S&p Global Inc. · NYSE:SPGI
S&p Global — McGraw Hill Financial — FY2014 Earnings Presentation
20 slides from S&p Global's earnings presentation, Feb 12, 2015
Slide 1: 4Q and Full Year 2014 Earnings Call
4Q and Full Year 2014 Doug Peterson Earnings Call President and CEO February 12, 2015 Jack Callahan Executive Vice President and CFO Chip Merritt Vice President, Investor Relations McGraw Hill Financial | 4Q and Full‐Year 2014 Earnings Conference Call/Webcast Comparison of Adjusted Information to U.
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: 2014 – Key Accomplishments
DOUG PETERSON PRESIDENT AND CHIEF EXECUTIVE OFFICER McGraw Hill Financial | 4Q and Full‐Year 2014 Earnings Conference Call/Webcast 2014 – Key Accomplishments • Completed portfolio rationalization with sale of McGraw‐Hill Construction • Resolved significant legal/regulatory matters • The Company deli
Slide 4: Resolved Significant Legal/Regulatory Matters
Resolved Significant Legal/Regulatory Matters • Reached settlement agreements with: –Department of Justice and the Attorneys General of 19 states and the District of Columbia –California Public Employees’ Retirement System (“CalPERS”) to resolve a lawsuit relating to three structured investment vehi
Slide 5: MHFI: A Proven Track Record of Growth
MHFI: A Proven Track Record of Growth Annual Revenue Growth Adjusted Operating Margin ($ in millions) +10% CAGR 35.9% $5,051 33.1% $4,702 31.4% $4,270 29.1% $3,762 2011 2012 2013 2014 2011 2012 2013 2014 McGraw‐Hill Education and McGraw‐Hill Construction reclassified to discontinued operations McGra
Slide 6: 2014 – Solid Growth
2014 – Solid Growth ($ in millions) 2014 2013 Change Revenue $5,051 $4,702 +7% Adj. Operating Profit $1,815 $1,555 +17% Adj. Operating Margin 35.9% 33.1% +280 bps Diluted Adjusted EPS $3.88 $3.22 +20% Full‐year 2014 highlights: • Another year of robust revenue growth • Continued focus on reducing co
Slide 7: Company Finishes 2014 with Strong Fourth Quarter
Company Finishes 2014 with Strong Fourth Quarter ($ in millions) 4Q 2014 4Q 2013 Change Revenue $1,290 $1,206 +7% Adj. Operating Profit $444 $347 +28% Adj. Operating Margin 34.5% 28.8% +570 bps Diluted Adjusted EPS $0.95 $0.78 +23% 4Q 2014 highlights: • All business units contributed mid to high sin
Slide 8: Standard & Poor's Ratings Services: Revenue Growth & Cost Focus Drive Margin Improvement
Standard & Poor’s Ratings Services: Revenue Growth & Cost Focus Drive Margin Improvement ($ in millions) 2014 2013 Change Revenue $2,455 $2,274 +8% Adj. Segment Op. Profit $1,074 $952 +13% Adj. Segment Op. Margin 43.8% 41.9% +190 bps ($ in millions) 4Q 2014 4Q 2013 Change Revenue $618 $574 +8% Adj.
