S&p Global Inc. · NYSE:SPGI
S&p Global — McGraw Hill Financial — Q1 2013 Earnings Presentation
19 slides from S&p Global's earnings presentation, Apr 30, 2013
Slide 1: 1Q 2013 Earnings Call
Harold McGraw III 1Q 2013 Earnings Call Chairman, President and CEO April 30, 2013 Jack Callahan Executive Vice President and CFO Kenneth Vittor Executive Vice President and General Counsel Chip Merritt Vice President, Investor Relations “McGraw Hill Financial” is subject to shareholder approval Com
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: McGraw Hill Financial Launch
McGraw Hill Financial Launch • Today we report first quarter earnings as a new company – McGraw Hill Financial • Shareholder approval of the new name is anticipated at tomorrow’s annual meeting • Pending approval, the new McGraw Hill Financial will be formally launched • New ticker symbol will begin
Slide 4: McGraw Hill Financial – Key Attributes
McGraw Hill Financial – Key Attributes Important Brands & Attractive Markets Impressive Financial Leverage sh rands ntial ca ted to Iconic b Operate in Substa ield Commit ing growin g flow y ma x im iz older markets shareh it a l v e lu market l ca Minima ents p a Leading ns Solid ire m a b le posi
Slide 5: McGraw Hill Financial: Strong Start to Year
McGraw Hill Financial: Strong Start to Year ($ in millions) 1Q 2013 1Q 2012 Change Revenue $1,181 $1,035 +14% Adj. Operating Profit $399 $311 +28% Adj. Operating Margin 33.8% 30.0% +380 bps Diluted Adjusted EPS $0.80 $0.62 +29% 1Q 2013 highlights: 10% organic revenue growth S&P Ratings, Platts,
Slide 6: Standard & Poor's Ratings Services: Great Start
Standard & Poor’s Ratings Services: Great Start Increased U.S. corporate issuance drove revenue growth while renascent U.S. structured issuance helped expand margins ($ in millions) 1Q 2013 1Q 2012 Change Revenue $561 $466 +20% Segment Op. Profit $259 $186 +39% Segment Op. Margin 46.1% 40.0% +610 bp
Slide 7: Standard & Poor's Ratings Services: Two Views of Revenue
Standard & Poor’s Ratings Services: Two Views of Revenue ($ in millions) 1Q 2013 1Q 2012 Change Non‐transaction $297 $272 +9% Transaction $264 $194 +36% ($ in millions) 1Q 2013 1Q 2012 Change International $248 $218 +14% Domestic $313 $248 +27% • Non‐transaction growth driven by entity credit rating
Slide 8: Standard & Poor's Ratings Services: Litigation Update
Standard & Poor’s Ratings Services: Litigation Update • DOJ complaint: On April 22nd the company responded to the DOJ complaint with a motion to dismiss the entire complaint because: – Corporate statements referring to independence and objectivity are not actionable under federal law, as determined
Slide 9: Standard & Poor's Ratings Services: Litigation Update
Standard & Poor’s Ratings Services: Litigation Update • Other litigation: – 32 cases now dismissed outright – The District court of Southern Florida dismissed all of Space Coast’s claims – which involved CDOs that are also at issue in the DOJ complaint – citing a number of pleading inadequacies – 11
Slide 10: SPDR S&P 500 (SPY) Celebrates 20th Anniversary
SPDR S&P 500 (Symbol: SPY) Celebrates 20th Anniversary • Launched in January 1993 with just $6.5 million in assets • Now the world’s largest ETF with more than $130 billion in assets under management • The most traded ETF with an average daily volume of 144 million shares • Provides outstanding liqu
Slide 11: S&P Capital IQ: Product, Content and Technology Investments Continue
S&P Capital IQ: Product, Content and Technology Investments Continue As planned, recent acquisitions and related expansion of products, content and technology investments reduced profitability ($ in millions) 1Q 2013 1Q 2012 Change Revenue $288 $274 +5%* Segment Op. Profit $56 $62 (9%) Segment Op. M
Slide 12: Consolidated Real-Time Data Feed Launched February 2013
Consolidated Real‐Time Data Feed Launched February 2013 QuantHouse enables connections to global exchanges using a single normalized API that is physically located in each region Consolidated exchange feeds represent 85% of the $2B real‐time market We are building a translation interface to ease imp
Slide 13: Commodities & Commercial Markets: Little Change
Commodities & Commercial Markets: Little Change Platts’ strong performance offset by Commercial’s results ($ in millions) 1Q 2013 1Q 2012 Change Revenue $236 $233 +1% Segment Op. Profit $62 $64 (2%) Segment Op. Margin 26.4% 27.3% (90 bps) 24 Commodities: Continued Steady Growth Commodities ($ in mil
Slide 14: Commercial: Challenging Comparison
Commercial: Challenging Comparison Commercial ($ in millions) 1Q 2013 1Q 2012 Change Revenue $106 $115 (8%) 1Q highlights: • J.D. Power revenue lower primarily due to reduced licensing from recent award recipients and prior year record results • ~30% of J.D. Power revenue is now from Asia • New McGr
Slide 15: McGraw Hill Financial 1Q 2013: 29% Adjusted EPS Growth
JACK CALLAHAN EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER McGraw‐Hill Financial 1Q 2013: 29% Adjusted EPS Growth 1Q 1Q % Change ($ in millions) 2013 2012 Revenue $1,181 $1,035 +14% Segment Operating Profit $444 $357 +24% Less: Adjusted Unallocated Expense ($45) ($46) (2%) Adjusted Consolida
Slide 16: 1Q 2013 Adjustments to Earnings (Pre-Tax)
1Q 2013 Adjustments to Earnings (Pre‐Tax) Growth and Value Plan costs winding down in 2013 ($ in millions) 1Q 2013 Growth and Value Plan (GVP) Costs $44 Legal Settlements ~$77 Total $121 • GVP costs necessary to separate McGraw‐Hill Education: a new payroll provider, the closure of a data center, an
Slide 17: Accelerated Share Repurchase Impact on Share Count
Accelerated Share Repurchase Impact on Share Count ($ in millions) Shares Diluted average shares outstanding 3/31/13 284.3 ASR shares received to date 8.6 Adjusted diluted average shares outstanding* 275.7 • No impact on the diluted average number of shares outstanding in the first quarter due to ti
Slide 18: Summary and Outlook
Summary and Outlook • Solid start to year • Maintaining existing EPS guidance of $3.10 to $3.20 despite a reduction in interest income due to the elimination of the $250 million 8.5% note on the sale of McGraw‐Hill Education • Second half comparisons become more difficult • Exceptional balance sheet
Slide 19: 1Q 2013 Earnings Call Replay Options
1Q 2013 Earnings Call REPLAY OPTIONS April 30, 2013 • Internet: Replay available for one year Go to www.mcgraw‐hill.com/investor_relations • Telephone: Replay available through May 30, 2013 Domestic: 800‐925‐0424 International: 402‐998‐0539 No password required
McGraw Hill Financial — Q1 2013 Earnings Presentation on 6ix