S&p Global Inc. · NYSE:SPGI
S&p Global — The McGraw-Hill Companies — Q1 2012 Earnings Presentation
23 slides from S&p Global's earnings presentation, Apr 24, 2012
Slide 1: 1Q 2012 Earnings Call
1Q 2012 Earnings Call April 24, 2012 PRESENTERS Harold McGraw III Chairman, President and CEO Jack Callahan Executive Vice President and CFO Chip Merritt Vice President, Investor Relations Comparison of Adjusted Information to U.S. GAAP Information This presentation includes adjusted financial infor
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: In Memoriam / Q1 2012 agenda
IN MEMORIAM Donald S. Rubin Senior Vice President, Investor Relations 4 The McGraw-Hill Companies Q1 2012: Strong Start with Record First Quarter Growth and Value Plan: Steady Progress McGraw-Hill Financial: Strong Overall Growth McGraw-Hill Education: Cost Savings Drive YOY Improvement 5
Slide 4: Record First Quarter
Record First Quarter 1Q Revenue 1Q Adjusted EPS $1,500 $1,331M $0.60 $0.51 ($ in millions) $1,000 $0.40 $500 $0.20 $0 $0.00 ’06 ’07 ’08 ’09 ’10 ‘11 ‘12 ’06 ’07 ’08 ’09 ’10 ‘11 ‘12 NOTE: Revenue has been adjusted to exclude Broadcasting for all periods. 2006 – 2009 adjusted EPS has not been revised t
Slide 5: McGraw-Hill Financial and McGraw-Hill Education Both Deliver Improved Results
McGraw-Hill Financial and McGraw-Hill Education Both Deliver Improved Results McGraw-Hill Financial (pro forma) ($ in millions) 1Q 2012 1Q 2011 Change Revenue $1,035 $958 +8% Operating Profit $357 $325 +10% Operating Margin 34.5% 33.9% McGraw-Hill Education (pro forma) ($ in millions) 1Q 2012 1Q 201
Slide 6: Growth and Value Plan: Significant Actions to Facilitate Separation
Growth and Value Plan: Significant Actions to Facilitate Separation On track for separation by year-end Received a ruling from the Internal Revenue Service agreeing to the tax-free status for the spin-off of McGraw-Hill Education Plan to file a Form 10 in the near future Remain on track to d
Slide 7: Pro forma McGraw-Hill Financial
The McGraw-Hill Companies Q1 2012: Strong Start with Record First Quarter Growth and Value Plan: Steady Progress McGraw-Hill Financial: Strong Overall Growth McGraw-Hill Education: Cost Savings Drive YOY Improvement 12 Pro forma McGraw-Hill Financial McGraw-Hill Financial (pro forma) ($ in millions)
Slide 8: Pro forma McGraw-Hill Financial
Pro forma McGraw-Hill Financial McGraw-Hill Financial (pro forma) ($ in millions) 1Q 2012 1Q 2011 Change Domestic Revenue $621 $588 +5% International Revenue $414 $370 +12% Total McGraw-Hill $1,035 $958 8% Financial International % of total 40% 39% • Standard & Poor’s Ratings segment was the most in
Slide 9: Standard & Poor's Ratings: Steady Growth of Non-transaction Business
Standard & Poor’s Ratings: Steady Growth of Non-transaction Business Standard & Poor’s Ratings Revenue ($ in millions) 1Q 2012 1Q 2011 Change Non-transaction $272 $267 +2% Transaction $194 $176 +10% ($ in millions) 1Q 2012 1Q 2011 Change International $218 $204 +7% Domestic $248 $239 +4% 16 Standard
Slide 10: Standard & Poor's Ratings: Operating Profit Slightly Lower in 1Q
Standard & Poor’s Ratings: Operating Profit Slightly Lower in 1Q • Targeted investments in new employees Reinforce growth of Corporate and Government ratings and emerging markets • Legal expenses higher in first quarter versus a year ago But down modestly on a sequential basis versus 4Q 2011 18 St
Slide 11: Standard & Poor's Ratings: Latest Developments on Litigation Front
Standard & Poor’s Ratings: Latest Developments on Litigation Front • Most recent dismissal: Judge granted our motion to dismiss the Reese case Case involved claims under the Exchange Act of 1934 Court dismissed all claims against the Company and two individual defendants named in the Complaint, ho
Slide 12: S&P Capital IQ and S&P Indices
S&P Capital IQ S&P Capital IQ ($ in millions) 1Q 2012 1Q 2011 Change Revenue $274 $248 +10% • 1Q highlights: Growth was driven by platform enhancements and cross- selling within S&P Capital IQ Subscriber growth continues to drive the business with more than 4,000 clients, an 11% increase compared
Slide 13: Commodities and Commercial
Commodities and Commercial Commodities and Commercial (formerly Information & Media segment) ($ in millions) 1Q 2012 1Q 2011 Change Revenue $233 $206 +13% Segment Op. Profit* $64 $39 +64% Segment Op. Margin* 27.3% 18.8% • Delivered strength across most of the segment • Strong top-line growth as well
Slide 14: What is Platts Today?
