Slide 1: 2Q 2018 Earnings Conference Call
2Q 2018 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations July 26, 2018 Comparison of adjusted information to U.S. GAAP information This presentation includes adjusted financial measures that ar
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,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events, trends,
Slide 3: Solid 2Q 2018 performance
Doug Peterson President and Chief Executive Officer Solid 2Q 2018 performance • Delivered 26% adjusted EPS growth to $2.17 • The adjusted effective tax rate declined 500 basis points to 23.9% as a result of U.S. tax reform • In 2Q 2018, generated $488 million in free cash flow excluding certain item
Slide 4: Organic revenue growth and EPS growth
Organic revenue growth, productivity gains and U.S. tax reform generated significant EPS growth 2Q 2018 2Q 2017 Change Revenue $1,609 $1,509 +7% Organic revenue $1,600 $1,509 +6% Adjusted operating profit $790 $706 +12% Adjusted operating profit margin 49.1% 46.8% +230 bps Average diluted shares out
Slide 5: U.S. leveraged loan market surpasses $1 trillion
U.S. leveraged loan market surpasses $1 trillion U.S. (institutional) leveraged loans outstanding $1,200B $1,000B $800B $600B $400B $200B $0B 2002 2004 2006 2008 2010 2012 2014 2016 Apr Source: S&P/LSTA Leveraged Loan Index; LCD 2018 9 Very strong 2Q 2018 bank loan ratings revenue $400 $350 $300 $25
Slide 6: S&P Dow Jones Indices Annual Survey of Assets
S&P Dow Jones Indices Annual Survey of Assets $13.7 trillion in assets globally track indices managed by SPDJI – $8.9 trillion benchmarked – $4.8 trillion indexed via investment products (15% increase over 12/31/16) Index Investment Category Highlights S&P 500 Smart Beta Fixed Income (assets in tril
Slide 7: Expanding differentiated content and creating new products
Expanding differentiated content and creating new products • Market Intelligence acquired RateWatch • Crunchbase data launched on the MI platform • SDG Evaluation Tool launched by Trucost • SPDJI launched the S&P 500 Carbon Price Risk 2030 Adjusted Index 13 Ewout Steenbergen Executive Vice President
Slide 8: Solid operating results in 2Q
Solid operating results in 2Q 2Q 2018 2Q 2017 Change Revenue $1,609 $1,509 +7% Organic revenue $1,600 $1,509 +6% Adjusted Corporate Unallocated (A) ($39) ($36) (7%) Adjusted total expense $819 $803 +2% Adjusted operating profit $790 $706 +12% Adjusted operating profit margin 49.1% 46.8% 230 bps Inte
Slide 9: Changes in foreign exchange rates increased 2Q 2018 adjusted operating profit
Changes in foreign exchange rates increased 2Q 2018 adjusted operating profit S&P Dow Favorable Market Ratings Platts Jones (Unfavorable) Intelligence Indices Revenue +$11 +$1 – – Adj. operating profit +$18 +$1 ($2) ($1) Adj. EPS +$0.05 – ($0.01) – ($ in millions) Key factors mitigating impact of cu
Slide 10: Revenue and profitability gains in every business segment
Revenue and profitability gains in every business segment 2Q 2018 vs. 2Q 2017 S&P Dow Market Ratings Platts Jones Intelligence Indices Reported revenue +4% +8% +7% +13% Organic revenue +4% +7% +7% +13% Adjusted operating +12% +9% +11% +15% profit 2Q 2018 adjusted 57.1% 32.8% 49.9% 65.8% operating pr
Slide 11: Ratings: Growth in non-transaction revenue maintains lead
Ratings: Growth in non-transaction revenue maintains lead over transaction revenue 2Q 2018 2Q 2017 Change Non-transaction $378 $353 +7% Transaction $397 $394 +1% ($ in millions) 2Q 2018 HIGHLIGHTS: • Non-transaction revenue increased due primarily to growth in fees associated with surveillance, new
Slide 12: S&P Dow Jones Indices: Strong revenue and adjusted operating profit growth
S&P Dow Jones Indices: Strong revenue and adjusted operating profit growth 2Q 2018 2Q 2017 Change Revenue $209 $184 +13% Adjusted segment operating profit $138 $120 +15% SPGI share of Adj. Seg. Op. Profit* $101 $89 +14% Adjusted segment operating profit 65.8% 65.1% +70 bps margin Trailing four quart
Slide 13: S&P Dow Jones Indices: Continued growth in ETF AUM
S&P Dow Jones Indices: Continued growth in ETF AUM associated with our indices Asset-linked fees: • Exchange-traded products industry net inflows were $119 billion in 2Q • 2Q average ETF AUM associated with our indices increased 21% YOY • Quarter ending ETF AUM associated Quarter Ending ETF AUM with
Slide 14: Market Intelligence: Solid revenue growth and improved profitability
Market Intelligence: Solid revenue growth and improved profitability 2Q 2018 2Q 2017 Change Revenue $447 $414 +8% Adjusted segment operating profit $146 $134 +9% Adjusted segment operating profit 32.8% 32.4% +40 bps margin Trailing four quarters adjusted 32.2% 31.2% +100 bps segment operating profit
Slide 15: Market Intelligence: Business highlights
Market Intelligence: Business highlights • As we institute enterprise-wide commercial agreements in desktop products, approximately 75% of former Capital IQ desktop customers have been converted • We realized a 13% increase in Market Intelligence’s active desktop users • We continue to develop the M
Slide 16: Platts: Petrochemicals and Metals & Ag lead revenue growth
Platts: Petrochemicals and Metals & Ag lead revenue growth Revenue $205 $200 $192 +10% $16 $14 +20% $11 $9 +5% $37 $150 $35 Metals & Ag $100 Petrochemicals +6% Power & Gas $133 $141 Petroleum $50 $0 ($ in millions) 2Q 2017 2Q 2018 Details may not sum to total due to rounding 31 Capital position rema
Slide 17: Revenue growth, lower taxes, and improved working capital enlarge free cash flow
Revenue growth, lower taxes, and improved working capital enlarge free cash flow 2Q 2018 YTD 2Q 2017 YTD Cash provided by operating activities $903 $674 Capital expenditures (60) (56) Distributions to noncontrolling interest holders (78) (54) Free cash flow $765 $564 Tax on gain from sale of SPSE an
Slide 18: 2018 GAAP guidance
2018 GAAP guidance - Modest reduction in interest expense Guidance Previous GAAP New GAAP Mid single-digit Mid single-digit Revenue increase increase Corporate Unallocated(A)(B) ($190 – $205 million)* ($190 – $205 million)* Deal-related amortization N.A. N.A. Operating profit margin 44% - 45% 44% -
Slide 19: 2Q 2018 Earnings Conference Call
2Q 2018 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations July 26, 2018 2Q 2018 Earnings Conference Call Doug Peterson REPLAY OPTIONS President and CEO Internet: Replay available for one year Ew