S&p Global Inc. · NYSE:SPGI
S&p Global — McGraw Hill Financial — Q2 2013 Earnings Presentation
21 slides from S&p Global's earnings presentation, Jul 25, 2013
Slide 1: 2Q 2013 Earnings Call
Harold McGraw III 2Q 2013 Earnings Call Chairman, President and CEO July 25, 2013 Doug Peterson President, Standard & Poor's Ratings Services Jack Callahan Executive Vice President and CFO Chip Merritt Vice President, Investor Relations Comparison of Adjusted Information to U.S. GAAP Information Thi
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: Highlights of Today's Call
HAROLD MCGRAW III CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER Highlights of Today’s Call •Strong momentum continues with exceptional second quarter results •Aggressively managing legal issues •Seamless transition of President and CEO role to Doug Peterson well underway •Continue to sharpen our b
Slide 4: McGraw Hill Financial: Exceptional Growth Continues
McGraw Hill Financial: Exceptional Growth Continues ($ in millions) 2Q 2013 2Q 2012 Change Revenue $1,250 $1,072 +17% Adj. Operating Profit $446 $347 +29% Adj. Operating Margin 35.7% 32.3% +340 bps Diluted Adjusted EPS $0.92 $0.70 +31% 2Q 2013 highlights: 13% organic revenue growth S&P Ratings,
Slide 5: Standard & Poor's Ratings Services: Litigation Update
Standard & Poor’s Ratings Services: Litigation Update DOJ Complaint: • July 8th ‐ Oral argument was held to allow both sides of the case to discuss the Company’s motion to dismiss • July 16th ‐ The Federal District Court in California denied the motion to dismiss – In ruling on the motion to dismiss
Slide 6: Standard & Poor's Ratings Services: Litigation Update
Standard & Poor’s Ratings Services: Litigation Update • Other litigation: – 33 cases now dismissed outright, including the June dismissal of the Tolin case by the U.S. District Court for the Southern District Court of New York – 11 dismissals by lower courts have been affirmed by higher courts – 10
Slide 7: S&P Dow Jones Indices: AUM Approached $550 Billion
S&P Dow Jones Indices: AUM Approached $550 Billion ($ in millions) 2Q 2013 2Q 2012 Change S&P Indices Revenue $94 $89 +6% Dow Jones Index Revenue $29 Total Revenue $123 $89 +39% Adj. Segment Op. Profit $80 $56 +43% MHFI Share of Op. Profit $60 $56 +6% Adj. Segment Op. Margin 65.1% 63.2% 190 bps 2Q h
Slide 8: S&P Capital IQ: Product, Content, and Technology Investments Continue
S&P Capital IQ: Product, Content, and Technology Investments Continue Expansion of products, content and technology investments continued to reduce profitability ($ in millions) 2Q 2013 2Q 2012 Change Revenue $287 $277 +3%* Adj. Segment Op. Profit $55 $59 (7%) Adj. Segment Op. Margin 19.2% 21.3% (21
Slide 9: Next Generation Risk Management for Portfolio and Risk Managers
Next Generation Risk Management for Portfolio and Risk Managers Portfolio Risk Solution Designed to improve users’ ability to identify systemic and counterparty risk Truly Unique Offering The only real-time, multi-asset, portfolio risk system that enables: - Internal and external collaboration - Cli
Slide 10: Commodities: Continued Double-Digit Growth
Commodities: Continued Double‐Digit Growth Commodities ($ in millions) 2Q 2013 2Q 2012 Change Revenue $137 $120 +14% 2Q highlights: • Growth in petroleum product subscriptions continued to be the primary driver of double‐digit growth • Licensing revenue from petroleum derivatives trading increased m
Slide 11: Commercial: Returns to Growth
Commercial: Returns to Growth Commercial ($ in millions) 2Q 2013 2Q 2012 Change Revenue $122 $120 +2% 2Q highlights: • Within J.D. Power, the Asian business drove a double‐digit revenue increase in automotive which was partially offset by reduced licensing from past award recipients • McGraw Hill Co
Slide 12: J.D. Power Celebrates 45 Years – Congratulations!