What is Platts Today? • A leading provider of energy, petrochemicals and metals information • Recent acquisitions have bolstered Platts’ capabilities BENTEK Energy Steel Business Briefing • More than 90% of revenue is derived from subscriptions to: Market data (price assessments and indices) Rea
Slide 15: Commodities & Commercial
Commodities & Commercial • Why do we believe subscriptions for Platts products will continue to grow? Access to information and market data facilitates and supports customer trading strategies in volatile energy markets Platts continues to extend capabilities across commodities covered • Acquisiti
Slide 16: McGraw-Hill Education
The McGraw-Hill Companies Q1 2012: Strong Start with Record First Quarter Growth and Value Plan: Steady Progress McGraw-Hill Financial: Strong Overall Growth McGraw-Hill Education: Cost Savings Drive YOY Improvement 30 McGraw-Hill Education McGraw-Hill Education ($ in millions) 1Q 2012 1Q 2011 Chang
Slide 17: Digitization of Education Represents the Opportunity of the Century
Digitization of Education Represents the Opportunity of the Century • Nearly 40% of Professional revenue is from digital products • Deferred revenue increased 63% to $106 million Digital products are mostly subscription based CINCH Science: All digital McGraw-Hill Connect: Homework management/ curr
Slide 18: McGraw-Hill Education: School Education Group
McGraw-Hill Education: School Education Group ($ in millions) 1Q 2012 1Q 2011 Change SEG Revenue $95 $106 (10%) • 1Q highlights: Both instructional materials and the testing business experienced revenue declines, driven by continued market weakness 1Q is the smallest seasonally • Better view of 20
Slide 19: Jack Callahan: Solid Top-Line Growth; Tight Expense Control
Jack Callahan Executive Vice President and Chief Financial Officer The McGraw-Hill Companies 36 Solid Top-Line Growth; Tight Expense Control The McGraw-Hill Companies 1Q 1Q % (dollars in millions) 2012 2011 Change Revenue $1,331 $1,261 +6% Adjusted expenses $1,077 $1,045 +3% Adjusted operating profi
Slide 20: EPS Benefits from Reduction in Shares Outstanding
EPS Benefits from Reduction in Shares Outstanding 1Q 1Q % (dollars in millions) 2012 2011 Change Adjusted operating profit $254 $216 +18% Interest expense $21 $19 +11% Tax rate 36.3% 36.3% NC Less: noncontrolling interests ($4) ($4) -- Adjusted net income $144 $121 +19% Adjusted diluted EPS $0.51 $0
Slide 21: Progress on $100 Million Cost Savings Target
Progress on $100 Million Cost Savings Target Margin expansion evident in 1Q results Savings from productivity initiatives will step up over the balance of the year Additional restructuring actions expected in support of these initiatives as the two new operating companies are established 40 On
Slide 22: Forming Two New Companies / Summary
Forming Two New Companies • McGraw-Hill Financial Target strong investment-grade rating Commitment to strong dividend • McGraw-Hill Education Target flexible investment-grade rating Initiate modest dividend Ensure adequate liquidity to meet business needs We have received a ruling from the Inte
Slide 23: 1Q 2012 Earnings Call Replay Options
1Q 2012 Earnings Call April 24, 2012 PRESENTERS Harold McGraw III Chairman, President and CEO Jack Callahan Executive Vice President and CFO Chip Merritt Vice President, Investor Relations NOTE: A replay of this webcast will be available approximately two hours after the end of the call from www.mcg
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