	6.5	4.1	2.8	1.0	(1.0)
Cap Goods/Machine&Equip	111	1.9	3.3	2.4	3.1	3.0	2.1
Chemicals	27	5.4	6.5	(0.1)	3.5	2.4	1.1
Consumer Products	98	5.7	2.1	1.1	(0.6)	0.8	(1.2)
Forest Prod/Bldg Mat/Packaging	52	4.5	1.1	6.5	5.1	3.1	2.5
Healthcare	105	2.9	4.6	3.4	0.0	0.0	(2.6)
Media, Entertainment & Leisure	148	8.9	7.9	2.8	4.6	2.0	0.3
Mining & Minerals	44	8.1	8.7	8.4	9.0	7.4	3.9
Oil & Gas	70	13.9	12.2	11.3	8.1	5.8	(0.4)
Restaurants/Retailing	79	5.7	7.3	6.7	2.7	2.0	0.0
Real Estate	26	4.3	4.9	2.5	1.4	(1.6)	10.6
Technology	98	3.2	4.3	3.3	0.6	2.9	(0.1)
Telecommunications	42	5.3	3.6	3.9	2.6	(0.4)	(2.0)
Transportation	29	5.8	5.8	8.1	10.4	4.6	1.0
Total	1,075	5.4	5.9	4.2	2.7	2.4	0.4
Reported capital expenditure (capex) without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 5b

Median capex growth by issuer credit rating
	Reported last-12-months period quarter over quarter (%)
Issuer credit rating*	Entity count	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
BB+	103	6.2	6.8	7.6	5.7	3.3	1.9
BB	115	4.3	4.0	4.3	3.8	2.0	0.7
BB-	121	7.1	7.9	4.2	5.7	3.7	2.1
B+	145	6.0	6.5	4.6	2.7	3.8	1.6
B	208	6.1	6.6	5.4	3.6	3.5	0.3
B-	232	3.4	4.7	3.6	1.6	1.7	(1.1)
CCC+	109	4.2	(1.2)	(1.7)	(1.2)	(1.6)	(0.1)
CCC	30	7.4	8.6	4.5	1.0	(3.5)	(5.4)
CCC-	10	13.3	3.7	(0.5)	(5.7)	(8.3)	(7.8)
CC	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
Total	1,075	5.4	5.9	4.2	2.7	2.4	0.4
*Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Reported capital expenditure (capex) without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 5c

Median EBITDA growth by company size
	Reported last-12-months period quarter over quarter (%)
Entity size (measured by EBITDA)	Entity count	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
<50	132	4.4	3.4	3.2	(1.3)	(1.4)	(4.0)
50-100	136	5.8	4.0	3.1	0.6	1.6	(0.8)
100-200	217	3.8	4.7	3.0	1.4	3.0	(0.9)
200-300	136	5.5	3.2	3.6	2.2	2.2	1.8
300-500	160	5.8	7.0	4.4	4.4	3.0	1.5
500-1000	150	5.8	6.9	4.3	3.6	2.4	0.8
>1000	144	6.1	7.9	7.9	6.6	4.5	1.7
Total	1075	5.4	5.9	4.2	2.7	2.4	0.4
Reported capital expenditure (capex) without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 6a

