S&p Global Inc. · NYSE:SPGI
S&p Global — McGraw Hill Financial — Q2 2014 Earnings Presentation
18 slides from S&p Global's earnings presentation, Jul 29, 2014
Slide 1: 2Q 2014 Earnings Call
2Q 2014 Earnings Call Doug Peterson July 29, 2014 President and CEO Jack Callahan Executive Vice President and CFO Chip Merritt Vice President, Investor Relations McGraw Hill Financial | 2Q 2014 Earnings Conference Call/Webcast Comparison of Adjusted Information to U.S. GAAP Information This present
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 This presentation contains forward‐looking statements, including without limitation statements relating to our businesses and our prospects, new products, sales, expenses, tax rates, cash flows, and operating and capi
Slide 3: 2014 – Excellent Second Quarter
DOUG PETERSON PRESIDENT AND CHIEF EXECUTIVE OFFICER McGraw Hill Financial | 2Q 2014 Earnings Conference Call/Webcast 2014 – Excellent Second Quarter • All lines of business delivered revenue and profit growth: Double‐digit revenue growth High single‐digit revenue growth Standard & Poor’s Ratings Ser
Slide 4: Company Delivers Double-Digit Adjusted EPS Growth
Company Delivers Double‐Digit Adjusted EPS Growth ($ in millions) 2Q 2014 2Q 2013 Change Revenue $1,346 $1,250 +8%* Adj. Operating Profit $486 $446 +9% Adj. Operating Margin 36.1% 35.7% +40 bps Diluted Adjusted EPS $1.06 $0.92 +15% * Organic growth was 9% excluding lost revenue from 2013 portfolio r
Slide 5: Changes to Leadership Team
Changes to Leadership Team • Lucy Fato appointed Executive Vice President PICTURE and General Counsel, effective August 4, 2014 • Since 2005, Lucy has served as Vice President, Deputy General Counsel and Corporate Secretary at Marsh & McLennan Companies • Previously a partner in the Capital Markets
Slide 6: Standard & Poor’s Ratings Services: Strong Results
Standard & Poor’s Ratings Services: Strong Results ($ in millions) 2Q 2014 2Q 2013 Change Non‐transaction $337 $312 +8% Transaction $327 $287 +14% 2Q 2014 highlights: Non‐transaction revenue: • Annual fees (predominately frequent‐issuer relationship fees and surveillance) growth • Rating Evaluation
Slide 7: U.S.: Debt Issuance - A Form of Synthetic Cash Repatriation
U.S.: Debt Issuance ‐ A Form of “Synthetic Cash Repatriation” Growth in Corporate Cash • As U.S. corporate cash balances reached Growth in Corporate Debt record levels during 2010‐2013, debt grew almost four times as fast ($ in billions) $748 • Why did corporations increase debt with so much cash on
Slide 8: Standard & Poor’s Ratings Services: Litigation Update
Standard & Poor’s Ratings Services: Litigation Update • Litigation statistics: Unchanged from the first quarter – 36 cases now dismissed outright – 13 dismissals by lower courts have been affirmed by higher courts – 11 cases have been voluntarily withdrawn – A couple dozen non‐government cases remai
Slide 9: S&P Capital IQ: Key Products Continue to Drive Growth
S&P Capital IQ: Key Products Continue to Drive Growth S&P Capital IQ Desktop S&P Credit S&P Capital IQ & Enterprise Solutions Solutions Markets Intelligence • S&P Capital IQ Desktop • RatingsDirect® • Global Markets • Portfolio Risk • RatingsXpress® Intelligence (GMI) • Compustat • Leveraged Comment
Slide 10: S&P Dow Jones Indices: Increased AUM Drives Growth
S&P Dow Jones Indices: Increased AUM Drives Growth ($ in millions) 2Q 2014 2Q 2013 Change Revenue $133 $123 +8% Segment Op. Profit $82 $77 +6% MHFI Share of Op. Profit* $60 $57 +5% Segment Op. Margin 62.1% 62.9% (80 bps) * The Company owns 73% of the S&P Dow Jones Indices joint venture 2Q 2014 highl
Slide 11: S&P Dow Jones Indices – Expanding the Business
S&P Dow Jones Indices – Expanding the Business • Introduced Dow Jones Commodity Index which emphasizes diversification and liquidity using an equal‐weighted approach • Continue to expand alternatively weighted and emerging markets index offering, including: ‒ Low Beta and Intrinsic Value Weighted in
Slide 12: Commodities: Continued Solid Growth
Commodities: Continued Solid Growth Commodities ($ in millions) 2Q 2014 2Q 2013 Change Revenue $149 $137 +9% 2Q 2014 highlights: • Platts’ price assessment and market data subscriptions continued to deliver double‐digit revenue growth • Global Trading Services licensing revenue decreased due to weak
Slide 13: Platts Acquires
Platts Acquires •Provides market leading data and analysis for European natural gas, power and liquefied natural gas (LNG) markets •Natural gas becoming increasing important as Europeans focus on clean energy •Enables Platts to leverage 2011 Bentek acquisition in North American natural gas McGraw Hi
Slide 14: Excellent 2Q Results
Excellent 2Q Results: • Continuing to create growth... ‒ 8% total revenue growth ‒ 10% international revenue growth ‒ Additional tuck‐in acquisition with Eclipse Energy Group ‒ Numerous new product launches • ...and drive performance ‒ 15% adjusted diluted EPS growth over the toughest quarterly comp
Slide 15: Financial Highlights – Key Areas
Financial Highlights – 3 Key Areas • Consolidated results • Balance sheet, free cash flow, and return of capital • Updated 2014 guidance McGraw Hill Financial | 2Q 2014 Earnings Conference Call/Webcast 28 McGraw Hill Financial: 15% Adjusted EPS Growth in 2Q 2014 2Q 2Q ($ in millions, except earnings
Slide 16: Free Cash Flow from Continuing Operations; Return of Capital
Free Cash Flow from Continuing Operations ($ in millions) 2Q 2014 Cash and equivalents $1,617 Total debt $799 ($ in millions) YTD 2014 YTD 2013 Cash provided by $459 $226 operating activities Capital expenditures (37) (43) Dividends and other payments (30) (38) to noncontrolling interests Free Cash
Slide 17: 2014 Guidance
2014 Guidance 2014 2014 Income Statement Initial Updated ($ in millions) Guidance Guidance Revenue Mid Mid single‐digit single‐digit Adjusted Unallocated Expense Flat ~ +$10m Adjusted Operating Profit Margin > 100 bps > 100 bps Adjusted Tax Rate ~ 34% ~ 33.5% Adjusted Diluted EPS $3.75–$3.85 $3.80–$
Slide 18: 2Q 2014 Earnings Call Replay Options
2Q 2014 Earnings Call REPLAY OPTIONS July 29, 2014 • Internet: Replay available for one year Go to http://investor.mhfi.com • Telephone: Replay available through August 29, 2014 Domestic: 866‐501‐2973 International: 203‐369‐1832 No password required McGraw Hill Financial | 2Q 2014 Earnings Conferenc
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