Slide 1: 3Q 2017 Earnings Conference Call
3Q 2017 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations October 26, 2017 Comparison of adjusted information to U.S. GAAP information This presentation includes adjusted financial measures that
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: 3Q 2017 highlights
Doug Peterson President and Chief Executive Officer 3Q 2017 highlights • Attained strong organic revenue and adjusted operating profit growth in every segment • Delivered 190 basis points of adjusted profit margin improvement and adjusted diluted EPS growth of 19% • Increased adjusted diluted EPS gu
Slide 4: Company delivered growth in revenue, adjusted profit margin and adjusted EPS
Company delivered growth in revenue, adjusted profit margin and adjusted EPS 3Q 2017 3Q 2016 Change Revenue $1,513 $1,439 +5% Organic revenue $1,503 $1,347 +12% Adjusted operating profit $701 $638 +10% Adjusted operating margin 46.3% 44.4% +190 bps Average diluted shares outstanding 257.9 265.3 (7.4
Slide 5: Banner year for bank loan ratings revenue
Banner year for bank loan ratings revenue $300 $250 3Q $200 $150 2Q $100 $50 1Q $0 2010 2011 2012 2013 2014 2015 2016 2017 (revenue, $ in millions) 9 Maturing U.S. leveraged loans continue to build Each bar depicts U.S. leveraged loans maturing in the next eight years, as of the end of each period 1
Slide 6: Global issuance decreased slightly versus 3Q16 with strength in structured finance issuance
Global issuance* decreased slightly versus 3Q16 with strength in structured finance issuance United States* Europe* Asia* 615 461 480 500 526 598 551 398 410 486 358 296 340 368 267 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 5% increase year-over-year 17% decrease yea
Slide 7: U.S. investment-grade bond volume by proceeds
U.S. investment-grade bond volume by proceeds M&A/LBO Buyback/Dividend Refinancing General Corporate Purposes/Other $1,200 $1,000 $800 $600 $400 $200 $0 ($, billions) 2012 2013 2014 2015 2016 3Q 2017 YTD *Note: Issuance excludes sovereign, guasi-sovereign, supranational, preferred and hybrid-structu
Slide 8: S&P Global Ratings Green Evaluations building momentum globally
S&P Global Ratings Green Evaluations building momentum globally • Multi-sector: – Greater Orlando Aviation Authority – City of Gothenburg – Mexico City Airport Trust • Water: – District of Columbia Water & Sewer Authority – Capital Region Water • Green Energy: – TenneT Holding B.V. – Three Gorges Fi
Slide 9: Platts: LNG swap volume continues to surge
Platts: LNG swap volume continues to surge Monthly JKM™ Swaps Volume on ICE Month End Open Interest (lots) Volume (lots) 12,000 10,000 8,000 6,000 4,000 2,000 0 May-15 May-16 May-17 Mar-15 Mar-16 Mar-17 Jan-15 Jul-15 Sep-15 Nov-15 Jan-16 Jul-16 Sep-16 Nov-16 Jan-17 Jul-17 Sep-17 17 S&P Dow Jones Ind
Slide 10: Outstanding operating results
Ewout Steenbergen Executive Vice President, Chief Financial Officer 19 Outstanding operating results 3Q 2017 3Q 2016 Change Revenue $1,513 $1,439 +5% Organic revenue $1,503 $1,347 +12% Adjusted unallocated expense $41 $29 +44% Adjusted total expense $812 $801 +1% Adjusted operating profit $701 $638
Slide 11: Stock-based compensation creates tax benefit
Stock-based compensation creates tax benefit 1Q 2Q 3Q 4Q 2017 EPS impact $0.04 $0.02 $0.14 $0.07 Est* FASB Accounting Standards Update: A 2017 requirement to record the tax effect related to share-based payments at settlement (or expiration) through the income statement results in lower reported tax
