S&p Global Inc. · NYSE:SPGI
S&p Global — McGraw Hill Financial — Q3 2015 Earnings Presentation
19 slides from S&p Global's earnings presentation, Nov 3, 2015
Slide 1: 3Q 2015 Earnings Call
Doug Peterson 3Q 2015 Earnings Call President and CEO Jack Callahan November 3, 2015 Executive Vice President and CFO Chip Merritt Vice President, Investor Relations McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Webcast Comparison of Adjusted Information to U.S. GAAP Information This pres
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: Significant quarter with excellent progress on strategic initiatives
DOUG PETERSON PRESIDENT AND CHIEF EXECUTIVE OFFICER McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Webcast 3Q 2015 Significant quarter with excellent progress on strategic initiatives while simultaneously delivering solid results McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Web
Slide 4: 3Q 2015 Strategic Highlights
3Q 2015 Strategic Highlights • Closed the SNL transaction and funded with $2 billion of new notes • Announced realignment of businesses and leadership changes • Commenced process to explore strategic alternatives for J.D. Power in 4Q 2015 • Portfolio focused on scalable, industry leading, interrelat
Slide 5: SNL Integration; Several Recent Leadership Changes
SNL Integration • Mike Chinn named President S&P Capital IQ and SNL • Leadership team formed from key leaders from both organizations • Mike will manage the business from Charlottesville, Virginia • Bringing the best of both companies together to create an offering that is unique and essential to th
Slide 6: Evaluating Strategic Alternatives for J.D. Power
Evaluating Strategic Alternatives for J.D. Power • Headquartered in Westlake Village, California • Project 2016 revenue of approximately $350 million • 800 global employees • No timetable set; expect thoughtful, disciplined process • Morgan Stanley will act as financial advisor The World's Most Trus
Slide 7: 3Q 2015 Performance Highlights
3Q 2015 Performance Highlights • The Company delivered: – Increased revenue driven by strength of broad portfolio – 230 basis‐point improvement in adjusted operating profit margin – 16% adjusted diluted EPS increased to $1.19 • Adjusted expenses increased less than 1% due primarily to continued prod
Slide 8: Consistent Profit Improvement in Every Business Unit
2015 – Consistent Profit Improvement in Every Business Unit Business Unit Results 3Q 2015 vs. 3Q 2014 Standard & Poor’s S&P Capital IQ S&P Dow Commodities Ratings and SNL Jones Indices & Commercial Services Revenue (3%) +14%* +9% +9%** Adj. Operating +5% +25% +18% +11% Profit Adj. Operating +380 +20
Slide 9: S&P Capital IQ and SNL: Key Products Continue to Drive Revenue Growth
S&P Capital IQ and SNL: Key Products Continue to Drive Revenue Growth S&P Credit S&P Capital IQ S&P Capital IQ Desktop Markets & Enterprise Solutions Solutions Intelligence Desktop & Enterprise SNL 3Q Revenue 3Q Revenue 3Q Revenue Sept Revenue * +7% (4%) +9% +13% Double‐digit increase in S&P Rat
Slide 10: Standard & Poor's Ratings Services: Record Quarterly Non-transaction Revenue
Standard & Poor’s Ratings Services: Record Quarterly Non‐transaction Revenue ($ in millions) 3Q 2015 3Q 2014 Change Non‐transaction $343 $335 +3% Transaction $244 $269 (9%) • Non‐transaction revenue reached a record driven by Rating Evaluation Service and CRISIL • Non‐transaction revenue increased 8
Slide 11: Key Market Issuance Trends: Muted Issuance
Key Market Issuance Trends: Muted Issuance United States* Europe* 1% increase year‐over‐year in 3Q 4% decrease year‐over‐year in 3Q (issuance, $ in billions) (issuance, $ in billions) $655 $614 $520 $448 $453 $461 Public Finance $354 $373 $345 $330 Structured Finance Corporates 3Q14 4Q14 1Q15 2Q15 3
Slide 12: S&P Dow Jones Indices: Market Volatility Drives Results
S&P Dow Jones Indices: Market Volatility Drives Results Exchange‐Traded Funds: • YTD industry inflows set record of $230 billion; inflows into U.S. equity turned positive in 3Q totaling $28 billion • AUM based on S&P DJI indices increased 2% to $749 billion but remains below peak levels at year‐end
Slide 13: Commodities & Commercial Markets: Platts Leads Revenue Growth
Commodities & Commercial Markets: Platts Leads Revenue Growth ($ in millions) 3Q 2015 3Q 2014 Change Revenue $248 $227 +9%* Adj. Segment Op. Profit $93 $83 +11% Adj. Segment Op. Margin 37.3% 36.7% +60 bps 3Q 2015 highlights: • Platts led the segment, delivering high single‐digit organic revenue grow
Slide 14: Creating Growth & Driving Performance
Summary Creating Growth & Driving Performance McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Webcast 26 JACK CALLAHAN EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Webcast 14
Slide 15: Financial Highlights – Key Areas
Financial Highlights – Key Areas • Consolidated income statements results • Adjustments to earnings • Impact from amortization and forex • Balance sheet update • Free cash flow and return of capital • Guidance update McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Webcast 28 3Q 2015: Margin
Slide 16: Adjustments to Operating Profit; Impact of Amortization Expense
3Q 2015: Adjustments to Operating Profit ($ in millions) 2Q 2015 Accruals for potential legal settlements net of $(86) insurance recoveries SNL acquisition related costs (32) Total pre‐tax loss excluded from adjusted results $118 McGraw Hill Financial | 3Q 2015 Earnings Conference Call/Webcast 30 Im
Slide 17: Strong U.S. Dollar Reduces Revenue Growth; Closed SNL Transaction
3Q 2015: Strong U.S. Dollar Reduces Revenue Growth (% change) Domestic International Total MHFI +12% +7%* +5% +1%** Reported Constant Reported Currency (5)% Constant Reported Currency * Total MHFI revenue increased 5% to $1,324 million in 3Q 2015 compared to $1,263 million in 3Q 2014. Excluding the
Slide 18: Free Cash Flow, Return of Capital and 2015 Guidance Increased
Strong Operating Free Cash Flow and Stepped up Return of Capital ($ in millions) 3Q 2015 3Q 2014 Cash (used for) provided by $(356) $820 operating activities Capital expenditures (74) (52) Dividends and other payments (67) (31) to noncontrolling interests Free Cash Flow (497) 737 After‐tax legal and
Slide 19: 3Q 2015 Earnings Call Replay Options
Doug Peterson 3Q 2015 Earnings Call President and CEO November 3, 2015 Jack Callahan Executive Vice President and CFO NOTE: A replay of this webcast will be available approximately two hours Chip Merritt after the end of the call from investor.mhfi.com Vice President, Investor Relations McGraw Hill
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