Median working capital change as a percentage of revenue by industry
		Reported last-12-month period quarter over quarter (%)
Industry	Entity count	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
Aerospace/Defense	24	(0.9)	(2.3)	(3.3)	(3.5)	(3.2)	(1.6)
Auto/Trucks	31	(2.8)	(0.9)	(0.8)	0.4	(0.3)	(0.1)
Business and Consumer Services	86	(2.5)	(2.1)	(1.8)	(1.1)	(0.7)	(0.5)
Cap Goods/Machine&Equip	109	(3.8)	(3.9)	(3.3)	(1.9)	(1.2)	(0.3)
Chemicals	27	(3.7)	(3.9)	(2.3)	(1.5)	0.4	0.8
Consumer Products	98	(5.4)	(4.4)	(4.2)	(2.0)	(0.2)	1.6
Forest Prod/Bldg Mat/Packaging	51	(4.7)	(4.1)	(2.7)	(1.1)	0.3	1.5
Healthcare	105	(2.5)	(3.3)	(2.2)	(2.2)	(1.8)	(1.0)
Media, Entertainment & Leisure	145	(1.5)	(1.5)	(1.2)	(0.8)	(0.5)	(0.4)
Mining & Minerals	45	(4.1)	(2.7)	(2.7)	(1.8)	(1.8)	(1.8)
Oil & Gas	70	(2.6)	(1.2)	(0.4)	0.2	1.1	(0.9)
Restaurants/Retailing	83	(1.8)	(2.2)	(1.9)	(1.3)	(0.3)	0.0
Real Estate	28	(6.6)	(4.7)	(5.8)	(2.9)	0.5	0.4
Technology	97	(2.3)	(2.7)	(2.5)	(1.7)	(1.5)	(0.9)
Telecommunications	41	(2.9)	(1.6)	(1.5)	(1.4)	(1.8)	(1.8)
Transportation	27	(0.8)	(0.8)	(0.2)	0.2	0.2	0.2
Total	1,067	(2.9)	(2.7)	(2.1)	(1.3)	(0.6)	(0.3)
Reported working capital change and revenue without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 6b

Median working capital change as a percentage of revenue by issuer credit rating
		Reported last-12-months period quarter over quarter (%)
Issuer credit rating*	Entity count	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
BB+	104	(2.0)	(1.7)	(1.8)	(1.4)	(1.1)	(1.1)
BB	119	(2.6)	(2.9)	(3.1)	(1.9)	(1.1)	(0.6)
BB-	124	(2.7)	(2.6)	(2.2)	(1.0)	(0.6)	(0.4)
B+	146	(3.1)	(2.5)	(1.8)	(1.3)	(0.2)	(0.1)
B	208	(3.3)	(3.0)	(2.4)	(0.9)	(0.6)	(0.3)
B-	220	(2.9)	(2.7)	(1.9)	(1.1)	(0.9)	(0.1)
CCC+	107	(3.0)	(3.0)	(1.9)	(1.1)	(0.1)	0.1
CCC	28	(1.3)	(2.0)	(1.8)	(0.6)	1.6	2.8
CCC-	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
CC	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.	n.m.
Total	1,067	(2.9)	(2.7)	(2.1)	(1.3)	(0.6)	(0.3)
*Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Reported working capital change and revenue without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

Table 6c

Median working capital change as a percentage of revenue by company size
		Reported last-12-months period quarter over quarter (%)
Entity size (measured by EBITDA)	Entity count	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2023	Sep. 30, 2023
<50	129	(2.9)	(2.2)	(1.0)	(0.6)	0.3	1.5
50-100	131	(3.4)	(3.5)	(2.0)	(1.0)	(0.4)	0.3
100-200	213	(3.0)	(3.3)	(3.3)	(1.9)	(1.1)	(0.6)
200-300	137	(3.2)	(2.7)	(2.2)	(1.5)	(1.1)	(0.1)
300-500	161	(3.2)	(3.7)	(2.8)	(1.5)	(1.1)	(0.7)
500-1000	152	(2.7)	(2.1)	(1.8)	(1.1)	(0.6)	(0.5)
>1000	144	(1.8)	(1.4)	(0.9)	(0.6)	(0.4)	(0.8)
Total	1067	(2.9)	(2.7)	(2.1)	(1.3)	(0.6)	(0.3)
Reported working capital change and revenue without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings.

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Primary Credit Analysts:	Hanna Zhang, New York + 1 (212) 438 8288; Hanna.Zhang@spglobal.com
	Minesh Patel, CFA, New York + 1 (212) 438 6410; minesh.patel@spglobal.com
	Omkar V Athalekar, Toronto +1 6474803504; omkar.athalekar@spglobal.com
Secondary Contact:	Steve H Wilkinson, CFA, New York + 1 (212) 438 5093; steve.wilkinson@spglobal.com
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