Slide 12: 3Q 2017: Non-GAAP adjustments to operating profit
3Q 2017: Non-GAAP adjustments to operating profit Pre-tax expense excluded from adjusted results 3Q 2017 Restructuring - Ratings ($15) Restructuring - Corporate ($4) Total ($19) ($ in millions) 3Q 2017 Deal-related amortization ($24) ($ in millions) 23 Every segment delivered strong organic revenue
Slide 13: Ratings: Delivered outstanding results
Ratings: Delivered outstanding results 3Q 2017 3Q 2016 Change Revenue $739 $642 +15% Adjusted segment operating profit $392 $330 +19% Adjusted segment operating margin 53.0% 51.3% +170 bps Trailing four quarters adjusted 51.8% 49.1% +270 bps segment operating margin ($ in millions) 3Q 2017 HIGHLIGHT
Slide 14: Ratings: Corporate and structured revenue led 3Q growth
Ratings: Corporate and structured revenue led 3Q growth $800 Revenue $739 $700 $642 $87 +11% $600 $78 (11%) $55 $62 $81 +36% CRISIL, Other* $500 $60 $104 +8% Governments $400 $96 Structured $300 Financials $412 Corporates $200 +19% $346 $100 $0 3Q 2016 3Q 2017 ($ in millions) *Other includes interse
Slide 15: Market Intelligence: Continuing to deliver strong organic revenue growth
Market Intelligence: Continuing to deliver strong organic revenue growth 3Q 2017 3Q 2016 Change Revenue $422 $429 (2%) Organic revenue $422 $392 +8% ($ in millions) 3Q 2017 HIGHLIGHTS: • Organic revenue increased 8% with growth across all major businesses • Realized a 13% increase in Market Intellig
Slide 16: Platts: Organic revenue growth ticks higher
Platts: Organic revenue growth ticks higher 3Q 2017 3Q 2016 Change Revenue $193 $175 +10% Organic revenue $184 $174 +6% ($ in millions) 3Q 2017 HIGHLIGHTS: • Organic revenue increased 6% due to increased subscriptions and strong growth in Global Trading ($ inServices millions) – The core subscriptio
Slide 17: S&P Dow Jones Indices: Revenue and adjusted operating profit growth continue
S&P Dow Jones Indices: Revenue and adjusted operating profit growth continue 3Q 2017 3Q 2016 Change Revenue $187 $164 +14% Adjusted segment operating profit $120 $108 +10% SPGI share of Adj. Seg. Op. Profit* $87 $80 +8% Adjusted segment operating margin 64.3% 66.2% (190 bps) Trailing four quarters a
Slide 18: S&P Dow Jones Indices: Continued strong growth in ETF AUM associated with our indices
S&P Dow Jones Indices: Continued strong growth in ETF AUM associated with our indices Asset-Linked Fees: • Exchange-traded products industry net inflows were $124 billion in the 3Q • 3Q average ETF AUM associated with our indices increased 31% YOY • Quarter ending ETF AUM associated Quarter Ending E
Slide 19: Capital position
Capital position 3Q 2017 4Q 2016 Cash and cash equivalents $2,312 $2,392 Long-term debt $3,568 $3,564 Adjusted gross leverage* $5,717 $5,632 Adjusted gross leverage 2.0x 2.1x to adjusted EBITDA ($ in millions) Approximately $2.1 billion of cash was held outside the U.S. at the end of 3Q 2017 * Adjus
Slide 20: 2017 GAAP guidance: Changes highlighted below
2017 GAAP guidance: Changes highlighted below Previous Guidance New Guidance Reported revenue Mid single-digit increase Mid single-digit increase Organic revenue N.A. N.A. Unallocated expense $130 – $135 million $135 – $140 million Deal-related amortization N.A. N.A. Operating profit margin 43.0% -
Slide 21: 3Q 2017 Earnings Conference Call
3Q 2017 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations October 26, 2017 3Q 2017 Earnings Conference Call REPLAY OPTIONS Internet: Webcast replay available for one year Go to http://investor.s