McGraw-Hill-Financial-logo2The Company reported fourth quarter 2015 revenue of $1.37 billion, an increase of 7% compared to the same period last year.  Excluding the impact of foreign exchange, fourth quarter revenue increased 8%.  Fourth quarter net income and diluted earnings per share from continuing operations were $248 million and $0.91, respectively.  For the full year, revenue increased 5% to $5.31 billion and net income and diluted earnings per share from continuing operations were $1,156 million and $4.21, respectively.

McGraw-Hill Q4 2015“An important goal for the Company has been creating growth and driving performance.  In 2015, we made great strides on both fronts.  Two prominent examples are the addition of SNL, a high-growth data and analytics business to help create growth, and the progress on the Company’s productivity initiatives which drove performance with a significant improvement in the 2015 adjusted operating margin,” said Douglas L. Peterson, President and Chief Executive Officer of McGraw Hill Financial.  He added, “Creating growth and driving performance continue to be at the forefront of our efforts in 2016.  Our focus will be on execution in a difficult macro-economic environment as we drive financial performance, integrate SNL, enhance the customer experience and expand collaboration enterprise-wide, all while maintaining a culture of integrity and accountability.”

Margin Improvement: Adjusted operating profit margin for the Company increased 280 basis points for the second year in a row to 38.7%, which includes 126 basis points of deal-related amortization.  This marks the fourth consecutive year of greater than 100 basis-point improvements.  Excluding deal-related amortization, the 2015 adjusted operating margin reached 39.9%.

McGraw-Hill Q4 2015 - Full Year 2015 AS&P Capital IQ and SNL

2015:  Full-year 2015 revenue increased 14% to $1.40 billion.  Excluding four months of SNL results, organic revenue growth was 7%.  Operating profit was unchanged from prior year at $228 million.  Adjusted operating profit grew 25% to $297 million.

4th Quarter, 2015:  Revenue increased 27% to $405 million in the fourth quarter of 2015.  Excluding SNL results, organic revenue growth was 7%.  Quarterly operating profit decreased 12% to $50 million.  Adjusted operating profit increased 22% to $75 million.  A number of restructuring actions have been implemented as part of the integration of SNL and S&P Capital IQ.

Standard & Poor’s Ratings Services

2015:  Revenue decreased 1% to $2.43 billion.  Operating profit increased to $1,078 million.  Adjusted operating profit increased 7% to $1,146 million compared to 2014.  Adjusted operating profit margin increased 340 basis points to 47.2%.  This marks the fourth straight year that the adjusted operating profit margin has increased by more than 100 basis points.  This accomplishment is particularly notable with the decline in 2015 revenue.

4th Quarter, 2015:  Due to weak global bond issuance, fourth quarter 2015 revenue decreased 7% to $578 million.  Excluding the impact of foreign exchange, fourth quarter revenue decreased 4%.  Operating profit increased to $232 million.  Adjusted operating profit decreased 3% to $252 million.  Adjusted operating profit margin increased to 43.7% in the quarter.

S&P Dow Jones Indices

2015: Revenue increased 8% to $597 million. Operating profit increased 13% to $392 million.  Adjusted operating profit attributable to the Company increased 12% to $291 million.

4th Quarter, 2015:  Revenue increased 7% to $151 million in the fourth quarter of 2015.  Quarterly operating profit increased 9% to $94 million.  Adjusted operating profit attributable to the Company increased 9% to $69 million due to increased license fees from exchange-traded derivatives, mutual funds, OTC derivatives, and data feeds, partially offset by a small decline in ETF revenue.

Commodities & Commercial Markets

2015:  Revenue increased 9% to $971 million.  Organic revenue, excluding the acquisition of Eclipse, NADA Used Car Guide, and Petromedia, increased 6%. Operating profit improved 23% to $357 million.  Adjusted operating profit improved 17% to $358 million.

4th Quarter, 2015:  Revenue increased 12% to $264 million in the fourth quarter of 2015.  Organic revenue, excluding the acquisition of NADA Used Car Guide and Petromedia, increased 8%.  Operating profit improved 26% to $92 million in the fourth quarter of 2015.  Adjusted operating profit improved 20% to $92 million in the fourth quarter, compared to the same period last year.

Platts delivered high single-digit organic revenue growth in the fourth quarter primarily due to Petroleum and Metals, Agriculture and Petrochemicals (MAPS) as well as strong growth in Global Trading Services.

J.D. Power had a strong finish to the year with a double-digit increase in reported revenue, and high single-digit organic revenue growth driven primarily by its auto business.  The business is also benefiting from the addition of NADA Used Car Guide and the newly formed data and analytics group.  The Company initiated an active program to sell J.D. Power and has received considerable interest from third parties.  The Company believes that a sale is probable in the next year and the assets and liabilities of J.D. Powerhave been reclassified as held for sale in our consolidated balance sheet as of December 31, 2015.

Pending shareholder approval, the Company will be re-branded “S&P Global”.  This name leverages the Company’s rich heritage and its powerful financial data and analytics brands, while signaling a strong global footprint and broad portfolio.  The change will be effective pending a shareholder vote on April 27, 2016.

Source:  McGraw Hill Financial

Editorial Comment:  Over 80% of the company’s revenues are sold under the trade mark of S&P, thus renaming the corporation S&P Global makes sense.    If shareholders approve, the McGraw Hill Publishing / Education aura will come to an end.