Slide 9: Issuance Trends: U.S and European Issuance Diverge in 4Q
Issuance Trends: U.S and European Issuance Diverge in 4Q United States* Europe* 20% increase year‐over‐year in 4Q 12% decrease year‐over‐year in 4Q (issuance, $ in billions) (issuance, $ in billions) $545 $517 $504 $476 $420 $448 $446 Public $384 Finance $336 $339 Structured Finance Corporates 4Q13
Slide 10: S&P Capital IQ: Adjusted Operating Profit Growth in 2014
S&P Capital IQ: Adjusted Operating Profit Growth in 2014 After two years of investments, S&P Capital IQ began to deliver adjusted operating margin improvement in 2014 ($ in millions) 2014 2013 Change Revenue $1,237 $1,170 +6%* Adj. Segment Op. Profit $237 $201 +18% Adj. Segment Op. Margin 19.1% 17.2
Slide 11: S&P Dow Jones Indices: Top- and Bottom-Line Growth
S&P Dow Jones Indices: Top‐ and Bottom‐Line Growth 2013 adjusted operating profit was impacted by a $26 million non‐cash impairment charge in 4Q ($ in millions) 2014 2013 Change Revenue $552 $493 +12% Adj. Segment Op. Profit $351 $266 +32% Adj. Segment Op. Margin 63.6% 54.0% +960 bps MHFI Share of A
Slide 12: Commodities & Commercial Markets: Continued Revenue Growth and Margin Expansion
Commodities & Commercial Markets: Continued Revenue Growth and Margin Expansion High single‐digit organic revenue growth at both Platts and J.D. Power drove 2014 results ($ in millions) 2014 2013 Change Revenue $893 $841 +6%* Adj. Segment Op. Profit $306 $278 +10% Adj. Segment Op. Margin 34.3% 33.0%
Slide 13: J.D. Power: Highest Revenue Quarter of the Year
J.D. Power: Highest Revenue Quarter of the Year J.D. Power highlights: • J.D. Power delivered low single‐digit revenue growth in the quarter and high single‐digit revenue growth for the year • Asia revenue growth in 2014 was 10% • Overall growth in both the quarter and the year were mirrored by gain
Slide 14: Expect Continued Growth and Performance in 2015
Expect Continued Growth and Performance in 2015 • Poised for continued success in 2015 with: – Mid single‐digit revenue growth guidance – Adjusted diluted EPS guidance of $4.35 to $4.45 • Focused on creating growth and driving performance by: – Strengthening customer and stakeholder engagement – Acc
Slide 15: Financial Highlights – Key Areas
Financial Highlights – Key Areas • Consolidated income statement results • Settlement and restructuring charges • Update on $100 million cost reduction target • Balance sheet and free cash flow results • Return of capital • 2015 guidance McGraw Hill Financial | 4Q and Full‐Year 2014 Earnings Confere
Slide 16: 2014: Achieved 20% Adjusted EPS Growth
2014: Achieved 20% Adjusted EPS Growth ($ in millions, except earnings per share) 2014 2013 % Change Revenue $5,051 $4,702 +7% Segment Operating Profit $1,968 $1,697 +16% Less: Unallocated Expense (152) (142) +7% Operating Profit $1,815 $1,555 +17% Operating Profit Margin 35.9% 33.1% +280 bps Tax Ra
Slide 17: 2nd Half 2014 Charges Related to Legal/Regulatory Matters
2nd Half 2014 Charges Related to Legal/Regulatory Matters ($ in millions) 3Q 2014 4Q 2014 DOJ settlement — $687.5 States settlement — $687.5 CalPERS lawsuit — $125 SEC & related states settlement $60 $17 Charges related to several private — $35 litigation matters Total legal/regulatory charges: $1,6
Slide 18: Free Cash Flow from Continuing Operations: Reached Full-Year Target of $1 Billion
Initiatives in Place to Deliver Approximately $140 Million of Productivity 2014‐2016 Cost Reduction Initiatives Corporate Center Procurement Restructuring ~$140M Real Estate McGraw Hill Financial | 4Q and Full‐Year 2014 Earnings Conference Call/Webcast 34 Free Cash Flow from Continuing Operations: R
Slide 19: Return of Capital Update and 2015 Guidance
Return of Capital Update • The Company has returned $3.3 billion to shareowners in last three years • Today, announced dividend increase of 10% to $1.32/share • 2015 marks the 42nd year of sustained dividend increases Maintaining disciplined capital allocation strategy: • Invest in organic growth •
Slide 20: 4Q and Full Year 2014 Earnings Call Replay Options
4Q and Full Year 2014 Doug Peterson Earnings Call President and CEO February 12, 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 Relatio