J.D. Power Celebrates 45 Years – Congratulations! 22 McGraw Hill Financial — Management Change Terry McGraw: “After serving as President for 20 years and CEO for 15 years, it’s great to have a successor the caliber of Doug Peterson” 23 12
Slide 13: Standard & Poor's Ratings Services: Great Quarter
DOUG PETERSON PRESIDENT, STANDARD & POOR'S RATINGS SERVICES Standard & Poor’s Ratings Services: Great Quarter Record revenue for any quarter ($ in millions) 2Q 2013 2Q 2012 Change Revenue $599 $483 +24% Segment Op. Profit $277 $208 +34% Segment Op. Margin 46.3% 43.0% +330 bps 2Q highlights: • Increa
Slide 14: Impact of Interest Rates on Issuance
Impact of Interest Rates on Issuance Global Issuance vs. Interest Rates 10‐Year Treasury Yield* 2003‐2012 Issuance Global SF Issuance $ in billions 4.8% Global Corporate Issuance 4.6% 7,000 4.3% 4.3% Average Corporate Issuance Level 2003‐2012 4.0% 3.7% 5,953 3.3% 3.2% 6,000 5,794 2.8% 5,000 1.8% 4,6
Slide 15: Issuance Trends: Increase YOY but Down Sequentially
Issuance Trends: Increase YOY but Down Sequentially United States Europe 10% increase year‐over‐year in 2Q 25% increase year‐over‐year in 2Q (issuance, $ in billions) (issuance, $ in billions) $484 $485 $446 $448 $417 $408 Public $357 $359 $351 Finance $287 Structured Finance Corporates 2Q12 3Q12 4Q
Slide 16: Douglas Peterson Elected President and CEO of McGraw Hill Financial
Douglas Peterson Elected President and CEO of McGraw Hill Financial, Effective November 1, 2013 • Transition – Ensure a seamless and smooth transition • Meet with leaders around the company to better understand: • Strategy • Corporate governance & planning process • Regulation • Capital allocation •
Slide 17: McGraw Hill Financial 2Q 2013: 31% Adjusted EPS Growth
McGraw Hill Financial 2Q 2013: 31% Adjusted EPS Growth 2Q 2Q % Change ($ in millions) 2013 2012 Revenue $1,250 $1,072 +17% Adjusted Segment Operating Profit $495 $394 +26% Less: Adjusted Unallocated Expense ($49) ($47) 4% Adjusted Consolidated Operating Profit $446 $347 +29% Tax Rate 35.0% 37.5% (25
Slide 18: Free Cash Flow from Continuing Operations
Free Cash Flow from Continuing Operations ($ in millions) 2Q 2013 Cash and equivalents $1,900 Total debt $799 ($ in millions) 2Q YTD 2013 2Q YTD 2012 Cash provided by $226 $219 operating activities Capital expenditures ($43) ($36) Dividends and other payments ($38) ($6) to noncontrolling interests F
Slide 19: CRISIL Investment
CRISIL Investment •CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services and India's leading ratings agency •The Company currently owns 53% of CRISIL •A voluntary offer has been made to purchase up to an additional 22% of the outstanding shares •If
Slide 20: 2013 Guidance and Outlook
2013 Guidance and Outlook •Excellent first half results –15% revenue growth –31% adjusted diluted EPS growth •Cautious about the balance of year growth due to issuance volatility and challenging year‐on‐year comparisons •Anticipate stronger cash generation in the second‐half, maintaining free cash f
Slide 21: 2Q 2013 Earnings Call Replay Options
2Q 2013 Earnings Call REPLAY OPTIONS July 25, 2013 • Internet: Replay available for one year Go to http://investor.mhfi.com • Telephone: Replay available through August 25, 2013 Domestic: 800‐925‐0608 International: 402‐220‐3037 No password required 21
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