S&p Global Inc. · NYSE:SPGI
S&p Global — The McGraw-Hill Companies — Bank of America Merrill Lynch 2010 Services Conference
18 slides from S&p Global's conference presentation, May 24, 2010
Slide 1: Bank of America Merrill Lynch 2010 Services Conference
Bank of America Merrill Lynch 2010 Services Conference May 24, 2010 1 Harold McGraw III Chairman, President and CEO The McGraw-Hill Companies Presented at the Bank of America Merrill Lynch 2010 Services Conference May 24, 2010 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 includes certain forward-looking statements about our businesses and our prospects, new products, sales, expenses, tax rates, cash flows, prepublication investments and operating and capital requirem
Slide 3: Latest from the litigation front
Latest from the litigation front • 12 cases completely dismissed; 11 this year – Eight different judges have ruled on the 12 dismissals • Five cases have been dropped by plaintiffs • Three motions to dismiss have been denied, pending discovery – We believe these cases are without merit and will ask
Slide 4: Latest from the litigation front
Latest from the litigation front • Clear and unambiguous takeaways from recent court decisions (continued): – Rating agencies’ alleged conflicts of interest were widely known by investors – Investors were adequately apprised of risks and limitations of using credit ratings • Not recommendations to b
Slide 5: Latest from the litigation front; The regulatory outlook: Contradictory language
Latest from the litigation front • Abu Dhabi case – During discovery we will show that S&P rating opinions were available globally at no charge and widely disseminated through the wire services – 10 of 11 claims have been dismissed, including all of the plaintiff’s negligence-based allegations • Cal
Slide 6: The regulatory outlook: Contradictory language
The regulatory outlook: Contradictory language • We fully support efforts that increase transparency, accountability and restore confidence in markets • But some proposals would set a precedent for more interference in the rating process – Could undermine analytical independence and perceptions that
Slide 7: Fundamental contradictions in the regulatory outlook
Fundamental contradictions in the regulatory outlook • Senator Dodd opposed Franken and LeMieux amendments – Franken amendment would establish a Board appointed by the SEC to assign a qualified NRSRO to do initial structured finance ratings – LeMieux amendment would remove rating requirements and re
Slide 8: The regulatory outlook: Looking for safety and soundness
The regulatory outlook: Looking for safety and soundness • Senator Dodd urged colleagues to review his Committee’s bill – “Our bill sets out a process by which overreliance on these rating agencies can be reduced without creating risk throughout the financial system. That is my concern. Stripping ev
Slide 9: How S&P has strengthened its ratings process
How S&P has strengthened its ratings process • S&P has taken important steps to: – Improve rating stability – Add value through more analysis and features – Increase comparability of ratings – Add more checks and balances to the ratings process – Educate the market about ratings and the ratings scal
Slide 10: How S&P is adding value to ratings
How S&P is adding value to ratings • S&P has invested heavily in people, systems and technology to expand its compliance efforts – 2009: Spent about $60 million – 2010: May spend around $75 million – Depending on final regulations, these costs could settle down • Strengthening analytics, increasing
Slide 11: Technology: An opportunity, not a threat
Technology: An opportunity, not a threat • What educational publishers know: 1. All content is not equal in the education marketplace – Sequenced and correlated content is based more and more upon learning progression 2. Content counts and ignoring standards is perilous 3. Digital does not disinterm
Slide 12: Growing digital opportunities in higher education
Growing digital opportunities in higher education • Using technology to increase the addressable market – Majority of our college and university textbooks are now available as e-books – Offering self-assessment tools for college students • Now more than 1.2 million registered users of McGraw-Hill Co
Slide 13: More digital content for the el-hi market
More digital content for the el-hi market • Our elementary-high school products and services are integrating digital components into virtually every program we produce – We offer multimedia packages – Mix of components varies by grade and subject • Interactive online student editions are a part of t
Slide 14: Positive indicators for growth in 2010
Growing digital opportunities in el-hi • ConnectED and McGraw-Hill Connect illustrate McGraw-Hill’s: – Ability to adapt to a rapidly changing environment – Use of technology to provide solutions our customers need to teach and learn more effectively 27 Positive indicators for growth in 2010 • Econom
Slide 15: Positive indicators for growth in 2010
Positive indicators for growth in 2010 • Increased the dividend for 37th consecutive year – Annual dividend has grown at an average compound rate of 9.9% since 1974 • Resumed share buybacks this year – 17.1 million shares were authorized in the program 29 Positive indicators for growth in 2010 • We
Slide 16: 2010 outlook for Financial Services
2010 outlook for Financial Services • Encouraging trends in 1Q continued through April • Pipeline for corporate issuance still looks good in May, but not at record levels we experienced in April • Recently, some issuers moving to sidelines because of uncertainty over conditions in Europe, pending U.
Slide 17: 2010 outlook for Information & Media
2010 outlook for Information & Media • Revenue: Expect mid single-digit decline – Excluding $99 million from BusinessWeek divestiture, revenue will increase in the mid single-digit range • Operating margin: Expect to rebound into the mid-teens 33 2010 outlook for The McGraw-Hill Companies • 2010 gui
Slide 18: Bank of America Merrill Lynch 2010 Services Conference
Bank of America Merrill Lynch 2010 Services Conference May 24, 2010 35
The McGraw-Hill Companies — Bank of America Merrill Lynch 2010 Services Conference on 6ix