S&p Global Inc. · NYSE:SPGI

S&p Global — The McGraw-Hill Companies — Q4 2012 Earnings Presentation

20 slides from S&p Global's earnings presentation, Feb 12, 2013

1. Slide 1: 4Q 2012 Earnings Call

   4Q 2012 Earnings Call February 12, 2013 PRESENTERS Harold McGraw III Chairman, President and CEO Jack Callahan Executive Vice President and CFO Kenneth Vittor Executive Vice President & General Counsel Doug Peterson President, Standard & Poor’s Chip Merritt Vice President, Investor Relations Compari

2. 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

3. Slide 3: 2012 — A Milestone Year: Growth and Value Plan Nearly Complete

   2012 — A Milestone Year: Growth and Value Plan Nearly Complete In September 2011 the Company announced an ambitious Growth and Value Plan Today marks the achievements of this plan 4 Growth and Value Plan: Anticipate Sale of McGraw-Hill Education in First Quarter Separation of McGraw-Hill Education 

4. Slide 4: Growth and Value Plan: Exceeded Cost Reduction Commitment

   Growth and Value Plan: Exceeded Cost Reduction Commitment Company exceeded its commitment of at least $100 million in run-rate cost reductions  Achieved nearly $175 million by the end of 2012  Select headcount restructurings  Migrated numerous accounting, human resource, and information technolog

5. Slide 5: McGraw Hill Financial: Strong Full-Year Results

   Growth and Value Plan: Investing for Growth 8 McGraw Hill Financial: Strong Full-Year Results ($ in millions) 2012 2011 Change Revenue $4,450 $3,954 +13% Adj. Operating Profit $1,385 $1,119 +24% Adj. Operating Margin 31.1% 28.3% +280 bps Diluted Adjusted EPS $2.75 $2.09 +32% 2012 highlights:  11% o

6. Slide 6: Standard & Poor’s Ratings Services: Solid 4th Quarter and Full-Year Results

   Standard & Poor’s Ratings Services: Solid 4th Quarter and Full-Year Results Robust Corporate & Government issuance drove 4th quarter and full-year results ($ in millions) 4Q 2012 4Q 2011 Change Revenue $584 $434 +34% Adj. Segment Op. Profit $254 $156 +63% Adj. Segment Op. Margin 43.5% 36.0% +750 bps

7. Slide 7: S&P Dow Jones Indices: Modest Growth; Great Margins

   S&P Dow Jones Indices: Modest Growth; Great Margins ($ in millions) 4Q 2012 4Q 2011 Change S&P Index Revenue $84 $80 +5% Dow Jones Index Revenue $26 Total Revenue $110 $80 Adj. Segment Op. Profit $67 $43 MHP Share Adj. Op. Profit $50 $43 +16% Adj. Segment Op. Margin 60.9% 53.8% 710 bps ($ in million

8. Slide 8: Commodities & Commercial Markets: Strong Growth and Margin Expansion

   Commodities & Commercial Markets: Strong Growth and Margin Expansion Platts’ performance drove consistent revenue growth and margin expansion throughout the year ($ in millions) 4Q 2012 4Q 2011 Change Revenue* $260 $239 +9% Adj. Segment Op. Profit* $59 $47 +27% Adj. Segment Op. Margin* 22.7% 19.7% +

9. Slide 9: McGraw Hill Financial: Focus on Growth

   McGraw Hill Financial: Focus on Growth Annual Revenue Growth The McGraw-Hill Companies McGraw Hill Financial ’10-’12 CAGR: 4% ’10-’12 CAGR: 11% Annual Adjusted EPS The McGraw-Hill Companies McGraw Hill Financial ’10-’12 CAGR: 13% ’10-’12 CAGR: 20% $3.44 $2.69 $2.91 2010 2011 2012 16 NOTE: 2010 growt

10. Slide 10: McGraw-Hill Financial 4Q 2012: 56% EPS Growth

    McGraw-Hill Financial 4Q 2012: 56% EPS Growth 4Q 4Q % ($ millions) 2012 2011 Change Revenue $1,226 $1,004 +22% Adjusted Segment Operating Profit $433 $300 +45% Less: Adjusted Unallocated Expense ($62) ($58) +7% Adjusted Consolidated Operating Profit $371 $242 +54% Tax Rate* 35.7% 37.2% (150 bps) Non

