S&p Global Inc. · NYSE:SPGI
S&p Global — The McGraw-Hill Companies — J.P. Morgan 39th Annual Technology, Media and Telecom Conference 2011
20 slides from S&p Global's conference presentation, May 16, 2011
Slide 1: J.P. Morgan 39th Annual Technology, Media and Telecom Conference
J.P. Morgan 39th Annual Technology, Media and Telecom Conference 1 May 16, 2011 Harold McGraw III Chairman, President and CEO The McGraw-Hill Companies Presented at the J.P. Morgan 39th Annual Technology, Media and Telecom Conference May 16, 2011 2
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, prepublication investm
Slide 3: Technology is transforming our world
Technology is transforming our world • Improves the business model • Key to our growing and reliable subscription business as model changes from print to digital • Increases our operating leverage • Enables us to reach more customers at lower costs • Facilitates innovation • Expands our addressable
Slide 4: Outlook for 2011
Outlook for 2011 We will benefit from: • Growth of digital products and services • Recovering capital markets • New global growth opportunities in all our segments • Performance of newest segment, McGraw-Hill Financial 7 Solid 1Q 2011 results for MHP: 18.2% increase in diluted EPS • Building on soli
Slide 5: McGraw-Hill Financial off to a strong start
McGraw-Hill Financial 9 McGraw-Hill Financial off to a strong start As Reported 1Q 2011 1Q 2010 Change Revenue $324.0 million $ 278.8 million 16.2% Operating Profit $96.3 million $71.2 million 35.3% Operating Margin 29.7% 25.5% • Double-digit top- and bottom-line growth • 29.7% operating margin 10
Slide 6: The strategy for McGraw-Hill Financial
The strategy for McGraw-Hill Financial • McGraw-Hill Financial – Complexity and growth of multi-asset portfolios is creating new global demand for pricing and analytics that span asset classes – Together, our brands can be more than the sum off their parts – Our goal: To create one scaled operation
Slide 7: One scaled operation offering high-value content across all asset classes
One scaled operation offering high- value content across all asset classes • McGraw-Hill Financial is about creating: – Scale – Horizontal solutions – Innovations in research and analytics • Capital IQ platform will support a growing $1.2 billion enterprise 13 The strategy for McGraw-Hill Financial’
Slide 8: Growing and expanding S&P Indices
Growing and expanding S&P Indices— the key to our Benchmarks operation • Liquid and investable indices are central to the growth of S&P indices • S&P indices are the basis of 333 exchange-traded funds with more than $323 billion in assets under management at the end of 1Q 2011 • Expect S&P Indices t
Slide 9: Favorable outlook as clarity returns to global debt markets
Favorable outlook as clarity returns to global debt markets • S&P expects to benefit from favorable trends, which include: – Strong new issuance in corporate and high-yield bonds and a growing bank loan market – Growth in public debt markets as banks continue to deleverage – An increasingly active M
Slide 10: Public and private sector borrowers have huge refinancing requirements
Public and private sector borrowers have huge refinancing requirements • S&P estimates $5.6 trillion in bond and loan maturities coming due between 2011 and 2014 for U.S. and European markets • Maturities in the range of $1.2 trillion to $1.5 trillion per annum between 2011 and 2014 Corporate Debt M
Slide 11: S&P's ratings will play an increasingly important role in the developing world
S&P’s ratings will play an increasingly important role in the developing world • Standard & Poor’s is majority owner of CRISIL – India’s leading ratings, research, and risk and policy advisory company • CRISIL’s 2010 revenue is up seven-fold since S&P acquired a majority position in the company in 2
Slide 12: Latest developments on litigation front
Latest developments on litigation front • We continue to make progress: – 20 cases dismissed outright – 8 more lawsuits have been voluntarily withdrawn 23 McGraw-Hill Education 24
Slide 13: McGraw-Hill Education: 1Q 2011 results
McGraw-Hill Education: 1Q 2011 results As 1Q 2011 1Q 2010 Change Reported Revenue $302.7 million $317.3 million (4.6%) Operating Loss $(75.5) million $(61.8) million (22.2%) • Operating loss reflects revenue decline and increased investment in digital infrastructure • 1Q results not reflective of fu
Slide 14: McGraw-Hill Education: Providing new value for our customers
McGraw-Hill Education: Providing new value for our customers • Learning solutions improve the efficiency of our customers’ workflows • Offering new tools and resources never before available 27 Internal publishing processes are digital • McGraw-Hill Education has a wealth of digital content and the
Slide 15: Unlocking a new market in the digital world — the student
Unlocking a new market in the digital world — the student • For the first time, marketing new products directly to students: – Test-prep programs as mobile phone apps, allowing students to review on the run – LearnSmart allows college students to assess, remediate, or reinforce and master concepts a
Slide 16: McGraw-Hill Education: A positive cash contributor
McGraw-Hill Education: A positive cash contributor • McGraw-Hill Education continues to be a positive contributor of cash to the corporation after pre-publication costs, capital investments, and working capital needs – Segment is a positive cash generator – Self-sufficient from a cash need 31 Inform
Slide 17: Information & Media: Strong growth in 1Q 2011
Information & Media: Strong growth in 1Q 2011 • 1Q: Delivering on the promise of a sustainable operating margin As Reported 1Q 2011 1Q 2010 Change Revenue $227.5 million $206.2 million 10.3% Operating Profit $37.4 million $27.8 million 34.5% Operating Margin 16.4% 13.5% 33 Information & Media: Growi
Slide 18: Subscriptions produce a stickier revenue stream
Subscriptions produce a stickier revenue stream • 75% of McGraw-Hill Financial’s revenue • 61% of Information & Media’s revenue • 61% of Standard & Poor’s ratings revenue is from recurring non-transaction revenue • Subscriptions also growing at McGraw-Hill Education as its business model changes fro
Slide 19: Summary
Summary • Improving prospects in key markets • Using technology to expand addressable markets in financial information, education, and information and media • Revenue stream is getting sticker as subscriptions continue to grow 37 Guidance for 2011 • Expect diluted EPS in the $2.79 to $2.89 range 38
Slide 20: J.P. Morgan 39th Annual Technology, Media and Telecom Conference
J.P. Morgan 39th Annual Technology, Media and Telecom Conference 39 May 16, 2011