11. Slide 11: Continued Strong Free Cash Flow from Continuing Operations

    Continued Strong Free Cash Flow from Continuing Operations ($ in millions) FY 2012 FY2011 Cash provided by $747 $924 operating activities Capital expenditures ($97) ($92) Dividends and other payment ($24) ($23) paid to noncontrolling interests Free Cash Flow $626 $809 12/31/2012 12/31/2011 Cash & Sh

12. Slide 12: McGraw-Hill Financial: 2013 Guidance

    McGraw-Hill Financial: 2013 Guidance FY 2013 ($ in millions) FY 2012 Guidance Income Statement Decline Adjusted Unallocated Expense $202 $10-15 million Net Interest Expense $81 $35 - $40 Adjusted Tax Rate 36.0% ~ 35.0% Adjusted Noncontrolling Interest $52 $90 - $100 Investment/Free Cash Flow Capital

13. Slide 13: DOJ Civil Lawsuit Filed Against McGraw-Hill and S&P

    Presenters on Today’s Call Terry McGraw Growth and Value Plan CEO and 2012 Year in Review Jack Callahan Highlight Key Financial Items and CFO Introduce 2013 Guidance Kenneth Vittor Update Concerning Recent General Counsel Legal Developments Doug Peterson Discuss Continuous Improvement President, Sta

14. Slide 14: DOJ Civil Lawsuit – Complaint Alleges Violations of FIRREA

    DOJ Civil Lawsuit – Complaint Alleges Violations of FIRREA DOJ’s Complaint seeks civil monetary penalties for alleged violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”)  Alleges acts of mail fraud, wire fraud and bank fraud “affecting” federally-insure

15. Slide 15: DOJ Civil Lawsuit – What the Government Must Prove

    DOJ Civil Lawsuit – What the Government Must Prove To recover any civil penalty, the Government must prove:  S&P issued ratings on the CDOs that were not actually believed by the Committees at the time the ratings were issued  S&P did so with the intent to defraud the investors that purchased thos

16. Slide 16: S&P’s Response to DOJ Civil Lawsuit

    S&P’s Response to DOJ Civil Lawsuit The Company has publicly responded to the Complaint  S&P’s press releases, relevant articles and examples of problems with the DOJ Complaint are collected at www.standardandpoors.com/response 30 DOJ Civil Lawsuit – State Lawsuits Filed 13 states and the District

17. Slide 17: S&P: Key Actions to Strengthen Ratings

    Presenters on Today’s Call Terry McGraw Growth and Value Plan CEO and 2012 Year in Review Jack Callahan Highlight Key Financial Items and CFO Introduce 2013 Guidance Kenneth Vittor Update Concerning Recent Legal General Counsel Developments Doug Peterson Discuss Continuous Improvement President, Sta

18. Slide 18: S&P: New Leadership to Strengthen the Management Team

    S&P: New Leadership to Strengthen the Management Team • Risk Management  Donald Howard, S&P’s chief risk officer, brings years of risk management experience from a wide variety of financial institutions • Macroeconomic Forecasts and Research  Paul Sheard, S&P’s chief global economist, is an intern

19. Slide 19: 2012: A Year of Achieving Commitments

    Presenters on Today’s Call Terry McGraw Growth and Value Plan CEO and 2012 Year in Review Jack Callahan Highlight Key Financial Items and CFO Introduce 2013 Guidance Kenneth Vittor Update Concerning Recent Legal General Counsel Developments Doug Peterson Discuss Continuous Improvement President, Sta

20. Slide 20: 4Q 2012 Earnings Call

    4Q 2012 Earnings Call February 12, 2013 PRESENTERS Harold McGraw III Chairman, President and CEO Jack Callahan Executive Vice President and CFO Kenneth Vittor Executive Vice President & General Counsel Doug Peterson President, Standard & Poor’s NOTE: A replay of this webcast will be available approx

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